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federal_court_australia · 63.7k rows

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federal_court_of_australia:fca/full/2019/2019fcafc0079	decision	commonwealth	federal_court_of_australia	text/html	2019-05-21 00:00:00	Minister for Home Affairs v G [2019] FCAFC 79	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2019/2019fcafc0079	2024-09-13T22:48:43.423034+10:00	FEDERAL COURT OF AUSTRALIA Minister for Home Affairs v G [2019] FCAFC 79 Appeal from: G v Minister for Immigration and Border Protection [2018] FCA 1229 File number: VID 1165 of 2018 Judges: MURPHY, MOSHINSKY AND O'CALLAGHAN JJ Date of judgment: 21 May 2019 Catchwords: ADMINISTRATIVE LAW – executive policy – Australian Citizenship Act 2007 (Cth) – Australian Citizenship Instructions – where primary judge declared part of the Instructions (being an executive policy) to be inconsistent with the Act and unlawful – principles applicable to whether an executive policy is inconsistent with a statute and unlawful CITIZENSHIP – citizenship by conferral – children under 16 years – Australian Citizenship Instructions – whether a part of the Instructions (relating to children under 16 years seeking citizenship by conferral) was inconsistent with the Australian Citizenship Act 2007 (Cth) and therefore unlawful Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth) Australian Citizenship Act 2007 (Cth), ss 19G, 20, 21, 22, 22A, 22B, 23, 24, 26 Australian Citizenship Amendment (Citizenship Test Review and Other Measures) Act 2009 (Cth) Judiciary Act 1903 (Cth), s 39B Migration Act 1958 (Cth), ss 48A, 48B Cases cited: Budilay v Minister for Immigration and Citizenship (2011) 194 FCR 133 Cummeragunga Pty Ltd (in liq) v Aboriginal and Torres Strait Islander Commission (2004) 139 FCR 73 Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 Elias v Federal Commissioner of Taxation (2002) 123 FCR 499 Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 Green v Daniels (1977) 13 ALR 1 Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189 MLC Investments Ltd v Commissioner of Taxation (2003) 137 FCR 288 NEAT Domestic Trading Pty Ltd v AWB Ltd (2003) 216 CLR 277 Nevistic v Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639 Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173 Singh v Minister for Immigration and Citizenship (2012) 199 FCR 404 Wong v R (2001) 207 CLR 584 Wong v R (2001) 207 CLR 584 Date of hearing: 19 February 2019 Registry: Victoria Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 79 Counsel for the Appellant: Mr R Knowles with Mr C Tran Solicitor for the Appellant: Sparke Helmore Lawyers Counsel for the First Respondent: Ms L De Ferrari SC with Mr M Guo Solicitor for the First Respondent: Asylum Seeker Resource Centre Counsel for the Second Respondent: The Second Respondent filed a submitting notice, save as to costs ORDERS VID 1165 of 2018 BETWEEN: MINISTER FOR HOME AFFAIRS Appellant AND: G First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGES: MURPHY, MOSHINSKY AND O'CALLAGHAN JJ DATE OF ORDER: 21 MAY 2019 THE COURT ORDERS THAT: 1. The name of the appellant be changed to the Minister for Home Affairs. 2. The appeal be allowed. 3. The declaration in paragraph 4 of the orders of the primary judge dated 5 September 2018 be set aside. 4. The appellant pay the first respondent's costs of the appeal, as agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: Introduction 1 The issue raised by this appeal concerns the validity of an executive policy. Specifically, the issue is whether a part of the Australian Citizenship Instructions (the Instructions), being an executive policy in relation to the Australian Citizenship Act 2007 (Cth), is inconsistent with the Act and therefore unlawful. 2 The respondent (G) is a child with a disability. He was born in Australia in 2009 and is a citizen of Albania. In January 2013, he was granted a protection visa and became a permanent resident of Australia. On 10 February 2015, G's mother, on his behalf, applied for G to be granted Australian citizenship by conferral. On 16 July 2015, a delegate of the Minister for Immigration and Border Protection, as the Minister was then named, refused the application. The delegate accepted that G was eligible to become an Australian citizen under s 21(5) of the Australian Citizenship Act, but decided to exercise the discretion available under s 24(2) of the Act to refuse the application, on the basis that G did not satisfy the policy guidelines set out in the Instructions. G applied to the Administrative Appeals Tribunal (the Tribunal) for review of the decision of the delegate. The Tribunal affirmed the decision under review. 3 G (through his litigation guardian) commenced a proceeding in this Court seeking judicial review of the Tribunal's decision, pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth). In his amended originating application, G relied on four grounds of review. These included that the Tribunal had inflexibly applied a policy (namely, the Instructions). The primary judge upheld each of the grounds of review. On 5 September 2018, her Honour made orders that: the decision of the Tribunal be set aside; the matter be remitted to the Tribunal for determination according to law; and the Minister pay G's costs. There is no appeal from these orders. 4 Ground 2 of the amended originating application included a contention that a part of the Instructions was invalid. The primary judge accepted this contention and made a declaration to reflect her conclusion. The declaration, contained in paragraph 4 of the orders made on 5 September 2018, was in the following terms: THE COURT DECLARES THAT: 4. The part of section 5.12.5 of the Australian Citizenship Instructions (as re-issued on 1 July 2014) emphasised in bold below is inconsistent with the Australian Citizenship Act 2007 (Cth) and unlawful: Children under 16 applying individually in their own right would usually not be approved under s 24 unless they are permanent residents at the time of application and decision and also meet the following policy guidelines: … • are under 16 when applying, living with a responsible parent who is not an Australian citizen and consents to the application, and the child would otherwise suffer significant hardship or disadvantage – see section 5.17 Ministerial discretion – significant hardship or disadvantage (s 22(6)) or … 5 The appellant, now named the Minister for Home Affairs (the Minister), appeals from part of the judgment of the primary judge, namely the declaration in paragraph 4 of the orders. The Minister contends that the primary judge erred in concluding that part of section 5.12.5 of the Instructions was inconsistent with the Australian Citizenship Act and unlawful. 6 For the reasons that follow, we accept this contention. The relevant part of the Instructions was not inconsistent with the Act and was not unlawful. Accordingly, the appeal is to be allowed and the declaration set aside. The key legislative provisions 7 The Preamble to the Australian Citizenship Act states: The Parliament recognises that Australian citizenship represents full and formal membership of the community of the Commonwealth of Australia, and Australian citizenship is a common bond, involving reciprocal rights and obligations, uniting all Australians, while respecting their diversity. The Parliament recognises that persons conferred Australian citizenship enjoy these rights and undertake to accept these obligations: (a) by pledging loyalty to Australia and its people; and (b) by sharing their democratic beliefs; and (c) by respecting their rights and liberties; and (d) by upholding and obeying the laws of Australia. 8 Division 2 of Pt 2 deals with acquisition of Australian citizenship by application. Within that Division, Subdiv B (comprising ss 19G-28) deals with citizenship by conferral. The "simplified outline" in s 19G describes the range of circumstances in which a person will be eligible for Australian citizenship by conferral: 19G Simplified outline The following is a simplified outline of this Subdivision: You may be eligible to become an Australian citizen under this Subdivision in 7 situations: • you satisfy the general eligibility criteria and have successfully completed citizenship test: see subsections 21(2) and (2A); or • you have a permanent or enduring physical or mental incapacity: see subsection 21(3); or • you are aged 60 or over or have a hearing, speech or sight impairment: see subsection 21(4); or • you are aged under 18: see subsection 21(5); or • you were born to a former Australian citizen: see subsection 21(6); or • you were born in Papua: see subsection 21(7); or • you are a stateless person: see subsection 21(8). You must make an application to become an Australian citizen. The Minister must approve or refuse you becoming an Australian citizen. You must be eligible to be an Australian citizen to be approved. You may be refused citizenship even if you are eligible. The Minister may be required to refuse your application on grounds relating to: • non-satisfaction of identity: see subsection 24(3); or • national security: see subsections 24(4) to (4C); or • non-presence in Australia: see subsection 24(5); or • offences: see subsection 24(6); or • cessation of citizenship: see subsection 24(7). You may need to make a pledge of commitment to become an Australian citizen. Relevantly for present purposes, one of the situations in which a person may be eligible to become an Australian citizen is if they are aged under 18; this situation is dealt with specifically in s 21(5), which is set out below. 9 Section 20 sets out the requirements for becoming an Australian citizen: 20 Requirements for becoming a citizen A person becomes an Australian citizen under this Subdivision if: (a) the Minister decides under subsection 24(1) to approve the person becoming an Australian citizen; and (b) if the person is required to make a pledge of commitment to become an Australian citizen – the person makes that pledge. Note: Sections 21 to 25 deal with the Minister approving the person becoming an Australian citizen. Sections 26 and 27 deal with the making of a pledge of commitment. 10 The provisions relating to the making of the pledge of commitment do not apply to a person who is under 16 years of age at the time of making the application to become an Australian citizen: see s 26(1)(a). 11 Section 21 deals with the application for citizenship and eligibility. Section 21(2) sets out the general eligibility criteria for persons aged 18 or over at the time of making the application. The criteria are detailed and include that the person: is a permanent resident at the time of making the application and at the time of the Minister's decision on the application; satisfies either the general residence requirement (which is dealt with in s 22), the special residence requirement (see s 22A or 22B) or the defence service requirement (see s 23) at the time of making the application; and is of good character at the time of the Minister's decision on the application. Other parts of s 21 deal with applicants who have a permanent or enduring physical or mental incapacity (s 21(3)), or who are over 60 years of age, or have a hearing, speech or sight impairment (s 21(4)). Other parts of s 21 deal with children of former Australian citizens, people born in Papua and stateless people. 12 The part of s 21 that is directly relevant for present purposes is s 21(5), which applies to persons aged under 18. It provides: (5) A person is eligible to become an Australian citizen if the Minister is satisfied that the person: (a) is aged under 18 at the time the person made the application; and (b) is a permanent resident: (i) at the time the person made the application; and (ii) at the time of the Minister's decision on the application. 13 Section 22 sets out a number of provisions about the "general residence requirement", which forms part of the eligibility criteria for some categories of applicant. While this provision is not directly relevant to G's application for citizenship, the provision is referred to in the part of the Instructions that relates to G's circumstances. We will therefore outline some aspects of s 22 in order to provide context for the relevant parts of the Instructions. Section 22(1) provides as follows: Subject to this section, for the purposes of section 21 a person satisfies the general residence requirement if: (a) the person was present in Australia for the period of 4 years immediately before the day the person made the application; and (b) the person was not present in Australia as an unlawful non-citizen at any time during that 4 year period; and (c) the person was present in Australia as a permanent resident for the period of 12 months immediately before the day the person made the application. 14 Section 22(6) is an ameliorative provision in the following terms: For the purposes of paragraph (1)(c), the Minister may treat a period as one in which the person was present in Australia as a permanent resident if: (a) the person was present in Australia during that period (except as a permanent resident or an unlawful non-citizen); and (b) the Minister is satisfied that the person will suffer significant hardship or disadvantage if that period were not treated as one during which the person was present in Australia as a permanent resident. 15 Section 24 confers a general power on the Minister to approve or refuse to approve a person becoming an Australian citizen. Its text, relevantly, is as follows: 24 Minister's decision (1) If a person makes an application under section 21, the Minister must, by writing, approve or refuse to approve the person becoming an Australian citizen. Note: The Minister may cancel an approval: see section 25. (1A) The Minister must not approve the person becoming an Australian citizen unless the person is eligible to become an Australian citizen under subsection 21(2), (3), (4), (5), (6), (7) or (8). (2) The Minister may refuse to approve the person becoming an Australian citizen despite the person being eligible to become an Australian citizen under subsection 21(2), (3), (4), (5), (6) or (7). 16 Section 24 then sets out a number of other, specified circumstances in which the Minister is precluded from granting citizenship. These circumstances include: where the Minister is not satisfied of a person's identity; where the person has an adverse security assessment; where a person is in prison, or facing proceedings for any offence against Australian law; or if a person's former citizenship status has ceased in the preceding 12 months. The Instructions 17 We now describe the relevant parts of the Australian Citizenship Instructions (referred to in these reasons as the "Instructions", but also referred to internally in the Instructions as the "ACIs"). The version of the Instructions applicable in the present case is the version issued on 1 July 2014. The Instructions comprise 278 pages, divided into 20 chapters. The Instructions are further divided into numbered parts, referred to as "sections". 18 There is no power conferred by the Australian Citizenship Act to make the Instructions. Despite appearing in a form that resembles a legislative instrument or that has a statutory source, the Instructions are made in an exercise of executive power. 19 The introduction to the Instructions commences with the following paragraph: The role of the ACIs is to support the Australian Citizenship Act 2007. The instructions provide guidance on policy in relation to the interpretation of, and the exercise of powers under, the Act and the Regulations. Decision makers should be mindful that policy must not be applied inflexibly. Policy cannot constrain the exercise of delegated powers under the Act. (Emphasis added.) 20 Chapter 5 of the Instructions deals with citizenship by conferral. It is divided into 31 sections, numbered from 5.1 to 5.31. Of principal relevance for present purposes is section 5.12, which deals with persons aged under 18 years. Section 5.12 is itself divided into eight sections, numbered 5.12.1 to 5.12.8. Sections 5.12.1 and 5.12.2 are in the following terms: 5.12.1 When was application received For applications received before 9 November 2009, refer to the Act and ACIs in effect immediately before 9 November 2009. For applications received on or after 9 November 2009, a person under the age of 18 years applying for Australian citizenship by conferral under s21(5), must be a permanent resident (that is, they must have activated their permanent visa) at the time of application and at the time of decision to be eligible for Australian citizenship. Person aged under 18 (5) A person is eligible to become an Australian citizen if the Minister is satisfied that the person: (a) is aged under 18 at the time the person made the application; and (b) is a permanent resident: (i) at the time the person made the application; and (ii) at the time of the Minister's decision on the application. The discretion in s24(2) to refuse to approve an applicant becoming an Australian citizen despite being eligible under s21(5) would usually be exercised where the applicant does not meet the policy guidelines. In making a decision whether to refuse or approve an application, the primary considerations that need to be taken into account are the legislative requirements, the best interests of the child and the policy guidelines set out below. 5.12.2 Best interests of the child The best interests of the child are to be considered as one of the primary considerations when assessing the application. This consideration only applies if the child is or would be less than 18 years of age at the time of decision on the application and the child is living in Australia. See Chapter 18 – Best interests of the child. 21 Section 5.12.5 provides: 5.12.5 Applicants under the age of 16 A child aged under 16 can make an individual application in their own right (by applying on a form that contains no other application) or on the same form and at the same time as a responsible parent. This is set out in s46(2A). In the case of an applicant who does not meet the policy guidelines below, decision makers must consider the full circumstances of the case, including the best interests of the child, to determine whether the application nevertheless warrants approval because of the unusual nature of those circumstances. Guidance on whether it may be reasonable to consider a particular set of circumstances as unusual can be obtained through the Citizenship Helpdesk.Under policy, if an applicant is under 16 years of age a responsible parent must sign the application form. Children under 16 applying individually in their own right Children under 16 applying individually in their own right would usually not be approved under s24 unless they are permanent residents at the time of application and decision and also meet the following policy guidelines: • are under 16 when applying and living with a responsible parent who is an Australian citizen and who consents to the application or • are usually resident in Australia with a permanent resident responsible parent who consents to the application, and that responsible parent would meet the residence requirement but has decided not to apply for Australian citizenship because they would lose the citizenship of another country or • are under 16 when applying, living with a responsible parent who is not an Australian citizen and consents to the application, and the child would otherwise suffer significant hardship or disadvantage - see section 5.17 Ministerial discretion - significant hardship or disadvantage (s22(6)) or • are an unaccompanied humanitarian minor who falls under the Minister's guardianship and a delegated guardian has consented to the application, see section 5.12.7 IGOC minors (previously wards of the Minister) or • are an unaccompanied humanitarian minor who does not fall under the Minister's guardianship and their responsible carer has consented to the application, see section 5.12.8 Non-IGOC minors (previously unaccompanied humanitarian minor (UHM) non-wards). Other requirements which must be satisfied relating to identity, national security, offences and former citizens are set out in section 5.27.1 Minister's decision (s24) - summary. Children under 16 applying on the same form and at the same time as a responsible parent Children under 16 applying on the same form and at the same time as a responsible parent would usually not be approved under s24 unless they are permanent residents at the time of application and decision and also meet the following policy guidelines: • the child was living in Australia with the relevant responsible parent and • the relevant responsible parent consented to the inclusion of the child in their application. Other requirements which must be satisfied relating to identity, national security, offences and former citizens are set out in section 5.27.1 Minister's decision (s24) - summary. Note: Decision makers must make a separate decision record for each applicant included on the application if the application is to be refused. Note: If a child under 16 applies on the same form and at the same time as a responsible parent, and that parent is refused, the child must be assessed against the policy guidelines for children under the age of 16 applying individually in their own right. The parts of section 5.12.5 that are particularly relevant are the second paragraph (commencing "In the case of …"), the paragraph immediately after the heading "Children under 16 applying individually in their own right" and the third bullet point under that heading. 22 Section 5.17 of the Instructions is headed "Ministerial discretion – significant hardship or disadvantage (s22(6))". We refer to this section as it is cross-referenced in the third bullet point in section 5.12.5. Section 5.17.2 states, in part, as follows: 5.17.2 What is significant hardship or disadvantage The Macquarie Dictionary Fifth Edition makes the following definitions: significant important; of consequence hardship a condition that bears hard upon one; severe toil, trial, oppression, or need disadvantage absence or deprivation of advantage; any unfavourable circumstance or condition People would normally be required to demonstrate some or all of the following circumstances: • inability to gain employment on the grounds that the employment is restricted to Australian citizens, and that comparable or alternative employment is not reasonably available • difficulty of international travel because the person cannot obtain a passport from their country of nationality/citizenship, or are unable to use a passport issued by that country for safety or similar reasons or cannot obtain an alternative travel document • academic (for example, research, academic scholarship) or other (sporting etc) potential is being limited or restricted, because the opportunities to reach that potential is available only to an Australian citizen, to the extent that it causes significant hardship. Applicants would need to demonstrate that not having citizenship is the only or major cause for the significant hardship or disadvantage. Decision makers will need to assess each application on its merits with particular reference to all the circumstances of the case to assess whether the person's lack of Australian citizenship is the only or major cause of the significant hardship or disadvantage. Evidence is required that a person's lack of Australian citizenship is the cause of the: • significant hardship or • disadvantage. For example, a letter from a potential employer, scholarship, sporting body stating that the person's citizenship status is the only reason they have not been selected, plus a statement in writing from the applicant, with appropriate supporting documentation, evidencing the significant hardship or disadvantage this has caused. The onus is on the applicant to provide the evidence to support the application. Decision makers should also be aware of situations where it appears that a person takes a course of action for the sole purpose of availing themselves of the exercise of this discretion. When making a decision regarding whether a person's circumstances constitute "significant hardship or disadvantage" officers should be aware of the difference between personal needs and personal wants. Personal needs relate to situations which would give rise to significant hardship or disadvantage if a person could not meet that need. For example, if a person could not find any employment, and was unable to adequately financially support themselves or their family. Personal wants are aspirations and generally do not constitute hardship (that is, the right to vote, election to Parliament, eligibility for HECS-HELP, representing Australia internationally in academics or sport). Australian citizenship is not a requirement to study in Australia at the primary or secondary levels. Australian universities may admit students who are not Australian citizens however eligibility for Commonwealth supported place may be limited to Australian citizens or permanent humanitarian visa holders. Further information on Commonwealth supported places is available from the Department of Industry, Innovation, Science, Research and Tertiary Education. Education, Science and Training at: http://www.innovation.gov.au/Pages/default.aspx Background 23 The following summary of the background facts is substantially drawn from the reasons of the primary judge (the Reasons). 24 G was born in Australia. He has a younger brother who was born in Australia in 2011. G has, on the uncontested medical evidence before the Tribunal, a severe language disability, borderline low IQ and Autism Spectrum Disorder. His parents are citizens of Albania. In 2004 and 2005 they applied for protection visas, in respect of Albania. They were unsuccessful and were therefore barred by s 48A of the Migration Act 1958 (Cth) from applying again, without a favourable exercise of the Minister's discretion under s 48B of the Migration Act. 25 G, however, made his own application for a protection visa. It was refused at first instance. On review, in September 2012, the Refugee Review Tribunal found that G faced a real chance of significant harm in Albania. The complementary protection basis for the grant of a protection visa was that the risk of harm arose as a consequence of a blood feud between G's family and another family. The Refugee Review Tribunal also made findings about the difficulty for G in accessing health and related services in Albania. G was granted a protection visa in January 2013, following the Refugee Review Tribunal findings. 26 Although G's claim for protection was in large part based on the circumstances of his parents, only G is the holder of a protection visa. 27 G became a permanent resident, while his parents have remained with no certain migration status, and indeed his father remained in immigration detention at the time of the hearing below. 28 G's mother has a bridging visa which enables her to live in the community with G and his brother, and to work, which she does. 29 The permanent residence status of G meant he was eligible to apply for Australian citizenship, which he did on 10 February 2015. His application was refused by a delegate of the Minister on 16 July 2015. G applied to the Tribunal for review of the delegate's decision. The Tribunal affirmed the delegate's decision. 30 The primary judge summarised the Tribunal decision at [71]-[124] of the Reasons. Given the limited nature of the Minister's appeal, it is not necessary for present purposes to outline the Tribunal's decision. The proceeding before the primary judge 31 G applied to this Court for judicial review of the Tribunal's decision. G relied on four grounds in his amended originating application. For present purposes it is only necessary to refer to ground 2. By this ground, G contended that the "Tribunal erred in applying the policy requirement to demonstrate 'significant hardship or disadvantage', such policy requirement being invalid". In the particulars to this ground it was contended that the invalidity arose from the proper construction of the discretion in s 24(2) of the Australian Citizenship Act, being a construction that precludes the importation of "significant hardship or disadvantage". The Reasons of the primary judge 32 As has been noted, the primary judge upheld all four grounds of review. Given the limited nature of the Minister's appeal, we will focus on the parts of the Reasons relating to ground 2 of the amended originating application (while noting that these parts need to be read in the context of the Reasons as a whole). 33 Her Honour noted that s 24 of the Australian Citizenship Act "confers a general power on the Minister to approve or refuse to approve a person becoming an Australian citizen", including "a discretion to refuse citizenship even in circumstances where a person has met the eligibility criteria" (Reasons, [28]). Her Honour stated that this is a "broad discretion" that is "highly discretionary, unless the discretion is controlled by any of the specific sub-sections in s 24" (Reasons, [31]). 34 The primary judge criticised the use of the word "usually" in the Instructions, because "the statute does not condition the discretion by any requirement about how it is to be 'usually' exercised" (Reasons, [46]). The word "usually" was said to impose "a starting premise on a decision-maker that is not contemplated or authorised by the statute" (Reasons, [46]). 35 At [134], the primary judge stated that the bases upon which she upheld grounds 2, 3 and 4 differed "but all have at their core my view about the extent to which the Citizenship Instructions travel outside the proper range of a policy formulated in an exercise of executive power to guide the exercise of a statutory administrative discretion". Her Honour stated that, on the basis of invalidity articulated in the amended originating application, she found the Instructions to be unlawful. She also indicated that, had further bases been identified, she may well have found other aspects to be unlawful. 36 At [136], the primary judge discussed s 24 of the Australian Citizenship Act. Her Honour noted that in Singh v Minister for Immigration and Citizenship (2012) 199 FCR 404, the Full Court at [54] approved the description given by Buchanan J in Budilay v Minister for Immigration and Citizenship (2011) 194 FCR 133 that the Minister had a discretion in s 24 whether or not to approve the citizenship application where there was no statutory direction that it not be approved. The primary judge stated that that was how she had approached s 24, but she placed more emphasis on the terms of s 24(1). Her Honour stated: "On their face, the terms of s 24(1) are obviously imperative, requiring the decision-maker to choose between approval or refusal of approval. That is the statutory task. The discretion in s 24(2) is a component of that task, but not the task itself." 37 The primary judge considered the role of executive policy, especially in the Tribunal, at [139]-[216]. In this section of the Reasons, her Honour discussed the following authorities: Green v Daniels (1977) 13 ALR 1; Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 (Drake (No 2)); Nevistic v Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639; and Minister for Immigration, Local Government and Ethnic Affairs v Gray (1994) 50 FCR 189. In the course of considering Drake (No 2), the primary judge stated at [161] that Brennan J's observations at 640 regarding the value of a guiding policy were concerned with consistency of approach to the exercise of a statutory discretion, and had little or nothing to do with consistency of outcome. Having considered these cases, her Honour discussed the dividing line between a lawful and an unlawful approach to the use of a policy at [200]-[205]. Her Honour then discussed the issue of the lawfulness of a policy itself at [206]-[210]: 206 … I commence with Brennan J's description in Drake (No 2) at 640. His Honour there identified three factors which might render a policy unlawful: it must allow the decision-maker to take into account the relevant circumstances, it must not require the decision-maker to take into account irrelevant circumstances, and it "must not serve a purpose foreign to the purpose for which the discretionary power was created". 207 Separately, his Honour stated that a policy would be inconsistent with the statute, and unlawful, if it: …sought to preclude consideration of relevant arguments running counter to an adopted policy which might be reasonably advanced in particular cases. 208 His Honour also described the boundaries of a lawful policy as one which: • does not "control" the exercise of discretion (Drake (No 2) at 641); • does not "determine in advance" the decision to be made (at 641); • is not one which imposes "broad and binding rules" on the exercise of a discretion (at 640); • does not accord a determinative effect to any factor (at 642); • does not deny the ability of countervailing factors to lead the decision-maker in particular cases to decline to exercise the power in favour of the individual (at 642); and • maintains the discretionary power "intact", merely specifying weight to be given to a factor or factors (at 642). 209 None of what I say in these reasons is to gainsay the valuable, and entrenched, role of the formulation of executive policy in administrative decision-making. However, what I have sought to focus on in these reasons is the boundary that I consider the Citizenship Instructions cross. That boundary can best be illustrated by reference, again, to what was said by Brennan J in Drake (No 2) (at 642): Not only is it lawful for the Minister to form a guiding policy; its promulgation is desirable, for reasons stated above. Its promulgation is consistent with the view of the distinguished American writer on administrative law, Professor K C Davis, a view which has received judicial approval in the United States: "When legislative bodies delegate discretionary power without meaningful standards, administrators should develop standards at the earliest feasible time, and then, as circumstances permit, should further confine their own discretion through principles and rules." (See Administrative Law Treatise, 2nd ed vol 2 para 8.8.) That is a commendable approach. It is not a rule of law, but it is none the less valuable as a principle of discretionary decision-making. 210 The boundary is clear: policy is not to become a rule of law. The statute is the expression of the rule of law. Executive policy cannot, in form or more importantly in substance, be perceived by decision-makers as, or operate as, a rule. In determining whether a particular policy crosses this boundary, a court must have regard not only to the language of the policy but, in my opinion more critically, to its structure and content. Even if a policy contains a qualification such as that contained in Green, or the Citizenship Instructions, is it really the case that the structure and content of the policy is such that the impression conveyed to decision-makers is that they are to treat the policy as a rule or a set of rules? These matters can be objectively determined. Although one option is to examine an individual exercise of power to see if the decision-maker has erred in treating a policy as a rule which must be followed in the particular exercise of power, for a court to limit its approach to that option may be to fail to grapple with the real difficulty – the nature of the policy itself. 38 The primary judge then considered Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173 (Plaintiff M64). Her Honour stated that she did not consider anything said by the High Court in that case compelled her to reach a different conclusion on the application (Reasons, [211]). 39 The primary judge dealt specifically with ground 2 at [244]-[262] of the Reasons. The primary judge commenced this section by stating that section 5.12.5 of the Instructions placed two additional, negative hurdles in the way of a child applicant: (1) The first was the instruction that a child applicant under the age of 16 and living with a responsible parent who was not an Australian citizen "would usually not be approved under s 24" unless (in addition to the statutory requirements) they met a series of policy guidelines, including that they could demonstrate "significant hardship or disadvantage" if they were not granted citizenship. (2) The second was that, if they did not meet the policy guidelines, they must demonstrate their application nevertheless "warrants approval" because of the "unusual nature" of their circumstances. 40 The primary judge noted at [246] that G's unlawfulness ground was confined to the imposition by the Instructions of the requirement for a child applicant to demonstrate "significant hardship or disadvantage" if she or he were not to be granted citizenship. G submitted before the primary judge that there were three reasons why that aspect of the Instructions was invalid: (a) The notion that "significant hardship or disadvantage" has any significance as a general prerequisite to the grant of citizenship is not supported by any provision in the Australian Citizenship Act. (b) The cross reference in the Instructions to the concept of "significant hardship or disadvantage" in s 22(6) introduces through the "back door" a statutory condition for citizenship that the Australian Citizenship Act imposes only in relation to certain, presently irrelevant, residence situations. (c) The purpose of the power in s 24 does not support the imposition of "significant hardship or disadvantage" as a further requirement for the grant of citizenship. 41 The primary judge accepted, at [247], that the Instructions "in both their structure and their content, do impose a matter in the nature of a precondition on the exercise of the power under s 24(1) (or, for that matter, the subsidiary discretion in s 24(2)) that is not present in the statute, and is inconsistent with it". 42 The primary judge noted, at [248]-[249], that G relied on an extract from the explanatory memorandum to the Australian Citizenship Bill 2005 (Cth). After noting that caution is needed when dealing with extrinsic material, and setting out the relevant extract, the primary judge at [250] accepted "that the mischief sought to be addressed by retaining a wide discretion to refuse, was to enable the refusal of applications where it was seen to be in the public interest to do so, bearing in mind this explanatory memorandum also describes citizenship as a 'privilege' not a right". The primary judge at [251] characterised the power in s 24(2) of the Australian Citizenship Act as a "broad, residual discretion, intended by Parliament to inform the principal statutory task in s 24(1)". The primary judge reasoned at [252]: There is no suggestion in the explanatory memorandum, nor in the text, context and purpose of the legislative scheme of the Citizenship Act as I have explained it above, to support the proposition that it was Parliament's intention that the "default position" for the exercise of the power in s 24(1), read with the discretion in s 24(2), should be refusal unless a series of additional requirements are met, including a pre-requisite to show "significant hardship or disadvantage" if citizenship is not conferred. Certainly, the Parliament has expressly considered and adopted the concept of "significant hardship or disadvantage" in a particular context, when dealing with residence eligibility conditions for citizenship applicants. In that context, the concept is used beneficially, as a way for applicants who do not satisfy the statutory criteria to nevertheless seek to meet the residence requirements. It can be taken to have consciously decided not to employ that concept elsewhere. It is beyond the bounds of a lawful executive policy for this statutory concept to be employed for a quite different purpose, particularly a non-beneficial one. 43 The primary judge, at [253], referred to "the dangers which are associated with repetitive and detailed guidelines or guidelines which encourage giving particular weight to particular factors". After referring to Wong v R (2001) 207 CLR 584, the primary judge reasoned at [257]: I consider the imposition of a prerequisite that an applicant show "significant hardship or disadvantage" crosses the boundaries discussed by Brennan J in Drake (No 2) and Stephen J in Green. For the same reasons given by Stephen J in Green, this aspect of the Citizenship Instructions is not saved by the use of the adjective "usually" in the phrase "would usually not be approved". If anything, this adjective contributes to the rule-like quality of this aspect of the guidelines. It purports to instruct decision-makers about what they would "usually" do: that is, they would "usually" refuse to approve unless an applicant had discharged a burden (impermissibly imposed in my opinion) to prove a particular kind of "significant hardship or disadvantage". 44 The primary judge concluded at [261] as follows: I find that part of s 5.12.5 of the Citizenship Instructions, emphasised in bold below, is unlawful: Children under 16 applying individually in their own right would usually not be approved under s24 unless they are permanent residents at the time of application and decision and also meet the following policy guidelines: … • are under 16 when applying, living with a responsible parent who is not an Australian citizen and consents to the application, and the child would otherwise suffer significant hardship or disadvantage - see section 5.17 Ministerial discretion - significant hardship or disadvantage (s22(6)) or … 45 This conclusion was subsequently reflected in the declaration set out at [4] above. 46 The key elements of the primary judge's reasoning can be summarised as follows: (a) Section 24 of the Australian Citizenship Act confers a broad discretion that is "highly discretionary" unless the discretion is controlled by one of the specific sub-sections in s 24 (Reasons, [31]). (b) The principles discussed by Brennan J in Drake (No 2) and by Stephen J in Green v Daniels were to be applied to determine whether an executive policy was inconsistent with the statute and therefore unlawful (Reasons, [206]-[209], [257]). (c) In determining whether a particular policy crosses the boundary, a court must have regard, not only to the language of the policy, but also to its structure and content (Reasons, [210]). (d) The Instructions, in both their structure and content, impose a matter in the nature of a precondition on the exercise of the power under s 24(1) (or, for that matter, s 24(2)) that is not present in the statute and is inconsistent with it, namely a "default position" of refusal unless a series of additional requirements are met, including a pre-requisite to show "significant hardship or disadvantage" if citizenship is not conferred (Reasons, [247], [252]). (e) This aspect of the Instructions is not saved by the use of the adjective "usually" in the phrase "would usually not be approved". If anything, the word contributes to the rule-like quality of this aspect of the Instructions (Reasons, [257]). The appeal 47 The Minister appeals from part of the judgment of the primary judge, namely from the declaration in paragraph 4 of the orders made on 5 September 2018. The sole ground of appeal is as follows: The primary judge erred in concluding that part of s 5.12.5 of the Australian Citizenship Instructions (as re-issued on 1 July 2014) is inconsistent with the Australian Citizenship Act 2007 (Cth) and unlawful. Particulars (a) Section 24(2) of the Australian Citizenship Act 2007 (Cth) confers a broad discretion on the Minister to refuse to approve a person becoming an Australian citizen. Contrary to the primary judge's reasons for judgment at [31], the breadth of the discretion justifies rather than limits the making of policy to guide decision-makers in the exercise of that discretion. (b) The Australian Citizenship Instructions do not, in terms, impermissibly fetter a decision-maker's consideration and exercise of power under s 24(2) of the Australian Citizenship Act 2007 (Cth). As the primary judge acknowledged, the Australian Citizenship Instructions state that "Decision makers should be mindful that policy must not be applied inflexibly. Policy cannot constrain the exercise of delegated powers under the Act" (Reasons at [37], [38], [210]). And contrary to the primary judge's reasons at [257], use of the term "usually" in policy does not contribute to the "rule-like quality" of the policy, but is a typical expression designed to recognise that decision-makers can and should consider all the circumstances of the case. (c) The primary judge incorrectly interpreted previous authorities as focusing upon consistency of process, which can be a lawful objective of a policy, rather than consistency of outcome, which the primary judge said at [161] cannot be a lawful objective of a policy. (d) The correct approach was to examine the Tribunal's exercise of power in this case, and the Appellant does not challenge the primary judge's conclusion that the Tribunal inflexibly applied the Australian Citizenship Instructions in this case. The primary judge erred in attributing the Tribunal's errors of application to the Australian Citizenship Instructions themselves. Consideration 48 The Minister submits that the primary judge was wrong to be so critical of the word "usually" in section 5.12.5 of the Instructions and wrong to see in the statutory breadth of the discretion in s 24(1) an embedded resistance towards structured guidance through policy. The Minister notes that policies that employ words such as "usually" and "normally" have been upheld in previous cases: see Elias v Federal Commissioner of Taxation (2002) 123 FCR 499 at [34]; Cummeragunga Pty Ltd (in liq) v Aboriginal and Torres Strait Islander Commission (2004) 139 FCR 73 (Cummeragunga) at [156]. See also MLC Investments Ltd v Commissioner of Taxation (2003) 137 FCR 288 at [30]. 49 The Minister submits that the distinction between process and outcome, which the primary judge discerned in the authorities, and which appears to have informed her Honour's ultimate conclusion about inconsistency, is unhelpful and inapt. It is submitted that the distinction between process and outcome is unstable, and that this is illustrated by the present case. 50 The Minister submits that it is precisely when discretions are broad that policies are welcome in order to "promote values of consistency and rationality in decision-making": Plaintiff M64 at [54]. 51 The Minister submits that the extent to which policy can guide a statutory discretion should, in principle, depend on interpretation of the relevant statutory provisions: see Aronson M, Groves M and Weeks G, Judicial Review of Administrative Action and Government Liability (Lawbook Co, 6th ed, 2017) at [5.270]. It is submitted that s 24(2) is, in express terms, an open-ended discretion that can only be confined, therefore, by the subject-matter, scope and purpose of the Australian Citizenship Act; and that the subject-matter tells against confining the executive's capacity to give guidance to delegated decision-makers on how to go about exercising the discretion. 52 The Minister submits that the effect of the primary judge's reasoning on significant hardship or disadvantage is that, in deciding whether to refuse citizenship under s 24(2), a decision-maker cannot consider whether a person would suffer significant hardship or disadvantage without being granted citizenship. It is submitted that, contrary to the primary judge's analysis, significant hardship or disadvantage is not a mandatory irrelevant consideration; it is a permissible consideration, which policy can therefore direct decision-makers to take into account: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40; Lo v Chief Commissioner of State Revenue (2013) 85 NSWLR 86 at [9]. 53 In relation to the primary judge's concern about the extent to which the Instructions resemble legal rules, the Minister submits that: the primary judge gave insufficient weight to the language of the introduction to the Instructions (quoted at [19] above); there is no principle of law that requires the executive to limit itself to policy drafted at any particular level of generality; and, unless the relevant statute, properly construed, precludes detailed policy guidelines being given, it is a matter for the executive as to how to draft its policies. 54 G submits that, because the Minister has not appealed from the orders made by the primary judge setting aside the decision of the Tribunal and remitting the matter for determination according to law, which were made on the basis of all four grounds in the amended originating application, it is not open to the Minister to challenge the primary judge's conclusion that part of the Instructions was unlawful. G submits that the Minister's appeal must fail because it neither raises as a ground of appeal, nor shows (or even attempts to show) in written submissions, that the primary judge's exercise of the discretion to make the declaration miscarried. It is submitted that the Minister is seeking, impermissibly, to challenge reasons rather than orders. 55 G submits that even if the issues of construction of the Australian Citizenship Act, and of consistency of part of the Instructions with it, could properly be said to be before this Court (which is not the case), the Minister: (a) accepts that a policy may exceed limits which are identified having regard to the relevant statute; and that, in determining whether a policy will do so, it is permissible to look at both the structure and content of the policy; and (b) fails to identify error with the conclusion that, properly and contextually construed, section 5.12.5 of the Instructions "impose[s] a matter in the nature of a precondition on the exercise of the power under s 24(1) (or, for that matter, the subsidiary discretion in s 24(2)) that is not present in the statute, and is inconsistent with it" (Reasons, [247]). 56 G submits that, instead of identifying error, the Minister in his written outline of submissions: (a) makes a de-contextualised attack on what the primary judge said about "usually" and how the term is deployed in this particular policy, which in any event was not central to her Honour's reasoning as to invalidity, let alone to her discretion to grant declaratory relief; (b) cites and/or quotes from a range of decisions that either arose in different contexts (i.e. different policies), or are ones where the particular issue in respect of the Instructions was quite different; and (c) wrongly suggests that at issue is the correctness of an "effects" test, which the Minister contends (i) flows from the primary judge's reasons and (ii) means that "significant hardship or disadvantage" will always be a mandatory irrelevant consideration – whatever might be the precise text of the particular part of the Instructions – even though this was not how her Honour concluded the policy was invalid, and once again, in any event, having nothing to do with the exercise of discretion to grant declaratory relief. 57 We will first consider the applicable principles and then address whether the primary judge erred. 58 It is established that an executive policy relating to the exercise of a statutory discretion must be consistent with the relevant statute in the sense that: it must allow the decision-maker to take into account relevant considerations; it must not require the decision-maker to take into account irrelevant considerations; and it must not serve a purpose foreign to the purpose for which the discretionary power was created: see Drake (No 2) at 640 per Brennan J; NEAT Domestic Trading Pty Ltd v AWB Ltd (2003) 216 CLR 277 at [24] per Gleeson CJ; Cummeragunga at [159] per Jacobson J. 59 An executive policy will also be inconsistent with the relevant statute if it seeks to preclude consideration of relevant arguments running counter to the policy that might reasonably be advanced in particular cases: Drake (No 2) at 640. Thus, an executive policy relating to the exercise of a statutory discretion must leave the decision-maker "free to consider the unique circumstances of each case, and no part of a lawful policy can determine in advance the decision which the [decision-maker] will make in the circumstances of a given case": Drake (No 2) at 641. 60 However, as Brennan J stated in Drake (No 2) at 641, "[t]hat is not to deny the lawfulness of adopting an appropriate policy which guides but does not control the making of decisions, a policy which is informative of the standards and values which the [decision-maker] usually applies". In Elias v Federal Commissioner of Taxation, Hely J stated at [34]: The Commissioner is entitled to adopt a policy to provide guidance as to the exercise of the discretion, provided the policy is consistent with the statute by which the discretion is conferred. Thus if the statute gives a discretion in general terms, the discretion cannot be truncated or confined by an inflexible policy that it shall only be exercised in a limited range of circumstances. A general policy as to how a discretion will "normally" be exercised does not infringe these principles, so long as the applicant is able to put forward reasons why the policy should be changed, or should not be applied in the circumstances of the particular case. See Re Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 640-641; Chumbairux v Minister for Immigration and Ethnic Affairs (1986) 74 ALR 480 at 492-493. This passage was approved by Jacobson J in Cummeragunga at [156]. 61 In Plaintiff M64, in the context of considering an executive policy that prioritised the processing of certain categories of visa applications, French CJ, Bell, Keane and Gordon JJ said at [54]: Policy guidelines like the priorities policy promote values of consistency and rationality in decision-making, and the principle that administrative decision-makers should treat like cases alike. In particular, policies or guidelines may help to promote consistency in "high volume decision-making", such as the determination of applications for Subclass 202 visas. Thus in Drake v Minister for Immigration and Ethnic Affairs [No 2], Brennan J, as President of the Administrative Appeals Tribunal, said that "[n]ot only is it lawful for the Minister to form a guiding policy; its promulgation is desirable" because the adoption of a guiding policy serves, among other things, to assure the integrity of administrative decision-making by "diminishing the importance of individual predilection" and "the inconsistencies which might otherwise appear in a series of decisions". The subjectivity of the evaluation by a decision-maker in a case such as the present highlights the importance of guidelines. The importance of avoiding individual predilection and inconsistency in making choices between a large number of generally qualified candidates by the application of the open-textured criterion of "compelling reasons for giving special consideration" is readily apparent. (Footnotes omitted.) Justice Gageler (at [62]) substantially agreed with the reasons of French CJ, Bell, Keane and Gordon JJ. 62 An executive policy that is inconsistent with the relevant statute in the sense described above is unlawful: see Drake (No 2) at 641. It is open to the Court to make a declaration to this effect, but whether it is appropriate to do so depends on an application of the general principles regarding the making of declarations, which are discussed in cases such as Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-438. 63 Having regard to these principles, in our respectful view, the primary judge erred in concluding that part of section 5.12.5 of the Instructions (namely, the words appearing in bold in the declaration set out at [4] above) was inconsistent with the Australian Citizenship Act and unlawful. Our reasons are as follows. 64 First, the statute confers a broad and unfettered discretion in s 24(1) to approve or refuse to approve a person who has made an application under s 21 becoming an Australian citizen. The breadth of the discretion is confirmed by s 24(2), which provides that the Minister may refuse to approve the person becoming an Australian citizen despite the person being eligible to become an Australian citizen under s 21(2), (3), (4), (5), (6) or (7). Further, the relevant eligibility category for present purposes, namely that set out in s 21(5), contains little by way of criteria. In contrast with the eligibility criteria in s 21(2), which are more detailed, s 21(5) provides that a person is eligible to become an Australian citizen if the Minister is satisfied that the person: (a) is aged under 18 at the time the person made the application; and (b) is a permanent resident at the time the person made the application and at the time of the Minister's decision on the application. 65 The breadth of the discretion in s 24(1) is not inimical to the adoption of an executive policy, even a detailed executive policy, to guide the exercise of the discretion. To the contrary, the breadth of the discretion tends to support the view that there is no inconsistency between section 5.12.5 of the Instructions and the statute. Moreover, the adoption of a policy in such a case promotes values of consistency and rationality in decision-making, and the principle that administrative decision-makers should treat like cases alike: see Plaintiff M64 at [54]. 66 Secondly, section 5.12.5 of the Instructions (or at least the part considered by the primary judge to be inconsistent with the statute) allows the decision-maker to take into account relevant considerations and does not require the decision-maker to take into account irrelevant considerations. The primary judge focussed on the reference, in the third bullet point in section 5.12.5, to the applicant suffering "significant hardship or disadvantage" if not granted citizenship. This third bullet point relates to a limited class of applications under s 21(5): children under 16 who are living with a responsible parent who is not an Australian citizen. If and to the extent that the primary judge considered "significant hardship or disadvantage" to be an irrelevant consideration (in the sense that it was impermissible for the Minister to take it into account when exercising the discretion to approve or refuse to approve an application for citizenship), we would respectfully disagree with her Honour. Neither the text of the legislation, nor the objects of the Act, suggests that the Minister cannot take this matter into account in exercising the discretion. The use of the expression "significant hardship or disadvantage" in s 22(6) should not be read as excluding consideration of this matter in the exercise of discretion under s 24(1). We would not infer that the use of the expression in one context, and its absence in the other, is explicable only on the basis that it was intended to be excluded from the latter. 67 Thirdly, section 5.12.5 of the Instructions does not serve a purpose foreign to the purpose for which the discretionary power was created. In considering this aspect, regard is to be had both to the discretion in s 24(1) to approve or refuse to approve an application for citizenship, and the relevant eligibility category, namely applicants who satisfy the criteria in s 21(5). 68 The executive has historically had a large role in deciding admission into the people of the Commonwealth. This is confirmed by the revised explanatory memorandum for the Australian Citizenship Bill 2005 (Cth), which stated in relation to cl 24 of the Bill: It has been a uniform feature of naturalisation legislation (ie. citizenship by conferral) throughout the Commonwealth for over a century to give the Executive a wide discretion regarding the approval or refusal of citizenship. This is because Australian citizenship by conferral is a privilege and not a right. The new Act will continue to promote this understanding. 69 Further, the revised explanatory memorandum for the Australian Citizenship Bill 2005 (Cth) envisaged the application of an executive policy in relation to proposed s 21(5) as to when an applicant would "usually" and "not usually" be approved. Before setting out the relevant passage, it should be noted that s 21(5) as originally introduced was not in the same terms as the current provision. As originally introduced, s 21(5) provided that a person was eligible to become an Australian citizen if the Minister was satisfied that the person was under 18 years of age at the time the person made the application; the section did not require the person to be a permanent resident. Section s 21(5) was repealed and replaced by the Australian Citizenship Amendment (Citizenship Test Review and Other Measures) Act 2009 (Cth). The effect of the amendment was to add the requirement that the person be a permanent resident at the time the person made the application and at the time of the Minister's decision on the application. (The background to the 2009 amendment is helpfully discussed in Rubenstein K, Australian Citizenship Law (Lawbook Co, 2nd ed, 2017) at [4.700] (chapter authored by K Rubenstein and J Field).) Returning to s 21(5) as originally introduced, the revised explanatory memorandum for the Australian Citizenship Bill 2005 (Cth) made the following observations: Subclause 21(5) outlines the eligibility provisions for citizenship where a person is aged under 18 years. It specifies that a person is eligible to become an Australian citizen if the Minister is satisfied that the person is aged under 18 at the time the person made the application. This new subsection is the equivalent of section 13(9)(a) of the old Act. As a matter of policy, applications considered under this subclause would usually be approved if the applicant meets the criteria in subclause (2). That is, the applicant is a permanent resident, satisfies the residence requirements, has a basic knowledge of English, the privileges and responsibilities of citizenship, the nature of the application and is likely to reside, or to continue to reside, in Australia or to maintain a close and continuing association with Australia if the application were to be approved, and is of good character. In addition, applications under this subsection would not usually be approved unless the applicant has a responsible parent (as defined by section 6 of this Act) who is an Australian citizen. 70 Thus, the revised explanatory memorandum envisaged the existence of an executive policy in relation to s 21(5) (as originally introduced) under which an application by a person under 18 would "usually" be approved if the person met the (more detailed) eligibility requirements set out in s 21(2), but "would not usually be approved" unless the applicant had a responsible parent who was an Australian citizen. There is no suggestion, in the extrinsic materials relating to the 2009 amendments, that the Parliament intended to depart from the approach outlined in the revised explanatory memorandum for the 2005 Bill. 71 The primary judge was concerned that, under section 5.12.5 of the Instructions, certain applications would usually not be approved unless certain policy guidelines were met. For the reasons indicated, we do not consider the adoption of this policy in relation to certain applications to be contrary to the purpose for which the discretionary power was created. 72 Fourthly, section 5.12.5 of the Instructions does not preclude an applicant raising arguments as to why the policy should not be applied in the particular case, nor does section 5.12.5 seek to control the outcome of the exercise of the discretion. We note, in particular, the following matters: (a) The introduction to the Instructions includes the statements that "[d]ecision makers should be mindful that policy must not be applied inflexibly" and that "[p]olicy cannot constrain the exercise of delegated powers under the Act" (see [19] above). (b) Section 5.12.5 states, in the second paragraph, that in the case of an applicant who does not meet the policy guidelines below, decision-makers "must consider the full circumstances of the case, including the best interests of the child, to determine whether the application nevertheless warrants approval because of the unusual nature of those circumstances" (see [21] above). (c) Under the heading "Children under 16 applying individually in their own right", section 5.12.5 states that children under 16 applying individually in their own right would "usually" not be approved under s 24 unless they meet the policy guidelines there set out. 73 The language used by the section, namely that certain applications would "usually" not be approved unless certain policy guidelines are met, indicates that there will be cases outside the usual course. Thus the policy contemplates that a person may not meet the policy guidelines but their application may nevertheless be approved. In these circumstances, we do not consider it accurate to say that section 5.12.5 of the Instructions imposes a matter in the nature of a precondition on the exercise of the power under s 24(1) (cf Reasons, [247]). 74 Fifthly, we do not regard the structure or content of section 5.12.5 as having a rule-like quality such that it purports to control the exercise of the discretion. As already discussed, section 5.12.5 states that children applying individually in their own right would "usually not be approved" unless they meet certain policy guidelines. But it is also stated that, in the case of an applicant who does not meet these guidelines, decision-makers must consider the full circumstances of the case and whether they are unusual. And, as set out in the introduction to the Instructions, the "policy must not be applied inflexibly". 75 Sixthly, the circumstances of this case are quite different from those in Green v Daniels. In that case, Stephen J held that a policy was inconsistent with a statutory provision regarding the entitlement to unemployment benefits. The statutory provision (set out at 4 of the report) contained specific criteria. As Stephen J said (at 9), "[n]o general discretion is conferred upon [the Director-General]; instead specific criteria are laid down by the Act and all that is left for him to do is to decide whether or not he attains a state of satisfaction that the circumstances exist to which each of these criteria refer". 76 Seventhly, we do not accept G's submission that it is not open to the Minister to challenge the declaration because he has not sought to appeal from the orders of the primary judge setting aside the decision of the Tribunal and remitting the matter for determination according to law. The declaration is a discrete matter and there is no inconsistency between the Minister accepting the correctness of the orders setting aside the decision of the Tribunal and remitting the matter, and challenging the correctness of the declaration. 77 We do not accept G's submission that the Minister's appeal must fail because he does not challenge the primary judge's exercise of the discretion (to make the declaration). It is true that the Minister does not challenge the primary judge's application of the general principles regarding the making of declarations. But the Minister does challenge the making of the declaration, on the basis that the primary judge erred in concluding that the relevant part of the Instructions was inconsistent with the statute and therefore unlawful. If the Minister's proposition is correct, it follows that the primary judge erred in making the declaration. It is open to the Minister to adopt this approach. Contrary to G's submissions, the Minister is not seeking to challenge reasons rather than orders; the appeal challenges the declaration, which forms part of the orders. 78 For these reasons, we respectfully disagree with the primary judge's conclusion that the relevant parts of section 5.12.5 of the Instructions are inconsistent with the Australian Citizenship Act. Conclusion 79 In our view, the appeal should be allowed and the declaration set aside. In relation to costs, the Minister has agreed to pay costs regardless of the outcome. We will make an order to this effect. We will also make an order changing the name of the appellant to the Minister for Home Affairs, as requested by the appellant at the outset of the hearing of the appeal. I certify that the preceding seventy-nine (79) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Murphy, Moshinsky and O'Callaghan. Associate: Dated: 21 May 2019	14,761
federal_court_of_australia:fca/single/2008/2008fca0174	decision	commonwealth	federal_court_of_australia	text/html	2008-02-27 00:00:00	SZJIB v Minister for Immigration and Citizenship [2008] FCA 174	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2008/2008fca0174	2024-09-13T22:48:45.215554+10:00	FEDERAL COURT OF AUSTRALIA SZJIB v Minister for Immigration and Citizenship [2008] FCA 174 SZJIB v MINISTER FOR IMMIGRATION AND CITIZENSHIP AND REFUGEE REVIEW TRIBUNAL NSD 2267 OF 2007 MCKERRACHER J 27 FEBRUARY 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2267 OF 2007 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZJIB Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MCKERRACHER J DATE OF ORDER: 27 FEBRUARY 2008 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant to pay the costs of the first respondent to be fixed at $2,700. 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 2267 OF 2007 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZJIB Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MCKERRACHER J DATE: 27 FEBRUARY 2008 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal against a decision of a Federal Magistrate (Lloyd-Jones FM) made on 26 October 2007 (SZJIB v Minister for Immigration & Anor [2007] FMCA 1697) dismissing an application for judicial review of a decision of the Refugee Review Tribunal (the Tribunal) handed down on 10 August 2006. The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs (as it was then known) to refuse to grant a protection visa to the appellant. BACKGROUND 2 The appellant is a citizen of India. He arrived in Australia on 14 February 2006. Before the Tribunal he claimed the following: · He belonged to Bhartiya Samajwadi Party (BSP) and began receiving threats from opposition parties demanding he stop his activities. · He went to the police but received no help and only received further serious threats as a result. · That after a few days the police came to his house with a search warrant on the pretext that there were hidden weapons and even though they found nothing arrested the appellant and only later released him on bail. · That the opposition party was putting pressure on him to leave BSP and join them which he resisted. He claimed his son was abducted and returned having suffered physical and psychological abuse. · He took his son to relatives for protection and came to Australia for protection. 3 In response to these assertions the Tribunal put to the appellant that it was concerned about his apparent inability to provide details about many aspects of his claims. The appellant responded to the effect that because he had to work his knowledge of the BSP was limited. The Tribunal made clear to the appellant that the Tribunal needed to further consider the persuasiveness of his explanations. 4 In its findings and reasons the Tribunal concluded that it was not satisfied that the appellant was a member of the BSP. The Tribunal found the appellant's responses to be generally vague and lacking in relevant details and was not persuaded by the appellant's explanations. It was the opinion of the Tribunal that the appellant's response to the question about party ideologies was vague which indicated he lacked an understanding of the BSP. Further, it found the uncertainty of the date he joined raised doubts about the appellant's claims. The Tribunal found the appellant's lack of knowledge about basic matters pertaining to the BSP raised further doubts about the veracity of the claims. 5 In relation to the alleged threatening phone calls the Tribunal recorded it had the impression the appellant was making up names rather than giving genuine responses which raised further doubts about his claims. In relation to the claim of his arrest, the Tribunal noted the vagueness and lack of details about a significant claim such as being arrested. 6 In light of the comments above and in consideration of the evidence as a whole the Tribunal was not satisfied that the appellant was ever a member of the BSP or that he was ever involved in any activities relating to the BSP or that he ever received threatening calls or that the police went to his home with a search warrant or that he was arrested and detained. The Tribunal was not satisfied that the appellant had a well-founded fear of persecution for a Convention Relating to the Status of Refugees 1951 and amended under the Protocol Relating to the Status of Refugees 1967 reason (the Convention). FEDERAL MAGISTRATE'S DECISION 7 On 7 September 2006 the appellant sought judicial review of the Tribunal's decision in the Federal Magistrates Court. In a further amended application filed on 22 February 2007 the appellant claimed the following grounds: · The Tribunal exceeded its jurisdiction and constructively failed to exercise jurisdiction by breaching s 91R (1) of the Migration Act 1958 (Cth) (the Act). · The Tribunal failed to give proper weight to the appellant's evidence and the persecution he and his family suffered. · The Tribunal breached its obligation under s 424A of the Act. · The Tribunal failed to assess the appellant's claims of 'political opinion'. 8 In relation to the consideration of the real chance of persecution the Federal Magistrate concluded the Tribunal set out the relevant test and went on to consider whether there was a real chance that the appellant would suffer harm amounting to persecution. The Federal Magistrate found the Tribunal did not accept that the alleged threat had been made and accordingly there was no subsequent failure to consider the quality and nature of the threat. The Federal Magistrate concluded that there was no error in the Tribunal disbelieving, rejecting or simply not being satisfied with the appellant's evidence. 9 In relation to the submission by the appellant that the Tribunal failed to assess his claims as they pertained to his political opinions the Federal Magistrate concluded the Tribunal decision was largely directed to that very consideration. However the Tribunal was not satisfied that the appellant was a member or even involved in the activities of BSP and rejected his claims on this basis. This was open to the Tribunal and no jurisdictional error arose. 10 In relation to s 424A of the Act, the Federal Magistrate found the Tribunal was not required to put to an appellant its thought processes or subjective determination for comment. The concept of "information" did not extend to identifying gaps, defects or lack of detail or specificity in evidence or to conclusions arrived at by the Tribunal in weighing up the evidence by reference to those gaps. The Federal Magistrate was satisfied the Tribunal was not obliged to issue the appellant with a s 424A letter. Grounds of Appeal 11 On 15 November 2007 the appellant filed a notice of appeal from the decision of the Federal Magistrate. The actual grounds of appeal are substantially lengthier than summarised in these reasons but, in essence, in relation to the first ground, it is asserted that the finding of the Federal Magistrate at [21] was 'blind acceptance' of the Tribunal's findings that the appellant had not suffered any harm attributable to a Convention reason. The appellant asserts that the Federal Magistrate ought to have found in accordance with his evidence that he had suffered torture. 12 The second ground, again, is substantially more expansive than set out in these reasons but, in essence, the appellant takes issue with the finding of the Federal Magistrate at [34], namely, the conclusion that the Tribunal was not satisfied that the appellant was a member of the BSP. This ground appears (by virtue of its reference to [34] of his Honour's decision to be raising a question of natural justice on compliance with s 424A of the Act. 13 The appellant filed written submissions which deal with the background, the statement of claims made to the Department of Immigration, give a summary of what occurred at the Tribunal hearing, a summary of two particular grounds of error advanced before his Honour in the Court below and short written submissions in relation to the appeal before this Court. 14 In particular in the submissions before this Court, the appellant raised the issue of the Tribunal's alleged failure to address the fact that there would be a risk of significant ill-treatment in the hands of the State authorities if the appellant relocated. The appellant contended that the Tribunal failed to consider this fact and failed to apply the appropriate test referring, in particular, to 'SZYAT v MIMIA (FCA 858/2005)'. 15 This would seem to be a reference to the decision of Wilcox J in SZAYT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 857. What His honour said in that case at [31]was: Persecution is not established merely by proof that somebody has made a statement (the 'threat') about an intention to kill the person seeking recognition as a refugee. The relevant decision-maker must evaluate the 'threat' and determine whether it amounts to 'serious harm' within the meaning of s.91R(2)(a) of the Act. That evaluation needs to take into account all the surrounding circumstances ... Wilcox J found (at [36]) that in that case the Tribunal had fallen into jurisdictional error in failing to consider the seriousness and likely effect of a threat to kill the appellant. 16 That case had no application to the present circumstances as the Tribunal in this instance found that no threat had been made in the first place. 17 In written submissions, the appellant referred to the alleged failure on the part of the Tribunal to follow the review process acMCKERRACHER J 27 FEBRUARY 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2267 OF 2007 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZJIB Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MCKERRACHER J DATE OF ORDER: 27 FEBRUARY 2008 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant to pay the costs of the first respondent to be fixed at $2,700. 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 2267 OF 2007 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZJIB Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MCKERRACHER J DATE: 27 FEBRUARY 2008 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal against a decision of a Federal Magistrate (Lloyd-Jones FM) made on 26 October 2007 (SZJIB v Minister for Immigration & Anor [2007] FMCA 1697) dismissing an application for judicial review of a decision of the Refugee Review Tribunal (the Tribunal) handed down on 10 August 2006. The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs (as it was then known) to refuse to grant a protection visa to the appellant. BACKGROUND 2 The appellant is a citizen of India. He arrived in Australia on 14 February 2006. Before the Tribunal he claimed the following: · He belonged to Bhartiya Samajwadi Party (BSP) and began receiving threats from opposition parties demanding he stop his activities. · He went to the police but received no help and only received further serious threats as a result. · That after a few days the police came to his house with a search warrant on the pretext that there were hidden weapons and even though they found nothing arrested the appellant and only later released him on bail. · That the opposition party was putting pressure on him to leave BSP and join them which he resisted. He claimed his son was abducted and returned having suffered physical and psychological abuse. · He took his son to relatives for protection and came to Australia for protection. 3 In response to these assertions the Tribunal put to the appellant that it was concerned about his apparent inability to provide details about many aspects of his claims. The appellant responded to the effect that because he had to work his knowledge of the BSP was limited. The Tribunal made clear to the appellant that the Tribunal needed to further consider the persuasiveness of his explanations. 4 In its findings and reasons the Tribunal concluded that it was not satisfied that the appellant was a member of the BSP. The Tribunal found the appellant's responses to be generally vague and lacking in relevant details and was not persuaded by the appellant's explanations. It was the opinion of the Tribunal that the appellant's response to the question about party ideologies was vague which indicated he lacked an understanding of the BSP. Further, it found the uncertainty of the date he joined raised doubts about the appellant's claims. The Tribunal found the appellant's lack of knowledge about basic matters pertaining to the BSP raised further doubts about the veracity of the claims. 5 In relation to the alleged threatening phone calls the Tribunal recorded it had the impression the appellant was making up names rather than giving genuine responses which raised further doubts about his claims. In relation to the claim of his arrest, the Tribunal noted the vagueness and lack of details about a significant claim such as being arrested. 6 In light of the comments above and in consideration of the evidence as a whole the Tribunal was not satisfied that the appellant was ever a member of the BSP or that he was ever involved in any activities relating to the BSP or that he ever received threatening calls or that the police went to his home with a search warrant or that he was arrested and detained. The Tribunal was not satisfied that the appellant had a well-founded fear of persecution for a Convention Relating to the Status of Refugees 1951 and amended under the Protocol Relating to the Status of Refugees 1967 reason (the Convention). FEDERAL MAGISTRATE'S DECISION 7 On 7 September 2006 the appellant sought judicial review of the Tribunal's decision in the Federal Magistrates Court. In a further amended application filed on 22 February 2007 the appellant claimed the following grounds: · The Tribunal exceeded its jurisdiction and constructively failed to exercise jurisdiction by breaching s 91R (1) of the Migration Act 1958 (Cth) (the Act). · The Tribunal failed to give proper weight to the appellant's evidence and the persecution he and his family suffered. · The Tribunal breached its obligation under s 424A of the Act. · The Tribunal failed to assess the appellant's claims of 'political opinion'. 8 In relation to the consideration of the real chance of persecution the Federal Magistrate concluded the Tribunal set out the relevant test and went on to consider whether there was a real chance that the appellant would suffer harm amounting to persecution. The Federal Magistrate found the Tribunal did not accept that the alleged threat had been made and accordingly there was no subsequent failure to consider the quality and nature of the threat. The Federal Magistrate concluded that there was no error in the Tribunal disbelieving, rejecting or simply not being satisfied with the appellant's evidence. 9 In relation to the submission by the appellant that the Tribunal failed to assess his claims as they pertained to his political opinions the Federal Magistrate concluded the Tribunal decision was largely directed to that very consideration. However the Tribunal was not satisfied that the appellant was a member or even involved in the activities of BSP and rejected his claims on this basis. This was open to the Tribunal and no jurisdictional error arose. 10 In relation to s 424A of the Act, the Federal Magistrate found the Tribunal was not required to put to an appellant its thought processes or subjective determination for comment. The concept of "information" did not extend to identifying gaps, defects or lack of detail or specificity in evidence or to conclusions arrived at by the Tribunal in weighing up the evidence by reference to those gaps. The Federal Magistrate was satisfied the Tribunal was not obliged to issue the appellant with a s 424A letter. Grounds of Appeal 11 On 15 November 2007 the appellant filed a notice of appeal from the decision of the Federal Magistrate. The actual grounds of appeal are substantially lengthier than summarised in these reasons but, in essence, in relation to the first ground, it is asserted that the finding of the Federal Magistrate at [21] was 'blind acceptance' of the Tribunal's findings that the appellant had not suffered any harm attributable to a Convention reason. The appellant asserts that the Federal Magistrate ought to have found in accordance with his evidence that he had suffered torture. 12 The second ground, again, is substantially more expansive than set out in these reasons but, in essence, the appellant takes issue with the finding of the Federal Magistrate at [34], namely, the conclusion that the Tribunal was not satisfied that the appellant was a member of the BSP. This ground appears (by virtue of its reference to [34] of his Honour's decision to be raising a question of natural justice on compliance with s 424A of the Act. 13 The appellant filed written submissions which deal with the background, the statement of claims made to the Department of Immigration, give a summary of what occurred at the Tribunal hearing, a summary of two particular grounds of error advanced before his Honour in the Court below and short written submissions in relation to the appeal before this Court. 14 In particular in the submissions before this Court, the appellant raised the issue of the Tribunal's alleged failure to address the fact that there would be a risk of significant ill-treatment in the hands of the State authorities if the appellant relocated. The appellant contended that the Tribunal failed to consider this fact and failed to apply the appropriate test referring, in particular, to 'SZYAT v MIMIA (FCA 858/2005)'. 15 This would seem to be a reference to the decision of Wilcox J in SZAYT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 857. What His honour said in that case at [31]was: Persecution is not established merely by proof that somebody has made a statement (the 'threat') about an intention to kill the person seeking recognition as a refugee. The relevant decision-maker must evaluate the 'threat' and determine whether it amounts to 'serious harm' within the meaning of s.91R(2)(a) of the Act. That evaluation needs to take into account all the surrounding circumstances ... Wilcox J found (at [36]) that in that case the Tribunal had fallen into jurisdictional error in failing to consider the seriousness and likely effect of a threat to kill the appellant. 16 That case had no application to the present circumstances as the Tribunal in this instance found that no threat had been made in the first place. 17 In written submissions, the appellant referred to the alleged failure on the part of the Tribunal to follow the review process according to law submitting that the Tribunal's analysis reaching this finding was erroneous, namely, that the Tribunal 'does not accept that the Applicant has suffered any harm attributable to a Convention reason, nor does the Tribunal accept that there is a real chance of such harm occurring to the Applicant in the reasonably foreseeable future'. The observation below in relation to the first ground of appeal apply equally to these written submissions. 18 The appellant submitted that both the Tribunal and the Court below failed to consider the appellant's claim that his son had been kidnapped and threatened by the appellant's opponents. This, it was said, amounted to 'serious harm' suffered by the appellant. It is said that this was jurisdictional error. 19 I turn to consider the grounds of appeal as filed. Ground 1 – 'blind acceptance' 20 As far as the first ground is concerned, a 'blind acceptance' by his Honour of the Tribunal's finding could only, in the absence of any evidence or specific assertion of bias, be taken to mean a lack of analysis of the finding of the Tribunal. The relevant finding was crucial to the appellant's argument. It was the Tribunal's ultimate conclusion that he had not suffered harm within the meaning of the Convention. Being a factual finding on the part of the Tribunal (even if it was in error for which there is no support other than the appellant's assertions), that of itself would not be sufficient to constitute jurisdictional error. This ground of appeal, in essence, simply seeks a merits review which is not available to the appellant on this appeal. 21 This ground must be dismissed. Ground 2 – Natural justice and s 424A of the Act 22 As to the second ground, it may be that the appellant has not understood the process. To appreciate the approach of the Tribunal it is necessary to examine both [33] and [34] below in which his Honour said: 33. Part (b) of the ground in the further amended application claims that the Tribunal failed to issue the applicant with a s.424A notice. Although not clearly particularised, it would appear that the applicant believes that the Tribunal may have relied upon his statement attached to his original protection visa application. An examination of the Court Book indicates that the statement was prepared by the applicant's wife but was not re-submitted with the application for review before the Tribunal. The Tribunal decision reproduces part of the translated statement under the heading "Claims and Evidence". The decision also set out, in considerable detail, the discussion between the applicant and the Tribunal member at the hearing: CB 81-83. In addition, it referred to a brief oral submission by the applicant's adviser and the country information referred to by the Tribunal. 34. The decision also sets out the following paragraph which explains how the Tribunal dealt with the statement and evidence given by the applicant (CB 84): In consideration of the evidence as a whole and for reasons outlined below, the Tribunal is not satisfied that the applicant is a member of the Samajwadi Party. The Tribunal notes that there are some differences in the information contained in the Statement provided in support of the application and the applicant's oral testimony. Given the applicant's evidence that his wife had prepared that document, in reaching its findings, the Tribunal has not relied on any noted inconsistencies. In the circumstances, I am satisfied that the Tribunal was not obliged to issue the applicant with a s 424A letter. 23 As indicated from this extract, the Tribunal has made allowances for inconsistencies which are allowances made in favour of the appellant rather than against him. In other words, to the extent there were inconsistencies which were capable of being attributed to the preparation of the document by the appellant's wife, then the Tribunal did not take into account any such inconsistencies. 24 The appellant appears to consider that the Tribunal has acted adversely to his interests in this regard whereas it is clear that the Tribunal has taken into account his explanation for the inconsistencies and out of an abundance of caution acted in his interests in relation to those inconsistencies in the manner outlined above. 25 It is clear, in my opinion, there was no jurisdictional error either in the decision of the Tribunal or in the decision of the Federal Magistrate. CONCLUSION 26 The appeal will bedismissed. The appellant is to pay the costs of the first respondent fixed at $2,700. I certify that the preceding twenty- six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. Associate: Dated: 27 February 2008 The Appellant represented himself Counsel for the First Respondent: SA Sirtes Solicitor for the First Respondent: Clayton Utz Date of Hearing: 26 February 2008 Date of Judgment: 27 February 2008	5,215
federal_court_of_australia:fca/single/1997/1997fca1442	decision	commonwealth	federal_court_of_australia	text/html	1997-12-18 00:00:00	Wily, Hugh Jenner v St George Partnership Banking Ltd [1997] FCA 1442	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1997/1997fca1442	2024-09-13T22:48:45.431425+10:00	FEDERAL COURT OF AUSTRALIA CORPORATIONS LAW - whether payments made by company in liquidation to the holder of an uncrystallised floating charge voidable transactions under s 122(1) of the Bankruptcy Act 1966 as applicable to companies in liquidation by reason of s 565 of the Corporations Law - whether regard should be had to s 221P(2) of the Income Tax Assessment Act 1936 in considering whether payments voidable transactions - whether holder of floating charge has equitable interest in the funds the subject of the charge. Bankruptcy Act 1966, s 122 Corporations Law, ss 474(2), 553E, 554E, 565 Income Tax Assessment Act 1936, s 221P Companies (New South Wales) Code, s 364 Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360, applied Re Asiatic Electric Co Pty Ltd & The Companies Act [1970] 2 NSWLR 612, applied Federal Commissioner of Taxation v Card (1963) 109 CLR 177, applied The Governments Stock and Other Securities Investment Co Ltd v The Manila Railway Company Ltd [1897] AC 81, referred to Illingworth v Houldsworth [1904] AC 335, referred to KLDE Pty Ltd v Commissioner of Stamp Duties (Qld) (1983) 155 CLR 288, applied Driver v Broad [1893] 1 QB 744, referred to Hamilton v Hunter (1982) 7 ACLR 295, referred to Wily v The Commonwealth (1996) 66 FCR 206, considered and applied Lyford v Commonwealth Bank of Australia (1995) 130 ALR 267, applied Sheahan v Carrier Air Conditioning Pty Ltd (1997) 71 ALJR 1223, applied Ex parte Cooper; In re Zucco (1895) 10 Ch App 510, applied Willmott v London Celluloid Co (1886) 31 ChD 425, applied In Re Yagerphone Ltd [1935] Ch 392, applied N A Kratzmann Pty Ltd (in liq) v Tucker (No 2) (1968) 123 CLR 295; applied Re Discovery Books Pty Ltd (1972) 20 FLR 470, applied Airservices Australia v Ferrier (1995) 185 CLR 483, referred to and applied Burns v Stapleton (1959) 102 CLR 97, applied National Australia Bank v KDS Construction Services Pty Ltd (1987) 163 CLR, referred to HUGH JENNER WILY v ST GEORGE PARTNERSHIP BANKING LIMITED NG 3453 of 1996 HILL J SYDNEY 18 DECEMBER 1997 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 3453 of 1996 BETWEEN: HUGH JENNER WILY IN HIS CAPACITY AS OFFICIAL LIQUIDATOR OF SPACE MADE PTY LIMITED (IN LIQUIDATION) Applicant AND: ST. GEORGE PARTNERSHIP BANKING LIMITED (formerly barclays bank australia limited) Respondent JUDGE: HILL J DATE OF ORDER: 18 DECEMBER 1997 WHERE MADE: SYDNEY THE COURT DECLARES THAT: The following payments made by Space Made Pty Limited to the respondent are not voidable transactions pursuant to s 122(1) of the Bankruptcy Act 1966, as applicable to companies in liquidation by reason of the provisions of s 565 of the Corporations Law: (i) $900,000 on 15 February 1991; (ii) $100,000 on 19 April 1991; and (iii) $112,000 on 29 April 1991. THE COURT ORDERS THAT: The applicant pay the 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 NG 3453 of 1996 BETWEEN: HUGH JENNER WILY IN HIS CAPACITY AS OFFICIAL LIQUIDATOR OF SPACE MADE PTY LIMITED (IN LIQUIDATION) Applicant AND: ST. GEORGE PARTNERSHIP BANKING LIMITED (formerly barclays bank australia limited) Respondent JUDGE(S): HILL J DATE: 18 DECEMBER 1997 PLACE: SYDNEY REASONS FOR JUDGMENT Mr Hugh Jenner Wily is the Official Liquidator of Space Made Pty Limited (in liquidation) ("the company"). He seeks a declaration that three payments made by the company between 15 February 1991 and 29 April 1991 are voidable transactions pursuant to s 122(1) of the Bankruptcy Act 1966, ("the Bankruptcy Act") as made applicable to companies in liquidation by reason of s 565 of the Corporations Law ("the Law"). He seeks as well an order that St George Partnership Banking Limited, formerly called Barclays Bank Australia Limited ("the Bank"), the recipient of the payments, repay to him the sum of $1,112,000, that being the total of them. There is no dispute as to the facts, although to some extent the detail is scant. As at 15 February 1991 and all relevant times thereafter, the company was unable to pay its debts as they became due from its own money. It was at that time, and at all relevant times thereafter, indebted to the Commissioner of Taxation in the sum of $786,491 for group tax which it had failed to deduct from the salary or wages of its employees and remit to the Commissioner and $872,748 for sales tax which it was liable to pay to the Commissioner but which it had not paid. On 20 July 1988 the company had executed a deed of charge, to secure all monies then or thereafter owing to the Bank. The charge was a fixed charge on all present and future freehold and leasehold property, plant and machinery, uncalled and called but unpaid capital, goodwill, securities and other personal property and a floating charge on the rest of the "Mortgaged Property" defined as in essence all the undertaking of the company and all its property present or future. The charge was duly registered. As at 31 January 1990 it appears to have been evident to the company and the Bank that the company's financial position was not sound. A proposal was put to the Bank that a company called Artisan Industries Pty Ltd ("Artisan") ("an untraded shelf co") would borrow from the Bank $600,000 on the security of assets transferred to it by Space Made Industries Limited ("Space Made Industries") in exchange for issued capital. The money so borrowed would be used by Artisan to purchase stock and debtors from the company. The company would sell by auction its plant and equipment and stock not required by Artisan and use the proceeds of the auction and the sale to Artisan to pay out the Bank. A company called Game Time (Australia) Pty Limited ("Game Time") was to lend the company $300,000 which was to be used by the company in part to repay the Bank. On 18 February the proposal was substantially implemented. Space Made Industries took the role of Artisan. It may be that Artisan changed its name, or it may be that Space Made Industries was an existing company and was substituted for it. That is not of any significance for present purposes. All that is necessary to know is that two cheques, one from Game Time for $300,000 and one from Space Made Industries for $600,000, were paid to the company. In each case the Bank provided, by way of overdraft accommodation to the companies making the payment, the funds to enable them so to do. These cheques were then deposited by the company to its account with the Bank and thus reduced the amount the company owed the Bank. An auction took place on 16 April 1991. Together with the proceeds of the realisation of plant and equipment which had, it seems, been sold privately, the company realised approximately $310,000 before commission. In consequence the company deposited to its account with the Bank certain amounts. Although the evidence suggests that the amount deposited to the company's account on 29 April 1991 was in excess of the amount of $112,000 referred to in the statement of claim, nothing turns upon this. The effect of the pleadings is an agreement between the parties that there was paid to the Bank by or on behalf of the company and in reduction of the company's indebtedness to the Bank, $100,000 on 19 April 1991 and $112,000 on 29 April 1991 respectively. Proceedings to wind up the company commenced on 7 May 1991 and an order was made on 31 July 1991 that the company be wound up and that Mr Wily be appointed its liquidator. The statement of affairs prepared by a director of the company and dated 23 September 1991 shows the company with only two assets as at 31 July 1991, debtors with a face value of $22,763 but a realisable value of $3,908, and a brand name with a realisable value of $1,000. There was an excess of liabilities over assets of $2,576,913. The deed granting to the Bank its charge provided that that part of the charge which was a floating charge would become fixed upon the giving by the Bank of a notice in writing and without notice, inter alia, on the happening of the following events: "(k) an application or order is made or a resolution is passed for the winding up of the Company or notice of intention to propose such a resolution is given; ... (m) the Company is unable to pay its debts within the meaning of section 364(2) of the Companies Code;". THE APPLICABLE LAW The winding up of the company was governed by the provisions of the Law. By force of the Law (s 565(1)), as then applicable, a payment made by a company, which if made by an individual would have been void as against the trustee in bankruptcy is, in the event that a company is wound up, void as against the liquidator. Thus there is incorporated into the Law governing a winding up the provisions of s 122 of the Bankruptcy Act. That section provided at the relevant time as follows: "(1) A conveyance or transfer of property, a charge on property, or a payment made, or an obligation incurred, by a person who is unable to pay his debts as they become due from his own money (in this section referred to as "the debtor"), in favour of a creditor, having the effect of giving that creditor a preference, priority or advantage over other creditors, being a conveyance, transfer, charge, payment or obligation executed, made or incurred: (a) within 6 months before the presentation of a petition on which, or by virtue of which, or by virtue of the presentation of which, the debtor becomes a bankrupt; or (b) on or after the day on which the petition on which, or by virtue of presentation of which, the debtor becomes a bankrupt is presented and before the day on which the debtor becomes a bankrupt; is void as against the trustee in the bankruptcy." For the purposes of its application to a winding up, s 122 is to be read for present purposes as if it referred to the filing of an application to wind up the company, rather than the presentation of a bankruptcy petition. Although there are obvious analogies between the bankruptcy of an individual and the winding up of a company, there are necessarily differences. In bankruptcy the property of the bankrupt, defined to include amounts divisible among creditors under s 122, vests in the trustee in bankruptcy, but subject to the rights of a secured creditor to deal with property the subject of any security. In the winding up of a company the assets of the company remain vested in the company subject to any security over them, but come under the control of the liquidator who takes the position of the directors, in the absence of an order being made under s 474(2) of the Law vesting the property of the company in the liquidator. So, although proceedings are brought in the name of the liquidator to recover amounts which constitute a preference, if successful, the proceedings will result in an order that the relevant property or money be transferred or paid to the company, rather than the liquidator: Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 372. Generally speaking, the principles applicable in bankruptcy as to proofs of debt apply to, or mirror, those applicable in a winding up: s 553E of the Law. Section 554E of the Law deals specifically, however, with the lodgment of proofs of debt by secured creditors. A secured creditor may not prove in the winding up for the whole of the secured debt unless the creditor surrenders the security for the benefit of creditors generally. If the secured creditor realises the security and there is a shortfall, there may be a proof in respect of that shortfall. The secured creditor has, what Street J called its "property rights", existing outside the winding up which it is entitled to enjoy to the exclusion of the liquidator except in so far as there is some statutory inroad made into them: Re Asiatic Electric Co Pty Ltd & The Companies Act [1970] 2 NSWLR 612 at 614. So too, generally speaking, the statutory order of distribution among creditors in a winding up will mirror that in bankruptcy. Such differences as there are are not, for present purposes, material. In the course of the winding up the liquidator, who is for the purpose of the Income Tax Assessment Act (1936) a "trustee", was obliged to abide by s 221P of that Act, which was in the following terms: "(1) Where an employer makes a deduction...from the salary or wages paid to an employee and refuses or fails to deal with the amount so deducted in the manner required by this Division... he shall be liable, and where his property has become vested in, or where the control of his property has passed to, a trustee, the trustee shall be liable, to pay that amount to the Commissioner." (2) Notwithstanding anything contained in any other law of the Commonwealth, or in any law of a State or of the Northern Territory - (a) an amount payable to the Commissioner by a trustee in pursuance of this section has priority over all other debts ... whether preferential, secured, or unsecured;". So, the liquidator, having control of the property of the company, was obliged in the winding up to pay to the Commissioner in the present case, in priority to other creditors, the sum of $786,491. The liability of the liquidator is, fortunately, limited to the extent of the assets which vest in, or which are under, the control of the liquidator. It is not unlimited, as the language of the section might otherwise suggest, and the Commissioner at one stage asserted: Federal Commissioner of Taxation v Card (1963) 109 CLR 177. THE SUBMISSIONS OF THE LIQUIDATOR It was submitted by senior counsel for the liquidator that the payments made to the Bank in reduction of the overdraft account of the company fell within s 122 of the Bankruptcy Act made applicable in the winding up of the company, notwithstanding the existence of the charge in favour of the Bank. For its part the Bank relied upon its charge. It was, it said, a secured creditor and a payment by a debtor to a secured creditor was not, it argued, a preference, except in a case (not the present case) where a payment to the secured creditor exceeded the value of its security. The specific submissions advanced by the liquidator may be summarised as follows: · Because the charge was a floating charge and had not crystallised, it conferred upon the Bank no proprietary interest and so was to be ignored in determining whether the payments were preferences for the purpose of s122 of the Bankruptcy Act. · Whether or not the charge conferred a proprietary interest upon the Bank the payments to the Bank had a preferential effect at the time when the payments were made, that being the relevant time to consider the matter rather than the time of an ultimate winding up for, at the time the payments were made, the charge had not crystallised and the Bank was thus unsecured. · Even if s 122 presupposes a notional liquidation taking place on the date of payment (that being contended for by the Bank) that notional liquidation would bring into play the provisions of s 221P of the Income Tax Assessment Act 1936 and in consequence would operate as against the Commissioner to confer upon the Bank a preference which otherwise it would not have. THE NATURE OF A THE CHARGEE'S RIGHTS TO THE ASSETS THE SUBJECT OF A FLOATING CHARGE At the forefront of the liquidator's case lay the submission that a floating charge before crystallisation did not confer an interest in the property the subject of the charge. The argument advanced was that because the charge had not crystallised the Bank had no entitlement to possession of, or indeed any interest in, the monies it received other than as a creditor. To put it in another way, the Bank at the time the payments were made stood, it was said, in no different position to any other unsecured creditor, so that to the extent that it received a benefit in excess of the rateable division of assets among unsecured creditors there was a preference. For reasons which will emerge, it is not in my view necessary, in the resolution of the present case, to determine whether, as the liquidator contends, a floating charge does not confer an interest in property in equity upon the beneficiary of the security or, as the Bank contends it does. And indeed, considering the already voluminous literature on the subject, I feel somewhat loathe to add yet another expression of opinion to it. However, as it was at the forefront of the liquidator's argument I feel constrained to deal with the issue. If I were to approach the matter without regard to precedent or the learned commentaries upon the topic, but rather with an eye to principle, I would be inclined to the view that until a floating charge crystallised it conferred no equitable interest upon the chargee in the assets the subject of the floating charge. Lord Macnaghten, in two cases, quoted whenever the nature of a floating charge is called into question, assayed descriptions of floating charges as they had developed around the turn of the century. I say descriptions, because his Lordship was careful to make it clear that he was not attempting to provide definitions. So, in The Governments Stock and Other Securities Investment Co Ltd v The Manila Railway Company Ltd [1897] AC 81 at 86 his Lordship said: "A floating security is an equitable charge on the assets for the time being of a going concern. It attaches to the subject charged in the varying condition in which it happens to be from time to time. It is of the essence of such a charge that it remains dormant until the undertaking charged ceases to be a going concern, or until the person in whose favour the charge is created intervenes." Subsequently in Illingworth v Houldsworth [1904] AC 355 at 358 his Lordship said: "A specific charge, I think, is one that without more fastens on ascertained and definite property or property capable of being ascertained and defined; a floating charge, on the other hand, is ambulatory and shifting in its nature, hovering over and so to speak floating with the property which it is intended to affect until some event occurs or some act is done which causes it to settle and fasten on the subject of the charge within its reach and grasp." No doubt Lord Macnaghten would view with some incredulity modern developments in both the drafting and concept inherent in floating charges. Nevertheless, the three essential characteristics which Romer LJ identified in Re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284 at 295, from which judgment Illingworth was the appeal, may still be found, namely a charge on a class of assets of the company, present or future, the class being one which in the ordinary course of business changes from time to time and the contemplation being that until some future step is taken by or on behalf of those interested in the charge the company may carry on its business in the ordinary way employing that class of assets in the business. A charge is no more than an agreement that a debt may be satisfied out of a particular fund. What differentiates the floating charge from the fixed charge is that the actual content of the fund will not be capable of identification until the security crystallises, although the general nature of the fund will be known. It would not, however, be correct to say that a floating charge is but a future security. It operates as a present security, in the sense that it will be available to the mortgagee as and from the time it is given, although crystallisation may occur in the future. The charge and remedies to enforce it remain dormant until the happening of some event which the parties agree will operate to fix the security. It takes the form it does because the person giving the charge ("the borrower") desires (perhaps needs) to deal with the assets the subject of the security in the ordinary course of business, and without the need to seek for each dealing the consent of the chargee. It is a consequence of the agreement of the lender that the borrower may deal with the assets the subject of the floating charge in the ordinary course of business that the lender is entitled to injunctive relief to restrain the borrower from dealing with the assets otherwise than in the ordinary course of business: Re Hamilton Young & Co; Ex parte Carter [1905] 2 KB 772. In the event of default the Court will intervene to appoint a receiver to permit enforcement of the charge or enforce the contractual rights in the charge by way of specific performance. But it does not follow from the entitlement to injunctive relief that the chargee has an equitable interest in the property the subject of the charge. There may be said to be an analogy between the nature of the interest of a chargee and that of a purchaser under a contract for the sale of land, although the analogy is far from complete. A purchaser under an unconditional contract of sale clearly has an equitable interest in the property the subject of the agreement. Indeed in such a case the purchaser has been said to be for some purposes, at least, the beneficial owner: KLDE Pty Ltd v Commissioner of Stamp Duties (Qld) (1983) 155 CLR 288. The interest is commensurate with the right of the purchaser to relief in equity by way of specific enforcement. However, if the contract be conditional, so that specific performance of it would not be granted, it is usual to say that no equitable interest is conferred upon the purchaser: eg Brown v Heffer (1967) 116 CLR 344. This is so notwithstanding that the purchaser could obtain injunctive relief restraining the vendor from dealing with the property inconsistently with the contract, and obtain the assistance of the Court to compel the vendor to do that which was necessary on the part of the vendor to have the condition performed: but see the discussion in the joint judgment of Deane and Dawson JJ in Stern v McArthur (1987-8) 165 CLR 489 at 523-4. So it might be said that even if the holder of a fixed charge has an equitable interest in the subject matter of the charge, the fact that the charge is conditional upon the happening of an event of default, in the sense that it is only then that the charge will become fixed, may suggest that no equitable interest arises until the happening of the event of default. There is another, and quite close analogy which would produce the same result. A beneficiary in an estate which is subject to a trust for sale has been held not to have an interest in the assets of that estate, which like the assets the subject of the floating charge, may be a fluctuating fund: In re Smyth; Leach v Leach [1898] 1 Ch 89 and cf the rights of an annuitant in a fluctuating fund held in Favorke v Steinkopff [1922] 1 Ch 174 not to constitute an interest in that fund. However, as I have already indicated, there is a wealth of authority, unfortunately conflicting, on the question. One line of authority, that in support of the view that the chargee has no equitable interest in the assets the subject of the floating charge, is to be found in Evans v Rival Granite Quarries Limited [1910] 2 KB 979 and is claimed to enjoy the support of Gibbs CJ as expressed in Luckins v Highway Motel (Carnarvon) Pty Ltd (1975) 133 CLR 164 and dicta in United Builders Pty Ltd v Mutual Acceptance Ltd (1980) 144 CLR 673 at 681-2 and 686. In the former case the question arose whether a debenture holder under a floating charge could, prior to crystallisation of the charge prevent execution against an asset the subject of the floating charge by way of garnisheeing a debt. It was held that the debenture holder could not. In one sense the case required no more to be decided than that execution did not operate to crystallise the particular security. However, in the course of the judgments each of their Lordships commented upon the nature of a floating charge and the rights of the chargee. Buckley LJ said (at 999-1000): "A floating security is not a future security; it is a present security, which presently affects all the assets of the company expressed to be included in it. On the other hand, it is not a specific security; the holder cannot affirm that the assets are specifically mortgaged to him. The assets are mortgaged in such a way that the mortgagor can deal with them without the concurrence of the mortgagee. A floating security is not a specific mortgage of the assets, plus a licence to the mortgagor to dispose of them in the course of his business, but is a floating mortgage applying to every item comprised in the security, but not specifically affecting any item until some event occurs or some act on the part of the mortgagee is done which causes it to crystallise into a fixed security.... it is a mortgage presently affecting all the items expressed to be included in it, but not specifically affecting any item till the happening of the event which causes the security to crystallise as regards all the items." His Lordship continued (at 1002): "In the result there is nothing to prevent us from affirming the following proposition ... no equity arises in a debenture-holder, whose security is a floating charge ... he must do something to turn his security from a floating into a fixed charge." The issue in Luckins was whether a floating charge answered the description of "a charge on property outside the State". It was not necessary, for the purposes of the case for the Court to decide whether the chargee under a floating charge did or did not have an interest in the assets the subject of the charge. In the course of his judgment Gibbs J, as his Honour then was, cited the description of a floating charge given by Lord Macnaghten in Government Stocks and Other Securities Investment Co Ltd v Manila Railway Ltd set out above and continued (at 173): "In other words, although a floating charge is an existing charge - a present security - it does not specifically affect any asset subject to it until it crystallises into a fixed security: see Evans v Rival Granite Quarries Ltd." One may be forgiven for saying that to say that a floating charge does not specifically affect the asset the subject of the charge is not necessarily to say that the chargee has no equitable interest in the asset. It is no more than a description of a floating charge. The comments in United Builders are if a similar order. Be that as it may the comments of Gibbs J were relied upon by Williams J in Tricontinental Corporation Ltd v Federal Commissioner of Taxation (1987) 87 FLR 453 at 454, as constituting along with other dicta there referred to a "strong line of authority" in support of the proposition that prior to crystallisation the mortgagee has no proprietary interest in the property the subject of a floating charge and the other members of the Full Court of the Supreme Court of Queensland appear to have taken a similar view in following Evans v Rival Granite Quarries Limited. Special leave was refused by the High Court to appeal from this decision. The view that no equitable interest is created in the chargee was accepted by Nicholson J in this Court in Lyford v Commonwealth Bank of Australia (1995) 130 ALR 267. The issue raised in that case was whether a floating charge might constitute a "settlement" for the purposes of s 120 of the Bankruptcy Act. It was held that because no equitable interest was created in the chargee until the charge crystallised there could be no disposition of property and hence no settlement falling within s 120. His Honour reviewed the authorities and academic literature but considered that in the light of the decision in Tricontinental, the reasoning of which his Honour accepted, no equity was created in the assets the subject of a floating charge until crystallisation. The contrary line of authorities includes the following cases, all cited by Nicholson J: Driver v Broad [1893] 1 QB 744; Wallace v Evershed [1899] 1 Ch 891 and Re Dawson [1915] 1 Ch 626 in the United Kingdom and Landall Holdings Ltd v Caratti [1979] WAR 97; Hamilton v Hunter (1982) 7 ACLR 295 at 306 per Holland J; Re Margart Pty Ltd (in liq) and Hamilton v Westpac Banking Corp (1984) 9 ACLR 269 at 272 per Helsham CJ in Australia. There is also the decision of a Full Court of this Court in Wiley v The Commonwealth (1996) 66 FCR 206 decided approximately a year later than Lyford which is relied upon by counsel for the liquidator. In Driver v Broad the issue for decision was whether a floating charge over land required writing for the purposes of the Statute of Frauds. That in turn depended upon whether it was a contract which dealt with "lands, tenements, or hereditaments or any interest in or concerning them". The argument was that no interest in the land was created. The argument was rejected. The situation was said to be the same whether the charge was fixed or floating. Kay LJ (at 748-749) expressed his Lordship's view as follows, speaking of a floating security: "That term only expresses what is more fully expressed in the conditions ...viz, that the company shall, notwithstanding the debentures, be at liberty to carry on its business, and in the ordinary course of such business to dispose of the property, as if the debentures did not exist. That is the ordinary meaning of the term "floating security". It does not mean that there is not to be a charge and an immediate charge, on the property, but merely that, notwithstanding the existence of the charge on all the property, including the real property, of the company, power is reserved to dispose of the property if in the ordinary courts of carrying on the company's business it becomes necessary to do so. The charge is none the less a charge because such a power is reserved... I have no doubt that these debentures did create an immediate charge on the land and buildings, which the company had when they were given, and therefore did create an interest in land. " Re Margart saw Helsham CJ in Eq consider the matter in the context of a realisation of assets of a company after the commencement of the winding up where the proceeds of the realisation were paid to the holder of a charge which was treated in the judgment as not having crystallised as at the time of payment. The argument was that the payments to the chargee were dispositions of its property by the company. It was held they were not. In coming to this conclusion the learned Chief Judge in Equity accepted what had been said by Holland J in the earlier case of Hamilton v Hunter (1982) 7 ACLR 295 where his Honour said (at 306): "The judgments in some of the cases are expressed, and the plaintiff's argument was put, as if the mortgagee had no proprietary interest whatever in the assets the subject of a floating charge until 'crystallization' occurred. I do not see why that should be so. The correct view would seem to me to be that from the commencement of a floating charge the mortgagee has an immediate and continuing equitable charge over the mortgagor's assets but it is subject to the right of the company to dispose of or deal with the assets free of or released from the charge to the extent that may properly be implied from the common intention of the parties that the company will continue to carry on its business or operations until the occurrence of some stipulated or contemplated event:" In the view of Helsham CJ the expression "disposition of the property of the company" with which his Honour was concerned referred only to a disposition of property with which the company was free to deal. Property the subject of a floating charge, albeit that the charge had not crystallised, was not within this description. In Wily v The Commonwealth the liquidator sought to recover from the Commonwealth amounts which the receivers and managers of a company had paid by way of television licence fees after the commencement of the winding up. The issue was thus the same as in Re Margart, namely, whether the monies paid were dispositions of the property of the company. At the time of payment the charge had crystallised, so that the question whether a chargee had an interest in the assets the subject of a floating charge did not arise for decision. All judges on the appeal accepted the correctness of Re Margart. But they did so not in the context of a floating charge, but in the context of a fixed charge. In my view, the case can not be seen as authority for the proposition that a floating charge does confer an interest in the assets the subject of the charge. As might be expected the views of academic writers are as diverse as the authorities which they consider. I do not propose to discuss them at length. Ms Everett in her monograph The Nature of Fixed and Floating Charges as Security Devices, Law Press, Faculty of Law, Monash University, 1988 espouses the view that a floating charge confers no proprietary interest. She seems, however, to be of the view (see p2) that fixed charges likewise operate in personam, and confer no proprietary interest, a view somewhat at odds with authority. But perhaps I do her a disservice in so stating her views. Dr Gough, in his chapter printed in Equity and Commercial Relationships, edited by Professor Finn, as his Honour then was, (The Law Book Co Ltd, 1987) dismissed as a "misconception" the theory that a floating charge creates an immediate, although defeasible interest subject to a licence to deal with the asset. Commenting on that paper (the commentary is included at the end of the chapter) McClelland J points to Driver v Broad and the other English cases mentioned above as holding that such an interest existed, emphasising that none of those cases had been overruled. It emerges from some of his Honour's comments that he was of the view that consideration should be given to the terms in which the parties to the transaction have expressed themselves, and that different outcomes might flow from them. More recently Dr Gough in his work Company Charges, Butterworths, 1996 has restated his earlier view. His dismissal of some of the cases opposed to his position is not particularly satisfactory. Farrar and Trotman in their chapter "Charges" in Australian Corporation Law, Butterworths, 1991 find Dr Gough's position unsatisfactory. Professor Ford in his Principles of Corporations Law, Vol 2, Butterworths, 1995 states at 19,141 the two competing theories but comes out in favour of the view that the chargee does have a proprietary interest in the fund of changing assets. Goode in his work Commercial Law, 2d ed, Penguin Books, 1982 appears to support the no interest view. The result of the above dissertation can hardly be said to be satisfactory. The diverging views stem in part, at least, from the use of inexact language. But not all can be dismissed so easily. On the whole I think that the prevailing view, and the view that accords best with principle is that the chargee under a floating charge does not have an equitable interest in the assets the subject of the floating charge from time to time. The decision in Wily v The Commonwealth does not require me to take a different view. Indeed it cites with approval the decision of Nicholson J in Lyford which, as a matter of comity I would follow unless of the view that it is clearly wrong. In the state of conflicting authority which exists it would be a brave person indeed who would be prepared to say of either view that it is clearly wrong. Hence, if the outcome of the present case depended upon the resolution of that issue, I would find for the applicant. But I do not think that it does. I turn to deal with other and more ultimately significant matters. WAS THERE A PREFERENCE? Some brief observations must now be made as to the application of s 122 of the Bankruptcy Act. They are not controversial, but they are important. First, it must be said that the purpose of s 122(1) is to recoup the estate of a bankrupt where moneys of the bankrupt have been paid preferentially. The recoupment is for the benefit of the general body of creditors, so that they can share rateably in it. To use the language of Gibbs CJ in Sheahan v Carrier Air Conditioning Pty Ltd (1997) 71 ALJR 1223 at 1230: "The language of s 122(1) - 'preference, priority or advantage' - shows that the section is concerned with the effect of payments made to a creditor payee who is in competition with other creditors for a share in the bankrupt's estate. The only preference with which s 122(1) is concerned is a preference as between the payee and the other general creditors who would otherwise be entitled to share in the money paid." Thus the liquidator could not be compelled to bring proceedings to recover an amount for the benefit of a secured creditor, and a fortiori a secured creditor could not bring proceedings, either in his own name or in the name of the liquidator/trustee, to recover a preference: Ex parte Cooper; In re Zucco (1875) 10 Ch App 510; Willmott v London Celluloid Co (1886) 31 ChD 425; (1886) 34 Ch D 147; In re Yagerphone Ltd [1935] Ch 392 at 395 and N A Kratzmann Pty Ltd (in liq) v Tucker (No 2) (1968) 123 CLR 295. The onus rests upon the liquidator to prove the elements of s 122(1): Re Discovery Books Pty Ltd (1972) 20 FLR 470 at 478. Of course, the tactical onus may shift during a trial, but nevertheless the overall burden will lie with the liquidator. The elements necessary to be proved are (in a case where the claimed preference is constituted by a payment that is made by a company) : · a payment by the company · the payee of that payment is a creditor; · insolvency of the company at the time of payment; · the preferring effect of the payment; and · the timing of the payment, it being a requirement that the payment be made six months before the relation back date. The preferring effect is determined objectively. However, as the joint judgment of Dawson, Gaudron and McHugh JJ in Airservices Australia v Ferrier (1995) 185 CLR 483 points out, this does not mean that intent will necessarily be irrelevant, particularly where, the payment may be seen to be part of a wider transaction. So, where the payment is, as it was in Airservices Australia, a payment made in the course of a running account between the debtor and creditor, the purpose for which the payment is made and received may determine the preferential effect. Further, the question whether the necessary preferential effect exists must be considered as at the time the payment is made and not at the date of actual liquidation: Airservices Australia at 501, note 511 and the cases there referred to. What that means, as the cases such as Re Discovery Books makes clear, is that while the effect of the payment is to be judged after bankruptcy, the creditors to which s 122(1) refers are the creditors as at the time of the payment. Ultimately one comes back to decide whether there is less money available to the general body of creditors as a result of the payment than would otherwise have been the case. A payment will be a preference where if it stands it would "dislocate the statutory order of priorities amongst creditors": Burns v Stapleton (1959) 102 CLR 97. From this it follows, at least in the ordinary case, that the payment to a secured creditor in full or partial discharge of a secured debt will not be a preference, for it will not dislocate that statutory order. Thus, in a passage relied upon by the Bank the High Court comprising Mason CJ, Brennan, Deane, Dawson and Toohey JJ, said in National Australia Bank Ltd v KDS Construction Services Pty Ltd (1987) 163 CLR 668 at 679: "a payment received in discharge of a valid security cannot amount to a preference, priority or advantage within the meaning of s 122(1)." If that is an absolute proposition applicable to the Bank's security, there is nothing further to be said. However, there are two problems about accepting it to be so. The first is that the reference in the case to a valid security was a reference to a subsisting lien. The statement was not necessarily made in the context of a charge which was, at the time the payment was made, a floating charge. The second, is that the statement would, with respect, seem in any event too wide. There seems no reason in principle to doubt that a payment made to a secured creditor in reduction of his debt could be a preference where the payment made exceeded the value of the security so that the secured creditor received an amount greater than the creditor would have received as an unsecured creditor in the bankruptcy. To the extent that the security is inadequate the secured creditor may be treated for the purpose of insolvency laws as unsecured. But that is not the issue presently falling for consideration. The argument advanced for the liquidator is simple. It commences with the uncontroversial proposition stated above that the time for determining the preferential effect is the time the payment is made. It is then said, that as at this moment of time (contrast the situation at the time of liquidation when the charge would have crystallised) the Bank was merely the beneficiary of an uncrystallised charge, that is to say the Bank had no status at all as a secured creditor. Had a winding up taken place at this point of time the Bank would, of necessity, so it is said, have been required to share rateably with other creditors, the charge not having crystallised. So it is submitted, the payment was preferential, in that it preferred the Bank to the other unsecured creditors. The submission is, in my view, misconceived. I think it places rather more emphasis on the preferential effect as at the time of payment than was intended by the High Court in the passage from Airservices Australia cited above on the authority of which the submission is made. While one takes into account the creditors as at the time of payment, and not bankruptcy, one judges the preferential effect of the payment after the bankruptcy, but paying due regard to the events occurring at and after the time of payment. To determine whether there is a preference within the section it is necessary to determine whether the statutory order on winding up is dislocated in consequence of the payment to the creditor. For this purpose it probably matters not whether one considers the matter by reference to the actual bankruptcy or some hypothetical bankruptcy deemed to take place as at the time of payment, so long as one bears in mind that the other creditors of which s 122(1) speaks are creditors as at the time of payment. That is to say there is to be made a comparison between what the payee obtained on the one hand and what the payee and the general body of other creditors would have received had the payment not been made and the statutory order of distribution in the winding up prevailed. The reason why payment to a secured creditor (at least where the payment is not in excess of the value of the security) will not constitute a preference is because the general body of creditors will receive not a cent less in the bankruptcy than they would have received had the payment not been made. This is so whether the matter is tested at the time the payment is made by reference to the advantage on that day (in which event presumably the advantage is to be tested by reference to a hypothetical liquidation on that day) or by looking ultimately at what would later be available for distribution in the actual bankruptcy. But the same result will follow where the security is a floating charge. If it is necessary to determine the advantage as at the date of payment, then in a hypothetical liquidation the charge will have crystallised (presentation of a winding up application being an act of default) and the chargee would be entitled to enforce its security. If one looks at the matter by reference to the ultimate liquidation the same result necessarily follows for the chargee is entitled to deal with the assets charged pursuant to the security. In no way can it be said as a matter of language that the payment to the Bank could operate to prefer the Bank over the general body of creditors existing as at the time of the payment. Likewise, it is clear that the policy behind s 122 and the Bankruptcy Act generally is in no way breached by the result which the language of s 122(1) requires.. Bankruptcy is designed to ensure that the assets of a bankrupt will be distributed rateably among creditors save, in respect of secured creditors who do not surrender their security, that such creditors may exercise the rights which their security grants. Section 122(1) is designed to claw back payments made within six months of the bankruptcy which alter the rateable division by giving to one creditor an advantage that creditor would not have as against the general body of creditors in the bankruptcy. In the bankruptcy the chargee under a floating charge would be entitled to exercise its security rights. Had the payment not have been made to the Bank but the money retained by the company no creditor (for present purposes I leave aside the statutory priority of the Commissioner of Taxation) would have received a cent more than will now have been received. The general body of unsecured creditors would share rateably only the assets not subject to the charge which on liquidation at the latest crystallised. To say, therefore, that some preference or advantage accrued to the holder of a floating charge by virtue of a payment made before bankruptcy smacks of unreality. The payment to the Bank did not, to use the language of the majority judgment in Airservices Australia (at 502): "result in a decrease in the net value of the assets that are available to meet the competing demands of the other creditors." It is necessary, therefore, to consider whether this situation is altered, by virtue of the statutory priority given to the Commissioner of Taxation over secured creditors by force of s 221P(2) of the Income Tax Assessment Act. THE COMMISSIONER'S STATUTORY PRIORITY The provisions of s 221P(2) are, to say the least, "incredibly ill-drawn": per Menzies J in Commissioner of Taxation v Card (1963) 109 CLR 177 at 194. Perhaps the kindest thing that can be said of the section is that it has now been repealed. The submission which is advanced on behalf of the liquidator is that in considering whether a payment is a preference voidable under s 122(1), regard is to be had to s 221P(2). The consequence of the submission is that any payment to a secured creditor in circumstances where s 221P was ultimately applicable in the liquidation would be a preference, for it would result in the Commissioner as a result receiving less in the distribution to be made by the liquidator than would otherwise be the case. The submission, if correct, provides yet another qualification to the statement of the High Court in KDS Construction Services to which reference has earlier been made. In my view the submission is not correct. What s 122 is concerned with is the giving of a preference to the recipient of a payment over and above the general body of creditors. It is concerned with the dislocation of the statutory order on a winding up, as that order is embodied in the Bankruptcy Act, or the Law, not with the avoidance of a payment where the competition is between one secured creditor and another (the Commissioner whose rights under s 221P are analogous to those of a secured creditor having security over the whole insolvent estate) where the rights of both stand outside the insolvency legislation. WHEN DID THE FLOATING CHARGE CRYSTALLISE? It is appropriate now to note an argument of construction advanced by the Bank. It will be recalled that among the events of default which operated to crystallise the charge was the company becoming unable to pay its debts within the meaning of s 364(2) of the Companies (New South Wales) Code. It is argued that, having regard to the concession that the company was at the time of payment unable to pay its debts as they fell due, the charge had crystallised, with the consequence that the Bank was the beneficiary of a fixed charge, and in consequence at all relevant times clearly a secured creditor. Section 364(1) of the Companies (New South Wales) Code set out the grounds upon which a winding up order might be made, one of which is inability to pay debts. Subs (2) then provides: "For the purposes of sub-section (1), if- (a) a creditor by assignment or otherwise to whom the company is indebted in a sum exceeding $1,000 then due has served on the company a demand... (b) execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or (c) the Court, after taking into account any contingent and prospective liabilities of the company, is satisfied that the company is unable to pay its debts, the company shall be deemed to be unable to pay its debts." It is clear that neither pars (a) or (b) of the section apply. It is submitted for the Bank that the reference to s 364(2) should be interpreted so that even if pars (a) and (b) are not satisfied, if the company is unable to pay its debts that sufficies. For the liquidator it is submitted that the par (c) could only be called in aid if a Court had actually formed the satisfaction which is referred to in the paragraph. Since that had not happened, there had been no crystallisation. Neither interpretation is completely satisfactory. It can not have been intended that par (c) of s 364(2) have a literal application because the only way a Court could come to form a view under par (c) would be if a winding up application had been filed. But the filing of such an application is itself an act of default. So par (c) could never have application if it depended upon the Court forming an opinion. The question of interpretation is thus whether the reference to s 364(2) in cl 10(2)(m) of the deed of charge should be read as a reference only to pars (a) and (b), or whether the reference should be taken to encompass actual inability to pay debts in circumstances where a Court could reach no conclusion other than such inability. The question is one of impression. However, I am of the view that the proper interpretation of cl 10(2)(m) of the deed is that the reference to s 364(2) of the Companies (New South Wales) Code is a reference to so much of that section as could have application, that is to say, pars (a) and (b), with par (c) being, in the circumstances, otiose. I reach this conclusion fortified by the fact that the question whether a company is unable to pay its debts after taking into account contingent and prospective liabilities may well be a matter upon which minds could differ. It is for that reason that the Court is given a discretion in s 364(2)(c). The test would well be too vague and subjective to stipulate as an event operating to crystallise a charge. It would be vital that the parties would know with some precision that such an event has occurred. Each of the other matters chosen as acts of default in the deed are objectively ascertainable and involve no element of judgment. WHETHER THE LIQUIDATOR SATISFIED THE ONUS OF PROOF It was submitted on behalf of the Bank that the liquidator had not discharged the onus upon him to show the necessary preferential effect, assuming, as against the Bank that it was not for the purposes of s 122(1) to be treated as a fully secured creditor. I do not accept the submission. It is true that the evidence of the events in February and April 1991 is somewhat scant. However, it can be inferred that at the time of the payments there were no, or virtually no, assets subject to the fixed charge, those assets having been disposed of either at the auction or by sale to Space Made Industries. I am satisfied that the liquidator has demonstrated that if the Bank were to be treated as an unsecured creditor the payments would have had the effect of preferring the Bank over the general unsecured body of creditors. THE CIRCUMSTANCES OF THE IMPUGNED PAYMENTS It was submitted by counsel for the Bank that when consideration is given to the circumstances as a whole in which the payments made to the Bank occurred there was no preference. It is beyond controversy that in a particular case it may be necessary to look beyond the mere fact that payment has been made to a creditor in determining whether a payment has the necessary preferential effect: Richardson v Commercial Banking Co of Sydney Ltd (1952) 85 CLR 110 and Airservices Australia v Ferrier (1996) 185 CLR 483. Rather it is necessary to consider, as was said in the latter case (at 501-502): "whether by reason of the payment, or dealing, there is less money available for the general body of creditors." Where a payment forms part of a "wider transaction" or "running account" the facts may lead to the conclusion that the net effect of the transaction was not to give one creditor a preference, priority or advantage over other creditors. I fail to see on the present facts how reference to the overall transactions between the company, the Bank and related companies which I have earlier described avoids the conclusion that the payments in the present case would not have had a preferential effect if the Bank were to be regarded as an unsecured creditor. The facts make it clear that the intention of the transaction was to see the Bank paid out. The transaction has to be seen against the background described in a letter from the Chief Executive Officer of the company to the Bank dated 31 January 1990 of "liquidity problems within the group". The transaction is one where the Bank's facility with an insolvent company is wholly repaid and the business of that company transferred to a related company which the Bank finances. Far from demonstrating a non preferential effect, an examination of the wider transaction reinforces the preferential effect. CONCLUSION In summary, I am of the view that if the Bank is to be treated as an unsecured creditor, each of the payments would have the effect set out in s 122(1). I would find also that the Bank's floating charge had not crystallised at the time of any of the payments. However, I am of the view that, whether or not the Bank as chargee under its floating charge had a beneficial interest in the assets of the company the subject of the floating charge, payments by the company to the Bank in repayment of monies secured by the floating charge will not constitute a preference. Put in another way, I am of the view that the Bank is in the same position vis a vis s 122(1) as it would be if it had held a fixed charge. Further it is my view that for the purposes of s 122(1) consideration should not be given to s 221P(2) of the Income Tax Assessment Act, which stands outside the ordinary administration in bankruptcy of an insolvent company. Preference is to be determined by reference to the general body of creditors, not by reference to the statutory right which in the event of a winding up accrues to the Commissioner by force of the Income Tax Assessment Act. Accordingly, I would declare that the payments referred to in par 1 of the application were not voidable transactions pursuant to s 122(1) of the Bankruptcy Act as applicable to companies in liquidation by reason of the provisions of s 565 of the Law and order that the liquidator pay the costs of the Bank. I certify that this and the preceding twenty-two (22) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill Associate: Dated: 18 December 1997 Counsel for the Applicant: BAJ Coles QC and MA Ashhurst Solicitor for the Applicant: McCrohon Bergeng Counsel for the Respondent: SD Epstein Solicitor for the Respondent: Gadens Ridgeway Date of Hearing: 8 & 9 December 1997 Date of Judgment: 18 December 1997	12,268
federal_court_of_australia:fca/single/2012/2012fca1146	decision	commonwealth	federal_court_of_australia	text/html	2012-10-22 00:00:00	Ruautu Tara v Minister for Immigration and Citizenship [2012] FCA 1146	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2012/2012fca1146	2024-09-13T22:48:45.479139+10:00	FEDERAL COURT OF AUSTRALIA Ruautu Tara v Minister for Immigration and Citizenship [2012] FCA 1146 Citation: Ruautu Tara v Minister for Immigration and Citizenship [2012] FCA 1146 Appeal from: Ruautu Tara v Minister for Immigration and Citizenship [2012] AATA 79 Parties: MIKAERA RUAUTU TARA v MINISTER FOR IMMIGRATION AND CITIZENSHIP and ADMINISTRATIVE APPEALS TRIBUNAL File number: NSD 367 0F 2012 Judge: PERRAM J Date of judgment: 22 October 2012 Catchwords: ADMINISTRATIVE LAW – Procedural fairness – whether applicant had notice of line of reasoning ultimately adopted by Administrative Appeals Tribunal in affirming decision to cancel applicant's visa – whether line of reasoning was in fact adopted – whether line of reasoning was clear from Minister's submissions and other material provided to applicant – whether line of reasoning had been assumed by both parties before the Tribunal – whether any error could be cured by an opportunity to make further submissions at the conclusion of the hearing Legislation: Migration Act 1958 (Cth) s 501 Direction (No. 41)—Visa refusal and cancellation under s 501 cll 10.1, 10.1.1, 10.1.2 Cases cited: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 cited Kioa v West (1985) 159 CLR 550 applied Makasa v Minister for Immigration and Citizenship [2011] AATA 719 cited Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 cited Ruautu Tara v Minister for Immigration and Citizenship [2012] AATA 79 cited Date of hearing: 28 September 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 44 Counsel for the Applicant: N Poynder Solicitor for the Applicant: Legal Aid Commission of NSW Counsel for the First Respondent: J Smith Solicitor for the First Respondent: Minter Ellison Lawyers Counsel for the Second Respondent: The second respondent did not appear IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 367 0F 2012 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: MIKAERA RUAUTU TARA Applicant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGE: PERRAM J DATE OF ORDER: 22 OCTOBER 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Order absolute in the first instance for a writ of certiorari directed to the Administrative Appeals Tribunal to quash its order dated 13 February 2012 in review proceeding 5061 of 2011 affirming the decision under review. 2. Order absolute in the first instance for a writ of mandamus directed to the Administrative Appeals Tribunal to determine the applicant's review application in proceeding 5061 of 2011 according to law. 3. The first respondent pay the applicant'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 NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 367 0F 2012 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: MIKAERA RUAUTU TARA Applicant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGE: PERRAM J DATE: 22 october 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 Mr Ruautu Tara is a citizen of New Zealand born in 1973 and, therefore, 39 years old at the time of this litigation. He was born in the Cook Islands. He came to Australia in mid-2007 for a period of ten days and, in 2008, entered on a special class of visa available to New Zealanders which confers a right of residence. 2 Mr Ruautu Tara's visa has now been cancelled and he is presently in immigration detention awaiting, subject to the outcome of this litigation, removal from Australia. The decision to cancel his visa was initially made by a delegate of the Minister for Immigration and Citizenship ('the Minister') on 23 October 2011 and thereafter affirmed by the Administrative Appeals Tribunal ('the Tribunal') on 13 February 2012: Ruautu Tara v Minister for Immigration and Citizenship [2012] AATA 79. 3 Mr Ruautu Tara's visa was cancelled because he did not satisfy the character test established by s 501(6) of the Migration Act 1958 (Cth) ('the Act'); because that failure enlivened in the Minister (and his delegate) a discretion, although not an obligation, to cancel the visa under s 501(2); and because the delegate and later the Tribunal concluded that its appropriate exercise required cancellation. 4 Mr Ruautu Tara failed the character test because on 6 April 2010 he was convicted in the District Court of Queensland of sexual assault on a 17 year old girl. He was sentenced by McGinness DCJ to a period of imprisonment for 12 months. Her Honour required him to serve three months of this sentence but suspended the balance for a period of 12 months subject to his good behaviour. It followed, at least as a matter of form, that he had been sentenced to a term of imprisonment of 12 months or more (even though he only had to serve three months) with the consequence that he had a 'substantial criminal record' within the meaning of s 501(7) of the Act. A person with such a record does not pass the character test: s 501(6)(a). 5 As it happens this was not Mr Ruautu Tara's only brush with the law. The sexual assault to which the conviction of 6 April 2010 related had occurred on 25 October 2009. Between the time of that offence and his conviction therefor, Mr Ruautu Tara was also charged with a sexual assault on a young woman which was alleged to have occurred on 28 February 2010. Of this charge he was ultimately acquitted. 6 The complexities of this case emerge from the Tribunal's attempts to utilise some of the matters surrounding the offence of which he was acquitted in the exercise of its discretion under s 501(2). 7 The case was argued very ably on both sides with Mr Smith of counsel appearing for the Minister and Mr Poynder of counsel for Mr Ruautu Tara. 8 It is necessary to say something first of the Tribunal's hearing. During its review the Queensland Police Service ('the Police') had produced a bundle of documents to the Tribunal which, following pagination, became Exhibit R2. The bundle had included the Police's internal records concerning the alleged offence of which Mr Ruautu Tara had been acquitted. This contained a report which stated that prior to the incident the victim had met Mr Ruautu Tara at a hotel where they had both been drinking, that the victim had given Mr Ruautu Tara a lift home and that shortly afterwards he was alleged to have entered her home and sexually assaulted her. 9 At the hearing the Tribunal took Mr Ruautu Tara, who was unrepresented, through his evidence. There were some questions about the alleged offence of 28 February 2010 from the Tribunal but, in substance, these confirmed only that he had been acquitted. 10 Part of the Tribunal's process of reasoning (to which I return below) focussed on Mr Ruautu Tara's drinking habits. In this regard the Tribunal asked him about his drinking at the time of the offence of which he was convicted. The burden of this evidence was that at the time of the offence he had been drunk as a result of being out for a day of cultural celebration for Cook Islanders. The Tribunal also asked him about his drinking habits immediately before entering immigration detention (where there is no access to alcohol). His answer was that he still drank albeit not so much as before. The Tribunal did not ask him about his drinking habits at the time of the alleged offence of which he had been acquitted. 11 When the Tribunal concluded its examination of Mr Ruautu Tara he was cross-examined by the solicitor appearing for the Minister. This cross-examination ranged across two topics (for present purposes). First, he was asked about his pre-detention drinking habits. He accepted that he drank five or six extra-dry lagers on the weekend which made him a little bit drunk. He thought that if he were allowed to stay in Australia he would probably give up drinking. 12 Secondly, the Minister's solicitor sought to cross-examine Mr Ruautu Tara about the matter of which he had been acquitted. The end to which this cross-examination was directed was to show that the circumstances of the offence of which he had been acquitted were similar to those of which he had been convicted. The questioning commenced by showing him the remarks of the sentencing judge in respect of the offence for which he had been convicted. These contained a description of the offence. The cross-examination continued: Ms Weston (for the Minister): --- what was translated to you? Now, is that similar to the other offence that you were charged with? The facts that are – were just translated to you? Mr Ruautu Tara: No. Ms Weston: How was it different? Mr Ruautu Tara: Well, this one is – I understand, because I guilty of this one, and the offence is – I didn't do it. I'm not guilty. Ms Weston: But the woman who claimed you did something claimed you did something similar. Is that right? Ms Ettinger (the Tribunal member): Ms Weston, I won't allow that question. That's oppressive, and he was not convicted of the other charge. Ms Weston: Certainly, Senior Member. Don't worry about responding. 13 The Tribunal did not seek directly to use the offence of which he had been acquitted. It did, however, have some regard to it under the rubric of considering two matters which were mandatory to its consideration. The first of these was the seriousness and nature of the conduct. The conduct, of course, was the offence of which he had been convicted. The conduct was not, it should be emphasised, his drinking. So much is apparent from cl 10.1.1 of 'Direction (No. 41)—Visa refusal and cancellation under s 501' ('Direction 41') which makes it clear that the mandatory consideration of the seriousness and nature of the conduct is concerned with crimes, especially those involving violence. Sub-clause (1) provides: (1) Crimes involving violence or the threat of violence are of special concern to the welfare and safety of the Australian community. Those crimes involving violence, particularly against vulnerable persons (such as minors, the elderly and the disabled), are especially abhorrent to the whole community. 14 Sub-clause (2) then provided a list of 'offences and conduct that are considered serious' which began with 'murder' and did not, perhaps unsurprisingly, include being drunk. 15 When assessing the seriousness of the conduct constituting the conviction, the Tribunal approached the acquittal this way. First, it 'noted' that he had been charged with a sexual assault on 28 February 2010 but acquitted: [23]. It then noted at [25], having referred to the Tribunal's decision in Makasa v Minister for Immigration and Citizenship [2011] AATA 719, 'that a priori this Tribunal cannot go behind an acquittal'. 16 It went on to say this at [26]-[28]: 26. I noted from Judge McGuiness' [sic] statements and the documents of the Queensland Police Service at Exhibit R2, that Mr Ruautu Tara was affected by alcohol at the time of the 2009 sexual assault. I noted further that in relation to the events of 28 February 2010, the Police reported he had been drinking with the complainant at a hotel prior to the alleged assault. 27. The Applicant gave evidence that he was aware of his propensity to drink, and presently restricted his drinking to six or seven cans of beer on one day a weekend, or a couple after work some days. His evidence regarding the pattern of drinking was not consistent. I am mindful he has undertaken no rehabilitation, and no educational programs in relation to alcohol. His evidence was that he had not looked into any such programs. 28. Mr Ruautu Tara's conviction for sexual assault, the pending charges in New Zealand, and his propensity to alcohol which he has not addressed adequately, weigh against him remaining in Australia. 17 Taken together it is clear from these paragraphs that the Tribunal embraced a case that Mr Ruautu Tara had been drinking with the woman who reported the offence of which he had been acquitted. I draw this conclusion because one subject of [26]-[27] is Mr Ruautu Tara's propensity for alcohol and because otherwise the last sentence of [26] serves no purpose. It is not self-evident why the Tribunal was discussing Mr Ruautu Tara's propensity for alcohol at this point. The question which it was ostensibly addressing was how serious the offence he had been convicted of was. Whether Mr Ruautu Tara had a propensity to drink does not seem germane to that inquiry (except perhaps, at least at a theoretical level, by way of mitigation). 18 It was relevant, however, to the second mandatory matter that the Tribunal considered, namely, the risk of the conduct being repeated. This was made relevant, and therefore mandatory, by cl 10.1(2)(b) of Direction 41. 19 On that topic in relation to the alleged offence of which he had been acquitted the Tribunal said (at [33]): I am mindful of the role alcohol played in Mr Ruautu Tara's sexual assault in 2009, and the report that he had been drinking with the complainant in the February 2010 incident. I note also that he has not undertaken any rehabilitation or alcohol programs, and note that pursuant to paragraph 10.1.2(2)(b) of Direction 41, evidence of the extent of rehabilitation may be taken into account. There has been none that I know of in the Applicant's case. 20 It is plain from this paragraph that the Tribunal took into account the alleged fact that Mr Ruautu Tara had been drinking with the alleged victim prior to the offence for which he was acquitted. 21 The Tribunal therefore used some of the alleged facts surrounding the matter of which he was acquitted for two purposes: (a) as material indicating a propensity to alcohol consumption; and (b) as material indicating a propensity to commit sexual assaults whilst drunk. 22 Mr Ruautu Tara's case is that this was procedurally unfair because such a case was never put to him for his response. It is necessary to deal with these two matters separately. (a) Propensity to consume alcohol 23 I do not think Mr Ruautu Tara's argument should be accepted in relation merely to a propensity to consume alcohol. As Mr Smith submitted, the fact that Mr Ruautu Tara had had some difficulties with alcohol in the past was not really in issue (this is discussed below at [38]-[40]). In any event, the Tribunal's inquiry about this took place under the rubric of considering how serious the offence of which he had been convicted was. Apart from the proposition that being drunk was not a mitigating factor, these two topics do not appear to be connected in any useful way. Nevertheless, no argument was advanced that Mr Ruautu Tara's propensity for alcohol should not have been considered at all under the issue of 'seriousness and nature of the conduct' (the conduct being the sexual assault and not Mr Ruautu Tara's drinking habits). One may legitimately wonder what the Tribunal was doing at this juncture but when the question is whether there was a denial of procedural fairness I think the answer, at this level, is that there was not. That Mr Ruautu Tara's conviction had occurred, in part, as a result of drunken mistake was his own contention. (b) Propensity to commit sexual assault whilst drunk 24 However, accepting all that to be so does not assist in relation to (b). Here the question was not whether he had a tendency to drink. Rather it was whether he had a tendency to commit sexual assaults whilst drunk. The relatively uncontroversial fact of his drinking did not put in play the more controversial proposition that he had a tendency sexually to assault young women in their houses whilst under the influence of alcohol. 25 Against this conclusion Mr Smith rallied four points: (a) paragraph [33] of the Tribunal's reasons (above at [19]) was quite capable of being read merely as being about Mr Ruautu Tara's alcohol consumption and not about a propensity sexually to assault whilst drunk. To read it as an element in an argument connecting drinking to a propensity to sexual assault was to go searching for error; (b) the case was in any event, raised by the Police file which had been served on him before the hearing together with the Minister's submissions; (c) in any event, there could be no procedural unfairness because the hearing was conducted by both sides on the basis that Mr Ruautu Tara had drunk excessively; and (d) further, Mr Ruautu Tara had been given an opportunity to add any further remarks he wished at the end of his evidence but did not do so. 26 Persuasively advanced though these submissions were, I cannot accept them. 27 As to the first it is an inevitable feature of the Minister's submission that the reference to alcohol consumption in [33] is not connected to a risk of committing sexual assault. It was, as Mr Smith put it, about 'just drinking simpliciter'. 28 But if that be so it is pertinent to ask what its relevance was in a section commencing with the heading 'Risk of the conduct being repeated'. The conduct under examination was not drunkenness (with which Mr Ruautu Tara had neither been charged nor convicted). The conduct was sexual assault. Further, the kind of behaviour to which cl 10.1.2 was directed was the risk of re-offending and the offences in question were those of the kind in cl 10.1.1(2), that is, crimes involving violence. 29 The choices of interpretation thrown up by [33] are either that the Tribunal was investigating the question of whether there was a risk of him taking up drinking again, or alternatively, that it was considering the future risk of Mr Ruautu Tara committing alcohol-fuelled sexual assault. 30 I do not accept the former as the correct reading of what the Tribunal did. If it were correct it would mean that the Tribunal had misunderstood its function and that the matters which enlivened the character test including drinking. This would involve such a serious misunderstanding of cl 10.1.1 that I cannot imagine that it was what the Tribunal had in mind. 31 It is much more likely – and indeed more rational – that the Tribunal was posing for itself the question of whether or not there was a pattern to Mr Ruautu Tara's criminal behaviour and whether that pattern involved, as a element, alcohol consumption. 32 I do not disregard the injunction in cases such as Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287 per Neaves, French and Cooper JJ and Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272 per Brennan CJ, Toohey, McHugh and Gummow JJ and 291 per Kirby J that one ought not read the reasons of an administrative tribunal with an eye keenly attuned to the detection of error. In this case, however, it is a question of identifying what the Tribunal did and what it did, in my opinion, was to consider the risk of Mr Ruautu Tara committing sexual assaults because of a propensity on his part to consume alcohol. 33 As to the second of the Minister's ripostes, having concluded that the Tribunal did embrace such an argument, I do not accept that it was adequately foreshadowed by the provision some days before the hearing to Mr Ruautu Tara of the Police file and the Minister's submissions. The Minister's statement of facts, issues and contentions to the Tribunal dealt with the two mandatory matters of the seriousness and nature of the conduct and the risk that the conduct might be repeated under separate headings. In the part dealing with the seriousness of the offence, the Minister's only submission touching upon Mr Ruautu Tara's drunkenness at the time of the offence was that it did not consitute a mitigating circumstance. 34 Under the heading 'Risk that the conduct might be repeated' in the same statement, there was no mention of alcohol at all, still less a case that Mr Ruautu Tara had drinking issues which, when combined with a propensity to commit sexual assault whilst drunk, meant that the risk of recidivism was increased. 35 Nor do I think that the supply of the Police file by itself adequately signalled such a case. A reasonable person might think that that part of his police record which terminated in an acquittal might not be used against him without the pertinent aspect of it being brought to his attention. But the Minister's submission did no such thing. The Minister did seek to make use of the fact of the alleged offence of which he had been acquitted in his statement of facts, issues and contentions but only in a rather confusing way. The Minister made the following points: (a) the fact that he committed the offence of which he was convicted whilst the charge against him in respect of the offence of which he was acquitted was pending was indicative of the seriousness of the conduct and showed a risk of repetition; and (b) the use of the acquittal required 'careful and restrained analysis' (citing Makasa at [31]). 36 It was accepted by the end of the Tribunal hearing (and before me) that the chronology in (a) was incorrect and the point was withdrawn. Proposition (b) is correct but has no practical content from the perspective of procedural fairness. 37 Thus were the uses of the material foreshadowed in the Minister's submissions. I do not accept that, armed with those submissions and the Police file, Mr Ruautu Tara could possibly have been expected to work out that the case against him was that he had a tendency to drink and when drunk to commit sexual assault. Nor do I think that the difficulty is ameliorated because Mr Ruautu Tara had been personally involved in his own trial or was aware that his conviction was likely to be subject to examination during the Tribunal's hearing. The first time such a case appears is at [33] in the Tribunal's reasons. As Mason J observed in Kioa v West (1985) 159 CLR 550 at 587, '[r]ecent decisions illustrate the importance which the law attaches to the need to bring to a person's attention the critical issue or factor on which the administrative decision is likely to turn so that he may have an opportunity of dealing with it'. This did not occur. 38 Nor for similar reasons do I think, turning to the Minister's third submission, that the fact that Mr Ruautu Tara was examined both by the Minister's solicitor and the Tribunal about his alcohol consumption in the slightest assists. It is no doubt true that, in his submission to the Tribunal, Mr Ruautu Tara did implicate alcohol in the matter of which he had been convicted. He said this: While being in prison I was thinking a lot about what I had done and what I have put my family through. I have learnt my lesson. I am very sorry for what I [have] done and will not go down that line again, it was a stupid drunken mistake, not to blame the alcohol but myself for the actions. 39 I would hesitate to say that this constituted evidence that Mr Ruautu Tara had a drinking problem and Mr Smith, very properly, would not accept that characterisation of the material preferring instead the more nuanced expression 'an earlier propensity for alcohol'. In that sense, no doubt the fact that the offence of which he had been convicted was committed under the influence of alcohol was not in issue. But this did not come close to putting in play the suggestion that Mr Ruautu Tara had a propensity to commit sexual assaults whilst drunk. 40 The questions of the Tribunal and the Minister's solicitor stand in no different position. The Tribunal had elicited from Mr Ruautu Tara only that he had been drinking on the night of the offence of which he was convicted and what his current drinking habits were. The Tribunal did not ask him anything about his drinking on the night of the matter of which he had been acquitted. 41 The Minister's solicitor sought to ask Mr Ruautu Tara about that night and its similarity to the other offence but the Tribunal stopped this from occurring. ('Ms Weston, I won't allow that question. That's oppressive, and he was not convicted of the other charge'). He was also asked about his pre-detention drinking by the solicitor. 42 Viewed through that prism the idea that his propensity to commit sexual assault whilst drunk had been raised as an issue by the Tribunal is untenable. The only time the hearing came near to touching on the issue the Tribunal stopped the questioning. Indeed, the manner in which that examination was terminated led Mr Poynder to make the submission that it had thereby been signalled to Mr Ruautu Tara that the circumstances of his acquittal were not relevant and that thereafter to use the acquittal as the Tribunal did was a breach of procedural fairness. Mr Smith submitted that the line of questioning (above at [12]) was limited, in substance, to the elements of the offence. I do not need to resolve that issue because I accept that the case based upon a propensity to commit sexual assault after drinking was not notified to Mr Ruautu Tara. The relevance of the manner in which the Tribunal stopped the questioning about his acquittal is only to show that no opportunity to meet the case was provided. Had it been necessary to resolve I think it likely that Mr Poynder's submission that the questioning was not limited only to the elements of the offence was correct. 43 The Minister's final argument was that the Tribunal's final question to Mr Ruautu Tara ('Is there anything else you want to say to me?') cured whatever other difficulties there were. I do not accept this submission. An opportunity to make a submission cut-off from any knowledge of the case being put against one is no opportunity at all. 44 Mr Ruautu Tara is entitled to writs of certiorari and mandamus. The Minister must pay his costs. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 22 October 2012	5,773
federal_court_of_australia:tribunals/adfdat/2016/2016adfdat0003	decision	commonwealth	federal_court_of_australia	text/html	2016-12-16 00:00:00	Williams v Chief of Army [2016] ADFDAT 3	https://www.judgments.fedcourt.gov.au/judgments/Judgments/tribunals/adfdat/2016/2016adfdat0003	2024-09-13T22:48:46.273691+10:00	DEFENCE FORCE DISCIPLINE APPEAL TRIBUNAL Williams v Chief of Army [2016] ADFDAT 3 Appeal from: Defence Force Magistrate File number: DFDAT 4 of 2015 Judges: TRACEY J (president), BRERETON AND HILEY JJ (members) Date of judgment: 16 December 2016 Catchwords: DEFENCE – appellant convicted of one charge before Defence Force Magistrate, acquitted of two other charges – whether DFM had jurisdiction to hear and determine the charges – consideration of "service connection" and "service status" tests of jurisdiction – DFM had jurisdiction – whether DFM erred in consideration of any inconsistencies in complaint evidence – whether the DFM's finding of guilt on Charge 1 was inconsistent with acquittals on Charges 2 and 3 – appeal dismissed Legislation: Defence Force Discipline Act 1982 (Cth) Defence Force Discipline Appeals Act 1955 (Cth), ss 20(1), 21(1)(b), 23(1)(a), 23(1)(b), 23(1)(d), 41(a) Evidence Act 1995 (Cth), s 66(2) Cases cited: Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 Hardcastle v Commissioner of Police (1984) 53 ALR 593 Lane v Morrison (2009) 239 CLR 230 MacKenzie v The Queen (1996) 190 CLR 348 Mills v Martin (1821) 19 Johnson's Supreme Court Reports (NY) 7 New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 O'Callahan v Parker 395 US 258 (1969) Papakosmas v The Queen (1999) 196 CLR 297 R v Murray (1987) 11 NSWLR 12 R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 R v White; Ex parte Byrnes (1963) 109 CLR 665 Re Aird; Ex parte Alpert (2004) 220 CLR 308 Re Nolan; Ex parte Young (1991) 172 CLR 460 Re Tracey; Ex parte Ryan (1989) 166 CLR 518 Relford v US Disciplinary Commandant 401 US 355 (1971) Solorio v United States 483 US 435 (1987) The Shell Company of Australia Limited v Federal Commissioner of Taxation (1930) 44 CLR 530 White v Director of Military Prosecutions (2007) 231 CLR 570 Date of hearing: 31 March 2016 Category: Catchwords Number of paragraphs: 119 Counsel for the Appellant: Mr R Clutterbuck and Mr G Kalimnios Solicitor for the Appellant: Bevan Bowe Solicitors Counsel for the Respondent: Mr D McLure SC and Mr J Nottle Solicitor for the Respondent: Director of Military Prosecutions ORDERS DEFENCE FORCE DISCIPLINE APPEAL TRIBUNAL DFDAT 4 of 2015 ON APPEAL FROM DEFENCE FORCE MAGISTRATE BETWEEN: ANDREW LEWIS WILLIAMS Appellant AND: CHIEF OF ARMY Respondent JUDGES: TRACEY J (president), BRERETON AND HILEY JJ (members) DATE OF ORDER: 16 December 2016 THE TRIBUNAL ORDERS THAT: 1. The period within which the appeal and application for leave to appeal herein must be lodged be extended to the date on which it was lodged. 2. Leave to appeal, insofar as it is required, be granted. 3. The appeal be dismissed. REASONS FOR DECISION TRACEY and HILEY JJ: 1 The appellant, Sergeant Andrew Lewis Williams, pleaded not guilty to three charges, as follows (the crucial conduct in each being emphasised): (1) [DFDA s 61(3) and Crimes Act 1900 ACT s 60(1)] Engaging in conduct outside the Jervis Bay Territory that is a Territory offence, being the offence of an act of indecency without consent—Being a Defence member in Toowoomba, in the State of Queensland on or about 26 January 2014 committed an act of indecency in the presence of [the complainant, a female Army sergeant] by stroking his penis with his hand inside his pants, without her consent, knowing she was not consenting or being reckless as to whether she was consenting. (2) [DFDA s 61(3) and Crimes Act 1900 ACT s 60(1)] Engaging in conduct outside the Jervis Bay Territory that is a Territory offence, being the offence of an act of indecency without consent—Being a Defence member in Toowoomba, in the State of Queensland on or about 26 January 2014 committed an act of indecency on [the complainant] without her consent, knowing she was not consenting or being reckless as to whether she was consenting by pressing his penis against her thigh and moving it against her thigh. (3) [DFDA s 61(3) and Crimes Act 1900 ACT s 26] Engaging in conduct outside the Jervis Bay Territory that is a Territory offence, being the offence common assault—Being a Defence member in Toowoomba, in the State of Queensland on or about 26 January 2014 assaulted [the complainant] by touching her with his hand on her inner right thigh. 2 On 23 April 2015, a Defence Force Magistrate ("DFM") convicted him of the first, but acquitted him of the second and third, charges. By notice of appeal dated 15 November 2015, he appeals to this Tribunal from his conviction on the first charge, and applies for an extension of time in which to do so. The respondent Chief of Army does not oppose an extension, under s 21(1)(b) of the Defence Force Discipline Appeals Act 1955 (Cth) ("the DFDAA"), of the time for appeal until the date on which it was lodged. BACKGROUND 3 At the time of the conduct the subject of the charges, the appellant and the complainant were both Sergeants in the Australian Regular Army. They had met through their service and had known each other since about 2004, when they were both posted to Canberra. In 2011, they were both posted to the Defence Force School of Signals, Electronic Warfare Wing, at Borneo Barracks, Cabarlah, as instructors. By 2014, the appellant was posted to 7th Signals Regiment, also at Borneo Barracks, Cabarlah. 4 On 26 January 2014, SGT Williams and his wife Rachel hosted an Australia Day barbeque at their private residence in Toowoomba. Prior to the barbeque, it had been agreed between SGT Williams and the complainant that she would stay the night at SGT Williams's residence, as she planned to consume alcohol and did not want to have to call a taxi for the 25-kilometre trip home to her residence. 5 On the morning of 26 January, the complainant went to the gym at Borneo Barracks before collecting some food and drinks for the barbeque—a carton (two dozen) premixed lemon/vodka drinks, a six-pack of beer, and an open bottle of Canadian Club whisky, which contained a quantity of whisky. She also took some decorations for the party. 6 At about midday, the complainant arrived at the Williams residence. She was the first guest to arrive. Others followed: Warrant Officer Class Two Chris Pleszkun (who was the complainant's supervisor) and his wife and their children; Sergeant Scott Mair (also from the School of Signals) and his wife; and Sergeant Rebecca Domjahn (a close friend of the complainant) and her husband then Petty Officer (now Sub Lieutenant) David Myers (both of whom were posted to the School of Signals) and their children. 7 SGT Domjahn and PO Myers left at about 2100. They were followed by WO2 Pleszkun and his family, and then by SGT Mair and his family. The complainant was offered a lift home on a couple of occasions, but she was enjoying the evening and was not ready to leave; she confirmed with Mrs Williams that she could stay for the night, and a mattress was prepared for her and located in the dining room area. Once all the other guests had left, SGT Williams, Mrs Williams, and the complainant remained outside in the patio area and continued talking and drinking. 8 Mrs Williams retired at 0250. She noticed the time, and hers is the only evidence which establishes the time with any precision. The complainant and the appellant remained, listening to a song about Afghanistan and reminiscing. 9 It was at this point that, according to the complainant, she noticed that the appellant, who was sitting about 1.5 metres from her, had one hand—she believed it was his left hand—down and inside the front of his pants. She at first thought that the appellant might be adjusting himself or scratching, but after a while concluded that he was not, observing a "slow movement of his hand underneath his pants on his groin". She asked, "Are you doing what I think you're doing? That's disgusting", and told him to stop. She says that the appellant removed his hand from his pants without saying anything. That was the subject of Charge 1. 10 Not long afterwards, according to the complainant, she decided that she should go to bed. She stood up and moved towards the door to the room where she was going to sleep. The appellant then endeavoured to hug her, and to push his face in front of hers, as if trying to kiss her. She was trying to push him away, and could feel his body against her leg; it felt to her as if he was slowly rubbing himself on her and as if he had an erection. This continued for 20 to 30 seconds before she succeeded in pushing the appellant away. That was the subject of Charge 2. 11 The complainant says that she then moved inside to go to bed, on the mattress which had been prepared for her earlier in the day. After she had fallen asleep—possibly half an hour after she went to bed—she was awoken by the back of her shorts being pulled down. She was lying face down, and propped herself up and brushed or knocked away the hand and said, "Fuck off, leave me alone, and go to bed with your wife". There was no response, but she believes the person—whom she did not see—left. At trial she did not recall what happened, or hearing the person walk away, although she accepted that in an earlier statement she had said that she heard footsteps leave the room. 12 Next, as she remained lying on her stomach, awake, in a state of some shock at what had happened, she felt someone come and lie in the bed next to her, and slide a hand underneath her right thigh, pushing towards her groin. This was the subject of Charge 3. She said, "Fuck off. Go away, leave me alone. Go to bed in your own bed with your wife". This time she saw that it was the appellant. He did not get out of the bed, but remained there. She used her pillow and blanket to create a barrier between them. She says she lay on the bed sobbing, until she heard the Williams children wake in the morning, when she jumped up and moved over to the couch, where she sat with them. The appellant remained asleep on the other side of the bed. When Mrs Williams emerged and came to the kitchen and asked what he was doing on the bed, the complainant says she replied that the appellant was being an idiot, but did not go into further detail. 13 When she had sufficiently sobered up to drive, the complainant left. Later on 27 January she related what had happened to PO Myers and SGT Domjahn, and subsequently, in varying degrees of detail, to a number of others. 14 On 31 January, the appellant (who had been endeavouring to contact the complainant to arrange for the return of her esky) sent her a text message: "Hey, [complainant], have been trying to catch up and apologise for being a useless drunk the other night. I'm sorry about that. I dropped over your Esky this morning, just out the front of your place. I hope that was okay?". 15 At the trial, the prosecution case comprised the evidence of the complainant (who the DFM found to be an honest and impressive witness, who made an earnest attempt to recall events to the best of her recollection, and whose evidence he accepted "in most respects"), and that of a number of witnesses to whom the complainant had related her complaint, to which it will be necessary to refer further. The defence case comprised the evidence of the appellant (whom the DFM found less impressive, and "less than convincing" in his record of interview, but unshaken in cross-examination), and that of Mrs Williams. 16 The appellant denied the conduct alleged against him. He said that after Mrs Williams went to bed, he finished his drink and had a cigarette, and told the complainant he was going to bed. They walked inside, he following her; she hopped into the bed that had been prepared for her as he went to his bedroom and went to bed. He and his wife talked briefly, had sex, and he went to sleep. When he woke the next morning it was early but light; he could hear the television, indicating that the children were up. He went to the kitchen, got a drink of water, and lay down on the floor in the lounge room, as the boys had one couch each and he needed to lie down. One of the boys joined him on the floor. It was quite cold, so he got up and saw the complainant sleeping on the mattress, with the blanket that was usually in the lounge. He walked over and said "you've got the blanket, I'm coming in, I'm cold" and got beneath the blanket; the complainant woke up, hopped straight out of bed and sat with the boys in the lounge. Later his wife told him that it was not appropriate for him to have got into the bed, and that he may have offended the complainant by doing so. This was consistent with the version he had given, apparently spontaneously, in his record of interview. 17 The evidence of Mrs Williams is of considerable importance, because the DFM accepted it. She said that she had gone to bed at 0250 (of which she was certain because she had looked at a clock), leaving the appellant and the complainant listening to a song about Afghanistan and reminiscing. About 15 minutes later the appellant came to bed. After some conversation (for 5 to 10 minutes), at her instigation they had sex (for, she estimated, between 45 minutes and an hour), and then went to sleep (which on her estimates would have been not before about 0400). When she woke in the morning, the sun was well and truly up; the appellant was awake or woke up and said that he was going to get a drink of water and left the bedroom. Shortly afterwards she heard the complainant and the children talking and decided to get up; she found the complainant on the couch with the two Williams children, and the appellant asleep on the mattress where the complainant had been sleeping. She looked at the complainant, and out to the mattress in the dining room where the appellant was asleep; the complainant said that he'd kicked her out and used a foot gesture; Mrs Williams said "Sorry". Mrs Williams denied that the complainant had said, "He was being an idiot last night". Mrs Williams said that later on, when the appellant had woken up, she suggested to him that he should send a text to the complainant to apologise for kicking her out of bed, and he agreed to do so. 18 On Charge 1, the evidence was fundamentally that of the complainant and the appellant. The DFM accepted the complainant, whose credibility he considered to be reinforced by the evidence of recent complaint, and rejected the appellant. Accordingly, the appellant was convicted on Charge 1. 19 On Charge 2, again, the evidence was fundamentally that of the complainant and the appellant. The DFM was satisfied beyond reasonable doubt, on the complainant's evidence, that the appellant had approached her and tried to hug and kiss her, in the course of which his groin pressed up against her thigh. He rejected the appellant's denial of having engaged in that conduct, but "having regard to the circumstances described by the complainant" was not satisfied beyond reasonable doubt that the appellant intentionally pressed and moved his penis against her thigh, and accordingly acquitted the appellant on this Charge. 20 On Charge 3, the relevant evidence included, in addition to that of the two chief protagonists, that of Mrs Williams. On this, the DFM concluded: "The situation is less clear with the third charge. The evidence of Mrs Williams, which I do accept for the reasons outlined, would make the opportunity for the accused to have engaged in the conduct as alleged by the complainant less likely. This is not to lose sight of the fact that the accused did in fact lay down beside the complainant. Despite his evidence that the complainant immediately got up and went and sat on the couch with the accused's children, it would be open, in my view, to find that some inappropriate touching by the accused on the complainant occurred at this time. The accused's explanation for doing so is far from convincing. That he was observed to sleep on the mattress even by his wife provides some support for the complainant's allegations in respect of Charge 3. But in this trial I must be satisfied of the guilt of the accused beyond reasonable doubt. In my view, it is difficult to reconcile the evidence of Mrs Williams as to when the accused left the bedroom and went outside and that of the complainant as to when the touching alleged in Charge 3 occurred. Again, in expressing this view, I am in no way doubting the honesty of the complainant. I suspect that the accused, perhaps in a drunken state, did engage in inappropriate conduct with the complainant as she lay on the mattress. But I am unable to be satisfied beyond reasonable doubt as to the reliability of the complainant's evidence in respect of Charge 3 and, in particular, how it is particularised, as proving that conduct, particularly in light of the evidence of Mrs Williams, which, in my view, is not entirely consistent and arguably inconsistent with the timings and opportunities available to the accused to engage in the conduct alleged. I have also had regard to the complaint evidence which I accept, in respect of Charge 3, may not be entirely consistent. In reaching these findings, I have also had regard to the text message sent by the accused on 31 January 2014. Whilst the text message might, on one view, be seen to be an admission by the accused, I cannot be satisfied that the accused's explanation, supported as it is by his wife's evidence, for sending that text message is untrue." THE APPEAL 21 The grounds of appeal specified in the notice are that: (a) the DFM lacked jurisdiction to hear and determine the charges and thereby wrongly concluded that the Court had jurisdiction to hear and determine the charges; (b) the finding of guilt on Charge 1 was inconsistent with the acquittals on Charges 2 and 3; and (c) the inconsistencies in the evidence of fresh or recent complaint were not taken into account or given due weight by the DFM such as to cause the trial to miscarry. 22 Under Ground (a), the appellant submitted that there was insufficient connection between the charged conduct and the maintenance of military discipline to justify the lawful exercise of jurisdiction under the Defence Force Discipline Act 1982 (Cth) ("the DFDA"). This plainly raises a question of law, under DFDAA s 23(1)(b). However, the appellant was astute to emphasise that no question of constitutional validity was raised; the argument was simply that, on the particular facts, jurisdiction was not attracted for want of sufficient service connection. 23 Ground (b) is a complaint of factual, not legal, inconsistency (cf MacKenzie v The Queen (1996) 190 CLR 348 at 366) between the conviction on Charge 1, and the acquittals on the other Charges. In substance it is a contention that the reasonable doubt which the DFM must have entertained about the complainant's evidence on Charge 3 should have led to similar doubt about her evidence on Charge 1. 24 Ground (c), insofar as it is framed as a failure to take into account a relevant consideration and cloaked as a question of law, is misconceived. The DFM was not exercising a discretion attended by mandatory relevant considerations, but making findings of fact. In truth it is a complaint that the DFM should not have been satisfied beyond reasonable doubt of the appellant's guilt on Charge 1 because of inconsistencies in the recent complaint evidence. 25 Thus both Grounds (b) and (c) are in reality factual, not legal, grounds of appeal under s 23(1)(d) (that, in all the circumstances of the case, the conviction is unsafe or unsatisfactory) or possibly s 23(1)(a) (that the conviction is unreasonable or cannot be supported having regard to the evidence), and require leave under s 20(1). 26 As will appear, at least Ground (b)—the complaint that the conviction is inconsistent with the acquittals—raises issues of substance, and accordingly leave to appeal on the "unsafe and unsatisfactory" ground should be granted. THE JURISDICTIONAL OBJECTION—GROUND OF APPEAL (A) 27 It is contended in the first ground of appeal that there was insufficient connection between the charged conduct and the maintenance of military discipline to justify the lawful exercise of jurisdiction under the DFDA. 28 The appellant was first arraigned before COL Woodward DFM on 11 December 2014, at which time an objection was taken to jurisdiction. Applying the "service connection" test, that DFM held that there was sufficient connection to found jurisdiction. COL Woodward subsequently recused herself, and the appellant was again arraigned before WGCDR Lynham DFM, before whom the objection to jurisdiction was renewed and who again (on 20 April 2015) overruled the objection, essentially adopting the reasons which had been given by his predecessor. 29 As was submitted for the respondent, the appellant's contention assumes that for jurisdiction under the DFDA to be available, the "service connection" test must be satisfied—that is, the proceedings can reasonably be regarded as serving the purpose of maintaining and enforcing service discipline. But the appellant concedes that, if the "service status" test is applicable, then there could be no doubt as to jurisdiction—because the appellant is, self-evidently, a defence member. The state of the law as to the requisite nexus was summarised by McHugh J in Re Aird; Ex parte Alpert (2004) 220 CLR 308, as follows: "[31] A trilogy of cases in this Court has held that, although a court martial tribunal exercises judicial power, it does not exercise the judicial power of the Commonwealth. That is because the power to make laws with respect to the defence of the Commonwealth under s 51(vi) of the Constitution contains the power to enact a disciplinary code that stands outside Ch III of the Constitution [Re Tracey; Ex parte Ryan (1989) 166 CLR 518; Re Nolan; Ex parte Young (1991) 172 CLR 460; Re Tyler; Ex parte Foley (1994) 181 CLR 18]. In Re Tracey; Ex parte Ryan, a majority of the Court held that a Defence Force magistrate, not appointed in accordance with Ch III of the Constitution, had jurisdiction to hear a charge of making an entry in a service document with intent to deceive, as well as two charges of being absent without leave. Mason CJ, Wilson and Dawson JJ held that ''it is not possible to draw a clear and satisfactory line between offences committed by defence members which are of a military character and those which are not'' [Re Tracey (1989) 166 CLR 518 at 544]. Their Honours said [Re Tracey (1989) 166 CLR 518 at 545]: 'It is open to Parliament to provide that any conduct which constitutes a civil offence shall constitute a service offence, if committed by a defence member. As already explained, the proscription of that conduct is relevant to the maintenance of good order and discipline in the defence forces. The power to proscribe such conduct on the part of defence members is but an instance of Parliament's power to regulate the defence forces and the conduct of the members of those forces. In exercising that power it is for Parliament to decide what it considers necessary and appropriate for the maintenance of good order and discipline in those forces.' [32] Two other Justices in the majority in Re Tracey (Brennan and Toohey JJ) took a different view of the power of Parliament to invest service tribunals with jurisdiction to hear offences. Brennan and Toohey JJ said that two constitutional objectives had to be reconciled [Re Tracey (1989) 166 CLR 518 at 569–570]. The first was dictated by s 51(vi) which empowered the parliament to give service authorities a broad authority to impose discipline on defence members and defence civilians. The second was dictated by Ch III and s 106 of the Constitution. It consisted in the recognition of the pre-ordinate jurisdiction of the civil courts and the protection of civil rights which those courts afforded civilians and defence members including defence civilians who are charged with criminal offences. Their Honours said [Re Tracey (1989) 166 CLR 518 at 570]: 'To achieve these objectives, civil jurisdiction should be exercised when it can conveniently and appropriately be invoked and the jurisdiction of service tribunals should not be invoked, except for the purpose of maintaining or enforcing service discipline.' [33] They went on to say that "proceedings may be brought against a defence member or a defence civilian for a service offence if, but only if, those proceedings can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline" [Re Tracey (1989) 166 CLR 518 at 570]. Brennan and Toohey JJ said that the power conferred on service tribunals was "sui generis which is supported solely by s 51(vi) for the purpose of maintaining or enforcing service discipline" [Re Tracey (1989) 166 CLR 518 at 574]. Deane and Gaudron JJ, the other justices who heard Re Tracey, dissented. [34] The division of opinion that arose in Re Tracey continued in Re Nolan; Ex parte Young [(1991) 172 CLR 460], a case decided after Wilson J had left the Court. In Re Nolan, a majority of the Court held that a Defence Force magistrate, not appointed in accordance with Ch III, had jurisdiction to hear charges concerning falsifying and using a service document—a pay list. Mason CJ and Dawson J said that they saw no reason to resile from the views that they had expressed in Re Tracey as to the scope of legislative power [Re Nolan (1991) 172 CLR 460 at 474]. They considered that it was open to the Parliament to provide that any conduct which constitutes a civil offence should constitute a service offence if committed by a defence member. Brennan and Toohey JJ also maintained the views that they had expressed in Re Tracey. They said that "the relevant power conferred by s 51(vi) does not extend to the making of a law to punish defence members and defence civilians for their conduct unless the proceedings taken in order to punish them can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline" [Re Nolan (1991) 172 CLR 460 at 484]. Later their Honours said [Re Nolan (1991) 172 CLR 460 at 489]: 'Service discipline is not merely punishment for wrongdoing. It embraces the maintenance of standards and morale in the service community of which the offender is a member, the preservation of respect for and the habit of obedience to lawful service authority and the enhancing of efficiency in the performance of service functions. Here, the charges are obviously 'service connected' but that is not the ultimate criterion though it is an important element in determining whether proceedings on those charges could reasonably be regarded as serving the purpose of maintaining and enforcing service discipline.' Deane and Gaudron JJ again dissented, holding to the views that they had expressed in Re Tracey. I agreed with the judgment of Deane J. [35] As I explained in the third of the trilogy—Re Tyler; Ex parte Foley—the "divergent reasoning of the majority judges in Re Tracey and Re Nolan means that neither of those cases has a ratio decidendi" [Re Tyler (1994) 181 CLR 18 at 37]. In Re Tyler, a majority of the Court held that a general court martial had jurisdiction to hear a charge against an Army officer that he had dishonestly appropriated property of the Commonwealth. Re Tyler also failed to obtain a majority of justices in favour of any particular construction of the defence power in relation to offences by service personnel. [36] The difference between the views of Mason CJ, Wilson and Dawson JJ and on the other hand Brennan and Toohey JJ in these cases is the difference between the "service status" view of the jurisdiction and the "service connection" view of that jurisdiction. The "service status" view—which is now applied in the United States [Solorio v United States (1987) 483 US 435]—gives a service tribunal jurisdiction over a person solely on the basis of the accused's status as a member of the armed forces. The "service connection" view of the jurisdiction requires a connection between the service and the offence. It was the view formerly accepted in the United States [O'Callahan v Parker (1969) 395 US 258]. However, Solorio v United States rejected the "service connection" view. In Relford v US Disciplinary Commandant [401 US 355 (1971) at 365], the Supreme Court had referred to twelve factors which the Court considered O'Callahan v Parker [(1969) 395 US 258 at 273–274] had emphasised in requiring a service connection. They were: '1. The serviceman's proper absence from the base. 2. The crime's commission away from the base. 3. Its commission at a place not under military control. 4. Its commission within our territorial limits and not in an occupied zone of a foreign country. 5. Its commission in peacetime and its being unrelated to authority stemming from the war power. 6. The absence of any connection between the defendant's military duties and the crime. 7. The victim's not being engaged in the performance of any duty relating to the military. 8. The presence and availability of a civilian court in which the case can be prosecuted. 9. The absence of any flouting of military authority. 10. The absence of any threat to a military post. 11. The absence of any violation of military property. One might add still another factor implicit in the others: 12. The offense's being among those traditionally prosecuted in civilian courts.' [37] The argument of the parties in the present case accepted, sometimes expressly but more often by assumption, that the general words of s 51(vi) of the Constitution must be read down to comply with Ch III of the Constitution, as interpreted in the trilogy of Tracey, Nolan and Tyler. Since those cases, it seems to have been generally accepted [Tracey, "The Constitution and Military Justice", paper delivered at the Annual Public Law Weekend: "The Australian Constitution in Troubled Times", Canberra, 8 November 2003, p 13]—indeed it was accepted by the Judge Advocate in the present case—that the proper test is the "service connection" test and not the "service status" test." 30 About that passage, the following observations may be made. First, the so-called "service connection" test requires, and requires only, that the proceedings can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline; while, in determining that question, "service connection" is an important aspect, it is not the ultimate criterion. Secondly, the factors listed by McHugh J (extracted from Relford v US Disciplinary Commandant 401 US 355 (1971)) are factors the existence of which may contribute to a finding of absence of service connection; however, as McHugh J explained, those factors are not exhaustive (Re Aird at 324 [45]), and it does not follow that it is necessary to exclude all or any of them in order to establish that proceedings can reasonably be regarded as substantially serving the purpose of maintaining or enforcing service discipline. Thirdly, the "general acceptance" since the trilogy cases of the "service connection" test has proceeded on the basis that it is the "lowest common denominator" and that if it is satisfied, the "service status" test will necessarily be satisfied; it has not proceeded on the basis of any judgment that it is necessarily the correct or preferable view. 31 The appellant pointed to the circumstances that the charged conduct took place when all concerned were off duty, on a public holiday, at a private dwelling, in town, not on base, and in a purely social and domestic setting. The appellant's submissions stressed that the offence was complete when it was committed in those circumstances, and jurisdiction could not be attracted by later developments—such as any need to provide counselling for the complainant, or to make administrative arrangements for her posting because of difficulties that might be encountered by her working in close proximity to the appellant. 32 In his powerful if somewhat polemical dissent in Solorio v United States 483 US 435 (1987), Marshall J (with whom Brennan J and, in this respect, Blackmun J agreed)—who would have retained the "service connection" test—explained why (in his Honour's view) it was not satisfied in that case, which concerned sexual abuse by the petitioner of children of fellow service personnel (483 US 435 at 462–463, emphasis added): "Petitioner's offenses did not detract from the performance of his military duties. He committed these crimes while properly absent from his unit, and there was no connection between his assigned duties and his crimes. Nor did petitioner's crimes threaten people or areas under military control. The crimes were committed in petitioner's private home in the civilian community in Juneau, where there is not even a base for Coast Guard personnel. Petitioner's acts were not likely to go unpunished; the court-martial judge determined that the offenses were of a type traditionally prosecuted by civilian courts, that such courts were available, and that, while the Alaska courts had deferred prosecution in light of the court-martial proceeding, the State had not declined to prosecute the offenses. Nor did the crimes implicate any authority stemming from the war power; they were committed within the territorial United States while the Nation was at peace. Moreover, the crimes caused no measurable interference with military relationships. Though the victims were dependents of Coast Guard members, the court-martial judge found that there was only de minimis military interaction between petitioner and the fathers of the victims, and that the relationships between petitioner and the families of the victims "were founded primarily upon the ages and activities of the children and additionally upon common sporting interests, common spousal interest and employment and neighborly relationships", rather than the connection of petitioner and the families through the Coast Guard. Because the crimes did not take place in an area within military control or have any effect on petitioner's military duties, their commission posed no challenge to the maintenance of order in the local command. The military judge found that the Government had not demonstrated any impact of the offenses on "morale, discipline, [or] the reputation or the integrity of the Coast Guard in Juneau". The only connection between the military and the offenses at issue was the fact that the victims were military dependents. But the military judge found explicitly that the military association of petitioner and the victims' fathers did not facilitate petitioner's crimes, and that "[t]he impact apparent in this case, that is, on the parents and the victims themselves is no different than that which would be produced by a civilian perpetrator"." 33 Even in that minority view of the service connection test there are apparent important distinctions with the present case, as appears from the emphasised passages in the above extract. Here, the victim was a military member, who worked in close proximity to the appellant, on the same base, and shared the same mess. The relationship between them was founded on their common service in the Australian Army. The conduct was calculated to affect their future ability to work together under those conditions. And whatever might have been the position in the United States in 1987, in Australia in 2014 such conduct if it became known would inevitably impact on the morale and reputation of the Army and the Australian Defence Force ("the ADF"), in Toowoomba and elsewhere. 34 The minority judgment in Solorio appears to insist that there be evidence that conduct has adversely impacted on good order, discipline, morale, welfare or reputation of a service or force element if its effect in that regard is to be relied on to establish service connection. However, whether conduct constitutes a service offence must be capable of ascertainment when it is committed, and cannot depend on its subsequent effect in fact. As the appellant argued, upon assumption that the service connection test governs, conduct which has no sufficient service connection when committed cannot be converted into a service offence by later events. 35 Nonetheless, the requisite impact on service discipline may lie in the inherent potential of the conduct to have future consequences in the service environment. If conduct is calculated to impact adversely on the good order, discipline, morale, welfare or reputation of a service or force element, that will tell in favour of a conclusion that the requisite service connection exists, regardless of whether or not such impact in fact eventuates. What is important is not its effect in fact, but its potential to have such an effect. 36 Sexual misconduct by one defence member against another—particularly when posted to the same location—is calculated to affect their working and service relationship, as well as the reputation of the Army and the ADF. This was referred to by McHugh J in Re Aird, in the following terms (at 323–324 [42] and 325 [45]): "… And it need hardly be said that other members of the Defence Force will be reluctant to serve with personnel who are guilty of conduct that in the Australian Capital Territory amounts to rape or sexual assault. This may be out of fear for personal safety or rejection of such conduct or both. Such reluctance can only have a detrimental effect on the discipline and morale of the armed services. … … In any event, as Brennan and Toohey JJ pointed out in Re Tracey, a service connection is evidence of but not definitive of what is necessary to maintain discipline and morale in the armed forces. A soldier who rapes another person undermines the discipline and morale of his army. He does so whether he is on active service or recreation leave." 37 In White v Director of Military Prosecutions (2007) 231 CLR 570, CPO White had been charged with seven Territory offences, involving acts of indecency or assault on five lower-ranking female members of the ADF, which occurred when the accused and the complainants were off duty, not in uniform, and away from Commonwealth premises. It was not suggested that there was insufficient service connection to found jurisdiction: see (2007) 231 CLR 570 at 580 [3] (Gleeson CJ), 650 [244] (Callinan J, with whom Heydon J agreed). In Lane v Morrison (2009) 239 CLR 230, LS Lane had been charged with an act of indecency after a day of drinking and golf while on a recruitment drive; he was off duty, out of uniform and on private property, but the suggestion that jurisdiction under the DFDA would not extend to such circumstances was rejected by French CJ and Gummow J ((2009) 239 CLR 230 at 251 [63]). 38 In our view, sufficient service connection is amply established in the present case. Both the complainant and the appellant were members of the ADF, in the Australian Regular Army. Both were members of the Royal Australian Signals, a relatively small corps. They knew each other through their service. From 2011 and at the time of the conduct charged, the complainant was posted to the Defence Force School of Signals, Electronic Warfare Wing, Borneo Barracks, Cabarlah. The appellant was, at the time of the conduct, posted to 7th Signal Regiment, also located at Borneo Barracks. While they were not then posted to the same unit and were not in the same chain of command, they were on the same base, in close geographical proximity, and shared the same mess, where they would inevitably encounter each other and be expected to socialise. The DFM adopted the reasoning of COL Woodward as to the jurisdictional question. COL Woodward, and hence the DFM, found: "[T]he 7th Signal regiment at Cabarlah is a reasonably small and specialised unit located on its own, outside of Toowoomba. Although called a regiment, it is not the size of an infantry regiment. Members of the unit undergo specialised training that can only be generally utilised in a Signals unit. It would be clear that the size of the unit (and the corps) would lead to an inference being drawn that everyone would be acquainted with each other at some level, particularly at the Sergeant level, when they would both be members of the Sergeant's mess, irrespective of the particular part of the regiment they were posted to." 39 In addition, the function, though off base, was attended by defence members and their families: all the guests at the barbeque were ADF members (and their families). 40 Reference was made to a number of circumstances that arose after the charged conduct. At least on the minority view in Solorio, evidence of such matters is necessary to establish service connection; but the better view is that it is the potential of the conduct and not its actual effect that is significant, and that subsequent events cannot change the legal character of the conduct. However, subsequent events can illustrate the potential inherent in the conduct to have adverse service-related impacts, and it is in that way that these matters are significant. Thus, that the complainant made a complaint to another service member in the same unit, so that her allegations became known within the small unit; that the complainant was fearful after the incident that she would encounter the appellant when walking around the barracks; the consequent necessity to repost her because of the difficulties that would be encountered by her working in close proximity to the appellant; and her request not to return to her specialty of Electronic Warfare so long as the appellant was in that trade, are relevant as proof, if it be needed, of the inherent potential of the charged conduct to have adverse service-related impacts. The inherent potential of such conduct to impact adversely in the service environment is exacerbated when the members are members of the same small corps, working in the same physical environment. As the respondent submitted, because of their pre-existing relationship and the relatively small size of Borneo Barracks, this incident could never have been "left at the front gate". 41 It follows that proceedings for the punishment of such conduct plainly serve the purpose of maintaining or enforcing service discipline. 42 The respondent submitted that, regardless of satisfaction of the "service connection" test, jurisdiction should be upheld on the footing of the "service status" test. As mentioned above, the "service connection" test has been generally applied since the trilogy cases, not by way of rejection of the "service status" test, but because it represents the "lowest common denominator", and in the factual situations that have arisen it has not been necessary to resort to "service status" alone to found jurisdiction. As explained in the above extract from the judgment of McHugh J in Re Aird, the "service status" test was preferred by Mason CJ, Wilson and Dawson JJ in Re Tracey; Ex parte Ryan (1989) 166 CLR 518, and adhered to by Mason CJ and Dawson J in Re Nolan; Ex parte Young (1991) 172 CLR 460. Its rationale, as expressed by Mason CJ, Wilson and Dawson JJ in Re Tracey (at 543–544), is this: "Suffice it to say that both as a matter of history and of contemporary practice, it has commonly been considered appropriate for the proper discipline of a defence force to subject its members to penalties under service law for the commission of offences punishable under civil law even where the only connexion between the offences and the defence force is the service membership of the offender. Such legislation is based upon the premise that, as a matter of discipline, the proper administration of a defence force requires the observance by its members of the standards of behaviour demanded of ordinary citizens and the enforcement of those standards by military tribunals. To act in contravention of those standards is not only to break the law, but also to act to the prejudice of good order and military discipline. It is appropriate that such conduct should be punished in the interests not only of the community but of the defence force as well. There can be little doubt that in war-time or upon overseas service such considerations warrant the treatment of civil offences as service offences and it is open to the legislature to regard the position in peace-time as warranting similar treatment. Good order and military discipline, upon which the proper functioning of any defence force must rest, are required no less at home in peace-time than upon overseas service or in war-time." 43 The service status test has been adopted by the United States Supreme Court in Solorio—overruling its earlier preference for the service connection test in O'Callahan v Parker 395 US 258 (1969). This appears to have been dependent primarily on giving full and unconstrained effect to the constitutional power of Congress "[t]o make Rules for the Government and Regulation of the land and naval Forces", but was also supported by policy considerations (483 US 435 at 449–450): "Since O'Callahan and Relford, military courts have identified numerous categories of offences requiring specialized analysis of the service connection requirement. For example, the courts have highlighted subtle distinctions among offences committed on a military base, offences committed off-base, offences arising from events occurring both on and off a base, and offences committed on or near the boundaries of a base. Much time and energy has also been expended in litigation over other jurisdictional factors, such as the status of the victim of the crime, and the results are difficult to reconcile. The confusion created by the complexity of the service connection requirement, however, is perhaps best illustrated in the area of off-base drug offences. Soon after O'Callahan, the Court of Military Appeals held that drug offences were of such 'special military significance' that their trial by court-martial was unaffected by the decision: United States v Beeker, 18 U.S.C.M.A. 563, 565; 40 C.M.R. 275, 277 (1969). Nevertheless, the court has changed its position on the issue no less than two times since Beeker, each time basing its decision on O'Callahan and Relford." (Footnotes omitted.) 44 While the High Court cases subsequent to the trilogy cases have not presented the necessity to resolve the issue—because "service connection" was established in any event—there are indications favourable to the "service status" test in Re Aird, in the judgment of Gummow J—with whose judgment Gleeson CJ and Hayne J expressed agreement. While stating that "this [was] no occasion to choose between 'the service connection' or any other 'test'", his Honour made the following relevant observations: "[65] Two passages from the joint judgment of Mason CJ, Wilson and Dawson JJ in Tracey make what for the present case is the essential point. The first passage followed acceptance by their Honours of the premise that [Re Tracey (1989) 166 CLR 518 at 543]: 'as a matter of discipline, the proper administration of a defence force requires the observance by its members of the standards of behaviour demanded of ordinary citizens and the enforcement of those standards by military tribunals.' Their Honours continued [Re Tracey (1989) 166 CLR 518 at 544]: 'There can be little doubt that in war-time or upon overseas service such considerations warrant the treatment of civil offences as service offences and it is open to the legislature to regard the position in peace-time as warranting similar treatment. Good order and military discipline, upon which the proper functioning of any defence force must rest, are required no less at home in peace-time than upon overseas service or in war-time.' [66] The second passage in the joint judgment of Mason CJ, Wilson and Dawson JJ in Tracey is as follows [Re Tracey (1989) 166 CLR 518 at 545]: 'In exercising that power it is for Parliament to decide what it considers necessary and appropriate for the maintenance of good order and discipline in those forces. And Parliament's decision will prevail so long at any rate as the rule which it prescribes is sufficiently connected with the regulation of the forces and the good order and discipline of defence members.' (Emphasis added.) [67] Article 1, s 8, cl 14 of the Constitution of the United States empowers the Congress "to make Rules for the Government and Regulation of the land and naval Forces". In his judgment in O'Callahan v Parker [(1969) 395 US 258], Harlan J, in the course of construing that provision, made observations of present significance. This is nonetheless so given that, whilst Harlan J was in dissent, his views later achieved acceptance by the Supreme Court [Solorio v United States (1987) 483 US 435 at 441, 444, 446]. Harlan J said [O'Callahan (1969) 395 US 258 at 281–2 (footnote omitted)]: 'The United States has a vital interest in creating and maintaining an armed force of honest, upright, and well-disciplined persons, and in preserving the reputation, morale, and integrity of the military services. Furthermore, because its personnel must, perforce, live and work in close proximity to one another, the military has an obligation to protect each of its members from the misconduct of fellow servicemen. The commission of offenses against the civil order manifests qualities of attitude and character equally destructive of military order and safety. The soldier who acts the part of Mr Hyde while on leave is, at best, a precarious Dr Jekyll when back on duty. Thus, as General George Washington recognised: 'All improper treatment of an inhabitant by an officer or soldier being destructive of good order and discipline as well as subversive of the rights of society is as much a breach of military, as civil law and as punishable by the one as the other' [Writings of George Washington, vol 14, pp 140–141 (Bicent ed).]' [68] Harlan J went on to stress a consideration of particular importance where defence personnel are stationed in other countries, namely, that [O'Callahan (1969) 395 US 258 at 282]: '[a] soldier's misconduct directed against civilians, moreover, brings discredit upon the service of which he is a member.' [69] With these further reasons, I support the conclusion that the provisions of the DFDA which permit the trial by general court martial of the prosecutor in respect of the alleged offence are not invalid. The offence provisions of the DFDA are sufficiently connected with the regulation of the Regular Army of which the prosecutor is a member, and with the maintenance of good order and discipline among its members." 45 The context of Re Aird was admittedly an overseas deployment—in which scope for military jurisdiction is arguably wider than in a domestic Australian peacetime context—albeit a training as distinct from an operational deployment; and the charged conduct occurred while PTE Alpert was on recreational leave. Nonetheless, Gummow J's endorsement of the passages cited by his Honour from Mason CJ, Wilson and Dawson JJ in Tracey and from Harlan J in O'Callahan v Parker—which judgment was influential in the reinstatement of the "service status" test in Solorio—tends to lend some support to the "service status" test. 46 The Constitution vests command of the Defence Force in the Governor-General as Commander-in-Chief. Command of the Defence Force is an aspect of the executive power. The discipline of the force is an aspect of its command. Service tribunals may act judicially, but they operate within the chain of command to "inform the conscience of the commanding officer": see Mills v Martin (1821) 19 Johnson's Supreme Court Reports (NY) 7 at 30, cited with approval in Lane at 257. Ultimately, they operate as part of the command (executive) function, albeit that they act judicially; the presence of the "trappings" of a trial is a necessary and appropriate concomitant of any formal process of adjudication of alleged violations of a disciplinary code in order to afford procedural fairness, but it does not transform the essentially executive nature of the function of maintaining a disciplined and effective defence force into a judicial one: see R v White; Ex parte Byrnes (1963) 109 CLR 665 at 670, 671; cf Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 65; The Shell Company of Australia Limited v Federal Commissioner of Taxation (1930) 44 CLR 530 at 544; R v Quinn; Ex parte Consolidated Foods Corporation (1977) 138 CLR 1 at 5, 6, 8–9, 12. Amenability to service discipline is an incident of being under command of the relevant Service Chief (or, as is now the case, the Chief of the Defence Force) and ultimately the Governor-General—that is to say, having the status of a defence member. 47 The objects of disciplinary proceedings conventionally include protecting the public, maintaining proper standards of professional conduct by members of the relevant profession (here, the ADF), and protecting the profession's reputation. Thus, conduct extraneous to professional practice attracts professional discipline because it can inform questions of "fitness" of the individual, and the reputation of the profession as a whole. In his dissent in Solorio, Marshall J decried the prospect that under the "service status" test any member of the Armed Forces could be subjected to military jurisdiction for any offense, "from tax fraud to passing a bad check, regardless of its lack of relation to 'military discipline, morale and fitness'" (483 US 435 at 467). However, "tax fraud" has been held to provide a basis for disciplinary proceedings against barristers (see, e.g., New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284), as no doubt would issuing bad cheques. The notion that disciplinary tribunals can impose disciplinary sanctions for conduct that is also a criminal offence, without offending the rule against double jeopardy, is well established: see, for example, Hardcastle v Commissioner of Police (1984) 53 ALR 593, 596–597. As was said (by a Full Court of the Federal Court) in Hardcastle (a case concerning disciplinary proceedings against a police officer for misconduct which was also a criminal offence) (at 597):' "If the appellant were charged with, and convicted of, the same unlawful assaults as are the subject of the disciplinary offences he would not face double jeopardy or be punished twice for the same offence. He would be convicted of an offence against the criminal law and be guilty of a breach of the disciplinary code of the Australian Federal Police. The two proceedings are essentially different in character and result." 48 Likewise, if a defence member be convicted of a service offence under the DFDA and subsequently prosecuted under civilian criminal law in respect of the same conduct, he or she does not face double jeopardy, but would be convicted of an offence against the criminal law and be guilty of a breach of the disciplinary code constituted by the DFDA. 49 It is, as pointed out in Re Tracey by Mason CJ, Wilson and Dawson JJ, in the passage subsequently endorsed in Re Aird by Gummow J with the concurrence of Gleeson CJ and Hayne J, for Parliament to decide what it considers necessary and appropriate for the maintenance of good order and discipline in those forces, and Parliament's decision will prevail so long at any rate as the rule which it prescribes is sufficiently connected with the regulation of the forces and the good order and discipline of defence members. In the military context, the commission of crimes by defence members, even when off duty and extraneous to their service, can reflect on their fitness, and on the reputation of the ADF as a whole. Parliament may thus decide, as it has, that any crime committed by a defence member may be prosecuted as a service offence. 50 Moreover, as recognised in Solorio, the "service status" test has the advantage of providing a much clearer and cleaner test than that of "service connection". 51 The DFDA attaches amenability to service discipline to status as a "defence member" (and, in certain cases, a "defence civilian"). In other words, the legislation is framed in terms of the "service status" test. As explained above, no decision of the High Court rejects the "service status" test, and it has never been held that, insofar as the DFDA embraces the "service status" test, it is beyond power. Accordingly, even if the "service connection" test were not satisfied, in the absence of any decision of the High Court precluding its acceptance, we would find jurisdiction on the basis of the "service status" test. 52 Ground of appeal (a) therefore fails. UNSAFE AND UNSATISFACTORY—GROUND OF APPEAL (B) AND (C) 53 As explained above, both Grounds (b) and (c) are in reality factual, not legal, grounds of appeal under s 23(1)(d) (that in all the circumstances of the case, the conviction is unsafe or unsatisfactory), or s 23(1)(a) (that the conviction is unreasonable or cannot be supported having regard to the evidence). Ground (b) is essentially that, the DFM having found that he could not be satisfied beyond reasonable doubt of the reliability of the complainant's evidence on Charge 3, he ought to have entertained a similar doubt in respect of her evidence on Charge 1. Ground (c) is in essence that there are such shortcomings in the "recent complaint" evidence as to render reliance on it unsafe. It is convenient first to address the "recent complaint" aspect, because it has some relevance also to Ground (b). The "recent complaint" evidence—Ground (c) 54 Ground (c) is that "[t]he inconsistencies in the evidence of fresh or recent complaint were not taken into account or given due weight by the learned Defence Force Magistrate such as to cause the trial to miscarry." The appellant contended that the DFM ignored a significant number of "inconsistencies in the evidence", failed to take into account "the important issue of credit" and should not have believed the complainant because of the inconsistencies in the complaint evidence. As already explained, this is in reality an aspect of a complaint that the conviction is unsafe or unsatisfactory. 55 Evidence of "recent complaint" on the part of the complainant was received at the trial, in respect of reports she had made to numerous others. That evidence may be summarised as follows. 56 According to SGT Domjahn, in the mid-morning of 27 January, while at the shops, she received a phone call from the complainant, who asked if she was at home and if she could come over, and said that she had "had to stop something" the previous evening; she sounded upset. The complainant arrived at the residence which SGT Domjahn shared with her husband, PO Myers, and spent most of the day there. The complainant appeared distressed and upset, and was crying. Similarly, PO Myers described the complainant as being "all over the place" and crying, and blaming herself for "hanging out with guys". SGT Domjahn asked the complainant "what happened last night?", and she replied "Willy had a go at me". SGT Domjahn asked, "what do you mean 'a go'?", and the complainant said "No, he had a go", and then described, using a hand gesture, an act of masturbation. 57 The complainant subsequently explained that, after the appellant's wife had gone inside and did not return, the appellant had his hand down his pants and it looked like he was scratching himself. She recounted that she had said, "Stop. That's filthy", to which the appellant replied, "Stop what?". The appellant kept doing it for a while; the complainant said something like, "That's disgusting. Go to bed. Your wife's inside". The appellant said "Sorry. I'm going to bed", and gave the complainant a long hug, during which "she could feel his groin pushing up against her". She then went to bed on the mattress. She said that she woke up and could feel the appellant's hand down the front area of her pants, in the groin region. At some point she said that the appellant was standing at the end of her mattress and appeared to be masturbating. 58 SGT Domjahn pictured from what she was told that the appellant fell asleep next to the complainant, and that the complainant stayed awake and prepared a text message to SGT Domjahn, which she did not send, but showed to SGT Domjahn the next day. It was quite a long message and SGT Domjahn did not read it fully, but it commenced "with something like she was laying there and something happened". SGT Domjahn described the complainant's recount as being "scattered"; she said that each time they went back over the events the complainant's story did not change, but more detail was provided. 59 PO Myers said that the complainant reported that the appellant "decided to have a crack, have a go at me", and that the complainant told him that she was "standing there" and "[the appellant] started pulling himself", on account of which the complainant said "[c]ut it out, that's gross". In cross-examination, PO Myers accepted the proposition that the complainant had reported to him that "[the appellant] then started touching his penis and rubbing it and getting it hard". The complainant used gestures to indicate what she said the appellant had been doing. She told PO Myers that after she went to bed the appellant laid down beside her and started rubbing her, and that she woke up to find her pants were "semi-undone" and his hand was down around her vagina. 60 At work the following day, 28 January, SGT Domjahn persuaded the complainant to speak to her Executive Officer, LT Janelle Stewart and the Padre, CHAP Bruce Johnson, about the matter. CHAP Johnson's recollection was that the complainant wanted to be assured of confidentiality concerning the matter. The complainant said that on the Australia Day weekend a sergeant had tried to touch her and later to remove her panties. 61 The complainant also spoke to a friend, SGT Hollie McBride, a medic, who had previously worked at the Cabarlah Clinic. SGT McBride said that the complainant told her that the appellant started masturbating in front of her and that she had told him to put it away. After she went to bed the appellant had spooned her, and she pushed him away and told him to go back to his wife. He later attempted to pull down her pants, following which she pushed him away and he passed out beside her. 62 SGT McBride advised the complainant to speak to a psychologist or a doctor, and encouraged her to see Dr Philip Wills, a doctor who worked for the ADF at Cabarlah Clinic, Borneo Barracks, Cabarlah. The complainant made an appointment to see Dr Wills. Dr Wills did not give oral evidence before the DFM, but provided a statement made on 1 April 2014 which was admitted. Dr Wills saw the complainant for psychiatric examination. She told him that she had attended a social event at the home of friends (whom she did not identify) on the night of 26 January, and that at the end of the evening, after "the wife" had gone to bed, "the husband" had "pulled out his penis and started playing with it", or words to that effect. Dr Wills referred the complainant to Ms Janice Clark, a psychologist. Dr Wills saw the complainant again on 29 January, the following day, after she had seen Ms Clark, and noted that she was still "quiet and reserved". He authorised her to take a week's convalescence leave. In his opinion she had presented with distress following the incident she described, but at no time did he diagnose any psychological or psychiatric disorder. 63 Ms Clark had previously performed a post-deployment screening of the complainant, and had seen her on various occasions around the base. On this occasion she described the complainant as being highly distressed and extremely fragile. Ms Clark said that Dr Wills had told her that the complainant's distress levels required psychological support. When the complainant was telling her about the events that had happened at the Williams's house she became highly emotional, overwhelmed and teary. Ms Clark had never previously seen the complainant other than confident and forthright. The complainant told her that after everyone had left the party, the appellant exposed himself on a couple of occasions; she told him to stop, and he did. After retiring to her bed, and falling asleep, the complainant awoke with SGT Williams on top of her and in an undressed state. She pushed him away, and he then left, but returned sometime later and the same thing occurred—he tried to force himself on her, being on top of her and trying to remove her clothing. Later, he again returned, and she again fought him off. "[S]he made a point that there was no penetration and that he returned to his room, and that was the end of it until the next morning". 64 Ms Angela Maher, who had known the complainant since 2013, saw her at a meeting early on 28 January. The complainant appeared unusually distracted and emotional, and broke down in tears. Ms Maher took the complainant out of the meeting and asked if everything was okay. The complainant told Ms Maher that, following the party, at the end of the evening, when she was in bed, she saw a person standing in the room, masturbating in front of her. She asked him to stop, but he did not. He then approached her, rubbed against her, and, when she proceeded to go to sleep, was attempting to force himself onto her. In response to questions from Ms Maher, the complainant eventually said that the person was the appellant. The complainant was not sure what she should do about the matter and whether she should take it any further, and said that she did not have faith in her chain of command. 65 The complainant's mother recalled having received a missed call from her daughter on the Tuesday after Australia Day, and when she returned the call her daughter sounded upset and she realised that something was wrong. The complainant told her that something happened at an Australia Day party to the effect that she was assaulted by a person at whose house she had been. She said, "I was on the mattress asleep and the man who owned the house, the husband, came out and attacked me, tried to grope me". She did not want to talk any further about it. The following day—Wednesday evening—the complainant's mother and her husband took the complainant back to their home in Toowoomba where she stayed for about a week. She noticed that her daughter was "definitely different" and "down". The complainant was particularly upset after receiving a text message from the appellant (presumably the message which he sent on 31 January). In cross-examination, the complainant's mother said that the complainant told her, "Well, it was awful, mum. He groped me. He tried to pull my pants off and he tried to put his penis in my face". The complainant's mother agreed that in a statement to Service Police she reported: "She [the complainant] said she had been asleep in the middle of the night. The guy she worked with, whose house it was, had come out and groped her. He had then tried to rip her clothes off and he tried to masturbate in her mouth, during which time she had tried to fight him off". 66 During the trial, counsel for the appellant put to the complainant that none of the things that she alleged the appellant had done to her had happened, and cross-examined her about what she had said to various other people about what had happened. She had difficulty recalling exactly what she had said to each of those people. It is evident that, in addition to telling people about the conduct the subject of the three charges, the complainant also told some people of other things that she believed the appellant had done to her after she had gone to bed on the mattress, in particular the attempted pulling down of her pants and the appellant standing at the end of the bed and masturbating. She did not deny (although she did not remember) having made such reports. However, her complaints about the events that preceded her going to bed were consistent, namely the appellant stroking his penis with his hand and attempting to hug her and pressing his erect penis against her thigh. Some may have assumed, wrongly, that her reference to the appellant masturbating implied that he was also exposing himself at the same time. With the exception of the medical witnesses, Dr Wills and Ms Clark, it does not appear that any of those to whom the complainant spoke about the matter made contemporaneous notes. It is hardly surprising, therefore, that their recollections of what the complainant had said to them some 15 months earlier would be imprecise. 67 It must be noted that this "recent complaint" evidence involves multiple witnesses separately recalling what the complainant reported to them on separate occasions. Their evidence is ultimately of their recollection or perception of what the complainant told them. It is to be expected that the complainant's report would not be identical on each occasion, and that she would very understandably relate different amounts of detail to different persons, depending on the context and her relationship with them. The fact that two accounts are not identical and do not descend to the same detail does not mean that they are necessarily inconsistent. Thus, even if each witness's recollection of the complainant's recount was perfect, some variation between them—according to the detail of the complainant's report to them—is to be expected. Moreover, the perception and recollection of the witnesses to whom she made complaint will not be perfect: each may have interpreted or recalled what the complainant recounted in his or her own way. Particularly in the absence of contemporaneous notes, their recollections will be of varying degrees of accuracy. Some discrepancies are to be expected. 68 In fact, the concordance of the complaint evidence, particularly in respect of Charge 1, is remarkable. Most of the reports attributed by the witnesses to the complainant are entirely consistent with the prosecution case on Charge 1. Into this category falls the evidence of PO Myers, SGT Domjahn, and SGT McBride. 69 Ms Maher recalls masturbation being mentioned, but when the complainant had gone to bed; it is highly probable that this is simply a misunderstanding of what the complainant was describing. Dr Wills noted the complainant referring to "the husband" pulling out his penis and playing with it; again, this might well be his interpretation of what the complainant reported. The complainant's mother also referred to masturbation, although apparently after the complainant had gone to bed; but the complainant appears to have not gone into much detail with her mother, whose recollection might well have been coloured by a mother's horrified reaction to her daughter's report and distress. The report to the Chaplain contained little detail. It alone did not refer to an incident which could have been masturbation; but the complainant explained that she was concerned about confidentiality with the Chaplain—which his evidence corroborated—and she did not tell him much. 70 Counsel for the appellant emphasised Ms Clark's evidence: Ms Clark did not report explicit mention of masturbation, but said that the complainant told her that the appellant "exposed himself" on a couple of occasions before she went to bed. However, the contemporaneous notes which Ms Clark made, some 15 months earlier, on 29 January 2014, contained no such reference; they referred only to the complainant describing "a recent event involving a colleague which has caused her immense psychological distress. Although she was able to physically defend against the persistent and unwelcome advances she described feeling emotionally defenceless and confused at the time". If the complainant had told Ms Clark about the conduct the subject of Charges 1 and 2, Ms Clark could well have recalled and construed it, 15 months later, as the appellant having "exposed himself". 71 The evidence suggested that the complainant was very upset and that she provided different amounts of detail to different people. However, there were no clear inconsistencies between what the complainant said in her evidence and what she is reported to have said to others, about the conduct the subject of Charges 1 and 2. The variations between the complainant's evidence and those to whom she complained related mainly to events that occurred after the complainant had gone to sleep. It is understandable that a person who has been asleep and intoxicated may not have as clear a memory about the details involved in the conduct alleged as she would have in respect of the events that occurred earlier, notwithstanding that she was also intoxicated at that time. The minor discrepancies in respect of Charge 1 are explicable by interpretation and perception on the part of the witnesses of what the complainant related, and by her not being as comprehensive with some (such as the Chaplain) as with others (such as her good friends PO Myers and SGT Domjahn). 72 The critical fact for the purposes of Charge 1 was that she saw the appellant's hand moving inside his pants and in the area of his genitals in a way that appeared as though he was masturbating. Counsel for the appellant frankly conceded that the complainant's evidence about Charge 1 was consistent with her complaint to SGT Domjahn about that incident. He could only point to Ms Clark's evidence that the complainant told her that the appellant exposed himself as a basis for the submission that there were relevant inconsistences within the complaint evidence in relation to Charges 1 and 2. The complainant's evidence about Charges 1 and 2 was also consistent with what she said about those events to PO Myers, SGT McBride and Dr Wills, and not inconsistent with what she had said to anyone else. The overall impression, in fact, is very much of consistency rather than inconsistency. 73 The DFM devoted much of his reasons to assessing credit, particularly that of the complainant, having correctly directed himself of the need to carefully scrutinise her evidence consistently with the principle in R v Murray (1987) 11 NSWLR 12. After summarising all of the evidence in the prosecution case, the DFM expressly observed that findings of credit were "paramount" in the matter. As we have already observed, he found the complainant to be an honest and impressive witness. 74 The DFM carefully and accurately summarised the complaint evidence, and considered the inconsistencies between the complainant's evidence and the evidence of complaint made by her to others. He accepted that there were "inconsistencies in the various accounts the complainant gave to various witnesses", and took them into account. He said: "Whilst inconsistency between what a witness alleges occurred and what the witness may have told someone else on another occasion are always important in making an assessment of honesty and reliability, I form the view that whilst there are clearly inconsistencies in some of the versions described by the complainant, this does not affect my overall assessment of the complainant's credit as a witness." 75 He found a "general consistency between what the complainant told the witness Rebecca Domjahn only [sic] after leaving the accused's residence", and noted that SGT Domjahn and others had observed that the complainant was distressed and emotional when she was describing what had happened to her. 76 The DFM did carefully consider and take into account the inconsistencies in the evidence of complaint. There was no inconsistency in the recent complaint evidence sufficient to render it an unreliable basis for considering the complainant a credible witness in respect of Charge 1. Ground (c) is not made out. Inconsistent outcomes—Ground (b) 77 Ground (b) is that the finding of guilt on Charge 1 was inconsistent with the acquittals on Charges 2 and 3. In essence, the appellant contends that, the DFM having found that he could not be satisfied beyond reasonable doubt of the reliability of the complainant's evidence on Charge 3, he ought to have entertained a similar doubt in respect of her evidence on Charge 1, and acquitted on that Charge also. 78 This ground relies upon the principle that a conviction following a verdict of guilty which is inconsistent with a verdict of not guilty of another charge is liable to be set aside as being unsafe and unsatisfactory because it would be illogical or unreasonable for the conviction to stand. 79 Principles relevant to the present matter are included within the general propositions stated in MacKenzie, in the context of inconsistent jury verdicts, at 366–368: "3. Where, as is ordinarily the case, the inconsistency arises in the jury verdicts upon different counts of the originating process in a criminal trial, the test is one of logic and reasonableness. A judgment of Devlin J in R v Stone (Unreported, 13 December 1954, per Devlin J) is often cited as expressing the test: He must satisfy the court that the two verdicts cannot stand together, meaning thereby that no reasonable jury who have applied their mind properly to the facts in the case could have arrived at the conclusion, and once one assumes that they are an unreasonable jury, or they could not have reasonably come to the conclusion, then the convictions cannot stand. … 5. … a residue of cases will remain where the different verdicts returned by the jury represent, on the public record, an affront to logic and common sense which is unacceptable and strongly suggests a compromise of the performance of the jury's duty. … It is only where the inconsistency rises to the point that the appellate court considers that intervention is necessarily required to prevent a possible injustice that the relevant conviction will be set aside. It is impossible to state hard and fast rules. "It all depends upon the facts of the case." 6. The obligation to establish inconsistency of verdicts rests upon the person making the submission." 80 After announcing his decision and reasons in relation to the first two charges, the DFM provided the following reasons in relation to the third charge: "The situation is less clear with the third charge. The evidence of Mrs Williams, which I do accept for the reasons outlined, would make the opportunity for the accused to have engaged in the conduct as alleged by the complainant less likely. This is not to lose sight of the fact that the accused did in fact lay down beside the complainant. Despite his evidence that the complainant immediately got up and went and sat on the couch with the accused's children, it would be open, in my view, to find that some inappropriate touching by the accused on the complainant occurred at this time. The accused's explanation for doing so is far from convincing. That he was observed to sleep on the mattress even by his wife provides some support for the complainant's allegations in respect of Charge 3. But in this trial I must be satisfied of the guilt of the accused beyond reasonable doubt. In my view, it is difficult to reconcile the evidence of Mrs Williams as to when the accused left the bedroom and went outside and that of the complainant as to when the touching alleged in Charge 3 occurred Again, in expressing this view, I am in no way doubting the honesty of the complainant. I suspect that the accused, perhaps in a drunken state, did engage in inappropriate conduct with the complainant as she lay on the mattress. But I am unable to be satisfied beyond reasonable doubt as to the reliability of the complainant's evidence in respect of Charge 3 and, in particular, how it is particularised, as proving that conduct, particularly in light of the evidence of Mrs Williams, which, in my view, is not entirely consistent and arguably inconsistent with the timings and opportunities available to the accused to engage in the conduct alleged. I have also had regard to the complaint evidence which I accept, in respect of Charge 3, may not be entirely consistent. In reaching these findings, I have also had regard to the text message sent by the accused on 31 January 2014. Whilst the text message might, on one view, be seen to be an admission by the accused, I cannot be satisfied that the accused's explanation, supported as it is by his wife's evidence, for sending that text message is untrue. The end result is this: that I find the accused guilty of Charge 1. I find the accused not guilty of Charges 2 and 3." (Emphasis added.) 81 The primary submission in relation to ground (b) was that, because the DFM was not satisfied beyond reasonable doubt about the reliability of the complainant's evidence in respect of the third charge, he should have had a reasonable doubt about the reliability of her other evidence and therefore acquitted the appellant of the first charge. The appellant also contended that his acquittal of the second charge was inconsistent with the guilty verdict on the first charge. 82 The DFM correctly directed himself about the onus and standard of proof, how to treat the evidence of the appellant, the need to carefully scrutinise the evidence of the complainant, the need to consider the evidence in relation to each charge separately and how to treat complaint evidence. 83 The DFM found that the complainant, based on her demeanour, was an "honest and impressive witness", who made "an earnest effort to recall events to the best of her recollection." On the other hand the DFM formed the view that the appellant was "less than convincing" and was not "as impressive a witness as the complainant when giving evidence." The DFM was satisfied beyond reasonable doubt as to the complainant's evidence relevant to Charges 1 and 2, including that the offending conduct occurred. 84 In relation to the second charge, the DFM was not satisfied that the appellant intended to press his penis against the complainant's thigh. As we have noted, intent on the part of the appellant to engage in the relevant conduct was an essential element of that offence. The appellant's acquittal of that charge had nothing to do with the DFM's assessment of the complainant's credibility and was not inconsistent with the guilty verdict in relation to the first charge. 85 However, it is apparent from the DFM's reasons quoted above that the reliability of the complainant's evidence about the conduct the subject of the third charge was one of a number of factors which caused the DFM to have a reasonable doubt about the appellant's guilt of that charge. It is relevant to note that the DFM's reservations about the complainant's evidence were confined to the reliability of her evidence about this particular conduct, "and, in particular, how it [was] particularised, as proving that conduct", and that his reservations concerned the reliability of the complainant's evidence, as distinct from the complainant's honesty. 86 The conduct had been "particularised" in the prosecutor's opening address. The prosecutor told the DFM that "each charge relates to a very short period of time sometime after 2200 hours on 26 January 2014." After outlining the facts in relation to the first two charges he said: "… She then made her way inside the house, to the bed and bedding that had been set aside for her, in an area inside the house, off the dining room. She went to bed and remained fully clothed but went to bed, on her stomach, covered from about the waist down, and proceeded to sleep. She'll tell you, sir, that she didn't get into a very heavy sleep before she noticed that somebody was beside her and was attempting to pull the shorts which she had been wearing down as she laid in that position. … [T]hat allegation is … not the subject of charge. At the time, [the complainant] was not able to make out who it was who was in the bed with her at that time. She assumed, you might infer, that the person who was engaging in that conduct was in fact SGT Williams but it cannot be taken any further than that at this stage. Sir, at that stage, [the complainant] will tell you, she rolled to her side and again attempted to go to sleep. She then felt the person who was beside her place his hand between the mattress and her inner right thigh. At this point in time, you'll hear [the complainant] tell you, there was enough ambient light in that location for her to make out SGT Williams; there is no doubt in her mind who the person was who placed his hand between the mattress of the bed and her inner right thigh. She then placed a barrier, using the pillows in the bedding, between herself and SGT Williams and she laid in that position for the rest of the night. She'll tell you, sir, that SGT Williams fell asleep and he slept in that location for the entire night, but that she could not sleep. … She'll tell you, sir, that the next morning, as the children and wife of the accused started to make their way around the house, watching television and making breakfast, [the complainant] left the bed made up for her and she put herself in a safe location, with the children, in the lounge room, watching television, until it was safe for her to leave." 87 The prosecutor's opening gave the clear impression that the conduct the subject of the third charge occurred soon after the complainant had gone to bed that night and before the appellant went to bed. It also conveyed that the appellant slept on the same mattress as the complainant for the entire night. This was contrary to the evidence of both the appellant and Mrs Williams. 88 In his summary of the complainant's evidence about this charge and the events leading up to it, the DFM noted that the complainant thought that she woke up feeling her pants being pulled down possibly half an hour after she went to bed. It was some time after that when the appellant lay down beside her on the mattress and put his hand underneath her thigh, near her groin. The complainant had the impression that the appellant stayed on her mattress for some time after that (the complainant said that "he stayed there" after she had told him to go to his own bed), during which time she constructed a barrier made of blankets and pillows to separate her from the appellant and drafted a text message which she was going to send to SGT Domjahn. 89 Mrs Williams gave evidence that she went to bed at 0250. She knew that because she saw the time on her bedside clock. She said that the appellant came to bed about 15 minutes later. She said that she and the appellant engaged in sexual intercourse for some time before both falling asleep, and that the appellant remained in the bed until he got up in the morning to go to the kitchen to get some water. When she got up, the complainant was on a couch with her two children, and the appellant had fallen asleep on the mattress where the complainant had been sleeping. 90 The DFM accepted the evidence of Mrs Williams, particularly in relation to the time when she went to bed and the fact that the appellant came to bed about 15 minutes later. The DFM also seems to have accepted her evidence that the appellant remained in bed until he got up in the morning to get some water, thereby excluding the possibility of him getting out of bed after she was asleep, engaging in the conduct alleged, then returning to bed. Although the prosecutor had referred to the three events occurring within "a very short time sometime after 2200 hours on 26 January 2014", there was no other evidence about the time when the events occurred, both the complainant and the appellant being very vague about timing. 91 The 15-minute period between 0250 and the time when the appellant went to bed did leave sufficient time for the events the subject of the first two charges to occur, but not for the later conduct on the mattress to take place. The complainant estimated that the conduct which led to Charge 3 occurred about half an hour after she had gone to bed. At that time, on Mrs Williams's account, the appellant was with her in the matrimonial bed. There he had remained until morning. It was not suggested to Mrs Williams that the appellant had left the bedroom between 0305 and when she observed him to get up in the morning after sunrise. Accordingly, the DFM concluded that the only opportunity for the appellant to have engaged in the conduct alleged would have been after the appellant had got up in the morning and when the family was stirring. This was quite different to the timing particularised by the prosecutor during his opening address and would have caused the DFM to have a reasonable doubt as to whether the actual conduct the subject of the third charge occurred. It would not have required the DFM to have had a reasonable doubt about the occurrence of the two events occurring some time earlier, before the appellant went to bed. 92 The DFM had the difficult task of reconciling the competing evidence of the complainant and Mrs Williams about the timing of events, in circumstances where both of them were heavily affected by alcohol at the time. 93 Although he considered it would be open to find that the appellant engaged in some inappropriate touching of the complainant after the appellant's wife saw him get out of bed, the DFM was concerned about a number of matters. As we have just observed, his main concern was the timing of the alleged offending, in light of how the prosecutor had particularised that offending during his opening, the complainant's uncertainty (perhaps understandable in light of her having been asleep and her intoxication), and the wife's evidence suggesting that the only opportunity for such conduct to have occurred would have been after the appellant got up in the morning. The complainant's evidence was that the charged conduct occurred when it was dark. Patio lights illuminated the area where her mattress was placed. Mrs Williams's evidence—which was accepted—was that, when the appellant arose in the morning, the "sun was well and truly up". It is, therefore, hard to see how the DFM could have been satisfied beyond a reasonable doubt that the conduct alleged in Charge 3, assuming it occurred, occurred in the morning. 94 We agree with counsel for the respondent that the DFM's reasoning did not require or in fact involve an adverse finding as to the complainant's credibility that creates doubt about her evidence in relation to Charges 1 and 2. The conduct the subject of Charges 1 and 2 occurred at a relevantly different place and time to the conduct the subject of Charge 3. The former occurred at the patio area before the complainant and the appellant went inside to go to bed. The conduct the subject of Charge 3 was alleged to have occurred sometime after the complainant had gone to sleep on the mattress in the dining room. 95 The complainant's evidence in relation to Charges 1 and 2 was clear. As we have observed, the DFM found that the complainant, based on her demeanour, was an "honest and impressive witness", who made "an earnest effort to recall events to the best of her recollection." Her evidence about those charges was also corroborated by the complaint evidence, particularly that of SGT Domjahn and PO Myers. As well as using the complaint evidence to assess the complainant's credibility, the DFM was entitled to treat that evidence, although hearsay, as evidence of the facts asserted by the complainant: s 66(2), Evidence Act 1995 (Cth); Papakosmas v The Queen (1999) 196 CLR 297. 96 The complainant's evidence in relation to the third charge was not as clear as her evidence in relation to the first two charges, particularly in relation to the time when the alleged conduct occurred. She had been sleeping and was intoxicated, and would have been trying to get back to sleep, when she thought the conduct occurred. 97 It is not illogical or unreasonable for the conviction in relation to the first charge to stand. CONCLUSION 98 Accordingly, each of the appellant's grounds fails, and the appeal must be dismissed. I certify that the preceding ninety-eight (98) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justices Tracey and Hiley. Associate: Dated: 16 December 2016 REASONS FOR DECISION BRERETON J: 99 I am in agreement with Tracey and Hiley JJ that grounds of appeal (a) and (c) fail, and the reasons given by their Honours in respect of those grounds are my reasons also. 100 However, in my opinion, for the reasons that follow, the appellant is entitled to succeed on ground (b). 101 Ground (b) is that the finding of guilt on Charge 1 was inconsistent with the acquittals on Charges 2 and 3. In essence, the appellant contends that, the DFM having found that he could not be satisfied, beyond reasonable doubt, of the reliability of the complainant's evidence on Count 3, he ought to have entertained a similar doubt in respect of her evidence on Count 1, and acquitted on that count also. 102 The present is not a case of legal inconsistency. In MacKenzie, the High Court explained that the argument that two or more jury verdicts are inconsistent (or repugnant or illogical) ordinarily arises, in the context of criminal trials, when it is suggested that a conviction resting upon one of those verdicts is thereby demonstrated to be unsafe or unsatisfactory. In respect of suggested factual inconsistency, Gaudron, Gummow and Kirby JJ said (at 366–368): "(3) Where, as is ordinarily the case, the inconsistency arises in the jury verdicts upon different counts of the originating process in a criminal trial, the test is one of logic and reasonableness. A judgment of Devlin J in R v Stone [Unreported, 13 December 1954, per Devlin J.] is often cited as expressing the test [See, eg, R v Hunt [1968] 2 QB 433 at 438; R v Durante [1972] 1 WLR 1612 at 1617; [1972] 3 All ER 962 at 966; cf Archbold, Criminal Pleading, Evidence & Practice, 43rd ed (1995), vol 1, par 4-457]: 'He must satisfy the court that the two verdicts cannot stand together, meaning thereby that no reasonable jury who had applied their mind properly to the facts in the case could have arrived at the conclusion, and once one assumes that they are an unreasonable jury, or they could not have reasonably come to the conclusion, then the convictions cannot stand.' (4) Nevertheless, the respect for the function which the law assigns to juries (and the general satisfaction with their performance) have led courts to express repeatedly, in the context both of criminal and civil trials, reluctance to accept a submission that verdicts are inconsistent in the relevant sense [See Mercer v Commissioner for Road Transport and Tramways (NSW) (1936) 56 CLR 580 at 595; Ward v Roy W Sandford Ltd (1919) 19 SR(NSW) 172]. Thus, if there is a proper way by which the appellate court may reconcile the verdicts, allowing it to conclude that the jury performed their functions as required, that conclusion will generally be accepted [R v Wilkinson [1970] Crim LR 176]. If there is some evidence to support the verdict said to be inconsistent, it is not the role of the appellate court, upon this ground, to substitute its opinion of the facts for one which was open to the jury [Hayes v The Queen (1973) 47 ALJR 603 at 604–605]. In a criminal appeal, the view may be taken that the jury simply followed the judge's instruction to consider separately the case presented by the prosecution in respect of each count and to apply to each count the requirement that all of the ingredients must be proved beyond reasonable doubt [R v Andrews Weatherfoil Ltd (1971) 56 Cr App R 31 at 40]. Alternatively, the appellate court may conclude that the jury took a "merciful" view of the facts upon one count: a function which has always been open to, and often exercised by, juries [R v Hunt [1968] 2 QB 433 at 436]. The early history of New South Wales was affected by English juries which, in the face of clear evidence, declined to find the value of goods stolen sufficient to attract the punishment of death, thereby affording to the offender the alternative punishment of transportation [Castles, An Australian Legal History (1982), p 56]. Australian decisions have acknowledged that the role of the jury continues to be ameliorative in this respect. In R v Kirkman [(1987) 44 SASR 591 at 593], in the Supreme Court of South Australia, King CJ (with the concurrence of Olsson and O'Loughlin JJ) observed: '[J]uries cannot always be expected to act in accordance with strictly logical considerations and in accordance with the strict principles of the law which are explained to them, and courts, I think, must be very cautious about setting aside verdicts which are adequately supported by the evidence simply because a judge might find it difficult to reconcile them with the verdicts which had been reached by the jury with respect to other charges. Sometimes juries apply in favour of an accused what might be described as their innate sense of fairness and justice in place of the strict principles of law. Sometimes it appears to a jury that, although a number of counts have been alleged against an accused person, and have been technically proved, justice is sufficiently met by convicting him of less than the full number. This may not be logically justifiable in the eyes of a judge, but I think it would be idle to close our eyes to the fact that it is part and parcel of the system of administration of justice by juries. Appellate courts therefore should not be too ready to jump to the conclusion that because a verdict of guilty cannot be reconciled as a matter of strict logic with a verdict of not guilty with respect to another count, the jury acted unreasonably in arriving at the verdict of guilty.' We agree with these practical and sensible remarks. (5) Nevertheless, a residue of cases will remain where the different verdicts returned by the jury represent, on the public record, an affront to logic and common sense which is unacceptable and strongly suggests a compromise of the performance of the jury's duty [R v Irvine [1976] 1 NZLR 96 at 99; R v Morgan [1981] 2 NZLR 164 at 168–169; R v Cooper (1993) 149 AR 207; Ewaschuk, Criminal Pleadings and Practice in Canada, (1983), §15.212, requiring that the verdicts be "so mutually contradictory or violently at odds in relation to the evidence that they cannot stand together in the sense that no reasonable jury, who had applied their mind to the facts of the case, could have arrived at the same conclusion": R v Peterson (1996) 106 CCC (3d) 64 at 79; cf Hall v Poyser (1845) 13 M & W 600 [153 ER 251]; Bedford v Crapper [1949] 3 DLR 153]. More commonly, it may suggest confusion in the minds of the jury or a misunderstanding of their function, uncertainty about the legal differentiation between the offences or lack of clarity in the judicial instruction on the applicable law [R v Zundel (1987) 35 DLR (4d) 338 at 401–402 applying R v McShannock (1980) 55 CCC (2d) 53 at 55–56; cf Mack v Elvy (1916) 16 SR(NSW) 313]. It is only where the inconsistency rises to the point that the appellate court considers that intervention is necessarily required to prevent a possible injustice that the relevant conviction will be set aside [R v Drury (1971) 56 Cr App R 104 at 105]. It is impossible to state hard and fast rules. "It all depends upon the facts of the case."" 103 However, the reasons for the reluctance of appellate courts to go behind jury verdicts in respect of inconsistent verdicts, which is manifest in that passage, are less compelling in the case of a trial by a judge (or, in present circumstances, DFM) alone, where reasons are required and given. 104 Mr McLure SC, for the respondent, submitted that the reasons on account of which the DFM entertained a reasonable doubt on Counts 2 and 3 did not necessitate a similar doubt in respect of Count 1. This is largely correct in respect of Count 2: the accused was acquitted in respect of that count not by reason of any doubt about the reliability of the complainant's evidence, but because the DFM was not satisfied, beyond reasonable doubt, that when the accused's groin made contact with the complainant's thigh, he intentionally pressed and moved his penis against her thigh. That involved no reflection upon the reliability of the complainant's evidence. Nonetheless, it is not without significance in the whole context of the events of that night that this involved acceptance, as a reasonable possibility, that the appellant's conduct involved in Count 2 was not actuated by sexual motives. 105 The position with Count 3, however, is more difficult. In order to convict on Count 3, the DFM had to be satisfied beyond reasonable doubt that the appellant had touched the complainant on the thigh. The complainant gave evidence that sometime after she had gone to sleep, she was awoken by a person—presumably the appellant—attempting to pull down her pants, and subsequently, while she was lying awake in a state of shock, she felt somebody come and lie in the bed, next to her. Then: "After you had felt somebody get into bed with you, what did you do, if anything?---I was quite tense, I believe. I was still in shock. Did you stay in that position?---Yes. Did anything else happen at that point in time that you can remember?---Yes, I felt a hand come underneath my right thigh, trying to push further towards my groin." 106 She told him: "Fuck off. Go away, leave me alone. Go to bed in your own bed with your wife". The appellant did not leave the bed, but remained there. She erected a barrier with a pillow and blankets between them, and lay there and sobbed for some time, until she heard the Williams children get up in the morning. 107 That evidence, if accepted, would have resulted in a conviction on Count 3. The DFM must have entertained a doubt that it was accurate. The question is whether, once the DFM had found that he could not be satisfied, beyond reasonable doubt, of the reliability of the complainant's evidence on Count 3, that similarly affected her reliability on Count 1. That requires analysis of what was involved in the DFM's doubt about Count 3. 108 The DFM's reasons for being unable to be satisfied beyond reasonable doubt as to the reliability of the complainant's evidence in respect of Charge 3 as particularised were founded in his acceptance of the evidence of Mrs Williams, which was "difficult to reconcile … as to when the accused left the bedroom and went outside" with "that of the complainant as to when the touching alleged in Charge 3 occurred" and was "not entirely consistent and arguably inconsistent with the timings and opportunities available to the accused to engage in the conduct alleged". Those reasons involve, not a mere doubt that the complainant had perhaps mistaken or misinterpreted what happened on the mattress, but—founded on acceptance of Mrs Williams' evidence—doubt that there had been time and opportunity for the appellant to engage in the conduct alleged at all. 109 The conduct the subject of Counts 1 and 2 is said to have occurred after Mrs Williams left the party to go to bed. On Mrs Williams' evidence it must have taken place in the 10 to 15 minutes after she left the party, before she was joined in bed by her husband. On the complainant's version, the attempt to pull down her pants happened as best she can recall possibly half an hour after she went to bed, but given her state of inebriation and sleep, and the hour (which must have been after 0300) it could conceivably have occurred before the appellant went to bed, or after he woke up in the morning and (admittedly) jumped onto her mattress. 110 Acceptance of Mrs Williams' evidence did not render it impossible for the appellant to have committed the conduct the subject of Count 3: as the DFM explained, it was still possible for it to have occurred, when the appellant admittedly lay on the mattress beside her. The DFM concluded that it was open to find, consistently with acceptance of Mrs Williams' evidence, that some inappropriate touching by the accused of the complainant occurred at that time, and indeed he "suspected" that it had. Thus, the doubt that resulted in the acquittal on Count 3 was not occasioned by the evidence of Mrs Williams rendering it impossible that the conduct concerned could have occurred. Rather, the effect of her evidence was to reduce the possibility of its having occurred—by narrowing the opportunity for it to have occurred: it left only the possibility that Count 3 occurred in the morning, after the appellant had got up, while the children were watching television in the next room; and that timing did not accord well with the complainant's version, and even less well with the way in which the prosecution case had been opened. This cast doubt on the accuracy and reliability of the complainant's version, and left open a reasonable possibility that the appellant's version was correct. 111 Moreover, Mrs Williams' evidence impacted not only on the opportunity for the conduct alleged to have occurred, but on the whole of the events from 15 minutes after she went to bed, until the appellant arose in the morning. Mrs Williams' evidence substantially corroborated the appellant's version of events between about 0305 and when he awoke; and if accepted—as it was—created the reasonable possibility that the appellant was telling the truth about those matters. Essentially, Mrs Williams' evidence founded acceptance of a reasonable possibility that the appellant's version of events from shortly after Mrs Williams went to bed until he arose in the morning was accurate. Logically, that cast a corresponding doubt on the whole of the complainant's version of events, at least from the moment the complainant went to bed. 112 Mrs Williams' evidence does not, of course, bear directly on the events during the 15 minutes after she went to bed before the appellant joined her, during which the conduct the subject of Counts 1 and 2 is said to have—and could have—occurred. However, the prosecution case, in respect of all three counts, depended on the complainant's evidence, though it was considerably fortified—on all three counts—by the evidence of recent complaint, including of the complainant's demeanour when making those complaints. Yet the DFM accepted that there were reasonable possibilities (1) (in respect of Count 2) that the appellant did not intend to rub his penis against the complainant's thigh (that is, that he did not have a sexual intent); and (2) (in respect of Count 3) that the conduct the subject of Count 3 did not happen. In particular, in the light of Mrs Williams' evidence, the complainant's evidence was not enough to exclude a reasonable possibility that the appellant's version of events from about 0305 onwards was accurate. 113 Critically, the differences between the appellant's (possibly true) version, and the complainant's version, in respect of the post-0305 period, cannot be explained by possibly minor defects of perception or recollection which could be restricted to the post-0305 timeframe. To the contrary, in the admittedly-possible event that the appellant's version—substantially corroborated by the accepted evidence of his wife—be true, the complainant's version of events after about 0305—as given in evidence, and as recounted to others—would be fanciful. Consistent with the DFM's acceptance of the complainant as honest, that doubt is explicable only as one that she may have imagined or misinterpreted those events. That being so, it is not readily apparent why the same possibility was not equally applicable in respect of the 15 minutes before 0305, and the conduct the subject of Count 1, as it was to the later period, and the conduct the subject of Count 3. In this respect it is not without significance that the conduct the subject of Count 1, involving as it did no allegation of exposure, depends on the complainant's interpretation of what she perceived the accused to be doing with his hand in his pants. 114 The DFM's reasons do not explain why the complainant's evidence on Count 1 can logically be regarded as less susceptible to doubt than her evidence on Count 3. Reasons why it might be so regarded can be imagined—for example, that whereas the complainant was awake albeit affected by alcohol before 0300, at the time of the later events a combination of alcohol, tiredness and sleep—even dreams—may have affected her perception and recollection. However, these were not the DFM's reasons, nor did anyone suggest that to be the case. The closest the DFM comes to an explanation is the comment that the complaint evidence in respect of Charge 3, "may not be entirely consistent". It is a fair observation that there were more discrepancies between the reports of the complainant's recounts of conduct after she went to bed than before; and in particular that nowhere in the complaint evidence is there to be found any complaint of conduct in the precise terms of that referred to in Count 3. But as is explained in the reasons of Tracey and Hiley JJ, such discrepancies are to be expected in complaint evidence and are explicable by differences in the amount of detail that she related to different persons, and differences in their perception and recollection of what she reported. Moreover, the evidence given by PO Myers, SGT Domjahn, and SGT McBride of the complainant's recounts to them is substantially consistent with Count 3. Thus while it can fairly be said that the complaint evidence in respect of Count 3 was a little less cogent than in respect of Count 1, this seems a faint basis for a conclusion that the complainant's evidence in respect of Count 3 did not establish the case beyond reasonable doubt, when her evidence in respect of Count 1 did. 115 Plainly, the substantial reason for the different outcomes was the evidence of Mrs Williams. It can scarcely be doubted from the DFM's reasons that, but for Mrs Williams' evidence, the appellant would have been convicted on Count 3. And that accentuates the problem: in essence, Mrs Williams' evidence created a reasonable doubt for the DFM in respect of Count 3, when he did not entertain one in respect of Count 1. But while there was no evidence of Mrs Williams to corroborate the accused's denial of Count 1, it was not for the accused to raise a reasonable doubt, but for the prosecution to exclude it. Conviction on Count 1 depended on the acceptance of the evidence of the complainant, which was contradicted only by the accused. There was no conviction on Count 3, because the accused's contradiction of the complainant's evidence was, to an extent, corroborated—though not in such a manner as to render commission of the offence impossible. The acquittal on Count 3 manifests a conclusion by the DFM that, in respect of the period from about 0305 onwards, there was a reasonable possibility that the appellant's version of the relevant events was accurate (and, thus, that the complainant's was not). Inability to produce a corroborating witness in respect of the 15 minutes before 0305 does not render insusceptible to doubt the evidence of a witness whose evidence, apparently credible as it was, was nonetheless insufficient to surmount the hurdle of reasonable doubt where the appellant could produce a partly corroborating witness for the following period. The DFM has, inadvertently, required the defence to raise a reasonable doubt, rather than the prosecution to exclude it. Alternatively put, there being reasonable doubt about the accuracy and the reliability of the complainant's evidence in significant respects on Count 3, which is not adequately explained by factors confined to Count 3, her evidence on Count 1 could not be inoculated from it. 116 The DFM suspected that the conduct the subject of Count 3 had happened. It may well be that it was open to him, on the evidence, to convict on that count. But he rightly distinguished between what might have seemed suspicious—even probable—and what was proved beyond reasonable doubt. He entertained a reasonable doubt about the complainant's evidence set out at [105] above (and implicitly also about other aspects of her evidence in respect of the period after she went to bed which were inconsistent with Mrs Williams' evidence). However, that same rigour insisted upon by the criminal standard of proof necessitated that if, as he found, there was a reasonable doubt about the accuracy and reliability of the complainant's evidence in significant respects on Count 3, in the factual circumstances of this case the doubt was one which logically extended to her evidence in respect of Count 1. Having entertained a reasonable doubt about the reliability of the complainant's evidence on Count 3, it was unsafe and unsatisfactory to convict on Count 1. 117 For those reasons, in my opinion Ground (b) succeeds. 118 As the DFM emphasised, this involves no reflection on the honesty of the complainant, who on any view perceived events on the occasion in question which enormously distressed her. But the requirement for proof beyond reasonable doubt means that in the circumstances of this case, where the DFM entertained reasonable doubt as to whether the conduct the subject of Count 2 was sexually motivated, and as to the reliability of the complainant's evidence of the events after about 0305, there ought also have been reasonable doubt about the reliability of her evidence and interpretation of events in the preceding 15 minutes, when the conduct the subject of Count 1 occurred. 119 It follows in my opinion that the conviction on Charge 1 should be quashed and, by operation of DFDAA s 41(a), the appellant deemed to have been acquitted. The orders which I would favour are: (1) The period within which the appeal and application for leave to appeal herein must be lodged be extended to the date on which it was lodged. (2) Leave to appeal, insofar as it is required, be granted. (3) The appeal be allowed. (4) The conviction on Charge 1 be quashed. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Decision herein of Justice Brereton. Associate: Dated: 16 December 2016	24,526
federal_court_of_australia:fca/single/2005/2005fca0427	decision	commonwealth	federal_court_of_australia	text/html	2005-04-18 00:00:00	Applicant VMAO v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 427	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2005/2005fca0427	2024-09-13T22:48:47.328562+10:00	FEDERAL COURT OF AUSTRALIA Applicant VMAO v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 427 Migration Act 1958 (Cth), s 424A(3)(a) NACA v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 659, cited SZACX v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 97, cited VMAO v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FMCA 197, referred to Décor Corporation v Dart Industries (1991) 33 FCR 397, cited APPLICANT VMAO v MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS VID 932 OF 2003 & VID 453 OF 2004 SUNDBERG J MELBOURNE 18 APRIL 2005 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 932 OF 2003 VID 453 OF 2004 BETWEEN: Applicant VMAO APPLICANT AND: Minister for Immigration and Multicultural and Indigenous Affairs RESPONDENT JUDGE: Sundberg J DATE OF ORDER: 18 APRIL 2005 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The notice of appeal in proceeding VID 932 of 2003 be struck out. 2. Leave to appeal in proceeding VID 453 of 2004 be refused. 3. The notice of appeal in proceeding VID 453 of 2004 be struck out. 4. The applicant pay the respondent's costs in proceeding VID 453 of 2004. 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 453 OF 2004 BETWEEN: Applicant VMAO APPLICANT AND: Minister for Immigration and Multicultural and Indigenous Affairs RESPONDENT JUDGE: Sundberg J DATE: 18 APRIL 2005 PLACE: MELBOURNE REASONS FOR JUDGMENT background 1 On 13 March 2001, the applicant lodged an application for a protection (class XA) visa under the Migration Act 1958 (Cth) ("the Act"). On 27 June 2001, a delegate of the respondent refused to grant the applicant a protection visa. The applicant's application to the Refugee Review Tribunal ("the Tribunal") for a review of the delegate's decision was unsuccessful. 2 The applicant applied to this Court for a review of the Tribunal's decision. That application was transferred to the Federal Magistrates' Court and was listed for hearing on 22 September 2003. On that day, the applicant failed to appear and Scarlett FM dismissed his application on that ground. 3 The applicant then filed a Notice of Appeal in this Court against the decision of Scarlett FM (proceeding VID 932 of 2003) — I shall refer to this proceeding as "the earlier proceeding". The earlier proceeding came on for directions before Weinberg J, who advised the applicant that he should apply to the Federal Magistrates' Court to have the decision of Scarlett FM set aside. The applicant duly did so and the matter was listed for hearing. 4 On 29 March 2004, the applicant appeared before Phipps FM and gave evidence as to the reasons for his failure to attend before Scarlett FM. For reasons I will outline later, Phipps FM dismissed the application to have the decision of Scarlett FM set aside. 5 The applicant then filed a Notice of Appeal in this Court against the decision of Phipps FM (proceeding VID 453 of 2004) — I shall refer to this proceeding as "the present proceeding". Black CJ directed that the appellate jurisdiction of the Court in the present proceeding be exercised by a single judge of the Court. The present proceeding came on for hearing before me on 13 April 2005. the earlier PROCEEDING 6 The current status of the earlier proceeding is unclear. According to the Court's internal systems, the earlier proceeding has been finally disposed of. However, the respondent proceeded under the apprehension that it remained on foot and asked me to strike it out on the basis that it was of no utility because it had been overtaken by events. 7 I agree. The decision of Scarlett FM has been superseded by that of Phipps FM. Therefore, the earlier proceeding no longer serves any purpose useful to the applicant. In any case, I note that the applicant — so far as I can gather — confined his "Contentions of Fact and Law", filed after the decision of Phipps FM, to that decision. 8 In light of the confusion surrounding the disposition of the earlier proceeding, I do not intend to make an order as to the costs of the earlier proceeding. the nature of the present proceeding 9 The respondent contends that the decision of Phipps FM was interlocutory in nature and that the notice of appeal in the present proceeding should thus be treated as an application for leave to appeal. I agree. Authority in this Court clearly establishes that such a decision is interlocutory in nature: NACA v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 659 at [15] per Hely J. Therefore, I will treat the present proceeding as an application for leave to appeal. the decision of phipps fm 10 Phipps FM held that he could only set aside the decision of Scarlett FM if he was satisfied that the applicant had a) provided an explanation for his failure to appear before Scarlett FM and b) some prospect of success if his original application were to be re-heard. This test is the correct test: NACA at [7] and SZACX v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 97 at [33] per Beaumont J. (The authorities cited speak of a "reasonable" or "satisfactory" explanation and an "arguable case". In the present circumstances, I do not think that much turns on the difference between these words and those used by Phipps FM.) 11 I agree with Phipps FM that the applicant has not satisfactorily explained his failure to appear before Scarlett FM and shown that he would have an arguable case if his original application were to be re-heard. Explanation for failure to appear 12 The reasons for judgment of Phipps FM set out what occurred in the lead-up to the hearing before Scarlett FM: VMAO v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FMCA 197 at [3]-[6]. To put it shortly, the applicant was first informed of the date and time of the hearing before Scarlett FM — and the consequences of failure to appear — by letter from the respondent's solicitors addressed to his residential address. He was subsequently informed of the same during a telephone call by him on 5 September 2003 to Jennifer Greaves of the respondent's solicitors — in the course of which Ms Greaves asked him to contact her if he did not intend to appear before Scarlett FM. This version of events was contained in an affidavit of Ms Greaves (exhibited to which was a handwritten note by her of the telephone call). It appears that the respondent did not controvert the contents of that affidavit in his oral evidence before Phipps FM. 13 The applicant also testified before Phipps FM that he was ill on the day of the hearing before Scarlett FM and did not attempt to telephone Ms Greaves or anyone else on that day: VMAO at [7]. Phipps FM noted that the applicant did "not say that he was so ill that he could not travel into the city to at least say to the court that he was too ill to proceed " and that he failed to explain why he had not attempted to contact Ms Greaves: VMAO at [9]. Further, the applicant's "Contentions of Fact and Law" add nothing to what was said by Phipps FM on this point save a bald statement that "There was no way that I would have been able to conduct my case." 14 Before me, the applicant did not in response to my invitations choose to say anything in support of the application and also indicated that he was content to rely upon what he had already said in his "Contentions of Fact and Law". In the circumstances, I am not satisfied that Phipps FM's decision on this point was wrong and I therefore do not propose to interfere with what is akin to a finding of fact. arguable case 15 Phipps FM sets out the basis of the applicant's claim for refugee status: VMAO at [11]-[13]. I do not propose to repeat it. In any case, I do not think it is of any relevance to my decision. 16 The applicant must show an error of law so serious that it constitutes jurisdictional error. The applicant's "Contentions of Fact and Law" allege a failure to accord him natural justice because he was not given an opportunity to comment on country information referred to in the Tribunal's reasons. Although a denial of natural justice does amount to jurisdictional error, the applicant's claim on this point raises the issue of whether the Tribunal's decision was based on that country information. Opportunity to comment on country information 17 I consider that the country information referred to in the Tribunal's reasons comes within the scope of s 424A(3)(a) of the Act. That is, the Tribunal was not bound to provide it to the applicant, explain its relevance to him and invite him to comment on it because it was "not specifically about the applicant or another person and is just about a class of persons of which the applicant or other person is a member". The country information related to the human rights and security situation in the Punjab and, to a lesser extent, Haryana states of India in the context of the Sikh insurgency and the activities of certain Indian political parties. 18 In any case, the delegate's decision included much of the country information referred to in the Tribunal's reasons. The applicant was thus aware of the information and its adverse impact on his case before the Tribunal came to hear his case. Relevance of country information to Tribunal's decision 19 I agree with Phipps FM that the Tribunal's decision turned on its view as to the applicant's credit. The burden of the Tribunal's findings and reasons was clearly upon its view as to the applicant's credit. Put simply, the Tribunal did not accept some of the most significant parts of the basis of the applicant's claim for refugee status: VMAO at [14]-[15]. 20 For that reason, even if the applicant was improperly denied an opportunity to comment on the country information, nothing turns on it. The country information was, at most, of secondary relevance to the Tribunal's decision. leave to appeal 21 As noted at [9], I intend to treat the Notice of Appeal in the present proceeding as an application for leave to appeal. In light of the foregoing, the decision of Phipps FM is not attended by sufficient doubt to warrant its reconsideration by the Court (whether a Full Court or a single judge). See Décor Corporation v Dart Industries (1991) 33 FCR 397. As noted at [10], Phipps FM correctly stated the applicable test. I am not satisfied that his decision on the first limb of the applicable test was wrong: see [12]-[14]. Nor am I satisfied that his decision on the second limb was wrong: see [15]-[20]. 22 In determining whether to grant leave it is also necessary to consider whether substantial injustice would result if leave were refused, supposing Phipps FM's decision to be wrong. As was said in Décor at 399, the "doubt" and "injustice" questions bear upon one another. In view of the remoteness of the prospect of success on appeal, if leave were granted, it is artificial to suppose that the decision below is wrong. In the circumstances, I am not satisfied that substantial injustice would result from a refusal of leave. conclusion 23 I refuse the applicant leave to appeal the decision of Phipps FM, strike out the notices of appeal in the earlier and present proceedings and order that the applicant pay the respondent's costs of the present proceeding. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. Associate: Dated: 18 April 2005 The Applicant appeared in person. Counsel for the Respondent: G Gilbert Solicitor for the Respondent: Blake Dawson Waldron Date of Hearing: 13 April 2005 Date of Judgment: 18 April 2005	2,764
federal_court_of_australia:fca/single/2004/2004fca0048	decision	commonwealth	federal_court_of_australia	text/html	2004-02-03 00:00:00	Michael Patrick O'Driscoll v Telstra Corporation Limited [2004] FCA 48	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2004/2004fca0048	2024-09-13T22:48:48.612174+10:00	FEDERAL COURT OF AUSTRALIA Michael Patrick O'Driscoll v Telstra Corporation Limited [2004] FCA 48 ADMINISTRATIVE LAW - Appeal from the Administrative Appeals Tribunal. Question of competency - whether appealable question of law or question of fact. Administrative Appeals Tribunal Act 1975 (Cth) s 44(1) Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 115 ALR 1, followed MICHAEL PATRICK O'DRISCOLL V TELSTRA CORPORATION LIMITED N 791 of 2003 HILL J 3 FEBRUARY 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 791 OF 2003 BETWEEN: MICHAEL PATRICK O'DRISCOLL APPLICANT AND: TELSTRA CORPORATION LIMITED RESPONDENT JUDGE: HILL J DATE OF ORDER: 3 FEBRUARY 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. the appeal be dismissed 2. no order as to 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 791 OF 2003 BETWEEN: MICHAEL PATRICK O'DRISCOLL APPLICANT AND: TELSTRA CORPORATION LIMITED RESPONDENT JUDGE: HILL J DATE: 3 FEBRUARY 2004 PLACE: SYDNEY REASONS FOR JUDGMENT 1 Mr O'Driscoll is the applicant in the present proceedings in which he seeks to appeal against a decision of the Administrative Appeals Tribunal constituted by a senior member and given on 6 June 2003. In its decision the Tribunal affirmed decisions of the respondent, Telstra Corporation Limited ("Telstra"), refusing Mr O'Driscoll's claim for payment of the cost of therapeutic appliances, refusing his claim for payment of compensation for permanent impairment, and setting aside two previous decisions, one of 18 November 2002 and the other of 2 July 2001, being decisions relating to compensation for neck, back and arm injuries. 2 In his notice of appeal Mr O'Driscoll stated the questions of law raised on the appeal to be as follows: "1. In denying compensation for the neck and back, the tribunal was incorrect on the facts given for their decision eg, neck, para 43 'was reported as playing competition squash until his bus injury in 1981.' I only played one season of competition squash in my life and that was 'D Grade' in the Autumn pennant in 1984. I have not played since." 3 The document continues with other examples which I do not need to set out here. As I indicated in the course of discussion with Mr O'Driscoll this court has jurisdiction only to hear an appeal from the Administrative Appeals Tribunal which is on, that is to say, limited to, a question of law: s 44(1) of the Administrative Appeals Tribunal Act 1975. The court has no jurisdiction to decide matters of fact which may arise in the course of a review conducted by the Tribunal. 4 Mr O'Driscoll is not represented in the motion which is brought by the respondent, Telstra, that his appeal be dismissed on the basis that the Court lacks jurisdiction to determine it. It is the submission of Telstra that Mr O'Driscoll's appeal involves no question of law. The distinction between a question of law and a question of fact is often very difficult. There is a useful analysis to be found in the decision of the Full Court of this Court in Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 115 ALR 1. 5 As is clear from the decision in that case, a question of law would arise if all facts being accepted, only one conclusion is available to be reached and the Tribunal reaches another and different conclusion. A question of law arises in such a case because if no other conclusion is available, it must follow that the Tribunal has made a mistake of law, even if that mistake is not clearly enunciated in the Tribunal's reasons. It is not a question of law that the Tribunal, faced with competing evidence, accepts the evidence of one witness as against another or other witnesses. 6 The three examples which Mr O'Driscoll gives in his notice of appeal, one of which I have set out, do not of themselves involve any issue of law. The first example which I have set out refers to paragraph 43 of the Tribunal's reasons. In that paragraph the Tribunal says: "We note however, that the symptoms had not persisted since 1975, as the applicant in other reports was reported as playing competition squash until his bus injury in 1981. Evidence adduced to the Tribunal in 1986 was that in 1978 the applicant purchased a 65 foot sloop which he sailed from time to time until 1986. These activities are not consistent with ongoing neck pain." 7 Mr O'Driscoll's complaint as to the reference to squash is that he only played one season of squash in his life and that was in 1984. That may very well be true. However, the Tribunal in the paragraph complained of says no more than that there were reports before it that the applicant was playing competition squash until 1981. 8 Counsel for Telstra referred me to various pages in reports before the Tribunal that state, as Mr O'Driscoll would say erroneously, a continuous involvement in squash until some date. It does not seem in fact that the Tribunal was making any finding on the question when Mr O'Driscoll did or did not play competition squash. Even if the Tribunal however did make a wrong factual finding, but did so on material before it, no issue of law would be involved. The same can be said of the other two matters which are dealt with in the notice of appeal. 9 I asked Mr O'Driscoll to identify for me what it was that he wished to have argued in the appeal. I did so because I was conscious of his difficulty, particularly because he was unrepresented, in clarifying precisely what the question of law was that arose in the appeal. Mr O'Driscoll referred to a number of matters. 10 His first complaint was that a tribunal differently constituted had, on a previous time and, as I understand it, on evidence that was not necessarily the same as that before the Tribunal now, found that he was entitled to compensation in respect of the injuries which he claimed to have suffered to his neck, back and elbow. The problem, I explained to Mr O'Driscoll, is that one tribunal is not bound to come to the same conclusion as another, particularly when the evidence before each tribunal may be different. Each tribunal is obliged to come to its own decision on the evidence which is before it. 11 The second matter which Mr O'Driscoll wished to argue on the appeal was that there was no definite evidence before the Tribunal that he suffered from Scheuermann's disease. In its reasons the Tribunal referred to a report of Dr Matheson, a consultant neurosurgeon, who had examined Mr O'Driscoll on behalf of Telstra. In that report Dr Matheson said that Mr O'Driscoll, "carries a bit of Scheuermann's disease at T-9 ...". The report also refers (it may be the same thing or it may be different), to some thoracic Scheuermann's disease. Mr O'Driscoll tells me that there was a radiography report before the Tribunal which makes it clear, he says, that there was no definite evidence of Scheuermann's disease. However matters of fact are matters for the Tribunal. There was clearly some evidence before the Tribunal, which it was entitled to accept if it wished to, that Mr O'Driscoll did have some indication of Scheuermann's disease. If the Tribunal decided not to accept other evidence to the contrary that was a matter for the Tribunal and involves no issue of law. 12 The next matter raised by Mr O'Driscoll was that in the course of the conduct of the hearing the Tribunal had, in questions it raised, discounted the fact that he had systemic lupus. In the result, some witnesses gave evidence of Mr O'Driscoll's ability to perform certain functions without reference to his systemic lupus. Again, that question does not raise a question of law. That is not suggesting that the Tribunal acted in any way in bad faith in conducting the review, and it was no doubt open to Mr O'Driscoll, had he wished to, to ask other questions of witnesses. In saying this I am conscious of the fact that Mr O'Driscoll was not represented in the Tribunal either. No question of law, however arises in respect of this matter. 13 The next matter raised by Mr O'Driscoll was that the Tribunal had not accepted the evidence of Dr Dixon, regarding it as less reliable than the evidence of other witnesses, apparently because of a mistake in a date in the evidence that Dr Dixon gave. Whether that is an accurate description of what the Tribunal did does not matter for present purposes. It is clear that the Tribunal is entitled to accept or reject the evidence of one medical practitioner and prefer the evidence of another, and its doing so involves no question of law. 14 Finally, Mr O'Driscoll referred me to the fact that Dr Griffith, in his evidence, had referred to Mr O'Driscoll having specific neurogenic pain, but the Tribunal had treated this as unbelievable. Again, I'm not sure that it's quite accurate to say that the Tribunal treated the evidence as unbelievable but even if it were, again it is for the Tribunal ultimately to decide matters of fact, not for this court. So long as it was open to the Tribunal to reach the finding it did then no question of law arises. 15 Mr O'Driscoll has made it clear to me that he could not pursue an appeal on the basis that if the evidence was accepted in its entirety before the Tribunal only one conclusion favourable to him was available. As I've already indicated that would involve an issue of law. However, none of the matters which Mr O'Driscoll has raised with me do involve questions of law and it follows that no question of law being raised in the appeal the Court lacks jurisdiction to hear the appeal. Accordingly I must uphold the objection to competency and dismiss Mr O'Driscoll's application to the Court. 16 Counsel for the respondent did not ask for costs and therefore I make no order as to costs of the application. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill . Associate: Dated: 16 March 2004 Counsel for the Applicant: the applicant appeared in person Solicitor for the Applicant: Counsel for the Respondent: N Polin Solicitor for the Respondent: Sparke Helmore Date of Hearing: 3 February 2004 Date of Judgment: 3 February 2004	2,415
federal_court_of_australia:fca/full/2022/2022fcafc0016	decision	commonwealth	federal_court_of_australia	text/html	2022-02-21 00:00:00	Star Entertainment Group Limited v Chubb Insurance Australia Ltd [2022] FCAFC 16	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2022/2022fcafc0016	2024-09-13T22:48:48.888750+10:00	Federal Court of Australia Star Entertainment Group Limited v Chubb Insurance Australia Ltd [2022] FCAFC 16 Appeal from: Star Entertainment Group Limited v Chubb Insurance Australia Ltd [2021] FCA 907 File number: NSD 879 of 2021 Judgment of: MOSHINSKY, DERRINGTON AND COLVIN JJ Date of judgment: 21 February 2022 Catchwords: INSURANCE - appeal from decision refusing application by insureds for declaratory relief - whether insurers obliged under insurance policy to indemnify for loss from business interruption caused by government orders directed to restricting spread of COVID-19 - where policy includes memorandum directed to extending indemnity to loss resulting from occurrence or discovery of notifiable disease at premises - where memorandum excludes cover for diseases listed in Biosecurity Act 2015 (Cth) - whether memorandum manifests or records full extent of cover for loss resulting from business interruption caused by occurrence of human infectious or contagious disease - whether business interruption loss covered by different memorandum directed to loss caused by action taken by lawfully constituted authority for purpose of retarding any conflagration or other catastrophe - whether reference to 'loss' in insurance policy confined to physical loss - whether COVID-19 pandemic considered a catastrophe for purposes of policy - appeal dismissed Legislation: Biosecurity Act 2015 (Cth) Cases cited: Australian Broadcasting Commission v Australasian Performing Right Association [1973] HCA 36; (1973) 129 CLR 99 BMW Australia Ltd v Brewster [2019] HCA 45; (2019) 269 CLR 574 Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 CGU Insurance Limited v Porthouse [2008] HCA 30; (2008) 235 CLR 103 Charben Haulage Pty Ltd v Environmental & Earth Sciences Pty Ltd [2004] FCA 403 Chief Commissioner of State Revenue v Tasty Chicks Pty Ltd [2012] NSWCA 181 Deputy Commissioner of Taxation v Clark [2003] NSWCA 91; (2003) 57 NSWLR 113 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 261 CLR 544 Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 Esso Australia Pty Ltd v The Australian Workers' Union [2017] HCA 54; (2017) 263 CLR 551 Findex Group Ltd v McKay [2020] FCAFC 182 Greencapital Aust Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd (Subject to Deed of Company Arrangement) [2019] NSWCA 53 HDI Global Specialty SE v Wonkana No. 3 Pty Ltd [2020] NSWCA 296; (2020) 104 NSWLR 634 Hume Steel Ltd v Attorney-General for Victoria (1927) 39 CLR 455 Liberty Mutual Insurance Company Australian Branch trading as Liberty Specialty Markets v Icon Co (NSW) Pty Ltd [2021] FCAFC 126 Macquarie International Health Clinic Pty Ltd v Sydney Local Health District [2020] NSWCA 161; (2020) 103 NSWLR 443 Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 228 CLR 566 Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37; (2015) 256 CLR 104 Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 Re Media Entertainment & Arts Alliance; Ex Parte Hoyts Corporation Pty Ltd (1993) 178 CLR 379 Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 267 CLR 514 Swiss Re International Se v LCA Marrickville Pty Limited (Second COVID-19 insurance test cases) [2021] FCA 1206 Todd v Alterra at Lloyds Ltd (on behalf of the underwriting members of Syndicate 1400) [2016] FCAFC 15; (2016) 239 FCR 12 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 Zhu v Treasurer (NSW) [2004] HCA 56; (2004) 218 CLR 530 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 136 Date of hearing: 8-12 November 2021 Counsel for the Appellants: Mr JC Sheahan QC with Mr DH Mitchell Solicitor for the Appellants: King & Wood Mallesons Counsel for the Respondents: Mr B Walker SC with Mr TW Marskell and Mr HR Fielder Solicitor for the Respondents: Wotton + Kearney ORDERS NSD 879 of 2021 BETWEEN: STAR ENTERTAINMENT GROUP LIMITED (ABN 85 149 629 023) First Appellant STAR ENTERTAINMENT SYDNEY HOLDINGS LIMITED (ACN 064 054 431) Second Appellant STAR ENTERTAINMENT QLD LIMITED (ACN 010 741 045) (and others named in the Schedule) Third Appellant AND: CHUBB INSURANCE AUSTRALIA LTD (ABN 23 001 642 020) First Respondent AIG AUSTRALIA LIMITED (ABN 93 004 727 753) Second Respondent XL INSURANCE COMPANY SE (ABN 36 083 570 441) (and others named in the Schedule) Third Respondent AND BETWEEN: CHUBB INSURANCE AUSTRALIA LTD (ABN 23 001 642 020) (and others named in the Schedule) First Cross-Appellant AND: STAR ENTERTAINMENT GROUP LIMITED (ABN 85 149 629 023) (and others named in the Schedule) First Cross-Respondent order made by: MOSHINSKY, DERRINGTON AND COLVIN JJ DATE OF ORDER: 21 FEBRUARY 2022 THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The cross-appeal be dismissed. 3. The appellant pay the respondent's costs of and incidental to the appeal and the cross-appeal to be assessed by a Registrar if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: 1 In 2019, a policy of insurance was agreed between The Star Entertainment Group Limited and a number of its associated entities (together, Star) as the insureds and eleven insurers each taking a share of the risk (Insurers). The policy is styled as an 'Industrial Special Risks Insurance Policy' (Policy). Each page of the Policy is headed with the name The Star Entertainment Group Limited and the name of a well-known insurance broker. As will emerge, the terms of the instrument appear to have been crafted with some care to meet the particular business circumstances of Star but retain provisions that contemplate more general application. The dispute between the parties 2 A dispute has arisen between Star and the Insurers as to whether the Policy provides indemnity for loss said to have been suffered by Star in consequence of the COVID-19 pandemic. It has led to Star seeking a declaration in this Court that the Insurers are obliged to indemnify Star for loss that was the consequence of interruption to its business caused by government orders and advice directed to restricting the spread of COVID-19. The primary judge has determined that the declaratory relief sought by Star should be refused: Star Entertainment Group Limited v Chubb Insurance Australia Ltd [2021] FCA 907. Star now brings an appeal. 3 The appeal raises issues as to the proper construction of the Policy. The appeal was heard together with a number of other appeals concerning the proper construction of provisions of other insurance policies which were said to provide business interruption insurance cover for various types of loss consequent upon steps taken by government authorities to limit the spread of COVID-19. Those appeals arise from the decision in Swiss Re International Se v LCA Marrickville Pty Limited (Second COVID-19 insurance test cases) [2021] FCA 1206 (Second Test Cases Appeal). The nature of the Policy 4 The Policy is dated 8 December 2019 and applies for a year and a day from 1 November 2019. It begins with a provision to the effect that the Policy incorporates its various parts 'which are to be read together'. The parts are listed as 'Schedule, Sections, Definitions, Conditions, Exclusions, Endorsements, Memoranda and Warranties'. In short, the express intention of the parties is that despite it being composed of distinct parts, the policy is to be given an operation by which all its components form a single coherent commercial instrument. 5 The Policy has a structure that is common for insurance instruments. The operative parts are divided into two sections and take effect by reference to specific provisions stated in a Schedule. Section 1 is headed 'Material Loss or Damage'. Section 2 is headed 'Consequential Loss'. Each of the two sections specifies the extent of an indemnity provided by that Section by reference to the 'Interest Insured' as described in the Schedule. Each of the two sections also has its own 'Basis of Settlement' provision by which claims are to be adjusted and also has its own definitions. Following each of the two sections is a list of Memoranda which modify the operation of the specific provisions. Then there is a list of the Exclusions that apply to both sections. It is followed by a further list of Memoranda that apply to both sections. After that there is a list of Conditions that apply to both sections. Finally, there is a list of Endorsements which alter earlier provisions. 6 Therefore, the Policy is something of a collage by which distinct parts are pasted together with the express intention that the generally expressed parts will apply according to the terms of the Schedule, Memoranda, Exclusions, Conditions and Endorsements. This course presents as a considered one intentionally adopted by the parties. It means that some mental gymnastics are required to put together the manner in which the agreed terms operate and which terms prevail over others. It also tends to compromise the ease with which and the extent to which consistency in grammatical forms can operate to signal the meaning of operative provisions. It also gives particular significance to understanding the instrument as a whole. 7 Discerning the proper construction of a commercial instrument by reference to its terms as a whole requires regard to all of the provisions. In order to perform this task it is necessary to bring all aspects to bear at the same time. Therefore, although exposition for that purpose can only occur sequentially, ultimately the various parts must be held up together in order to gather a true sense of what is meant by particular provisions. Put another way, the nature and extent of the qualifications and extensions expressed by the Memoranda, Exclusions, Endorsements and the like may provide important contextual indications as to the overall commercial objective of the parties as recorded in the whole of the text of the Policy which may in turn be used iteratively to interpret particular provisions. The principles to be applied in construing the Policy 8 The principles to be applied in construing commercial instruments are well established. They require the language used by the parties to be interpreted objectively by considering what the language adopted by them would mean to a reasonable businessperson in the position of the parties. The language used by them is to be considered in the context of the surrounding circumstances known to them at the time of the transaction and the purpose or object of the transaction evident from those matters: Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22]; Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 at [35] (French CJ, Hayne, Crennan and Kiefel JJ) ; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 at [46]-[47] (French CJ, Nettle and Gordon JJ) and Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 267 CLR 514 at [44] (Kiefel CJ, Gageler, Nettle and Gordon JJ). 9 Issues may arise as to the extent to which there may be regard to surrounding circumstances in the absence of any real ambiguity in the text or for the purpose of demonstrating ambiguity: see, Mount Bruce at [48]-[49], [52] (French CJ, Nettle and Gordon JJ) and [111] (Kiefel and Keane JJ) and the most recent reference to the relevant debate in Liberty Mutual Insurance Company Australian Branch trading as Liberty Specialty Markets v Icon Co (NSW) Pty Ltd [2021] FCAFC 126 at [45] (Allsop CJ, Besanko and Middleton JJ). However, no such matters were raised in the present case. 10 The question for consideration is not what each of the parties meant to say, but rather what is the objective meaning to be attributed to the words they have used to express what they have agreed: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ), Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 at [17] (French CJ), [59] (Gummow and Hayne JJ) and [98] (Heydon and Crennan JJ) and HDI Global Specialty SE v Wonkana No. 3 Pty Ltd [2020] NSWCA 296; (2020) 104 NSWLR 634 at [18]-[19] (Meagher JA and Ball J). 11 In the absence of a contrary intention, the construction of a commercial instrument will be approached on the basis that the parties intended to produce a commercial result and constructions that make for commercial nonsense or would work commercial inconvenience should be avoided: Zhu v Treasurer (NSW) [2004] HCA 56; (2004) 218 CLR 530 at [82], Electricity Generation Corporation v Woodside Energy Ltd at [35] (French CJ, Hayne, Crennan and Kiefel JJ) applied in Mount Bruce at [51], Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 261 CLR 544 at [17] (Kiefel, Bell and Gordon JJ) and Liberty Mutual Insurance Company Australian Branch trading as Liberty Specialty Markets v Icon Co (NSW) Pty Ltd at [152] where such an approach was expressed as applying in the context of an insurance policy. However, care must be taken to ensure that it is the evident commercial object that is being given effect recognising that minds may differ as to the commerciality of a particular outcome: Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 at [43] (Gleeson, Gummow and Hayne JJ). Therefore, reasoning by reference to commerciality has its limits. 12 Commercial instruments should be construed fairly and broadly without being too astute or subtle in finding defects: Australian Broadcasting Commission v Australasian Performing Right Association [1973] HCA 36; (1973) 129 CLR 99 at 109‑110. 13 A policy of insurance is a commercial contract and should be given a businesslike interpretation in accordance with the above principles: McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 at [22] (Gleeson CJ); as approved in CGU Insurance Limited v Porthouse [2008] HCA 30; (2008) 235 CLR 103 at [43]. 14 The policy should be construed as a whole, by considering the entire text: Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited at [46]. Therefore, it should not be approached by isolating particular fragments or disregarding its overall character. There must be due regard to the overall nature of the instrument, the nature of the transaction or dealing that it records and its commercial purpose as evident from considering all of its terms. This also requires consideration of the style, layout, language and structure of the instrument. Some commercial instruments present as having been drafted with the coherence and consistency in terminology and grammatical expression that may be expected of an experienced and expert commercial lawyer. In such cases it is appropriate for the language to be construed by reference to the customary forms adopted in such instruments. Others present as 'a clumsily tailored variation of an ill-fitting off-the shelf precedent': Ecosse Property Holdings at [51] (Gageler J). In such instances, no reasonable business person would interpret the instrument with the same eye to differences in language and terminology as might be appropriate for instruments that have a different form of structure and expression. Some commercial instruments, are relatively informal or are brought into existence to meet the exigencies and necessities of everyday commercial life without time or inclination to ensure neatness of grammar and consistency in terminology. Others present as being carefully considered and settled by those with considerable experience in their drafting. All such characteristics of the instrument as a whole should be brought to account when giving a businesslike construction to the instrument. 15 In the present case, the policy document has aspects that are bespoke and other aspects that indicate the use of standard terminology. It adopts a form common to many insurance instruments whereby separate clauses are deployed to limit, exclude and extend the operation of the principal provisions that describe the nature and extent of the primary cover. This reflects the nature of its subject matter. It deals with the provision of indemnity for the risk of loss arising from particular perils. In order to agree a premium for the particular coverage that is sought, underwriters usually work with policies that provide established and known types of cover for particular types of risk. From that base, they must evaluate the incremental changes to exposure that result from the inclusion of particular limits, exclusions and extensions. The use of known or familiar forms of words as building blocks for such an instrument facilitates evaluation of the extent of the risk for the purpose of settling upon an appropriate premium. The significance for the construction of insurance instruments of these characteristics of the commercial purpose served by insurance instruments was described by Allsop CJ and Gleeson J in Todd v Alterra at Lloyds Ltd (on behalf of the underwriting members of Syndicate 1400) [2016] FCAFC 15; (2016) 239 FCR 12 at [35]-[44]. 16 Therefore, although these reasons begin by focussing upon the particular clauses in issue, it will be necessary to then place those provisions in the overall context of the instrument by due regard to its terms as a whole, the manner in which the Policy is structured and what the instrument reveals about its purpose. The claim by Star based on the terms of memorandum 7 The key provisions of the Policy 17 The claim by Star both before the primary judge and on appeal relies upon the terms of the indemnity provided in Section 2 as affected by memorandum 7 in the Memoranda to Section 2. The indemnity itself is expressed in the following terms: In the event of any building or any other property or any part thereof used by the Insured at the Premises for the purpose of the Business being physically lost, destroyed or damaged by any cause or event not hereinafter excluded (loss, destruction or damage so caused being hereinafter termed 'Damage') and the Business carried on by the Insured being in consequence thereof interrupted or interfered with, the Insurer(s) will, subject to the provisions of this Policy including the limitation on the Insurer(s) liability, pay to the Insured the amount of loss resulting from such interruption or interference in accordance with the applicable Basis of Settlement. 18 The above provision is immediately followed by a proviso in the following terms: Provided that the Insurer(s) will not be liable for any loss under this Section unless the Insured's property lost, destroyed or damaged is insured against such Damage and the Insurer or Insurers by which such property is insured shall have paid for, or admitted liability in respect of, such Damage unless no such payment shall have been made or liability shall not have been admitted therefor solely owing to the operation of a provision in such insurance excluding liability for loss below a specific amount. 19 Memorandum 7 of the Memoranda to Section 2 forms part of some twenty memoranda that are introduced by the following words: Except to the extent this Policy is hereby modified under the following Memoranda the terms, Conditions and limitations of this Policy shall apply. It says: The word 'Damage' under Section 2 of this Policy is extended to include loss resulting from or caused by any lawfully constituted authority in connection with or for the purpose of retarding any conflagration or other catastrophe. 20 Star accepts that the principal indemnity provision in Section 2 is confined to business interruption in the event of physical loss, destruction or damage to a building or other property. However, it contends that memorandum 7 modifies the indemnity by expanding it to include instances where there was no physical loss, destruction or damage, in particular where the loss resulted from or was caused by a government authority making orders or directions for the purpose of limiting the spread of COVID-19. It says that the loss covered by the terms of Memorandum 7 for which it is entitled to indemnity under Section 2 for business interruption includes loss of use, loss of custom or financial loss resulting from action by an authority of the kind described in memorandum 7 which, it says, includes action taken in response to the COVID-19 pandemic. 21 Memorandum 8 then provides that loss as insured by Section 2 of the Policy resulting from interruption or interference with the business of Star that is in consequence of 'Damage to property' within a 10 kilometre radius of the business premises 'shall be deemed to be loss resulting from Damage to property used by the Insured at the premises'. It may be noted that the extension applies only where there is damage to property within the specified radius. 22 The next provision, memorandum 9, is important for the case advanced by the Insurers. Like memorandum 7 it extends the term damage as defined in the indemnity provision for Section 2. Amongst other things, it includes in the indemnity damage that results from Notifiable Disease. As will emerge, it does so in a manner that is hedged with a number of qualifications and limitations. Memorandum 9 provides: Damage is extended to include loss resulting from:- 1. a) Any occurrence of a Notifiable Disease (as defined below) at the Premises or a Notifiable Disease attributable to food or drink supplied at the Premises, b) Any discovery of an organism at the Premises likely to result in the occurrence of a Notifiable Disease 2. The discovery of vermin or pests at the Premises, 3. Any accident causing defects in the drains or other sanitary arrangements at the Premises, which causes restrictions on the use of the Premises on the order or advice of the competent Local Authority 4. Any occurrence of murder or suicide at the Premises 23 Memorandum 9 goes on to specify a number of 'Special Provisions' that apply to the provision. They begin by defining 'Notifiable Disease' as follows: Special Provisions (a) Notifiable Disease shall mean illness sustained by any person resulting from 1. Food or drink poisoning or 2. An occurrence of a human infectious or human contagious disease which the competent Local Authority has stipulated shall be notified to them, with the exception of any occurrence, whether directly or indirectly, arising from Quarantinable disease listed in the Bio Security Act 2015, which are all specifically excluded hereunder. 24 It may be especially noted that the term Notifiable Disease has an express exclusion for any occurrence that arises directly or indirectly from a category of disease defined by reference to the Biosecurity Act 2015 (Cth). COVID-19 is such a disease (see the explanation of the statutory provisions in the Second Test Cases Appeal). This was accepted by Star before the primary judge and the same position was taken by Star on appeal. 25 The exclusion at the end of Special Provision (a)2. is doubly expressed. It first excepts from a particular category of disease identified by reference to the Biosecurity Act those occurrences of human infectious or human contagious disease that will be a Notifiable Disease as defined. It then states in addition that such diseases 'are all specifically excluded hereunder'. These additional words emphasise the intention to exclude coverage for loss from the occurrence of such diseases. 26 The Special Provisions in memorandum 9 then provide as follows: (b) For the purpose of the extension Indemnity Period shall mean the period during which the results of the Business shall be affected in consequence of the Damage, beginning with the date from which the restrictions on the Premises are applied (or in the cast of 4, above, with the date of the occurrence) and ending not later than the maximum Indemnity Period thereafter. Maximum Indemnity Period shall mean 3 months. Premises shall mean only those locations stated in the Premises definition situate in Australia. In the event that the Material Damage or Business Interruption sections include an extension which deems Damage at other locations to be Damage at the Premises such extension shall not apply to the Extension. (c) The Insurer shall not be liable under this extension for any costs incurred in the cleaning, repair, replacement and recall or checking of property (d) The Insurer shall only be liable for loss arising at those premises which are directly subject to the Damage (e) The liability of the Insurer shall not exceed the inner Limit of Liability stated in the specification (f) Notwithstanding Special Provision (c), the insurance by this extension extends to include the costs and expenses necessarily incurred with the consent of the Insurer in 1. Cleaning and decontamination of property used by the Insured for the purpose of the Business (other than stock in trade) 2. Removal and disposal of contaminated stock in trade At or from the Premises, the use of which has been restricted on the order or advice of the competent Local Authority solely in consequence of the Damage as defined above. Notifiable Disease - AUD $1,000,000 in the aggregate any one period of Insurance (original emphasis) 27 The emboldened references to the limit on the indemnity period and to the sub-limit at the end of memorandum 9 are quite striking. The first limits any claim to a maximum period of three months. The second is a cross-reference to a Sub-limit for Notifiable Disease of $1 million in the aggregate in the period of insurance that is specified elsewhere in the Policy. No other Sub-limit is highlighted in this way within the Memoranda to Section 2. It reinforces to the reader that when it comes to the memorandum concerned with Notifiable Disease there are specific limits. This is an important contextual feature. It would be brought to account by a reasonable business person in considering whether the Policy, by provisions other than memorandum 9, may allow for a claim based upon the occurrence of a human infectious or human contagious disease. Even more so where the occurrence falls within the exclusion for certain types of human disease expressed by reference to the Biosecurity Act. 28 What is also striking is the extent of the qualifications and limitations expressed in memorandum 9. It presents as a considered and carefully crafted provision addressing the extent to which the Policy will provide cover in respect of human infectious or contagious disease. It takes effect within a Policy that otherwise excludes liability for physical loss, destruction or damage 'occasioned by or happening through … disease': see Perils Exclusion 4(a). Therefore, without specific provision in the Memoranda to Section 2, in order for there to be cover for business interruption there would need to be physical loss, destruction or damage to property used in the business of Star that was not occasioned by and did not happen through disease. Three principal propositions underpinning Star's case on appeal 29 Star's position depends upon two propositions concerning memorandum 7, namely: (1) the reference to 'loss' is not confined to physical loss; and (2) the manifestation of COVID-19 (both as to the risk and the eventuality of its spread) falls within the ambit of the words 'or other catastrophe' such that orders and directions by government authorities made in order to limit the spread of COVID-19 were 'in connection with or for the purpose of retarding' that catastrophe. 30 Star's position on appeal also depends upon the further proposition that despite memorandum 9 setting a number of different types of constraints upon the scope of the extension of cover for human infection and a limit of $1 million in the aggregate on such claims in the period of insurance, nevertheless in the event of action taken in response to the risk or occurrence of human infection that resulted in loss for reasons that fall outside the terms of memorandum 9, a claim to the full limit of liability specified for each address is covered by the policy. In the case of the premises at which The Star Hotel and Casino is located that would allow a claim for up to $4 billion in the period of insurance. 31 The Insurers advance a cross-appeal. It concerns a finding by the primary judge at [202] in the following terms: While the incidence of COVID-19 in Australia may not have been as physically great as it was globally, it nonetheless reached the level of a catastrophe, if only as a consequence of the way in which the Federal, State and Territory authorities approached and responded to it. It led to the further finding by the primary judge at [203] that an inchoate or incipient catastrophe is a catastrophe nonetheless. In consequence, his Honour posed the following question: The question then becomes (again on the hypothesis that the construction advanced by Star is correct) whether the intervention by Federal, State and Territory authorities was done in connection with, or for the purpose of retarding, this incipient catastrophe. 32 Ultimately, his Honour found (on the hypothesis as stated) that there was action taken by relevant authorities in connection with or for the purpose of retarding an incipient domestic catastrophe: at [207]. The cross-appeal challenges the propositions that the concept of catastrophe in memorandum 7 includes an incipient catastrophe or that a catastrophe may exist by reason of the nature of the response to something that was not otherwise a catastrophe. These issues only arise if Star's case as to the proper construction of memorandum 7 is accepted. 33 In its response to the cross-appeal, Star contends that the primary judge ought to have found that the COVID-19 pandemic was a domestic catastrophe (not just an incipient catastrophe). It also contends that the pandemic was a catastrophe irrespective of the nature of the response by the Federal, State and Territory authorities. 34 Before the primary judge the Insurers accepted that the restrictions relied upon by Star were actions of a lawfully constituted authority for the purposes of memorandum 7. However, they did not accept that the advices given by those authorities had that character. 35 The issues raised by Star's contentions in answer to the cross-appeal only arise if Star succeeds in its appeal and the Insurers also succeed in their cross-appeal on the basis that an incipient catastrophe of the kind found by the primary judge was not a catastrophe for the purposes of memorandum 7. Summary of outcome 36 For the reasons which follow, the primary judge was correct to reject Star's position concerning memorandum 7 and its scope. Memorandum 9 expresses the full extent of the liability of the Insurers under the Policy in respect of the subject matter which it addresses. Relevantly for present purposes, that subject matter is loss resulting from the interruption of Star's business by reason of the occurrence of human infectious or contagious disease. Memorandum 9 limits that liability in a number of ways, including by requiring there to be an 'occurrence' of human infectious or contagious disease 'at the Premises', by specifically excluding certain diseases by reference to the Biosecurity Act, by providing for a maximum limit on the period of any claim of three months and by applying the Sub-limit highlighted in the endorsement at the end of memorandum 9. To the extent that the generally expressed terms of memorandum 7 might be said to encompass action taken by a lawfully constituted authority to confine the spread of a disease such as COVID-19 on the basis that it is a 'conflagration or other catastrophe', the scope of memorandum 7 is to be read down so as to avoid inconsistency with the language of memorandum 9 which deals with such matters expressly by setting clear limits on the extent of the indemnity afforded in respect of loss associated with human infectious and human contagious diseases. The appeal should be dismissed on that basis. 37 In any event, we are not persuaded by Star's argument that memorandum 7, construed in context, applies to loss resulting from actions by an authority to prevent or restrict the spread of a human disease such as COVID-19. This is principally because, in context, the term catastrophe is used to refer to a physical phenomenon the course of which may be affected by physical action in the same way that a conflagration may be so affected. A similar conclusion was reached by the primary judge: at [172]. 38 Therefore, it is not necessary to determine the issues raised by the cross-appeal and the matters raised by Star's notice of contention in that cross-appeal which all concern the reasoning by the primary judge as to whether there was a catastrophe for the purposes of memorandum 7 (assuming Star's construction was correct). However, in our view no error has been demonstrated in the approach by the primary judge in concluding (on the hypothesis that Star's construction of memorandum 7 was correct) that there was an incipient domestic catastrophe at the relevant time. 39 In consequence, the points of contention raised by Star in the cross-appeal do not arise. In our view, it is not necessary or appropriate to deal with them. Matters which emerge from reading the Policy as a whole 40 We begin by considering the matters relevant to the construction of memoranda 7 and 9 that emerge from the Policy as a whole. Principal indemnity requires physical loss, destruction or damage 41 The insurance afforded by the Policy is against loss resulting from 'insured events'. In Section 1, the Policy provides for indemnity '[i]n the event of any physical loss, destruction or damage' not otherwise excluded happening at the Situation to the Property Insured (being a term which is defined broadly and, speaking generally, includes all real and personal property belonging to Star or for which it is responsible or in which it has an interest). It may be noted that the indemnity in section 1 is not confined by language of causation. The indemnity is 'in accordance with the applicable Basis of Settlement'. 42 Section 2 of the Policy provides for indemnity '[i]n the event of' any property 'used by' Star at its premises for the purpose of its business being 'physically lost, destroyed or damaged by any cause or event not hereinafter excluded' and the business of Star being 'in consequence thereof interrupted or interfered with'. Further, the loss to be paid is the 'amount of loss, resulting from such interruption or interference' and is to be in accordance with the Basis of Settlement. 43 There are Exclusions that are expressed to apply to 'All Sections'. They begin with a list of types of property which is introduced by the following words: This Policy does not cover physical loss, destruction of or damage to the following property or loss under Section 2 resulting therefrom The list appears to be in standard terms. It includes references to livestock, standing timber and oil and gas drilling rigs. It is not apparent how property of that kind could relate to the nature of the business conducted by Star. However, it emphasises the focus of the principal indemnity provisions upon physical loss, destruction of or damage to property. 44 The Exclusions that apply to All Sections then have a list of provisions introduced by the words: The Insurer(s) shall not be liable under Sections 1 and 2 in respect of … The list that follows has numerous provisions that use the terminology 'physical loss, destruction of or damage [to the Property Insured or specified types of property]'. 45 One item in the list (item 4 of the Perils Exclusions) is expressed in the following terms (insofar as is presently relevant): physical loss, destruction or damage occasioned by or happening through … disease … Provided further that the Insurer will indemnify the Insured for any loss, destruction of or damage to Property Insured caused directly by any circumstances not excluded under this Policy, notwithstanding that these circumstances may in turn have been caused by, or have been followed by, any of the circumstances referred to in this Perils Exclusion 4'. 46 Plainly, the scope of the principal indemnity provisions is upon physical loss, destruction of or damage to property (being the insured peril) and business interruption in consequence of the same. Declared values and limits of liability 47 The Policy has declared values for property. It also has limits and sub-limits for liability under a number of the provisions. All are specified in the Schedule. 48 The Declared Value for Section 1 is more than $4.58 billion and for Section 2 is more than $6.56 billion. Although the Schedule refers to the Declared Values being 'in accordance with the Basis of Settlement', it appears that they are provided for the 'purpose of premium adjustment only': see item 3 of Memoranda to Section 1 (which deals with those values in respect of Section 1 and Section 2). They appear to specify overall values for property covered by each of the two sections. 49 The Limits of Liability specify maximum limits of liability for separate addresses. For example, the limit for The Star Hotel and Casino including The Darling Hotel Sydney is $4 billion. There are detailed Sub-limits specified for particular aspects of the coverage specified in the policy. For example as to Section 1 the coverage for removal of debris is limited to $30 million. For Section 2, there are a number of Sub-limits specified as follows: Section 2(i) - Consequential Loss Claims Preparation Costs-Item no 4 $ 3,500,000 Accounts Receivable -The Indemnity (j) $ 10,000,000 Additional Increase in Cost of Working - Item No. 5 $ 75,000,000 General Area Damage in respect of The Star\The Darling $ 20,000,000 properties in Sydney & Gold Coast - Memorandum no 8 General Area Damage in respect of All Other $ 15,000,000 Situations- Memorandum no 8 Isolation by Landslip or Flood - Memorandum no 10 $ 2,000,000 Utilities Extension -Memorandum no 11 $ 30,000,000 Premises in the Vicinity/Prevention of Access - $ 30,000,000 Memorandum no 15 - in the annual aggregate Severance Pay - Memorandum no 17 $ 30,000,000 Premises Extension - Customers and Suppliers $ 7,500,000 - Specified and Unspecified- Memorandum no 18 Violent Threat of Damage - Memorandum no 19 $ 5,000,000 - in the annual aggregate Infectious Disease Murder Closure $ 1,000,000 - Memorandum no 9 - in the annual aggregate Unspecified Customer's / Supplier's Premises $ 7,500,000 Section 2(ii) - Consequential Loss The Star Benefit Levy and Casino Duty (CCA Levy) $278,000,000 - Memorandum no 4. annual / 36 mth indemnity period aggregate of $825,000,000 Sections 1 & 2 Combined Subsidence, Erosion, Earth Movement & Collapse. $ 5,000,000 This Sub-Limit shall not apply where loss, destruction or damage is caused by or occasioned through an earthquake or seismological disturbance or storm and tempest or rainwater or flood. Flood - The Star Gold Coast - any one event and $ 100,000,000 in the annual aggregate Flood - Waterline Park facility, Brisbane $ 10,000,000 - any one event and in the annual aggregate If more than one Sub-Limit of Liability applies, the greater amount shall be payable. 50 The limit for Section 2(ii) illustrates how bespoke certain of the terms in the Policy are to the nature of the business conducted by Star. 51 It may be noted that for memorandum 7 of the Extension there is no sub-limit, but for memorandum 9 (dealing with infectious disease, vermin, pests, murder and suicide) there is a limit of $1 million in the annual aggregate. As has already been noted, there is a further endorsement to the same effect at the end of memorandum 9 which is expressed in bold typeface as follows: Notifiable Disease - AUD $1,000,000 in the aggregate any one period of Insurance 52 These provisions as to limits and sub-limits are detailed. They provide for different sub-limits for many particular provisions under which cover is afforded. By this mechanism the extent of cover for the particular risks the subject of particular provisions concerning the extent of the indemnity provided in particular circumstances is specified. The sub-limits depend for their operation upon the limits attaching to specific risks. 53 The case advanced for Star would mean that despite the sub-limit for notifiable disease expressed by reference to the detailed provision in memorandum 9, there would no limit where the disease might be described as a catastrophe and the authorities took action of the kind described in memorandum 7. The terminology used in memorandum 9 54 Memorandum 9 does not simply identify a risk or peril that is to be included in the cover by way of extension or expansion. Rather, it is expressed in terms that contain a number of exclusions and limits. Some might be viewed as describing the nature of the risk or peril. However, there are a number of aspects that manifest an intention to limit the extent to which there will be cover for the particular type of peril the subject of memorandum 9. That is to say, the memorandum takes a form that both describes what is covered and what is not covered when it comes to the events addressed by the memorandum. This aspect is significant because it manifests an intention which is inconsistent with other provisions being read in a way that would include cover of the kind that memorandum 9 says is not covered. In short, the form of memorandum 9 indicates an intention that its specific provisions should apply to the exclusion of the application of more general provisions when it comes to the subject matter that it addresses. So, without clear words elsewhere in the Policy, cover that is expressly excluded by memorandum 9 is not provided. 55 The following aspects of memorandum 9 (each of which is addressed separately below) assume significance when it comes to considering the extent of cover afforded by the Policy in connection with human infectious or human contagious disease: (1) paragraph 1 of the memorandum is confined to an occurrence of Notifiable Disease at the Premises or any discovery of an organism at the Premises likely to result in the occurrence of a Notifiable Disease; (2) only Notifiable Diseases are covered; (3) the definition of Notifiable Disease in the Special Provisions excludes a category of human disease defined by reference to the Biosecurity Act; (4) there is a maximum indemnity period of three months from the relevant occurrence (or discovery) at the Premises; (5) other provisions that may expand indemnity to include events that occur outside the Premises do not apply to memorandum 7; (6) the Insurers are only liable for loss arising at the Premises directly subject to the occurrence or discovery; and (7) there is a Sub-limit of $1 million. (1) Occurrence or discovery of Notifiable Disease at the Premises 56 The first qualification to the extent of cover afforded by memorandum 9 in relation to human infectious or contagious disease is to be found in the language in paragraph 1. It confines the cover to loss resulting from an occurrence of disease at the Premises or discovery of an organism at the Premises likely to result in the occurrence of disease. Events and occurrences that occur beyond the Premises or steps taken to deal with the risk of future occurrence or discovery are not covered. This focusses the extent of the insured peril upon what may happen at the Premises. (2) Notifiable Disease 57 Next the definition of Notifiable Disease operates to limit the cover. It is expressed in terms that include an illness resulting from an occurrence of a human infectious or contagious disease 'which the competent local Authority has stipulated shall be notified to them'. Also, paragraph 1 of memorandum 9 should be read as being qualified by the words which follow paragraph 3, namely 'which causes restrictions on the use of the Premises on the order or advice of the competent Local Authority' (a proposition that was in issue before the primary judge but was accepted as correct by Senior Counsel for Star in oral submissions on the appeal). In addition, it may be noted that elsewhere in memorandum 9 there is a provision to the effect that the indemnity period is to be calculated beginning with the date 'from which the restrictions on the Premises are applied'. These aspects of memorandum 9 manifest considered attention being given by the parties to the Policy to the extent to which the consequences of a particular human disease will come within the perils insured. They focus upon whether the disease is one which is notifiable to a competent authority and whether a notification has led to restrictions on the use of the Premises. There are requirements that must be met as to both those aspects. 58 The focus upon action by relevant authorities echoes to some degree the form of memorandum 7 which refers to loss resulting from or caused by any lawfully constituted authority in connection with or for the purpose of retarding any conflagration or other catastrophe. Therefore, the language of memorandum 7 also deals with the extent to which there will be indemnity where loss results from action taken by a competent authority. If indeed the parties intended memorandum 7 to apply to actions taken in relation to disease then the requirement in memorandum 9 that there be action taken which leads to restriction on the use of the Premises would not apply if the disease could be characterised as a catastrophe for the purposes of memorandum 7. The other limits upon the scope of memorandum 9 (as listed above) would also not apply. The detailed specific provisions addressing the extent to which there is cover in relation to the consequences for the insured of human disease could be overtaken by the general terms of memorandum 7 where the incidence of the disease could be encompassed by the term catastrophe. (3) Exclusion by reference to the Biosecurity Act 59 As has been noted, the definition of Notifiable Disease (to which the terms of paragraph 1 of memorandum 9 are confined), itself excludes a category of disease defined by reference to the Biosecurity Act. It is an exclusion which is doubly expressed. It is a statement about what is not covered. In order for it to be given effect, the occurrence of a disease such as COVID-19 must be excluded from the extent of the additional cover provided by memorandum 9. As has been noted, that additional cover is itself limited in a number of respects, notably limited to an occurrence or discovery of a disease that is not an excluded disease at the Premises. As cover for such an occurrence or discovery at the Premises is excluded expressly by the terms of memorandum 9, it is unlikely that some other provision operated in a manner that would allow cover for loss resulting from the occurrence of such an excluded disease (whether at the Premises or elsewhere). Yet, that is the case that Star advances as to the scope of memorandum 7. (4) Maximum indemnity period of three months 60 Memorandum 9 states that the cover for loss resulting from an occurrence or discovery of a Notifiable Disease is limited to three months. Memorandum 7 is not limited in that way. If memorandum 7 was to be construed as affording cover where there was action taken to retard the spread or the risk of spread of a human infectious disease (on the basis that it fell within the words 'or another catastrophe' as Star contends) then there would be no such limitation. It may be accepted that, on the construction for which Star contends, there may be cases covered by memorandum 7 that are not a catastrophe. However, there would be a degree of disconformity in treating those cases as being subject to the three month limit (and otherwise confined to loss in the manner specified in memorandum 7) and allowing coverage for a catastrophic event which, by its very character, would be likely to be productive of greater loss (or at the very least posed that possibility) which was not so limited. 61 It is possible that greater coverage for an event that was assessed as being less likely might be agreed than for one which was assessed as being more likely. However, the Sub-limits are a significant factor to be kept in mind in considering whether that is the way in which a reasonable business person would understand what is expressed by the language of the Policy. The differential is extremely large. Aided by that particular aspect of the context, it appears to be most unlikely that the parties to the Policy would go to the trouble of imposing a Sub-limit of $1 million in the aggregate over the term of the Policy and allow a claim on the basis that memorandum 7 applies to an insured peril of similar character which claim could be in the billions of dollars. 62 The difficulty with Star's construction when it comes to provisions such as the three month limit on loss is that it introduces the potential for overlap such that cases which fall within memorandum 9 might be the subject of a claim to indemnity by Star on the basis of its contention that memorandum 7 applies. In that eventuality, action taken by an authority by reason of the occurrence of disease at the Premises which formed part of what Star would claim to be a catastrophe which caused loss beyond three months would be able to be claimed under memorandum 7 (unconstrained also by the other limits in memorandum 9). This would defeat the carefully worded terms of memorandum 9 (directed expressly to the occurrence of human disease) which concerns not only what was covered but also what was not covered. It would result in a claim for loss from the occurrence of a Notifiable Disease at the Premises (that otherwise conformed to limits expressed in memorandum 7) even though the Policy states in emboldened terms in memorandum 9 that there is a maximum indemnity period of three months from the date of occurrence. (5) Provisions that may expand indemnity to events outside the Premises do not apply 63 As part of Special Provision (b), memorandum 9 provides expressly that the reference to Premises in memorandum 9 are not extended to include damage at other locations even where there is an extension of that kind that applies to other provisions that extend cover. This reinforces the express intention that the provisions in memorandum 9 are confined to what occurs at the Premises. As has been noted, memorandum 8 takes the form of extending loss resulting from Damage to property to Damage to property within a 10 kilometre radius. Memorandum 7 would not allow that provision to be used to expand its scope. (6) Only loss arising at the Premises 64 Special Provision (d) to memorandum 9 specifies a further limit on the coverage afforded if the peril described by its terms was to occur. It says that the Insurers shall only be liable for loss 'arising at those Premises which are directly subject to the Damage'. There is no such limit expressed in memorandum 7. (7) The Sub-limit of $1 million in the aggregate 65 Reference has already made to the significance of the Sub-limit for memorandum 9 of $1 million in the aggregate in any one period of insurance and the absence of any equivalent for memorandum 7. Conclusion 66 On Star's case, the carefully crafted provisions which govern the extent of cover in the case of loss resulting from the occurrence of human infectious or human contagious disease would not apply where the occurrence was of a kind that might be described as a catastrophe for the purposes of memorandum 7 and an authority acted in connection with or for the purpose of retarding the catastrophe. The express statements in memorandum 9 as to what was not covered would not apply despite the risk arising from the same subject matter. The extent of the seven qualifications that we have described as forming part of the description of the extension effected by memorandum 9 count strongly against such a conclusion. They are not simply describing the nature and extent of the insured peril. They are expressing agreement as to certain circumstances that will not be covered. Memorandum 7 67 The merits of Star's case concerning the scope of memorandum 7 depend upon the existence of an overlap in subject matter as between memorandum 7 and memorandum 9. It involves construing memorandum 7 in a manner that would result in memorandum 7 overriding the limitations in memorandum 9 in cases where there was action by an authority in response to a human infection that was a catastrophe for the purposes of memorandum 7. On Star's case, the very general would apply over the very specific. In consequence, despite there being no reference to disease in memorandum 7, it would apply in a case where the peril was in connection with a human infectious or contagious disease. Disease exclusion 68 The general indemnity in Section 2 covers physical loss, destruction of or damage to property used by Star in its business 'by any cause or event not hereinafter excluded'. There are a number of exclusions. As has been noted, one of those is for physical loss, destruction or damage occasioned by or happening through disease (exclusion 4(a)). In that context, if indeed it was intended that the general language of memorandum 7 might apply in a manner that might allow for indemnity where action was taken in connection with disease and thereby cover what was otherwise expressly excluded, it may be expected that language that would manifest that specific intention might be used (especially given the terms of memorandum 9 which address specifically and in considerable detail the extent of cover for a peril connected with human disease). The purpose of the Policy 69 The Policy is a commercial instrument which expresses the extent of risk for which insurance is to be provided by the Insurers. As has been explained, where an instrument of that character is negotiated to arrange coverage that fits the particular circumstances of an individual insured, it is necessary for an underwriter to assess a premium that is an appropriate commercial price for the extent of coverage. In such a context, where, as here, particular memoranda are used to expand or limit the scope of the indemnity afforded by the principal indemnity it may be inferred that the parties have turned their minds to particular topics or types of risk and drafted appropriate memoranda to deal with each such instance. 70 All of which is not to say that there may not be overlap between some memoranda and others. The risk of future events cannot be neatly compartmentalised. Indeed this is reflected in the Sub-limits that apply across Section 1 and Section 2 for particular events. However, the nature of an insurance instrument and its evident purpose is such that where one provision focusses upon a particular type of risk and articulates with considerable precision the extent to which indemnity will be provided by a combination of the use of a key definition (Notifiable Disease), confining language (occurrence at the Premises), exclusions (Premises is not expanded to other locations by any other provisions of the Policy), exceptions (diseases identified by reference to the Biosecurity Act) and a Sub-limit ($1 million in the aggregate in any one period of insurance), those matters together signal to a reasonable business person that the extent of coverage relating to that risk as described (human infectious or human contagious disease) is confined by those express terms and more general terms which might also be said to apply should be read accordingly. Proper construction of memoranda 7 and 9 in the context of the Policy as a whole 71 Memorandum 9 is by far the most comprehensive of the Memoranda to Section 2. It is unique in stating such detailed limitations and exclusions to the scope of the extended cover that it affords. It deals with four distinct categories of cover; occurrence or discovery of human infectious or contagious disease at the Premises, discovery of vermin or pests at the Premises, accident causing defects in the sanitation at the Premises and any occurrence of murder or suicide at the Premises. It has detailed provisions that limit the scope of the cover. 72 Having regard to the matters of context that have been described, even assuming in Star's favour that the terms of memorandum 7 are capable of the breadth of construction for which it contends, a reasonable business person would read the general terms of memorandum 7 as being subject to the detailed and specific provisions of memorandum 9 when it came to the extent of coverage afforded in connection with human infectious or contagious disease. 73 For Star, a number of submissions were advanced against concluding from the specific terms of memorandum 9 an intention that it was to apply to all instances where the claim was for loss consequent upon an event that arose by reason of human infectious or contagious disease by stating both what was and what was not covered in any such instance. 74 First, it was said that memorandum 9 was dealing with instances where there was an occurrence of disease on the Premises. In such cases, so it was submitted, the insured's moral hazard explained the limitations. The point was developed by reference to the cover for the discovery of vermin or pests on the Premises. It was said that there was a moral hazard because the likelihood of occurrence of the event was affected by the manner in which Star was to run its business establishment. It was also said that there was also a moral hazard in how it responded if there is such a discovery. The limitations were said to explain such aspects which were not present in the case of a catastrophe for which Star as the insured would have no responsibility. 75 There are a number of difficulties with the submission. First, if moral hazard (rather than a concern about limiting the extent of the indemnity to be extended for the agreed premium) was the explanation for the limitations in memorandum 9 then there was much clearer language that might be directed towards excluding events that were attributable to the conduct of Star as the insured. Second, cl 13 of the Conditions to the Policy required Star as the insured to 'take all reasonable precautions to prevent loss, destruction or damage to the property insured by this Policy'. Third, the contention does not fit in the same way with the other perils described in memorandum 9 being cover for occurrence of a Notifiable Disease, accident causing defects to sanitation or the occurrence of murder or suicide. Therefore, we are not persuaded that it is a reason to reach a different view concerning the limitation on the scope of memorandum 7 by reason of the terms of memorandum 9. 76 Secondly, it was said that operation of the Memoranda to Section 2 did not require the elimination of overlap or inconsistency. This is a point to which we have already had regard. 77 Thirdly, it was submitted that to reason from the extent of the exclusions and exceptions in memorandum 9 that it operated, in effect, as a statement of the extent to which perils associated with human disease were covered as well as not covered was to apply a form of the Anthony Hordern principle: as to which, see the authorities listed in Esso Australia Pty Ltd v The Australian Workers' Union [2017] HCA 54; (2017) 263 CLR 551 at [47], fn 72. 78 In that regard, Star placed particular reliance upon the following passage from Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 228 CLR 566 at [59] (Gummow and Hayne JJ): Anthony Hordern and the subsequent authorities have employed different terms to identify the relevant general principle of construction. These have included whether the two powers are the 'same power', or are with respect to the same subject-matter, or whether the general power encroaches upon the subject-matter exhaustively governed by the special power. However, what the cases reveal is that it must be possible to say that the statute in question confers only one power to take the relevant action, necessitating the confinement of the generality of another apparently applicable power by reference to the restrictions in the former power. In all the cases considered above, the ambit of the restricted power was ostensibly wholly within the ambit of a power which itself was not expressly subject to restrictions. (footnotes omitted) 79 It appears that in doing so, Star seeks to emphasise that, on the case advanced by the Insurers, memorandum 7 was not wholly within the terms of memorandum 9 and rely upon that aspect as a reason for the Anthony Hordern principle not to be applied. However, in the present case we are not concerned with the specific type of statutory construction question to which the Anthony Hordern principle applies but rather the more general principle which underpins that line of cases. As was explained by Edelman J in BMW Australia Ltd v Brewster [2019] HCA 45; (2019) 269 CLR 574 at [206]: The [Anthony Hordern] principle concerns in substance the same general language convention, or 'ordinary usage' of language, that is sometimes expressed as generalia specialibus non derogant and seeks to resolve inconsistency by preferring the specific provision to the general provision. A general provision will usually be interpreted so that it does not contradict a specific power that imposes 'conditions and restrictions which must be observed' in the exercise of the same power. 80 As such, it is a principle that forms part of the conventions and forms of language that a reasonable business person would bring to account in forming a view as to the scope of a general provision in the context of a more specific provision dealing with the same subject matter: Findex Group Ltd v McKay [2020] FCAFC 182 at [156] (Markovic, Banks-Smith and Anderson JJ); Hume Steel Ltd v Attorney-General for Victoria (1927) 39 CLR 455 at 466 (Higgins J); and Charben Haulage Pty Ltd v Environmental & Earth Sciences Pty Ltd [2004] FCA 403 at [171] (Wilcox J). 81 Such principles, once viewed as canons of construction, are now properly seen as illustrations of the way in which an instrument is construed as a whole such that its provisions fit together: Greencapital Aust Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd (Subject to Deed of Company Arrangement) [2019] NSWCA 53 at [51]-[52] (Leeming JA, Sackville and Emmett AJJA agreeing); and Macquarie International Health Clinic Pty Ltd v Sydney Local Health District [2020] NSWCA 161; (2020) 103 NSWLR 443 at [269]-[270] (Bathurst CJ, Bell P and McCallum JA agreeing). 82 Further, a conflict between apparently inconsistent provisions in the same instrument 'is to be resolved, if at all possible, on the basis that one provision qualifies the other and, hence, that both have meaning and effect': Re Media Entertainment & Arts Alliance; Ex Parte Hoyts Corporation Pty Ltd (1993) 178 CLR 379 at 386 (Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ). The conflict arises here if, and to the extent that, the specific terms of memorandum 9 manifest an intention to deal comprehensively with the circumstances in which business interruption due to human infectious or contagious disease is covered by the Policy. 83 For reasons we have given, the detailed terms of memorandum 9, particularly as to its limits and exclusions identify not only what is covered but also what is not covered when it comes to such loss. It is dealing with the full extent of such claims and other provisions of the Policy should be approached on that basis. Memorandum 7 does not in terms refer to human disease. To the extent that its terms might be construed as embracing such an instance they should be read down in favour of the specific terms of memorandum 9. 84 Indeed, in the case of the exclusion expressed by reference to the terms of the Biosecurity Act, memorandum 9 uses language to that effect by saying that all such occurrences are specifically excluded. Likewise, the provision in relation to any extension for Damage that occurs elsewhere than on the Premises. 85 In any event, for the following reasons, memorandum 7 when properly construed in context, does not extend cover in the manner contended for by Star. The effect of memorandum 7 upon the scope of the indemnity provided by Section 2 86 The principal indemnity provision of Section 2 has already been quoted. For convenience of reference, it is restated below: In the event of any building or any other property or any part thereof used by the Insured at the Premises for the purpose of the Business being physically lost, destroyed or damaged by any cause or event not hereinafter excluded (loss, destruction or damage so caused being hereinafter termed 'Damage') and the Business carried on by the Insured being in consequence thereof interrupted or interfered with, the Insurer(s) will, subject to the provisions of this Policy including the limitation on the Insurer(s) liability, pay to the Insured the amount of loss resulting from such interruption or interference in accordance with the applicable Basis of Settlement. 87 As has been noted, the indemnity provision begins by describing an insured event. The event occurs when property used by Star at its Premises for its business is physically lost, destroyed or damaged by any cause not excluded. The provision then states that the loss, destruction or damage 'so caused' is 'hereinafter termed 'Damage' '. Therefore, unless otherwise extended, the term 'Damage' is confined to physical loss, destruction or damage resulting from a non-excluded cause. So, the first reference to loss in the indemnity clause is of that character. Therefore, the term 'Damage' is shorthand for the extent of the perils covered by the indemnity. It is all instances where there is physical loss, destruction or damage to property used by Star at its Premises howsoever caused, unless it is caused by an excluded event. It follows that the defined term 'Damage' is used to refer to the events the occurrence of which give rise to the right to the indemnity provided under Section 2. In that context, the term 'loss' is used as part of the description of the insured event. It is not referring to the loss that may be claimed. In that sense it is inapt to think of the reference to loss and the defined term Damage as a reference to loss and damage respectively in their familiar sense of a loss that is to be claimed. Rather, the term Damage (and the language 'loss, destruction or damage so caused' to which it refers) is describing the extent of the peril that is covered by the Policy. In the case of loss, it is physical loss of property used by Star in its business. 88 The term Damage is defined as referring to loss, destruction or damage 'so caused', namely 'by any cause or event not hereinafter excluded'. There are many exclusions. For example, the Perils Exclusions include in clause 1(b) an exclusion for 'physical loss, destruction of or damage to the Property Insured … resulting from … requisition or damage to property by or under the order of any Government or Public or Local Authority'. The exclusion itself is confined by the following write back provision: Notwithstanding the provisions of Perils Exclusion 1(b) the Insurer(s) shall be liable for loss, destruction of or damage to, or the cost of removal of, sound property at the Premises for the purpose of preventing or diminishing imminent damage by, or inhibiting the spread of, fire or any other peril insured against under this Policy. 89 This deals, at least as to the spread of fire, with a subject matter that is also addressed by memorandum 7. It appears to be concerned with property claims, not with the subject matter of Section 2 which is claims for loss due to interruption to business. Much was sought to be made by the Insurers of the terms of the write back for the purposes of construction of the language used in memorandum 7. However, the exclusion is expressed in terms that engage with the principal indemnity which contemplates that claims will only arise where there is physical loss, destruction or damage to property. On any view, the language of memorandum 7 is making clear the extent to which that indemnity is extended. It may be effecting that extension by over-riding an exclusion or it may be simply providing for an additional peril that is covered or it may be doing both. Therefore, contrary to the contention advanced for the Insurers, the existence of the qualifying language to cl 1(b) of the Perils Exclusions does not provide any real assistance in understanding what was intended by memorandum 7. Whatever it says and however it operates, the nature of the memoranda is such that it has the potential to change the scope of the exclusion. 90 There is also an exclusion in cl 7 of the Perils Exclusions for physical loss, destruction or damage occasioned by or happening through any kidnapping, bomb threat, threat of contamination, hoax or extortion. Further, as has been noted, there is an exclusion for disease (quoted above). These exclusions (and others) operate by reference to the language of the general indemnity provided for in Section 2. Most use the terminology 'physical loss, destruction of or damage to [property]' in describing the perils excluded. By reason of their terms, the defined term Damage in Section 2 must be read as being qualified by these many exclusions. However, they offer little assistance when it comes to interpreting the memoranda to the indemnity in Section 2 because those memoranda can alter the extent of the Perils Exclusions. Also, as we have seen in relation to memorandum 9, they can provide for cover for consequential loss through business interruption as a result of events that do not involve any physical loss, destruction of or damage to property. Memorandum 19 is also of that character (see below). The Perils Exclusions to which we have referred do not engage with perils of that kind. The words in the Policy that introduce the Memoranda to Section 2 support an approach whereby the memoranda can alter the cover that would otherwise be provided by the principal indemnity described in Section 2 which is expressly made subject to the exclusions including the Perils Exclusions. Those introductory words state: Except to the extent this Policy is hereby modified under the following Memoranda the terms, Conditions and limitations of this Policy shall apply. 91 Returning to the text of the indemnity clause, after defining the events covered (to be referred to as Damage) the indemnity clause then refers to 'the amount of loss' that is 'in consequence' of the Damage interrupting or interfering with the business of Star as the insured. This part of the clause is not describing the insured events. Rather, it is describing the extent of the indemnity for loss in consequence of the occurrence of an insured event (namely, Damage) occurring. The loss described at this point in the clause might be described as the consequential loss or the indemnified loss. It is the loss occasioned by interruption to the business of Star. 92 Finally, the clause states that the cover is for the amount of such loss 'in accordance with the applicable Basis of Settlement'. This might be described as the quantified loss. 93 It is within that immediate context that the terminology in the Memoranda to Section 2 must be considered. The terms 'Damage' and 'loss' are deployed throughout the Memoranda to Section 2. 94 The first way in which that occurs is in memorandum 2 which provides that if the business of the insured is conducted in departments then certain of the Basis of Settlement provisions are to be applied 'separately to each department affected by the Damage'. In each of memoranda 3, and 5 there are related provisions dealing with the Basis of Settlement. These three memoranda each refer to calculation of loss due to the Damage. In each case loss is used to refer to the consequential loss and Damage is used to refer to the event giving rise to a claim. In the case of memorandum 2, it has the effect that, despite there being a single peril, the quantified loss is to be calculated separately for different departments of the business. 95 Memorandum 4 deals with the case of a claim to recover The Star Casino Benefit Levy being a type of loss for which there is express provision. It refers to instances in which the levy 'would have been payable in accordance with the above contractual arrangements had the Damage not occurred'. Again Damage is being used in the sense defined in the principal indemnity for Section 2. It is the event giving rise to the loss to be claimed. The memoranda specifies how the Basis of Settlement is to apply in such a case. Then, memorandum 4 states: The sub limits stated in Section 2(i), with the exception of Infectious Diseases, of this policy shall not apply to Casino Weekly Duty, Rebate Player Duty and Responsible Gambling Levy - Sub Limit Section 2(ii). 96 It can be seen that memorandum 4 lifts the Sub-limits in the case of a claim for loss that takes the form of loss of the levy. All limits are lifted except that for Infectious Diseases. As has been noted that limit is for $1 million in the aggregate for the term of the Policy. In our view, the retention of the limit in that case supports our conclusion that the terms of the Policy reflect a considered view that memorandum 9 expresses the full extent to which there would be cover for Infectious Diseases. As the Sub-limit applies only to memorandum 9, a construction which allowed memorandum 7 to apply to disease (and thereby without constraint by the Sub-limit) would mean that the qualification to memorandum 4 would not apply. However, the qualification appears in a context which manifests an intention that loss of the Levy would be subject to the Sub-limit for Infectious Diseases in all instances. That would only be the case if memorandum 9 expressed the full extent of cover for human infectious or contagious disease. 97 Memorandum 6 deals with the way in which information in the books of account of the insured may be treated in investigating or verifying any claim. 98 Then comes the key provision for Star's case, memorandum 7. It adopts the form of extending what is meant by Damage. It says: 'The word "Damage" under Section 2 is extended to include loss resulting from or caused by [the specified act of an authority]'. Therefore, its focus is upon extending the insured event covered by the principal indemnity for Section 2. Notably, it uses the expression 'loss', not the phrase 'loss, destruction or damage'. For the following reasons, the use of the term loss in that manner is ambiguous. 99 On one view, the focus of the opening words on extending the term Damage indicates that the memorandum is expanding the extent of cover by including something more within the defined term. In particular, it is including an instance where the action of an authority in connection with or for the purpose of retarding a conflagration or other catastrophe results in loss. On that approach, loss is not the indemnified loss that may be claimed and assessed according to the Basis of Settlement. Rather, loss is used as part of the terminology to define the kind of event for which indemnity is afforded. Therefore, 'loss' is not referring to loss which is a result of business interruption. Rather, it is referring to loss that causes business interruption (being loss that happens because of the action of an authority). On that approach loss is referring to the immediate consequence of the action of the authority in connection with or for the purpose of retarding any conflagration or other catastrophe. It is pointing to the effect of the action taken by the authority. It must have the effect of 'loss'. Accordingly, it is not referring to the financial or economic loss that flows from that action. 100 If such an approach is taken to the interpretation of the provision then it is difficult to see how the word loss could refer to an action by the authority that did not have some adverse physical consequence. As the primary judge concluded at [169] after considering the above aspects: Thus, there is a clear textual and structural foundation of 'loss' in memorandum 7 to be physical loss, which would practically in any case include destruction. There is no textual reason, other than the similarity (though not identity) of introductory wording of memoranda 7 and 9, to consider that 'loss' means loss of use. 101 The reference at [169] to the possible significance of the similarity with the opening wording of memorandum 9 lies in the fact, already noted, that memorandum 9 by its subject matter expands the scope of Damage to include events that do not result in physical loss. Therefore, when it refers to extending Damage to include loss resulting from the matters there specified it is not confined to physical loss. 102 Despite this, the primary judge concluded at [179] that: The word 'loss' in memorandum 7 means physical loss of (and so destruction of, but not damage to) property, not loss of use, or of custom or financial loss. 103 This further step seems inevitable if the opening words '"Damage" … is extended to include loss' are read as referring to loss as part of the insured event (in the same way that physical loss, destruction or damage are part of the insured event in the main indemnity provision). 104 However, as the extension is only for loss, such a construction produces the odd feature that the extension is only for action by the authority that causes loss, not for action that causes 'physical loss, destruction or damage'. 105 A different view of the references to loss in memoranda 7 and 9 arises if the use of that term is contrasted with the extensive use throughout the Policy of the phrase 'loss, destruction or damage' (or equivalent language) and the use of that terminology in the principal indemnity in Section 2 (which is then reduced to the term Damage). In that context, the use of the term 'loss' instead of the phrase 'physical loss, destruction or damage' presents as a deliberate one. It leads to an alternative view to that described above, which is to treat the reference to loss as a reference to the indemnified loss, namely the loss suffered by reason of interruption to or interference with the business being carried on by Star. This requires some small assault to the grammatical structure of each of memoranda 7 and 9 because they both use the form of extending Damage 'to include loss resulting from'. However, it is possible to read the opening words of each of the two memoranda as meaning the scope of the insured peril (Damage) is extended to include consequential loss that results from the event that is then specified in the memorandum (in the case of memorandum 9, each of the four numbered events). This would treat the opening words of each of memoranda 7 and 9 as providing, in effect, that Damage is extended so as to include loss resulting from specified events (which are insured perils). This approach is strongly supported by the fact that it is not the loss that is the object the extension. Rather, it is the events that are thereafter specified that are the object of the extension. 106 Put another way, in the case of memorandum 7, Damage (the insured event) is extended by the memorandum such that consequential loss resulting from or caused by the action of an authority in connection with or for the purpose of retarding any conflagration or other catastrophe is covered. It is the action of an authority of the kind described in the memorandum that becomes the insured peril. Damage is extended to include that peril with the result that loss resulting from or caused by that peril (that is, consequential loss) is the subject of the agreed indemnity. The same approach may be applied to memorandum 9. 107 This alternative construction sits with the overall structure of the Policy in four respects. First, for memorandum 7 to provide that Damage (being the term used to describe the extent of the insured events) is extended indicates that the provision is expanding the scope of the insured perils for which there will be indemnity for the consequential loss. It does not suggest that there will both be a new peril but also a narrowing of the physical effect that must be established (to exclude damage). Yet this is the consequence of the first construction (as was recognised by the primary judge). Second, as will emerge, most of the memoranda that follow have the effect of identifying an additional insured peril and they do so without consistency in the form of words used. Third, it is unlikely that the same form of words as used in memorandum 7 and memorandum 9 would have different meanings. Both are dealing with the same type of issue and they are proximate in the document. You would expect both to be using 'loss resulting from' in the same sense. Fourth, it would reflect the fact that the Policy uses the term physical loss in many of its provisions when it is referring to loss of that kind. 108 Therefore, the use of the term loss (being the term used for consequential loss that can be claimed) appears to indicate a reference to the indemnified loss not some aspect of the insured peril. 109 Next there is memorandum 8. It is in the following terms: Loss as insured by Section 2 of the policy resulting from interruption or interference with the Business in consequence of Damage to property within a 10 kilometre radius of the Premises which results in cessation or diminution of Business due to temporary falling away of potential custom shall be deemed to be loss resulting from Damage to property used by the Insured at the premises. Property Exclusions 4, 9, 10, 14 shall not apply to the cover granted by this extension. 110 Expressed in those terms, it simply deems the indemnified loss to include loss resulting from Damage occurring within the extended radius of any of Star's Premises. However, it is to be observed that the term loss is used to refer to consequential loss in contradistinction to the term Damage. 111 Then memorandum 9 opens with the words 'Damage is extended to include loss resulting from …'. It goes on to specify certain events (such as occurrence of a Notifiable Disease at the premises). The events as specified are not concerned with property loss, destruction or damage. Therefore, as has been observed, it is clear from that context that memorandum 9 extends the insured events to include those described in memorandum 9 even though they may not involve physical loss, destruction or damage. 112 Then there are memoranda that refer expressly to the loss as insured being extended or deemed to include the loss described (in the same basic structure as memorandum 8). They are memoranda 10, 15, 16, 18 and 19. Memoranda 10, 15, 16 and 18 each refer to loss in consequence of Damage to property (in the case of memorandum 16, registered vehicles and/or trailers at the Premises). Memorandum 19 applies where there is an interruption to the business as a result of a threat of damage to the premises by order of competent Public Authority). It does not use the defined term Damage. No doubt this reflects the fact that the damage described includes damage to persons and is not confined to property. In each case, there is no change to the need for physical loss, destruction or damage (noting the incremental change for threat of such damage to property or persons). Therefore, it makes sense to frame the provisions by reference to the consequential loss that may be claimed. 113 In using the term loss, it is clear that these memoranda are referring to the consequential loss (to be determined in accordance with the Basis of Settlement provisions). However, they retain the focus on the physical nature of the peril. They each refer separately to Damage (or in the case of memorandum 19, damage to property or persons), being the operative event which forms part of the language used to described the insured peril. 114 Memorandum 9 is different to these memoranda. The four events listed in its numbered paragraphs make clear that it is changing the nature of the insured peril to include events that do not have physical consequences. It uses the form of extending what is meant by Damage. Plainly it does not do so by including in Damage only loss of the kind specified. Rather, it extends Damage in a manner that means the consequential loss resulting from any of the four specified events may be claimed under the Policy. Significantly, memorandum 7 adopts the same form. Therefore, the context suggests that they are both identifying events that may lead to consequential loss as a result of a peril that may not involve damage to property. Star's first proposition as to memorandum 7: not confined to physical loss 115 Taking account of the use of the term 'loss' in both memoranda 7 and 9 rather than the phrase 'loss, destruction or damage' and the fact that memorandum 9 uses that form in a provision that necessarily indicates an intention that the term Damage should be extended to include loss other than physical loss, as well as the surrounding context, we are of the view that the reference to loss in memorandum 7 is not confined to physical loss. All that is required is that there be consequential loss resulting from or caused by the action of an authority of the kind described. 116 Therefore, the first of Star's propositions should be accepted. The reference to 'loss' in memorandum 7 is not confined to physical loss. Rather, it refers to the indemnified loss being the loss that can be claimed because Damage is extended to allow such loss to be recovered upon the occurrence of the insured peril described in the memorandum. Star's second proposition as to memorandum 7: ambit of the words 'or other catastrophe' 117 The next issue is whether loss caused by an authority in connection with or for the purpose of dealing with the COVID-19 pandemic falls within the terminology 'in connection with or for the purpose of retarding any conflagration or other catastrophe'. 118 Star claims that memorandum 7 should be read as covering two distinct types of actions by any lawfully constituted authority, namely: (1) action in connection with any conflagration or other catastrophe; or (2) action for the purpose of retarding any conflagration or other catastrophe. 119 The significance of Star's claim is that it leads to the proposition that any action taken by the relevant authority does not have to involve retarding any conflagration or other catastrophe provided it is undertaken in connection with any conflagration or other catastrophe. However, the usual way in which to construe a grammatical form such us 'in connection with or for the purpose of' is to apply both alternatives to the words that follow; in the present case 'retarding any conflagration or other catastrophe'. Further, if it were sufficient for the loss to result from action of the authority in connection with a conflagration then that language would include any case in which the action was for the purpose of retarding the conflagration. The subsequent words would be redundant. On the other hand, if memorandum 7 is taken to refer to action in connection with a particular activity, namely retarding a catastrophe then there is an ambiguity as to whether it includes that particular activity, namely action for the purpose of retarding that catastrophe. To speak of something 'in connection with' another thing is to identify something apart from that other thing. 120 Therefore, as a matter of ordinary language, the focus of memorandum 7 is upon circumstances in which the authority does something that amounts to retarding, not something that is merely 'in connection with', a conflagration or other catastrophe. There is no commercial or other reason advanced as to why Star's more awkward construction should be preferred. Therefore, we do not accept Star's claim in that regard. 121 Otherwise, there are three aspects of the immediate context within memorandum 7 to be kept in mind in considering whether the COVID-19 pandemic might fall within the words 'or other catastrophe'. First, there is the word 'retarding'. The insured peril as described requires that the authority act in connection with or for the purpose of retarding. So, the conflagration or other catastrophe must be of a kind that it is apt to contemplate an authority doing something to retard it. 122 Secondly, there is the word 'conflagration'. It has significance because of the use of the word 'other' in the phrase 'conflagration or other catastrophe'. It indicates the nature of the catastrophe that the parties had in mind. It must include a conflagration. However, it is perhaps less clear that it is appropriate to take the further step of construing conflagration as establishing a category that confines the scope of the term catastrophe: Deputy Commissioner of Taxation v Clark [2003] NSWCA 91; (2003) 57 NSWLR 113 at [126] (Spigelman CJ, Handley and Hodgson JJA agreeing); and Chief Commissioner of State Revenue v Tasty Chicks Pty Ltd [2012] NSWCA 181 at [54] (Meagher JA, Barrett and Sackville JA agreeing). 123 Thirdly, there is the implicit requirement that there be an action by the authority that has the character that it is in connection with or for the purpose of retarding. The memorandum is not directed to any action by an authority. It is confined to one that has a connection with or is for the purpose of retarding a conflagration or other catastrophe. In the case of a conflagration (being the first mentioned case) this contemplates that there has been physical action by the authority. The significance of the term 'retarding' 124 Something must exist and be active in order for it to be retarded by the action of someone. A person or thing (or an action or process of development) may be retarded but only if it is has commenced and is ongoing, not if it is simply threatened or there is a risk of its occurrence. It is not a term that is apt to describe steps taken to prevent an occurrence of something or the possibility of its eventuality. Even when forms of the verb 'retard' are used in respect of an object that is abstract in character, it conjures a sense of physical restraint being imposed upon something that is underway in a manner that indicates its future progression if left unimpeded or it was to follow its usual course. In order for something to be able to be retarded it must be moving in a particular direction or following a particular course such that actions or steps may be taken to interrupt what would otherwise be its progression. 125 Further, where, as here, reference is made to a lawfully constituted authority retarding any conflagration or other catastrophe, the character and usual capacity of such authorities informs the understanding of a reasonable business person as to what is meant. Memorandum 7 is referring to something that can be done by an authority to retard a conflagration or other catastrophe. A conflagration cannot be retarded by the making of directions or orders or the giving of advice. It requires physical steps to be taken. Therefore, the reference to 'or other catastrophe' must take its meaning from that immediate context. The focus of the reader is upon physical actions that can be done to impede, interrupt or slow down the course of a great or destructive fire, not things that might be done to reduce the risk or possibility of one. 126 Steps taken to stop the spread of a human disease such as COVID-19 might be described in a loose way as retarding the disease. However, the term is not apt to describe those steps that might be taken to curtail the risk of spread or prevent the commencement of contagion. Further, the spread of a disease is not interrupted by physically restraining or interrupting its progress. Although the spread of the virus is a physical phenomenon by which individuals are infected with the disease, the steps taken by authorities to contain a viral pandemic are not directed at the virus or the disease. They are directed at the behaviour of people so as to curtail and limit the opportunities for the virus to spread. Therefore, it is somewhat awkward to describe the steps taken by authorities to prevent or abate the spread of the virus as being undertaken for the purpose of retarding COVID-19 or the virus that causes COVID-19. All the more so given the juxtaposition with language concerning retarding a conflagration which is inherently physical in nature and will involve action directed at the conflagration itself as a physical phenomenon. The significance of other matters of context 127 Further, the reference to catastrophe in memorandum 7 must be construed contextually. All of the matters that have been identified in the course of reaching the conclusion that the specific terms of memorandum 9 prevail over the general terms of memorandum 7 are also significant parts of the context when it comes to ascertaining the extent of the indemnity afforded for interruption to the business of Star associated with human infectious or human contagious disease. Those same matters, together with the association with the word conflagration and the need for action by the authority retarding the conflagration or other catastrophe would lead a reasonable business person to conclude that the reference to a catastrophe does not include an occurrence such as the COVID-19 pandemic. Rather, the words 'or other catastrophe' are to be confined to catastrophic events that can be retarded by physical actions directed towards restraining or interrupting the progress of a physical phenomenon. 128 This was the conclusion reached by the primary judge at [172]. It is a conclusion with which we respectfully agree. 129 It is now possible to deal with each of the grounds of appeal and cross-appeal. Appeal ground 1 130 Star's first appeal ground was to the effect that the primary judge ought to have found that the word loss in memorandum 7 is not confined to physical loss and 'includes loss of use, loss of custom and/or financial loss'. For reasons we have given, we accept the contention that the reference to loss in memorandum 7 is not confined to physical loss or indeed to loss that forms part of the insured event. It refers to the consequential loss that can be claimed and is to be assessed according to the Basis of Settlement. Appeal ground 2 131 Star's second appeal ground is to the effect that the words 'or other catastrophe' in memorandum 7 encompasses the COVID-19 pandemic and the response thereto if only because, as the primary judge found at [202] 'as a consequence of the way in which the Federal, State and Territory authorities approached and responded to it'. For reasons we have given, the primary judge was correct to find that the COVID-19 pandemic and the response to it was not a catastrophe for the purposes of memorandum 7. Appeal ground 3 132 By its third ground, Star claims that the primary judge ought to have found that the Insurers were obliged under the indemnity contained in Section 2 of the Policy as extended by memorandum 7 to indemnify Star for economic loss of the kind specified in its claim. For reasons we have given, the primary judge was correct in finding that there was no such obligation to indemnify. Cross-appeal 133 By their cross-appeal the Insurers claim that the primary judge ought to have found, in effect, that an incipient domestic catastrophe (being the finding made by the primary judge as to the extent of the COVID-19 pandemic in Australia at the relevant time) was not a catastrophe for the purposes of memorandum 7. For reasons we have given, unless and until there is something underway there can be nothing to retard. However, the unchallenged finding made by the primary judge, based on the expert evidence was that, at the relevant time, COVID-19 was 'a global catastrophe with at least an incipient existence in Australia': at [202]. Further it had a physical presence in Australia, such that '[w]hile the incidence of COVID-19 in Australia may not have been as physically great as it was globally, it nonetheless reached the level of a catastrophe, if only as a consequence of the way in which the Federal, State and Territory authorities approached and responded to it'. We take this to be a finding that it was the actions taken in response to COVID-19 that manifested its catastrophic effect. We do not interpret the finding of the primary judge as suggesting that there was no catastrophe other than that brought about by some form of unjustifiably extreme response by the relevant authorities. Nor do the Insurers seek to make that case. 134 Significantly, the primary judge concluded that if memorandum 7 applied to human disease then the extension effected by its terms 'would place no limitations upon how evolved that catastrophe must be: it would not need to be fully developed, nor fully realised': at [203]. We agree. Just because a catastrophe may become even more of a catastrophe does not mean that it was not a catastrophe until it was fully fledged. The capacity for the initial spread of the virus to become uncontrolled is what made it a catastrophe in its incipiency. For those reasons, had it been necessary to consider the cross-appeal we would not have upheld the grounds of cross-appeal. Star's contentions in the cross-appeal 135 It follows that the points of contention raised by Star in the cross-appeal do not arise. They require the assumption of a view as to what may amount to a catastrophe that is contrary to that which we have determined was agreed between the parties to the Policy. It would require the expert and other evidence to be considered on the basis of that hypothesis in circumstances where no detailed argument was addressed to that material. Therefore, in our view, it is not necessary or appropriate to deal with those points of contention. Conclusion and costs 136 It follows that both the appeal and the cross-appeal should be dismissed. As it is the Insurers who have been substantially successful as to the subject matter of the appeal and the cross-appeal occupied little of the argument, costs should follow the event and there should be an order that Star pay the Insurers' costs of the appeal and the cross-appeal to be assessed as one set of costs if not agreed. I certify that the preceding one hundred and thirty-six (136) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Moshinsky, Derrington and Colvin. Associate: Dated: 21 February 2022 SCHEDULE OF PARTIES NSD 879 of 2021 Appellants Fourth Appellant: STAR PTY LIMITED (ACN 060 510 410) Fifth Appellant: STAR ENTERTAINMENT SYDNEY PROPERTIES PTY LTD (ACN 050 045 120) Sixth Appellant: STAR ENTERTAINMENT SYDNEY APARTMENTS PTY LTD (ACN 075 423 666) Seventh Appellant: STAR ENTERTAINMENT QLD CUSTODIAN PTY LTD (ACN 067 888 680) Eighth Appellant: STAR BRISBANE CAR PARK HOLDINGS PTY LTD (ACN 610 776 184) Ninth Appellant: STAR ENTERTAINMENT GC INVESTMENTS PTY LTD (ACN 615 401 164) Respondents Fourth Respondent: ZURICH AUSTRALIAN INSURANCE LIMITED (ABN 13 000 296 640) Fifth Respondent: ALLIANZ AUSTRALIA INSURANCE LIMITED (ABN 15 000 122 850) Sixth Respondent: SWISS RE INTERNATIONAL SE AUSTRALIA BRANCH (ABN 38 138 873 211) Seventh Respondent: ASSICURAZIONI GENERALI S.P.A (HONG KONG) Eighth Respondent: LIBERTY MUTUAL INSURANCE COMPANY (ABN 61 086 083 605) Ninth Respondent: HDI GLOBAL SE AUSTRALIA (ABN 55 490 279 016) Tenth Respondent: ALLIED WORLD ASSURANCE COMPANY, LTD (SINGAPORE BRANCH) Eleventh Respondent: PICC PROPERTY AND CASUALTY COMPANY LIMITED Cross-Appellants Second Cross-Appellant: AIG AUSTRALIA LIMITED (ABN 93 004 727 753) Third Cross-Appellant: XL INSURANCE COMPANY SE (ABN 36 083 570 441) Fourth Cross-Appellant: ZURICH AUSTRALIAN INSURANCE LIMITED (ABN 13 000 296 640) Fifth Cross-Appellant: ALLIANZ AUSTRALIA INSURANCE LIMITED (ABN 15 000 122 850) Sixth Cross-Appellant: SWISS RE INTERNATIONAL SE AUSTRALIA BRANCH (ABN 38 138 873 211) Seventh Cross-Appellant: ASSICURAZIONI GENERALI S.P.A (HONG KONG) Eighth Cross-Appellant: LIBERTY MUTUAL INSURANCE COMPANY (ABN 61 086 083 605) Ninth Cross-Appellant: HDI GLOBAL SE AUSTRALIA (ABN 55 490 279 016) Tenth Cross-Appellant: ALLIED WORLD ASSURANCE COMPANY, LTD (SINGAPORE BRANCH) Eleventh Cross-Appellant: PICC PROPERTY AND CASUALTY COMPANY LIMITED Cross-Respondents Second Cross-Respondent STAR ENTERTAINMENT SYDNEY HOLDINGS LIMITED (ACN 064 054 431) Third Cross-Respondent STAR ENTERTAINMENT QLD LIMITED (ACN 010 741 045) Fourth Cross-Respondent STAR PTY LIMITED (ACN 060 510 410) Fifth Cross-Respondent STAR ENTERTAINMENT SYDNEY PROPERTIES PTY LTD (ACN 050 045 120) Sixth Cross-Respondent STAR ENTERTAINMENT SYDNEY APARTMENTS PTY LTD (ACN 075 423 666) Seventh Cross-Respondent STAR ENTERTAINMENT QLD CUSTODIAN PTY LTD (ACN 067 888 680) Eighth Cross-Respondent STAR BRISBANE CAR PARK HOLDINGS PTY LTD (ACN 610 776 184) Ninth Cross-Respondent STAR ENTERTAINMENT GC INVESTMENTS PTY LTD (ACN 615 401 164)	21,829
federal_court_of_australia:irc/1995/1995irca0117	decision	commonwealth	federal_court_of_australia	text/html	1995-03-30 00:00:00	Raymond Ernest Grout v Gunnedah Shire Council [1995] IRCA 117	https://www.judgments.fedcourt.gov.au/judgments/Judgments/irc/1995/1995irca0117	2024-09-13T22:48:48.988410+10:00	CATCHWORDS DAMAGES - assessment of damages for unlawful dismissal - effect of tax COSTS - whether Court has power to award costs in common law claim in associated jurisdiction Industrial Relations Act 1988 (Cth), s 347 NSW Cancer Council v Sarfarty (1992) 28 NSWLR 68 Wheeler v Philip Morris (1989) 97 ALR 282 at 312 Kilbourne v NZ Precision Products Pty Ltd (1988) 4 VIR 31 Byrne v Australian Airlines Ltd (1992) 45 IR 178 Bostik (Australia) Pty Ltd v Gorgevski (1992) 36 FCR 20 Atlas Tiles Ltd v Briers (1978) 144 CLR 202 Cullen v Trappell (1980) 146 CLR 1 The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36 FCR 439 Byrne v Australian Airlines Ltd (1994) 47 FCR 30 Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 Gas Industry Salaried Officers' Federation v Municipal Officers' Association of Australia (1989) 29 IR 48 Viner v Australian Building Construction Employees and Builders' Labourers' Federation (1981) 38 ALR 550 Cooke v Goodhew (1989) 91 ALR 447 Gregory v Phillip Morris Ltd (1987) 74 ALR 300 Standish v University of Tasmania (1989) 28 IR 129 Burgundy Royale Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 Corporate Affairs Commission v Bradley (1974) 1 NSWLR 391 No. NI 397 of 1994 RAYMOND ERNEST GROUT v GUNNEDAH SHIRE COUNCIL MOORE J SYDNEY 30 MARCH 1995 IN THE INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) No. NI 397 of 1994 ) NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: RAYMOND ERNEST GROUT Applicant AND: GUNNEDAH SHIRE COUNCIL Respondent JUDGE: Moore J PLACE: Sydney DATE: 30 March 1995 ORDER OF THE COURT THE COURT ORDERS: 1. Judgment for the applicant in the sum of $71,134.00. 2. No order as to costs. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) No. NI 397 of 1994 ) NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: RAYMOND ERNEST GROUT Applicant AND: GUNNEDAH SHIRE COUNCIL Respondent JUDGE: Moore J PLACE: Sydney DATE: 30 March 1995 REASONS FOR JUDGMENT Following my reasons for judgment of 13 February 1995, no agreement was reached on how the damages should be quantified. The parties had been asked to make written submissions on the impact of taxation on the quantification of the damages. The written submissions of the applicant and those of the respondent in reply traversed that and a number of other issues which I now address. Taxation The respondent submitted that the damages reflecting salary for the period of notice should be assessed on the applicant's net income, that is, his income after PAYE tax had been deducted, the damages reflecting the superannuation contributions assessed by reference to the amount paid into the fund after tax was deducted and the damages for the loss of the use of the car and phone should take into account the fringe benefits tax that would have been paid. The amounts assessed in this way should then be increased by a amount equivalent to the tax that will be payable on them as eligible termination payments. This approach was said to be consistent with the joint judgment of Gleeson CJ and Handley JA in NSW Cancer Council v Sarfaty (1992) 28 NSWLR 68. The question of whether the damages for unlawful dismissal should reflect gross or net earnings is a vexed one. The balance of recent judicial opinion is that it should be gross earnings: see Wheeler v Philip Morris (1989) 97 ALR 282 at 312, Kilbourne v NZ Precision Products Pty Ltd (1988) 4 VIR 31 at 34, Byrne v Australian Airlines Ltd (1992) 45 IR 178 at 203; see also Bostik (Australia) Pty Ltd v Gorgevski (1992) 36 FCR 20, having regard to the introduction of s27B into the Income Tax Assessment Act 1936 ("the Tax Act") which renders those damages taxable as assessable income. In Wheeler, supra, Gray J discussed the earlier decisions of the High Court in Atlas Tiles Ltd v Briers (1978) 144 CLR 202 and Cullen v Trappell (1980) 146 CLR 1 and changes that have since been made to the Tax Act at 312: "The first question which arises is whether a calculation of the loss suffered by the applicant as a result of his dismissal should be based on gross earnings, or earnings after tax. In Atlas Tiles Ltd v Briers (1978) 144 CLR 202; 21 ALR 129, the High Court dealt with a case of damages for wrongful dismissal. The court took the view that those damages should be calculated by reference to likely gross earnings, and not likely earnings net of income tax. Subsequently, in Cullen v Trappell (1980) 146 CLR 1; 29 ALR 1, the High Court held that in assessing damages for personal injuries, a court should take into account the income tax which the plaintiff would have had to pay on the earnings of which his injuries had deprived him. This view, however, was based on the proposition that an award of damages was not itself taxable. At that time, s 26(d) of the Income Tax Assessment Act 1936 (Cth) provided that the assessable income of a taxpayer should include 'five per centum of the capital amount of any allowance, gratuity or compensation where that amount is paid in a lump sum in consequence of retirement from, or termination of, any office or employment, and whether so paid voluntarily, by agreement or by compulsion of law'. In his dissenting judgment in Atlas Tiles Pty Ltd v Briers (CLR at 227), Gibbs J (as he then was) expressed the view that where such a small portion of an award of damages was subject to tax, the award of damages should be treated as non-taxable for the purpose of determining whether it should be assessed according to gross or net earnings. The dissenting view of Gibbs J prevailed in Cullen v Trappell. Section 26(d) of the Income Tax Assessment Act has now been repealed. The provisions of Sub-div AA of Pt III of that Act now include in assessable income any 'eligible termination payment'. That phrase is defined in s 27A(1) as including 'any payment made in respect of the taxpayer in consequence of the termination of any employment of the taxpayer ...'. Under s 27A(3), a payment is an eligible termination payment whether it is made voluntarily, by agreement or by compulsion of law. So much of an eligible termination payment as is referrable to employment occurring after 30 June 1983 is now included in a taxpayer's assessable income: see s 27B(1). In my view, these provisions operate to make taxable an award of damages for dismissal in a case such as the present. They thereby undermine the reasoning in Cullen v Trappell, and dictate that the recipient of damages should receive them calculated according to rates of gross earnings." Hill J expressed agreement with this approach in Byrne, supra. Since Wheeler, supra, was decided, amendments have been made to SubdivAA of Div2 of PtIII of the Tax Act and related changes made by the enactment in 1989 of SubdivAAA of Div17 of PtIII. However those amendments were not relied upon by the respondent to demonstrate that the conclusion reached by Gray J was now not correct. Rather the respondent relied upon the joint judgment of Gleeson CJ and Handley J in Sarfarty, supra. The applicant submitted that judgment concerned not whether the approach in Cullen, supra, of calculating damages by reference to net income should continue to be applied notwithstanding the amendments to the Tax Act made since 1980, but rather whether damages calculated by reference to net income should then be increased to allow for tax payable on the damages. Their Honours decided they should. It is clear, in my opinion, that unlike in Wheeler and Byrne, supra, their Honours did not address the antecedent question of whether damages should be calculated by reference to gross or net income because the parties appeared to have assumed that the net income was the relevant amount. The trial and appeal were conducted on that basis. I should follow the decisions of Gray J and Hill J unless it has been demonstrated that they were wrongly decided or decided by reference to a legislative scheme that has altered materially. The respondent has demonstrated neither. Accordingly damages representing salary for the period of notice will be assessed by reference to the applicant's gross income. I see no basis for adjusting other amounts included in the damages to take into account fringe benefits tax payable by the employer. As to the tax that would have been paid on the superannuation contribution equivalent to 2.5% of the applicant's salary, namely 15%, I deal with that in this way. It appears to be common ground that this component of the damages will be taxable as an eligible termination payment. Broadly consistent with the approach in Wheeler, supra, that element of the damages is to be assessed by reference to the gross contribution and I proceed on that basis. I do not propose to "gross up" the amounts that will be awarded for the loss of the use of the car, the phone and the lost superannuation contributions as the applicant submitted I should. The Court could embark upon a detailed examination of the tax that would have been payable on all amounts the applicant would have been paid but for his unlawful dismissal. It could do so having regard to the entire financial circumstances of the applicant in the relevant period, about which the evidence is limited. It could also embark on a detailed examination of the tax that will be payable on those damages again having regard to the applicant's entire financial circumstances. Unless that examination is undertaken then it is likely there will be some anomalies that would not arise if the task of assessing damages is approached with the exactitude necessary in assessing actual liability for tax under the Tax Act. If the approach in Wheeler, supra, is the correct one, then some measure of approximation may be expected. As Barwick CJ said in Atlas, supra, at 212, though it is a view that has not since prevailed: "I cannot help thinking that in the choice between holding that liability to taxation on taxable income is an irrelevant and remote circumstance in the assessment of damages and imposing on judges at first instance and juries a task which neither is fitted to perform, it would have been so much better - legal principle apart for the moment - to have chosen the former, leaving it to the legislature to determine whether, and, if so, to what extent damages awarded for personal injuries should be included in assessable income .... Also, if tax is to be imposed the community and not defendants will get the benefit of it. If one had to consider the practical difficulties of a tribunal of fact, be it primary judge or jury, in attempting adequately to apply Gourley's Case, particularly in a case where the affairs of a party in relation to taxation are of a complicated nature, I would consider these difficulties to be quite overbearing." Accumulated sick leave In my judgment of 13 February 1995, I volunteered the following conclusion: "Some adjustment must be made, in my opinion, for the sick leave to which the applicant was entitled at the time of his wrongful dismissal. Had he been given reasonable notice he would have exhausted his sick leave during it. Accordingly the amount representing accumulated sick leave he was paid upon termination has to be set off against the damages that might otherwise be due." It was a matter not directly addressed by either party and my conclusion is now put in issue by the applicant. In those circumstances it is appropriate that I deal with the written submission made. It was not in issue that the applicant was, because of illness, unable to perform his duties from 23 May 1994. The case of the applicant on the medical evidence was that the applicant would have, at least by October 1994, been able to resume his duties though that was disputed by the respondent. However the sick leave entitlements that the applicant was paid out on termination would have entitled the applicant to sick leave until 11 August 1994. While I have accepted that the respondent's repudiation of the contract exacerbated and prolonged the applicant's illness, the evidence did not support a finding that, apart from the conduct of the respondent, the applicant would have been able to resume his duties before 11 August 1994. Thus, even on the applicants' case, it is likely he would have exhausted his sick leave before being able to resume duties had he not been unlawfully dismissed on 24 May 1994 and had he been given nine month's notice on that day. The applicant submits that had the respondent terminated the applicant's employment by payment in lieu of notice, the applicant would have received nine months salary and payment for untaken sick leave. However, in determining how damages should be assessed, I should proceed on the basis that the respondent would have discharged its contractual obligations in a way that would have been most beneficial to it: see The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 92 per Mason CJ and Dawson J. The entitlement of the applicant to payment for accumulated sick leave was said by Mr Dutton to have arisen under s99A of the Industrial Relations Act 1991 (NSW) which relevantly provides: "(1) An award must not allow or require an employee to cash-in the employee's accumulated sick leave. (2) .... (3) This section applies whenever the accumulated sick leave is to be cashed-in, including on termination of employment (whether by resignation, retirement, death or otherwise) or during the period of employment. (4) .... (5) However, this section does not affect the cashing-in of accumulated sick leave under an existing provision on termination of employment (whether by resignation, retirement, death or otherwise), but the maximum number of days (or other periods) of that leave that may be cashed-in is to be calculated as follows: Step 1: .... Step 2: .... (6) .... (7) .... (8) .... 'existing provision' means a provision of an award that allows or requires an employee to cash-in the employee's accumulated sick leave on termination of employment (whether by resignation, retirement, death or otherwise), being a provision that commenced before the commencement of this section." I infer from Mr Dutton's evidence and the terms of the section that the applicant's entitlement to payment, or cashing-in to use the language of the section, derived from an award: see s99A(5) and the definition of "existing provision" in s99A(8), though the applicable award in evidence contains no provision dealing with the cashing in of accumulated sick leave. Even if the payment had been under the contract, I do not see how my conclusion would alter. Had the respondent wished to lawfully terminate the applicant's employment on 24 May 1994, it could have given nine month's notice or, arguably, paid an amount in lieu. This latter course would have required the payment of salary for the period of notice and, at best for the applicant, an additional payment flowing from the combined operation of s99A and the relevant award provision or the operation of a contractual term. Had notice been given it was then likely that the sick leave would have been exhausted before the notice expired. The respondent would have thus paid the applicant's salary for part of the period of notice as paid sick leave. This would have resulted in the respondent not having to pay out any accumulated sick leave at the expiry of the period of notice. Accordingly, having regard to the principle discussed in The Commonwealth v Amann, supra, I should proceed on the basis that this course would have been followed by the respondent and thus the view I earlier expressed was correct. Petrol The applicant submits damages should be awarded to reflect petrol paid for by the respondent for private use of the car the respondent provided. In my earlier judgment I determined that the applicant should be awarded $5,197.50 which reflects the loss of the use of the motor vehicle to which he was entitled under his contract of employment. I understood the annual figure on which that was based which was advanced by the respondent included an amount for petrol. Mr Dutton's evidence in par3 of his affidavit of 7 March 1994 was to this effect which I accepted. The applicant's evidence to the contrary proceeds on the false assumption that it was not included in the figure identified by Mr Dutton. I do not propose to reconsider my earlier determination of damages on this issue. Long service leave, annual leave and wage increases The applicant submits the damages should include an amount reflecting additional benefits that would have accrued during the period of notice for long service leave and annual leave as well as wage increases that would have occurred in that period. In the schedule of damages prepared on the applicant's behalf, no mention is made of those matters nor is mention made of them in the affidavit of the applicant of 28 October 1994 particularising and quantifying some of the damages. It is not a matter that it is appropriate I now deal with. Damages It follows from the preceding discussion that the applicant is entitled to damages in the sum of $66,171.44 comprising: aggravation of psychiatric illness $15,000.00 salary for period of reasonable notice$57,947.75 foregone superannuation payments $ 1,448.70 loss of use of car $ 5,197.50 loss of use of phone $ 457.05 ---------- $80,051.00 ---------- less amount paid by respondent $13,879.56 as untaken sick leave ---------- $66,171.44 __________ Costs In its written submissions the applicant raised the question of costs in three contexts. The first concerned taxation and damages which I have already dealt with. The second was, in essence, as a head of damages. The applicant submitted that the costs of maintaining the application for reinstatement were costs incurred in mitigating damages and are recoverable. This was not a matter raised in the schedule of damages. Even assuming the claim has any legal foundation, it is a matter about which evidence might have been called by the respondent or on which the applicant might have been cross-examined. I do not propose to allow the applicant to raise this matter at this stage. The third was an application for costs which involves a consideration of s347. Section 347 provides: "(1) A party to a proceeding (including an appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause. (2) In subsection (1): 'costs' includes all legal and professional costs and disbursements and expenses of witnesses." The applicant submits s347 does not preclude an order for costs in his favour as the claim for damages for wrongful dismissal pursued in the Court's associated jurisdiction is not or not part of a proceeding to which s347 relates. This is put in issue by the respondent. In Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36 FCR 439 the Full Court of the Federal Court considered the scope of s347 in the context of an appeal from a judgment in which a penalty had been imposed under s178 and damages awarded for a breach of the contract of employment prosecuted in the Court's associated jurisdiction. Both Sheppard J (with whom Heerey J agreed) and Gray J decided s347 operated so as to limit the power to award costs both in relation to that part of the appeal concerning the imposition of the penalty under s178 and that part concerning the common law claim. Sheppard J based his conclusion on the nature of the common law claim. The term of the contract that had been breached was a term that had its genesis in an award provision applying to the employment of the respondent to the appeal. Accordingly the common law claim was, in substance, a proceeding in a matter arising under the Act. Gray J approached the matter, in part, on a slightly different basis. His Honour took the view that s347 requires consideration of whether there is before the Court, a proceeding in a matter arising under the Act. If "matter" in s347 is given the meaning it has in s76 of the Constitution it is to be taken to be a reference to the entire justiciable controversy between the parties. After referring to R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 and Fencott v Muller (1983) 152 CLR 570, his Honour said: "Applying these principles, it is plain that the subject of the appeal was a single "matter", being a justiciable controversy between the parties over the dismissal of the respondent by the appellant and the legal consequences of that dismissal. The matter manifested itself in the claims for a penalty and for damages, both of which depended upon precisely the same facts. That matter arose under the Act, because it depended for its existence upon the making of a binding award by an arbitral tribunal, exercising power under the Act. The enforcement of that award depended upon s178 of the Act. Leaving aside any effect which legislation relating to cross-vesting of jurisdiction may have, the only way in which this Court derived its jurisdiction to deal with the matter was because the controversy depended upon the Act. It is clear that, in those circumstances, the proceeding was one in a matter arising under the Act." While it is not entirely clear to what extent his Honour saw the source of the relevant contractual terms, viz an award made under the Act, as of significance, the substance of his Honour's approach is that the action founded in contract was part of a single justiciable controversy which included the application for a penalty. That entire justiciable controversy was a "matter" and was a "matter arising under the Act" for the purposes of s347. The word "matter" in s347 had earlier been viewed as having that meaning by a Full Court in Thompson v Hodder (1989) 21 FCR 467 at 469. The same issue arose in an appeal decided by a Full Court of the Federal Court in Byrne v Australian Airlines Ltd (1994) 47 FCR 30. Again an application had been made under s178 for the imposition of a penalty and a claim made in the Court's associated jurisdiction for damages for breach of contract. The judge at first instance had refused to make an order as to costs because of the provisions of s347. A cross appeal was brought against that decision. The Full Court comprised Black CJ, Keely, Beaumont, Gray and Heerey JJ. On the question of costs, Keely J agreed with Beaumont and Heerey JJ who, in a joint judgment, dismissed the cross appeal on the basis that the reasoning of the Court in Bostik, supra, was correct. Gray J, with whose reasons on the question of costs Black CJ agreed, dealt with the question in the following way: "The respondent's cross-appeal on the question of costs must fail. The law on this issue has been laid down clearly by the Full Court in Poulos v Waltons Stores (Interstate) Ltd (1986) 68 ALR 537 and Thompson v Hodder (1989) 21 FCR 467, both of which were cited with apparent approval by the High Court of Australia in Re Polites; Ex parte Hoyts Corporation Pty Ltd (No 2) (1991) 173 CLR 78 at 93, and in my judgment in Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36 FCR 439 at 445-446. The 'matter' in contention in the present case is the purported dismissals of the appellants and the legal consequences of those purported dismissals. That 'matter' arises under the Act by reason of the reliance of the appellants on cl11(a) of the award, which was made under the Act, and their invocation of the jurisdiction given by s178 of the Act. Each application dealt with by Hill J was therefore a proceeding 'in a matter' arising under the Act. Severance of different causes of action in the one proceeding is not possible for the purposes of s347 of the Act. Nor is it legitimate to attempt to characterise a proceeding by reference to its predominant element. If the Act is called in aid, the proceeding is one arising in a matter under the Act, and there exists no power to award costs. For similar reasons, these appeals are proceedings in matters arising under the Act. This Court has no power to award costs." However both Bostik and Byrne, supra, were decided by the Federal Court whose associated jurisdiction was conferred by s32 of the Federal Court of Australia Act 1976 ("Federal Court Act"). Section 347 was a provision in another Act limiting the exercise of the Federal Court's power under s43 of the Federal Court Act to award costs. Section s430 of the Act is the statutory source of this Court's jurisdiction in associated matters. It provides: "(1) So far as the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked. (2) The jurisdiction conferred by subsection (1) extends to jurisdiction to hear and determine an appeal from a judgment of a court so far as it relates to a matter that is associated with a matter in respect of which an appeal from that judgment, or another judgment of that court, is brought." The applicant submitted s430 draws a distinction between matters for which jurisdiction is conferred by that section and matters in which jurisdiction is otherwise conferred by the Act. Reference was also made to s418. Thus, it was submitted, s430 contemplates two classes of "matter" or "matters". Firstly matters arising under the Act (and were it relevant, other Commonwealth law) where the Act is the source of the jurisdiction to adjudicate and the right or duty which is the subject of the proceedings owes its existence to the Act. Secondly, matters in the associated jurisdiction concerning matters where the right or duty does not owe its existence to the Act. Thus, as a matter of construction, this distinction should be maintained in s347. The approach adopted in Bostik and Byrne, supra, was to focus on the meaning of the word "matter" in s347. At the time of the enactment of the Industrial Relations Reform Act 1993 ("the Reform Act") which introduced s430, s347 had been the subject of a number of decisions, and in particular Bostik, supra, and its meaning was, for present purposes, comparatively settled. Section 347 was not amended by the Reform Act and it might be thought that the enactment of s430 was not intended to alter the meaning of s347. However in view of the language of s430 it cannot simply be assumed that the meaning that has been attributed to the word "matter" in s347, in the context of a different legislative framework, was intended to continue to be its meaning. Section 430 is in language that is relevantly the same as s32 of the Federal Court Act. Section 32 also appears to draw a distinction between two classes of matters. However the terms in which it is drafted were discussed by Mason J in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 516: "Section 32 seems to proceed on the footing that a matter arising under non-federal law may be 'associated' with a matter arising under federal law for the purpose of its determination in the exercise of federal jurisdiction. The remarks of Latham CJ in Carter may have led to the use of the word 'associated' in s32. If so, his Honour's remarks have been misunderstood; he was speaking of an association between two claims which led to the existence of one 'matter' in federal jurisdiction. He did not say that two matters, one federal, the other non‑federal, might be associated so as to be both capable of determination in federal jurisdiction." The remarks of Latham CJ referred to in this passage are: "None of the cases mentioned presented the feature which is to be found in this case, namely, an entirely severable claim having no relation whatever to another claim or claims made in the same proceeding which other claim or claims alone involved the interpretation of the Constitution. For the reasons stated I am of opinion that the claim for an account, not being in itself a matter in which this Court has jurisdiction, does not become such a matter by being associated with other claims in relation to which the Court has jurisdiction." See Carter v The Egg and Egg Pulp Marketing Board for the State of Victoria (1942) 66 CLR 557 at 580. The reference to "matters" in both s32 of the Federal Court Act and s430 of the Act may be taken to be a reference to claims that are associated in such a way as to constitute, together, a "matter" for the purposes of s76 of the Constitution. Viewed this way, there is no warrant for treating the apparent distinction drawn in s430 between classes of matters as suggesting the word "matter" in s347 should now be given a limited meaning and not the meaning most recently determined in Bostik and Byrne. Indeed it is the very existence of the one "matter" that enables s430 to operate, consistent with chIII of the Constitution, so as to confer jurisdiction on the Court to hear the common law claim. That meaning of the word "matter" was adopted by Wilcox J in Gas Industry Salaried Officers' Federation v Municipal Officers' Association of Australia (1989) 29 IR 48 at 55 when construing the provisions of what was then s53(2) of the Act, now s415. Support for this construction of s347 is found elsewhere in the Act. The expression "party to a proceeding in a matter arising under the Act" also appears in s469. It deals with representation of a party and authorises representation in a number of ways. It is unlikely that Parliament intended that a mode of representation authorised by the section is not authorised for the purpose of prosecuting an associated claim in the Court's jurisdiction arising under s430. Were it otherwise a litigant who is a member of an organisation of employees could be represented by an officer of the organisation: see s469(7)(b), for the purposes of prosecuting a claim under s170EA alleging unlawful dismissal or under s179 for the recovery of wages but could not be represented, at least as authorised by s469, by that officer in prosecuting any related claim in the associated jurisdiction. Section 469 is the statutory source of the Court's general power to permit representation and conditions it: see Nicholson v Heaven and Earth Gallery Pty Ltd (1994) 126 ALR 233 at 235. The word "matter" in s469 comprehends both the statutory claim and any related claim in the associated jurisdiction and supports the meaning of s347 discussed by Gray J in Bostik and Byrne, supra. The applicant referred to a number of cases concerning proceedings alleging contempt of Court, the first of which was Viner v Australian Building Construction Employees and Builders' Labourers' Federation (1981) 38 ALR 550 at 553. Northrop J had to consider whether the legislative predecessor of s347, s197A of the Conciliation and Arbitration Act 1904 ("C & A Act"), limited the Federal Court's power to award costs. His Honour concluded that an application made by notice of motion alleging contempt of Court in relation to proceedings for the deregistration of an organisation brought under the C & A Act, was a separate proceeding taken under s31 of the Federal Court Act and thus s197A had no application. That conclusion has been affirmed by a Full Court in Cooke v Goodhew (1989) 91 ALR 447 at 458 per Sheppard J, 464 per Wilcox J and 474 per Gray J: see also Gregory v Phillip Morris Ltd (1987) 74 ALR 300. However Northrop J's conclusion in Viner, supra, turned on the special nature of contempt proceedings which are criminal in character and have historically been treated as proceedings separate from the proceedings which gave rise to the contempt. Viner, supra, and the cases that have applied it do not provide an answer to the more general question of what is the scope of s347. The applicant also referred to Standish v University of Tasmania (1989) 28 IR 129 at 138-139 where Lockhart J awarded costs, notwithstanding the provisions of s347, in an application purporting to be an application for an interpretation of an award under s51 of the Act. His Honour concluded that the statutory application was incompetent and though there was a proceeding before the court, it was not "a proceeding .... in a matter arising under this Act". However the circumstances of that case were unusual as his Honour plainly considered that the statutory application was entirely misconceived. Were such a case to arise in a proceeding where an associated claim was made in conjunction with a statutory claim that was entirely misconceived, then issues of substance might arise both about the Court's jurisdiction to deal with the associated claim: see Burgundy Royale Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219 and the applicability of s347. However these issues do not arise in these proceedings. Given the view I take about the meaning of the word "matter" in s347 it is not essential that I deal with a submission that the respondent appeared to make that a common law claim for damages made in the associated jurisdiction is itself, viewed in isolation, "a matter arising under the Act". However I should indicate that it is a submission that, in my opinion, should not be accepted. In Re Polites; Ex parte Hoyts Corporation (1991) 173 CLR 78 at 93, the High Court determined that a proceeding in the Court to enforce a statutory duty conferred on the Australian Industrial Relations Commission by the Act was a "proceeding in a matter arising under the Act" for the purposes of s347. It did so because the order sought from the Court was to enforce a duty which owes its existence to the Act notwithstanding that the source of the Court's jurisdiction to make the order was s75(v) of the Constitution and not the Act. However it is apparent from Re Polites, supra, that the central question in determining whether s347 applies is whether there exists a duty or right to which the proceedings relate which owes its existence to the Act. If there is it is a matter arising under the Act. A common law claim based on contract plainly does not involve the enforcement of a right that owes its existence to the Act. The decision in Re Polites, supra applied the approach the High Court has taken in construing the expression "Arising under any laws" in s76(ii) of the Constitution reflected in the following passage from the judgment of Latham CJ in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154: "Thus one is compelled to the conclusion that a matter may properly be said to arise under a Federal law if the right or duty in question in the matter owes its existence to Federal law or depends upon Federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law. In either of these cases, the matter arises under the Federal law." This is not an apt description of a common law right, the vindication of which is pursued in the associated jurisdiction. Even though the right depends upon Federal law for its enforcement or vindication in this Court, its enforcement does not depend upon that law. It may be enforced by other means in other courts and it cannot be said that "it can only be enforced by virtue of (the Act)" (emphasis added): see Felton v Mulligan (1971) 124 CLR 367 at 416 per Gibbs J. Thus a claim brought in the associated jurisdiction is not, viewed in isolation, a matter arising under the Act simply because the source of the Court's jurisdiction to hear and determine the claim is a provision of the Act, namely s430. To this point I have been focussing on the meaning of the word "matter". However the ultimate question of construction is not what the word "matter" means but what is comprehended by the entire expression "proceeding ... in a matter arising under this Act". Its scope is wide if "matter" has the same meaning as in s76 of the Constitution. However its scope may still be wide if it does not. This depends on the meaning of the word "proceeding" in s347. Even if the matter to which the section refers is only a statutory claim, the "proceeding in" such a matter may be a reference to the trial of that claim (or other proceedings such as an appeal) or the trial of that claim and claims associated with it. The section identifies parties "to a proceeding" or "the proceeding" and it provides that one of the identified parties shall not be ordered to pay the costs of the other party. It thus indirectly limits the power of the Court to order the first party to pay costs. If the applicant in these proceedings is to obtain an order for costs other than in the special circumstances identified in the concluding words of s347(1), it is necessary he not be "a party to a proceeding ... in a matter arising under this Act" in so far as the claim for damages is concerned. The applicant plainly became a party to the proceeding resulting from the making of the statutory application as did the respondent. A question then arises, assuming the word "matter" has a meaning narrower than the meaning I consider it has, whether the proceeding in which the statutory application is determined is, for the purposes of s347, the same proceeding in which the common law claim is determined in the Court's associated jurisdiction. If it is, then the applicant was a party to it as was the respondent, and s347 would preclude an order being made requiring the respondent to pay the applicant's costs. The word "proceeding" is defined in s360 in the following way: "In this Part, unless the contrary intention appears: 'proceeding' means a proceeding in a court, whether or not between parties, and includes: (a) an incidental proceeding in the course of, or in connection with, a proceeding; and (b) an appeal; ...." While the Part to which this definition relates is PtXIV which does not contain s347, that Part constitutes the Court and invests it with many, though not all, its statutory powers. The definition is in substance, though not form, the definition appearing in s4 of the Federal Court of Australia Act 1976. In Re Adamson (1984) 57 ALR 280 at 293 Gray J adverted to the possibility that having regard to that definition, an application to set aside a subpoena was a separate proceeding to the proceeding for which the material under subpoena was sought. This definition may be taken to provide some indication of what "proceeding" might mean in s347. However the manner in which the definition is framed rather begs the question of what is a proceeding for present purposes. One meaning of the word "proceeding" which is suggested as its primary technical legal meaning is as the invocation of the jurisdiction of a court by a process other than a writ. If jurisdiction is invoked by writ it is described as an action: see Herbert Berry Associates Ltd v Inland Revenue Commissioners, (1977) 1 WLR 1437 at 1446 per Russell LJ, Forrest v Kelly (1991) 105 ALR 397 at 408 per O'Loughlin J and Re Healey: re inquiry into election in Australian Workers' Union (1992) 40 IR 110 at 118 per O'Loughlin J. However authorities such as Herbert Berry, supra are of limited assistance in construing s347. I would respectfully adopt the following remarks of Smart J in Blake v Norris (1990) 20 NSWLR 300 at 306 in relation to the meaning of "proceeding": "In Stroud's Judicial Dictionary, 5th ed, vol 4 at 2029-2035, some fifty-five instances are given of the use of the words 'proceeding' or 'proceedings' in legislation, rules of court or documents having legal significance. The meaning depends on the context in which the word is used. In some cases it is equivalent to 'an action' whereas in others it may mean a step in an action. Sometimes it may include a counter claim. The Oxford Companion To Law (1980) by Professor Walker states (at 1002-1003) that 'proceedings' is sometimes used as including, or meanings (sic), an action or prosecution, and sometimes as meaning a step in an action. The word 'proceeding' is capable of such a variety of meaning that dictionary definitions as to its ordinary or natural meaning are not of much use. They tend to highlight the number of meanings which the word can bear. Any assistance as to its meaning has to be derived from the statutory context and the objects of the legislation in question." As to the relationship between the words "matter" and "proceeding(s)" in the application of chIII of the Constitution: see Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd, supra, at 509 per Mason J and the cases referred to. Several points can be made about the use of the word "proceeding" in the Act that illustrate that it does not have a fixed meaning. The first is that there are instances where the words "proceeding" and "proceedings" are used interchangeably: see s208(4) and (9) and s220(2)(e) and (3)(a). Second, there are instances where "proceeding" is used to describe only the statutory application that might be made under the Act: see s178(6), (6A)(8), s185(2), s179A and s342(2)(b). Third, there are instances where "proceeding" describes an interlocutory application in proceedings: see s373(2)(a). Fourth, there are instances where "proceeding" may be a reference to all claims being heard at the one time: see s334(1(f), (3)(e) and (4)(c), s370 and s372. The expression "proceeding in a matter arising under the Act" or variations of it appear in not only s347 but also ss416, 432, 469, 470 and 471. These sections indicate the word "matter" has a wide meaning, "proceeding" has a wide meaning or both. For convenience I presently consider them in the context of the meaning of the word "proceeding" on the assumption that "matter" does not have as wide a meaning as "matter" in s76 of the Constitution. However as I have already said it is ultimately the meaning of the entire expression that is relevant though its width is determined, in large part, by the meaning of these two words. I have already discussed s469 in the context of considering the meaning of the word "matter". If I am wrong as to what "matter" means in s469, then for the reasons I earlier gave, the word "proceeding" in s469 refers to the entire proceedings involving the trial of the statutory claim and any associated common law claim. Section 470 deals with intervention and enables the Court to grant leave to intervene "in a proceeding .... in a matter arising under the Act". While it is not as clear as is the case with s469, it is nonetheless unlikely that Parliament intended to limit the intervention that might occur under s470 to only that part of a trial that concerned a statutory claim or application and not extend to any claim which was being dealt with concurrently by the Court in the associated jurisdiction. There is no apparent purpose served by treating the power to grant intervention as limited in this way and practical difficulties in the conduct of the litigation could arise if it was. A person has no general right to intervene in proceedings before a court: see Corporate Affairs Commission v Bradley (1974) 1 NSWLR 391 and see also Re Boulton; Ex parte State of Victoria (1994) 126 ALR 620. It is thus likely that intervention in the "proceeding" arising from the grant of leave under s470 is intervention in the entire proceedings including the trial of any claim in the associated jurisdiction. Section 471 deals with intervention by the Minister "in a proceeding before the Court in a matter arising under the Act". Some of the observations I made concerning s470 would be relevant in construing s471. However the Minister's interests that led Parliament to confer a right to intervene are likely to concern primarily the Act and its operation and not issues arising in, for example, common law claims in the associated jurisdiction. Accordingly it is less clear that intervention arising under s471 would be in the entire proceedings. Section 416 deals with references to a Full Court. A Judge may refer a question of law to a Full Court for its opinion at any stage of "a proceeding in a matter arising under the Act": see s416(1)(b). If "proceeding" did not comprehend the trial of a claim in the associated jurisdiction made in conjunction with a statutory claim then the power to refer a question of law would not extend to a question of law concerning the claim in the associated jurisdiction. There is no apparent reason why Parliament would have intended to limit a Judge's power in this way and obvious reasons why it would not. The purpose of the section is to enable complex legal questions or questions that answered either way by a trial judge are likely to provoke an appeal, to be answered by a Full Court. There is no basis for assuming that this purpose would have been viewed by Parliament as having no relevance to legal questions of that character arising in claims in the associated jurisdiction. Sections 469, 470 and 416 support the construction of the word "proceeding" in the expression "proceeding in a matter arising under the Act" as being a reference to the entire proceedings constituting the trial of a statutory claim or application and any related claim in the associated jurisdiction and thus support a similar construction of the expression in s347. This conclusion is consistent with the observations of Gray J in Byrne, supra, in the passage I earlier quoted that "severance of different causes of action in the one proceeding is not possible for the purpose of s347 of the Act" and observations his Honour earlier made in Geneff v Peterson and ors (1986) 19 IR 40 at 90: "Even if I were of the view that the fraudulent nature of the applicant's claim with respect to the major aspect of the case was such as to make that claim one which was instituted vexatiously or without reasonable cause, in my view I should still be debarred by s 197A from awarding costs in favour of the respondents. This is because the section operates in relation to a 'proceeding'. There is only one proceeding before the court, although that proceeding involves a number of separate claims, each of which might have been the subject of a separate proceeding. It is no doubt true, as Mr Kenzie pointed out, that there is gross unfairness involved in the applicant safeguarding herself against costs by choosing to append to a major claim a small number of minor claims which are undoubtedly arguable. Unfair or not, however, that is what s 197A requires. In my view, it is impossible to split the claims within a proceeding for the purpose of the application of s 197A." In my opinion the expression "proceeding in a matter arising under the Act" in s347 comprehends not only the trial of the statutory claim but also the trial of the common law claim brought in the associated jurisdiction. The respondent was a party to a proceeding in a matter that comprehended the statutory claim and the common law claim for damages. The immunity that the respondent has under s347 precludes any order for costs being made against it in that proceeding. No submission was made that the exception found in the concluding words of s347(1) has any operation. I make no order as to costs. Interest The applicant claims interest up to judgment under s482. The respondent submitted no interest at all should be awarded but if so, the submission then made is that it should be on the damages calculated on after tax income. Section 482 requires interest be included in the judgment sum unless good cause is shown to the contrary. None was advanced by the respondent and accordingly interest up to judgment will be included in the judgment sum. Section 482(1) enables the Court to determine interest in one of two ways. The first requires the Court to identify the date on which the cause of action arose, which would have been 24 May 1994 having regard to my application of Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435, and then determine a rate of interest and order that it be applied to all or some of the money recovered, subject to the qualifications elsewhere in s482, for the whole or part of the period. The second allows the Court to determine a lump sum without undertaking that calculation. I propose to follow the latter course. The applicant is entitled to damages in the sum of $66,171.44 and I order that there be included in the sum for which judgment will be given a lump sum of $4,962.80. I give judgment for the applicant in the sum of $71,134.30. I certify that this and the preceding twenty-nine (29) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore. Associate: Date: 30 March 1995 Counsel for the Applicant: Mr R.E. Dubler Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondent: Mr R.J. Buchanan QC Mr R.M. Goot Solicitor for the Respondent: Sly & Weigall Date of judgment: 30 March 1995	10,774
federal_court_of_australia:fca/single/2000/2000fca0676	decision	commonwealth	federal_court_of_australia	text/html	2000-05-25 00:00:00	Old Digger Pty Ltd v Azuko Pty Ltd [2000] FCA 676	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2000/2000fca0676	2024-09-13T22:48:50.107938+10:00	FEDERAL COURT OF AUSTRALIA Old Digger Pty Ltd v Azuko Pty Ltd [2000] FCA 676 Patents – infringement – whether respondents' product infringed the express words of the claims -–whether it took the substance of the invention – whether differences relied on by the respondents were minor variations in the invention of no mechanical significance. Patents – revocation – invalidity – whether invention lacked novelty having regard to the prior art base and prior information – whether prior publications of other patent specifications anticipated the invention – whether prior claiming – whether there had been prior use of the invention by the inventor and by others before the priority date – whether receipt of orders by the inventor before the priority date from a third party under an obligation to keep the invention confidential to purchase the commercial embodiment of the invention constituted a use of the invention – whether manufacture of several commercial quality assemblies embodying the invention in a period of less than one month between field trials and filing of the provisional specification constituted part of the reasonable trial of the invention – whether invention obvious – whether complete specification described the invention fully – whether patent obtained by false suggestion – whether invention useful. Patents Act 1952 (Cth), ss 40, 100(1)(f), 100(1)(h), 100(1)(k) Patents Act 1990 (Cth), ss 7(2), 18(1)(c), 138(3)(c), 138(3)(d), 233(4), 234(5) Minnesota Mining and Manufacturing Co v Beiersdorf (Aust) Ltd (1980) 29 ALR 29 applied Radiation Limited v Galliers and Klaerr Pty Ltd (1938) 60 CLR 36 applied Commonwealth Industrial Gases Limited v M W A Holdings Pty Ltd (1970) 180 CLR 160 applied Populin v HB Nominees Pty Ltd (1982) 41 ALR 471 cited Nesbit Evans Group Australia Pty Ltd v Impro Limited (1997) 39 IPR 56 cited Catnic Components Limited v Hill & Smith Limited [1982] RPC 183 cited Decore Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 applied Raleigh Cycle Co Ltd v Miller and Co Ltd (1948) 65 RPC 141 cited Utilux Pty Ltd v AMP Inc (1974) 48 ALJR 17 cited Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 11 IPR 281 cited NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1993) 26 IPR 513 applied Nicaro Holdings Pty Ltd & Others v Martin Engineering Co & Another (1990) 91 ALR 513 applied Kromschröder (G.) A.G.'s Patent [1960] RPC 75 discussed Daikin Kogyo Co Ltd (Shingu's) Application [1974] RPC 559 discussed Merck and Co (Macek's) Patent [1967] RPC 157 distinguished Wilkinson Sword Limited's Application [1970] RPC 42 distinguished Ethyl Corp (Cook's) Patent [1970] RPC 227 distinguished Alcatel NV v Commissioner of Patents (1996) 35 IPR 255 cited Stanway Oyster Cylinders Pty Ltd v Marks (1996) 35 IPR 71 applied Fomento Industrial SA, Biro Swan Ltd & Anor v Mentmore Manufacturing Co Ltd [1956] RPC 87 applied Melbourne v Terry Fluid Controls Pty Ltd (1993) 26 IPR 292 applied Montecatini Edison SpA v Eastman Kodak Co (1971) 45 ALJR 593 cited Monsanto Co (Brignac's) Application [1971] RPC 153 applied Boyce v Morris Motors Limited (1926) 43 RPC 105 cited Re Wheatley's Patent Application (1984) 2 IPR 450 distinguished Hudson, Scott and Sons Limited v Barringer, Wallis and Manners Limited (1906) 23 RPC 79 applied International Paint Co Ltd's Application [1982] RPC 247 cited Harrison v Project & Design Co (Redcar) Ltd [1978] FSR 81 applied Non-Drip Measure Co Ltd v Stranger's Limited (1943) 60 RPC 135 considered Wellcome Foundation Limited v V R Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 cited W R Grace & Co v Asahi Kasei Kogyo Kabuschiki Kaisha (1993) 25 IPR 481 cited Genetics Institute Inc v Kirin-Amgen Inc (No 3) (1998) 41 IPR 325 applied Patent Gesellschaft AG v Saudi Livestock Transport and Trading Company (1997) 37 IPR 523 applied No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231 cited Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 cited Lahore Patents, Trade Marks and Related Rights 1996 Ricketson The Law of Intellectual Property 1984 Young et al Terrell on the Law of Patents 14th ed 1994 Blanco White Patents for Inventions 4th ed 1974 Matter No. SG 5 of 1997 OLD DIGGER PTY LTD (formerly called SDS Digger Tools Pty Ltd) v AZUKO PTY LTD & SEISMIC SUPPLY INTERNATIONAL PTY LTD VON DOUSSA J ADELAIDE 25 MAY 2000 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SG 5 OF 1997 BETWEEN: OLD DIGGER PTY LTD (formerly called SDS Digger Tools Pty Ltd) AND: AZUKO PTY LTD First Respondent SEISMIC SUPPLY INTERNATIONAL PTY LTD Second Respondent JUDGE: VON DOUSSA J DATE OF ORDER: 25 MAY 2000 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. Direct the applicant to bring into Court within fourteen days minutes of order reflecting the reasons for judgment delivered this day. 2. Further consideration of the application adjourned to a date to be fixed. 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 5 OF 1997 BETWEEN: OLD DIGGER PTY LTD (formerly called SDS Digger Tools Pty Ltd) AND: AZUKO PTY LTD First Respondent SEISMIC SUPPLY INTERNATIONAL PTY LTD Second Respondent JUDGE: VON DOUSSA J DATE: 25 MAY 2000 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 The applicant claims remedies for infringement of two patents. The respondents deny infringement and by counter-claim seek revocation of both patents. By consent it has been ordered that the questions of infringement and revocation will be decided first, and issues relating to remedies will, if necessary, be determined at a later hearing. 2 The inventions described in the patents in suit both concern features of a down hole reverse circulation percussive hammer incorporating a face sampling drill bit. Hammers of this kind are used in the mining industry for exploratory drilling. The intended purpose of such hammers is to permit the collection of cuttings from the drill face which are of sufficient quality and quantity to permit reliable geological evaluation. The applicant contends that the inventions claimed in the patents markedly improved the quality and quantity of sample recovery over other rock drilling arrangements known at the relevant priority dates. 3 The applicant and the respondent Azuko Pty Ltd (Azuko) are manufacturers and suppliers of drilling equipment to the mining and exploration industry, and compete with one another. Azuko trades as "Premier Rock Tools". 4 The applicant is the present owner of both patents in suit. The claims of each patent said to have been infringed are as follows: Australian Letters Patent No. 638571 entitled "Transmission sleeve for a down hole hammer" (the SDS patent) claims: 1. A sacrificial transmission sleeve when used with a reverse circulation down hole hammer of the percussive type actuated by a fluid under pressure, including an outer sleeve, a drill bit retaining means held in the outer sleeve, and a drill bit retained in the retaining means and extending forwardly therefrom; the transmission sleeve comprising a body and an annular flange, the body having a first inner surface and a second outer surface, the diameter of the second outer surface being greater than that of outer sleeve and substantially the same as that of the drill bit, the transmission sleeve located near an end of the down hole hammer proximate the drill bit, the annular flange being of diameter substantially the same as the drill bit and extending from the body towards the drill bit, and the wear characteristics of the transmission sleeve being similar to that of the drill bit, whereby, in use, the transmission sleeve wears at a similar rate to the drill bit. 2. A sacrificial transmission sleeve according to claim 1, in which at least a length of said drill bit is provided with a plurality of longitudinal grooves forming exhaust air passages in sides of the drill bit and wherein said flange encircles at least a portion of said length in such a manner as to form a continuous shroud to assist in the downward passage of the exhaust air to a cutting face of the drill bit. 3. A sacrificial transmission sleeve according to claim 1 or 2, wherein said transmission sleeve is clamped to said hammer between said outer sleeve and said drill bit retaining means. 5. A sacrificial transmission sleeve according to claims 1 or 2, in which the transmission sleeve and the drill bit retaining means are integrally formed with one another. Claims 7 to 9 and 11, which it is alleged have been infringed, describe a reverse circulation down hole hammer of the percussive type working in association with a transmission sleeve and drill assembly as claimed in claims 1 to 3 and 5 respectively. For example, claim 11 reads: 11. A reverse circulation down hole hammer according to claim 7 or 8, wherein the transmission sleeve and the drill bit retaining means are integrally formed with one another. Claims 13 and 14 also said to have been infringed, are omnibus claims which read: 13. A sacrificial transmission sleeve when used with a reverse circulation down hole hammer substantially as hereinbefore described with reference to Figure 1, Figure 2 or Figure 3 of the accompanying drawings. 14. A reverse circulation down hole hammer substantially as hereinbefore described with reference to Figure 1, Figure 2 or Figure 3 of the accompanying drawings. Australian Letters Patent No. 656724 entitled "Percussive drilling arrangement" (the Giehl patent – so called after its inventor, Werner Giehl) relevantly claims: 1. A drill bit assembly for in-the-hole hammer reverse circulation percussive drilling using air pressure to both drive the percussion hammer and clear cuttings, the bit having a plurality of outermost channels extending in direction parallel to the axis of the bit down the outer side of the bit and having a collection duct or ducts passing through the bit with its collection opening or openings through the face of the bit and an outlet at the axially aligned opposite end of the bit, and an outermost cover acting as a shroud which is located to engage against and extend around the outer side of the drill bit and form with the channels conduits which are shaped and positioned so that air flow to clear the cuttings will be directed by reason of passage through a one or more of the conduits directly at the periphery of the cutting face of the bit for subsequent passage across the face of the bit to the collection opening or openings of the collection duct or ducts through the face of the bit and such that substantially all of such directed air will flow through such collection opening or openings to the collection duct or ducts. … 4. A drill bit assembly substantially as described in the specification with reference to and as illustrated by the accompanying drawings. 5. A drill bit assembly as in any one of the preceding claims incorporated in an in-the-hole hammer reverse circulation percussive drill using air pressure to both drive the percussion hammer and clear cuttings and such that air flow to clear the cuttings from the face of the bit will be directed by reason of passage through a respective one of the conduits thereby directly at the periphery of the cutting face of the bit for subsequent passage across the face of the bit. 5 The feature of each of these patents which is central to the allegation of infringement is the "transmission sleeve" referred to in the SDS patent, and the "shroud" referred to in the Giehl patent. In the course of evidence these expressions were often used interchangeably and the same component part has at times been described by witnesses, and by counsel as a "gauge sleeve". It is convenient to use that description. 6 The priority date of the Giehl patent is 19 April 1990. There is a dispute about the priority date of the claims in the SDS patent contained in the specification as sealed, but the date alleged by the applicant is 26 April 1990, a few days after the Giehl patent. 7 The patent applications were lodged under the Patents Act 1952 (Cth) (the 1952 Act). That Act was repealed by s 230 of the Patents Act 1990 (Cth) (the 1990 Act). Under the transitional and saving provisions in Chapter 23, s 234, the 1990 Act applies to applications lodged under the 1952 Act as if they were lodged under the 1990 Act, subject however to the provisions of ss 233(4) and 234(5) which have application in relation to the counter-claim seeking revocation on the ground of invalidity. The SDS patent was granted on 19 December 1996 on an application made by way of provisional specifications PJ9817 filed on 26 April 1990 and PK3850 filed on 12 December 1990, and by a complete specification filed on 24 April 1991. The SDS patent was therefore granted under the 1990 Act (which came into operation on 30 April 1991) on an application made under the 1952 Act. That is also the situation in relation to the Giehl patent which was granted on 7 January 1997 on a provisional specification filed on 19 April 1990, and by a complete specification filed on 19 April 1991. The issues of infringement and relief are therefore to be determined under the 1990 Act. 8 It is not in dispute that on the dates alleged in the particulars of infringement Azuko manufactured and distributed face sampling reverse circulation down hole hammers known as the Premier PR5, the Premier PR54 and the Premier PR40, and that the second respondent, Seismic Supply International Pty Ltd (Seismic) distributed and sold the Premier PR54 and PR40 tools from its premises in Queensland. There are design differences between the PR5 and PR54 models, but those differences relate to the internal mechanism of the hammer, and not to the gauge sleeve. The PR54 and PR40 hammers are of the same design, but have different diameters. The PR5 operates a five inch drill bit, whereas the PR54 operates a five and a half inch drill bit and the PR40 operates a four inch drill bit. Each of these hammers is said to infringe the patents in suit. These models are referred to simply as "Premier tools". 9 Infringement is disputed on various grounds, but principally on the grounds that within the meaning of the SDS patent Premier tools do not have a "transmission sleeve" and, if the final integer in claim 1 is capable of any sensible meaning (which the respondents dispute), do not have a transmission sleeve "the wear characteristics" of which are "similar to that of the drill bit" and which "wears at a similar rate to the drill bit"; and that within the meaning of the Giehl patent the Premier tools do not have "an outermost cover acting as a shroud which is located to engage against and extend around the outer side of the drill bit and form with the channels conduits…". 10 Revocation of the patents is sought on grounds of alleged invalidity that are largely common to both patents, although it is also said that the SDS patent is invalid, having been anticipated by the Giehl patent which has an earlier priority date. The respondents contend that the alleged inventions lacked novelty and were obvious having regard to the prior art base and prior information available in Australia before the relevant priority dates. The prior art base alleged comprises the publication of a number of earlier patents, and the use of other drill assemblies said to incorporate transmission sleeves and shrouds which anticipated the inventions claimed in the patents in suit. A number of other publications in mining journals are also relied on. It will be necessary to consider each of the prior publications and uses alleged. It is also contended that the alleged inventions were used in Australia by Werner Giehl before the respective priority dates of the patents. In addition the respondents allege that the specifications of each of the patents fail to comply with the requirements of s 40 of the 1990 Act, that the patents were obtained by false suggestion, and that in the case of the SDS patent the patent is invalid for inutility. 11 The alleged inventions claimed in the patents in suit have application in exploratory drilling where cuttings from the drill hole are collected for analysis by geologists. The object is to recover the greatest possible percentage of cuttings from the drill face, free of contamination from material from elsewhere in the drill hole, and to accurately determine the depth from which a sample has been collected. Problems to which improvements in drilling techniques have been directed include the reduction of sample loss, and the prevention of contamination. 12 In the early 1970's exploratory drilling was carried out by rotary drilling with tri-cone bits. Initially cuttings from the bits were recovered by delivering high pressure air through a central duct in the drill string to the bottom of the drill hole, the cuttings being then entrained and carried to the surface by the air in the annular gap between the drill string and the wall of the hole. This mode of conveying cuttings to the surface is known as a conventional drilling system. As cuttings travel up the annular space, there is a significant risk of contamination by additional materials from elsewhere in the hole which can be collected on the way. 13 During the 1970's coaxial (dual walled) drilling rods became available. With these rods, it was possible to deliver high pressure air to the bottom of the hole through one system of ducts, and to recover the cuttings combined with the air released at the bottom of the hole through another duct system, namely the central duct in the drill string. This mode of recovery of the cuttings reduced the risk of contamination from material higher in the hole collected as air returned to the surface (as with a conventional drilling system). However, contamination could still occur by material higher in the hole falling to the bottom, and being intermixed with fresh cuttings as the drill string rotated. 14 Rotary drilling with tri-cone bits was largely overtaken in the late 1970's by the use of down hole percussion hammers. These hammers consist of an air operated reciprocating piston which rapidly strikes the head of an anvil bit. At the same time the drill string is rotated by mechanical force applied at the drilling rig on the ground surface, thereby rotating the bit. The components of a down hole percussive hammer include an outer sleeve or housing for the body of the hammer, an upper sub assembly which fastens the hammer to the drill string, and a lower sub assembly into which the drill bit fits and through which rotational force is applied. The lower sub assembly is commonly referred to as the "drive sub". 15 The face of the bit is armed with tungsten carbide buttons. The force of the hammer blows, transmitted to the rock at the face of the bit, breaks the rock into small fragments. In early models of down hole percussive hammers air expelled after driving the hammer was exhausted through an opening at the centre of the bit face. This air flowed outwards across the face of the bit, carrying with it loose cuttings that were then carried to the surface in the exhaust air through the annular space between the drill string and the wall of the hole in the same way as the conventional drilling system used in rotary drilling. However, with the advent of coaxial drilling rods "crossover subs" were introduced to enable the application of a reverse circulation system. The upper sub assembly incorporated external channels and a passageway leading from the annular space between the outer housing of the hammer body and the wall of the hole to the central duct in the drill string. By restricting air flow by sealing means between the upper sub assembly and the wall of the drill hole above the crossover passageways, the exhaust air and cuttings from the drill face were directed into the central duct in the drill string, and carried to the surface. This substantially reduced the risk of contamination from material higher in the hole, but did not reduce the risk of contamination from material in the wall of the hole from the face of the bit to the crossover sub, a distance of several feet. Over this distance, the cuttings continued to pass through the annular space between the outer sleeve of the hammer and the wall of the hole. The reverse circulation system combined with a crossover sub helped to reduce sample contamination, but introduced a new problem not present in conventional drilling. It was not possible to completely seal the annular space between the upper sub assembly of the hammer and the wall of the hole, as this would jam the hammer in the hole. Some gap was necessary, but through this gap air and cuttings could escape causing "blow back". The greater the gap, the greater the escape of cuttings up the outside of the drill stem to the surface. Further, material from the wall of the hole could fall, and if the gap permitted, this material would drop below the sealing means, and contaminate cuttings entering the crossover sub. 16 The next major improvement in reverse circulation drilling was the advent of face sampling down hole percussion hammers. The intended mode of collection of cuttings in these hammers involves the release of air at or below the drive sub so that air travels down the outside of the drill head, then across the face of the bit carrying the cuttings to ducts in the face of the bit which lead in turn to the passage in the centre of the drill string, then to the surface. The intent of this process is that cuttings are collected direct from the face of the drill bit, further reducing the risk of contamination. As with earlier forms of reverse circulation drilling, the efficiency of sample collection was influenced by the effectiveness of the sealing means employed to prevent air escaping through the annular space between the outer sleeve of the hammer and the wall of the hole. Early face sampling hammers included (in about 1976 or 1977) the Bakerdrill, (then some ten years later) the Bulroc, the Samplex, the Halco-Lister, the Mincon, the Klemm (Hydroc) and the Ingersol-Rand hammers, each of which the respondents plead as relevant prior art – either by the publication of patents of which the hammers are said to be the commercial embodiments, by their description in brochures and literature publicly available in Australia, or by their use in Australia. 17 It is clear on the evidence, and I so hold, that these hammers did not receive widespread acceptance in the mining industry in Australia. Indeed, apart from a version of the Bulroc hammer (which differed from the preferred embodiment described in the Bulroc patent) the hammers were hardly used, but remained with suppliers as display items. There is evidence that the Bulroc hammer was tested by a number of drilling companies, but it seems that its commercial use in Australia was limited. The industry perception was that the drilling capability of the hammer was slow, and, more important for present purposes, the sampling efficiency was inadequate. The hammer did not recover a sufficient proportion of the cuttings. 18 Before the priority dates of the patents in suit, it was common general knowledge in the drilling industry that the efficiency of sample recovery in face sampling reverse circulation drilling depended in part upon the effectiveness of the sealing means engaged to prevent blow back of air. I find that it was generally thought that if the annular space between the outer sleeve of the hammer and the hole could be sufficiently sealed, enough exhaust air from the hammer would flow into the ducts in the face of the drill bit to ensure that a sufficient sample was returned to the surface through the central passage inside the drill string. It was generally understood that the sealing means should be near the lower end of the down hole hammer so as to minimise the risk of contamination and the risk of air dissipating into the surrounding strata. A complete seal was practically impossible as this would cause the hammer to jam in the hole. As will appear from discussion about particular hammers, features of some of the prior art patents were directed to achieving sealing means between the hammer and the wall of the hole. It was also generally understood that sample recovery was assisted by directing airflow, which exhausted from the hammer through the drive sub, towards the head of the bit. 19 It is necessary to refer to another drilling problem which arose from inevitable wear to the tungsten carbide buttons on the drill bit. The diameter of the hole being drilled is determined by the outermost buttons forming the gauge row. As the gauge row buttons wear, the diameter of the hole diminishes, thus narrowing the annular gap between the outer housing of the hammer and the wall of the hole. Before the introduction of a compensating sleeve, fitted to the outer surface of the housing of the hammer, which wore down in sympathy with the wearing of the gauge row buttons, the reducing diameter of the hole led to a risk of the hammer jamming. Jamming at the least causes unproductive down time, and at worst may lead to the loss of expensive equipment down the hole, and the abandonment of the hole. Drillers were faced with a dilemma: if a drilling pass commenced with a drill bit that provided minimal clearance between the outer housing of the hammer and the wall of the hole, a good recovery was initially achieved, but the length of the pass possible before the risk of jamming occurred was diminished. Alternatively, if a gap was initially provided which allowed for wear of the bit as the hole deepened, the efficiency of the sample recovery was compromised. 20 One of the patents pleaded by the respondents as an anticipation of the inventions claimed in the patents in suit is Australian Patent, application no. 43643/89, published on 26 April 1990 (the DTA compensating ring patent). The application was filed by the present applicant, then named Drilling Tools Australia Pty Ltd (DTA), for a "Compensating Ring for a Down Hole Hammer". The invention described in the application was "a sacrificial compensating ring … designed to provide an effective seal between the bore of the hole and the drill tube and to wear down at a similar rate as the drill bit to maintain such seal as the drill bit wears". The specification stated that "[s]acrificial in the context of the present invention means that the compensating ring is intended to be consumed in drilling much the same as the drill bit is". The compensating ring had been invented and developed by four of the applicant's personnel at that time, Brian Sanfead, John Elsby, John Urquhart Dewar and Andrew Greathead. Messrs Elsby, Greathead and Sanfead, were also the inventors of the invention the subject of the SDS patent. DTA had started to develop a prototype reverse circulation hammer in late 1987. The potential for such hammers was seen as promising and a period of twelve months rigorous testing was undertaken by the company. This led to the development of the compensating ring. 21 The incorporation of features reflecting the above-mentioned common knowledge into those face sampling reverse circulation hammers which preceded embodiments of the patents in suit did not satisfactorily overcome the problem of inefficient sample recovery. 22 A continuing problem was described in the preamble in the body of the specification of the Giehl patent as follows: "Australian Patent Application No. 80143/87 … describes an arrangement characterised by a drill stem comprising coaxial air ducts. Compressed air flows down one of the ducts to a reciprocating valveless motor. The other air duct is connected to the collection ducts. The arrangement allows for collection of material chips from a known drill depth with minimal contamination of other materials from other depths and sources. Such an arrangement has proved to be of significant improvement compared to previous arrangements. But, there has been a problem of significant loss of chips recovered from the cutting head. Experimentation has shown that the air transports only about 70% of the chips the surface (sic). To discover the cause of loss of chips has required very extensive investigations, trials and discovery. The chips form a very important source of information regarding the cut material. This is particularly the case where substances drilled for are found only in small concentrations. Accordingly, the problem has been to provide an arrangement and method by which some greater efficiency of drilling and collection of chips can be achieved." [Australian Patent Application No. 80143/87, upon grant became the 1987 Giehl patent, discussed later in this judgment, which the respondents contend anticipated the Giehl patent in suit.] 23 The consistory clause describes the invention in the Giehl patent as follows: "The invention may be said to reside in a drill bit assembly … the bit having a plurality of outermost channels extending in direction parallel to the axis of the bit down the outer side of the bit and having a collection duct or ducts passing through the bit with its collection opening or openings through the face of the bit and an outlet at the axially aligned opposite end of the bit, and an outermost cover acting as a shroud which is located to engage against and extend around the outer side of the drill bit and form with the channels conduits which are shaped and positioned so that air flow to clear the cuttings will be directed by reason of passage through a one or more of the conduits directly at the periphery of the cutting face of the bit for subsequent passage across the face of the bit to the collection opening or openings …" (emphasis added). The specification goes on to explain "What appears to happen with such an assembly is that the air is constrained within the conduit shape defined by the respective channel and the enclosing shroud and it is therefore caused to flow in strongly directed manner directly at the periphery of the cutting face of the bit and thereby over the periphery of the working face and thence across the face." 24 The continuing problem which still existed in April 1990 is described in more detail in the preamble in the body of the specification of the SDS patent: "In general, in the art of reverse circulation drilling, a relatively small annular clearance, of typically 3mm, is provided between the drill tube and the bore of the hole being drilled. The clearance must be kept relatively small so that air preferentially travels around the drill bit and forces the rock cuttings from the bottom of the hole through a passageway in the drill itself and the drill string to the surface by the action of compressed air exhausted around the sides of the drill bit and at the face of the bit. To further minimise leakage of air and/or rock cuttings into the annular space, the exhaust ports at the sides of the drill bit, and the drive sub or chuck must be adapted so as to direct air to the face of the bit. A further requirement of reverse circulation drilling is [to] maximise the recovery of rock sample from the bottom of the hole. This aim is achieved in practice by having the maximum outside diameter of the drill bit as close as possible to the maximum outside diameter of the drill tube. However, as the cutting face of the drill bit bores out the hole, it wears down and becomes smaller in diameter. When the diameter of the drill bit approaches that of the drill tube, the drill bit would normally be replaced to prevent damage to the drill tube occurring through contact between the drill tube an[d] the wall of the hole. If a drill bit is used with a maximum outside diameter greater than that of the drill tube, the clearance between the drill tube and the bore of the hole is increased. This type of arrangement leads to longer bit life but increases the leakage of air into the annular clearance, reduces the rate of sample recovery and results in higher sample contamination." 25 The combination of the integers comprising the invention described in the SDS patent is said to address these problems as the transmission sleeve: (a) is sacrificial in that it is intended to be consumed in drilling in much the same way as the drill bit. It is intended to wear preferentially avoiding the replacement of other more expensive components, and allows the use of larger drill bits for a given diameter drill tube than would otherwise be the case; (b) provides an improved and effective seal between the bore hole and the drill tube throughout the lifetime of the drill bit because it seals the hole closer to the face of the bit, and the seal is maintained over a longer length; (c) provides an improved rate of sample recovery without undue sample contamination or undue air consumption by releasing the exhaust air from the hammer closer to the face of the drill bit. 26 The applicant commenced the commercial production and sale of the preferred embodiment of the SDS patent (the SDS hammers) in about September 1990. The SDS hammers received industry acceptance in Australia, and they became widely used. They achieved rates of sample recovery which satisfied the exploration geologists. Evidence led about the success of the SDS hammers provides strong support for the applicant's case that the integers in claims 1 and 2 of the SDS patent, incorporated in the SDS hammers, constituted a novel improvement that largely overcame the continuing problem identified in earlier hammer assemblies. Important to the success of the SDS hammer is the fact that the gauge sleeve (transmission sleeve) directs the air flow to clear the cuttings directly at the periphery of the cutting face of the bit, that also being an essential integer of the Giehl patent. 27 It is convenient at this point to record the circumstances leading up to the design, manufacture and distribution of the Premier tools. 28 Prior to February 1993 Patrick Purcell held a fifty per cent interest in the applicant through an Irish company controlled by him, Mincon International Limited (Mincon). In February 1993 Patrick Purcell sold his fifty per cent interest to Fred Moir who was the other co-owner of the applicant at the time. Thereafter the applicant underwent a name change to SDS Digger Tools Pty Ltd (and has since undergone a further name change to Old Digger Pty Ltd). 29 Joseph Michael Purcell, the son of Patrick Purcell, worked at times between 1980 and 1988 for Mincon. In the same period he undertook tertiary training, obtaining a Bachelor of Engineering with Honours in Ireland in 1988. Thereafter he worked for Mincon in the United States as a technical representative. He was seconded to work for the applicant in Australia for three months between August and October 1990. He then returned to Ireland and worked as a design engineer for Mincon. In April 1991 he took up a position with the applicant as its chief design engineer, and held that position until 2 July 1993. During that time he worked in Australia with Mr Elsby who was the general manager of the applicant, and Mr Sanfead who was the applicant's production development manager. Joseph Purcell's duties included producing designs of hammers and bits, both conventional and reverse circulation, threaded bits, and various other products of the applicant. In their several capacities Messrs Joseph Purcell, Elsby and Sanfead had access to the applicant's design information relating to its products. Joseph Purcell became familiar with the design of the applicant's reverse circulation hammers, models RC60 and RC55. He designed the reverse circulation hammers known as models RC44 and RC46. The RC44, RC46, RC55 and RC60 produced by the applicant all exhibit the design described in the SDS patent and differ only in size. 30 Shortly after he commenced with the applicant, Joseph Purcell's duties required him to consider correspondence from the applicant's patent attorney regarding the completed specification for the SDS patent. His correspondence with the patent attorney concerned, in particular, the final integer in claim 1 relating to wear characteristics. 31 Following Patrick Purcell's sale of his interest in the applicant, he and Joseph Purcell, together with Mr Elsby, took steps to set up a new company which is now Azuko. Initially it was called Veldan Pty Ltd (Veldan). It was proposed that the company would manufacture threader bits which would put it in competition with only a very small part of the applicant's business. However, the business of Veldan soon went beyond that, and Veldan commenced production of parts, including spare parts used in conjunction with SDS hammers and bits. 32 Following Joseph Purcell's resignation from the applicant on 2 July 1993 he was concerned with setting up Azuko. Mr Elsby resigned from the applicant and commenced working for Azuko in November 1993. Joseph Purcell commenced working for Azuko in February 1994, and Mr Sanfead resigned from the applicant and joined Azuko in March 1994. 33 In July 1994 the applicant took proceedings in the Supreme Court of Western Australia against Messrs Elsby, Joseph Purcell, Patrick Purcell, Sanfead and Veldan, and others, first to obtain an Anton Piller order, and then injunctions to restrain the use by those parties of SDS computer programs containing the applicant's design information, and programs for sophisticated manufacturing machinery used in making the applicant's drilling equipment. Following those orders Joseph Purcell set about designing the PR5 Premier tool. In his witness statement Exhibit R23 he says: "When I was designing the PR5 hammer, I knew that it must not infringe the SDS Patent. From working at SDS and using and applying the SDS Patent, my understanding was that a reverse circulation down hole hammer design would not infringe the SDS Patent if it did not include a shroud. A shroud is the common name for the part referred to in the SDS Patent as a 'transmission sleeve', and is so named because it covers and 'shrouds' the head of the bit." 34 The PR54 and PR40 models of Premier tools followed the PR5 model. The Premier tools have achieved market acceptance, and compete with the SDS products which incorporate the transmission sleeve, the subject of the SDS patent. The applicant's case on infringement is that the Premier tools also include that invention, notwithstanding Joseph Purcell's endeavour to avoid infringement. 35 The invention the subject of the Giehl patent was made by Werner Giehl. Mr Giehl's tertiary training and professional experience is as a surgical and orthopaedic instrument maker, but since 1968 he has also designed and manufactured items of drilling equipment. At the time that he applied for patent protection for his invention, he was not associated with the applicant, which later acquired the invention from him. The applicant was the owner of the patent at the time that Joseph Purcell worked for SDS, and he was aware of it whilst he was designing the Premier tools. 36 The question now for decision is whether Joseph Purcell was successful in his endeavour to avoid infringement of the patents in suit, and if not, whether the patents are in any event invalid. 37 To understand the arguments of the parties, particularly on the infringement claim, it is helpful to compare Figure 1 from the SDS patent specification relating to the preferred embodiment of the invention with a comparable drawing of a Premier tool prepared by Joseph Purcell, which appear below. The figure from the SDS patent is descriptive of the commercial embodiment of the invention in the SDS hammers (although the relevant comparison that must be made in determining infringement is not between the features of the SDS hammers and Premier tools, but between the claims in the patents and the Premier tools). Figure 1 is relevantly described in the SDS specification as follows: "Shown in figure 1 … is a down hole hammer 10 comprising a drill bit 12 having air passages 13, a cutting face 14 and a plurality of apertures 16 extending into a central aperture 18. The drill bit 12 is retained in a drill bit retaining means in the form of a drive sub 20 by slip split rings 22 and splines 23 which are dimensioned so as to allow for exhaust air passages 13 between the drill bit 12 and the drive sub 20 in known manner. The drive sub 20 is held in an outer sleeve 24 typically by way of a threaded portion 26 of the outer sleeve 24. The outer sleeve 24 surrounds porting means (not shown) of known type to enable a piston (not shown) to reciprocally strike the bit 12 in known manner. … Longitudinally intermediate of the outer sleeve 24 and the drive sub 20 is a sacrificial transmission sleeve 28 having a body 29 comprising a first inner surface 30 substantially conforming to the drive sub 20 and a second outer surface 32. … As may also be seen, the body 29 is partially proud of the outer sleeve 24. Preferably, the diameter of the transmission sleeve 28, as measured at the body 29 … is substantially the same as that of the drill bit 12. The transmission sleeve 28 further comprises an annular flange 38 extending from the body 29 of the transmission sleeve 28 towards the drill bit 12. The flange 38 is disposed with an interior surface 40 overlying the drive sub 20 extending beyond the drive sub 20 towards the drill bit 12. … The flange 38 is adapted to encircle a portion of the drill bit which defines longitudinal grooves forming the exhaust air passages 13 in the sides of the bit in such a manner as to form a continuous shroud around at least a part of the grooves so as to assist in the downward passage of the exhaust air to the face of the drill bit 12. … The transmission sleeve 28 of the present invention serves to provide a more effective seal with the hole 108 than the compensating ring of our earlier Australian Patent Application No. 43643/89, as it seals the hole 108 closer to the face 14 of the drill bit 12. Further, the flange 38 allows the seal to be maintained over a longer length. This reduces the chances of sample contamination and/or increased air consumption. The words emphasised in bold print were added in the amended provisional specification filed on 12 December 1990, and included in the complete specification filed on 24 April 1991. 38 It is common ground that transmission sleeve 28 is so described in the SDS patent as it transmits air in the manner described in the specification. 39 It is not necessary to understand the arguments on infringement to depict in similar fashion the features claimed in the Giehl patent. It is sufficient to say that the Giehl patent concerns "an outermost cover acting as a shroud". In the preferred embodiment depicted in the drawing of the Giehl patent the outermost cover acting as a shroud is fitted in a similar position in relation to the drill bit as the transmission sleeve in the SDS patent. The specification says: "In preference, the said cover means are part of a drill chuck sub adapted to affix to a drill stem. Alternatively, the said cover means are fixed about the said drill bit by a drill chuck sub adapted to affix to a drill stem. It will be appreciated that it is a minor matter to design the cover means to be separate but held in place by the drill chuck sub. However, the former is preferred." The expression "drill chuck sub" in the Giehl specification means a drive sub. 40 It is convenient to first consider the claim of infringement of the SDS patent. 41 The Premier tools incorporate a gauge sleeve similar in shape, dimensions and position to the transmission sleeve in the SDS hammer. The Premier gauge sleeve has a body and an annular flange. The outer diameter of the body of the gauge sleeve is greater than the outer diameter of the outer sleeve (the hammer housing) and substantially the same diameter as the drill bit. The annular flange has a diameter which is substantially the same as the drill bit. Moreover, the Premier gauge sleeve extends from the body towards the drill bit. These are features of the sacrificial transmission sleeve claimed in claim 1 of the SDS patent. However, as will be noted from the diagrams above, the gauge sleeve in the Premier hammers does not extend in an axial direction downward from the drive sub. In the Premier hammers the drive sub has been extended so that it terminates flush with the lower end of the gauge sleeve. 42 The Premier tools comprise a hammer of the type described and claimed in the SDS patent. At trial there was some argument over the meaning of the expression "drill bit retaining means". According to the evidence that is not an engineering term. It carries its ordinary meaning. The SDS patent describes the drill bit retaining means as being in the form of a drive sub. The Premier tools plainly have a drill bit retaining means of the kind described in the SDS patent. Further, the evidence establishes that the Premier tools are used with a gauge sleeve that is "sacrificial" in nature. The gauge sleeve fitted to the Premier tools is consumed in much the same way as the drill bit, and that it wears in preference to other components of the hammer assembly, and in particular the outer housing of the hammer and the drive sub. 43 The respondents' defence asserts that whilst the gauge sleeve of the Premier tool is sacrificial, it is not a "transmission" sleeve within the meaning of the SDS claims as it does not transmit air. Because it does not transmit air the respondents contend that the gauge sleeve simply fulfils the function of a compensating ring, like that described in the DTA compensating ring patent. In the Premier tools, the transmission of air is performed by the drive sub which ends flush with the gauge sleeve. Further, the respondents contend that the wear characteristics of the Premier gauge sleeve are not "similar to that of the drill bit", and that the Premier gauge sleeve does not wear at a "similar rate" within the meaning of the final integer of claim 1 in the SDS patent. 44 The question of infringement is to be decided upon a proper understanding of what is described in the body of the specification, and on a proper construction of the claims. On a literal construction of the claims, a gauge sleeve, to meet the description "transmission sleeve" will be a sleeve that transmits air. In the manner in which the Premier tools have been designed and manufactured, the gauge sleeve is not performing that function. Infringement is a question of fact, and it is clear on the authorities that infringement may occur where the respondent takes the substance of the invention yet stays outside the express words of the claim, unless the wording of the claim makes it clear that the relevant area has been deliberately left outside the claim: Minnesota Mining and Manufacturing Co v Beiersdorf (Aust) Ltd (1980) 29 ALR 29 per Aitken J (with whose judgment Barwick CJ, Stephen, Mason and Wilson JJ agreed) at 52-53. It is sufficient to cite the comments of Dixon J in Radiation Limited v Galliers and Klaerr Pty Ltd (1938) 60 CLR 36 at 51 where his Honour said: "But, on a question of infringement, the issue is not whether the words of the claim can be applied with verbal accuracy or felicity to the article or device alleged to infringe. It is whether the substantial idea disclosed by the specification and made the subject of a definite claim has been taken and embodied in the infringing thing". and Menzies J in Commonwealth Industrial Gases Limited v M W A Holdings Pty Ltd (1970) 180 CLR 160 at 167-168: "Patent rights are not to be set at nought by such a subterfuge which I am satisfied added nothing to the equipment and was made merely in an attempt to take full advantage of the invention while avoiding infringement of the plaintiff's letters patent by a modification so small as to be insignificant… The cases do establish that, if the alleged infringement differs materially from an essential feature of the plaintiff's claim, there can be no infringement…In the present case normality of the reflector is made an essential feature of the plaintiff's patent. As I have said, however, the modified manufacture since 1966 does not avoid the essential feature because the reflector as made thereafter is so close to being flat that the defendant's manufacture and sales still takes the plaintiff's invention". These and other authorities to a like effect were discussed by a Full Court of this Court in Populin v HB Nominees Pty Ltd (1982) 41 ALR 471 at 475-477. See also Nesbit Evans Group Australia Pty Ltd v Impro Limited (1997) 39 IPR 56 at 80 and Catnic Components Limited v Hill & Smith Limited [1982] RPC 183 per Lord Diplock at 242-243. 45 I agree with and accept the opinion of Mr G A McGoggin, called by the applicant, that the extension of the Premier drive sub is a minor variation, one which he described as a "trifling variation of no mechanical significance". The configuration of the extended portion of the drive sub in the Premier tools, which masks the inner surface of the gauge sleeve, serves merely to replace channels formed in the bit and enclosed by the inner surface of the transmission sleeve described in the SDS patent with mirror image channels formed in the drive sub, and enclosed by the surface of the drill bit. In normal operation, the variation does not result in the Premier tool losing any of the advantages of the invention claimed in the SDS patent. The Premier tool is the functional equivalent of the SDS invention. I consider that this is a plain case of Azuko taking the substantial idea disclosed in the specification of the SDS patent and seeking to avoid the literal meaning of the claims by a contrived modification that has no practical significance in the normal operation of the drilling apparatus. 46 By their terms, none of the claims indicates that a modification of the kind undertaken by Azuko has been deliberately left outside the scope of any of the claims. Rather, the body of the SDS patent specification concludes with the statement that: "Modifications and variations such as would be apparent to a skilled addressee are deemed within the scope of the present invention" and the evidence satisfies me that a modification of the kind made by the respondent would be apparent to a skilled addressee, particularly having regard to claim 5 and the accompanying figure representing that embodiment. 47 The gauge sleeve on the Premier tools acts to seal the annular space between the hammer assembly and the bore hole much closer to the face of the bit than was known before April 1990. The gauge sleeve works in combination with the drive sub on the Premier tool to direct the flow of exhaust air, and to restrain it until released at the head of the drill bit proximate to the face of the bit. The gauge sleeve is also a sacrificial component of the Premier tools. 48 The respondents' other infringement defence based on wear characteristics and wear rate turns primarily on the construction of the final integer of claim 1 which reads: "…and the wear characteristics of the transmission sleeve being similar to that of the drill bit, whereby, in use, the transmission sleeve wears at a similar rate to the drill bit". The respondents contend that "wear characteristics" is to be read separately from, and given a distinct meaning to "wear at a similar rate to the drill bit". The respondents contend that "wear characteristics" is a reference to the inherent metallurgical properties or mechanisms of wear, rather than to the rate of wear of the sleeve and bit in use. In my opinion the applicant is correct in the construction which it places on this integer, namely that it is to be read as a whole, and as concerned with wear of the relevant components in use. So construed this integer imposes a requirement that the transmission sleeve and the gauge row of carbides in the drill bit wear sympathetically so that the difference in diameters remains similar. This is a construction which is practical, purposive and consistent with the disclosure of the invention in the SDS patent. 49 As Mr McGoggin and Mr McInnes in their evidence explained, assertions by the respondents' witnesses that the final integer requires that the sleeve of the invention have a similar "hardness" to the drill bit confuses the static properties of the respective components with the dynamic analysis of "wear" to the transmission sleeve and drill bit in use. I was impressed by the evidence of each of these witnesses, and I prefer their evidence to that of the respondents' expert witnesses where they differ. 50 I agree with the applicant that the construction contended for by the respondents through the evidence in chief of their witness Mr Laczko is not a fair attempt to construe claim 1 so as to make the invention work. Mr Laczko in his cross-examination acknowledged that the SDS patent teaches that the transmission sleeve must be constructed so that in use it reduces in diameter at approximately the same rate as the diameter of the gauge row, and that the patent appears to be focusing on maintaining in use an equivalent reduction in diameters of the transmission sleeve and gauge row. 51 Joseph Purcell in his witness statements said that he did not understand the final integer, and sought to give "wear characteristics" and "wear at a similar rate to the drill bit" meanings which would render the final integer meaningless. However, in his cross-examination he conceded that he did not think the expressions were meaningless when he was corresponding with the applicant's patent attorney in April 1990, and that his witness statements to the contrary were false, to support Azuko's case. 52 Witnesses who gave evidence about the manufacture of gauge sleeves were unanimous in their view that there would be no difficulty in meeting the teaching of the SDS specification that: "Typically, the transmission sleeve 28 is made of a heat treated alloy steel with a hardness similar to the outer sleeve 24 but softer than the drive sub 20 (i.e. the drill bit retaining means)". 53 The requirement of the final integer of claim 1 is also to be understood against the general knowledge of those experienced in the art in April 1990. Mr Stevens, called by the respondents, agreed that the materials used in the manufacture of all reverse cycle hammers was at that time standard. In particular that was the case for the materials used in drill bits, carbides, hammer casings, drive subs and sleeves and shrouds. The wear mechanisms of the different materials were well known. Similar evidence was given by another of the respondents' witnesses Mr Schwann. 54 In final submissions counsel for the respondents argued that the applicant had failed to establish that the gauge sleeves and carbides of the Premier tools wear in use at a similar rate. It was said that there was no evidence adduced from any "hands-on driller" that this occurred in practice. I understand this submission to contend that the applicants had failed to establish that the gauge sleeve and carbides of Premier tools would wear in use in such a way that the outside diameters of the two would reduce in sympathy. I reject this submission. There was expert evidence led by the applicant from Mr McGoggin, who explained that the gauge sleeves and carbides of the Premier tools would wear in this way in use. This evidence received support from the evidence of the respondents' witness Mr Leahy. Further, the underlying premise on which the case was fought on both sides was that the gauge sleeves and carbides of the Premier tools do wear at similar rates in use – indeed if they did not, the Premier tools would not have achieved the degree of market success which they have achieved. 55 It was contended by the respondents, in relation to claim 2 of the SDS patent, that even if the drive sub and gauge sleeve are treated as a combined item which constrains and directs exhaust air until released, the gauge sleeve and drive sub do not encircle a portion of the drill bit "in such manner as to form a continuous shroud to assist in the downward passage of the exhaust air to [the] cutting face of the drill bit". I do not accept this submission. I agree with and accept the opinion of Mr McGoggin in paragraph 53 of his reply statement, Exhibit A6, that the Premier drive sub/gauge sleeve combination does encircle a portion of the length of the drill bit in a manner to form a continuous shroud to assist in the downward passage of exhaust air to the cutting face of the drill bit. This arrangement in the Premier tool shrouds the longitudinal grooves in the side of the drill bit head at their commencement in the shoulder of the bit. This arrangement directs the passage of exhaust air into these grooves, and directly at the cutting face, particularly when the hammer is operating in the closed, i.e. normal operating, position. The Premier tools, like the applicant's hammers, are designed and intended for use in hard conditions. In those conditions, I am satisfied by the evidence, particularly that of Mr McInnes, that the operating gap between the weight bearing surface of the drive sub and the shoulder of the head of the bit would be very small, and not such that the combination of the gauge sleeve and a drive sub in Premier tools would not perform the function of directing exhaust air into the longitudinal grooves of the drill bit proximate to the cutting face. 56 It is not a requirement either of claim 1 or claim 2 of the SDS patent that the sacrificial transmission sleeve encircle and cover part of the head of the drill bit below the weight bearing shoulder. There is nothing in the claims in the SDS patent, or in the specification, to suggest such a requirement. 57 The gauge sleeve on the Premier tools is clamped to the hammer between the outer sleeve of the hammer and the drill bit retaining means, namely the drive sub, and that integer of claim 3 is present. 58 The applicant contends that claim 5 is infringed in that the Premier gauge sleeve and drive sub acting in combination constitute: "A sacrificial transmission sleeve according to claims 1 or 2, in which the transmission sleeve and the drill bit retaining means are integrally formed with one another". 59 The respondents deny this contention saying that a component is not integrally formed unless it is manufactured as one item. In the Premier tools the gauge sleeve and the drive sub are separately manufactured, and remain separate, even though they are clamped together when in operation. 60 If recourse is had to the body of the specification it is, in my opinion clear from descriptions of possible embodiments of the invention that a transmission sleeve "integrally formed" is one manufactured as a single discrete item. However, it is the claims themselves which define the invention which is the subject of the patent and it is not legitimate to confine the scope of the claims by reference to limitations which may be found in the body of the specification if the claims are otherwise clear: Decore Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 400. But if an expression used in a claim is not clear or is ambiguous, it is permissible to resort to the body of the specification to define or clarify the meaning of the words used in the claim. 61 The Shorter Oxford English Dictionary defines "integrally" to mean "in an integral manner; as a whole; entirely". The primary meanings of the adjective "integral" are "1. Of or pertaining to a whole. Set of a part or parts: Belonging to or making up an integral whole; constituent, component; spec necessary to the completeness of the whole. (2) made up of component parts which together constitute a unity…". 62 The words "integrally formed" must be construed in context. The full expression used in claim 5 is "integrally formed with one another". Standing alone, this expression could imply that the sacrificial transmission sleeve claimed is not one separate and discrete item, but one in which the transmission sleeve and another component of the assembly, one with the other, are combined, for example by being welded or screwed together, locked or clamped together, or joined by any mechanical means so that they are united for practical purposes. 63 In the context of the claims, however, if this were the meaning, claim 5 would cover the same ground as claims 1 and 3. In my opinion there is such ambiguity or uncertainty in the meaning of the expression "integrally formed with one another" as to require recourse to the body of the specification. It then becomes clear that the expression in claim 5 means that the transmission sleeve is physically formed with the drive sub, that is, that they are made or produced as a whole. There are statements in the description of the second and third embodiments of the invention to this effect. It is sufficient to refer the description of the third embodiment, to which claim 5 relates, on page 12 of the specification: "Similarly, as the flange … of the drive-sub … of the third embodiment is worn the drive-sub … will require to be replaced in its entirety. Thus, it can be seen that the first embodiment of the present invention is to be preferred …" and to figure 3 which shows the drive sub and the flange as a single component. 64 The respondents' case, and evidence from Joseph Purcell in particular, sought to assert material differences between the Premier tools and the SDS invention. These were said to demonstrate that the gauge sleeve and drive sub assembly in Premier tools were not a mere mechanical equivalent of the SDS invention. A number of these alleged differences were said to result in the Premier tool being less efficient in sample recovery in certain modes of operation. Even if that were so I do not consider that such differences, because they have that effect, offer the respondents a defence to the infringement allegations. As noted above the Premier tools are designed and intended for use in hard conditions, and in those conditions the gauge sleeve / drive sub combination of the Premier tools achieves all the advantages afforded by the SDS invention and the invention works in the same way. It is beside the point that in some infrequent operating conditions the advantages so gained might be somewhat diminished. 65 In one of his witness statements filed before the commencement of the trial Joseph Purcell alleged three major differences between the Premier tools and the SDS patent. One difference concerned the fact that the Premier gauge sleeve did not extend past the drive sub so as to shroud the head of the bit. This alleged difference has already been considered. Another difference was that when the drill bit is in the fully extended position the combination of the gauge sleeve and the drive sub in the Premier tool no longer covered any part of the head of the bit, whereas in the preferred embodiments disclosed in the SDS patent the transmission sleeve would still encircle part of the bit head. This difference was said to give rise to a reduced efficiency. In normal operating conditions, a hammer is not operating with the drill bit in an extended position. Indeed, when the drill bit is in the extended position, the reciprocating piston in the hammer is inoperative. The difference is functionally irrelevant. Moreover, no evidence was led to show that the alleged difference resulted in any practical inefficiency in sample recovery. 66 The other difference alleged by Joseph Purcell was that the air flow in the Premier tools was not as direct as in the SDS patent assembly which "gives the air a smooth passage all the way down the drill bit to the face of the bit". In the Premier tools the air flow, he said, was not as direct "therefore when the air leaves the drive sub and enters the channels in the side of the bit, there is a slight disruption in air flow. This affects the passage of the air to the face of the bit and therefore the efficiency of the sampling". Again, there was no evidence led that the sampling efficiency was any less in the case of a Premier tool than occurred with the use of the SDS patent assembly. Further, there was no evidence led from any expert qualified to give it that the movement of the air through the passages described by Joseph Purcell caused "slight disruption in air flow". Moreover, as already noted, even if differences between the preferred embodiment of the SDS patent and the Premier tools led to a slight diminution in efficiency, this does not save the Premier tools from infringement. 67 Other differences were alleged during the course of the trial, namely "partial reaching", "shanking" and restricted lateral movement of the bit in the drive sub. The evidence led in support of these alleged differences was not advanced initially in the respondents' witness statements, but came forth during the trial in circumstances which I consider indicate that it was advanced as an afterthought in an attempt to obfuscate the real issues raised by the infringement case. I found the evidence unconvincing, and, significantly, no attempt was made to lead any evidence that, when Premier tools were operating in the field, there was any inefficiency in sampling capabilities. 68 "Partial reaching" was said to occur in operation when the bit was further extended than in the normal operating position, but not fully extended. There was no satisfactory evidence led that Premier tools operate in a "partial reaching" position in normal drilling operations, or that the alleged differences in fact affected sample recovery. Indeed, Mr Schwann said that there was no technical basis for a comparative assessment of the Premier tools with the SDS patent assembly, and that there was no difference "at the surface", by which I understood him to mean that there was no appreciable difference in the sample recovery. On the question of partial reaching I found the evidence of Mr McInnes convincing, and I accept it in preference to the evidence of the respondents' witnesses on that topic. 69 The "shanking" difference was said to relate to the comparative potentials of drill bits in Premier tools and SDS assemblies to fracture. The respondents' case suggested that differences in the configuration of bits used in Premier tools would give them added strength. No evidence was led as to analysis or testing of the different bit configurations, and the evidence fails to indicate whether in fact there is any difference in strength. The difference therefore is not made out on the evidence, but in any event, as the applicant points out, the claims do not relate to the bit design. 70 Finally, it was suggested that in the Premier tools the configuration of the extended drive sub allows less opportunity for lateral movement of the bit. Again, this allegation was not supported by appropriate technical evidence, and it was wholly rejected by Mr McGoggin who considered that there was no difference in lateral movement between the two assemblies. Insofar as it is possible to form a view by visual examination of the exhibits, Mr McGoggin's opinion would appear to be correct. Again, however, the claims do not relate to this issue. 71 In the result, I am satisfied, and so find, that the Premier tools infringe claims 1, 2, 3, 7, 8, and 9 of the SDS patent. I also consider that the Premier tools infringe the omnibus claims in claims 13 and 14 which incorporate the drawings into the claim: Raleigh Cycle Co Ltd v Miller and Co Ltd (1948) 65 RPC 141; Utilux Pty Ltd v AMP Inc (1974) 48 ALJR 17 at 20 and Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 11 IPR 281 at 300. The Premier tools are substantially as described in the body of the SDS patent and Figure 1 which accompanies the specification. 72 I turn now to the allegation of infringement of the Giehl patent. It is not disputed that the Premier tools incorporate: (a) a drill bit assembly for in-the-hole hammer reverse circulation percussive drilling (b) using air pressure to both drive the percussion hammer and to clear cuttings (c) the bit having a plurality of outermost channels extending in a direction parallel to the axis of the bit down the outer side of the bit and (d) having a collection duct or ducts passing through the bit with its collection opening or openings through the face of the bit and (e) an outlet at the axially aligned opposite end of the bit these being the first five integers of claim 1. However, the respondents contend that the remaining integers are not present, namely: (f) an outermost cover acting as a shroud which is located to engage against and extend around the outer side of the drill bit (g) (which) form(s) with the channels conduits which are shaped and positioned so that air flow to clear the cuttings will be directed by reason of passage through one or more of the conduits directly at the periphery of the cutting face of the bit. 73 The respondents' contentions are in substance those advanced in support of the argument that Premier tools do not have a "transmission sleeve" that infringes claim 1 of the SDS patent. It is contended that the gauge sleeve of the Premier hammer is the "outermost cover" but that it does not act as a "shroud" which is located to engage against and extend around the outer side of the drill bit so as to form conduits with channels in the drill bit. In my opinion the respondents' contentions should be rejected for the same reasons given for rejecting similar submissions in relation to the SDS patent. The Premier gauge sleeve and drive sub in combination act to relevantly direct air and answer the description of a shroud within the meaning of claim 1 of the Giehl patent. The substantial idea of the claim has been taken, and the design modification of the drive sub to mask the inner surface of the gauge sleeve is a mere subterfuge adopted in an attempt to take full advantage of the invention, while avoiding infringement of the letter of the claims. As with the SDS patent, there is nothing in the wording of the claims which make it clear that the relevant idea has been deliberately left outside the claim. Significantly, the invention claimed concerns the direction of air by means of a shroud so that the air flow to clear the cuttings will be directly at the periphery of the cutting face of the bit. The invention is not concerned with a sacrificial sleeve which maintains a seal whilst wearing down sympathetically with the gauge row of the drill bit. In the preferred embodiment, the subject of the drawings accompanying the specification, air is relevantly directed by the inner surface of the drive sub. That is exactly what occurs in the Premier tools. 74 In the Giehl patent there is no requirement in either the claims or the specification that the cover acting as a shroud cover part of the drill bit below the weight-bearing shoulder of the bit. Part of the teaching in the specification is directed to the portion of the channels on the outside of the drill bit which are not covered. An alternative description of the invention on page 4 of the specification reads (and it is to be noted that the expression "drill head" in the specification describes the totality of the bottom assembly including the bit (or "drill") and the drive sub): "Alternatively the invention can be said to reside in a drill head that includes a plurality of channels each extending from the working face of the drill, the arrangement being characterised in that there is a cowl surrounding the drill head and shaped and adapted with the remainder of the drill head whereby each of the respective channels has its otherwise open side closed by the cowl to the extent that there is only a relatively short channel part which extends directly from the working face of the drill up the side of the drill head which is not so closed off. It appears that the channels and the cover means of such an arrangement constrain the flow of air. Further, the air is strongly directed toward at the edge of the cutting face. Then the air flows to the collection ducts…" (emphasis added) Joseph Purcell says that in designing the Premier tools to avoid infringing the SDS patent: "In basic terms, I brought the face of the bit closer to the drive sub, rather than extending the drive sub towards the face of the bit" (Exhibit 23). By this design the Premier tools took and applied the substance of the invention as described above in the Giehl patent, and, in my opinion, infringed claims 1, 4 and 5. 75 I turn now to the cross-claim which seeks the revocation of both the SDS patent and the Giehl patent. Revocation is sought on numerous grounds, separately particularised in relation to each patent. In the presentation of the case, counsel concentrated first on the SDS patent and then on the Giehl patent. I shall follow the same course but, as many of the arguments addressed to the Court are common to both patents, a degree of cross referencing is both convenient and inevitable. 76 As earlier stated, both patents were granted under the 1990 Act on applications made under the 1952 Act. The validity of both patents is therefore to be determined in accordance with the 1990 Act, subject to ss 233(4) and 234(5) of that Act. The relevant effect of those sections was discussed in NV Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (1993) 26 IPR 513 where Lockhart J, with whose reasons Northrop J concurred at 515 and Burchett J generally agreed at 542, said at 527: "In my opinion the evident intent of s 233(4) is to ensure that the grounds of revocation under the 1990 Act (which, though in some cases are expressed in different terms, are essentially the same as the grounds previously available under s 100 of the 1952 Act) apply as the grounds for revocation of a 1952 Act patent; but with this important qualification, namely, that the elements of each ground of revocation under the 1990 Act apply only to the extent that they replicate in substance the elements that previous constituted a ground of revocation under the 1952 Act. Hence, if a ground of revocation under the 1990 Act omits an element which was a necessary part of a ground under the 1952 Act, the patentee has the benefit of it. On the other hand, if a ground under the 1990 Act contains an element not previously present under the 1952 Act, it cannot apply in aid of revocation of the 1952 Act patent. In short, a 1952 Act patentee is not to be worse off than he would have been if the 1952 Act had continued to operate, but he may be better off if the 1990 Act treats a former element of a ground of revocation as being no longer necessary." In short, whilst the claims fall to be determined under the 1990 Act, the effect of ss 233(4) and 234(5) is that the applicant may be "better off" by reason of the 1990 Act, but should "not be worse off" if the 1952 Act had continued to operate. These sections assume importance in determining whether the Giehl patent prior claims of the SDS patent. 77 The first ground of attack on each patent is that it lacks novelty having regard to the prior art base and prior information in Australia before the relevant priority date of the patent, being in the case of the SDS patent 26 April 1990 on the applicant's case, or alternatively either 12 December 1990 or 24 April 1991 on the respondents' case, and in the case of the Giehl patent 19 April 1990. The respondents rely on four prior publications of patent specifications in the case of the SDS patent and eight in the case of the Giehl patent (reliance upon the ninth publication pleaded, the Mincon patent, being abandoned at trial). 78 Counsel were in agreement as to the principles of law applicable to determine whether a prior publication anticipates the invention claimed in a patent in suit. Those principles are conveniently summarised in the judgment of Lockhart J in Nicaro Holdings Pty Ltd & Others v Martin Engineering Co & Another (1990) 91 ALR 513 at 517: "It is well established that the prior art must disclose all features of the invention embodied in the patent in suit and must do so in clear, unequivocal and unmistakeable terms. The prior art must enable the notional skilled addressee at once to perceive and understand and be able practically to apply the discovery without the necessity of making further experiments. Whatever is essential to the invention must be read out of or gleaned from the prior publication: see Hill v Evans (1862) 31 LJ Ch 457 at 466: General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd, supra, at 486; Washex Machinery Corp v Roy Burton & Co Ltd (1974) 49 ALJR 12 at 18; and Van der Lely NV v Bamfords Ltd [1963] RPC 61 at 72-3. In revocation proceedings the prior publication must disclose all of the integers with the possible exception of the substitution of 'mechanical equivalents to perform analogous purposes': Sunbeam Corp v Morphy-Richards (Aust) Pty Ltd (1961) 35 ALJR 212 per Windeyer at 220; R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd, supra; Dennison Manufacturing Co v Monarch Marking Systems Inc (1983) 66 ALR 265 at 273, 274, 276 and 286. Although nothing turns on it in this case, I accept the correctness of the submission of counsel for the respondents that the term 'mechanical equivalents' is properly used in cases of want of novelty and the term 'workshop improvement' is essentially a term applicable to cases of obviousness: see Blanco White, Patents for Inventions, 5th ed, para 4.212 and Terrell, The Law of Patents, 13th ed, para 5.108; cf Terrell, para 6.52. The invention must appear in a single disclosure, so it is not permissible to make a pattern or mosaic of or to read together various pieces of prior art in different patents. It is, however, permissible to refer not only to the patent relied on as the source of disclosure but to another patent or other patents incorporated by reference provided that it is plain that the incorporation by reference unequivocally and plainly demonstrates that the draftsman has adopted the cross-referencing system solely as a shorthand means of incorporating a writing disclosing the invention: George C Warner Laboratories Pty Ltd v Chemspray Pty Ltd (1967) 37 AOJP 2513 at 2516; Blanco White, 5th ed, at para 4.107 and Gratwick, 'Having Regard to What was Known and Used' (1972) 88 LQR 341 at 343." See also Gummow J at 524-539. It is also common ground that where a published specification is to be construed as part of the prior art in relation to an issue of novelty, the specification is to be construed in light of common general knowledge in the relevant industry at the time of publication of that specification. 79 It is with these principles in mind that each of the prior publication, and prior uses, pleaded by the respondents must be considered. The SDS patent – novelty (a) The DTA compensating ring patent 80 This patent, in respect of a "Compensating Ring for a Down Hole Hammer" has already been referred to at para 20 above. The patent became open to public inspection on 26 April 1990, the date which the applicant alleges as the priority date for the SDS patent. If that date, being the date of the first provisional application PJ9817 upon which the SDA patent is based, is the correct priority date (which I think it is – see below) the DTA patent does not prior publish the SDS patent (see s 18(1)(b) of the 1990 Act). 81 In any event, I do not consider that the specification of the DTA patent was anticipatory of the SDS patent. The DTA compensating ring patent discloses a reverse circulation face sampling percussive hammer in association with a sacrificial compensating ring which acts as a seal to prevent escape of air, and which wears sacrificially as the drill bit wears. It is held between the drive sub and the hammer barrel, and is positioned above the exhaust air outlet at the bottom of the drive sub. In this position, the compensating ring does not act to transmit air. This integer of the SDS patent is absent. The purpose of the compensating ring is to provide an effective seal and to wear as a drill bit wears. It is not designed to seal the hole closer to the face of the bit than was otherwise known in April 1990, and it is not part of the claimed invention that the compensating ring releases air closer to the face of the bit than was previously known. 82 The respondents acknowledge that the DTA compensating ring patent does not disclose a separate transmission sleeve as claimed in the SDS patent. However, this concession is made on the footing that the compensating ring is not "integrally formed" with the drive sub. If the respondents' submissions on the construction of claim 5 of the SDS patent were to be rejected, the respondents contend that it would follow that the DTA compensating ring patent anticipated claim 5 of the SDS patent in that the DTA patent taught that the compensating ring, could encircle the drive sub. If the applicant's argument is correct, namely, that it is sufficient for a ring or sleeve in that position to work in combination with the drive sub to be "integrally formed" for the purpose of claim 5 of the SDS patent, then the compensating ring and the drive sub would in combination transmit air. Even on that argument, however, the two components working in combination would not seal the hole closer to the bit face, nor release air closer to the bit face than was otherwise known in April 1990. (b) The Giehl patent 83 As the Giehl patent was not published until well after the SDS patent was open to public inspection, the respondents are constrained to rely on the Giehl patent as a prior claiming of the invention disclosed in the SDS patent. The respondents contend that the specification of the Giehl patent discloses in substance the invention claimed in the SDS patent. In particular it is contended that the evidence establishes that a skilled addressee is informed by the specification that the shroud can be a separate component that is sacrificial. The respondents contend that the "wear characteristics" integer of the SDS patent, although not specifically expressed in the Giehl patent, would be automatically read into the Giehl patent by a skilled addressee, as the need to ensure those characteristics in a shroud or compensating sleeve was common general knowledge in the field of technology to which the patent related. 84 The respondents concede that if they are confined as a matter of law to the claims made by the Giehl patent, those claims do not anticipate the invention claimed in the SDS patent. The absence of these integers from the claims made in the Giehl patent led the respondents to argue that as a matter of law they were not confined to the terms of the claims in the Giehl patent, but could have regard to the specification generally and the substance of the invention there disclosed. The 1990 Act, by s 7(2), relevantly provides that an invention is taken to be novel when compared with the prior art base unless it is not novel in light of prior art information contained in a single specification of the kind mentioned in subparagraph (b)(ii) of the definition of "prior art base" in Schedule 1 to the Act. That definition reads: "(b) In relation to deciding whether an invention is or is not novel: … (ii) information contained in a published specification filed in respect of a complete application where: (A) if the information is, or were to be, the subject of a claim of the specification, the claim has, or would have, a priority date earlier than that of the claim under consideration; and (B) the specification was published after the priority date of the claim under consideration; and (C) the information was contained in the specification on its filing date and when it was published." 85 Under these provisions an invention will lack novelty if it has been anticipated in a published specification which meets the requirements of subparagraph (b)(ii). The disclosure need not be contained within the actual claims of the published specification. The respondents argue that the 1990 Act has not materially altered the test for prior claiming which applied in Australia under the 1952 Act. 86 The respondents contend that there is no decided authority in Australia which compels a narrow test which would limit prior claiming under the 1952 Act to the terms of the prior claim. The respondents acknowledge the decisions of the Court of Appeal in Kromschröder (G.) A.G.'s Patent [1960] RPC 75 and Daikin Kogyo Co Ltd (Shingu's) Application [1974] RPC 559 which confined the inquiry under analogous provisions of the Patents Act 1949 (UK) (the 1949 Act) to the disclosures contained in prior claims. The respondents contended that these decisions should not be applied in Australia in the construction of the 1952 Act. I do not agree. Kromschröder's case concerned an application for revocation of a patent under s 32(1)(a) of the 1949 Act that provided "that the invention, so far as claimed in any claim of the completed specification, was claimed in a valid claim of earlier priority date contained in the complete specification of another patent granted in the United Kingdom". Daikin's case concerned opposition proceedings brought under s 14(1)(c) of the 1949 Act which in similar terms denied novelty where the invention is claimed in a claim in the earlier specification. Lord Evershed MR, delivering the judgment of the Court in Kromschröder said at 82: "In our judgment, the language of Para. (a) of Sec. 32(1) of the Act requires that … the words 'claimed in a valid claim' are not satisfied if the invention in question is only covered or comprehended by the claim as being a part or integer (however important) or some wider combination or 'arrangement' which and which alone is the subject matter of the claim. The words at the beginning of the paragraph– 'the invention so far as claimed in any claim' – seem to us to postulate that the subject matter contemplated must itself be that for which protection is claimed; and we think the same sense should be given to the later words– 'claimed in a valid claim'." 87 Notwithstanding several single judge decisions which place a different interpretation upon the relevant provisions of the Patents Act 1949 (UK), holding that the interpretation given in Kromschröder was only applicable to the "type" of patent there subject to appeal, (see for example Merck and Co (Macek's) Patent [1967] RPC 157, Wilkinson Sword Limited's Application [1970] RPC 42 and Ethyl Corp (Cook's) Patent [1970] RPC 227), the Court of Appeal in Daikin's case confirmed the construction placed on the 1949 Act by Lord Evershed. Buckley LJ at 579 referred to the test approved in Kromschröder as well established law and said at 580: "It does not suffice to show that what is claimed in the applicants' specification is to be found somewhere comprehended or described in an opponent's specification. In Kromschröder's Patent (supra) the court was concerned with an application for revocation under section 32(1)(a) of the Patents Act, 1949, but the language of that subsection is for all practical purposes the same as the language of section 14(1)(c) with which we are concerned. Where an earlier claim is wider in its scope than a later claim and there is no separate claim in the earlier specification restricted to the subject-matter of the later claim, the claimant of the earlier claim cannot, in my judgment, assert that he has made a prior claim to the subject-matter of the later claim." 88 In my opinion s 100(1)(f) of the 1952 Act should be similarly construed, and the expression "so far as claimed in any claim of the completed specification…" should be read literally so as to require the invention to be disclosed in a claim, not otherwise upon a reading of the complete specification. That this was the law in Australia prior to the 1990 Act gains support from the 1984 report of the Industrial Property Advisory Committee on Patents, Innovation and Competition in Australia upon which the relevant provisions of the 1990 Act are based: see Alcatel NV v Commissioner of Patents (1996) 35 IPR 255 at 257, a view accepted by Burchett J in that decision. 89 In any event, even if it were permissible, where prior claiming is alleged, to have regard to the description of the invention in the specification, as opposed to the claims themselves, I am persuaded by the evidence of Mr McGoggin that a skilled addressee would not be taught by the specification, and the specification would not be read and understood in light of common general knowledge to disclose, that the wear characteristics claimed in the SDS patent were part of the invention claimed in the Giehl specification. 90 In summary, I do not consider the Giehl patent discloses all the features of the SDS patent, and certainly, the claims in the Giehl patent do not do so. Moreover, I consider that only the claims in the Giehl patent are available as a ground of revocation under s 100(1)(f) of the 1952 Act. (c) The Bakerdrill patent 91 The Australian application of the Bakerdrill patent, entitled "Sampling Airhammer Apparatus" became open to public inspection in Australia on 24 November 1977, and its publication appears to be that which introduced face sampling reverse circulation percussive hammers on to the Australian scene. 92 The Bakerdrill specification is difficult to understand. Two of the respondents' witnesses, Messrs Stevens and Purcell, doubted that the drill, as described in the specification, would work. The specification contains mistakes in that descriptions relating to figures 6 and 7, and a section line through figure 1(d), are inaccurate. These mistakes were not detected by the respondents' witnesses Messrs Stevens and Schwann. Their failure to detect these mistakes, which were relevant to issues under consideration, in my opinion reflects adversely on the quality of their evidence. I accept the submission of counsel for the applicant that this omission indicates that they too readily allowed information given to them by the respondents to influence their opinions. 93 Read at its publication date, I do not consider a skilled addressee would understand the specification as disclosing the features of the sacrificial transmission sleeve of the SDS patent. 94 The invention described in the Bakerdrill specification is said to overcome those problems associated with hammers using a crossover sub to divert the airflow and samples from outside of the hammer to the inside of the dual pipe drill string. The claimed apparatus is said to operate with reverse circulation airflow and a static air seal. The static air seal of the invention includes what is called a "gauge sleeve" which is mounted on a housing structure a short distance above the lower end of the drill bit. The gauge sleeve does not extend below the drive sub. The gauge sleeve is of slightly less diameter than the outer diameter of the gauge row of the drill bit, and it is held in place by being clamped between the drive sub and the outer housing of the hammer. In those respects its features are similar to those of the DTA compensating ring patent, but the specification is silent as to whether the gauge sleeve is intended to wear at all, and if it is, there is no statement as to its wear characteristics. Rather, the specification describes a static (fluid) seal created around the gauge sleeve by exhaust air from the hammer being directed into the bore hole adjacent to the upper and lower ends of the gauge sleeve. The static seal is described as preventing drill cuttings or rock debris from passing upwards or downwards around the gauge sleeve. 95 It is clear from the body of the specification, although not so clear from the figures attached, that the operation of the Bakerdrill depends on two separate air circuits, one circuit being for high pressure or supply air, and the other being for exhaust air expelled after driving the piston of the hammer. In contrast, the SDS patent is concerned only with the transmission of exhaust air, and with a face sampling apparatus in which the cuttings are entrained solely in exhaust air. 96 The exhaust air from the Bakerdrill is expelled through exhaust ports or holes in the drive sub below the gauge sleeve. The gauge sleeve therefore has no function in directing exhaust air. In addition to the exhaust air, high pressure air also flows into the bore hole "to sweep the cuttings produced on the bottom of the hole around the bit drilling face and into the (central) passages through the anvil bit". High pressure air is constantly pumped through discharge ports of holes for this purpose. The discharge ports open into a shallow annular space at the lower edge of the gauge sleeve but at a point above the lower end of the drive sub. It is said by the respondents that this feature teaches that the gauge sleeve directs or transmits air and therefore acts as a "transmission sleeve". Although there is no reference to the gauge sleeve being sacrificial, or being intended to have a similar wear rate to the drill bit, the respondents contend that it would go without saying that the gauge sleeve was sacrificial and that standard drilling practice would dictate that so far as possible a skilled addressee would attempt to achieve a similar wear rate for the gauge sleeve and drill bit. 97 Insofar as the intended operation of the Bakerdrill can be deduced from the specification, the purpose of the gauge sleeve is quite different to the transmission sleeve of the SDS patent. Its stated purpose is to create a static seal in conjunction with airflow from ports above and below the gauge sleeve. In the absence of any reference to the potential of the gauge sleeve to wear, or to its wear characteristics, I am unable to accept that a skilled addressee would infer that the gauge sleeve was sacrificial or that standard drilling practice would dictate that the skilled addressee should attempt to achieve a similar wear rate for the gauge sleeve and a drill bit. Moreover, high pressure air flowing from the discharge ports at the lower end of the gauge seal is not described in the Bakerdrill patent as being directed to the cutting face of the bit. On the contrary, once the high pressure air is discharged, the specification says, only, that it "flows into the bore hole … to sweep the cuttings produced on the bottom of the hole around the drill bit face …". The specification does not teach that air, either exhaust or high pressure, should be transmitted by a sleeve extending towards the drill bit in the manner required by the SDS patent, nor does the Bakerdrill have a flange which encircles at least a portion of the length of the drill bit to form a continuous shroud to assist in the downward passage of exhaust air to the cutting face of the drill bit as required by claims 2 and 8 of the SDS patent. (d) The Bulroc (Weaver and Hurt) patent 98 This patent entitled "Closed Fluid Circulation in Down Hole Drill" became open to public inspection in Australia on 11 December 1986. The patent discloses a reverse circulation face sampling percussive hammer, the object of which is to provide a rock drill where clearing of the chippings and debris from the bottom of the hole can be substantially guaranteed, thereby overcoming difficulties in the prior art where airways feeding exhaust air to the cutting face become blocked. The consistory clause reads (page 3): "According to the present invention, a rock drill comprises an outer wear tube, an inner centre tube, a drill bit mounted on the end of the centre tube, a reciprocal piston slidably mounted on the centre tube…the arrangement being such that the piston, at the end of its down-stroke, strikes the inner end of the drill bit, and there being porting means…to direct exhaust air to an annular passageway between the end of the wear tube and the drill bit and whereby air is exhausted in its entirety around the periphery of the drill bit to the bottom of the hole, from where it enters a central bore through the drill bit and is exhausted through the centre tube carrying with it all chippings and debris gathered in the bottom of the hole. While the annular passageway can be formed between the end of the wear tube and the drill bit, it is preferred to provide a short extension tube connected to the end of the wear tube, the annular passageway being formed between the extension tube and the drill bit. … An inevitable result of producing a bore is the creation of a narrow annular gap between the outer face of the wear tube and the wall of the hole, and up which exhaust air can pass. It is therefore usual to seal the upper end of the bore at the surface, but this can have the possibly harmful effect of a gradual build-up of pressure in the annular gap. It is therefore a further advantageous feature of the invention that seal means are provided between the outer wear tube and the hole wall to limit the length of the annular gap over which pressurisation can occur. Thus, a sealing ring may be secured to the wear tube of a material that combines the two required properties of reasonable flexibility and wear resistance, and which will therefore not impede the passage of the drill down the hole or its withdrawal." (emphasis added) 99 A drawing depicting an embodiment of the invention is attached to the specification. In describing that embodiment the specification reads: "In the drawing, a down-the hole rock drill as (sic-has) an outer wear sleeve 1 secured at one end to a back head 2 and at the opposite end to a chuck 3…" 100 It is plain from the drawing and the description that the wear sleeve 1 referred to in the specification is the outer casing of the hammer, and is separate and distinct from both the back head 2 and the chuck 3 (i.e. the drive sub). 101 There is no description in the specification of the seal means which is said to be a further advantageous feature. Nor is there any description of its placement on the "wear tube", or of its dimensions. However, as it is described as "secured to the wear tube", I conclude that the sealing ring must be above the drive sub. 102 The description of the drawing also instructs that: "The outer surface of the drill bit and the inner surface of the chuck are correspondingly splined as indicated at 12, the splines being so dimensioned as to provide a number of gas passageways 13 around the drill bit 10…Thus, for so long as pressure air is provided the piston is caused to reciprocate at high speed, with pressure air in the chambers 32 and 33 being alternatively exhausted through the passageways 13 around the exterior of the drill bit. Consequently, all of the exhausted air passes around the exterior of the drill bit and into the bottom of the hole being drilled from where it escapes through the angled passageway 31 in the bit and up through the centre of the drill…" 103 In the drawing the drill bit is depicted as having a pronounced shoulder, giving the head of the drill bit, to use the applicant's description, a square profile at the point of contact of the drive sub with the shoulder of the bit. This shoulder would deflect the downward flow of exhaust air towards the sides of the bore hole. 104 The respondents contend that the "short extension tube" referred to in the specification teaches a reader of the Bulroc patent of a transmission sleeve with all the features of the SDS patent. This view was supported by the evidence in chief of Messrs Stevens and Schwann who deposed to diagrams, prepared by Mr Joseph Purcell for the purposes of these proceedings, as representing their interpretation of the "extension tube" (see Exhibits RS45 and PS27 to their respective affidavits). These diagrams depict a length of tubing slid over the external circumference of the drive sub and affixed so that portion of the tube extends from the bottom of the drive sub towards the cutting face of the bit in a manner that encircles the portion of the bit below the square shoulder. The "short extension tube", so placed by these diagrams, is said to constitute a transmission sleeve with all the features of the SDS patent. 105 The effect of sliding a tube over the drive sub in this manner, is to create a flange with an outer diameter substantially the same as that of the drill bit. This is not a feature of the drawing accompanying the Bulroc specification. The extension tube in this position also gives it the appearance of being a sacrificial sleeve which would wear in use in preference to the drive sub and the outer housing of the hammer (i.e. the "wear tube"). The specification does not state that the short extension tube is intended to be a sacrificial component. 106 I found the evidence led by the respondents in support of their interpretation of the Bulroc patent depicted in these diagrams unconvincing. Doubts about their correctness were heightened when in cross examination it was revealed by Mr Stevens that in his attempts to understand the Bulroc patent he had created his own "independent" diagram which he had given to the respondents' solicitors. This diagram was not referred to in his witness statements. That diagram (Exhibit A9) showed the extension tube as being of equal diameter to the outer circumference of the drive sub, and extending from its lower edge. 107 The features and configuration of the "short extension tube" referred to in the Bulroc specification are not clearly described, nor is its location. Neither the diagrams deposed to by Messrs Stevens and Schwann, nor Mr Stevens own diagram depict an extension tube "connected to the end of the wear tube", that is, to the end of the outer casing of the hammer. On the contrary, they show an extension tube affixed to the drive sub, an interpretation which finds no support in the wording of the specification. 108 Moreover, the diagrams deposed to by Messrs Stevens and Schwann are not a fair representation of the Bulroc assembly as it appears in the drawing accompanying the specification. The diagrams give a different representation to the drive sub, they disregard or span the spanner flats depicted in the drawing, and they show a different configuration of the splines on the inside of the drive sub and on the shaft of the drill bit. The collection ports and grooves on the face of the bit are different, and, importantly, the grooves in the side of the bit are more sharply angled in the drawing accompanying the specification plan than in the diagrams. This last mentioned feature of the diagrams suggests that exhaust air would encounter less obstruction from the curves in the grooves in the side of the bit than would occur in the preferred embodiment of the Bulroc patent. 109 Mr McGoggin, whose evidence I accept on this topic as I do on others in preference to that of Messrs Stevens and Schwann, was not able to put any clear meaning or definition to the reference in the Bulroc specification to the "short extension tube". However, in cross examination he indicated how it would be possible to attach a short extension tube to the end of the wear tube in a manner that accorded with the teaching of the specification (see his drawing, Exhibit R5). In particular, a short extension tube in the position shown, would result in an annular passageway being formed between the extension tube and the drill bit in accordance with the description of the preferment of a short extension tube. The specification does not teach that air is exhausted through an annular passage formed between the drill bit and the drive sub. In my opinion the respondents' construction, which treats the annular passageway as being formed between the drive sub, or an extension to it, and the drill bit is incorrect. 110 The respondents say that Mr McGoggin's interpretation of the specification should be rejected, as an extension tube so positioned would perform no function. Mr McGoggin disagreed with this proposition, offering the opinion that it would serve to protect the bottom edge of the hammer housing (the "wear tube") from abrasion. This is not a function described in the specification but Mr McGoggin's evidence reflects the best interpretation which a skilled addressee reasonably and intelligibly could place on the otherwise vague and imprecise instruction offered by the specification. 111 In my opinion the Bulroc patent does not anticipate the SDS patent. The Giehl patent – novelty 112 It is convenient now to deal with the eight prior patent specification publications relied on by the respondents as anticipating the Giehl patent. (a) The 1987 Giehl patent 113 This patent became open to public inspection on 28 April 1988. It is entitled "Rotary‑Percussive Drill with Reversed Air Circulation" and relates to a drilling arrangement for rotary percussive drilling. Prior percussive hammers relied on normal circulation, and the specification describes important factors for drilling arising from reverse circulation. The invention uses air pressure to drive a hammer which is characterised by the fact that there are two air passages in the drill stem, and that it is a face sampling reverse circulation hammer: "The air passageways being arranged with respect to the drill bit such that air at pressure is directed from above and outside of the drill bit so as to pass around the side of the drill bit and below and into an aperture passing upwardly through the body of the drill bit, whereafter connecting with one of the said two passageways extending to an above surface outlet. A significant advantage of this arrangement is that the drill bit has then only to be designed to allow for air only to pass around its outer perimeter rather than to include both air and chips so that accordingly, any channels or scallop shape (sic) passageways that must be cut from the external side of the drill bit, can be significantly smaller than hitherto. … The invention can also be said to reside in the method of effecting percussion drilling which includes the steps of directing air such that it will pass from above and then around the outside of the drill bit and then pass across the bottom of the drill bit whereby to carry cut chips into an inner located upwardly extending conduit. One of the significant further advantages of having air travel in the direction stated, is that the air can be caused to flow prior to collecting chips, across most of an external surface of the drill bit. … One problem that has been further discovered relates to maintaining that a majority of air directed into the location immediately above the drill head will indeed travel through the channels and across the drill bit face and into an outer conduit. Conventionally, the drill bit is supported by a backing cylinder housing which has a diameter approximately equal to the diameter of the hole cut. It has been found that, however, in some situations with the ground, particularly where the surface that is being cut is relatively soft, some bleed out from the housing at the outside of the drill stem will occur. This is considered an advantage with soft material but if the cutting surface is hard, there is found to be more advantage in providing that with air being introduced into a channel, that the channel be only open downward towards the drill bit face and that the housing will provide a more effective seal against air loss up the side of the drill stem. It is presumed nonetheless that such channels as would be provided, would open onto the bit face and in a preferred instance would have an axis which is parallel to the axes of other of the channels so that there might be four or five or more such channels around the peripheral side wall of the drill bit and support housing and further that these axes are parallel to the axis of the drill bit head. According to a preferred arrangement then, there are provided distinct channels connecting the bottom of each channel extending up the side of the support housing, to an inlet conduit within the drill bit adapted to collect the cuttings." 114 The attached drawings illustrating the preferred embodiments depict a drill bit with a prominent square shoulder, or weight bearing surface, and with grooves positioned in the head of the bit such that air from the hammer exhausting through the drive sub would be substantially deflected by curves in channels as they pass around the shoulder of the bit. 115 The respondents contend that the 1987 Giehl patent discloses all the features of the Giehl patent. Although it is acknowledged that the language is different, they contend that there is nothing of substance new in the Giehl patent. The respondents argue that the only apparent difference between the assemblies of the two patents is the presence of a shroud on the head of the bit in the case of the Giehl patent, yet (contrary to an argument put in their defence to the infringement claim) they say there is nothing in the Giehl patent that makes it clear that the shroud must extend around the head of the bit rather than the shank. Through their witness Mr Stevens, the respondents argue that if the words "drill bit" in the Giehl patent include the shank, then a drive sub shrouding the shank (as in the 1987 Giehl patent) would fall within and therefore anticipate the claims of the Giehl patent. 116 It follows from what I have said above regarding the infringement of the Giehl patent, that I construe the words "drill bit" in the Giehl patent as meaning the whole drill bit component, and that the invention claimed does not require that the shroud extend around or cover part of the head of the bit. Nevertheless, I do not consider that the 1987 Giehl patent anticipates the Giehl patent. 117 The Giehl patent expressly refers to the 1987 Giehl patent application, and refers to problems with the hammer described in the 1987 Giehl patent in that it returns only about 70 per cent of chips to the surface. The 1987 patent does not describe or illustrate an "outermost cover acting as a shroud to direct the air directly at the periphery of the cutting face of the bit" as required by the Giehl patent, and the 1987 Giehl patent does not show a flange that extends towards the drill bit that directs air that is exhausted from the hammer in the manner described and claimed in the Giehl patent. (b) The Samplex (Ennis) patent 118 The respondents particulars of prior publication plead two Samplex patents, the first being the publication of the Australian patent number 15048/88 which became open to public inspection on 27 October 1988, and the United States patent specification number 4765418 which became available for inspection in the Patent Office Library, Canberra, on 19 September 1988. The two specifications are in material respects identical, and there does not appear to have been any evidence adduced by the respondents directed specifically to the United States patent. It is convenient to deal with the two together as the Samplex patent. 119 The Samplex patent describes a "Valveless Down-the-Hole Hammer". The assembly disclosed in the patent is directed to a valveless hammer with a less complex piston design than those in the prior art. The object of the assembly is to provide a valveless type hammer drill in which damage to the piston is avoided by not having a complex piston design incorporating complicated port and or passage configurations formed in the hammer piston. The valveless hammer described comprises a body tube, a chuck mounted on the body tube with exhaust ports and three axially projecting dogs which fit into corresponding recesses in the exterior of the cutter bit so as to provide a driving connection between the body tube and the cutter bit which is retained within it. The hammer comprises an inner tube, surrounding a sample tube and an annular section piston with the ports controlling the airflow. Face sampling from the hammer is achieved by a sample tube and annular nozzle within the central passageway in the cutter bit to inject a portion of high pressure air upwardly into the lower end of the sample tube. In the operation of the hammer, high pressure air, which bypasses the hammer, is redirected upwardly into the sample tube by "an airflow reversing device". This arrangement, according to the specification, "ensures a strong upward flow of high pressure air into the sample tube which can entrain the chippings or other material and carry it away up the sample tube". This arrangement creates a venturi effect. The invention intends that a suction effect at the cutting face will entrain cuttings from the bit face and carry them into the sample tube and thence to the surface. The intended operation of the invention is more fully described in a brochure published in 1988 by Entech Industries Limited, a Northern Ireland company promoting the sale of the preferred embodiment of the invention of the Samplex patent. 120 The bit shank of the hammer does not have any splines to facilitate the rotation of the bit, as the rotational force is applied through the dogs projecting from the chuck (the drive sub). 121 The respondents contend that the projecting dogs form a shroud that directs exhaust air to the periphery of the cutting face of the drill bit, as is done in the Giehl patent. 122 I do not agree that the Samplex patent anticipates the Giehl patent. The Samplex patent is concerned with a valveless hammer that recovers chips from the cutting face by suction, whereas the invention disclosed in the Giehl patent does not rely to any extent on a suction effect. The projecting dogs of the Samplex hammer do not act as a continuous shroud which "extends around the side of the drill bit". 123 Exhaust air from the operation of the Samplex hammer passes through the inner portion of the chuck, or drive sub, and exhausts mainly at the lower end of the drive dogs. The respondents contend that the venturi effect cannot and is not expected to work on its own and is dependent on the exhaust air directed by the dogs to the cutting face. Whilst it is clear from the description of the invention that exhaust air passes between the drive dogs and the body of the bit, the specification does not describe that the passage of exhaust air past the drive dogs is designed to contribute to the flushing of chips produced at the bit face, nor does the specification teach that the dogs direct air to assist with the recovery of cuttings from the drill face. (c) DTA compensating ring patent 124 This patent has already been discussed in relation to the allegation of want of novelty in the SDS patent. It did not become open to public inspection until seven days after the priority date of the Giehl patent which was 19 April 1990. The DTA compensating ring patent is therefore not available as an anticipation of the Giehl patent. In addition, the respondents' witnesses did not assert that the invention of the DTA compensating ring patent disclosed all the features of the Giehl patent. In particular, the compensating ring does not operate to constrain exhaust air or direct it to the periphery of the face of the bit, nor does the compensating ring locate or engage against, and extend around, the drill bit. (d) The Lister patent 125 This patent became open to public inspection on 18 April 1990, the day before the Giehl patent. It is entitled "Improvements in Pneumatic Percussion Hammers". The patent describes a face sampling reverse circulation hammer. An important feature of the hammer is that exhaust air is directed by internal ducts within the drill bit itself to flutes in the side of the drill bit, where it is released into the bore hole significantly below the drive sub. The exhaust air is then intended to flow through the flutes or channels in the face of the bit into and up the central bore of the hammer. 126 The respondents, through Mr Schwann, sought to support the pleading that the Lister patent anticipated the Giehl patent, and has the features of the invention of the Giehl patent. Mr Schwann gave evidence about the introduction in the late 1980's of the Halco-Lister hammer, which appears to be the commercial embodiment of the Lister patent. Mr Schwann noted that the features of the Halco-Lister hammer include an "oversized" drive sub, the outside diameter of which is greater than that of the hammer casing and nearly the same as the outside diameter of the drill bit itself, that air is directed through passageways in the drill bit towards the cutting face of the drill bit, and that air also passes between the drive sub and the drill bit towards the cutting face of the bit. In his evidence, however, Mr Schwann acknowledged that this airflow was for lubrication purposes. Mr Schwann's evidence seems not clearly based upon the specification itself, but rather to be based partly on promotional leaflets published in connection with the Halco-Lister hammer. 127 Again, I do not think that the Lister patent anticipates the Giehl patent. There is no disclosure in the Lister patent of "an outermost cover acting as a shroud to direct air to the periphery of the cutting face of the bit". Whilst the Lister drive sub is connected to the outer casing of the hammer, there is no space between the drive sub and the drill bit to direct any relevant airflow to the face of the bit. There is no skirt or shroud to form channels to direct the air to the face of the bit. Rather, the flow of air exhausted from the hammer is transmitted to the face of the bit through oblique air ducts and flutes in the body of the drill bit itself, and, as already mentioned, the air exhausts below the drive sub. (e) The Klemm (Hydroc) patent 128 This patent became open to public inspection in Australia in about May 1982. The invention describes an "Annular Drilling Hammer". The patent is relied upon by the respondents primarily in support of its plea of obviousness in the case of the SDS patent, but it is also pleaded as an anticipation of the Giehl patent. The Klemm patent discloses a reverse circulation face sampling hammer. The hammer includes an annular bore crown (drill bit) with flow channels leading from the rear shoulder through to both the cutting face and to the central aperture in the bore crown. Air exhausted from the hammer flows through these channels and aids the entrapment of bored material (cuttings) which are then carried out through the inner tube with the aid of a venturi opening. The clearing mechanism disclosed in the patent depends primarily upon the venturi effect created by the flow of exhaust air through the channels leading into the central aperture of the bore crown. The specification describes longitudinal grooves or splines within the drive sub through which exhaust air flows. The lower end of the drive sub is: "…conically enlarged and in this region the driving medium (exhaust air) flows against the bore crown… To ensure that as high a percentage as possible of working fluid flows back through the inside of the annular bore crown…rather than through the gap between the outer tube (drive sub) … and the bore hole wall, a set of bore holes 65 and 66 are provided in the bore crown. … The bores 65 extend from the rear shoulder of the bore crown to the front end, whilst the bores 66 lead directly from the rear shoulder to the interior of the bore crown. A part of the working fluid is conducted directly through the bores 65 and 66 into the interior of the bore crown…and thence to the inner tube. This direct flow creates a suction at the bore crown by which the working fluid which leaks out laterally between the outer tube (drive sub) … and the bore crown…is entrained and urged into the inside of the bore crown…" 129 It is apparent from this description that in the intended working of the invention a high percentage of the exhaust air will flow through the flow channels, or bores 65 and 66, and that only a low percentage of exhaust air will "leak out laterally" between the conically enlarged end of the drive sub and the outer surface of the drill bit. 130 The respondents assert that the Klemm patent discloses an outermost cover acting as a shroud, namely, the conically enlarged drive sub. Mr Stevens expressed the opinion in his evidence in chief that the Klemm patent discloses all the features of the invention claimed in the Giehl patent. It appeared in his cross examination that this opinion was based on the assumption that most of the exhaust air would pass through an annular space between the conically enlarged end of the drive sub and the drill bit. This assumption is inconsistent with the teaching of the patent. Both Mr Stevens and Mr Schwann based their evidence on the assumption that there are "scallops" which convey airflow across the back of the bit and towards the periphery of the hole. This interpretation of the specification is not supported by the description in the body of the specification, or by the drawings (which do not show a cross section or representation at any point above the bit face). 131 In my opinion, the Klemm patent does not disclose a cover acting as a shroud in the manner of the invention of the Giehl patent. The mechanism for clearing cuttings from the bottom of the hole is by a suction effect. Whilst the specification of the Klemm patent describes a conically enlarged drive sub acting to constrain and direct air, it is directing air not through conduits external to the periphery of the bit for passage across the face of the bit into the inner tube, but through the internal flow channels in the drill bit described as the bores 65 and 66. 132 In my opinion the Klemm patent does not anticipate the Giehl patent. (f) The Bakerdrill patent 133 This patent has already been discussed in relation to the SDS patent. It is pleaded that the Bakerdrill patent discloses an assembly that has all the features of the Giehl patent, but this allegation does not appear to have been taken up by the witnesses called for the respondents, or by the respondents in final submissions. The Bakerdrill patent does not have all the features of the Giehl patent. In particular, it does not have an outermost cover acting as a shroud, to direct exhaust air. (g) The Bulroc (Weaver and Hurt) patent 134 This patent has also been discussed in relation to the SDS patent, and the respondents' assertions in relation to the Bulroc patent, as against the novelty of the Giehl patent, are essentially the same as those made against the SDS patent. It is contended that the short extension tube described in the Bulroc patent performs precisely the same function as the shroud referred to in the Giehl patent. Again, this submission depends upon the interpretation of the Bulroc patent represented in the diagrams deposed to by Messrs Stevens and Schwann as Exhibits RS45 and PS27 respectively. I have rejected that interpretation. In my opinion the Bulroc patent does not disclose an "extension tube" which acts as an outermost cover acting as a shroud to direct air to the periphery of the cutting face of the bit, nor does it disclose a skirt or a shroud to form channels to direct air to the face of the bit as in the invention of the Giehl patent. (h) The Minroc patent 135 This patent became open to public inspection in Australia in approximately April or May 1989. The patent claims a reverse circulation down-the-hole face sampling hammer drill apparatus. In final submissions counsel for the respondents indicated that this patent was no longer relied on as an anticipation of the Giehl patent, and whilst it lay "at the edge of the respondents' case" it was said to be relevant in showing the general common knowledge in the relevant field of expertise at the priority dates of the patents in suit. 136 Within the drill bit of the Minroc patent there are exhaust air ducts leading from an expansion chamber into which exhaust air from the hammer flows. The ducts through the body of the bit emerge on the cutting face near its periphery. There are also angled passageways in the bit face which act as collection ducts. The stem (or shank) of the bit also has venturi orifices leading to the central bore of the bit. 137 The Minroc patent does not anticipate the Giehl patent. It does not disclose an outermost cover acting as a shroud to engage against and extend around the outer side of the drill to form conduits. Such a feature would be pointless as the exhaust air in the Minroc patent flows to the periphery of the cutting face through the air ducts situated within the body of the drill bit. Novelty – prior uses 138 Against both the SDS patent and the Giehl patent a number of prior uses are alleged. In many instances the allegations of prior use are common to both patents. It is convenient first to deal with those which are not common. (a) SDS patent – use of DTA patent compensating rings 139 There is evidence that prior to April 1990 about forty compensating rings were sold and thereafter presumably used in the field. However, it follows from the conclusion that the DTA patent did not anticipate the SDS patent, that the use of articles in the form of the preferred embodiment of the patent did not constitute prior use. (b) Giehl patent – use of the Halco-Lister hammer 140 There is scant evidence about the use in Australia of any Halco-Lister reverse circulation face sampling percussive hammers prior to April 1990. The manufacturer in Australia of Halco-Lister hammers, Mr Bourne, gave evidence for the respondents. He said that some twelve to eighteen hammers were made in Australia prior to April 1990, which were exported to the United Kingdom. In cross examination, he said that the hammers were manufactured in accordance with the Lister patent. It appears that other hammers known as Halco-Lister hammers may have been imported into Australia, as there is evidence from Mr Cocking that he saw one at some stage in Kalgoorlie, and Mr McElroy was aware of brochures promoting such a hammer in Australia. Mr Schwann identified a brochure published by the Halifax Tool Co of England for a Halco-Lister hammer and an article in a mining journal "World Mining Equipment", April 1990, relating to reverse circulation sampling systems promoted by Halco-Lister, which incorporated a hammer. It seems these documents came into Mr Schwann's possession well after April 1990. The evidence falls short of establishing that Halco-Lister hammers imported into Australia were used in Australia before April 1990. Moreover, there is no suggestion in the evidence of Mr Cocking, or in the brochures, that the Halco-Lister hammer referred to departed in any material respect from the preferred embodiment of the Lister hammer described in the Lister patent. 141 It follows from the description of the Lister patent already given, that it operated in an entirely different manner to the invention of the Giehl patent, and that the use of a commercial embodiment of the invention of the Lister patent did not anticipate the Giehl patent. (c) Giehl patent – use, publication and sales of the Samplex hammer 142 The evidence shows that there was minimal use of Samplex reverse circulation face sampling percussive hammers in Australia prior to April 1990. In November 1989 the second respondent entered into negotiations with Entech Industries Limited of Northern Ireland with a view to securing Australian distribution rights for the Samplex product. Two Samplex hammers were imported into Australia by the second respondent from Entech for trial purposes, arriving in about December 1989. The hammers were of the Samplex 501 model, the precise configuration of which is not disclosed in the evidence. Trials of the hammers were conducted by Davies Drilling and Drillcorp in Western Australia, and by Kelly Drilling in Queensland. The testing was completed in about February 1990, and in May 1990, orders for the commercial supply of these hammers were placed by the second respondent with Entech. With the delivery of the two hammers imported for trial purposes in December 1989, a number of brochures relating to the hammers were received by the second respondent. Although use of the Samplex hammers in Australia prior to April 1990 was for trial purposes only, it is not suggested that the trials were in any sense secret. It is not suggested that the Samplex hammers differed in any material respect from the preferred embodiment described in the Samplex patent. It follows from my conclusion that the Samplex patent did not anticipate the Giehl patent, that the use of the commercial embodiment of the Samplex patent also did not do so. (d) Giehl patent – use of the Bakerdrill hammer 143 By late amendment to the Particulars of Objection filed by the respondents a prior use of the Bakerdrill hammer is alleged to anticipate the Giehl patent. This amendment was made following evidence from Mr George Bourne (Snr), given in the course of the trial that he had seen an experimental Bakerdrill hammer in Brisbane (of unknown operation and unknown configuration) on dates unknown (but probably in the late 1980's). Mr Bourne's evidence does not establish that the experimental Bakerdrill hammer observed by him was a reverse circulation face sampling hammer, being a commercial embodiment of the Bakerdrill patent. However, even accepting that it was, it follows from the finding that the Bakerdrill patent did not anticipate the Giehl patent, that the use of a commercial embodiment of the Bakerdrill patent would not do so. (e) Both patents in suit – sale by Mincon Limited and use by Pontil Pty Ltd of a wear sleeve. 144 The respondents led evidence that a wear sleeve for use on the drive sub of a reverse circulation hammer, as described in the preferred embodiment of the Mincon patent, was sold by Mincon Limited and used by Pontil Pty Ltd in about February 1990. As I understand the final submissions of the respondent, this prior use is no longer relied upon. In any event, the features of the wear sleeve were similar to the DTA compensating ring patent, and it did not contain features which anticipated the invention of the SDS patent or the Giehl patent. (f) Both patents in suit – prior use of tri-cone bits 145 The widespread use of tri-cone bits fitted with shrouds or skirts in rotary reverse cycle drilling is pleaded as an anticipatory use of the invention of both the patents in suit. As I understood the final submissions of the respondents, the respondents now rely on this use primarily as evidence showing the obviousness of the inventions of the patents in suit, rather than as an anticipatory use. Nevertheless, the pleadings require that the alleged anticipatory use be considered. In paras 12 and 13 of these reasons, a brief description is given of the process of rotary drilling with tri-cone bits. When coaxial drilling rods became available, it became common practice to place a shroud between the end of the drill string and the tri-cone bits. The process of drilling and the recovery of cuttings in the rotary drilling systems is fundamentally different to that employed in a reverse circulation percussive hammer which incorporates a face sampling drill bit. In reverse circulation rotary drilling, high pressure or supply air is delivered down the external annulus of the dual wall drill string with the sole function of entraining cuttings and carrying them to the surface. There is no hammer in the system and no reciprocating piston driven by the supply air. By contrast, the exhaust air has already worked the piston with reverse circulation percussive hammers. 146 Whilst evidence was given by the manufacturers of tri-cone bits about the probable directions of airflows within the bottom of the hole in the drilling process, there was no scientific evidence put forward to support any of the theories advanced. The evidence, however, reveals that the cuttings produced by the rotating tri-cone bits were cleared in consequence of high pressure air entering through restricted ports the cavity at the bottom of the hole in which the tri-cone bits operated, such ports acting as jets or nozzles to increase the velocity of the air released directly above the part of the bottom of the hole just cut by each rotating cone. Thus the air was expelled with force directly at the cuttings on the bottom of the hole without intermediate obstruction from the working part of a drill bit. In contrast, in a reverse circulation percussive hammer incorporating a face sampling drill bit, the bottom of the hole being drilled is always covered by the bit which necessarily impedes the collection of the cuttings. The shroud commonly used in reverse circulation tri-cone bit assemblies was an extension and continuation of the drill string fitted to better confine the high pressure air to ensure that it was vented through jets directed to the bottom of the hole, and between the rotating tri-cones. As I understand the evidence, the shroud also served a sealing function. However, as the nature of the reverse circulation tri-cone drilling process is fundamentally different to that involved in a reverse circulation percussive hammer incorporating a face sampling bit, I agree with counsel for the applicant that there is no relevant comparison at all to be made between the two drilling assemblies. I do not consider that the use of shrouds with reverse circulation tri-cone bits anticipates either of the patents in suit. Moreover, the dissimilarity of the nature of the two drilling processes means that the shroud on a tri-cone assembly is not relevantly sacrificial and is not intended to and does not wear at a similar rate to the drill bit. (f) Both patents in suit – use of the Bulroc patent 147 Mr Schwann described the demonstration of a Bulroc hammer he witnessed in 1988. He said that it was fitted with a bit which had a similar configuration to the drawing appended to the Bulroc patent, and was not like the bit shown in the brochure. Insofar as the design followed the drawing of the patent, it did not anticipate the inventions of the patents in suit, for the reasons already given: see par 98-111, 134. 148 There is also evidence of the sale and use of a Bulroc reverse circulation hammer in Australia during the late 1980's which was of a slightly different design to that disclosed in the drawing appended to the Bulroc patent. The finding that the Bulroc patent did not anticipate the inventions of the patents in suit, therefore, does not necessarily dispose of the respondents' plea that the use and sale of Bulroc hammers before the relevant priority dates constituted anticipatory uses of the invention. 149 The design of the commercial production of the Bulroc hammers sold and used in Australia is depicted in a brochure tendered through the evidence of Mr Stevens, Exhibit RS26. The hammer did not incorporate a "short extension tube" and in this respect did not differ materially from the drawing of the Bulroc patent. Whilst the head of the bit as depicted in the brochure is of a slightly different configuration to that shown in the drawing appended to the patent, the passage of exhaust air through the internal mechanism of the hammer and the sub assembly is apparently the same. The exhaust air flows generally through the interlocking splines on the drill bit and the inner surface of the drive sub, and is expelled at the shoulder of the head of the bit. The air is exhausted much further from the face of the bit than is taught by the specifications of the patents in suit, a fact further illustrated by the drill bit and drive sub of a Bulroc hammer, which are Exhibit R9. The design philosophy of the Bulroc hammer appears to accept the then current belief that the outer housing of the hammer would act as a sufficient seal thereby causing exhaust air to travel to the bottom of the hole and across the face of the bit to the inlet ports on the face of the bit. To use Mr McGoggin's expression, it was generally understood in the drilling industry at that time that air could be "delivered" to the face of the bit in this way, but air so delivered did not sufficiently entrain the cuttings being produced by the hammer. 150 In my opinion, for present purposes, the Bulroc hammer depicted in the brochure does not materially differ from the preferred embodiment of the invention described in the Bulroc patent, and the sale and use of the Bulroc hammer did not anticipate the inventions in either of the patents in suit. (g) Both patents in suit – prior use of the inventions 151 The following allegations of anticipatory use assert that the inventions of the patents in suit were used either in field trials, or by Werner Giehl, before the relevant priority dates. Between 1985 and 1989 Mr Giehl was intermittently engaged in research and development to produce an effective reverse circulation percussive hammer incorporating a face sampling drill bit. Broadly speaking, he developed three prototypes, the first in 1985, the second in 1987, and the third at a date between late 1988 and early 1990. The first prototype was tested on one occasion at Kambalda in Western Australia. The testing of the first prototype led to the 1987 Giehl patent. The second prototype was tested by Cherlor Air Drillers Pty Ltd and Mr Simpson at Mineral Hills. The third prototype led to the application for the Giehl patent in suit following experimentation conducted by Gaden Drilling in Mr Giehl's presence in the Northern Territory in March 1990. The testing of each of these prototypes is pleaded as an anticipatory use of each of the inventions in suit. Testing of prototypes made by a third party are also relied upon. 152 In order to deprive a patented invention of novelty, the use relied upon must be a use in public which discloses to a person skilled in the relevant art all the essential features or integers of the invention the subject of the challenged patent. The information must enable the notional skilled addressee at once to perceive and understand, and be able to practically apply the discovery, without the necessity of making further experiments: Stanway Oyster Cylinders Pty Ltd v Marks (1996) 35 IPR 71 at 75. The use must be such that the public were free to do whatever they wished with the information derived from that use. A disclosure to a person under an obligation of confidence, who is not free in law or equity to make use of the information acquired for their own purposes, is not use in public: Fomento Industrial SA, Biro Swan Ltd & Anor v Mentmore Manufacturing Co Ltd [1956] RPC 87 at 99 per Lord Evershed. 153 Under the 1952 Act for the purpose of determining whether a ground for revocation exists under s 100(1)(g) because the invention was not novel in Australia on the priority date account shall not be taken of any secret use: s 100(2). A use will be "secret" if it is a use for trial and evaluation for the purpose of assisting the manufacturer to learn whether his product needs improvement, or to learn how it may be improved: Melbourne v Terry Fluid Controls Pty Ltd (1993) 26 IPR 292 at 302. A secret use for a purpose other than the purpose of reasonable trial or experiment only, however, is a separate ground for revocation: see ss 100(1)(l) and 100(3)(a) of the 1952 Act. 154 Under the 1990 Act revocation may be ordered on the ground that the invention is not a patentable invention: s 138(3)(b). An invention will not be a patentable invention if the invention has been: "…secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee's or nominated person's predecessor in title to the invention.": s 18(1)(d) By s 9 of the 1990 Act the following acts are not to be taken to be secret use of the invention in the patent area: "(a) any use of the invention by or on behalf of, or with the authority of, the patentee or nominated person, or his or her predecessor in title to the invention, for the purpose of reasonable trial or experiment only; (b) any use of the invention by or on behalf of, or with the authority of, the patentee or nominated person, or his or her predecessor in title to the invention, being use occurring solely in the course of a confidential disclosure of the invention by or on behalf of, or with the authority of, the patentee, nominated person, or predecessor in title; …" 155 Thus the questions which the allegations of prior use of the inventions pose are: a) whether the alleged use disclosed to a person skilled in the relevant art all the essential features or integers of each of the inventions; and if so b) whether the use was a use in public; or c) whether the use was a secret use by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee's or nominee's predecessor in title to the invention, not being acts protected by s 9 of the 1990 Act. [This question is posed in terms of the 1990 Act as the 1952 Act is not more favourable to the applicant in its treatment of secret use: see par 76 above]. 156 The onus of proof is on the respondents to establish a clear case of invalidity: see Montecatini Edison SpA v Eastman Kodak Co (1971) 45 ALJR 593 at 595-596 per Gibbs J. The evidence adduced by the respondents as to the prior use of the invention is the oral evidence of witnesses to the alleged use based on their recollections of events years beforehand. The alleged use is said to have taken place in the course of trialling reverse circulation percussive hammers incorporating prototype face sampling drill bit assemblies. The particular assemblies have not been produced in evidence. Oral evidence led in these circumstances must be viewed with particular caution, partly for the reason that the memory of the witnesses is likely to have been influenced by other products seen in the meantime, and to reflect reconstruction on the basis of these later observations: see Commonwealth Industrial Gases Limited v MWA Holdings Pty Ltd (1970) 180 CLR 160 at 165-166, and Nicaro Holdings Pty Ltd & Others v Martin Engineering Co & Another (1990) 91 ALR 513 at 525 per Gummow J. (1) Prior use by Cherlor Air Drillers Pty Ltd and Lionel Simpson 157 This use is said to have occurred in May 1987 at Mineral Hills Gold Prospect, near Condobolin in New South Wales. The respondents called Mr Lionel Simpson, the former managing director of Cherlor Air Drillers Pty Ltd, and Mr Philip Kitson, a driller, to prove this alleged use of the inventions. The applicant called Mr Giehl, who denied that the apparatus used on the occasion deposed to by Messrs Simpson and Kitson incorporated or anticipated the invention. 158 The particulars of the alleged use describe the apparatus, said to have been used in exploration drilling, as: "…featuring a skirt or shroud mounted at the lower end of the drill sub extending over the drill bit. The skirt had an outside diameter greater than the sleeve of the reverse circulation hamme,r and a little less than the diameter of the drill bit. The skirt extended below the lower drive sub and around the sides of the drill bit. In order to accommodate the skirt the inner end of the head of the bit was ground away for approximately one half of the length of the head of the bit to a depth of approximately one half of an inch. The skirt was welded to the drive sub to keep it centralised to the drill bit and fixed to the drive sub." A drawing reflecting this arrangement is appended to the particulars. If the oral evidence led by the applicant established the particulars, a strong case of anticipatory use of the invention of the Giehl patent would be made out, provided that the use was a public use, in the sense that those present were not obliged to keep the trial confidential, and the trial was not a reasonable trial or experiment. 159 The first question is whether the particulars are established by the evidence. It is common ground between Messrs Simpson, Kitson and Giehl that a prototype manufactured by Mr Giehl was tested at Mineral Hills on 14 May 1987, that it did not perform well, and that there was discussion between Mr Giehl and Mr Simpson, in the presence of Mr Kitson, as to how sample recovery might be improved. 160 The evidence of Mr Simpson, supported by Mr Kitson, is that at the site on the day of the test Mr Simpson suggested that a skirt or a shroud be mounted at the lower end of the drive sub to extend over the drill bit. Mr Simpson gave evidence that this suggestion was further discussed by himself and Mr Giehl as the two men drove from the site back to Mr Simpson's home at Dubbo. Mr Simpson says that not only the drill bit, but the whole of the Giehl hammer assembly was returned from the site to Dubbo that day. At his workshop late that day Mr Simpson fabricated a skirt for the hammer. To mount the skirt it was necessary for Mr Simpson to grind away the inner head of the bit for approximately one half the length of the head. The skirt was then welded to the drive sub of the hammer. In addition, Mr Simpson says that he deepened the existing external airways in the drill bit in line with the splines as he considered that the original airways in the bit were not sufficiently deep to ensure that air was delivered to the bottom of the drill hole. 161 Mr Simpson's evidence was strenuously denied by Mr Giehl. Mr Giehl gave evidence that the conversation at the site concerned the probable beneficial effects of cutting grooves into the face of the bit leading directly from the periphery of the bit face to the sample retrieval holes. He denies that either at the site, or elsewhere, was there any discussion about a skirt or a shroud. Mr Giehl says that only the drill bit was returned to Dubbo, and that it was he, not Mr Simpson, who cut deeper grooves in the side of the head of the bit, and across the face of the bit with an angle grinder. 162 Mr Giehl says he left Dubbo the following day to return to Adelaide, on the understanding that Mr Simpson would return to the test site and test the modified drill bit in the Giehl hammer. Mr Giehl says that he received a facsimile from Mr Simpson dated 19 May 1997 which discussed the performance of the modified drill bit. Mr Giehl, on his return to Adelaide, had prepared another drill bit with deeper grooves properly machined into it, which was sent to Mr Simpson for further testing. Mr Giehl says that on 25 May 1987 he received a further facsimile from Mr Simpson reporting on the testing of the properly machined drill bit. Two facsimiles bearing transmission dates of 19 May and 25 May 1987 were produced by Mr Giehl. Neither facsimile makes any reference to a shroud or skirt. The second of the facsimiles is strongly supportive of the evidence of Mr Giehl that the modifications being tested concerned the characteristics and depth of grooves machined into the drill bit head. 163 Sometime later, after Mr Simpson and Mr Giehl had fallen out because of adverse comments Mr Simpson had made about the Giehl hammer, Mr Giehl requested that the prototype hammer which had been tested at Mineral Hills be returned to him. The hammer, but not the drill bits, were returned. He says that the hammer and drive sub showed no sign of having been modified, and there was no evidence to suggest that a skirt or shroud had at any time been attached to the drive sub. 164 Mr Giehl gave evidence at length about the development of his prototypes, and the trials of them which are the subject of the respondents' allegations of anticipatory use. He gave his evidence in a straightforward way, and there is nothing about either the content of his evidence, or the manner in which it was given, that causes me to doubt its general reliability and truthfulness. On the other hand, there were aspects of the evidence of both Mr Simpson and Mr Kitson which cause me to doubt their reliability. In particular: · In his oral evidence Mr Simpson said that he had "always" suggested to Mr Giehl that a shroud was necessary, and that he was surprised that the prototype hammer which Mr Giehl brought to the test was not fitted with a shroud. This evidence was contrary to his earlier written statement where he asserted that the suggestion was made on the site. When this was pointed out to him in cross examination he said that his written statement was wrong; · Mr Simpson said in evidence that he had told other people about his testing of the shroud on Mr Giehl's prototype. When pressed, he could identify only Mr Ted Rear as the person so informed. Other evidence establishes that Mr Rear was in discussion with the respondents' advisers in Adelaide about this case shortly before Mr Simpson's evidence was given. Mr Rear was not called by the respondents, nor was any reason for his absence proffered by them. Mr Rear is himself a designer and manufacturer of drilling equipment. It is significant that neither he nor anyone else adopted a shroud in the two years which followed the testing. Had the shroud been used in May 1989 with the degree of success now claimed by Mr Simpson, it is indeed surprising that no one took up the improvement – in particular either Mr Rear or Mr Giehl himself; · In response to Mr Giehl's pre-trial statement identifying the facsimiles, Mr Simpson in his statement in response merely noted that "The extracts of the fax referred to in Mr Giehl's statement appear to me to be incomplete. Unfortunately I do not have a copy of the fax…". He did not otherwise seek to answer those parts of the second fax which clearly refer to the characteristics of the grooves in the head of the bit. In cross examination he said that the faxes had been prepared by his wife. No evidence as to the incompleteness of the faxes was forthcoming from her; · In the course of his cross examination, Mr Simpson suggested that the second fax was one sent in 1990 dealing with the testing of a completely different hammer owned by Mr Giehl. This assertion was surprising, first because it was not raised earlier in response to the production of the second fax by Mr Giehl in his written statement, and secondly because the evidence suggests that the two men had earlier fallen out and had not collaborated since. When pressed about the transmission date shown on the foot of the second fax, Mr Simpson asserted that the fax had been fabricated. I reject that suggestion entirely, and, in my opinion, the fact that the suggestion was made is indicative of how lightly Mr Simpson treats the truth. The frank way in which Mr Giehl conceded matters put to him in the course of his cross examination is quite inconsistent with the conduct of a witness prepared to fabricate evidence to advance a cause; · I was unimpressed by the evidence of Mr Kitson. He was plainly wrong about the circumstances in which he came to give a declaration in opposition proceedings brought by Pasdonnay Pty Ltd against the SDS patent application, and his evidence about the preparation of the statement was not credible. He also denied having discussed his evidence in the present proceedings with Mr Simpson in the course of their travel from Dubbo to Adelaide to give evidence, when it is plain that there was relevant discussion between the two men. 165 As the respondents carry the onus of proof it would be sufficient to find in the applicant's favour that I am not satisfied that the onus of proof has been discharged, and that the respondents have not clearly made out an anticipatory use of the inventions. However, I go further and make positive findings as I think the evidence justifies me doing so. I accept the evidence of Mr Giehl that there was no discussion about a shroud or sleeve between himself and Mr Simpson at Mineral Hills. I reject the evidence of both Mr Simpson and Mr Kitson to the contrary, and I also reject Mr Simpson's evidence that he conceived the idea of a shroud or sleeve in May 1987, and his evidence that he fitted such an improvement to the Giehl hammer. 166 In light of this finding it is not necessary to consider whether the testing of the prototype at Mineral Hills was conducted in circumstances that imposed obligations of confidentiality upon those present, nor whether it was a use for the purpose of reasonable trial or experiment only. (2) Prior use by Werner Giehl in 1985 167 This allegation concerns an alleged anticipatory use of the inventions of both patents in suit by Werner Giehl when trialling his first prototype at Kambalda in 1985. 168 The respondents' particulars allege the use in exploratory drilling of a reverse circulation percussive hammer featuring a shroud between the body of the hammer and the drill bit, comprising a piece of pipe welded on to the end of the drive sub which had a configuration as shown in an annexed drawing. It is said that the use was not secret as claimed by Werner Giehl as it was conducted in the presence of persons who were not under any obligation of confidentiality, namely Greg Botica, Alex Mahony, Stan McMann and Kevin McCoombe. The drawing, prepared by the respondents for the purposes of the proceedings, depicts a piece of pipe welded on to the drive sub so that the greater length of the pipe extended towards the face of the bit, and covered approximately half the distance between the weight bearing shoulder of the bit and the cutting face, being a length more than one third the diameter of the face of the drill bit. 169 None of Messrs Botica, Mahony, McMann and McCoombe gave evidence. The only evidence touching on the 1985 alleged prior use in Kambalda comes from Mr Giehl himself. His evidence is that the body of the hammer of the first prototype, which he refers to as the "drill sleeve", was six and a quarter inches in diameter, and the drill bit was six and a half inches in diameter. It was taken by him to Kambalda to be tested on a site operated by Western Mining Corporation. The arrangements were made for that test to be carried out by two employees of Western Mining Corporation who were also acting in another capacity as Mr Giehl's agents for the promotion of his business. On the first test of the assembly it became stuck. Mr Giehl made arrangements during the lunch break to access a machine shop where he was able to machine down the entire length of the outer surface of the body of the hammer (the drill sleeve) to about six inches in diameter. He did this to create a larger gap so as to prevent the hammer sticking in the hole. Having done this, he was concerned that the size of the hole would cause an excessive escape of air which might compromise the efficiency of sample collection. To fill in "the gap" he decided to weld a piece of pipe over the drive sub. A piece of pipe of suitable diameter was found in the machine shop and tack welded on to the drive sub. The precise dimensions of the attached pipe are not disclosed by the evidence. In cross examination Mr Giehl said that the pipe extended below the drive sub by half an inch. He said that in welding the pipe on to the drive sub he was not concerned with directing air to the face of the bit. The following exchange occurred in cross examination: "You say you welded it after your concern that reducing the diameter would allow blowblack? (sic)---That's correct, yes. You welded at the bottom of the sleeve, near the bit?---Yes. And the purpose of it was to?---Fill up the hole. Yes, make sure the air went down towards the bit?---That's right. And down towards the face of the bit?---At the time, it was mostly to fill up the hole. To fill up the hole to stop the air blowing back up the hole? You've nodded, that's - - -?---Yes. So you knew that welding the pipe on would stop the air blowing back up the hole?---We hoped so. That, therefore, the air would flow down the hole?---Yes. And the purpose of the pipe being welded on was to direct the air down the hole?---Yes. Well, once you fill up the hole, it has to go down. We hoped so, anyway. To direct it down the hole to the face of the bit?---Yes." 170 The assembly so described, with the piece of pipe extending not more than half an inch below the drive sub, does not have the characteristics of the sleeve shown in the drawing appended to the particulars. The evidence fails to establish that in the assembly the attached piece of pipe had the effect of transmitting air in the manner described in the SDS patent, or that in operation it would form with the channels in the drill bit conduits to direct air by reason of passage through one or more of the conduits directed at the periphery of the cutting face of the bit as required by the Giehl patent. Indeed, the evidence fails to describe either the characteristics of the drill bit used in the trial, nor any information about the exhaust flow of air from the reciprocating hammer. 171 It is clear that accidental, experimental or de minimus use will not deprive an invention of novelty. Where experimental use produces a product which is rejected as useless before its true potential is revealed that experimental use may not constitute a prior use of the invention: Monsanto Co (Brignac's) Application [1971] RPC 153 at 165. In the present case, if the relatively small projection of the pipe beyond the drive sub had any significant effect on directing air in the manner claimed in the patents in suit, that fact was not recognised as the hammer so modified did not work satisfactorily. The use plainly was experimental and moreover, was de minimus: see Boyce v Morris Motors Limited (1926) 43 RPC 105. (3) Prior use by Drillquip 172 Against both patents in suit anticipation is alleged by the prior use by Pasdonnay Pty Ltd (trading as Drillquip International) in 1989 at Peak Hill and Kalgoorlie, Western Australia of reverse circulation percussive hammers featuring: "(a). a sleeve between the body of the hammer and the drilling bit as illustrated in 'Figure 5' annexed hereto; and (b). a shroud between the body of the hammer and the drilling bit as illustrated in 'Figure 6' annexed hereto." Figure 5 shows a sleeve fitted at the lower edge of the housing of the hammer so as to protect the otherwise uncovered outer surface of the drive sub. The drawing indicates a "replaceable sleeve which reduces annular space between hammer and bore hole". The sleeve does not extend below the drive sub. Figure 6 shows a "replaceable shroud which encapsulates head of bit and directs air to face of bit" which is again fitted at the lower end of the housing of the hammer so as to cover the otherwise exposed outer surface of the drive sub and extends therefrom towards the cutting face of the bit so as encircle the head of the bit for at least half the distance between the shoulder of the bit and the cutting face. 173 Presumably these figures were prepared by the respondents for the purposes of these proceedings, but neither drawing was proved in evidence by any of the witnesses called in support of this allegation. The alleged uses are said to have occurred during the testing of Drillquip reverse circulation hammers designed as TRC 55 (in March 1989) and TRC 45 (in November 1989). There is however no evidence before the Court which depicts the actual dimensions of either of those hammers. The hammers themselves are not in evidence. 174 The use alleged is not by the patentee or predecessor entitled to either invention. It is use by a third party. The case has been conducted on the basis that such a use of an apparatus which has all the essential features or integers of the patents in suit, and is not a secret use, would anticipate the claimed inventions. This approach appears to be in accordance with the law: see Lahore Patents, Trade Marks and Related Rights 1996 at 12,735. 175 The respondents called three witnesses in support of the alleged anticipatory use, Messrs Alan Bennett, Gavin Redmond and Bevan Ritchie. A Mr Miller who was present at the testing in November 1989, who is alive and presumably available to give evidence, was not called by the respondents. Mr Ted Rear, the principal of Drillquip who was intimately involved with the trials and testing for Drillquip equipment in 1989 and 1990, was also not called by the respondents. Freehand sketches prepared by Mr Ritchie on the eve of his evidence, to illustrate the sleeve or shroud, were tendered in evidence and identified as BRRA, BRRB and BRRC. Freehand sketches prepared by Mr Redmond, annexures GR5 and GR6 to his affidavit, were also tendered. None of the sketches is dimensioned, or purports to be to any particular scale. They do not show cross sectional views, and are uninformative about the internal and hidden features of the apparatus such as would enable the adequate identification of features said to correspond with the features or integers of the patents in suit. Moreover, in the years intervening between the alleged uses, and the preparation of the sketches, the memories of both Mr Ritchie and Mr Redmond are likely to have been influenced by the development and success of shrouds and sleeves of the kind claimed in the patents in suit which are now common in the market place. 176 The inadequacy of the sketches, and the evidence generally, as to the characteristics, configuration and operation of the apparatus said to anticipate the inventions of the patents in suit in my opinion is sufficient to lead the Court to conclude that the respondents have not clearly made out a case of invalidity of either patent on the ground of anticipation by prior use. That that is the proper conclusion to draw is strongly supported by evidence that Pasdonnay pursued at length and with vigour proceedings mounted both under s 27 and under s 59 of the 1990 Act before the Commissioner of Patents, and in those proceedings in 1993, when memories were less likely to be influenced by later improvements in drilling systems, no mention at all was made by Pasdonnay, or by Messrs Rear and Ritchie, both of whom made declarations in the proceedings, about the testing of sleeves or shrouds by Pasdonnay Pty Ltd (Drillquip) in 1989 or 1990. 177 According to the evidence of Mr Ritchie the first of the trials featuring a "sleeve" occurred in March 1989 at Peak Hill. A test was conducted by Mr Bennett, in his capacity as a drilling supervisor at Peak Hill. Mr Bennett's evidence as to the apparatus tested was both general in nature, and not helpful in determining the characteristics of the "shroud" which he claims were used. Significantly, however, Mr Ritchie, who would be better positioned to know what was trialled, says that the trial concerned the item depicted in his sketch BRRA. That is merely a sleeve that does not extend beyond the drive sub, and on the most favourable view of the evidence from the respondents' viewpoint, would operate like the compensating ring in the DTA compensating ring patent. It does not exhibit the features or integers of either of the patents in suit. 178 In his evidence at trial Mr Ritchie said that the assemblies depicted in his drawings BRRB and BRRC were trialled by Mr Redmond and Mr Miller at Kalgoorlie. Mr Redmond kept no relevant records of his drilling or testing, and I am satisfied (by the evidence of Mr Tye in particular) that Mr Redmond has no reliable recollection of the dates upon which the various tests were performed. It may be that at some time he tested apparatus for Drillquip that included a shroud which was at least superficially similar to one of the embodiments of the patents in suit, but his evidence does not establish that the event occurred before April 1990. Mr Ritchie kept a diary at the time, some extracts of which have been copied into a statutory declaration he made in the proceedings before the Commissioner of Patents. However, the diary has now been lost. The only entry which might relate to the events about which he gave evidence at trial is one dated 30 November 1989 concerning a communication with Mr Miller wherein Mr Miller said that he would try a Drillquip hammer again "with a drive sub shroud". Mr Ritchie had no independent evidence which would enable him to date the events about which he spoke. The diary entry just mentioned anticipates future conduct by Mr Miller, but there is no evidence from him or from any other source either that the forecast event occurred, or when it occurred. Mr Ritchie may now be confused about dates, a possibility which might explain why no reference was made in his 1994 statutory declaration filed with the Commissioner of Patents to the testing now described by him. 179 The evidence fails to establish a clear case of invalidity of the patents in suit by reason of prior uses by Drillquip which anticipated the inventions. Further, the evidence shows that Drillquip is an organisation that is sensitive to confidentiality requirements of patentable subject matter and that it would expect its employees and drillers engaged to assist in testing to maintain confidentiality. Both Mr Bennett and Mr Redmond acknowledged that obligation. In the circumstances the evidence supports a finding that the Drillquip uses of the assemblies being tested in 1989 were secret uses for the purpose of reasonable trial or experiment. As such, the uses were not uses in public which disclosed the features of the apparatus being trialled. (4) Use by Werner Giehl in March 1990 (5) Secret use by Werner Giehl March 1990 180 These two alleged uses may conveniently be discussed together. In the course of developing his third prototype in late 1989 – early 1990, Mr Giehl had a number of tests conducted by a friend in whom he had confidence, Mr Peter Gaden of Gaden Drilling, in the Northern Territory. On the last of these occasions, a hammer which is represented in the preferred embodiment of the Giehl patent was trialled. Mr Giehl considered that the shroud directed air in a new and significant way, and overcame the problems that remained in drilling assemblies reflecting the prior art. It is plain on the evidence that these tests were conducted secretly for the purpose of reasonable trial and experiment only, and they are not relied upon by the respondents as an anticipatory prior use. However, the events which followed are relied upon by the respondents. 181 At the conclusion of the testing Mr Gaden encouraged Mr Giehl to apply for patent protection of the hammer assembly saying, according to Mr Giehl, "Werner, patent that thing: none of them got it there yet…they haven't woken up to it". Mr Giehl says he returned to Adelaide and forthwith consulted the patent attorney who had assisted him in obtaining the 1987 Giehl patent. The provisional application for the Giehl patent was filed on 19 April 1990. The evidence relied upon by the respondents is contained in a short section of Mr Giehl's cross examination as follows: "Yes?---I knew Mr Gaden for 20 years and I would have done business with him for 20 years. That's right, and when you went up to Darwin in connection with the events that you describe regarding the third prototype in your statement, was that in connection with the supply of equipment to him?---No, that was already to – the hammer, what he had there. But I suggest to you you had other business reasons for going up to see him as well as testing the hammer?---No, it was at that time for testing. We only went up for testing. The business, what we did, he done with the fax and talk to my people at the office. So didn't – we just brought that up in between driving. I see, but during this period he did order other equipment from you?---Yes. Which you supplied?---Yes, lots of it. And he was in the habit of ordering equipment from you?---Yes. I suppose you regarded him as a good potential customer for when your hammer was ready for the market?---He was. He was?---Yes. When you were up there developing the hammer, as you say in your statement, you discussed with him I suppose supplying the hammer to him?---Yes. Did he say he wanted to order some?---He did. Was that while you were up there testing it?---No, the ordering came in afterwards, once we had tested them, and we only had the one hammer there. We had to run it, we had to bring it back, then we made the second one up. I had to bring it back – like, the same identical hammers, one up, one down, one up, one down. But while this was happening he must have said to you things like, 'Well, if this works I'll want to buy some'?---That's right, yes. So you knew he was a potential customer if you'd got a product that worked?---He always was a good customer. … And then in [your witness statement] you say, 'On my return to Adelaide in about March 1990 I manufactured several more hammers in accordance with the design of the final version of the third prototype' - - -?---That's right. '- - - which included the cover.' Is that right?---That's correct. Now, that was after you'd done all the testing and the third prototype, so far as you were concerned, was working?---That's right. The hammers you manufactured there, you manufactured for sale?---Afterwards, yes. When you returned to Adelaide in about March 1990?---It was still a bit later. Well, you see, you say there in [your witness statement], 'On my return to Adelaide in about March 1990 I manufactured several more hammers in accordance with the design of the final version of the third prototype'?---That's correct. Do you see that?---That's correct. That was immediately on your return to Adelaide?---Can I say something? Well, was it immediately on your return to Adelaide?---It was immediately, yes. You manufactured several hammers?---Lots of them. Yes. And so far as you were concerned, the hammers you manufactured were ready to work?---That's right. But you didn't sell any of them?---Until later. Until later. You didn't sell any of them until Mr Schulze had filed the provisional application of 19 April 1990?---That's correct. How many of the hammers you manufactured did you have in stock on 19 April 1990?---I would have had about 15 or 20. 15 or 20?---Yes. They were manufactured and it was your intention to sell them?---That's correct. You knew that Mr Gaden was likely to buy one or more?---He already ordered at that time five or six. What, he gave you that order then you were up in Darwin?---When we were there, yes. He said, 'Make us some hammers up and let us know afterwards.'" 182 Upon this evidence the respondents contend firstly that the invention was used before the priority date by the manufacturer of hammers in accordance with the claims of the Giehl patent in or about March 1990, and, in the alternative, by "the placing of an order to purchase five or six of these hammers placed by Peter Gaden of Gaden Drilling made orally to Mr Giehl in Darwin in about March 1990". 183 Against the Giehl patent it is also pleaded that the same conduct, the manufacture and "the placing of an order", constituted a secret use by Mr Giehl. 184 It is not clear on the evidence that the order by Mr Gaden to purchase five or six hammers was made orally by Mr Gaden to Mr Giehl in Darwin in about March 1990. In light of the apparent success of the confidential trials which Mr Gaden, a drilling contractor, had performed and witnessed, it is not surprising that he expressed interest in acquiring hammers of the same design if and when they became available. However, he was aware of the confidentiality of the testing, and it is reasonable to conclude he was also aware that steps were to be taken by Mr Giehl to obtain patent protection. 185 On one view of Mr Giehl's evidence, the orders for five or six hammers were received by him after he returned to Adelaide. Perhaps it does not matter whether the orders were made orally in Darwin or were received by written communication later in Adelaide. On either view orders were placed by Mr Gaden, and received by Mr Giehl prior to 19 April 1990. Possibly Mr Giehl commenced manufacture of the fifteen to twenty hammers before the order was received, but even if this were not so it is reasonable to assume that at least some of the hammers were manufactured after the order was received and before 19 April 1990. 186 The respondents contend that upon this evidence the decision of the Court of Appeal in Re Wheatley's Patent Application (1984) 2 IPR 450 is decisive in the respondents' favour. According to the head note of that case the applicant invented a new kind of pull key to stop conveyor belts and other machinery used in coal pits. He demonstrated a prototype at a meeting with an official of the National Coal Board (NCB). At the meeting the applicant indicated that the internal workings of the prototype were "secret and confidential" and the NCB official apparently accepted this. As a result of this demonstration, an oral order for ten pull keys was placed with the applicant by the NCB. The order was later confirmed in writing. The applicant filed his patent application on the same day as he delivered the pull keys to the NCB. The application was opposed on the ground of alleged prior use by the oral order and its subsequent written confirmation. The Patents Court held that there had been a prior use, and this decision was upheld by the Court of Appeal which held that the applicant had dealt commercially in the invention before he had obtained any patent rights, and that constituted a "use" which was not a "secret use". 187 In my opinion the decision in Re Wheatley's Patent Application is distinguishable. A critical finding of fact in that case was that Mr Wheatley accepted the order when it was placed by the NCB. Lawton LJ at 451 noted this fact and said: "The applicant accepted the offer. It is likely that price would have been mentioned and discussed. By accepting the order he had undertaken when the time came for delivery to transfer to the NCB for gain and commercial advantage to himself the products of his invention. The NCB got a legal right to delivery of these pull keys and on delivery to do what they liked with them." Oliver LJ agreed, as did Dillon LJ who said at 455: "Any sale or agreement for sale of articles made according to the invention is, on the natural meaning of words, a use of the invention and as the acceptance of the order from the NCB took place before the priority date and was not secret, the opponents must succeed." 188 A similar conclusion had been reached long before in the case of Hudson, Scott and Sons Limited v Barringer, Wallis and Manners Limited (1906) 23 RPC 79 where Kekewich J at 88 held that there had been a prior use of an invention where he had before him "distinct evidence of orders given and secured before the date of the patent, orders which, if they were not fulfilled would be a foundation for an action … That, to my mind, is distinct user." 189 What anticipates an invention is "use" in public. There will be such a use in public if in advance of obtaining patent protection, the patentee enters into an enforceable contract of sale, or has engaged in the commercial promotion of an embodiment of the invention by offering it for sale (Hudson Scott & Son Limited at 87) or by display and gift of a sample (Fomento Industrial SA, Biro Swan Limited & Anor v Mentmore Manufacturing Co Ltd). Such conduct by the patentee places the invention on the market and constitutes use in public. In the present case, however, Mr Giehl did not engage in conduct of this kind. He did not place his invention on public display or seek to solicit orders from the public. There is no evidence that the unsolicited order received from Mr Gaden was accepted by Mr Giehl prior to 19 April 1990. The effect of his evidence is to the contrary. Mr Gaden had become aware of the invention in circumstances which placed upon him an obligation to keep his knowledge confidential. By placing an order Mr Gaden could not convert the confidential information in his possession to public information, nor could he convert a confidential, secret use to a public use by this means. The confidence, the secrecy, was that of Mr Giehl. It required some action or consent by Mr Giehl to waive the confidence and to remove the secrecy. Acceptance of the orders by Mr Giehl would have done so, but there is no evidence that he accepted them before the priority date. 190 In my opinion there was no use in public of the invention by Mr Giehl in March 1990 or thereabouts which was anticipatory of the inventions in the patents in suit, such that those inventions were not novel in Australia on the priority date. 191 The respondents also allege that the manufacture of the fifteen to twenty hammers before the priority date was a secret use which prevented the invention from being a patentable invention on 19 April 1990. One of the historical bases for the secret user ground of revocation was to prevent a patentee from gaining a longer monopoly than the statutory period of sixteen years by enjoying a period of de facto monopoly through the secret user without meeting the corresponding obligation attaching to such a monopoly, namely the public disclosure of the invention. It is against this rationale that the exemption in respect of use for the purpose of reasonable trial and experiment only is to be understood. There is authority that a prior secret use, if it is to invalidate a patent, must be a commercial use, although not every commercial use will necessarily be outside the concept of a reasonable trial and experiment only: see Ricketson The Law of Intellectual Property 1984 at 49.27 and International Paint Co Ltd's Application [1982] RPC 247 at 274. Whether or not a particular secret use is for the purposes of reasonable trial and experiment only is a question of fact and degree in each case, depending on all the circumstances including the nature of the invention in question: see Harrison v Project & Design Co (Redcar) Ltd [1978] FSR 81 at 89 and Young et al Terrell on the Law of Patents 14th ed 1994 at 5.41. In the present case the trial and experimentation conducted in Darwin in March 1990 was of a single prototype hammer. In my opinion reasonable trial and experiment of the invention would extend to the use of the invention in proceeding from that prototype to the production of commercial quality hammers for sale. Without actual manufacture of a commercial quality product, it would be difficult to know whether the invention would be economically viable, and whether other modifications were required to perfect the invention. I consider the manufacture of fifteen to twenty hammers in the period of less than one month following the trials in Darwin is within the scope of reasonable trial – at least that view is open on the very limited evidence elicited from Mr Giehl about the manufacture, which did not inquire of him what was involved in proceeding from prototype to commercial production, and why fifteen to twenty hammers were made when they were. I am not satisfied that the respondents have made out a case for revocation of the Giehl patent on the ground of secret use not being for the purpose of reasonable trial or experiment only. 192 However, whether or not that view be correct, in my opinion the manufacture of the fifteen to twenty units, none of which was exposed for public view, or offered for sale before the priority date, comes within the exception from secret use provided in s 9(b) of the 1990 Act. In the manufacture of those units the invention was used by and on behalf of the predecessor in title of the invention, that use being a confidential use which did not involve disclosure of the invention to anyone other than employees of Mr Giehl engaged upon the manufacture. SDS patent – novelty and fair basing: meaning of "drill bit retaining means" 193 The provisional specification PJ9817 of the SDS patent filed on 26 April 1990 refers in several places to "drive sub". When the complete specification was filed on 12 December 1990 the expression "drill bit retaining means" was substituted. The respondents contend that the expression "drill bit retaining means" is wider in meaning than "drive sub", that the complete specification is therefore not based on the provisional specification, and that the earliest priority date of the SDS patent is therefore 12 December 1990. As there had been sales of articles made in accordance with the SDS patent before that date, the patent is invalid on the ground of lack of novelty. 194 The respondents argue that the "drill bit retaining means" is a description of split rings within the drive sub which have the function of preventing the drill bit sliding out of the drive sub when the bit is not subjected to upward pressure from the surface being drilled. 195 The expression "drill bit retaining means" must be read in context. Whilst in another context, the expression might fairly describe split rings within a drive sub, in the context of the provisional specification the expression "drive sub" is used in a broad way to describe one of three components of a down hole hammer, the other components being the outer sleeve of the hammer itself, and the drill bit. The specification is not concerned to describe the mechanical way in which a drill bit is retained within the drive sub. The method by which the drill bit is retained is not a feature or integer of the invention. 196 The expression "drill bit retaining means" is not an engineering term. It carries its ordinary English meaning. The complete specification teaches that the drill bit retaining means is in the form of a drive sub and that the two expressions are used interchangeably. This is made clear in two places where the complete specification has been amended by manuscript insertion, but I think that this is clear in any event without the additions. For example from figure 3 and the description of that figure in the body of the specification, it is clear that the drill bit is retained in the "drive sub" and that this description is of the same feature which is elsewhere described as a drill bit retained in "the retaining means". 197 I do not accept the respondents' contention that the SDS patent is not fairly based on the provisional specification. In my opinion, the priority date of the claims of the SDS patent is 26 April 1990. Both patents in suit – obviousness 198 The respondents contend that the inventions disclosed in both patents in suit involved no inventive step and would have been obvious to the notional person skilled in the art, in light of the common general knowledge as at the relevant priority dates. The respondents contend that the notional person skilled in the art is a person (or combination of persons) skilled in the art of the design, manufacture and use of reverse circulation down hole hammers as at the priority dates. On this point the applicant appears to be in substantial agreement as it contends that the relevant addressees include all those people involved in the design, manufacture and use of down hole drilling equipment, although the applicant then says that neither Mr Stevens nor Mr Schwann answer this description. I do not think it unfair to any of the witnesses called to give evidence as skilled addressees to observe that not one of them had expertise in each of the three designated fields. The expertise of each of them was confined primarily to a particular aspect of the drilling industry. Of the witnesses called I have already expressed my general preference for the evidence of Mr McGoggin. 199 The Court must guard against determining the issue of obviousness in "the glare of hindsight": Lahore Patents, Trade Marks and Related Rights 1996 at par 12,865. The question of obviousness must be judged in light of the common general knowledge of relevantly skilled addressees at the priority dates of the patents in suit. It pays to repeat the observations of Lord Russell of Killowen in Non-Drip Measure Co Ltd v Stranger's Limited (1943) 60 RPC 135 at 142, a passage cited with approval by Menzies J in Commonwealth Industrial Gases Limited v M W A Holdings Pty Ltd & Others (1970) 180 CLR 160 at 163164: "Whether there has or has not been an inventive step in constructing a device for giving effect to an idea which when given effect to seems a simple idea which ought to or might have occurred to anyone, is often matter of dispute. More especially is this the case when many integers of the new device are already known. Nothing is easier than to say, after the event, that the thing was obvious and involved no invention. The words of Moulton LJ (British Westinghouse Electric Manufacturing Co v Braulik (1910), 27 RPC 209, at p 230) may well be called to mind in this connexion: - 'I confess' (he said) 'that I view with suspicion arguments to the effect that a new combination, bringing with it new and important consequences in the shape of practical machines, is not an invention, because, when it has once been established, it is easy to show how it might be arrived at by starting from something known, and taking a series of apparently easy steps. This ex post facto analysis of invention is unfair to the inventors, and in my opinion it is not countenanced by English patent law.' My Lords, it is always pertinent to ask, as to the article which is alleged to have been a mere workshop improvement, and to have involved no inventive step, has it been a commercial success? Has it supplied a want? Some language used by Tomlin J in the cse of Samuel Parkes & Co Ltd v Cocker Bros Ltd (1929), 46 RPC 241, at p 248, may be cited as apposite: 'Nobody, however, has told me, and I do not suppose that anybody ever will tell me, what is the precise characteristic or quality the presence of which distinguishes invention from workshop improvement … The truth is that when once it has been found, as I find here, that the problem had waited solution for many years, and that the device is in fact novel and superior to what had gone before, and has been widely used, and used in preference to alternative devices, it is, I think, practically impossible to say that there is not present that scintilla of invention necessary to support the patent.'' No evidence is more cogent of the success of the invention than that the defendants simply copied it and made profits by making and selling the products." That quotation emphasises the well known principle that "a scintilla of inventiveness" is sufficient. The observation that such a degree of inventiveness is likely to exist where it is found that the problem has awaited solution for a long time, and that the device claimed as an invention is in fact novel and superior to that which has gone before, in my opinion has particular application in the present case. 200 In Wellcome Foundation Limited v V R Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 270 Aickin J (with whom the other members of the Court agreed) formulated the question to be asked as follows: "It is as well to bear in mind that the question of obviousness involves asking the question whether the invention would have been obvious to a noninventive worker in the field, equipped with the common general knowledge in that particular field as at the priority date, without regard to documents in existence but not part of such common general knowledge." See also W R Grace & Co v Asahi Kasei Kogyo Kabuschiki Kaisha (1993) 25 IPR 481 at 491-493, a decision of a Full Court of the Federal Court. Pertinent to this case are observations of the Full Court made at 493 in relation to the significance of trade articles and publications which were said to form part of common general knowledge in Australia: "It is necessary, of course, for the material in the articles to have become part of the stock of the common general knowledge of the hypothetical skilled addressee…and it is not sufficient that it is simply public knowledge. It must become part of the common stock of knowledge of the hypothetical skilled addressee in relation to the art or science." 201 The respondents contend that the relevant common general knowledge at the priority date included: (a) a number of reverse circulation hammers including: (i) the DTA reverse circulation hammer including a hammer with a compensating ring or sleeve according to the DTA compensating ring patent; (ii) the Drillquip reverse circulation hammer, the subject of the field testing at Peak Hill in Kalgoorlie in November 1989; (iii) the Bulroc hammer; (iv) the Samplex hammer; (v) tri-cone bits with shrouds and reverse circulation rotary drilling; (b) reverse circulation drilling using tri-cone bits including tri-cone bits with a sleeve or shroud directing air to the cutting face of the bit; and (c) matters including build up of the drive sub, sealing the hole, the need to direct air to the face of the bit, wear characteristics / wear rates "in use" and relevant drilling practices directed to achieving efficient sample recovery using a reverse circulation percussive hammer associated with a face saving drill as recognised in the general preamble in the body of the SDS specification. 202 In light of this common general knowledge the respondents contend that it would have been obvious to a person skilled in the art that a sleeve or shroud could be used to direct air downwards towards the face of the bit, and, further, such a person would encounter no difficulties in attaching or using such a device or shroud to achieve that end. It is contended that the obviousness of the SDS invention can be illustrated by the fact that a number of persons in the industry independently arrived at the concept at about the same time as the invention of the SDS patent, or beforehand, namely Lionel Simpson, Werner Giehl and Drillquip (including Mr Ritchie). The respondents called Mr Brian Sanfead, one of the inventors of the invention of the SDS patent, to say that he did not consider the SDS patent involved any inventive step. He said "this idea came to me naturally as a matter of routine when I was considering the modified bit. It seemed to me an obvious engineering solution to the problem concerning the bit and I thought of it without any difficulty…". At the time, however, he nevertheless joined with the other inventors in seeking patent protection. 203 Whilst not specifically referred to by the respondents in their final submissions, the pleadings also allege as relevant to the common general knowledge for the purpose of the objections to the patents in suit, an Australian patent number 604024 in the name of Ingersol Rand entitled "two piece downhole drill chuck" made open for public inspection on 4 February 1988, and also refer to the Mincon patent. 204 Mr Sanfead's assertion that the development of the SDS transmission sleeve was a matter of routine, and an obvious engineering solution to the problems being encountered in the industry with reverse circulation hammers in April 1990 is not decisive of the issue of obviousness. Even at face value I do not think that Mr Sanfead's evidence establishes the lack of an inventive step. The solution took a long time to come to him, notwithstanding that there had been discussion, so he says, as early as late 1988 that a shroud extending towards the face of the bit from the drive sub might improve performance. He says the notion of the transmission sleeve came to him as he was machining a drill head for another purpose. A form of sleeve was manufactured and trialled, and further modifications were made. Marked improvement in the performance of the drill assembly was evident. In due course, when the assembly was marketed, it was an instant success and collared the market. The combination of features involved was new. In my opinion, the success of the combination, and the general description of its development given by Mr Sanfead, indicates that there was an inventive step involved. Notwithstanding this interpretation of his evidence, however, I indicate that I do not accept Mr Sanfead's opinion as honestly stating the opinion which he held at the time. He presently has a shareholding in the first respondent, and a very direct interest in the outcome of these proceedings. He joined in the application for the SDS patent as one of the inventors and asserted then that the claims made involved an inventive step worthy of patent protection. Rather, I hold that he did so as he then believed the invention was patentable. 205 Neither Mr Stevens nor Mr Schwann proffered a personal opinion that the inventions of the patents in suit were obvious to them, or more importantly, would have been obvious to them on the priority dates. Rather, they made broad assertions about matters that would be of common general knowledge to persons experienced in the design and manufacture of drilling equipment at that time, despite neither of them being engaged in those fields. In preparing to give evidence in the case, and in their evidence, each of them was asked to consider the various patents pleaded as part of the prior art. Their ultimate conclusions, plainly, are influenced by interpretations which they placed upon those specifications which I have already rejected. Importantly, on the question of obviousness, neither of the witnesses claimed to have read or considered the specifications prior to April 1990 as part of their work duties. The patents, and much of the other information tendered through them which was said to be relevant to the question of common general knowledge, was supplied to the witnesses as part of a package of information put together by or on behalf of the respondents for the purposes of this case, years after the priority dates. 206 As for the patent specifications, and the various reverse circulation percussive hammers relied upon as evidence of prior anticipatory use, in my opinion they establish that by April 1990 the common general knowledge was as I have summarised it early in these reasons at para 18. Mining journals proved in evidence about particular drill assemblies gave only limited information. The evidence falls short of establishing that the specifications of the prior art hammers relied on, and the hammers themselves, were known in Australia other than by a very few people. It is doubtful that they had become part of the common general knowledge by April 1990. Apart from the Bulroc hammer, the other drill assemblies appear to have been unsuccessful and undergone only minimal trialling. Reference has already been made to the limited use of the Bakerdrill, Samplex and Halco-Lister hammers. There is no evidence of a drill assembly according to the Klemm patent being operated in Australia. As for the hammer according to the Mincon patent, there is no more than a suggestion that a Mincon hammer of unknown configuration was only briefly trialled in Australia, and was then discarded as having an unacceptable performance. The evidence regarding the Ingersol Rand patent indicated that it concerned a form of disposable wear ring, "the Chuck-It ring", but this ring was used only with a conventional circulation percussive hammer. Such a ring would teach nothing about the directing and transmission of exhaust air in a face sampling drill assembly. As for the prior uses by Cherlor Air Drillers, Pasdonnay and Werner Giehl, relied upon by the respondents, the evidence which I have accepted about those uses demonstrates, in my view, that the inventions the subject of the patents in suit were not obvious at the times of those events, or by the priority date. The uses alleged, which were in each instance experimental trials, were not followed up by the development of a shroud or transmission sleeve having the effect described in the specifications of the patents in suit. 207 I am persuaded by the evidence that the opinion of Mr McGoggin is correct, that as at the priority dates the inventions of the patents in suit would not have been obvious to a non-inventive skilled addressee involved in the design, manufacture and use of reverse circulation percussive hammers incorporating a face sampling drill bit. 208 In summary, I consider the evidence shows that as at the priority dates, it was not part of common general knowledge that it was necessary that the exhaust air from such hammers be constrained by a shroud or transmission sleeve, so that the air was released closer to the face of the bit, and that at the point of release the air was directed directly at the face of the bit. Hammers prior to the inventions of the patents in suit were designed to operate, and did operate, on the incorrect assumption that if there were adequate sealing means between the hammer assembly and the wall of the hole, exhaust air would flow across the face of the bit in a manner sufficient to entrain the cuttings, and transport them to the central collection tube. Non-compliance with section 40. 209 In accordance with ss 233(4) and 234(5) of the 1990 Act, only those elements of s 40 of the 1990 Act which are common to the 1952 Act are relevant to the validity of the patent. In Genetics Institute Inc v Kirin-Amgen Inc (No 3) (1998) 41 IPR 325 Heerey J at 336 considered that despite some drafting differences, s 40 of the 1952 Act and s 40 or the 1990 Act had the same effect, and accordingly applied s 40 of the 1952 Act in a case where the patent application was commenced under that Act, and not finally dealt with before the commencement of the 1990 Act. 210 Section 40(1) of the 1952 Act requires that a complete specification shall fully describe the invention, including the best method of performing the invention which is known to the applicant. The respondents contend that in the case of the SDS patent this requirement is not met, as the final integer which requires "the wear characteristics of the transmission sleeve being similar to that of the drill bit, whereby in use, the transmission sleeve wears at a similar rate to the drill bit" is nonsensical and lacking in meaning. The construction of this integer has already been discussed at para 48 above. If due regard is given to the concluding words of the integer "whereby, in use, the transmission sleeve wears at a similar rate to the drill bit", I consider it is clear that the integer refers to the transmission sleeve reducing in diameter at a similar rate to the gauge row buttons of the drill bit when in use. The teaching of the specification is that the transmission sleeve of the invention must be constructed such that the sleeve reduces in diameter at approximately the same rate as the gauge row buttons reduce in diameter in use. The concern of the inventor is that the sleeve of the invention reduces in outside diameter sympathetically with the inevitable reduction of the diameter of the gauge row buttons so as to prevent the hammer jamming, but not to reduce in diameter at a significantly greater rate as that would compromise the sealing means of the drill assembly. 211 The applicable principles are stated in Blanco White Patents for Inventions 4th ed 1974 as follows: "Para 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'. … Para 4-504. A specification is not insufficient merely because some experiment of a routine character (as distinct from 'prolonged research, inquiry or experiment' is necessary in each particular case; nor because it fails to give detailed instructions as to matters which a 'practical person…would naturally settle, and would expect to have to settle himself', provided he 'would find no difficulty in so doing'; nor merely because it fails to give detailed instructions as to matters not forming part of the invention." 212 The specification will contain a full description if it makes the nature of the invention plain to persons having reasonably competent knowledge of the subject, and makes it plain, to a skilled addressee, how to perform the invention: Patent Gesellschaft AG v Saudi Livestock Transport and Trading Company (1997) 37 IPR 523 at 530. 213 The degree of "sufficiency" required was discussed in No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231 at 243 where Romer LJ said: "…the Patentee fulfils his duty if in his complete specification he describes and ascertains the nature of the invention, and the manner in which the invention is to be performed, sufficiently and fairly. It is not necessary that he should describe in his specification the manner in which the invention is to be performed, with that wealth of detail with which the specification of the manufacturer of something is usually put before the workman who is engaged to manufacture it. Specifications very frequently contain mistakes; they also have omissions. But if a man skilled in the art can easily rectify the mistakes and can readily supply the omissions, the patent will not be held to be invalid. The test to be applied for the purpose of ascertaining whether a man skilled in the art can readily correct the mistakes or readily supply the omissions, has been stated to be this: Can he rectify the mistakes and supply the omissions without the exercise of any inventive faculty? If he can, then the description of the specification is sufficient. If he cannot, the patent will be void for insufficiency." 214 The evidence establishes that skilled people involved in the design and manufacture of reverse circulation down hole hammers as at the priority date would have no difficulty in manufacturing a flange having the characteristics described in the specification. The design and manufacture of the transmission sleeve would involve no more than continuing to apply existing, known technology about the material to be used, about machining, and about heat treatment of the component parts. The "wear characteristics" integer is defined by reference to the result which is to be achieved (as to which, see Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 480 per Barwick CJ and Mason J). The teaching in the specification is in my opinion sufficient for the result to be obtainable by the exercise of the common general knowledge of those to whom the specification was addressed. 215 I consider the SDS patent is not rendered invalid on the ground that the "wear characteristics" integer and the description pertaining to it in the specification is devoid of meaning, or constitutes a failure to fully describe the invention. SDS patent – false suggestion and inutility 216 These alleged grounds for revocation of the SDS patent are closely related. The ground of false suggestion is provided for in s 100(1)(k) of the 1952 Act and s 138(3)(d) of the 1990 Act, and the ground of inutility is provided for in s 100(1)(h) of the 1952 Act and, by virtue of ss 18(1)(c) and 138(3)(c), is a ground under the 1990 Act. The respondents' allegations under both grounds concern the "wear characteristics" integer of the claims. The alleged grounds are related because it is suggested that the false suggestion is a misrepresentation as to the nature or "utility" of the claimed invention. In Lahore Patents Trademarks and Related Rights 1996 at para 12,980 the relationship of these two grounds is discussed: "If the patentee has claimed that his invention will achieve a particular result and it is incapable of doing so, the patent will be bad for lack of utility. If on the other hand the specification contains statements which are subsequently shown to have been 'over-sanguine and erroneous' an objection to validity should more properly be based on false suggestion. This assumes that the inventor has not claimed that particular level of performance can be achieved; if he has, then inutility is a more apt objection." (footnotes omitted) 217 In the SDS specification it is stated that: "The sacrificial transmission sleeve of the present invention is designed to provide an effective seal between the bore of the hole and drill tube and to wear down at a similar rate to the drill bit thus maintaining the seal throughout the lifetime of the drill bit." 218 The respondents acknowledge that in practice a driller will endeavour to match the transmission sleeve and the drill bit so that the clearance between the sleeve and the side of the hole will remain roughly the same for the life of the drill bit. Both drillers and others in the industry recognise that to achieve this result the outside surface of the transmission sleeve needs to reduce in diameter at a "similar" rate to the outside diameter of the carbides of the drill bit. The respondents assert that this does not happen in practice, and that there is no evidence that it does happen in practice. 219 The "wear characteristics" integer has been discussed both in relation to infringement and the "no sufficient description" ground for revocation. The integer is to be construed as requiring the wear characteristics of the transmission sleeve and the drill bit to be similar, in that in use both reduce in outside diameter at a similar rate. In my opinion the evidence establishes that transmission sleeves and matched drill bits do reduce in diameter at similar rates in use. The evidence also establishes, in my opinion, that the instruction of the specification would enable a person skilled in the art to make a transmission sleeve that, with a degree of routine trial and error in the field by the driller, will achieve the result forecast by the specification. Whilst under these alleged grounds for revocation the respondents argue that similar wear rates cannot be achieved in practice, and that there is no evidence that this happens in practice, I note that in respect of the allegations of prior claiming by the Giehl patent of the invention of the SDS patent, and in relation to obviousness, the respondents argue that the "wear characteristics" described in the SDS patent were part of the common general knowledge of those skilled in the relevant art at April 1990. 220 In my opinion these grounds of revocation of the SDS patent are not established. Giehl patent – no sufficient description 221 In their final address the respondents summarised their challenge to the Giehl patent by arguing that use of the word "drill bit" in the specification is vague and uncertain because it does not differentiate between the head and the shank of the bit. The respondents submit that "clearly the shroud is not intended to extend around the shank of the bit". It is also contended that the phrase "directly at the periphery of the cutting face" is vague in that it does not specify how close the shroud needs to be to deliver air in accordance with the invention. 222 The preferred embodiment of the invention of the Giehl patent, and the drawing thereof has the shroud extending around the outer side of the drill bit head but the invention, as claimed, is not so limited. I do not consider there is any vagueness in the use of the word "drill bit" in the body of the specification or in the claims. No evidence was adduced that a person skilled in the relevant art, following the teaching of the specification, could not perform the invention because the specification does not say how close to the face of the bit the shroud needs to be. That omission is one that can be supplied with experiment of a routine character, without the exercise of any inventive faculty. 223 I do not consider the respondents have made out a ground for revocation of the Giehl patent on the basis that the specification does not fully describe the invention. The Giehl patent – false suggestion 224 The particulars allege that the Giehl patent was obtained by false suggestion or misrepresentation because Mr Giehl was not the inventor, or alternatively was not the sole inventor of the patent, and because he falsely suggested that he was in the Notice of Entitlement filed with the Application. The respondents contend that Lionel Simpson was the sole, or alternatively, the co-inventor. I have rejected Mr Simpson's evidence upon which this ground of revocation was based, and accordingly the ground fails. For the same reason, the allegation that the patentee is not entitled to the invention fails. 225 In my opinion the respondents have not made out any of their grounds for revocation and the cross claim should be dismissed. 226 For the above reasons the applicant is entitled to declarations that the respondents have infringed claims 1, 2, 3, 7, 8, 9, 13 and 14 of the SDS patent and claims 1, 4 and 5 of the Giehl patent; and to relief consequential upon the infringements. The cross claim should be dismissed with costs. I direct that the applicant bring into Court within fourteen days minutes of order reflecting these reasons for judgment. I certify that the preceding two hundred and twenty-six (226) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice von Doussa. Associate: Dated: Counsel for the Applicant: Mr B N Caine with Mr B J Hess Solicitor for the Applicant: Norman Waterhouse Counsel for the Respondent: Mr J Garnsey QC with Mr G W Provan Solicitor for the Respondent: Freehill Hollingdale & Page Dates of Hearing: 8-25 March 1999 and 6-21 July 1999 Date of Judgment: 25 May 2000	44,525
federal_court_of_australia:fca/single/2005/2005fca1852	decision	commonwealth	federal_court_of_australia	text/html	2005-12-12 00:00:00	Commonwealth Bank of Australia v Jeans [2005] FCA 1852	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2005/2005fca1852	2024-09-13T22:48:50.393276+10:00	FEDERAL COURT OF AUSTRALIA Commonwealth Bank of Australia v Jeans [2005] FCA 1852 BANKRUPTCY – Application for adjournment of petition in circumstances where debtor has pending action against employee of petitioning creditor in relation to events associated with origin of judgment debt – Discussion of relevant principles – Adjournment granted. Ling v Enrobook Pty Ltd (1997) 74 FCR 19 discussed and applied COMMONWEALTH BANK OF AUSTRALIA v JOHN ANTHONY JEANS NSD 1079 of 2004 WILCOX J 12 DECEMBER 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1079 of 2004 BETWEEN: COMMONWEALTH BANK OF AUSTRALIA APPLICANT AND: JOHN ANTHONY JEANS RESPONDENT JUDGE: WILCOX J DATE OF ORDER: 12 DECEMBER 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The hearing of the petition be adjourned until 10.15am on Wednesday, 15 February 2006. 2. Costs of today be costs in the petition. 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 1079 of 2004 BETWEEN: COMMONWEALTH BANK OF AUSTRALIA APPLICANT AND: JOHN ANTHONY JEANS RESPONDENT JUDGE: WILCOX J DATE: 12 DECEMBER 2005 PLACE: SYDNEY REASONS FOR JUDGMENT WILCOX J: 1 Listed for hearing today is a petition by the Commonwealth Bank of Australia ('the bank') seeking a sequestration order against the estate of John Anthony Jeans. 2 Proceedings between the parties have a considerable history. I need not set out that history; it is stated in a chronology prepared by the bank which is not in dispute. 3 The Court of Appeal of New South Wales has granted leave to appeal against a decision of Matthews AJ, given on 17 December 2004, in which her Honour dismissed an application by one Stephen Cleary for summary dismissal of a damages claim brought against him by Mr Jeans. Mr Cleary was the officer of the bank who arranged a loan to Deangrove Pty Limited ('Deangrove'), which loan the bank claims to have been guaranteed by Mr Jeans. The bank sued Mr Jeans on the guarantee, thus giving rise to the judgment on which the bankruptcy petition is based. 4 The Court of Appeal heard argument about the matter on 12 September 2005. The Court granted leave to appeal, but reserved judgment on the appeal itself. Information obtained by Mr J M Ireland QC, counsel for the debtor, indicates that the Court hopes to give judgment in the appeal before the end of term, that is to say within the next few days. 5 When the matter came on this morning, Mr Ireland sought an adjournment of the hearing of the petition until February 2006. He put the application on two bases. First, he referred to the forthcoming judgment in the Court of Appeal and submitted this was a material matter which ought to be taken into account. He conceded that, if the decision of the Court of Appeal went against his client, the order made by Matthews AJ was reversed and it was decided the action brought by Mr Jeans against Mr Cleary should be summarily dismissed, that would be the end of the road, so far as his client was concerned, in his dispute with the bank. In that event, as I understand Mr Ireland, he would be unable to put any substantial argument against the making of a sequestration order. On the other hand, Mr Ireland suggested, if his client proved successful in upholding the order of Mathews AJ this would provide a basis for a further application for an adjournment – this time until after the trial of the action against Mr Cleary. 6 The second matter that Mr Ireland referred to was a forthcoming hearing before Branson J, fixed to commence on 6 February 2006, concerning a dispute between Deangrove and a receiver appointed by the bank. The dispute apparently relates to actions taken by the receiver in disposing of assets of Deangrove. To the extent that Deangrove was successful against the receiver, this may affect the quantum of the debt recoverable by the bank against Deangrove and, therefore, the amount recoverable by the bank against Mr Jeans under the guarantee. However, it is not contended that the hearing before Branson J could have the effect of totally removing the indebtedness of Deangrove to the bank and therefore, if the guarantee be valid, Mr Jeans' indebtedness to the bank. 7 The matter that has given me concern arises out of the Supreme Court action. As I have said, if Mr Jeans is unsuccessful in the Court of Appeal, that seems to be the end of the road; it would be appropriate for a sequestration order to be made. On the other hand, if he is successful in the Court of Appeal, his contention will be that he has a claim against Mr Cleary, the quantum of which would equal or exceed the quantum of his indebtedness to the bank. 8 There is a problem as to whether the Supreme Court claim could be resolved before expiry of the bankruptcy petition on 9 July 2006. However, I think that consideration carries less than its usual weight in the present case, for two reasons. 9 The first reason is that it is apparent, from the affidavit evidence, that the only reason there is doubt about the action for damages being determined before 9 July next is that the bank has chosen to proceed slowly in preparation for the hearing. I do not say that critically. From one point of view, this was a prudent course. The bank, presumably, did not wish to incur legal costs in preparation of a trial which, if it succeeded before the Court of Appeal, would never take place. However, in taking that course, the bank took the risk that, if it failed in the Court of Appeal, the result would be a trial that could not be completed before expiration of the bankruptcy petition. It is not possible to further extend the life of the bankruptcy petition. 10 The other reason is that the evidence indicates that there are no creditors, at least no substantial creditors, of Mr Jeans other than the bank and, perhaps, a company controlled by Mr Jeans. This does not seem to be a case where strangers have claims against Mr Jeans, as was the situation in Ling v Enrobook Pty Ltd (1997) 74 FCR 19, an authority cited by Mr A Bell SC, senior counsel for the bank. 11 Ling is an interesting case because it draws a distinction between indebtedness to the petitioning creditor and indebtedness to a stranger. In a decision preceding this one, a sequestration order was made against Ling on the petition of the Commonwealth of Australia, the party against whom Ling wished to prosecute a claim for damages. That sequestration order was set aside by a Full Court: see Re Ling; Ex parte Ling v Commonwealth of Australia (1995) 58 FCR 129. The reason was that the person against whom the sequestration order had been made had a live claim against the petitioning creditor for an amount of money that exceeded the claim which was the basis of the bankruptcy petition. Later, a second sequestration order was made, this time on the petition of Enrobook, a company unaffected by the dispute between Ling and the Commonwealth. Enrobook was the owner of premises that had been leased by Ling. Enrobook's claim was for outstanding rental. That sequestration order was upheld by a differently constituted Full Court: see Ling v Enrobook, cited above. 12 As noted by Mr Bell, the relevant principles are discussed at page 26 of the report of the second case. The Court said: 'The above authorities do not, in our view, support the appellant's contention that the courts recognise a public interest in allowing a debtor to prosecute litigation commenced by the debtor. The public interest recognised by such authorities is that which, in broad terms, is reflected also in s 40(1)(g) of the Act; that is, that a sequestration order ought only to be made on the basis of an indebtedness which is not counterbalanced by a claim by the debtor against the petitioning creditor. Such authorities provide no comfort to a debtor who asserts a claim, not against his or her creditor, but against a third party.' 13 I pause to note the Court's emphasis upon the correspondence of identity between the petitioning creditor and the party against whom the claim was made. Mr Bell emphasises that, in the present case, Mr Jeans' claim is made against Mr Cleary, whereas the petitioning creditor is the bank. However, Mr Cleary was a servant of the bank, at the time of the events which give rise to the bank's claim against Mr Jeans. He was apparently involved in arranging the credit facility and taking security documents, including the guarantee. The evidence is that his costs, in the litigation between him and Mr Jeans, have so far been borne by the bank; although the bank has not yet provided to him an indemnity against any liability he may suffer in that proceeding. Mr Cleary stands in an intermediate position between an identical party and a total stranger, as was Endobrook. 14 It is also relevant to note that, in the second Ling decision at 26, the Full Court went on: 'The authorities also show that satisfaction that the debtor is well advanced with litigation likely to result in the debtor being in a position to pay his or her debts may well provide a basis for a finding that there is "sufficient cause" for a sequestration order not to be made … But the authorities do not suggest that it is in the public interest to allow insolvent debtors to prosecute litigation generally. They only recognise that it is not in the public interest for a debtor to be forced into bankruptcy by reason of a state of insolvency likely to be of only short duration.' 15 I think I should take that paragraph into account in considering this application. At the present time, it is impossible to say whether the debtor is 'well advanced with litigation likely to result' in him being in a position to pay his debts, including his debts to the bank. If the bank succeeds in the strikeout motion, then the debtor will not be well advanced with such litigation; it will have been terminated. If the debtor succeeds in that motion, so that his action against Mr Cleary is able to proceed, the question will be whether it can be said he is so well advanced with that litigation that he can take advantage of the second principle, having regard also to the fact that Mr Cleary is in an intermediate position in regard to the first principle. 16 I have decided to accede to Mr Ireland's application for an adjournment until February. I propose the matter be listed in the second week in February. By that time, the decision of the Court of Appeal will almost certainly be known. If the Court of Appeal rules against Mr Jeans, I suspect there will be nothing further that can be said on his behalf and a sequestration order will be made. If the Court of Appeal rules in favour of Mr Jeans, there will be a question as to the position which the litigation has reached at that time. There is currently an application for a stay listed, before a registrar, in the first week in February. That application may be overrun by events. In any event, Mr Ireland informed me it would be his client's intention to seek expedition of his action against Mr Cleary. If Mr Jeans is to take advantage of what I call the second principle, it would be necessary for him to be able to show me what he has done in that regard. I am not today indicating a view, one way or the other, as to whether a further adjournment might be granted in February, if the action against Mr Cleary is still on foot. 17 The course I propose will allow the situation to be clarified, by an adjournment for what is a comparatively short period of time and will cause no particular prejudice, other than the general prejudice any creditor suffers in being delayed in finalising a claim. There is no evidence that Mr Jeans has been removing assets or, in any other way, adversely affecting the ability of his estate to pay whatever dividend it might pay if a sequestration order was made today. 18 I will adjourn the hearing of the petition until 10.15 am, Wednesday, 15 February. The costs of today will be costs in the petition. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox. Associate: Dated: 20 December 2005 Counsel for the Applicant: Mr A G Bell SC and Mr D A McLure Solicitor for the Applicant: J K O'Sullivan Counsel for the Respondent: Mr J M Ireland QC Solicitor for the Respondent: Robert H Butler Date of Hearing: 12 December 2005 Date of Judgment: 12 December 2005	2,837
federal_court_of_australia:fca/full/2022/2022fcafc0110	decision	commonwealth	federal_court_of_australia	text/html	2022-06-30 00:00:00	Yu v ACT Education Directorate [2022] FCAFC 110	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2022/2022fcafc0110	2024-09-13T22:48:50.829729+10:00	FEDERAL COURT OF AUSTRALIA Yu v ACT Education Directorate [2022] FCAFC 110 Appeal from: Yu v ACT Education Directorate (No 2) [2021] FedCFamC2G 267 File number(s): ACD 100 of 2021 Judgment of: THOMAS, SC DERRINGTON AND HALLEY JJ Date of judgment: 30 June 2022 Catchwords: INDUSTRIAL LAW – adverse action – whether employee exercising a workplace right under s 343(1)(a) of the Fair Work Act 2009 (Cth) – where employee claimed to have been exercising her right to take reasonable care of her own health and safety under s 28(a) of the Work Health and Safety Act 2011 (ACT) when refusing the directions of her employer to prepare a Professional Pathways Plan, to teach under observation and to attend certain meetings INDUSTRIAL LAW – Enterprise Agreement – construction of – alleged contravention in breach of s 50 of the Fair Work Act 2009 (Cth) – whether breach of obligation to place permanent teachers in suitable positions – whether employer caused emotional distress – whether breach of procedural requirements relating to disciplinary process INDUSTRIAL LAW – National Employment Standards – whether contravention of s 44 were final entitlements not paid on date of termination but were subsequently paid in full PRACTICE AND PROCEDURE – trials – procedural fairness – where applicant gave oral evidence and was cross-examined before trial adjourned part-heard – where matter subsequently determined, at primary judge's suggestion, "on the papers" three and half years later – where primary judge indicated relevant findings could not be made in the absence of cross-examination of the respondent's witnesses – where no issue of procedural fairness raised by either party – whether primary judge erred in failing to make findings on evidence before him PRACTICE AND PROCEDURE – procedural fairness – where primary judge considered and made "observations" or purported preliminary findings adverse to the respondent on legal issues not raised by the parties – whether such observations and preliminary findings had any bearing on the primary judge's ultimate conclusions Legislation: Fair Work Act 2009 (Cth) ss 340, 343, 44, 50 Work Health and Safety Act 2011 (ACT) s 28 Cases cited: Yu v ACT Education Directorate [2019] FCA 272 Lee v The Queen (1998) 195 CLR 594 Tattsbet Ltd v Morrow [2015] FCAFC 62; 233 FCR 46 Division: Fair Work Division Registry: Australian Capital Territory National Practice Area: Employment and Industrial Relations Number of paragraphs: 96 Date of hearing: 16 May 2022, 8 June 2022 Counsel for the Appellant: Appellant appeared in person Counsel for the Respondent: Ms P Bindon with Ms K Weir Solicitor for the Respondent: ACT Government Solicitor Table of Corrections 30 June 2022 Paragraphs 94-96 were inserted 4 July 2022 Catchwords - updated 4 July 202 Legislation - updated ORDERS ACD 100 of 2021 BETWEEN: JING YU Appellant AND: AUSTRALIAN CAPITAL TERRITORY (EDUCATION DIRECTORATE) Respondent order made by: THOMAS, SC DERRINGTON AND HALLEY JJ DATE OF ORDER: 30 June 2022 THE COURT ORDERS THAT: 1. The appeal be allowed. 2. Order 1 of the Federal Circuit and Family Court of Australia (Division 2) dated 18 November 2021 be set aside. 3. The appellant's claims against the respondent for breach of ss 44(1), 340(1) and 343(1)(a) of the Fair Work Act 2009 (Cth) as pleaded in the Amended Application filed on 3 April 2017 be dismissed. 4. The appellant's claim against the respondent for breach of s 50 of the Fair Work Act 2009 (Cth) as pleaded in the Amended Application filed on 3 April 2017, in so far as it relies on contraventions of cll A2.2, R2.9 and R3.10 of the ACT Public Sector Education and Training Directorate (Teaching Staff) Enterprise Agreement 2014-2018, be allowed. 5. The appellant's claim against the respondent for breach of s 50 of the Fair Work Act 2009 (Cth) in relation to all other pleaded contraventions of the ACT Public Sector Education and Training Directorate (Teaching Staff) Enterprise Agreement 2014-2018 be dismissed. 6. The matter be remitted to the Federal Circuit and Family Court of Australia (Division 2) for the determination of appropriate remedies. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: 1 Ms Yu prosecuted four substantive claims against the Australian Capital Territory (Education Directorate) in the Federal Circuit and Family Court consequent upon her dismissal from the Directorate in 2016. Ms Yu was employed by the Directorate as a teacher of Mandarin since 1991. 2 Ms Yu claims the Directorate has breached various provisions of the Fair Work Act 2009 (Cth) (FWA). In particular, she seeks compensation from and the imposition of pecuniary penalties on the Directorate for: (1) adverse action for exercising a workplace right in breach of s 340(1) of the FWA; (2) coercion not to exercise a workplace right in breach of s 343(1)(a) of the FWA; (3) contravention of an Enterprise Agreement in breach of s 50 of the FWA; and (4) contravention of the National Employment Standards in breach of s 44(1) of the FWA. 3 The primary judge dismissed Ms Yu's claims, holding that neither the processes undertaken by the Directorate, nor any of the reasons provided in support of its actions, constitute circumstances that would entitle Ms Yu to any of the relief as sought (Reasons at [20]). 4 Despite this apparently straightforward conclusion, the primary judge held that the Court was unable to make any formal findings of adverse action 'in light of the inability (and agreement by the parties) to conduct the balance of the litigation "on the papers"' (Reasons at [198]). The primary judge said further (Reasons at [215]): …on the evidence she provided, and how her case was presented, together with the procedural anomaly and immense difficulty of no cross examination of the Respondent's witnesses, making relevant findings was almost impossible. Additionally, the evidence, from a legal perspective simply did not support the claims made. 5 The primary judge's comments must be examined in the context of the procedural history of the matter. 6 Ms Yu has at all times been self-represented. Her initiating application was filed on 18 November 2016 and was subsequently amended on 3 April 2017 (Amended Application). The trial commenced in March 2018 but was adjourned part heard. The resumed hearing was scheduled for 12 March 2019. The delay was consequent upon Court availability, the availability of critical witnesses for the Directorate, and an application (and subsequent appeal) brought by Ms Yu for the primary judge to disqualify himself. 7 At pre-hearing directions listed for 7 March 2019, Ms Yu did not appear because of ill-health. The hearing date of 12 March 2019 was vacated and the matter was listed for further directions on that same day. Ms Yu was again unable to attend on health grounds and proffered a medical certificate attesting to her stress and anxiety-depression. The Court adjourned the matter to June 2019 and sought a psychiatric report in respect of Ms Yu. 8 Submissions were made by the Directorate, pursuant to Order 2 of Orders made by the primary judge on 20 June 2019, proposing that the parties be permitted to address alternatives to a further full hearing and noting that Ms Yu had had the benefit of having concluded her case in chief more than a year previously. Orders were subsequently made on 20 September 2019 dismissing all extant applications and granting Ms Yu leave to reopen the matter in six months' time. 9 On 20 March 2020, Ms Yu sought to have the matter reinstated and relisted. A directions hearing was held on 17 August 2020. At a further directions hearing on 3 November 2020, the following concerns were summarised in the notations to the Orders made (Reasons at [38]): A. The orders of 17 August 2020 provided that the parties notify the Court if there was an agreement to deal with the matter on the papers. The parties indicated that there was agreement for the matter to proceed in this way; B. Given that the matter has been on foot for a significant period of time and the matter previously progressed to a final hearing where the Applicant gave evidence, the Court sought to enquire what the parties say the Court should do with that earlier evidence; C. Both parties were of the view that the evidence of the Applicant should be retained and considered by the Court. However, the Respondent indicated that it considered it necessary for the Court to have an oral hearing unless the Court could be satisfied that the Applicant fully understood that (and continues to understand) the balance of the "hearing" would be conducted "on the papers" and that there would be no further cross-examination of any party or witness; D. The Court is also concerned about the Applicant's ability to conduct the proceedings, especially given that correspondence was previously sent to the Court by the Applicant in March 2019 indicating that due to her health issues she was unable to deal with matters relating to the proceedings (see Annexure A and B to these Orders). The Court raised the possibility of the appointment of a litigation guardian pursuant to Division 11.2 of the Federal Circuit Court Rules (2011) (Cth); E. The Applicant strongly opposed the appointment of a litigation guardian 10 In her affidavit filed on 6 January 2021, Ms Yu deposed: [56] On 29 September 2020, to my astonishment, Mr Karcher, solicitor for the Respondent, emailed the Associate of the Judge, raised a new issue, i.e. I may not fully understand the meaning of "matter to be dealt with on the papers". He requested a hearing to confirm my understanding. No application, legal or factual basis were presented to justify the existence of the issue and the needs of the process. I was disturbed greatly. [57] Notwithstanding that I sent a response showing my understanding of this simple term, the Court listed a hearing to deal with my "understanding issue" and in addition, to deal with the litigation guardian issue that the Respondent raised 15 months ago (see [53] herein). I was extremely worried about being force out of the proceedings. … [59] On 3 November 2020, at the hearing, the Judge proposed to make an order for me to get a confirmation from my psychologist about my capacity, and Mr Karcher also submitted that I get a confirmation from my psychologist about my "understanding". This disturbed me further as I had no doubt that the Respondent has the capacity to get a report that supports the appointment of a litigant guardian for me (my psychologist has worked for the Respondent before). I was extremely frustrated because my capacity/understanding was evidenced to all concerned – I have managed this straightforward matter for 4 years, a confirmation report from a psychiatrist about my capacity has already been filed on 20 March 2020 (see [55] herein)… (emphasis added) 11 Ms Yu now appeals the Orders of the primary judge made on 18 November 2021 on three grounds. 12 By Ground One, Ms Yu contends the primary judge incorrectly or falsely summed up the case. The gravamen of her complaint seems to be that the primary judge was wrong to find, as a matter of fact and law, that the Directorate did not breach the relevant provisions of the FWA. This emerges from her contention that, although the Directorate did not dispute, or did not seriously dispute, the existence of the factual matrix which led to her dismissal, the primary judge 'changed my case and told the reader the wrong story'. 13 By Ground Two, Ms Yu contends the primary judge did not comply with the rules of evidence. Ms Yu asserts the primary judge refused to accept relevant evidence she says proved the legal elements of her claims under ss 340, 50 and 44(1) of the FWA and her claims for aggravated/exemplary damages. Further, Ms Yu contends that the primary judge accepted the Directorate's submissions which were unsupported by evidence. She also complains the primary judge did not comply with the rules of evidence by regarding the transcript of her cross-examination as 'the Applicant's oral evidence'. 14 By Ground Three, Ms Yu contends the primary judge 'did not address any relevant issues of this matter, nor found any relevant facts. There is no valid reason to justify the conclusion'. In particular Ms Yu contends that, contrary to the primary judge's observation that 'with no cross-examination of the Directorate's witness, making relevant findings was almost impossible', there was relevant evidence before the judge to make the necessary findings. Ms Yu says that if the lack of cross-examination is a reason for being unable to find the facts, the primary judge erred in suggesting to the parties that the remainder of the matter be heard on the papers. Ms Yu contends further that the primary judge dealt with groundless or irrelevant issues, including: her legal capacity; consideration of the appointment of a litigation guardian; potential claims for apprehended bias and unfair procedures; and use of the AAT approaches. 15 The Directorate filed a notice of contention by which it contends the judgment of the Federal Circuit and Family Court should be affirmed on grounds other than those relied on by the Court. Specifically, the Directorate contends (particulars of the notice of contention omitted) that: (1) The primary judge erred in considering, and making "observations" or purported preliminary findings adverse to the Directorate, on legal issues that were not part of the claim that was before him to determine (irrelevant legal issues), including: (a) The issue of "apprehended bias" of the decision-maker who made the decision to terminate Ms Yu's employment and of the investigator who prepared a report for the decision-maker for the purposes of making that decision – see [9]-[11], [16]-[17], [21]-[22], [159]-[176] of the Reasons. (b) The issue of "unfair procedures" or "failure of process" by the Directorate in its dealings with Ms Yu – see [177]-[188] of the Reasons. (c) The issue of the decision-maker who made the decision to terminate Ms Yu's employment failing to take account of "relevant considerations" in his reasoning process – see [143]-[148] of the Reasons. (2) The primary judge erred in making "observations" adverse to the Directorate, following from his consideration of the irrelevant legal issues, as to the manner in which the Directorate ought to have dealt, or ought in the future to deal, with Ms Yu's claims including: (a) That the Directorate should have engaged a counsellor, or engaged an alternative dispute resolution process – see [91], [96], [103] and [149] of the Reasons. (b) That the Directorate should have paid Ms Yu a redundancy payment – see [137]-[138] of the Reasons. (c) That the Directorate consider making an ex gratia payment to Ms Yu – see [24], [91] and [216] of the Reasons. (3) The primary judge erred in concluding that he was not able to make any "findings" about adverse action for the purposes of Ms Yu's claim under s 340 of the FWA because the proceeding was in part determined on the papers and/or the Directorate's witnesses had not been cross-examined – see [98], [202], and [215] of the Reasons. 16 Grounds 1 and 2 of the notice of contention appear to contend that this Court should find the primary judge erred in making admittedly irrelevant observations and considering a range of issues irrelevant to his ultimate findings (a matter with which Ms Yu agrees) and that the finding of such errors are grounds for affirming the judgment below. The logic of such a contention is difficult to discern. It is apparent that none of the matters complained of by the Directorate had any bearing on the primary judge's ultimate decision – they were no more than observations along the way. Grounds 1 and 2 of the notice of contention must be dismissed. 17 As to Ground 3 of the notice of contention, similarly, Ms Yu agrees the primary judge erred in concluding he was unable to make any findings about adverse action for the purposes of her claim under s 340 of the FWA. For the reasons discussed below in respect of Ground Three of Ms Yu's amended notice of appeal, Ground 3 of the notice of contention is upheld. 18 At first blush, given the matter has been heard in two different modes, with only one party's witness having been cross-examined, it might be thought that there is little alternative but to remit the matter to Federal Circuit and Family Court of Australia for an orthodox hearing, shorn of the unnecessary observations about the "unpleaded and unexplored claims" which the primary judge considered ought to have been pursued. That, however, is a less than desirable course given the obvious stress afflicting Ms Yu arising from these proceedings and the difficulties surrounding the fact that the matters required to be traversed again took place now almost seven years ago. It is also apparent from the paragraph in Ms Yu's affidavit set out above that she was adamant she understood how the matter would be dealt with and was content with the hearing to be finalised 'on the papers'. 19 The evidence filed before the primary judge was extensive comprising: • Affidavit of Jing Yu filed 5 May 2017 (Aff-JY 5/7/17) • Affidavit of Jing Yu filed 20 September 2017 (Aff-JY 20/9/17) • Affidavit of Jing Yu filed 13 March 2018 (Aff-JY 13/3/18) • Affidavit of Jing Yu filed 20 March 2020 (Aff-JY 20/3/20) • Affidavit of Jing Yu filed 26 June 2020 (Aff-JY 29/6/20) • Affidavit of Jing Yu filed 6 January 2021 (Aff-JY 6/1/21) • Affidavit of Catherine Crook filed 31 July 2017 (Aff-CC) • Affidavit of Natalie Stewart filed 31 July 2017 (Aff-NS) • Affidavit of Eileen Currie filed 31 July 2017 • Affidavit of Samara Chisholm filed 31 July 2017 • Affidavit of Philip Beecher filed 31 July 2017 (Aff-PB) • Affidavit of Katrina Sheaves filed 31 July 2017 (Aff-KS) • Affidavit of Lauren Harman filed 31 July 2017 (Aff-LH) • Affidavit of Dougal Whitton filed 7 September 2017 (Aff-DW) 20 In addition, as has already been observed, Ms Yu was cross-examined on her affidavit evidence at the initial hearing in March 2018. Grounds Two and Three 21 It is convenient to first deal with Grounds Two and Three together. The gravamen of both is that the primary judge failed to deal with the relevant issues and evidence appropriately which resulted in his Reasons failing to justify the conclusion. 22 Ms Yu contends the primary judge did not comply with the rules of evidence "by refusing to accept the relevant evidence" that was said to support her claims under the FWA. The primary judge did not refuse to accept her evidence, nor did he find that she was untruthful in her evidence. The primary judge observed her evidence was "confused and confusing" and "in certain respects and degrees histrionic" (Reasons at [96]) but accepted that, on her evidence, she was engaged in "something of a David and Goliath battle between herself and the Directorate" (Reasons at [97]). 23 Ms Yu also contends the primary judge did not comply with the rules of evidence by disregarding her evidence relating to her claim for aggravated/exemplary damages. This contention seems to relate to the repetition before the primary judge of matters which were raised in her application for the primary judge to disqualify himself. That application had already been dismissed and unsuccessfully appealed to the Federal Court (Yu v ACT Education Directorate [2019] FCA 272). That evidence was not relevant to her claims as currently articulated before the primary judge. 24 Ms Yu contends the primary judge erred in accepting the Directorate's submissions without supporting evidence. She gives as an example the Directorate's submission that its actions were lawful. There is no substance to this complaint. The primary judge drew clear distinctions between the parties' submissions and the evidence and matters of law on which those submissions were based. It is the function of submissions to put a party's case to a judge, both in respect of what weight it is said should be given to particular evidence and in relation to what the party contends the law to be. 25 Similarly, there is no substance to Ms Yu's contention that the testimony a witness gives in the course of cross-examination is not to be treated as evidence relevant to the claim. The examination and cross-examination of witnesses is integral to the testing of evidence within an adversarial legal system (Lee v The Queen (1998) 195 CLR 594, [32]). 26 Nevertheless, it is necessary to examine what evidence was available to the primary judge from which it was possible to make relevant findings (Ground Three), including findings as to whether or not Ms Yu proved the legal elements of her claims under ss 340, 50 and 44(1) of the FWA. 27 The primary judge summarised Ms Yu's claims under the FWA as (Reasons at [196]): (1) adverse action for exercising a workplace right (s 340(1) FWA); (2) coercion not to exercise a workplace right (s 343(1)(a) FWA); (3) contravention of an enterprise agreement (s 50 FWA); and (4) contravention of the National Employment Standards (s 44 FWA). 28 The primary judge dealt briefly with the coercion claim and the claim for contravention of the National Employment Standard. This was appropriate and no error has been demonstrated in respect of these two claims. The coercion claim - s 343(1)(a) 29 The primary judge held (Reasons at [208]) there was no evidence to support this claim. Ms Yu abandoned the coercion claim on appeal. The contravention of National Employment Standard claim - s 44 30 As was found by the primary judge (Reasons at [213]), Ms Yu has been paid her full entitlements. Ms Yu did not dispute that. The primary judge was correct to dismiss that claim. The adverse action claim – s 340(1) and s341(1)(a), (c) 31 In dismissing the first claim, the primary judge said (Reasons at [198]): Regrettably, in relation to all of the Applicant's formally stated claims in her material, to state the obvious, albeit in negative terms, in the first instance, the Court can make no formal findings of adverse action in the light of the inability (and agreement by the parties) to conduct the balance of the litigation "on the papers." Further, also regrettably, so much of the Applicant's evidence, properly and fairly viewed, was an amalgam of assertions and complaints. To the contrary, to the degree that it is apposite to comment at all, the Respondent's various Affidavit evidence from its [unexamined] witnesses does not disclose any relevant action that could reasonably or relevantly constitute adverse action for the purposes of s.361(1), and s.340 of the FW Act. 32 The primary judge did, however, find that Ms Yu had misunderstood the processes relating to the Professional Improvement Plan (PIP) on the one hand, and the Professional Pathways Plan (PPP) on the other, which misunderstanding led her "inaccurately – to form an inappropriate view regarding the matters just mentioned – her work, health and safety, and legitimate and proper direction at her place of employment" (Reasons at [199]). 33 Although the primary judge lamented that the comments and evidence of Mr Whitton, who was the decision-maker in respect of Ms Yu's dismissal "is not able to be relevantly challenged" (Reasons at [203]), in circumstances where the primary judge invited the parties to continue with the resumed hearing "on the papers" and where the parties took up that invitation, it is unfortunate to say the least that the primary judge considered findings could not be made because of the inadequacies in the trial process. 34 Despite having expressed his inability to make appropriate findings, the primary judge was correct to dismiss the adverse action claim. 35 Division 3 of the FWA is concerned with workplace rights. Section 340 provides: (1) A person must not take adverse action against another person: (a) because the other person: (i) has a workplace right; or (ii) has, or has not, exercised a workplace right; or (iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or (b) to prevent the exercise of a workplace right by the other person. 36 The meaning of 'adverse action' by an employer against an employee is defined in Column 2 of Item 1 of s 342(1) of the FWA as if the employer: (a) Dismisses the employee; or (b) Injures the employee in his or her employment; or (c) Alters the position of the employee to the employee's prejudice; or (d) Discriminates between the employee and other employees of the employer. 37 A 'workplace right' is defined in s 341: (1) A person has a workplace right if the person: (a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or (b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or (c) is able to make a complaint or inquiry: (i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or (ii) if the person is an employee—in relation to his or her employment. 38 There was no dispute between the parties that the Directorate took adverse action against Ms Yu. What remained in dispute was whether Ms Yu had established that she had exercised, or proposed to exercise, a workplace right. If that were established, it was then for the Directorate to establish that whatever adverse action it took was not because of the exercise, or proposed exercise, of a workplace right (Tattsbet Ltd v Morrow [2015] FCAFC 62; 233 FCR 46 at [119]). 39 In her Amended Application, Ms Yu pleads the workplace right on which she relies is provided for in s 28(a) of the Work Health and Safety Act 2011 (ACT) (WHSA) (or alternatively cl A2.17 of the ACT Public Sector Education and Training Directorate (Teaching Staff) Enterprise Agreement 2014-2018 (EA)) being that, while at work, "a worker must take reasonable care for his or her own health and safety" (which includes physical and psychological health). It is assumed that this right is said to fall within the ambit of s 341(1)(a) of the FWA. The Directorate, quite properly, accepted that s 28(a) of the WHSA might, in certain circumstances, give rise to the exercise of a workplace right for the purposes of s 341(1)(a). The Directorate submitted, however, these were not such circumstances. Although there is no doubt that Ms Yu was distressed by the circumstances in which she found herself, it is tolerably clear from all the evidence before the primary judge that Ms Yu's refusal to comply with the Principal's directions that her teaching be observed on 27 May 2016 and 9 June 2016, and to attend the meeting to finalise her PPP was not done in the exercise of her workplace right to take reasonable care for her own health and safety. Rather, her refusals were a consequence of her "suspicion" formed at the very commencement of her time at Canberra High School (CHS) that she had been sent there to be performance managed out of her employment, and her fundamental disagreement with the management of CHS that she needed any assistance with improving her teaching performance so as to enhance her prospects of securing a permanent position. 40 Further, Ms Yu relies on her workplace right provided for in s 341(1)(c) of the FWA, to make a complaint or inquiry – to a person or body having the capacity under a law to seek compliance with that law or a workplace instrument, or if the person is an employee, in relation to his or her employment. Ms Yu seems to suggest that, in her case, she was able to make a complaint to the Principal. This emerges from paragraphs [18] - [20] of her Amended Application. If that is indeed the basis of her claim, there is some evidence that Ms Yu made a complaint to the Principal that she was concerned that she had received a dishonest report from a colleague who had observed her class. This was not a matter that was pressed below. 41 Ms Yu also pleads that the workers' compensation claim she brought in 2008 for psychological injury caused by the Directorate, and in which she was ultimately successful before the Administrative Appeals Tribunal in 2010, was the exercise of a workplace right. There was no dispute that Ms Yu had exercised such a right in 2008. The primary judge formally ruled that any matter raised and settled in the Comcare proceedings in 2008 was not and would not form part of any current matter to be determined in the current proceedings (Reasons at [16]). To the extent that the primary judge indicated the ruling might be revisited, this was in the context of what are described as the "unpleaded and unexplored claims" as to which the primary judge made no findings. 42 The matter therefore proceeded at first instance on the basis that the only relevant work place right was that relating to Ms Yu's health and safety. 43 The background to Ms Yu's dismissal commences in January 2016 when she was moved to CHS which had a Mandarin programme. By this time, she had become a supernumerary teacher – she no longer held a permanent position as a teacher of Mandarin but remained employed by the Directorate at Experienced Teacher 2 level. Ms Yu confirmed in her oral evidence that she did not apply for any permanent positions for the 2016 teaching year. So much was not in dispute before the primary judge. 44 Shortly after commencing at CHS, on 8 February 2016, Ms Yu was given a draft PPP prepared by Natalie Stewart, the Professional Practice Executive teacher. The Principal of CHS, Mr Beecher, Ms Stewart, and Ms Currie, Ms Yu's Executive Teacher, all deposed to that having occurred at a meeting with Ms Yu. In oral evidence, Ms Yu denied the meeting took place. Nevertheless, Ms Yu does not dispute that she was given the draft PPP, nor that she had had a discussion with Mr Beecher about doing the PPP to give her some support (Reasons at [70]). 45 It is apparent that, from this point onwards, Ms Yu became distrustful of the Directorate and the staff at CHS. Part G of her Amended Application at [9] states: A week later, on 8 February 2016, for reasons unknown to her, the applicant was issued a Six-week Pathway to Improvement Plan written by the School Principal and the Deputy Principal. No evidence was tabled to warrant such action imposed upon the applicant. The applicant has always been efficient in her work over the 25 years of her employment, hence she disputed the legitimacy of the process. 46 Ms Yu's reference in that paragraph to a 'Pathway to Improvement Plan' (PIP) was a misapprehension, no doubt coloured by her experience of having had one put in place for her in 2008. Relevantly, a PIP, as described in the affidavit of Ms Harman, is a process to improve an employee's performance at work in accordance with the Performance and Development Procedures in the EA (Aff-LH at [6]). By contrast, a PPP is required of every teacher at the beginning of each year to set out a teacher's professional development goals (Aff-PB at [12]; Aff-KS at [32]; Aff-NS at [7]). 47 Although the evidence discloses there were multiple occasions on which the purpose of a PPP was explained to Ms Yu, it is clear from her evidence that she did not accept she was being required to complete a PPP to assist with her career. From the outset, she remained convinced the PPP was in fact to be used to performance manage her out of her job: (1) At paragraph [15] of Aff-JY 6/1/21, in relation to being asked to sign a PPP, Ms Yu deposed: I realised that this process was for an improper purpose and would bring serious harm to my career and well-being. For my own protection, I did not accept the process. (2) In her oral evidence, she denied the PPP was with a view to increasing her teaching of the Year 8 Mandarin class, saying: It was for assessment purposes (Reasons at [68]). (3) She said further that the object of either a PPP or a PIP was the same in the sense that there was always an "agenda" (presumably likely to be adverse to her) behind it (Reasons at [69]). (4) In her oral evidence, when asked about being moved to CHS, Ms Yu said (Reasons at [67]): I'm not placed there to teach. There's no class for me to teach. I go there to go through a performance process, so they legally to get me out. (sic) (5) Ms Yu was read an email dated 12 February 2016 (Aff-LH Annexure LH5) which recorded that Ms Yu had 'expressed a view that she felt [a PPP] was a punishment and did not wish to proceed with the development of the professional pathways plan'. In oral evidence, Ms Yu agreed that she (Reasons at [71]): (a) Believed the PPP was a punishment because she thought it was a performance management plan; (b) Thought 'this punishment different', despite agreeing every teacher had to do one and believed she could write the plan on her own; and (c) Always insists to do her own PPP saying 'I don't want the plan they impose on me and it doesn't work'. (6) Ms Yu was asked in evidence whether she wanted to get a position and whether there was therefore anything offensive about [CHS] suggesting they wanted to help her get a position. Ms Yu's response was (Reasons at [79]): Why need help me to get a position? If there's a position, just give it to me and let me teach. (7) When it was put to Ms Yu it was because she was in her third year without successfully getting a permanent position, she replied (Reasons at [79]): Because they secretly – secretly give the position to the temporary – temporary employee. They don't want to use me. That's the whole thing…I will have evidence for that. (8) Ms Yu gave further oral evidence that comments made by Ms Currie following observation of her teaching were 'not honest' (Reasons at [87]). (9) She confirmed she told the Principal, Mr Beecher, she did not want anyone further to observe her teaching and that 'the whole management at Canberra High School had some sort of background agenda to exit [her] from the school' (Reasons at [88]). 48 There was no dispute before the primary judge that Ms Yu refused to sign a PPP, nor that following two observations of her teaching, she refused to be further observed. 49 At paragraphs [10]-[11] of Part G of her Amended Application, Ms Yu claims: From then on, adverse action against the applicant were frequently organised by the respondent, for example, repeatedly pressed the applicant to sign the Improvement Plan, carried on ad hoc lesson observations, produced dishonest lesson observation report, and suggested that she resign. Meanwhile, the school management excluded the applicant from participating in whole school programs, for example, the professional community learning programs which including peer observation in the classroom and feedback. 50 There was no dispute before the primary judge that a series of meetings were arranged between various staff at CHS and Ms Yu in an attempt to have her discuss a PPP and sign off on it. The first was on 12 February 2016 between Ms Yu, Ms Harman, Ms Sheaves, and Ms Chisolm. 51 There was no dispute before the primary judge that a follow-up meeting was scheduled for 16 February 2016 and that Ms Yu took sick leave and did not attend. 52 Similarly, there was no dispute before the primary judge that, on 29 February 2016, Ms Yu received a letter by hand (Ms Yu had not yet set up an email account at CHS) from Ms Harman noting that it was now the end of week 4 of Term 1 and the importance of finalising a PPP so that 'the school can work with you to develop your teaching skills to enable you to gain a transfer into a substantive position by the end of 2016' (Aff-LH Annexure LH9). The letter invited Ms Yu to comment on the draft, identify any additional support mechanisms or professional learning opportunities, and to bring a support person. There was no dispute that Ms Yu returned from sick leave on 29 February 2016, that she refused to participate in the meeting, that she was requested to attend Mr Beecher's officer where he gave her a letter directing her to attend a meeting on 1 March 2016 at 8.30am to finalise the PPP, and warned her that "Failure to comply with my direction would be considered misconduct and may lead to discipline action". The letter also gave Ms Yu a further opportunity "to comment on the draft plan and to identify any additional support mechanisms or professional learning opportunities" (Aff-PB Annexure PB1). 53 There was no dispute before the primary judge that Ms Yu again took sick leave but did not tell CHS any particulars of her illness. Ms Yu returned to CHS on 22 March 2016 when, it is not disputed, she was directed to attend a meeting with Ms Harman, Ms Sheaves, Mr Beecher, and Ms Chisolm and again refused to sign, indicating she would take some long service leave (Reasons at [53] referring to Aff-JY 6/1/21 at [19]). Ms Yu took a period of long service leave sometime shortly after 23 March 2016 until 5 May 2016 (Aff-PB at [32]). 54 On 8 April 2016, Ms Yu sent a revised draft of a PPP, which had been prepared by her in March, which was little different from the original on which she had been given feedback. In oral evidence, Ms Yu confirmed that "lesson plans can be good for some teachers but they are not suitable for her" (Reasons at [84]). 55 There is no dispute that, on 9 May 2016, Ms Yu received a letter from Cathy Crook, Manager HR People Services in the Directorate which explicitly set out the performance expectations and professional responsibilities of employees classified as "Experienced Teachers 2", detailed the concerns with her performance, including that she was struggling to demonstrate satisfactory attendance, effective teaching practice or constructive engagement with professional support structures, and listed the "reasonable administrative requests" she was declining to follow. Those were specified to be declining: to teach her allocated workload; develop and enact a PPP with suitable goals; be observed by her colleagues with a view to providing her with constructive feedback; and undertake the broader responsibilities of a teaching role (including planning differentiated learning; assessing and reporting learning outcomes). The letter directed Ms Yu to (Aff-CC Annexure CC1): (a) finalise and sign a Professional Pathways Plan that is agreed with the Principal and/or Deputy Principal and that is consistent with the National Professional Standards for Teachers and with whole school priority areas (of which, at Canberra High School, one is curriculum and assessment differentiation). Consequence of inaction – If this does not occur by Monday 16 May then the draft Plan which you have previously been given, and invited to annotate, will be deemed to be operational. If progress is not made against the goals in this plan by Friday 10 June then you will transition to Pathways to Improvement and potentially to underperformance action. (b) teach an allocated workload of Chinese lessons and engage meaningfully with support structures (including mentoring and lesson observations) to further develop your professional practice. Consequence of inaction – disciplinary procedures. (c) apply for advertised classroom teaching positions in your areas of learning specialisations/experience, including Chinese and EALD. A current option is a local site selection at Mawson PS closing on 18 May and I expect to see your application in the selection schedule. Failure to follow my directions may constitute professional misconduct and lead to disciplinary action that could result in the termination of your employment. 56 Ms Yu took further sick leave and returned to work on 26 May 2016. There was no dispute before the primary judge that Ms Yu refused to meet with Ms Crook and Mr Whitton on 27 May 2016. In oral evidence, Ms Yu said she refused to be observed teaching, she had done nothing wrong, and the school management was treating her unfairly which caused her much distress (Reasons at [92]). Her oral testimony was that in her letter in response to the allegations she "explained on 27 May I had to protect myself from further harm because I was in an aggressive and antagonistic work environment and was experiencing anxieties" (Reasons at [93]). The text of that letter, dated 15 June 2016, referred to in Aff-JY 5/7/17 at [119], said: Circumstances and reasons that lead me to cancelling the appointment with Ms Crook and did not wish to attend arranged the meeting on 27 May 2016 By 12:20 pm I was feeling very weary and I could not see any constructive purpose of the meeting this afternoon. I am here alone, helpless and powerless on the other side, two powerful HR managers supported by three powerful school leaders. I felt this was a source of misery. Should I go on to get more wounds or give up and take some refuge? I choose the latter. So I rang Phil to let him know that I could not attend the meeting. At the beginning of lunch I went to the school yard for a walk to relieve my heavy heart. After seeing Wei, I went to the school library, sat in a corner writing my prayers to get some rest and solace. After lunch I went back to my staffroom, sat on my desk and continued with my writing. I did not go to the meeting when Phil repeatedly asked me to. I have given up defending myself and did not wish to risk myself with more wounds. Besides, at that time I needed some space; my soul was yearning for peace and solace. (sic) 57 There was also no dispute that Ms Yu took unapproved leave from 30 May 2016. On 31 May 2016, Ms Harman was appointed to investigate the allegations of Ms Yu's misconduct which, by then, were identified as (Reasons at [127]): 1. refusal to conduct lessons on 27 May 2016 while under observation (the Observation Allegation); 2. failure to comply with an express direction to attend a meeting to discuss her PPP (the Meeting Allegation); and 3. being on unapproved leave since 30 May 2016 (the Leave allegation). 58 There was also no dispute that Ms Harman directed Ms Yu to attend a meeting with her on 3 June 2016 but Ms Yu declined on the basis of ill health. Ms Harman then requested a detailed response to the allegations in writing by close of business on 9 June 2016. 59 Ms Yu returned to CHS on 9 June 2016. There was no dispute that Ms Yu again refused to teach under observation and so would not teach. Ms Yu then met with Ms Harman, at which time Ms Harman determined it was not tenable for Ms Yu to remain at CHS and she was stood down with pay in accordance with cl U7.6 of the EA (Aff-LH at [37]). 60 It is uncontroversial that, on 7 July 2016, Mr Whitton wrote to Ms Yu advising that he proposed to terminate her employment (Aff-DW at [30]). Ms Yu responded to that letter on 3 August 2016 reiterating her previously expressed views to the management and staff at CHS and within the Directorate that: it was unreasonable for her lessons to be observed more than every other teacher; it was unreasonable for her to be pressed to sign a ready-made PPP when the Guidelines state that the teacher is responsible for developing and recording a professional pathways plan; and she was distressed, in tears, and in no condition to attend any meeting and it was unreasonable to repeatedly demand her attendance at meetings under duress and "acting to protect my own welfare is not misconduct" (Aft-JY 5/7/17 Annexure JY10.36). 61 Ms Yu's employment was terminated by letter dated 17 August 2016 in which Mr Whitton concluded (Aff-DW at [34]): You have not provided me with any information that would change my view that you have engaged in wilful and deliberate conduct that is inconsistent with continuation of the contract of employment. As a result, I have no alternative but to terminate your employment. 62 This summary of the circumstances leading up to Ms Yu's claims demonstrates the evidence before the primary judge, relevant to the material elements of the claims, was largely undisputed. There was direct evidence in Mr Whitton's affidavit as to his reasons for determining to dismiss Ms Yu. His uncontradicted evidence was that he "did not find that [Ms Yu] had engaged in misconduct because she had or sought to exercise any workplace rights, or for any other reason unrelated to the reasons" he had outlined (Aff-DW at [33]). The fact he was not cross-examined on it does not mean relevant findings could not be made on the basis of the uncontradicted evidence before the primary judge. 63 There was a sufficient evidential basis to support the primary judge's conclusion that Ms Yu is unable to establish her claim under s 340(1) of the FWA. Breach of the EA – s50 FWA The scope of the claim 64 At [31] of her Amended Application dated 3 April 2017, Ms Yu claimed the Directorate breached s 50 of the FWA by its contravention of cll A2.2, R2.9, H1.4, H2.1, H2.2(e), H2.3, H7.1, H7.2, A2.16, A2.17, Section K, and H1.2 of the EA. 65 A summary of the particulars of those claims follows: A2.2 The Directorate agrees to use temporary employees only where no officer is available with necessary expertise, skills or qualifications; Ms Yu was removed from Hawker College in 2013 and replaced with a temporary/casual; Ms Yu was not offered position at CHS in 2016 but position given to a casual. (Amended Application at [32]) R2.9 The Directorate had the obligation, which takes precedence over any other method of filling vacancies, to place Ms Yu in a suitable position; they did not do so in 2015/6 (Amended Application at [35]). H1.4 The Directorate was required to act in accordance with principles of procedural fairness, and in a manner that promotes the values and general principles of the Australian Capital Territory Public Service (ACTPS) (Amended Application at [36]); the particulars of failure to do so are: H2.1, H2.2(e) and H2.3 – procedures around initiating a preliminary assessment; Ms Yu was not informed that a preliminary assessment process had been commenced; the Principal did not make an allegation of inappropriate behaviour nor any preliminary assessment or recommendation for further action until 27 May 2016 (Amended Application at [37]) H7.1 and H7.2 – the Directorate may commence an investigation process and stand down/suspend a person after receiving a recommendation from school management under H2.2(e); no recommendation was received from school management but HR commenced an investigation process on 2 June 2016, stood Ms Yu down on 9 June 2016 and suspended her on 7 July 2016 (Amended Application at [39]). A2.16/17 The Directorate is committed to promoting, achieving and maintaining highest levels of health and safety of all employees and the Directorate and all employees must act in a manner consistent with the WHSA; the Directorate failed in its duty under A2.16/7 and took adverse action against Ms Yu for taking reasonable care of her safety (Amended Application at [41]). Section K The Directorate made Ms Yu an excess Mandarin teacher but refused to treat her fairly and manoeuvred her out of the workplace by using disciplinary action instead (Amended Application at [43]). H1.2 HR managers and school leaders failed to act responsibly and to be accountable for their actions (Amended Application at [44]). 66 These particulars were expanded upon in "The Applicant's Outline of Submissions" dated 13 March 2018 (filed only 10 days before the hearing) at [54] – [100] by which additional breaches were alleged, namely of F25.4, U10.5, R3.10, R4.1, A2.10, G1.1, H1.4, H2.2(b), H10.1, U7.6, R9.2 and A2.18. 67 Before the primary judge at the first hearing, the Directorate submitted these subsequent claims should not be entertained on the basis that leave had not been sought to amend the claim and the Directorate had already filed all of its affidavit evidence. Before the matter eventually resumed on the papers, the primary judge made orders, on 11 November 2020, relating to the filing of submissions and "updating affidavits" which were to explain to the Court what the party understood its position and its case to be. The dates for compliance with those orders were subsequently amended to 6 January 2021 for Ms Yu and 3 February 2021 for the Directorate. 68 Ms Yu filed her "updated" affidavit and a further "Applicant's Outline of Submissions" on 6 January 2021. It appears from this material that the only claim relevant to the breach of s 50 which was additional to those contained in the Amended Application was that relating to an alleged breach of cl R3.10 of the EA. The references to clauses F25.4, U10.5, R4.1, A2.10, G1.1, H1.4, H2.2(b), H7.1, U7.6, R9.2 and A2.18 that had appeared in her Submissions dated 13 March 2018 had been deleted (except to the extent that cl F25 was identified as a particular of the alleged breach of A2.16/A2.17). 69 The Directorate filed an affidavit of Justin Robert Karcher, solicitor for the Directorate, dated 5 February 2021 (Aff-JRK), in which he deposed to the enlarging of Ms Yu's claim without leave, or an application for leave, and contended her claims for contravention of s 50 ought be limited to those in her Amended Claim. In its submissions, the Directorate did not address any claims for which it contended leave was required, despite there being no ruling at that stage as to what would be considered by the primary judge. 70 The primary judge dealt with the objection to the enlarged claims in his Reasons. The primary judge referred to Mr Karcher's affidavit (Reasons at [14]-[15]). His Honour referred to his raising of concerns at the outset of the hearing on 22 March 2018 as to the expansion of the claims (Reasons at [18]), which, at that point, included the larger number of alleged breaches stipulated in Ms Yu's Submissions dated 13 March 2018. It is tolerably clear from the transcript that those concerns were in fact raised by counsel for the Directorate and their attribution to the primary judge is an error in the transcript. Ultimately, the primary judge indicated that (Reasons at [19]): Unless otherwise indicated, I cannot, and will not, have any regard to material filed in contravention of the Orders made by consent dated 11th November 2020 and subsequently amended, also by consent. More particularly, unless otherwise specified, the Court's primary points of reference regarding the Applicant's claims will be (a) the Amended Application filed 3rd April 2017, and (b) her Summary Affidavit, filed 7th January 2021. I will also have regard to the Applicant's primary submissions, filed 7th January 2021 and those filed in Reply, on 6th April 2021. The filing date of the Summary Affidavit and the primary submissions should be read as 6 January 2021. 71 Piecing together the relevant changes as between the Submissions dated 13 March 2018 and those dated 6 January 2021, it appears the primary judge was content to accept the additional claim of an alleged breach of cl R3.10 of the EA, but not the additional claims concerning F25.4, U10.5, R4.1, A2.10, G1.1, H1.4, H2.2(b), H7.1, U7.6, R9.2 and A2.18. 72 Having made that ruling, the primary judge found (Reasons at [209]-[211]): There are no particulars or relevant details of the Applicant's contention regarding some breaches of the EA. As such, she has not discharged her evidentiary onus to establish relevant facts to form a basis for the Court to determine such a claim. On this basis alone, this claim cannot succeed. (emphasis added) To the degree that there was compliance with all relevant parts of the EA, the Respondent's witnesses depose that all such action was so undertaken. This included the processes undertaken regarding the investigation into the Applicant's conduct pursuant to Clauses H7.1 and H7.2. Other than assertion, there is no evidence provided by the Applicant to establish any breach of s. 50 of the FW Act. 73 The primary judge's reasons do not provide any indication of which alleged breaches of the EA were insufficiently particularised nor of the extent to which those which were not decisive to his finding that Ms Yu could not discharge her evidentiary onus. That is unfortunate. Although some of the alleged breaches of the EA were of a general nature and underpinned by bare assertion, it cannot be said that there were insufficient particulars of several breaches which were also amply supported by the evidence before the primary judge. Cll A2.16 and A2.17 74 In her Amended Application at [41], Ms Yu contended the Directorate contravened clause A2.16 or A2.17 by 'failing to fulfil its duty of care' under the clauses and by taking adverse action against her for taking reasonable care of her own health and safety. Those clauses provide: A2.16 The ACTPS is committed to promoting, achieving and maintaining the highest levels of health and safety for all employees. A2.17 The ACTPS will take all reasonable steps and precautions to provide a healthy, safe and secure workplace for the employee. The ACTPS and all employees will act in a manner that is consistent with the Work Health and Safety Act 2011 (ACT)(WHS Act). 75 In her written submissions filed on 6 January 2021, Ms Yu submitted the Directorate breached these clauses by "wilfully engaging in unlawful actions that caused the Applicant's emotional distress" at [9]. The gravamen of the complaint appears to be that the breaches alleged flow necessarily from the allegation that the Directorate took adverse action against Ms Yu. For reasons that have already been explained in relation to the claim under s 340 of the FWA, the Directorate did not take adverse action against Ms Yu. 76 The primary judge was correct to find no breach of cll A2.16 or A2.17 of the EA had been established. Cll H2, H7.1 and H7.2 77 Clauses H2.1, H2.2(e) and H2.3 of the EA relate to the manner in which a preliminary assessment is to be conducted. Ms Yu particularised the alleged breach of cl H2 at [38] of her Amended Application. There was no evidence before the primary judge that there had been a breach of this clause. To the contrary, the evidence establishes that a preliminary assessment was made by Mr Beecher in the form of a report to Human Resources (Aff-PB, PB-2 and PB-3). 78 Clauses H7.1 and H7.2 relate to commencing and investigation and standing down or suspending employees. Ms Yu particularised the alleged breach at [40] of her Amended Application. There is, however, no substance to the allegation that these clauses were breached. The evidence establishes that Mr Whitton received the relevant assessment from Mr Beecher and then determined that the alleged misconduct could not be resolved without investigation (Aff-DW at [24]-[26]). He took appropriate steps under cl H7.1(a) – (c) by appointing Ms Harman to conduct the investigation who then notified Ms Yu (Aff-DW at [26]; (Aff-LH at [33]). 79 There was a sufficient evidentiary basis before the primary judge for him to conclude that no breach of cll H.2, H7.1 and H7.2 had been established. Section K 80 The primary judge was also correct to dismiss Ms Yu's contention that Section K of the EA had been contravened. It was uncontroversial that Ms Yu was not an excess employee, but a supernumerary employee. As such the provisions of Section K simply did not apply to her. Cll A2.2, R2.9 and R3.10 81 Clause A2.2 of the EA provides: A2.2 In order to promote permanent employment and job security for employees, the ACTPS will endeavour to minimise the use of temporary and casual employment. The ACTPS agrees to the use of temporary employees only where there is no officer available with the expertise, skills or qualifications required for the duties to be performed or the assistance of a temporary nature is required for the performance of urgent or specialised work within a particular business unit of the ACTPS and it is not practical in the circumstances to use the services of an existing officer. 82 Ms Yu alleges the Directorate breached this clause by removing her from Hawker College and filling her position with a temporary staff member. Ms Yu deposed to her position at Hawker College having been filled by a casual maths teacher 'who was on a temporary working visa' (Reasons at [53]). Nothing in the Directorate's evidence before the primary judge disputes this allegation. 83 Ms Yu also contends the Directorate breached cl R2.9 by failing to meet its obligation under that clause in 2015/2016, and cl R3.10 by advertising a Mandarin teaching position on the Jobs ACT website when the position ought first to have been offered to her. 84 Clause R2.9 provides: R2.9 The head of service has the right and obligation to place permanent teachers in suitable positions, as required. This requirement takes precedence over any other method of filling vacancies. 85 Clause R3.10 provides: R3.10 There will be an annual classroom teacher transfer process. Teachers identified for transfer will be considered for placement through the annual process. Vacancies unable to be filled through transfer or central placement will go to open advertisement in accordance with subclause R4.1. 86 Ms Yu's allegations in relation to cll A2.2 and R2.9 were articulated and particularised in her Amended Application in 2017. As has already been said, the allegation relating to cl R3.10 was first made on 13 March 2018 and reiterated in her Outline of Submissions filed on 6 January 2021. Although the Directorate objected to the inclusion of the claim relating to cl R3.10 without leave to amend having been granted, the Directorate could not have been taken by surprise given the foundation of the allegation in relation to cll A2.2 and R2.9 is the same that underpins the alleged breach of cl R3.10 – namely, that she was a permanent employee who should have been placed in or offered a permanent position before any position for which she was qualified was given to a temporary or casual employee or was advertised externally. Being on notice that this was a live issue, the Directorate had the opportunity to seek to adduce further evidence about the operation of cll A2.2, R2.9 and R3.10 before the matter resumed in 2021 but apparently did not do so. 87 As has already been observed above, there was no dispute before the primary judge that by January 2016 when she was moved to CHS, Ms Yu had become a supernumerary teacher. Nevertheless, she remained employed by the Directorate at Experienced Teacher 2 level. 88 Ms Yu confirmed in her oral evidence that she did not apply for any permanent positions for the 2016 teaching year and that she did not see the advertisement for the position at CHS in Jobs ACT (Reasons at [64]). In her written submissions, Ms Yu contended that the Directorate breached cl R2.9 by failing to place her, being a permanent teacher, into a suitable position before filling the vacancy at CHS through external advertisement. 89 Similarly, Ms Yu alleged that she had been identified for transfer and so ought to have been transferred to CHS before the position went to open advertisement. It is clear from the Directorate's evidence before the primary judge that there had been no consideration of Ms Yu for the vacant position as a teacher of Mandarin at CHS (Aff-KS at [30]) as required by cll R2.9 and R3.10 – rather it seems to have been expected that she should have applied for the position through the open advertisement process (Aff-PB at [7]). In its written submissions, the Directorate contended that the onus lay on Ms Yu to nominate a reasonable range of schools (cl R3.13) but submitted that Ms Yu had in fact been placed in accordance with cl R2.9. The Directorate's written submissions did not address the alleged breach of cl R3.10 despite the nature of that breach being inextricably linked with the alleged breach of cll A2.2 and R2.9. 90 In oral submissions, the Directorate suggested, in accordance with cl R3.13, the onus was on Ms Yu to nominate herself for a reasonable range of positions to enable a transfer. There was no evidence that Ms Yu had been made aware of any suitable positions for which she might seek a transfer. When read alongside cl R3.10, the Directorate contended the clause allowed for open advertisement as another mechanism for filling positions and that the clause should be construed as "vacancies not filled" by central placement or transfer rather than "unable to be filled". The Directorate's argument cannot be sustained. Clause R2.9 imposes on the "head of service" an obligation to identify and place permanent teachers in suitable positions. If that obligation cannot be fulfilled, viz, the vacancy is "unable" to be filled through transfer or central placement, only then does the vacancy "go to open advertisement in accordance with subclause R4.1". 91 The primary judge ought to have found that the Directorate contravened cll A2.2, R2.9 and R3.10 of the EA and so contravened s 50 of the FWA. 92 For these reasons, Grounds Two and Three must be upheld. Ground One 93 In light of the conclusion reached in relation to Grounds Two and Three, it is unnecessary to deal with the first ground of appeal as to whether or not the primary judge "incorrectly or falsely summed up the case". Disposition 94 For the reasons given, the appeal must be allowed and Order 1 of the Orders of the Federal Circuit and Family Court of Australia (Division 2) dated 18 November 2021 must be set aside. Orders will be made to the effect that the Directorate has breached s 50 of the FWA by contravening cll A2.2, R2.9 and R3.10, but no other clauses, of the EA and dismissing the claims under ss 44 and 340(1) of the FWA. 95 The matter will be remitted to the Federal Circuit and Family Court of Australia (Division 2) for determination of the quantum of damages and for consideration of any penalty. 96 Given that this is a matter within the Fair Work jurisdiction, and no submissions were made to the contrary, there will be no order as to costs. I certify that the preceding ninety-six (96) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Thomas, SC Derrington and Halley. Associate: Dated: 30 June 2022	14,115
federal_court_of_australia:fca/single/2006/2006fca0081	decision	commonwealth	federal_court_of_australia	text/html	2006-02-06 00:00:00	SZGWC v Minister for Immigration & Multicultural Affairs [2006] FCA 81	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2006/2006fca0081	2024-09-13T22:48:51.443556+10:00	FEDERAL COURT OF AUSTRALIA SZGWC v Minister for Immigration & Multicultural Affairs [2006] FCA 81 SZGWC v MINISTER FOR IMMIGRATION & MULTICULTURAL AFFAIRS AND REFUGEE REVIEW TRIBUNAL NSD 2381 OF 2005 MADGWICK J 6 FEBRUARY 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2381 OF 2005 BETWEEN: SZGWC APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS FIRST RESPONDENT REFUGEE REVIEW TRIBUNAL SECOND RESPONDENT JUDGE: MADGWICK J DATE OF ORDER: 6 FEBRUARY 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Refugee Review Tribunal be joined as the second respondent. 2. The application for leave be dismissed with costs assessed in the sum of $800. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2381 OF 2005 BETWEEN: SZGWC APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS FIRST RESPONDENT REFUGEE REVIEW TRIBUNAL SECOND RESPONDENT JUDGE: MADGWICK J DATE: 6 FEBRUARY 2006 PLACE: SYDNEY REASONS FOR JUDGMENT HIS HONOUR: 1 This is an application for leave to appeal against a decision of the Federal Magistrates Court given on 27 October 2005 which dismissed an application for judicial review of a decision of the Refugee Review Tribunal ('the Tribunal') given on 21 July 2000. 2 The applicant is seven days out of time with his application for leave to appeal and an extension of time would be required. He has given some slim explanation of the delay and I would prefer to deal with the matter on the merits of the application for leave to appeal. I will extend time for the filing of the application for leave to appeal until 25 November 2005, the application having in fact been filed on 24 November 2005. 3 The learned Federal Magistrate declined to grant the applicant's application for an adjournment and dealt with the more or less 'boilerplate' grounds of the application to review the Tribunal decision. His Honour shortly, it would appear more or less unarguably, rejected the various challenges and in any event held that: 'Even if there were a ground for a review of this decision, in my view the delay in commencing proceedings is so excessive and so poorly explained that it would be quite wrong to grant relief.' 4 The intended notice of appeal does not deal with any error of the learned Magistrate in any comprehensible way. The applicant also asks the Court to appoint a lawyer for him on the basis that he has no chance of arguing a case without a lawyer. The case appears quite hopeless to me. There seems to be no doubt of the correctness of the learned Magistrate's decision and I do not propose to trouble any member of the legal profession with the matter. 5 The application for leave will be dismissed with costs assessed in the sum of $800. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. Associate: Dated: 13 February 2006 Solicitor for the Applicant: The Applicant appeared in person Solicitor for the Respondent: Clayton Utz Date of Hearing: 6 February 2006 Date of Judgment: 6 February 2006	836
federal_court_of_australia:fca/single/2013/2013fca0502	decision	commonwealth	federal_court_of_australia	text/html	2013-05-21 00:00:00	Maytom v Prentice (No 2) [2013] FCA 502	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2013/2013fca0502	2024-09-13T22:48:51.479032+10:00	FEDERAL COURT OF AUSTRALIA Maytom v Prentice (No 2) [2013] FCA 502 Citation: Maytom v Prentice (No 2) [2013] FCA 502 Parties: GARY ALLAN MAYTOM v MAXWELL WILLIAM PRENTICE OF BPS RECOVERY, CRAIG PRYOR OF WARREN MCKEON DICKESON SOLICITORS PTY LTD and JACKSON LALIC SOLICITORS File number: NSD 547 of 2013 Judge: JACOBSON J Date of judgment: 21 May 2013 Catchwords: PRACTICE AND PROCEDURE – application for extension of time to appeal from the Federal Magistrates Court Legislation: Federal Court Rules 2011 r 1.39 Date of hearing: 21 May 2013 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 10 Solicitor for the Applicant: The applicant appeared in person Counsel for the Respondents: Mr A Combe Solicitor for the Respondents: Sally Nash & Co Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 547 of 2013 BETWEEN: GARY ALLAN MAYTOM Applicant AND: MAXWELL WILLIAM PRENTICE OF BPS RECOVERY First Respondent CRAIG PRYOR OF WARREN MCKEON DICKESON SOLICITORS PTY LTD Second Respondent JACKSON LALIC SOLICITORS Third Respondent JUDGE: JACOBSON J DATE OF ORDER: 21 MAY 2013 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Applicant's application for an extension of time in which to file and serve a Notice of Appeal be dismissed. 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 547 of 2013 BETWEEN: GARY ALLAN MAYTOM Applicant AND: MAXWELL WILLIAM PRENTICE OF BPS RECOVERY First Respondent CRAIG PRYOR OF WARREN MCKEON DICKESON SOLICITORS PTY LTD Second Respondent JACKSON LALIC SOLICITORS Third Respondent JUDGE: JACOBSON J DATE: 21 MAY 2013 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 17 April 2013 I made orders extending the time for filing and serving a notice of appeal by the applicant, Mr Maytom, until 7 May 2013. Order 3 provided in express terms that the grounds of the appeal were to be limited to the question of denial of procedural fairness in accordance with the ex tempore reasons for judgment I handed down on that day. 2 I imposed, as a condition of the extension, a requirement that the matter be referred to mediation before a Registrar of the Court no later than 1 May 2013. The mediation took place but was unsuccessful. Mr Maytom appears today. He has a legal guardian, namely his daughter, Ms Taylor, who unfortunately could not be present this morning. Nevertheless, I have considered Mr Maytom's affidavit very carefully and have taken into account everything that he put to me from the bar table insofar as I was able to accept what was said. 3 Mr Maytom explains in his affidavit that on 5 May 2013 he was travelling on a train from Museum rail station to Central and that he fell asleep and had with him many bags containing a lot of court documentation surrounding his matter, including a draft notice of appeal with a supporting affidavit. He says that when he reached Newcastle station he found that the two bags that he had with him were taken while he was asleep. He did not see who took the bags but he immediately phoned City Rail to try to recover them. 4 On 7 May 2013 Mr Maytom wrote to the registry of the Court. His letter is annexed to his affidavit. It explains the circumstances set out in his affidavit and says that he would need 10 to 14 business days to replace, restore and renew everything that he had lost. Mr Maytom received a letter from the registry dated 8 May 2013 which informed him that his request for an extension of time "to re-do my appeal" was dependent upon the filing of a properly completed notice of appeal which was due to be filed and served by 7 May 2013. 5 The letter went on to say that, if Mr Maytom had not complied with this order he would need to seek orders of the Court allowing him to file the notice of appeal; that is to say a further extension of time. On 10 May 2013 Mr Maytom filed an interlocutory application requesting a further extension pursuant to Rule 1.39 of the Federal Court Rules 2011 (Cth). 6 Mr Combe, who appears for the respondent, Mr Maxwell William Prentice, opposes the application for an extension of time. He points to a number of matters which he says I should take into account in refusing the application. First, he points out that notwithstanding the fact that Mr Maytom obtained a replacement of court documents no later than 9 May, it is now 21 May 2013 but no draft notice of appeal is attached to the application. Mr Combe does not seek to put in issue Mr Maytom's explanation of the circumstances in which he says he lost the court papers, rather, he emphasises that the order which I made on 17 April 2013 was limited to the question of denial of procedural fairness. 7 In particular, I did not, he submits, contemplate in the draft notice of appeal grounds which required a reconsideration of all of the factual matters which Mr Maytom apparently wishes to re-litigate. Mr Combe submits that although Mr Maytom requested 10 to 14 business days in his letter, in fact Mr Maytom is retired and that more than sufficient time has elapsed. The substance of Mr Combe's submission is that Mr Maytom has had more than sufficient time to prepare a draft notice of appeal. He says that even though Mr Maytom is only requesting until Friday of this week I should nonetheless refuse the application. 8 Mr Combe submits that it is evident in the light of what is revealed in Mr Maytom's affidavit that he is not seeking to obtain the just, cheap and quick resolution of this appeal. 9 He also draws my attention to paragraph [3] of my reasons for judgment of 17 April 2013. On that occasion I was informed by Mr Maytom's legal representative that the default judgment on which the sequestration order was made was set aside by an order of the Local Court made on 28 March 2012. However, I have before me today an order of the Local Court made on 8 June 2012, which shows that the order made on 28 March 2012 setting aside the default judgment was itself set aside. Moreover, it is evident from the orders of the Local Court of 8 June 2012 that the default judgment upon which the sequestration order was based remains on foot and stands. 10 In all of those circumstances, notwithstanding the concerns that I have for Mr Maytom, which I expressed in my earlier reasons for judgment and the fact that I accept what he put to me today about his ill health, I cannot, in all of the circumstances set out above, further extend the time for filing a notice of appeal. Accordingly, the interlocutory application filed on 10 May 2013 is dismissed. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 21 May 2013	1,729
federal_court_of_australia:fca/single/2019/2019fca1866	decision	commonwealth	federal_court_of_australia	text/html	2019-11-08 00:00:00	Coeur De Lion Investments Pty Limited v The President's Club Limited, in the matter of The President's Club Limited (No 2) [2019] FCA 1866	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca1866	2024-09-13T22:48:52.038828+10:00	FEDERAL COURT OF AUSTRALIA Coeur De Lion Investments Pty Limited v The President's Club Limited, in the matter of The President's Club Limited (No 2) [2019] FCA 1866 File number(s): QUD 801 of 2018 Judge(s): GREENWOOD J Date of judgment: 8 November 2019 Catchwords: CORPORATIONS – consideration of an application for an urgent interlocutory injunction Legislation: Corporations Act 2001 (Cth), s 250N(2), s 1324 Date of hearing: 8 November 2019 Date of last submissions: 8 November 2019 Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 14 Solicitor for the Plaintiff/Second and Sixth Cross-Respondents: Alexander Law Counsel for the Defendant/Cross-Claimant: Mr G Handran Solicitor for the Defendant/Cross-Claimant: McBride Legal ORDERS QUD 801 of 2018 BETWEEN: COEUR DE LION INVESTMENTS PTY LIMITED ACN 006 334 872 (and other Cross-Respondents named in the Schedule) Plaintiff/First Cross-Respondent AND: THE PRESIDENT'S CLUB LIMITED ACN 010 593 263 Defendant/Cross-Claimant JUDGE: GREENWOOD J DATE OF ORDER: 8 NOVEMBER 2019 THE COURT ORDERS THAT: 1. The application for an injunction pending the determination of the principal proceeding is dismissed. 2. The applicant, Coeur De Lion Investments Pty Limited, Palmer Leisure Australia Pty Ltd and Clive Frederick Palmer, pay the costs of the respondent of and incidental to the application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. EX TEMPORE REASONS FOR JUDGMENT GREENWOOD J: 1 This is an application for an injunction to restrain the conduct of the Annual General Meeting ("AGM") of the company described as The President's Club Limited ("TPC"). The AGM is a meeting which has been sought to be convened by a Notice of Meeting dated 14 October 2019 and the meeting is to be held on Monday, 11 November 2019, commencing at 5.30 pm, at the Athenaeum Club, 87 Collins Street, Melbourne, on Monday. 2 That AGM of the company is held in discharge of the company's obligation under s 250N(2) of the Corporations Act 2001 (Cth) which provides, relevantly, that a public company must hold an annual general meeting within five months after the end of its financial year. 3 The time required by s 250N(2) has fallen in in the sense that the company seeks to conduct its AGM within that timeframe, in compliance with the legislation. A failure to do so gives rise to the possibility of a penalty, although, of course, the Court can grant an extension of the period for holding the AGM. 4 The injunction that is sought today by the applicant is in aid of the causes of action which are advanced in the principal proceeding set down for trial for two weeks commencing on 2 December 2019. In that principal proceeding, the applicant seeks remedies or relief on the just and equitable ground arising out of a series of factual matters which are set out in the originating concise statement. These matters essentially go to contended conduct of the entity in respect of which it is said to be conducting a managed investment scheme operated unlawfully. This contention has been on foot for some considerable time and no interim relief has been sought in relation to that matter. 5 The circumstance which has arisen now is the intervention of the proposed AGM to be held on Monday, 11 November 2019. As I mentioned, this AGM is convened by the Notice of Meeting of 14 October 2019 and I understand the position to be that the applicants have had notice of that meeting from about at least about 21 October this year. 6 The matter concerning the principal proceeding was brought before the Court as recently as last Monday, 4 November 2019, in which some interlocutory questions were tested concerning a notice to produce and also an application on the part of the respondents for access to particular classes of documents. No mention was made on Monday of a concern about the AGM to be held on 11 November 2019 notwithstanding that the notice had gone out in October and the applicants were conscious of the impending meeting. 7 I am not satisfied that there is a serious question raised in relation to the contravening conduct which would warrant at this point in time the grant of a relief to restrain the conduct of the meeting by the company in discharge of its obligations under the Corporations Act. 8 The second aspect of the matter is that the subject matter of the meeting is set out in the notice and consists of five principal items. Those matters, relevantly for present purposes, include considering the possibility of the passing of an ordinary resolution that the directors be authorised to pay fees to directors of an amount not exceeding $60,000 or such other amount as may be resolved by members at the meeting in respect of the year ending 30 June. 9 What is put against the applicants is that the meetings historically, over the last few years at the very least, and at least since 2012, have been held at this time of the year, and the conduct of those meetings has comprehended resolutions for the approval of directors' remuneration. So it follows that the applicants have had a level of consciousness about the orthodoxy of these meetings at this moment in time of each year, and, in particular, they have had knowledge of the proposed meeting since October. However, the matter is now brought before the Court urgently on Friday afternoon, immediately before the conduct of the meeting. I am not satisfied that the application warrants the urgency that is now attached to it. 10 If this application was to be brought on, it ought to have been brought on properly on Monday of this week, but, certainly, with some greater degree of notice attaching to the contended urgency. As I said, I am satisfied that the applicants have had knowledge of the orthodoxy of the timing of these meeting and, of course, of the orthodoxy of the AGM being held in discharge of the Corporations Law obligations at which this very class of conduct historically has been brought before the meeting, that is to say, the approval of directors' fees in relevant amounts. So for those reasons, I am not satisfied that the status quo ought to be altered by the intervention of the Court today to restrain the AGM. 11 I am encouraged by the respondent to the application to characterise the present application as, in effect, yet another species of the oppressive conduct that is contended for in the principal proceeding. I choose not to do so. It is sufficient to dispose of the application today to simply recognise that I am not satisfied that there is a serious question made out in relation to the aid in which the injunctive relief is sought and in the way it is sought. Secondly, there has been delay in the bringing of the application as it could have been brought on in a timely way at any point, really, from about the third week of October going forward. 12 I do not propose to descend into any observations about whether this is a class of conduct which is said to fall within the oppressive conduct generally alleged in the principal proceeding. It is not appropriate to make any findings or observations about those matters. It is just sufficient to dispose of the matter to recognise that I am not satisfied that a contravention, relevantly, is made out which establishes properly a basis for intervention, and in any event, there has been delay in bringing the specific application, compounded by a recognition that, at least over the last few years, the applicants have had knowledge that the company brings on its AGM at about this time and foreshadows the possibility of ordinary resolutions being passed addressing the subject matter which is now addressed. 13 There is one further matter which I think is relevant to the question of the application. That concerns the entitlement of shareholders to vote at the meeting. It is conceded that at least there are some levies which have not been paid by CDLI or other applicants for this relief. In circumstances where that is an extant fact, I am satisfied that this is a matter that also goes to the discretion when urgent interlocutory relief is sought of the kind that is sought today. 14 For those reasons, I dismiss the application with costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. Associate: Dated: 8 November 2019 SCHEDULE OF PARTIES QUD 801 of 2018 Cross-Respondents Second Cross-Respondent PALMER LEISURE AUSTRALIA PTY LTD ACN 152 386 617 Third Cross-Respondent PALMER LEISURE COOLUM PTY LTD ACN 146 828 122 Fourth Cross-Respondent CLOSERIDGE PTY LTD ACN 010 560 157 Fifth Cross-Respondent PALMER COOLUM RESORT PTY LTD ACN 010 593 638 Sixth Cross-Respondent CLIVE FREDERICK PALMER	2,001
federal_court_of_australia:fca/single/1999/1999fca0398	decision	commonwealth	federal_court_of_australia	text/html	1999-04-14 00:00:00	Australian Securities & Investments Commission v Solution 6 Holdings Pty Ltd [1999] FCA 398	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca0398	2024-09-13T22:48:52.990278+10:00	FEDERAL COURT OF AUSTRALIA Australian Securities &Investments Commission v Solution 6 Holdings Ltd [1999] FCA 398 CORPORATIONS - proposed placement of shares - report of independent expert - subsequent proposed rights issue - whether expert report was or had become misleading - whether it was incomplete - silence - inter-relation between share placement and rights issue - whether meeting should be restrained - proposed restraint of Resolutions relating to placements. PRACTICE and PROCEDURE - application to restrain consideration of resolutions in general meeting - whether interlocutory or final in character - appropriate tests. WORDS AND PHRASES – "engaging in conduct, "misleading conduct" Corporations Law, ss 762, 995(2), 1324(1) and (5) Trade Practices Act s 52 Fraser v NRMA Holdings Ltd (1995) 55 FCR 452, followed Pancontinental Mining Ltd v Goldfields Ltd (1995) 16 ACSR 463, followed With v O'Flanagan [1936] AC 575 at 583, cited Traill v Baring 4 De G J & S 318, applied Tiplady v Gold Coast Calton Pty Ltd (1984) 3 FCR 426, cited Banque Bruxelles Lambert SA v Australian National Industries Ltd [1989] 21 NSWLR 502, cited Wright v TNT Management Ltd (1989) 21 NSWLR 679, cited AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v SOLUTION 6 HOLDINGS LIMITED NG 3035 OF 1999 TAMBERLIN J SYDNEY 14 APRIL 1999 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 3035 OF 1999 IN THE MATTER OF SOLUTION 6 HOLDINGS LIMITED ACN 003 264 006 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Applicant AND: SOLUTION 6 HOLDINGS LIMITED Respondent JUDGE: TAMBERLIN J DATE OF ORDER: 14 APRIL 1999 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Respondent, by itself, its servants or agents be restrained until further order from further distributing to its shareholders the Notice of General Meeting and Explanatory Statement set out in Exhibit "IM1" to the Affidavit of IA Macdonald sworn 31 March 1999. 2. The Respondent, by itself, its servants or agents in the event that Resolution 1 in the Notice referred to above is passed, be restrained from proceeding with the business of Resolutions 2 and 3 referred to in that Notice at the general meeting of members identified in that Notice, other than such steps as are necessary or appropriate to adjourn that meeting, in respect of the business referred to in Resolutions 2 and 3, without the prior leave of the Court. 3. Liberty to either party to apply on 24 hours notice. 4. Costs be reserved, to be further reconsidered at the hearing of this matter. 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 3035 OF 1999 IN THE MATTER OF SOLUTION 6 HOLDINGS LIMITED ACN 003 264 006 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Applicant AND: SOLUTION 6 HOLDINGS LIMITED Respondent JUDGE: TAMBERLIN J DATE: 14 APRIL 1999 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this matter I made Orders on 8 April 1999. I now provide my reasons for making those Orders. 2 The applicant, Australian Securities and Investments Commission ("ASIC"), seeks to restrain the respondent, Solution 6 Holdings Limited ("Solution 6") from further distributing to its shareholders a Notice of General Meeting and an Explanatory Statement dated 10 March 1999 (both of which I refer to as "the Statement") in relation to the making of placements of shares by the respondent with Thorney Holdings Pty Limited ("Thorney") on the ground that such a distribution includes conduct which is likely to mislead or deceive in contravention of s 995(2) of the Corporations Law ("the Law"). That section provides: "995(2) A person shall not, in or in connection with: (a) any dealing in securities; or (b) without limiting the generality of paragraph (a): (i) the allotment or issue of securities; (ii) any prospectus issued, or notice published, in relation to securities; … engage in conduct that is misleading or deceptive or is likely to mislead or deceive." 3 Other provisions of the Law relevant for present purposes are: "1324(1) Where a person has engaged, … in conduct that constituted …: (a) a contravention of this Law; (b) attempting to contravene this Law; … the Court may, on the application of the Commission, or of a person whose interests have been, are or would be affected by the conduct, grant an injunction, on such terms as the Court thinks appropriate, restraining the first-mentioned person from engaging in the conduct and, if in the opinion of the Court it is desirable to do so, requiring that person to do any act or thing." 4 Section 1324(5) further empowers the Court to make orders in the nature of compensation for loss or damage arising from contraventions of the Act. 5 By s 762 of the Law, a reference to "engaging in conduct" is a reference to doing or refusing to do any act including the making of or the giving effect to a provision of an agreement. 6 In addition to the proposed restraint on distribution of the Statement, ASIC also seeks to restrain Solution 6 in the general meeting from proceeding to consider two Resolutions referred to in the Notice and Statement; namely, Resolutions 2 and 3 which concern the issue and allotment of shares pursuant to a Share Placement Subscription Agreement made in January 1999. The meeting is scheduled for 10 am on Friday 9 April 1999. It should be noted that the injunction sought is not to restrain the holding of the meeting but to require the adjournment of the consideration of the two proposal Resolutions at that meeting. In all, there are six Resolutions proposed for consideration at the meeting. Background 7 Solution 6 is a company which has been listed on the Australian Stock Exchange ("ASX") since 1987 and which provides software and services to the accounting profession and other clients. On 8 January 1999, Solution 6 executed the Subscription Agreement with Thorney in order to raise an amount of $12,735,000 by way of share placements to Thorney. The agreement provided, among other things, for the issue and allotment of shares in Solution 6 to Thorney as follows: (1) The raising of an amount of $5,185,000 by way of allotment of 6,100,000 ordinary shares at 85 cents each; (2) The raising of $2,550,000 by allotment of 3 million ordinary shares of 85 cents each; and (3) The raising of $5 million by allotment of $4,545,455 converting to 8% preference shares at $1.10. 8 On 8 January 1999, the placement of 6,100,000 ordinary shares at 85 cents was effected. 9 It is a requirement of the Subscription Agreement that before the issue and allotment of the 7,445,445 shares can be effected, appropriate amendments must be made to the company's constitution and that Resolutions approving such steps should be passed by the company in general meeting. If these condition precedents are not satisfied then the obligations of the parties under the Subscription Agreement in relation to the issue of those shares are of no further force or effect. 10 On 5 March 1999, KPMG Corporate Finance furnished an Independent Experts Report in relation to the remaining proposed placements. This was called for by the ASIC Listing Policy Statement No 74. The opinion expressed by KPMG in that report was that the proposed transactions were fair and reasonable to the non-associated shareholders of Solution 6 and the Report formed part of the Statement which was issued by the directors on 10 March 1999 and provided to shareholders. 11 At the time of completion of its Reports on 5 March 1999, it is clear that KPMG was aware of the possibility of an imminent, one for two revocable rights issue by Solution 6 at a price of $2 per share, which would raise in the order of $47.3 million. On 10 March 1999, the Notice and Statement were sent to shareholders in relation to the placement fixing the meeting for 9 April 1999. Of the six Resolutions proposed only the first three are relevant to the present application. Of these Resolutions the first relates to amendments to the constitution of the company. The proposed Resolutions 2 and 3 concern the approval of the issue and the agreement to allot the shares to Thorney. On 12 March 1999, 2 days after the Notice and Explanatory Statement was sent out, Solution 6 notified ASX of an underwriting proposal in respect of the one for two rights issue. 12 The nature and extent of the present dispute is delineated in the following correspondence. On 15 March 1999, ASIC wrote to the solicitors for Solution 6, Corrs Chambers Westgarth ("Corrs"). The letter reads as follows: "I refer to the one for two rights issue announced by Solution 6 Holdings Limited ('SOH') on 12 March 1999 the prospectus for which will be dispatched to SOH shareholders prior to the date of the proposed meeting of the shareholders of SOH to be held on 9 April 1999, which will consider and, if thought fit, pass resolutions … … I now set out below what ASIC's would consider as essential minimum disclosure for SOH shareholders to enable them to assess the merits of approving Resolution 3 and make an informed decision on that resolution on 9 April 1999. 1. Comprehensive and prominent disclosure of a) the impact of the rights issue on Resolution 3 including, but not limited to, an opinion from KPMG Corporate Finance (NSW) Pty Ltd about the implications of the rights issue on the contents of their report dated 5 March 1999, and revised opinion taking into account the rights issue, and b) comprehensive additional disclosure of the impact of the rights issue on the information that was provided to shareholders in considering Resolution 3, and c) details of the impact of the rights issue on Thorney's entitlement to SOH shares, given that Thorney, is a sub-underwriter of the rights issue. In ASIC's view this disclosure must be in a document separate from the rights issue prospectus. 2. The offer of the opportunity to SOH shareholders who have sent in their proxies for Resolution 3 to withdraw their proxies. In the absence of the above its ASIC's view that it would be unreasonable to expect the shareholders of SOH to be able to cast properly informed votes on the proposed solutions. Please advise in writing by 5.00 pm on 16 March 1999 whether SOH agrees to provide to SOH shareholders the information outlined above. …" 13 On 16 March 1999, the prospectus relating to the case for rights issue was furnished to ASIC. 14 On 17 March 1999, Corrs stated in a facsimile to ASIC: "… We understand that while KPMG is prepared to confirm the details of the attached letter (in terms of the impact of the rights issue on Thorney's entitlement to ordinary shares) the directors do not believe that commissioning a new Independent Expert's Report (which is what will be required to obtain a revised opinion) is warranted in order for shareholders to cast properly informed votes of the proposed resolutions. This view is based on the fact that the placement to Thorney and the rights issue are two separate and distinct transactions, both of which require approval from shareholders to proceed and in which the shareholders have been properly informed. …" 15 On 22 March 1999, ASIC informed Corrs that: "… ASIC does not necessarily accept the contention that doubling the issued capital of Solution 6 does not affect the disclosure made in relation to the section 623 transaction, or that the two transactions can be considered without reference to the other. However, if the statement reflects the views of Solution 6 directors, those views must be disclosed to Solution 6 shareholders. It is not appropriate that Solution 6 shareholders are left to surmise or infer this from their directors' silence on the interaction of the two transactions…" 16 On 24 March 1999, KPMG wrote to Corrs saying: "We understand that the Australian Securities and Investment Commission has requested : • our opinion on the implications of the proposed Solutions 6 Holdings Limited ("Solution 6") rights issue (of approximately 23.7 million shares at $2.00 per share) in the context of our report dated 5 March 1999; and • a revised opinion (as contained in our report dated 5 March 1999) taking into account the proposed rights issue. In our view the proposed transaction which we considered in our report dated 5 March 1999 and the present proposed rights issue are two separate transactions. Each must be viewed against a background of a particular set of financial and operational circumstances faced by Solution 6 at that time. Further while we were aware of the possibility of a rights issue when we issued our report dated 5 March 1999, it is inappropriate for us to attempt to recast the opinion contained in that report in the context of the proposed rights issue having occurred as, firstly, it hadn't at the time our report was issued and, secondly, the overall circumstances of Solution 6 are likely to have changed in the intervening period. …" 17 On 31 March 1999, the prospectus for the rights issue was furnished to shareholders. 18 On the same day ASIC instituted the present proceedings in this Court. Contentions 19 ASIC contends that the issue of the Explanatory Memorandum and the subsequent refusal to amend or supplement the KPMG Report was "conduct" in relation to the issue of securities within s 995(2)(b)(i) of the Law. It says that the express purpose of both the share placements and of the share rights issue were the same; namely, to enable the company to raise funds to assist it to develop market strength, particularly in the area of intellectual property which was part of its core business. The funds were required to allow the company to consolidate within the accounting software industry and to develop new methods and software in order to provide substantial economic benefits to its customers and the accounting market generally. 20 Specifically, it is said by ASIC that the Notice and Memorandum, including the KPMG Report, did not refer to the proposed one for two rights issue and did not explain or consider the implications of that issue with respect to the placement. In particular, it is said that the Report did not explain to shareholders the necessity for the proposed share placements to Thorney in the context of the proposal for the $47.3 million rights issue. This failure, it is said, was a material omission which made the Statement and Report misleading. 21 It is also submitted by Counsel for ASIC that even if the Explanatory Statement and Report were not misleading when issued on 10 March 1999 they became misleading after 12 March 1999 when the rights issue was announced and confirmed without any subsequent amendment or supplementary material being provided in respect of the 5 March 1999 KPMG Report. The KPMG Report, when discussing the question of funding, considered the potential use of debt but it did not consider any possibility of funds being provided by the imminent rights issue. 22 For Solution 6 it is said that the Statement and Report were complete and accurate at the time they were sent out on 10 March 1999 and that there was no statutory obligation on Solution 6 to send out further or varied material. There was no reason, it is said, why the rights issue should have been dealt with in the Statement or the KPMG Report. Further, it is submitted that the silence of KPMG and the directors as to the rights issue cannot be said to be material to the decision which the shareholders faced in relation to the placements. Counsel for Solution 6 submitted that all the shareholders needed to know in order to make an informed decision was that there was a rights issue at $2 a share. They would, so it is said, have also been aware that as recently as 7 April 1999 the shares were trading on the ASX at $3.25. The shareholders must be treated as well-informed shareholders. They had received a copy of the Rights Issue Prospectus in early April and also a letter from the Chairman of 19 March 1999 and they were, therefore, well able to properly consider the relevant issues in relation to the first three Resolutions on the agenda for 9 April 1999. Interlocutory or final proceeding 23 A submission was made that the application was one for final, as opposed to interlocutory, relief and that it was not appropriate to deal with the application at this stage as a final hearing. Moreover, it was said that the standard requirements for an interlocutory injunction; namely, arguable case and balance of convenience were not the appropriate benchmarks against which to consider the application and the evidence. 24 During the course of the discussion which took place in the course of the hearing it was evident that ASIC does not press for any declaration at this stage. Presently ASIC seeks a restraint upon the consideration by the meeting of Resolutions 2 and 3 concerning issue and allotment in the event that Resolution 1 is passed. Of course Resolutions 2 and 3 could not be passed if Resolution 1 was not approved because the Articles would not provide for such shares. In my view the relief sought at this stage of the proceeding is interlocutory in character. The applicant does not seek any declaration nor does it make any determination of rights on a final basis. What is sought is a holding restraint until proper consideration can be given to the question as to whether there has been a contravention of the Law. Case law 25 In the course of argument reference was made to two decisions of the Court. These were Fraser v NRMA Holdings Ltd (1995) 55 FCR 452, which was a decision of the Full Court and a decision of Tamberlin J in Pancontinental Mining Ltd v Goldfields Ltd (1995) 16 ACSR 463. 26 In Fraser's Case the Full Court considered the proposal to demutualise NRMA Holdings Limited with respect to a claim that there had been a contravention of s 52 of the Trade Practices Act 1974 (Cth) in the form of statements and silences which amounted to misleading and deceptive conduct. In that case, the Court emphasised that a practical and realistic approach should be taken. The Court said, at 468: "It is important that the adequacy of the information provided by the prospectus and supporting documents be assessed in a practical, realistic way having regard to the complexity of the proposal. In the circumstances the Court should not be quick to conclude that a contravention of s 52 has occurred because other information could have been provided that was not. The need for the applicants to establish the materiality of errors and omissions is an important step in the proof of their claims." 27 In the present case it is necessary for ASIC to establish that the failure to refer to or consider the implications of the rights issue is a material omission or failure in relation to the consideration of the proposals for placement of the shares. 28 At 467 their Honours said: "Whilst s 52 does not by its terms impose an independent duty of disclosure which would require a corporation or its directors to give any particular information to members asked to consider a motion in general meeting, where information for that purpose is promulgated, unless the information given constitutes a full and fair disclosure of all facts which are material to enable the members to make a properly informed decision, the combination of what is said and what is left unsaid may, depending on the full circumstances, be likely to mislead or deceive the membership." (Emphasis added) 29 In Pancontinental Mining an issue was raised about the need to issue supplementary information in order to prevent material becoming misleading or deceptive. In that case, one of the issues for consideration was whether disclosure ought to have been made of the fact that a prospectus had been withdrawn by the company after the ASIC had made it clear that the prospectus would not be registered in its original form. 30 At 487-488 Tamberlin J said: "There is no complaint that the statement was misleading when it was made or registered in this respect, but the allegation is that because of a subsequent change in circumstances, namely the withdrawal of the prospectus, the statement has now become misleading … … Furthermore, I think that the circumstances of the withdrawal and the attitude of the ASC to the prospectus are material information which ought be made known to the shareholders in Pancontinental. The complications and the surrounding circumstances which led to the 'withdrawal' of the prospectus would, if not disclosed, be a contravention of ss 750 and 995. However, in my view the matter is one which is capable of correction by supplementary statement disclosing and clarifying this aspect."(Emphasis added) 31 Where an expert opinion is expressed or a recommendation is made in relation to a decision to be made at a known future time and the party expressing that opinion or making that recommendation subsequently becomes aware of a matter which could materially affect that opinion, then it may be misleading conduct to fail to take steps to supplement or vary the report or recommendation as originally expressed. The Report is designed to operate at the time when the decision is to be made; namely, on 9 April 1999, and there is a clear possibility of inaccuracy or incompleteness arising from supervening events. 32 In the present case, the recommendation of the directors and the report of KPMG up to and including the time of the meeting on 9 April 1999 can arguably be characterised as an ongoing representation which carries with it a responsibility to qualify or vary, where appropriate, if circumstances materially changed after 10 March 1999 in order to prevent it becoming misleading: see for example With v O'Flanagan [1936] Ch 575 at 583 per Lord Wright and Traill v Baring (1864) 4 De G J & S 318 at 329 where Lord Justice Turner said: "I take it to be quite clear, that if a person makes a representation by which he induces another to take a particular course, and the circumstances are afterwards altered to the knowledge of the party making the representation, but not to the knowledge of the party to whom the representation is made, and are so altered that the alteration of the circumstances may affect the course of conduct which may be perused by the party to whom the representation is made, it is the imperative duty of the party who has made the representation to communicate to the party to whom the representation has been made the alteration of those circumstances…." 33 See also the observations of Fitzgerald J in Tiplady v Gold Coast Calton Pty Ltd (1984) 3 FCR 426 at 458-459. Also Banque Brussels Lambert SA v Australian National Industries Ltd (1991) 21 NSWLR 502 at 529. 34 In my view, in considering what amounts to misleading conduct, the substance of the above remark is apposite to the present case. 35 In order to determine whether conduct is misleading, the Court must focus on what the conduct or statement would give a shareholder to understand or what is to be taken from that conduct: see Wright v TNT Management Ltd (1989) 15 NSWLR 679 at 683 per Mahoney JA. Arguable case In support of the application, ASIC relies on an affidavit from Mr Reading, a partner of Pricewaterhouse Coopers, who practises in the Financial Advisory Services Division. He has prepared a report of 31 March 1999 commenting upon the Report furnished by KPMG. He was not called to give any oral evidence, nor was he cross examined. No doubt this was because of the urgency of the matter. The thrust of his evidence is that the rights issue and the placement were closely interrelated in a number of important respects and that the rights issue would significantly impact upon the assessment of the placement made by KPMG. He considered that the indicative value for Solution 6 shares adopted by KPMG in its 5 March Report would be significantly varied by a one for two rights issue at $2 per share. The share value could increase from $1.05 to a figure in the order of $1.37. This latter figure was 38% above the discounted issue price to Thorney referred to in the KPMG Report. He considered that this aspect of rights issue should have been considered by KPMG and drawn to the shareholders' attention. He also pointed out that the placements would occur at amounts less than the net assets per share of the Company if the rights issue is taken into account. He considered that the funds raised by the rights issue would affect the ability of Solution 6 to complete its contracts without a placement. Several other matters were adverted to by Mr Reading including his opinion that the amount of the rights issue would have a significant impact on a full and proper consideration of the placement. 36 Clearly the Independent Expert Report of KPMG is, and was intended to be, of central importance to the consideration by shareholders of the proposed placement. Emphasis is naturally placed on it in the Chairman's letter to shareholders set out in the Notice and Memorandum of 10 March 1999. It is also pointed out there that the KPMG report has advised that the placement is fair and reasonable. The Directors' Recommendation makes reference to and emphasises the conclusions of KPMG. 37 The objective of the report is, of course, to fully and fairly inform the recipients of the merits or demerits of the placement so that they can exercise a properly informed judgment on the proposed Resolutions. Where circumstances change, in significant and material respects, between the date of the report and the date of the meeting, it is, in my view, reasonably arguable that it is misleading conduct to allow the report to remain unamended and a fortiori to refuse to amend it. The consequence of such a course of conduct is that shareholders might be led to make decisions on an understanding which is no longer accurate or comprehensive. As the case law referred to earlier indicates, statements and opinions which may not be misleading when made, if unamended, or not supplemented by reference to later events, may become misleading. 38 In circumstances where an announcement is made only two days after the Notice and Statement are sent out, to the effect that there will be a rights issue to shareholders at a price of $2 raising $47.3 million, such a statement appears prima facie to be both material and important to a decision whether to approve the placement. 39 It is not sufficient for the shareholders to simply be informed subsequently of the fact of the rights issue and, perhaps, to be aware of the current market behaviour of share prices in Solution 6. In order to prevent a misleading view being formed it is important, in my view, that the shareholders be informed of the views of the directors and KPMG as to the impact of the rights issue on the desirability of the placement and that these views be accurate at the time when the decision is proposed to be made; namely on 9 April 1999. 40 In approaching the above questions, it is important to bear in mind that the underlying policy of the Law is to ensure that the acquisition, issue, or allotment of securities takes place in an accurately informed market where shareholders are supplied with sufficient information to enable them to properly assess the merits of any proposal related to the acquisition of shares. This policy is reflected, for example, in s 731(c) of the Law. 41 I do not accept that the Thorney placements and the one for two rights issue can be regarded as separate and independent transactions with no inter–relationship calling for consideration of their interaction and co-existence. They are arguably inter-related in a number of material respects as evidenced by the Pricewaterhouse Coopers' Report. 42 It was also submitted by Counsel for Solution 6 that the present circumstances only demonstrate a difference of opinion between two professional accounting groups in relation to what ought to be done and that this is not, of itself, indicative that there is any contravention of the Act or does not support in any way a submission that there is an arguable case. In my view, in the circumstances of the present case, the views of Mr Reading in relation to the adequacy of the KPMG Report are important considerations to be taken into account. They represent not simply opinions on hypothetical questions but go directly to the importance of the inter-relationship between the two fund raising proposals represented by the placement and the rights issue. 43 I am persuaded, on the present state of the evidence, that there is an important temporal and financial inter-relationship which arguably requires further comment in order to prevent the statements made in the KPMG Report from being misleading by omission. In this respect I think that the refusal to deal with the rights issue in relation to the placement arguably does amount to misleading and deceptive conduct. Such a failure is, therefore, arguably in contravention of s 995. I am also satisfied that, subject to any arguments as to the balance of convenience, in the present case it is appropriate to grant an interlocutory injunction to restrain further distribution of material and to restrain the consideration of proposed Resolutions 2 and 3. Balance of convenience 44 The meeting is due to be held tomorrow. It is said that for all practical purposes in the "real world" shareholders have all the information they need and that the balance of convenience requires that all proposed Resolutions should be put to shareholders at the meeting. It is also said that there is every indication, having regard to current market prices of the shares and the number of proxies which have been lodged, that the amendment to the Articles would clearly be rejected so that the resolution should be allowed to be put in order to resolve this question. In the course of submissions, Solution 6 indicated that it would agree not to allot the shares if the Resolutions 1 2 and 3 were passed, until the expiry of two business days from the resolution so that an opportunity would be provided for an injunction to be sought in order to restrain the issue and allotment of the shares. 45 In my opinion market fluctuations in the share price do not afford a reason why a meeting should be permitted to proceed on the basis of incomplete and arguably misleading material. Such a course would ignore the underlying purpose of the Law. 46 In any event, the difficulties raised in the balance of convenience arguments advanced for Solution 6 are largely overcome by the final proposed formulation of the relief sought by ASIC. The proposed relief now sought is to the effect that the further distribution of the 5 March 1999 material should be restrained. This clearly appears to be appropriate although, perhaps, of limited effect at this late stage. The relief sought permits the proposals as to amendment of the articles to proceed but adjourns consideration of the Resolutions to issue and allot the shares in the event that Resolution 1 is passed. This has the advantage that there will be no Resolutions passed approving the issue and allotments of the placement shares so that the rights of Thorney under the placement will not crystallise and enliven the Subscription Agreement. 47 In my view, these orders largely avoid any inconvenience in that the meeting can proceed and the other Resolutions can be considered and dealt with. The two relevant Resolutions which are proposed to be restrained can be adjourned for consideration at a later stage when the substance of the parties' arguments can be properly considered on completed evidence and a final decision can be made as to whether there is a contravention of the Law. 48 If the injunction were refused then the Resolutions would go before the meeting and it would proceed on the basis of conduct which arguably is misleading and deceptive and which may affect the shareholders' decision. This result is clearly inappropriate and undesirable. Accordingly, I am persuaded that the balance of convenience lies in favour of granting the injunction to restrain distribution of the material and consideration of Resolutions 2 and 3, in the event that Resolution 1 is passed. 49 I have already made orders in this matter. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. Associate: Dated: 14 April 1999 Counsel for the Applicant: T Lynch Solicitor for the Applicant: Australian Securities and Investments Commission (In- house Counsel) Counsel for the Respondent: S.J Archer Solicitor for the Respondent: Corrs Chambers Westgarth Date of Hearing: 7 April 1999 Date of Orders: 8 April 1999 Date of Judgment: 14 April 1999	7,120
federal_court_of_australia:fca/full/2024/2024fcafc0036	decision	commonwealth	federal_court_of_australia	text/html	2024-03-19 00:00:00	Tratter v Aware Super [2024] FCAFC 36	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2024/2024fcafc0036	2024-09-13T22:48:53.396815+10:00	FEDERAL COURT OF AUSTRALIA Tratter v Aware Super [2024] FCAFC 36 Appeal from: Tratter v Aware Super [2023] FCA 491 File number(s): VID 440 of 2023 Judgment of: O'CALLAGHAN, ANDERSON AND MCELWAINE JJ Date of judgment: 19 March 2024 Catchwords: SUPERANNUATION — appeal under s 1057(1) of the Corporations Act 2001 (Cth) from determination of the Australian Financial Complaints Authority (AFCA) affirming a decision of the trustee of a superannuation fund in relation to the apportionment of a death benefit — where the trustee of the fund apportioned the death benefit 70% to the deceased member's former spouse and 30% to the deceased member's mother — whether AFCA made error of law in determining that the trustee's determination was neither unfair nor unreasonable — no error of law established — appeal dismissed Legislation: Acts Interpretation Act 1901 (Cth) s 25D Corporations Act 2001 (Cth) ss 1053, 1055, 1055A, 1057 Superannuation Industry (Supervision) Act 1993 (Cth) s 10(1) Cases cited: Board of Trustees of the State Public Sector Superannuation Scheme v Edington [2011] FCAFC 8; 119 ALR 272 Carrascalao v Minister for Immigration and Border Protection [2017] FCAFC 107; 252 FCR 352 Corbisieri v NM Superannuation Proprietary Limited [2023] FCA 1319 EEU20 v Meat Industry Employees' Superannuation Fund Pty Ltd [2020] FCA 1359 Minister for Immigration and Border Protection v Eden [2016] FCAFC 28; 240 FCR 158 Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11; 237 FCR 1 Minister for Immigration and Border Protection v SZSRS [2014] FCAFC 16; 309 ALR 67 QSuper Board v Australian Financial Complaints Authority Limited [2020] FCAFC 55; 276 FCR 97 Reeves v Nulis Nominees (Australia) Limited (Trustee) [2022] FCA 627 Wan v BT Funds Management Limited [2022] FCFCA 189 Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 95 Date of hearing: 20 February 2024 Counsel for the Appellant: The Appellant appeared in person Counsel for the First Respondent: Mr O Wolahan Solicitor for the First Respondent: KHQ Lawyers Counsel for the Second Respondent: The Second Respondent filed a submitting notice Counsel for the Third Respondent: The Third Respondent filed a submitting notice ORDERS VID 440 of 2023 BETWEEN: RENATE TRATTER Appellant AND: AWARE SUPER First Respondent CHRISTOS ORFANIDIS Second Respondent AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY Third Respondent order made by: O'CALLAGHAN, ANDERSON AND MCELWAINE JJ DATE OF ORDER: 19 March 2024 THE COURT ORDERS THAT: 1. The appeal is dismissed. 2. The appellant pay the first respondent's costs of the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT O'CALLAGHAN J: 1 I agree with Anderson J. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice O'Callaghan. Associate: Dated: 19 March 2024 REASONS FOR JUDGMENT ANDERSON J: INTRODUCTION 2 The late Trevor Tratter (the deceased) died in March 2019. There is a death benefit payable of approximately $243,000 arising from his membership of what is now known as the Aware Super superannuation fund (Fund). The deceased is the appellant's son. 3 The first respondent (Trustee), acting in its capacity as trustee of the Fund, determined on 30 March 2020 to pay the death benefit in the following proportions (Trustee's decision) (a) 70% to the second respondent, Mr Christos Orfanidis, as the deceased's spouse; and (b) 30% to the appellant, the deceased's mother, as a financial dependant. 4 By its Determination made on 3 November 2021, the third respondent (AFCA) affirmed the Trustee's Decision (the Determination). 5 The appellant brought an appeal against the Determination pursuant to s 1057(1) of the Corporations Act 2001 (Cth). That appeal was dismissed by order of the primary judge on 19 May 2023 (Order). The primary judge's reasons are Tratter v Aware Super [2023] FCA 491 (Judgment). 6 By her further amended notice of appeal filed on 21 December 2023, the appellant appeals from the Judgment and Order (Amended NOA). 7 The active parties on the appeal are the appellant and the Trustee. AFCA and the second respondent have filed submitting notices. 8 The grounds articulated in the Amended NOA are set out at [39] below. The appellant filed written submissions on the appeal dated 22 January 2024, and made oral submissions at the hearing on 20 February 2024. As will be further discussed, the appellant's written and oral submissions did not proceed by reference to the grounds in the Amended NOA. BACKGROUND 9 The deceased joined the Health Super superannuation fund on 16 March 2009. Health Super and the Fund, which at the time was named First State Super, merged on 30 June 2011. The deceased held insurance cover through Health Super and (after the merger) the Fund, including death cover. 10 On or before 12 August 2010 (as a member of Health Super), the deceased nominated the appellant as the preferred recipient of the whole of any death benefit payable from Health Super in respect of him. By reason of the terms of the Health Super fund trust deed, the nomination was not binding on the trustee of Health Super. 11 The deceased's nomination was transferred from Health Super to the Fund upon the merger. The Trustee indicated in the deceased's annual benefit statements that his nomination was non-binding. 12 From 2014, the deceased's annual benefit statements included an explanation of the implications of having a non-binding nomination and drawing attention to the option of making a binding nomination under the rules of the merged fund. 13 The deceased died on or around 25 March 2019. 14 The Fund was governed by a Trust Deed dated 19 February 1999 (as amended from time to time) (Trust Deed) and the Rules of the Fund annexed to the Trust Deed (Fund Rules). 15 At the relevant time, rule 8.6 of Division 1A of the Fund Rules relevantly provided as follows: (italics in original): Recipient of a member's benefit – on death 8.6 Subject to any contrary provision in a Section or Division of these Rules, if a member dies: … (b) … the member's benefit must be cashed in favour of either or both of: (i) the member's legal personal representative; and (ii) one or more of the member's dependants, as the Trustee determines… 16 Rule 1.11 of Division 1A of the Fund Rules provided that italicised words and expressions in the Fund Rules had the same meaning as in the Superannuation Industry (Supervision) Act 1993 (Cth) and Superannuation Industry (Supervision) Regulations 1994. 17 Accordingly, for the purposes of rule 8.6(b)(ii) of Division 1A of the Fund Rules, "dependant" had the meaning given in s 10(1) of the SIS Act, which was as follows (bolding and italics in original): dependant, in relation to a person, includes the spouse of the person, any child of the person and any person with whom the person has an interdependency relationship. 18 Relevantly, for the purposes of this appeal, the term spouse was defined in s 10(1) of the SIS Act as including "another person who, although not legally married to the person, lives with the person on a genuine domestic basis in a relationship as a couple". 19 The SIS Act definition of "dependant" was inclusive and did not exclude financial dependants. Accordingly, a person that was financially dependent on the deceased before death could be a dependant for the purposes of the SIS Act. 20 Rules 8.9 and 8.10 provided as follows: 8.9 The Trustee may permit a member to inform the Trustee (by notice) of the person or persons that the member would prefer to receive the member's benefit on or after the death of the member (non-binding nomination notice). 8.10 If the Trustee has received a non-binding nomination notice from a member, the Trustee must consider the notice but must exercise its own discretion as to the person or persons to whom the member's benefit is to be paid. The Trustee's decision 21 The Trustee communicated to the second respondent and the appellant that it proposed to distribute the death benefit payable in respect of the deceased in the following proportions: (a) 70% to the second respondent; and (b) 30% to the appellant. 22 The second respondent and the appellant objected to this decision, with each party disputing the financial dependence of the other. 23 The Trustee, after conducting an internal review, determined to affirm its decision. Its reasons were communicated to the appellant and second respondent by separate letters dated 11 May 2020. Those letters relevantly stated: (a) both the appellant and the second respondent were considered as dependants within the meaning of the "superannuation law"; (b) the deceased's nomination of the appellant as a beneficiary preceded the commencement of his relationship with the second respondent; (c) the deceased's nomination was not binding, and therefore the Trustee was required to exercise its discretion to determine the shares to be distributed to the dependants; (d) as the spouse of the deceased, the second respondent was recognised in "superannuation law" as a dependant and had the primary right to receive the deceased's death benefit. (e) the appellant had provided evidence of partial financial dependence in relation to sharing some expenses for the property she jointly owned with the deceased; and (f) weighing up the amount of those expenses, the Trustee considered a distribution of 30% of the deceased's death benefit to the appellant was a reasonable provision to cover the approximate amount she would have continued to receive from the deceased had he not died. AFCA's Determination 24 On 12 May 2020, the second respondent lodged a complaint with AFCA in relation to the Trustee's decision, claiming that he should have received 100% of the deceased's death benefit. The appellant was joined as a party to the complaint and submitted to AFCA that she should have received 100% of the death benefit. 25 Before turning to AFCA's Determination of the complaint, it is useful to outline the statutory context in which AFCA made the Determination. 26 Section 1053(1) of the Corporations Act prescribes the nature of complaints that may be made to AFCA in relation to superannuation. Section 1053(1)(j) provides that a person may make a complaint to AFCA that a decision relating to the payment of a death benefit is or was "unfair or unreasonable". 27 In the determination of a superannuation complaint by AFCA, s 1055(3) provides: (3) AFCA must affirm a decision relating to the payment of a death benefit if AFCA is satisfied that the decision, in its operation in relation to: (a) the complainant; and (b) any other person joined under subsection 1056A(3) as a party to the complaint; was fair and reasonable in all the circumstances. 28 Section 1055(5) provides: If AFCA is satisfied that a decision relating to the payment of a death benefit, in its operation in relation to: (a) the complainant; and (b) any other person joined under subsection 1056A(3) as a party to the complaint; is unfair or unreasonable, or both, AFCA may take any one or more of the actions mentioned in subsection (6), but only for the purpose of placing the complainant (and any other person so joined as a party), as nearly as practicable, in such a position that the unfairness, unreasonableness, or both, no longer exists. 29 AFCA's powers in s 1055(6) include the power to vary, set aside, substitute, or remit a decision. 30 AFCA affirmed the Trustee's decision in its Determination. 31 In section 2.2 of the Determination, AFCA referred to the fact that the Deceased had nominated the appellant to receive 100% of his death benefit. However, AFCA found that the deceased knew, or should have known, that the nomination was not binding on the Trustee, and that he had an opportunity to make a binding nomination in the Fund after becoming a member of the Fund through the merger. AFCA therefore found that the nomination was not binding and could not be treated by the trustee as being binding. AFCA's reasons in this respect are relevant to the appellant's appeal and are discussed further at [89] below. 32 In section 2.3 of the Determination, AFCA concluded that the second respondent was a dependant of the deceased. This conclusion followed from AFCA's finding that, at the time of the deceased's death, the second respondent was living with the deceased on a genuine domestic basis in a relationship as a couple and was therefore a "spouse" of the deceased. AFCA's finding that the second respondent was a spouse of the deceased was supported by detailed reasons. AFCA's reasons in this respect are relevant to the appellant's appeal, and are summarised at [68]-[69] below. 33 In section 2.4 of the Determination, AFCA also concluded that the appellant was also a dependant of the deceased. In sections 2.5 and 2.6 of the Determination respectively, AFCA concluded that both the appellant and the second respondent had an expectation of receiving financial support from the deceased. AFCA's reasons in sections 2.4-2.6 of the Determination are relevant to the appellant's appeal, and are summarised at [76]-[78] below. 34 AFCA ultimately concluded, in section 2.7 of the Determination, that: [T]he trustee's decision is fair and reasonable in its operation in relation to the complainant [the second respondent] and the joined party [the appellant] in all the circumstances. The trustee correctly identified each of the [second respondent] and [appellant] as being dependants of the deceased member. It was open to the trustee to allocate the death benefit in the proportions that it identified. The purpose of a superannuation death benefit is to provide for a deceased member's dependants who were receiving financial support and might reasonably have expected to receive or continue to receive financial support from the deceased member, had they not died. As the deceased member's spouse, the complainant could reasonably have expected to receive financial support from the deceased member for the remainder of their lives together. As a person who was partially financially dependent on the deceased member, the joined party could reasonably have expected to receive some financial support from the deceased member for the remainder of her life. … With the exercise of a trustee discretion, there is often a range of decisions that might be considered fair and reasonable, if the trustee's decision falls within that range, it must be affirmed. I am satisfied it was open to the trustee to allocate the death benefit in the manner and proportions it did. Appeal to the primary judge 35 Pursuant to s 1057(1) of the Corporations Act, the appellant was entitled to appeal AFCA's Determination to the Federal Court, on "a question of law". 36 On 12 April 2022, the appellant filed such an appeal. 37 Before the primary judge, there were two grounds of appeal, as set out in a second further amended notice of appeal dated 27 April 2023. First, the appellant submitted that AFCA erred in its decision by asking itself the wrong question, namely whether the determination of the Trustee was open, as opposed to whether the Trustee's decision was fair and reasonable in all the circumstances. Secondly, the appellant submitted that AFCA had failed to provide any or adequate grounds for its decision that the Trustee's decision was fair and reasonable in its operation. 38 As noted by the primary judge, although the proceeding before his Honour was styled an "appeal", it was a form of statutory judicial review on a question of law: Judgment [1]. 39 The primary judge dismissed the appeal. The primary judge's key conclusions in the Judgment were as follows: (a) The primary judge held that it was clear from AFCA's reasons that it addressed itself to the correct question, namely whether the Trustee's decision was fair and reasonable in its operation in relation to the appellant and the second respondent in all the circumstances: at [46]. Relatedly, the primary judge rejected the contention that AFCA asked itself only whether the Trustee's decision was open to it. Instead, AFCA merely recognised that, in the circumstances of this case, there was an acceptable range of decisions that might be considered fair and reasonable: at [48]. (b) The primary judge rejected a submission that AFCA erred by accepting the correctness of the Trustee's decision as a starting point. The primary judge held that AFCA's determination was conditioned on forming an opinion that the Trustee's decision was unfair, unreasonable or both. The primary judge further noted that, in addressing this question, AFCA had regard to the deceased's non-binding nomination: at [49]. (c) The primary judge rejected a submission that AFCA's reasons for its determination were inadequate. The primary judge held that AFCA set out in sufficient detail the findings that it made on questions of fact, and its conclusion was one of evaluation based on its anterior findings: at [50]. APPEAL TO THE FULL COURT – THE APPELLANT'S APPEAL GROUNDS AND SUBMISSIONS 40 By her Amended NOA, the appellant relies on the following three grounds of appeal: (1) The "Decision" (which I understand is intended to be a reference to AFCA's Determination) is unreasonable, unfair and/or unjust such that there has been a failure to properly exercise the function of making a Determination as required by s 1055 of the Corporations Act (Ground 1). (2) The "Decision" is unreasonable, unfair and/or unjust such that there has been a failure to properly exercise the function of making a Determination as required under the "ASIC Regulations" 267.123; 267.128; 267.134 and 267.135 (Ground 2). (3) The primary judge erred in failing to find that: (a) the second respondent was not the spouse of the deceased at the time of the deceased's death (Ground 3(a)); and (b) the appellant was the sole dependant of the deceased at the time of the deceased's death and was therefore entitled to 100% of the death benefit payable in respect of the deceased (Ground 3(b)); and (c) in the event only that the finding was that the second respondent was the spouse of the deceased at the time of the deceased's death, the primary judge erred in failing to find that the "Decision" regarding the disproportionate distribution split of 70/30 favouring the second respondent was unreasonable, unfair and/or unjust (Ground 3(c)); and (d) in the event that the finding was that the second respondent was the spouse of the deceased at the time of the deceased's death or otherwise, the primary judge erred in his Honour's finding in relation to the "Decision" regarding the deceased's nomination of the appellant as his sole beneficiary for 100% of his death benefit (Ground 3(d)). 41 As previously noted, the appellant's written submissions did not proceed by reference to the grounds in the Amended NOA. The appellant made detailed oral submissions at the hearing of the appeal which were broadly consistent with her written submissions, albeit her oral submissions substantially expanded on her written submissions. 42 Taken together, the appellant's submissions identify three discrete errors in AFCA's reasons which I understand the appellant to assert ought to have been found by the primary judge to constitute errors of law within the meaning of s 1057(1) of the Corporations Act. 43 First, the appellant alleges that the primary judge erred in failing to find that AFCA made an error of law in finding that the second respondent was the "spouse" (as defined in the SIS Act) of the deceased at the time of the deceased's death. This submission appears to correspond with Grounds 3(a) and (b) of the Amended NOA. For convenience, I will refer to this as the Status Error. 44 In her oral submissions, the appellant identified seven errors that she said gave rise to the Status Error. Those errors were as follows: (a) AFCA failed to take into account relevant considerations which established that the second respondent and the deceased were not in a genuine domestic relationship. The range of errors identified by the appellant as falling within this category were extensive. It is sufficient to set out the most notable errors, which were: (i) AFCA's alleged failure to take into account consistent and contemporaneous public declarations by the deceased in legal documents and social media that the deceased was single; (ii) AFCA's reliance on materials such as photographs, videos and voicemail messages which was said to be consistent with the deceased and the second respondent being merely boyfriends; (iii) AFCA's allegedly erroneous dismissal of a declaration given by the deceased's friend and former boyfriend, PS, who attested to the deceased's independence; (iv) AFCA's alleged failure to take into account the personal history of the deceased, which informed his lifelong commitment to being single; (v) AFCA's alleged failure to take into account that the deceased had been evicted from the second respondent's unit in around 2018, and thereafter only infrequently returned to the unit; and (vi) AFCA's alleged failure to take into account the conduct of the second respondent after the deceased's death in withdrawing money from the deceased's bank account without authorisation; (b) AFCA failed to take into account that the second respondent claimed to be a de facto spouse of the deceased since they met, a claim that was said to be unsustainable on the materials provided to AFCA; (c) AFCA failed to take into account relevant considerations in finding that there was "financial interdependence" between the second respondent and the deceased, critically, that the second respondent had provided no "corroborating evidence" in support of any claim of financial interdependence with the deceased, that the deceased was paying for his own expenses, and that the second respondent had made contradictory claims about the extent of his financial dependence, or interdependence, on the deceased; (d) in finding that the deceased contributed financially to the second respondent's mortgage payments, AFCA failed to take into account that those statements were recorded in the deceased's bank records as "rent" payments; (e) AFCA failed to take into account the deceased's contemporaneous public statements and legal declarations that he was single; (f) AFCA's Determination failed to take into account that correspondence from the Australian Embassy in Phnom Penh and the Department of Foreign Affairs recorded the appellant as the deceased's next of kin, and that the deceased has recorded the appellant as his next of kin in correspondence with his employer; (g) the primary judge, at Judgment [47] found that "the nature of the second respondent's expected dependency was that of a spouse, involving combined financial resources", in circumstances where a challenge to this finding was abandoned by her pro bono counsel against her direction. 45 Secondly, the appellant alleges that the primary judge erred in failing to find that AFCA made an error of law by finding that the Trustee's decision to distribute the death benefit payable in respect of the deceased in the proportions it did (70% to the second respondent and 30% to the appellant) was not fair and reasonable in its operation in relation to the appellant. This submission appears to correspond with Ground 3(c) of the Amended NOA. For convenience, I will refer to this as the Apportionment Error. 46 In her oral submissions, the appellant identified two errors that she said gave rise to the Apportionment Error. Those errors were as follows: (a) AFCA did not engage with significant representations made by the appellant specific to the Trustee's decision concerning apportionment, most notably concerning: (i) the appellant's income, which was significantly less than the second respondent's income; (ii) the deceased's financial contribution to the appellant which, relative to the appellant's income, was significantly higher than the deceased's financial contribution to the second respondent relative to his income; (iii) the future needs of the appellant for financial support, given the appellant had no prospect of work; and (b) the primary judge, at Judgment [49]-[50], did not address the fact that AFCA's Determination did not contain a review of the Trustee's decision insofar as it concerned the apportionment of the death benefit payable in respect of the deceased. 47 Thirdly, the appellant alleges that the primary judge erred by failing to find that AFCA made an error of law in not giving proper consideration to the deceased's non-binding nomination in favour of the appellant in assessing the fairness or reasonableness of the Trustee's decision to distribute 70% of the death benefit payable in respect of the deceased to the second respondent. This submission appears to correspond with Ground 3(d) of the Amended NOA. For convenience, I will refer to this as the Nomination Error. 48 In her oral submissions, the appellant identified three errors that she said gave rise to the Nomination Error. Those errors were as follows: (a) AFCA failed to adequately consider the deceased's nomination of the appellant as the recipient of the whole of any death benefit payable, as required by the Fund Rules; (b) AFCA failed to consider whether the deceased's nomination represented a statement of intent and status, and such a consideration ought to have been paramount; (c) The primary judge, at Judgment [49], erroneously concluded that AFCA had taken into account the deceased's non-binding nomination of the appellant as his intended recipient of the death benefit, when in fact there was no evidence of any consideration by AFCA of the deceased's nomination of the appellant as his sole beneficiary. 49 I understand the appellant to further contend that the Status Error, Apportionment Error and the Nomination Error amount to legal unreasonableness, consistently with Grounds 1 and 2 of the Amended NOA. 50 It should be noted that, before the primary judge, pro bono counsel for the appellant abandoned a ground that AFCA's Determination was "unreasonable and unjust", and clarified that the appellant did not invite the primary judge to review the Determination for legal unreasonableness: Transcript of Proceedings, 26 April 2023, pages 23 (line 40) – 24 (line 5). Pro bono counsel for the appellant also confirmed that the appellant did not claim that there was any legal error in AFCA's determination that the second respondent was a spouse (ie, the Status Error): Transcript of Proceedings, 26 April 2023, pages 19 (lines 11-16, 39) – 20 (line 6). At the hearing of the appeal, the appellant submitted that the concession by pro bono counsel that the Status Error was not pressed was made without her knowledge or consent, and was contrary to her instructions. Beyond this submission from the bar table, there was no evidence in support of this assertion. 51 Nonetheless, bearing in mind that the appellant is self-represented and therefore may have been unfamiliar with the requirement to file evidence in support of any claim that pro bono counsel acted contrary to instructions, it is convenient to proceed to determine the appellant's submissions on this appeal, irrespective of whether the issues raised by those submissions were properly before the primary judge. CONSIDERATION Ground 1 and 2 – Legal Unreasonableness 52 Grounds 1 and 2 of the Amended NOA impugn AFCA's determination as "unreasonable, unfair and/or unjust". Ground 2 appears to be a restatement of ground 1. I understand that, by these grounds, the appellant advances a broad contention that AFCA's determination was legally unreasonable, and that the primary judge erred by failing to find such an error. It is not the Court's role to consider whether the decision was more broadly fair and/or unjust except in so far as AFCA's decision might be characterised as legally unreasonable and therefore beyond power: Reeves v Nulis Nominees (Australia) Limited (Trustee) [2022] FCA 627 at [65] (Nicholas J). 53 For the appeal to succeed on these grounds, the Court must find that the primary judge erred in failing to find that the Determination was legally unreasonable. As Allsop CJ observed in Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11; 237 FCR 1 at [11] this requires the finding that the Determination was: sufficiently lacking rational foundation, or an evidence or intelligible justification, or in being plainly unjust, arbitrary, capricious, or lacking in common sense having regard to the terms, scope and purpose of the statutory source of the power, such that it cannot be said to be within the range of possible lawful outcomes as an exercise of that power. 54 The Court may not review the merits of a decision under the guise of an evaluation of the decision's reasonableness: Minister for Immigration and Border Protection v Eden [2016] FCAFC 28; 240 FCR 158 at [59] (Allsop CJ, Griffiths and Wigney JJ). Within the boundaries of power, there is an area of "decisional freedom" within which a decision maker has a genuinely free discretion, and within which reasonable minds may differ as to the correct decision or outcome: Eden at [62]. 55 In order to identify the width and boundaries of any area of decisional freedom and the bounds of legal reasonableness, the Court must construe the relevant statute: Eden at [63]. In this case, AFCA's power to vary or set aside a decision relating to the payment of a death benefit is prescribed by s 1055(5) of the Corporations Act. By that sub-section, AFCA may only vary or set aside a decision if the relevant trustee's decision is "unfair or unreasonable" in its operation in relation to the complainant or any other person joined as a party to the complaint. As noted by Moshinsky, Bromwich and Derrington JJ in QSuper Board v Australian Financial Complaints Authority Limited [2020] FCAFC 55; 276 FCR 97 at [64], "such a power is more aptly applied in relation to discretionary powers which, by their nature, confer wide decisional freedom on the repository such that a broad range of decisions might legitimately be made from a single set of facts". 56 In EEU20 v Meat Industry Employees' Superannuation Fund Pty Ltd [2020] FCA 1359 at [91], Mortimer J, as Her Honour then was, observed that the authorities emphasise the "demanding threshold" which must be reached for an exercise of power to be characterized as legally unreasonable. 57 This demanding threshold has not been satisfied by the appellant. The reasoning of AFCA as disclosed in the Determination is rational and justifiable, and there is nothing unjust, arbitrary, or capricious about it. 58 Although the argument that the Determination was infected with the error of legal unreasonableness was not advanced by pro bono counsel for the appellant before the primary judge, the primary judge found, in particular at Judgment [46], that AFCA properly discharged its statutory function by reviewing the Trustee's decision and determining that it was fair and reasonable in its operation in relation to the appellant and the second respondent. It is implicit in these findings that the primary judge did not consider that the Determination was infected with any error of legal unreasonableness and that it was within the range of "decisional freedom" available to AFCA, having regard to s 1055(5) of the Corporations Act: Eden at [62]. 59 I detect no error in the reasoning and conclusion reached by the primary judge in this respect. 60 Grounds 1 and 2 of the appeal must be rejected. Ground 3 – Discrete legal errors 61 I now turn to address whether the Status Error, Apportionment Error and/or the Nomination Error amounted to legal errors. 62 In considering the appellant's submissions with respect to these errors, I am conscious that, in the proceeding before the primary judge and in turn before this Court, the jurisdiction of the Court is a limited one, as the appellant may only appeal on a question of law: s 1057(1) of the Corporations Act. No appeal lies from AFCA's findings of fact, unless those findings were reached in a manner giving rise to a question of law. A question of law may, however, arise where, in reaching a factual finding, AFCA failed to take into account a relevant consideration, had regard to an irrelevant consideration, or adopted a wrong approach: Board of Trustees of the State Public Sector Superannuation Scheme v Edington [2011] FCAFC 8; 119 ALR 272 at [36] (Kenny and Lander JJ). On the other hand, issues of the weight to be given to evidence do not generally give rise to a question of law: Edington at [61]. 63 It is important to bear in mind that AFCA is not a judicial body and its obligation to give reasons for its determinations is statutory, arising under s 1055A of the Corporations Act: Corbisieri v NM Superannuation Proprietary Limited [2023] FCA 1319 at [29] (O'Callaghan J). As the requirement to give reasons arises under statute, s 25D of the Acts Interpretation Act 1901 (Cth) applies. That section provides that the relevant reasons should set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based. This is a limited obligation: QSuper at [202]. 64 It is important to consider the totality of AFCA's reasons, and not with an eye clearly focused or an ear keenly attuned to the perception of error: Wan v BT Funds Management Limited [2022] FCFCA 189 at [48], [52] (McEvoy J, Markovic and McElwaine JJ agreeing). This proposition is particularly apposite in the context of an appeal from a determination by AFCA made under s 1055 of the Corporations Act, given that AFCA's determination as to the fairness and reasonable of the Trustee's decision inevitably involves a strong evaluative component that is essentially a matter for AFCA: Edington at [67]. 65 It should also be noted that AFCA's failure to refer to certain evidence will not necessarily mean that AFCA did not consider that evidence. In Minister for Immigration and Border Protection v SZSRS [2014] FCAFC 16; 309 ALR 67, Katzmann, Griffiths and Wigney JJ at [34] made the following observations in assessing a submission whether the (then) Refugee Review Tribunal had overlooked evidence before it (citations omitted): The fact that a matter is not referred to in the tribunal's reasons, however, does not necessarily mean the matter was not considered by the tribunal at all … The tribunal may have considered the matter but found it not to be material. Likewise, the fact that particular evidence is not referred to in the tribunal's reasons does not necessarily mean that the material was overlooked. The tribunal may have considered it but given it no weight and therefore not relied on it in arriving at its findings of material fact. But where a particular matter, or particular evidence, is not referred to in the tribunal's reasons, the findings and evidence that the tribunal has set out in its reasons may be used as a basis for inferring that the matter or evidence in question was not considered at all. The issue is whether the particular matter or evidence that has been omitted from the reasons can be sensibly understood as a matter considered, but not mentioned because it was not material. In some cases, having regard to the nature of the applicant's claims and the findings and evidence set out in the reasons, it may be readily inferred that if the matter or evidence had been considered at all, it would have been referred to in the reasons, even if it were then rejected or given little or no weight. 66 Similarly, in Carrascalao v Minister for Immigration and Border Protection [2017] FCAFC 107; 252 FCR 352, Griffiths, White and Bromwich JJ stated, at [45], that, when a decision maker is required to consider a claim or other mandatory criteria, this does not require the decision-maker to refer in the reasons for decision to every piece of evidence and every contention made by an applicant, and it may be that some material provided will not be relevant to the criteria. 67 The observations of the Full Court in SZRS at [34] and Carrascalao at [45], although made in a different context, are also applicable to the assessment of whether an omission in AFCA's reasons amounts to an error of law pursuant to s 1057(1) of the Corporations Act: see generally QSuper at [202], citing both SZRS and Carrascalao in assessing a contention that AFCA did not take into account a relevant matter. First alleged error – Status Error 68 The question of whether the second respondent was the "spouse" of the deceased (and therefore a "dependant" within the meaning of s 10(1) of the SIS Act and correspondingly the Fund Rules) was considered in detail by AFCA. AFCA's analysis of this matter extended over more than six pages in section 2.3 of the Determination (pages 6-12). AFCA ultimately found that the second respondent was the spouse of the deceased on the basis that the second respondent was living with the deceased member on a genuine domestic basis in a relationship as a couple. 69 In finding that the second respondent was the spouse of the deceased, AFCA: (a) correctly identified that, pursuant to the Fund's Trust Deed, the deceased's benefits were to be cashed in favour of either or both of the deceased's legal personal representative and the deceased's dependants, as the Trustee determined; (b) correctly identified that, under the Trust Deed, the term "dependant" was to be given the same meaning as in the SIS Act, which defined a dependant as including a spouse; (c) correctly referred to the definition of "spouse" in the SIS Act, which included "another person who, although not legally married to the person, lives with the person on a genuine domestic basis in a relationship as a couple"; (d) properly focused its enquiry into whether the second respondent was living with the deceased on a genuine domestic basis in a relationship as a couple; (e) correctly listed the various relevant "common law factors" that are indicative of two people living together on a genuine domestic basis in a relationship as a couple, namely: (i) the duration of the relationship; (ii) the nature and extent of a common residence; (iii) whether or not a sexual relationship exists; (iv) the degree of financial dependence or interdependence; (v) the ownership, use and acquisition of property; (vi) the degree of mutual commitment to a shared life; (vii) the care and support of children; (viii) the reputation and public aspects of the relationship; (f) considered the submissions and evidence relevant to the inquiry, setting out its assessment against each of the "common law factors"; and (g) after discussing and weighing up the submissions and evidence, ultimately found that the second respondent was living with the deceased on a genuine domestic basis in a relationship as a couple, meaning that the second respondent was the deceased's "spouse for the purposes of superannuation law and the [F]und's Trust deed". 70 In considering the application of each of the common law factors, AFCA canvassed a wide range of evidence and conflicting claims by the second respondent and the appellant. AFCA relevantly: (a) referred to inconsistencies in, and uncertainty about, the second respondent's evidence as to when he met the deceased and when they commenced living together; (b) ultimately concluded that the second respondent and deceased lived together for at least two and a half years, and were in a relationship prior to co-habiting; (c) referred to the fact that it was not in dispute that the second respondent and the deceased lived together; (d) referred to competing evidence as to whether the second respondent and the deceased were in a continuing sexual relationship, including noting evidence from an expert that it was possible for two LGBTI people to share one bedroom without being in a sexual relationship; (e) ultimately concluded that the second respondent and deceased had a continuing sexual relationship; (f) referred to evidence of the deceased making payments, described in the deceased's bank records as "rent", to the second respondent, which were used to pay the second respondent's mortgage; (g) referred to competing evidence from the appellant and the second respondent as to the extent of other financial contributions made by the deceased to the second respondent; (h) ultimately found that there was financial interdependence between the deceased and the second respondent; (i) referred to the fact that the second respondent had, after the deceased's death, amongst other things paid the outstanding balance on the deceased's credit card – describing this as a step that properly fell to the appellant, but which was undertaken in good faith by the second respondent; (j) referred to the fact that the second respondent and deceased did not own property together; (k) referred to competing evidence from the appellant, the second respondent, PS and the deceased's aunt as to the deceased and second respondent's commitment to a shared life, including the appellant's claim that the second respondent had evicted the deceased in 2018, and evidence of the deceased and his aunt's plan to purchase a house together; (l) ultimately accepted that their relationship suffered difficulty in 2018, but that the deceased and the second respondent continued co-habitation, and the relationship was subsisting at the time of the deceased's death; (m) referred to the fact that the second respondent and deceased did not have children; (n) referred to competing evidence from the second respondent, the second respondent's friends and the appellant as to the deceased and second respondent's commitment to a shared life, including the deceased's public statements on tax returns and social media that he was single; and (o) ultimately concluded that the deceased and the second respondent were known publicly as a committed couple. 71 It is thus apparent that AFCA considered the "common law factors" and carefully weighed the relevant evidence and submissions. It is also apparent that AFCA addressed the large majority of considerations said by the appellant to have not been taken into account by AFCA as set out at [43(a)]–[43(f)] above. In these circumstances, the appellant's submissions as to the Status Error were, in substance, an attempt to challenge the fact finding of AFCA in the Determination, or the weight given to evidence by AFCA. Such a challenge was not available to the appellant under s 1057(1) of the Corporations Act on appeal to the primary judge, as that section restricted the appellant's right of appeal to an appeal on a question of law. 72 It was not apparent from the appellant's submissions which of the matters said to constitute the Status Error were pressed as having been entirely overlooked by AFCA. In any case, AFCA was not required to refer in its Determination to every piece of evidence or contention made by the appellant: Carrascalao at [45]. Viewed in its totality and without an eye keenly attuned to the perception of error (as required by the Full Court in Wan at [48], [52]), AFCA's Determination contained a detailed consideration of the question of the status of the second respondent and addressed the conflicting claims and evidence of the second respondent and the appellant on this topic. The appellant has not established that the AFCA Determination overlooked any material consideration such as to amount to jurisdictional error. 73 I detect no legal error in AFCA's reasoning and its finding in relation to the status of the second respondent as the spouse of the deceased. As a consequence, this ground of appeal must be rejected. Second alleged error – Apportionment Error 74 The second alleged error is AFCA's alleged failure to find that the Trustee's decision to distribute the death benefit payable in respect of the deceased in the proportions it did (70% to the second respondent and 30% to the appellant) was unfair or unreasonable in its operation in relation to the appellant. 75 In advancing this ground the appellant appears to contend that the principal legal error committed by AFCA or the primary judge is the error of failing to take into account relevant considerations. Those considerations are set out at [45(a)] above. 76 In the Determination, AFCA correctly identified both the appellant and the second respondent as dependants of the deceased and went on to determine that the Trustee's decision as to the proportions of the death benefit payable to each of them (70% to the second respondent and 30% to the appellant) was fair and reasonable in all the circumstances. 77 AFCA's consideration of this matter included an assessment, in section 2.4 of the Determination, of the extent of the appellant's financial dependence on the deceased. In this respect, AFCA considered the appellant's claim that the deceased had contributed to rates, provided her a car, contributed to the purchase of a log splitter, and paid for or contributed to the cost of various one-off expenses, such as the repair of a heater. AFCA accepted that the appellant had established a pattern of contribution by the deceased towards the costs of maintenance and upkeep of the property jointly owned by the deceased and the appellant. AFCA also found the deceased was jointly liable for rates. AFCA therefore found the appellant was partially financially dependent on the deceased. 78 AFCA went on to assess, in sections 2.5 and 2.6 of the Determination, the second respondent's and the appellant's expectation of receiving financial support from the deceased if he had not died. In respect of the second respondent, AFCA observed that there was an expectation between spouses that they would share in their financial resources, including superannuation. AFCA also referred to the second respondent's expectation that the deceased would contribute to his mortgage repayments. 79 In respect of the appellant, AFCA referred to the fact that the deceased had contributed towards the maintenance and upkeep of the property they jointly owned, that the appellant was on a low income with a small superannuation balance, that she would have relied on the deceased as she aged, and the appellant's expectation that the deceased would contribute to what was described as "capital expenditure". 80 Ultimately, in section 2.7, AFCA framed the second respondent's and the appellant's expectations as to the deceased's financial support in the following terms: As the deceased member's spouse, the [second respondent] could reasonably have expected to receive financial support from the deceased member for the remainder of their lives together. As a person who was partially financially dependent on the deceased member, the [appellant] could reasonably have expected to receive some financial support from the deceased member for the remainder of her life. 81 The above analysis formed the basis for AFCA's ultimate conclusion, in section 2.7, that the Trustee's decision with respect to apportionment fell within the range of decisions available to it. 82 AFCA's above approach exposes no failure to take into account a relevant consideration. Indeed, it is evident that, contrary to the appellant's submission, AFCA did take into account the appellant's low income, the deceased's financial contributions to her, and the fact that she would have relied on the deceased for financial support as she aged. That AFCA did not frame this evidence in a manner more favourable to her – by comparing, for example, the deceased's relative contributions to the appellant and the second respondent's income – is not an error of law. 83 The appellant's other contention was that AFCA's Determination did not contain a review of the Trustee's decision insofar as it concerned the apportionment of the death benefit payable in respect of the deceased. 84 However, as noted by the primary judge at Judgment [48], AFCA's jurisdiction to intervene in the Trustee's decision required it to reach a state of satisfaction that the Trustee's decision was not fair and reasonable in its operation. It is evident from those parts of AFCA's determination which are set out at [76]-[79] above that AFCA undertook this task, receiving detailed submissions and making findings of its own in relation to the fact of the appellant and the second respondent's dependence upon the deceased, as well as their expectations of financial contributions into the future if the deceased had not died. It cannot be said that AFCA did not undertake a review of the Trustee's decision insofar as it concerned the apportionment of the death benefit payable in respect of the deceased. AFCA did so, albeit while confining itself to the question of whether the Trustee's decision was within the range of what was "fair and reasonable", consistently with its statutory task. 85 I detect no error in the approach in AFCA's Determination of the fairness and reasonableness of the Trustee's decision in respect of the apportionment of the death benefit, nor in the primary judge's reasons in connection with that issue. Accordingly, this ground of appeal must be rejected. Third alleged error – Nomination Error 86 The appellant contends that AFCA erred by not giving any, or any proper, consideration to the relevance of the non-binding death benefit nomination given to the Trustee by the deceased (which nominated the appellant as the sole beneficiary of the death benefit payable in respect of the deceased). 87 AFCA in its determination found that the Trustee "acted appropriately in the consideration it gave to the [non-binding] nomination". It was aware of rule 8.10 of the Fund Rules, which dealt with the relevance of non-binding nominations, and extracted it in section 3.3 of the Determination. 88 The minutes of the Trustee's Complaints and Disputes Executive Panel (which made the Trustee's decision on behalf of the Trustee) records the following: It was noted no Will had been left by the deceased and the nomination of beneficiaries made by the deceased on 12 August 2010 in favour of his mother (which was not binding) was made prior to the commencement of his relationship with his spouse. 89 Accordingly, the Trustee considered the non-binding death benefit nomination made by the deceased in accordance with rule 8.10. 90 In section 2.2 of the AFCA Determination, AFCA similarly referred to the fact that the deceased had made an on-line nomination with his former fund in favour of the appellant. AFCA went on to note that, after the merger of the deceased's former fund with the Fund, the Trustee clearly indicated to the deceased in his annual benefit statements that such a nomination was non-binding. AFCA then observed that there was no evidence that the deceased confirmed his nomination at any time, although he ought to have been aware his nomination was non-binding. AFCA rejected a submission by the appellant that the deceased did not change his nomination to be binding because he believed it already was binding. AFCA was ultimately satisfied that the nomination was not binding, and the Trustee acted appropriately in the consideration it gave to the nomination. 91 It is evident from the above that, contrary to the appellant's submission, AFCA did give consideration to the fact of the non-binding nomination. The appellant's challenge to AFCA's Determination in respect of the nomination is ultimately to challenge the weight given by AFCA to the non-binding nomination in the Determination. Such a challenge was not available to the appellant in the proceeding before the primary judge by reason of s 1057(1) of the Corporations Act, nor is it available on appeal from the primary judge. 92 The primary judge referred to the deceased's non-binding nomination, and to rule 8.10 of the Fund Rules at Judgment [6]-[9]. After noting at Judgment [45] that the Determination must be read as a whole, and not in an "over-zealous way with an eye keenly attuned to error", the primary judge found at Judgment [49] that "AFCA took account of the deceased's non-binding nomination of the appellant as his intended recipient of the death benefit" and that "AFCA noted that the nomination was not binding on the Trustee, and stated that the Trustee acted appropriately in the consideration it gave to the nomination". 93 I detect no legal error in the reasoning and conclusion of AFCA in relation to the deceased's non-binding nomination, or any error in the reasons of the primary judge on the same issue. It follows that this ground must also be rejected. DISPOSITION 94 For the reasons given above, each ground of appeal must be rejected, and the appeal dismissed with costs to be fixed by way of an agreed lump sum or, in default of agreement, by way of a lump sum fixed by a Registrar. I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson. Associate: Dated: 19 March 2024 REASONS FOR JUDGMENT MCELWAINE J: 95 I have had the considerable benefit of reading the draft reasons for judgment of Anderson J. I agree that the appeal should be dismissed with costs for the reasons given by his Honour. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice McElwaine. Associate: Dated: 19 March 2024	11,731
federal_court_of_australia:fca/single/2010/2010fca1324	decision	commonwealth	federal_court_of_australia	text/html	2010-12-02 00:00:00	Tuatara v Minister for Immigration & Citizenship [2010] FCA 1324	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2010/2010fca1324	2024-09-13T22:48:55.705262+10:00	FEDERAL COURT OF AUSTRALIA Tuatara v Minister for Immigration & Citizenship [2010] FCA 1324 Citation: Tuatara v Minister for Immigration & Citizenship [2010] FCA 1324 Appeal from: Tuatara and Minister for Immigration and Citizenship [2010] AATA 496 Parties: DONALD TUARA TUATARA v MINISTER FOR IMMIGRATION AND CITIZENSHIP and ADMINISTRATIVE APPEALS TRIBUNAL File number: NSD 1000 of 2010 Judge: EDMONDS J Date of judgment: 2 December 2010 Legislation: Migration Act 1958 (Cth) s 501 Direction [no 41]—Visa refusal and cancellation under s501 Cases cited: CDJ v VAJ (1998) 197 CLR 172 referred to Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 cited Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 cited Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992 12 cited NADH of 2001 v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 214 ALR 264 cited Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165 cited Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 74 ALJR 405 cited WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 75 ALD 630 cited Date of hearing: 28 October 2010 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 51 Counsel for the Applicant: Mr J Smith Solicitor for the Applicant: Legal Aid Commission of NSW Counsel for the First Respondent: Mr GR Kennett SC with Ms F Ramsey Solicitor for the First Respondent: DLA Phillips Fox IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1000 of 2010 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: DONALD TUARA TUATARA Applicant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGE: EDMONDS J DATE OF ORDER: 2 DECEMBER 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the first respondent's costs, as taxed or agreed. 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 1000 of 2010 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: DONALD TUARA TUATARA Applicant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGE: EDMONDS J DATE: 2 DECEMBER 2010 PLACE: SYDNEY REASONS FOR JUDGMENT INtroduction 1 This is an application under s 476A of the Migration Act 1958 (Cth) ('the Act') in respect of a decision of the second respondent ('the Tribunal') dated 2 July 2010. The Tribunal affirmed a decision of a delegate of the first respondent ('the Minister') made on 6 April 2010 to cancel the applicant's Special Category visa under s 501(2) of the Act. 2 The Minister's power to cancel a visa granted to a person arose in this case because the delegate reasonably suspected that the applicant did not pass the character test and the applicant did not satisfy the delegate that he passed the character test: s 501(2). There was no issue either before the delegate or the Tribunal that the applicant did not pass the character test in light of his substantial criminal record: ss 501(6) and 501(7). 3 In considering the exercise of the power to cancel, the delegate and, on review, the Tribunal, were obliged to comply with a written direction given by the Minister, Direction [no 41]—Visa refusal and cancellation under s501 ('the Direction'): s 499(1) and (2A). The applicant contended that the Tribunal failed to comply with the Direction in two critical respects: first, in respect of relevant international obligations and, in particular, the best interests of the children relevant to the proceedings before it; and secondly, in respect of the risk that the applicant would commit further offences upon release from custody. According to the applicant, this failure means that the Tribunal did not complete the task required of it by the Act and that its decision is infected with jurisdictional error. 4 The applicant contended that the Tribunal also erred because the manner in which it dealt with the issue of the best interests of the children meant that its decision was irrational, illogical and not based on findings or inferences of fact supported by logical grounds. Background facts 5 The applicant was born to Maori parents in New Zealand on 3 August 1972. He is now 38 and the youngest of seven children, the eldest two of whom share a different father. He migrated to Australia with his parents and siblings at the age of 14 years and 9 months. He was granted a special category visa by operation of law on 1 September 1994. 6 He has four children, aged 15, 13, 11 and 10, who live with his former wife, her partner and their child. He has not had contact with his children since 2002. His mother died of cancer in November 2008. His father lives with the applicant's half-sister and her children in Sydney. Also in Australia are his older sister, her daughter and her three children; and his brother, his brother's partner and their son. 7 In November 1987, eight months after arriving in Australia, the applicant was charged with break, enter and steal and placed on a good behaviour bond. He returned to New Zealand in September 1989 for 11 months during which time he was convicted of six counts of burglary. He returned to Australia in August 1990, apparently contrary to supervision orders to which he was subject at the time. 8 During his time in Australia the applicant has committed and been punished for numerous offences. He has spent a little over 5 years in gaol. His last term of imprisonment commenced on 12 January 2009 and ended on 11 October 2010. The applicant is currently in immigration detention. 9 On 6 April 2010 a delegate of the Minister made a decision to cancel the applicant's visa under s 501(2) of the Act. On 14 April 2010 the applicant applied to the Tribunal for review of that decision. On 2 July 2010 the Tribunal made a decision to affirm the delegate's decision. The Tribunal's Decision 10 The Tribunal first dealt with two issues that it considered were 'preliminary'. The first was whether it could consider the applicant's statement of facts, issues and contentions. It rejected the Minister's submission that s 500(6J) of the Act applied to prevent the Tribunal from having regard to it: at [20] and [21]. The second 'preliminary' issue was whether the best interests of the children of the applicant's siblings (and niece) were relevant. The Direction provides at 10.4(1) that a decision-maker must have regard to the best interests of any child in Australia who is potentially affected by a visa cancellation. It decided, at [23], that it was not necessary to determine the issue because there was 'no significant evidence put before the Tribunal as to the extent' of the impact of a decision on those children. The Tribunal went on to say that it gave no significant weight to the submissions made on the issue because 'the lack of any useful evidence' did not enable it to evaluate any such detriment: at [24]. According to the applicant, these statements reveal that the Tribunal failed to comply with the Direction and failed to understand the import of the evidence given by the parents of the children concerned. 11 The Tribunal turned to the primary considerations referred to in the Direction. The first of these was the protection of the Australian community from serious criminal or other harmful conduct. This involved consideration of (i) the nature and seriousness of the applicant's conduct; and (ii) the risk the conduct may be repeated. The Tribunal found that the applicant had a long and consistent history of serious offences from the age of 14 and had been sentenced four times to substantial periods of imprisonment. It found that this reflected how seriously the courts have viewed his conduct: at [34]. 12 The Tribunal next considered the risk that the applicant's conduct may be repeated. It referred to evidence given by two independent experts that the prospects of the applicant's rehabilitation were good: at [42] and [46], and that the risk of violent recidivism was low: at [46]; however, despite this evidence it found that the risk of the applicant re-offending was high. The reason given for this conclusion (at [49]) was as follows: 'If this were the first occasion on which Mr Tuatara had undertaken a rehabilitation program, we would be more inclined to accept his chances of success. However, his long history of repeated breaches of judicial orders and undertakings, combined with his history of relapses makes the risk of re-offending, and engaging in violent conduct, unacceptably high.' The Tribunal made no findings about the extent of rehabilitation already achieved by the applicant, (according to the evidence given by the two independent experts and the applicant himself) or the prospects of further rehabilitation. The applicant submitted that the Tribunal did not explain why it did not accept the expert evidence in this respect. 13 The Tribunal then referred to the fact that the applicant was a minor when he began living in Australia and had committed his first offence eight months after arriving here. 14 Next, the Tribunal considered the best interests of the child as described in the Convention on the Rights of the Child ('the CROC'). After a brief survey of the relevant evidence, the Tribunal referred to the general presumption referred to in the Direction that a child's best interests are served by remaining with both its parents. It then stated at [61]: 'There must be some basis on which a child's best interests can be determined [if] it can be said that contact with a parent is in its best interests. The eight year period in which Mr Tuatara has not seen his children represents a large part of their lives and no significant evidence as to their best interests has been adduced on his behalf.' 15 Later, in its conclusion, the Tribunal expanded upon this statement at [74]): [W]e are not satisfied, on the evidence before the Tribunal that the best interests of Mr Tuatara's children, or other children to whom he is related, require that he remain in Australia. His relationship with his children has been virtually non-existent for eight years and there is no evidence that their best interests would be served by him remaining in the country or, even, that he will be able to see them in future if he does.' 16 The Tribunal next considered other matters including the applicant's family ties, his links to New Zealand, and the fact that he had previously been advised of the possibility of deportation. 17 In its conclusion, the Tribunal stated that it was not satisfied that any other considerations outweighed the risk of harm (to the Australian community): at [74]. For that reason, it affirmed the decision under review. The Applicant's Case on Appeal First ground: Failure to comply with Direction 41 18 The Direction requires that, in each case, the Tribunal must take into account four primary considerations. Those considerations are set out in paragraph 10 of the Direction. Further directions are given in respect of each primary consideration in paras 10.1 to 10.4. The facts before the Tribunal suggested that the critical issues arose from the first and fourth of the primary considerations, namely, the protection of the Australian community and the relevant international obligations. Those considerations are as follows: 10(1) In deciding whether to refuse to grant a person a visa or cancel a person's visa, the following (the primary considerations) are to be considered: (a) the protection of the Australian community from serious criminal or other harmful conduct, particularly crimes involving violence; … (d) relevant international obligations, including but not limited to: (i) the best interests of the child, as described in the Convention on the Rights of the Child (CROC); and …' 19 According to the applicant, the Tribunal erred in respect of both considerations. It is convenient to deal first with the international obligations under the CROC. The best interests of the child 20 The applicant submitted that the relevant interests are not simply 'the best interests of the child', but rather, 'the best interests of the child, as described in the Convention of the Rights of the Child'. This, together with the express reference to 'relevant international obligations', makes it clear, according to the applicant, that the Direction seeks to implement the terms of the CROC. 21 Thus, the Direction requires, according to the applicant, attention not simply to a broad and indefinite notion of best interests, but to the terms of the CROC including, as already noted, the rights of the child recognised in it. Without being exhaustive, the matters of importance in the CROC include the following: The rights and duties of the child's parents or, where applicable members of the extended family or community: Arts 3(2) and 5; Economic, social and cultural rights: Art 4; The right to know and be cared for by his or her parents: Art 7; The right to preserve his or her identity, including nationality, name and family relations: Art 8; The right of a child who is separated from one or both parents to maintain personal relations and direct contact with both parents on a regular basis, except if contrary to the child's best interests: Art 9(3); Education of the child is to be directed to the development of respect for the child's parents, his or her own cultural identity, language and values: Art 29(l)(c); and Where ethnic minorities exist, the child belonging to that minority shall not be denied the right to enjoy his or her own culture: Art 30. 22 The applicant submitted that the Tribunal's attention was directed to each of these matters but it considered none of them. Instead, according to the applicant, it proceeded on the basis that there had to be some 'significant evidence' as to what the best interests of the children were: at [61]. It did not explain what it meant by 'significant'. It did not, for example, reject the evidence of the applicant and his family with respect to his relationship with his own children and those in his extended family. Indeed, that evidence was not contested. Nor did it find that there was any risk of harm that the applicant might bring to his children that might indicate that their best interests were served by cancellation of his visa in spite of the rights recognised in CROC; to the contrary, it found that there was no such suggestion: at [58]. 23 The matters to be considered by the Tribunal in respect of the best interests of the child are expanded upon in para 10.4.1. Subpara (4) states: 'Under Australian law, it is generally presumed that a child's best interests will be served if the child remains with its parents. Factors which may indicate that the child's best interests are served by separation from the person include, but are not limited to: (a) any evidence that the person has abused or neglected the child in any way, including physical, sexual and/or mental abuse or neglect; (b) any evidence that the child has suffered or experienced any physical or emotional trauma arising from the person's conduct.' 24 According to the applicant, the presumption referred to here is simply a conclusion that must be drawn until the contrary is proved. It is not a fact to be inferred from evidence for two reasons: first, the best interests of a child are not facts (see CDJ v VAJ (1998) 197 CLR 172 at [152]), and secondly, that would be inconsistent with the import of the second sentence, namely, that the conclusion can be avoided (as opposed to arrived at) in light of the evidence. In requiring that there be 'some basis on which a child's best interests can be determined' the Tribunal ignored the presumption and, in effect, inverted the inquiry so that it required evidence to establish what the Direction said was to be presumed. The risk of recidivism 25 The second critical issue before the Tribunal was the risk of recidivism. Paragraph 10(l)(a) of the Direction makes a primary consideration the protection of the Australian community from serious criminal or other conduct, particularly those crimes involving violence. There are two matters germane to the level of risk of harm to the community: the seriousness and nature of the relevant conduct; and the risk that the conduct may be repeated: para 10.1(2). 26 Paragraph 10.1.2 directs the Tribunal in its consideration of the risk that the conduct may be repeated. The Tribunal referred to this paragraph in its reasons (at [35]), but did not set it out in full. Paragraph 10.1.2(2) states: 'The following factors are to be considered as particularly relevant to this assessment: (a) a recent history of convictions, which should be considered as indicating an increased risk of re-offending; (b) evidence of the extent of rehabilitation already achieved and the prospect of further rehabilitation. Greater weight should generally be given to evidence from independent and authoritative sources, such as judicial comments, professional psychological reports, pre-sentence reports for the courts, parole assessments, and similar sources of authoritative information or assessment; and (c) evidence that the person has breached judicial orders, including parole, bail, bonds, suspended sentences and any other relevant undertakings or conditions imposed by the courts.' 27 The applicant contended that the Tribunal failed to comply with this part of the Direction in two respects: first, it did not refer to the evidence given by the applicant's family as to the extent of his rehabilitation; and secondly, it did not give greater weight to the evidence of either Mr Taylor or Ms Bond. Conclusion on first ground 28 By ignoring the rights recognised in the CROC, the applicant contended that the Tribunal failed to give consideration to relevant international obligations as required by the Direction. Further, the Tribunal failed to comply with the Direction by failing to apply the presumption referred to in para 10.4.1(4) of the Direction and by failing to consider evidence of the extent of rehabilitation and, in doing so, give greater weight to the evidence of independent experts. Compliance with the Direction was a necessary precondition to the exercise of the Tribunal's jurisdiction. The Tribunal's failure to comply with the Direction infected its decision with jurisdictional error. Second Ground: the decision was irrational, illogical and/or not based on findings or inferences of fact supported by logical grounds 29 The applicant contended that a decision made by the Tribunal may be affected by jurisdictional error where it is irrational, illogical and not based on findings or inferences of fact supported by logical grounds: Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611; Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165 at [36] – [37]; Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992 at [38]; NADH of 2001 v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 214 ALR 264 at [130] – [139]. 30 The applicant put this ground on two bases: first, on the basis that the argument in ground one concerning the proper understanding of para 10(1)(d) of the Direction is accepted; and secondly, on the basis that it is not. 31 On the first basis, this ground may be seen as a corollary of the first ground: once it is accepted that the rights of the child as described in the CROC inform the child's best interests there is no need for evidence to establish those best interests, and it is illogical to require there to be evidence in order to determine those interests. 32 Conversely, if it is necessary to have evidence of what decision would be in the child's best interests; then, in the face of uncontested evidence of the applicant's relationship with his own children and those of his siblings and niece, the children's love and respect for the applicant, and the impact his removal to New Zealand would have on the family, it was irrational to find, as the Tribunal did, at [74], that there was no evidence that the best interests of the applicant's children, or other children, would be served by him remaining in Australia. That is because all of that evidence logically supported the conclusion that it was in the best interests of the children that the cancellation decision be set aside. On that basis it must be concluded that there was no logical connection between that evidence and the Tribunal's conclusion. 33 The Tribunal was required to give primary consideration to the best interests of all of the children. The finding that there was no evidence to support the applicant's case in this respect was thus critical to consideration of the exercise of the power to cancel. The lack of logical connection between the evidence and the Tribunal's conclusion thus infected the decision with jurisdictional error. The MInister's Response on Appeal The best interests of the child Failure to refer to various rights conferred by the CROC 34 The Minister observed that although para 10(1)(d) of the Direction speaks in terms of considering 'international obligations', detailed instructions are provided in para 10.4 as to how the best interests of the child are to be considered. Neither the Direction nor the Act under which it is made purports to incorporate the provisions of the CROC into Australian law; nor does para 10.4 adopt the terms of the CROC. Rather, para 10.4(1) imposes a single requirement – that decision-makers have regard to the interests of the child – which is said to 'reflect' Australia's obligations under the CROC; and para 10.4.1 gives detailed instructions as to how that obligation is to be carried out. 35 According to the Minister, what paras 10.4(1) and 10.4.1 do is to impose a specific obligation which 'reflects' the duty imposed on Australia pursuant to Art 3(1) of the CROC. No part of the CROC is adopted in any direct sense; and other obligations imposed on Australia by that instrument do not form part of the duties of decision-makers under the Direction in any direct way. 36 The Minister accepted that the reference to the CROC in para 10.4(1) may make the context of the CROC relevant, in some cases, to an understanding of the concept of the best interests of the child. Hence, for example, as a result of Art 30 of the CROC the children's Maori heritage (and the applicant's ability to provide them with a link to that heritage) might have been a significant issue in determining how their interests would be affected by the cancellation decision, if the findings of the Tribunal had been different. However, the Minister pointed out that what the Tribunal did find was that the applicant had not seen, or tried to see, his children for eight years, and there was no evidence, except for a desire expressed by the applicant, that this situation would change in the future. According to the Minister, those findings led inevitably to the Tribunal's lack of satisfaction that the impact of cancellation on the children's interests would be significant. They made it unnecessary to gain a refined understanding of those interests by reference to the matters dealt with in the CROC. The Tribunal therefore did not err by failing to give separate attention to the various rights of children which are referred to by the applicant. Assessing the interests of the children 37 The Minister contended that the Tribunal was not asked to find that the presumption referred to in para 10.4.1(4) of the Direction had been rebutted, or that the best interests of the children did not support a decision permitting the applicant to remain in Australia. Rather, the submission was that the children's interests would not be 'affected' (which should be understood to mean affected to a significant degree) by the cancellation of the applicant's visa and were therefore 'not a factor that weighs significantly in the balance of the case'. 38 According to the Minister, the Tribunal's reasoning should be read in that light. The Tribunal acknowledged the existence of the presumption and did not suggest that it regarded the presumption as having been rebutted or displaced. Its conclusion about the case was that no other considerations 'outweigh the unacceptable risk of harm'; and the interests of the children were cited as a 'particular' of that proposition. In other words, the decision turned on the weight to be given to the children's interests. 39 When the Tribunal remarked on the absence of 'significant evidence as to their best interests', it was, according to the Minister, referring to what it perceived as a lack of material to persuade it that the cancellation of his visa would have a significant adverse effect on the interests of the children. It evidently required such persuasion in light of the evidence, to which it had referred, concerning the lack of any contact between the applicant and his own children for some years. It was entitled, according to the Minister, to look to the applicant for that evidence, given that he was better placed than the Minister to bring forward evidence about his relationship with his children and the children of his family members. 40 Understood in this way, the Tribunal's approach did not involve any error. It did not invert the inquiry that was required by the presumption in cl 10.4.1(4). 41 Nor, according to the Minister, was there any lack of rationality in not regarding the evidence of the applicant's family members as demonstrating that the cancellation of his visa would affect the interests of the children. First, while the Tribunal used the expression 'no evidence', it should not be regarded as having stated a conclusion of law; it meant that there was no evidence that it found persuasive. Secondly, the Tribunal was required to reach the correct or preferable decision and was not bound in any way by the fact that evidence was 'uncontested'. It was entitled to give that evidence such weight as it thought appropriate. Thirdly, even if the Tribunal erred in characterising the evidentiary position in the way that it did, it cannot be said that its decision was rendered 'irrational, illogical and not based on findings or inferences of fact supported by logical grounds'. The risk of recidivism 42 As to the applicant's submission that the evidence of family members was not 'referred to', according to the Minister, this falls short of the allegation in the application that that evidence was not 'considered'. The difference is not insignificant. It is true that the Tribunal does not refer in its reasons to the evidence in question. However, the Tribunal was not under any obligation to analyse evidence that it did not find persuasive: Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 74 ALJR 405 at [64] – [65]. Failure to 'refer to' the evidence is therefore of no legal significance in itself. Further, the absence of reference to the opinions and observations of the applicant and his relatives signifies only that this evidence was not relied upon. It does not support any conclusion as to whether the evidence was 'considered'. 43 The allegation is therefore not made out. Even if it were, a failure to advert to evidence which might have led to a different conclusion on an issue does not amount to a failure to consider the issue; it is no more than an error of fact: WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 75 ALD 630 at [46], referring to Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at [87] – [97]. 44 As to the applicant's submission that the Tribunal did not give 'greater weight' to the evidence of Mr Taylor or Ms Bond, the Minister responded that the weight to be given to evidence was a matter for the Tribunal. It is clear that the Tribunal had regard to the evidence of Ms Bond and Mr Taylor and was assisted by it in reaching its conclusion. It was not under an obligation to agree with their assessments of the applicant. The Tribunal's obligation was to make its own assessment of the risk that the applicant's criminal conduct would be repeated. Consideration The best interests of the child 45 The failure of the Tribunal to refer to, or even consider, the rights of the child recognised in the CROC, even though its attention was directed to them, does not, in my view, amount to error on the part of the Tribunal in the circumstances of this case. The Tribunal found that the applicant had not seen or tried to see his children since his release from gaol in April 2002 and, as the Minister observed, there was no evidence, except for a desire expressed by the applicant, that this situation would change in the future. Those findings and circumstances made it unnecessary to gain a refined understanding of the children's interests by reference to the matters dealt with in the CROC because they led inevitably to the Tribunal's lack of satisfaction that the impact of cancellation on the children's interests would be significant. 46 At [61] of the Tribunal's reasons, the Tribunal recorded that the Direction acknowledges that it is generally presumed, under Australian law, that a child's best interests are served by remaining with its parents. The Tribunal did not suggest that it regarded the presumption as having been rebutted or displaced but observed that the presumption 'is more than [an] abstract principle'. Its conclusion about the case was that no other considerations (including the best interests of the children) 'outweighed the unacceptable risk of harm' (at [74]). When (at [61]) the Tribunal remarked on the absence of 'significant evidence as to [the] best interests' of the children, it was referring to what it perceived as a lack of material to persuade it that the cancellation of the applicant's visa would have a significant adverse effect on the interests of the children. The need for persuasion was totally comprehensible in the face of the evidence concerning the lack of any contact between the applicant and his own children for over eight years. 47 The Tribunal's approach, so understood, did not involve any error; nor did it invert the inquiry that was required by the presumption in cl 10.4.1(4) of the Direction. Indeed, the Tribunal's approach is contemplated and mandated by the first three factors in cl 10.4.1(5) which are to be considered in considering the best interests of the child, namely: '(a) the nature of the relationship between the child and the person, for example, a relationship that has parental rights or regular meaningful contact with a child compared to a relationship with long periods of absence and limited meaningful contact with a child; (b) the duration of the relationship, including the number and length of any separations and reason/s for the separation; (c) the extent to which the person is likely to play a full parental role up to the child's eighteenth birthday…' 48 For the reasons advanced by the Minister at [41] above, nor was there any lack of rationality in not regarding the evidence of the applicant's family members as demonstrating that the cancellation of his visa would affect the interests of the children. The risk of recidivism 49 There is no error in the Tribunal's decision by its failure to refer, in its reasons, to evidence of family members concerning the extent of the applicant's rehabilitation. It certainly does not support any conclusion that the evidence was not 'considered'; at most, such failure could only suggest that such evidence was not found to be so persuasive as to be relied upon. 50 The applicant's submission that the Tribunal erred in not giving 'greater weight' to the evidence of Mr Taylor and Ms Bond, cannot be sustained. It is not suggested, nor could it be, that such evidence was not considered; the weight to be given to evidence was a matter for the Tribunal and it was under no obligation to agree with their respective assessments of the applicant. Conclusion 51 The application must be dismissed with costs. I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. Associate: Dated: 2 December 2010	7,031
federal_court_of_australia:fca/single/2011/2011fca0104	decision	commonwealth	federal_court_of_australia	text/html	2011-02-14 00:00:00	Mentha, in the matter of The Griffin Coal Mining Company Pty Limited (administrators appointed) [2011] FCA 104	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2011/2011fca0104	2024-09-13T22:48:55.983206+10:00	FEDERAL COURT OF AUSTRALIA Mentha, in the matter of The Griffin Coal Mining Company Pty Limited (administrators appointed) [2011] FCA 104 Citation: Mentha, in the matter of The Griffin Coal Mining Company Pty Limited (administrators appointed) [2011] FCA 104 Parties: BRIAN KEITH MCMASTER, MARK FRANCIS XAVIER MENTHA, CLIFFORD STUART ROCKE AND SCOTT BRADLEY KERSHAW, IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF THE GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) and THE GRIFFIN COAL MINING COMPANY PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 008 667 285) File number: WAD 31 of 2011 Judge: GILMOUR J Date of judgment: 14 February 2011 Legislation: Corporations Act 2001 (Cth) ss 443A 443D, 443E, 443F, 447A(1), 447D Cases cited: Mentha; in the matter of The Griffin Coal Mining Co Pty Ltd (administrators appointed) [2010] FCA 30 Mentha; in the matter of The Griffin Coal Mining Co Pty Ltd (No 2) (administrators appointed) [2010] FCA 499 Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 764 Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) (No 3) [2010] FCA 1087 Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 1469 Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) (No 2) [2010] FCA 1470 Date of hearing: 8 February 2011 Place: Perth Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 13 Counsel for the First & Second Plaintiffs: Mr J A Thomson Solicitor for the First & Second Plaintiffs Baker & McKenzie IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 31 of 2011 IN THE MATTER OF GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) BETWEEN: BRIAN KEITH MCMASTER, MARK FRANCIS XAVIER MENTHA, CLIFFORD STUART ROCKE AND SCOTT BRADLEY KERSHAW, IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF THE GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) First Plaintiff THE GRIFFIN COAL MINING COMPANY PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 008 667 285) Second Plaintiff JUDGE: GILMOUR J DATE OF ORDER: 8 FEBRUARY 2011 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. Directs pursuant to s 447D of the Corporations Act that the first plaintiffs were justified in causing the second plaintiff, The Griffin Coal Mining Company Ltd (Administrators Appointed) (ACN 008 667 385) (Griffin Coal), to enter into a coal supply agreement dated 21 December 2010 with Perdaman Chemicals and Fertilisers Pty Ld (Perdaman) (Coal Supply Agreement). 2. Pursuant to s 447A(1) of the Corporations Act that Part 5.3A of the Corporations Act is to operate in relation to Griffin Coal: (a) so that any personal liability of the first plaintiffs pursuant to s 443A of the Corporations Act arising out of or in connection with the Coal Supply Agreement will only apply in respect of debts or liabilities accruing during the period of the voluntary administration of Griffin Coal and shall not extend to any liability that accrues or may be attributable to the period after the voluntary administration of Griffin Coal ends; (b) as if s 443A(1) of the Corporations Act provided that the debts and liabilities incurred by Griffin Coal pursuant to the Coal Supply Agreement and which accrue during the period of voluntary administration of Griffin Coal are debts incurred by the first plaintiffs in the performance and exercise of their functions and powers as administrators of Griffin Coal and are the subject of the right of indemnity referred to in s 443D for the purposes of s 443E and 443F; and (c) such that, notwithstanding paragraph (a), if the indemnity of the first plaintiffs under s 443D of the Corporations Act is insufficient to meet any amount for which the first plaintiffs may be liable arising out of or in connection with the Coal Supply Agreement, the first plaintiffs will not be personally liable to repay such amount to the extent of that insufficiency. 3. That Confidential Exhibit "BKM-10" to the affidavit of Brian Keith McMaster affirmed on 15 December 2010 for proceeding WAD 399 of 2010 and Confidential Exhibit "BKM-12" to the affidavit of Brian Keith McMaster affirmed on 1 February 2011 be kept confidential in the court file in these proceedings and not be accessed (other than by the plaintiffs) without order of the Court on at least 48 hours' prior notice to the plaintiffs' solicitors on any application seeking such an order. 4. The costs of this application be costs in the administration of Griffin Coal. 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 WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 31 of 2011 IN THE MATTER OF GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) BETWEEN: BRIAN KEITH MCMASTER, MARK FRANCIS XAVIER MENTHA, CLIFFORD STUART ROCKE AND SCOTT BRADLEY KERSHAW, IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF THE GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) First Plaintiff THE GRIFFIN COAL MINING COMPANY PTY LIMITED (ADMINISTRATORS APPOINTED) (ACN 008 667 285) Second Plaintiff JUDGE: GILMOUR J DATE: 8 FEBRUARY 2011 PLACE: PERTH REASONS FOR JUDGMENT 1 I made orders in this matter on 8 February 2011. These are my reasons for so doing. 2 The plaintiffs are administrators of various companies in the Griffin group of companies, including, the second plaintiff, Griffin Coal Mining Company Pty Ltd. Each of the plaintiffs is a partner of KordaMentha, an accounting firm. 3 The history of the various administrations is described in earlier decisions of the Court: Mentha; in the matter of The Griffin Coal Mining Co Pty Ltd (administrators appointed) [2010] FCA 30; Mentha; in the matter of The Griffin Coal Mining Co Pty Ltd (administrators appointed) (No 2) [2010] FCA 499; Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 764; Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) (No 3) [2010] FCA 1087; Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 1469 and Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) (No 2) [2010] FCA 1470. 4 The present application is similar to the application in Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd administrators appointed) [2010] FCA 1469. It is supported by an affidavit of the first-named first plaintiff sworn on 1 February 2011. The administrators also rely on certain of the affidavit material read in this earlier decision. The administrators seek orders and directions pursuant to s 447A and s 447D of the Corporations Act 2001 (Cth) stating that they were justified in causing Griffin Coal Mining Company Pty Ltd to enter a particular long term coal supply contract, and to limit their liability as administrators under that contract in respect of any liabilities which might arise after they retire. The contract itself contains a provision with the desired limiting effect: cl 1A.2 of the coal supply agreement. 5 However, s 443A of the Corporations Act imposes personal liability upon the administrators in respect of liabilities to which it applies, despite any agreement to the contrary: s 443A(2). The only way to alter this is by way of orders modifying the operation of Pt 5.3A pursuant to s 447A of the Corporations Act. 6 The Court has the power to make orders of the type sought. I referred, in this regard, to the statutory provisions and the relevant authorities in Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 1469 at [23]-[38]. 7 The administrators are of the view that it was and is in the best interests of the creditors of Griffin Coal Mining Company Pty Ltd for it to enter the coal supply contract. This is for two reasons. First, the agreement represented a valuable business opportunity for Griffin Coal Mining Company Pty Ltd to sell its coal product to a purchaser. Second, the administrators were concerned that a failure to enter such an agreement might lead to the company losing the opportunity to sell coal to this particular purchaser and that they would be placed in breach of a previously agreed heads of agreement. 8 The proposed orders limiting the administrators' liability are consistent with the agreed contractual position. Hence, the purchaser under the coal supply contract will suffer no prejudice, compared to what they consensually agreed, by the contemplated orders or the limitation of the administrators' liability. 9 The Committee of Creditors for Griffin Coal Mining Company Pty Ltd unanimously support the application. 10 The only secured creditor, which is ACN 113 353 638 Pty Ltd, has acknowledged in correspondence with the first plaintiff, in effect, that it does not approve or disapprove of the proposed limitation orders. 11 In my view, the creditors will not be prejudiced by the orders limiting the liability of the administrators to exclude liabilities which arise after the administrators' retirement. I set out, in principle, the reasons for this previously in Mentha; in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 1469 at [45]-[46]. These reasons are apt also to this application. Indeed, it is, to the contrary, in the creditors interests that the orders be made. I accept the view to that effect expressed by the administrators. 12 I am also satisfied that there is a sound basis for making the confidentiality orders sought. Conclusion 13 For all these reasons, I will make orders as sought in the application. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate: Dated: 14 February 2011	2,563
federal_court_of_australia:irc/1996/1996irca0632	decision	commonwealth	federal_court_of_australia	text/html	1996-12-24 00:00:00	Holmes v A1 Professional Cleaning Services [1996] IRCA 632	https://www.judgments.fedcourt.gov.au/judgments/Judgments/irc/1996/1996irca0632	2024-09-13T22:48:57.585807+10:00	DECISION NO:632/96 C A T C H W O R D S INDUSTRIAL LAW - termination of employment - whether employment terminated by employer or employee - Held abandonment of employment - the legitimate refusal of an employer to make an unauthorised payment demanded by an employee does not constitute an act which results in a termination of employment which attracts the jurisdiction of Division 3 of Part VIA of the Workplace Relations Act 1996 Workplace Relations Act 1996 ss170CB, 170DE, 170EA CASES: Mohazzab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154 Santos v SIDY's Ice Cream (unreported, IRCA, Millane JR, 10 May 1996) WILLIAM HOLMES -v- A1 PROFESSIONAL CLEANING SERVICES No. VI-1064 of 1996 Before: Ryan JR Place: Melbourne Date: 24 December 1996 INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1064 of 1996 B E T W E E N : WILLIAM HOLMES Applicant AND A1 PROFESSIONAL CLEANING SERVICES Respondent MINUTES OF ORDERS Judicial Registrar Ryan 24 December 1996 THE COURT ORDERS: 1. That the application be dismissed. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1064 of 1996 B E T W E E N : WILLIAM HOLMES Applicant AND A1 PROFESSIONAL CLEANING SERVICES Respondent Before: Ryan JR Place: Melbourne Date: 24 December 1996 REASONS FOR JUDGMENT This claim of unlawful termination of employment revolves around a dispute as to whether the Applicant was entitled to payment in lieu of "leave" which had not accrued. The Applicant asserts that Mr Arthur Karras, then Cleaning Services Supervisor with the Respondent, had agreed to provide him with payment in lieu of leave which had not accrued and that when he persisted with his attempts to have the agreement honoured, Mr Karras unlawfully terminated his employment. Mr Karras denies that there was any agreement to pay for non existent leave. Mr Karras no longer works for the Respondent but he was the only person to give evidence for the employer. The Applicant was the only person to give evidence on his own behalf. Both parties were represented by counsel. The Applicant's position is that there was an unlawful termination of employment and he now seeks reinstatement although when he lodged his application he sought compensation only. The Respondent's position is that the Applicant abandoned the employment. It is not necessary to go into detail about the employment relationship except to the extent that the developing dispute between the Applicant and Mr Karras reflects on their credibility. The Court has to determine which version of events is the more probable. The onus lies with the Applicant to establish that there was an act or initiative of the Respondent as employer which led to the unlawful termination of the employment. I have concluded that the Applicant has failed to discharge this onus and that the application must be dismissed. The Applicant was employed under a Job Start Wage Subsidy Agreement cleaning portable buildings. He was employed from about 16 August 1995 to 4 January 1996. He admitted in cross-examination that he had received holiday pay in advance in December 1995. He also admitted that the Wageline organisation which he consulted advised him that he was only entitled to 7 days leave after his short employment but that Mr Karras had "promised me 14 days". He also admitted that Mr Karras had confirmed that he could only be paid for accrued leave but that he nevertheless wanted payment and that he believed that he was entitled to the payment because of their agreement. Both men agree that over the Christmas break between 22 December and 3 January there were several telephone discussions in which the Applicant persisted with his claim for payment in lieu of unaccrued leave. The dispute came to a head on Thursday 4 January 1996. Mr Karras was delayed in traffic on the Westgate Bridge. The Applicant contacted him on his car telephone and demanded his wages (and almost certainly repeated his demand for the payment for the unaccrued leave). Mr Karras agreed to travel to a licensed club in Frankston to pay wages due to the Applicant who indicated that he was certainly not willing to remain at the work site in Cheltenham until Mr Karras arrived. The Applicant claims that: · Mr Karras arrived at the club and threw the wages across a table · he indicated that the amount was incorrect because he had not been paid for Christmas period holidays The Applicant was at that time continuing with his oft repeated claim for unaccrued leave. Mr Karras denied that he threw the wages to the Applicant. He stated that when the Applicant persisted in his claim for additional payment in respect of the unaccrued leave he told the Applicant that they would discuss the matter further at the work site in Cheltenham on Friday 5 January. Mr Karras stated that the Applicant was not at the work site at 8.00 am on 5 January but that he telephoned at about 1.30 pm when Mr Karras was in the western suburbs and that the Applicant then told him that he had contacted Wageline. The Applicant admitted in his evidence that Wageline had in effect advised him that he was not entitled to the additional payments but that he nevertheless persisted with his demand. Both parties concede that this telephone conversation became somewhat heated. Mr Karras states that he told the Applicant that they "would need to get together and work the matter through" and that the Applicant told him that he wanted the additional payments and that he (Mr Karras) "could stick the job up his arse". The Applicant denies that he ever used words similar to that or of that import. Indeed he claims that Mr Karras told him that he was "to get his gear and get off the site and......get his arse out of here"". The Applicant never returned to work after 5 January. Indeed, from the point of view of the Respondent, and the Court, there is no evidence that Mr Holmes worked at all after Thursday 4 January. Both counsel but particularly counsel for the Applicant sought to rely on Mohazzab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200. In that case at 204 a Full Court of this court stated: "It is necessary to consider the ordinary meaning of the expression "termination at the initiative of the employer" in context in the Convention having regard to its object and purpose. The word "initiative" is relevantly defined in the New Shorter Oxford Dictionary in the following way: 'initiative 1. The action of initiating something or of taking the first step or the lead; an act setting a process or chain of events in motion; an independent or enterprising act.' And in the Concise Macquarie Dictionary in the following way: 'initiative 1. an introductory act or step; leading action; to take the initiative. 2. Readiness and ability in initiating action; enterprise: to lack initiative.' These definitions reflect the ordinary meaning of the word 'initiative'. Viewed as a whole, the Convention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression 'termination at the initiative of the employer' as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship." Again, at 205 the Full Court stated: "in these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphic Pty Ltd (unreported, Industrial Relations Court of Australia, 12 July 1995, Wilcox CJ). His Honour, at p3, referred to the situation of an employee who resigned because "he felt he had no other option". His Honour described those circumstances as: "...a termination of employment at the instance [of] the employer rather than of the employee." And at p5: "I agree with the proposition that termination may involve more than one action. But I think it is necesssary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment." In Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154 at 160 Moore J commented on the above passages as follows: "However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer's conduct." In this case all Mr Karras did on behalf of the Respondent was indicate that he could not pay for holidays which had not been taken or for leave which had not accrued. I cannot accept, and in the absence of clear authority to the contrary will not accept, that either the Convention or the Full Court dicta in Mohazab at 204, 205 and 206 can be interpreted as support for the proposition that an employer, who refuses to make an unauthorised payment to an employee, has, by that act of refusal, brought about the termination of the employment relationship. There may be many actions of an employer which can be correctly categorised as actions which bring about the termination of the employment in circumstances which attract the jurisdiction of Division 3 of Part VIA of the Workplace Relations Act 1996. However, the legitimate refusal of an employer to make a payment for leave which is not due or authorised under a relevant industrial award cannot be so categorised. Counsel for the Applicant concedes that the Applicant wrongly believed himself entitled to be paid for holidays accrued but not taken. However, it is asserted on behalf of the Applicant that, although he misconceived his entitlements, the Respondent, through Mr Karras, was fed up with the Applicant's constant requests for payment and that, even if the Court was to conclude that the Applicant told Mr Karras where he could put his job, nevertheless a failure by Mr Karras to explain to the Applicant the inability to make the payments "culminated in conduct on the part of the Respondent which, on any reasonable view, would have or could have as its probable effect the bringing of the Applicant's employment to an end or that the cessation of such employment would or could be the probable result of the employer's conduct". I do not accept this proposition. It is difficult in such cases where there is evidence only from two witnesses and where there are stark conflicts as to what occurred. I have concluded that the most likely circumstances are that the Applicant did tell Mr Karras what he could do with the job and did abandon his employment. Having observed Mr Karras and the Applicant giving their evidence, I have preferred the evidence of the former. The Applicant presented as agressive and assertive. He had taken a position which he maintained while giving evidence. His position was that Mr Karras had agreed to give him payment in lieu of unaccrued, unauthorised leave and that he was entitled to such payment although Wageline had confirmed that he had no such entitlement. The Court accepts that the most likely course of events is that Mr Karras: · advised the Applicant of the basic conditions of employment when the Job Start Agreement began · advised the Applicant that the Christmas break late December to early January was an accepted and required practice in the cleaning industry · advised the Applicant that his Christmas pay would include accrued leave and public holidays · advised the Applicant that he was not entitled to unaccrued extra leave · advised the Applicant that he could discuss the dispute over unaccrued leave with Wageline and his Job Start Case Manager The Court has concluded that it is more probable than not that the Applicant told Mr Karras to "stick the job up his arse" and that it is less probable that Mr Karras told the Applicant that "he was to get off the site...and get his arse out of here". The Court has concluded that the Applicant stubbornly persisted in a demand for an additional payment for leave which was unauthorised and which had not accrued and, having earlier received a payment in advance for leave which later accrued, the Applicant was quite unprepared to work after 4 January 1996 and did not work on 5 January. The Applicant abandoned his employment. While the facts differ my conclusion is the same as that reached in Santos v Sidys Ice Cream (unreported, IRCA, Millane JR, 10 May 1996) and expresed as follows: "The evidence before the Court fails to establish on the balance of probability that there was any intention on the part of the employer to bring the employment to an end or that on any reasonable view of the evidence the probable effect of the Respondent's actions....would have the effect of bringing the Applicant's employment to an end" The employment was not ended by an action or initiative of the Respondent. The application under s170EA lacks jurisdiction and must be dismissed. MINUTES OF ORDERS THE COURT ORDERS: 1. That the application be dismissed. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. I certify that this and the preceding 6 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan. Associate: Dated: 24 June 1996 Solicitors for the Applicant: McDonald Murholme Counsel for the Applicant: Mr P Ginnane Solicitors for the Respondent: George Rossis & Co Counsel for the Respondent: Mr G Devries Date of hearing: 21 and 24 June 1996 Date of judgment: 24 December 1996	3,227
federal_court_of_australia:fca/full/2004/2004fcafc0095	decision	commonwealth	federal_court_of_australia	text/html	2004-05-05 00:00:00	Forbes v Australian Federal Police (Commonwealth of Australia) [2004] FCAFC 95	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2004/2004fcafc0095	2024-09-13T22:48:58.189687+10:00	FEDERAL COURT OF AUSTRALIA Forbes v Australian Federal Police (Commonwealth of Australia) [2004] FCAFC 95 DISABILITY DISCRIMINATION – employer withholds information concerning a former employee's medical condition from a Review Panel considering re-employment of the employee – information withheld because employer considers it irrelevant to the Panel's deliberations – whether employer discriminates against its employee on the grounds of her disability – findings inconsistent with any such conclusion – decision not to re-employ employee based on the breakdown of the employment relationship – finding inconsistent with a conclusion that the employer discriminated against the employee on the ground of her disability Disability and Discrimination Act 1992 (Cth) ss 3, 4, 5, 6, 15, 22 Australian Federal Police Act 1979 (Cth) ss 6, 23, 24, 64B Human Rights and Equal Opportunity Commission Act 1986 (Cth) ss 46PH, 46PO Purvis v New South Wales (2003) 202 ALR 133 applied Waters v Public Transport Corporation (1991) 173 CLR 349 cited James v Eastleigh Borough Council [1990] 2 AC 751 cited FORBES v AUSTRALIAN FEDERAL POLICE (COMMONWEALTH OF AUSTRALIA) S 594 of 2003 BLACK CJ, TAMBERLIN and SACKVILLE JJ SYDNEY 5 MAY 2004 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S 594 OF 2003 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: PAMELA ANNE FORBES APPELLANT AND: COMMONWEALTH OF AUSTRALIA (REPRESENTED BY THE AUSTRALIAN FEDERAL POLICE) RESPONDENT JUDGES: BLACK CJ, TAMBERLIN & SACKVILLE JJ DATE OF ORDER: 5 MAY 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The cross-appeal be allowed. 3. The Federal Magistrate's declaration that the respondent discriminated unlawfully against the appellant be set aside. 4. The Federal Magistrate's order that the respondent apologise to the appellant be set aside. 5. The appellant pay the respondent's costs of the appeal and the cross-appeal in this Court and the proceedings in the Federal Magistrates Court. 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 594 OF 2003 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: PAMELA ANNE FORBES APPELLANT AND: COMMONWEALTH OF AUSTRALIA (REPRESENTED BY THE AUSTRALIAN FEDERAL POLICE) RESPONDENT JUDGES: BLACK CJ, TAMBERLIN & SACKVILLE JJ DATE: 5 MAY 2004 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT: the appeal 1 This is an appeal and cross-appeal from a judgment of a Federal Magistrate in proceedings brought under the Human Rights and Equal Opportunity Commission Act 1986 (Cth) ('HREOC Act'). In those proceedings the present appellant, formerly a police officer with the Australian Federal Police ('AFP'), claimed compensation and other relief from the Commonwealth by reason of unlawful discrimination, contrary to s 15 of the Disability Discrimination Act 1992 (Cth) ('Disability Discrimination Act'). The appellant's case was that the Commonwealth, through the AFP, had discriminated against her on the ground of disability, namely a depressive illness from which she suffered. 2 The learned Magistrate rejected the appellant's case insofar as it alleged unlawful discrimination in relation to her conditions of employment and to the AFP's refusal to re-employ her at the conclusion of her fixed term contract as a police officer. However, his Honour found that the AFP had discriminated against the appellant by withholding information about her medical condition from the AFP Review Panel ('the Panel'). The Panel had been convened to make recommendations to the Commissioner of the AFP as to whether the appellant should be re-employed at the expiration of her fixed term contract. The Panel recommended against her re-appointment and the Acting Commissioner acted on that recommendation. 3 The Magistrate made a declaration that 'the Australian Federal Police discriminated against the applicant in withholding relevant material from the AFP Review Panel which considered the future employment of the applicant with the Australian Federal Police in 2000.' His Honour also ordered the AFP to provide a written apology to the appellant in terms to be agreed between the parties or as determined by the Court. However, he declined to award the appellant any compensation in respect of economic or non-economic loss. He subsequently ordered that each party should bear her or its own costs. PARTIES 4 The AFP consists of the Commissioner and Deputy Commissioner of Police, AFP employees and special members: Australian Federal Police Act 1979 (Cth) ('AFP Act'), s 6. However, as the Magistrate observed, it appears that the AFP is not an independent legal person. The Commissioner is empowered, on behalf of the Commonwealth, to engage persons as employees: AFP Act, s 24(1). The Commissioner, on behalf of the Commonwealth, has all the rights, duties and powers of an employer in respect of AFP employees: AFP Act, s 23(1). 5 The Commonwealth was joined as the respondent to the proceedings determined by the Magistrate. His Honour observed that the Commonwealth was the proper respondent by reason of s 64B of the AFP Act. Section 64B makes the Commonwealth liable 'in respect of a tort committed by a member in the performance or purported performance of his or her duties as such a member in like manner as a person is liable in respect of a tort committed by his or her employee in the course of his or her employment'. 6 It is not entirely clear that the proceedings can be characterised as 'in respect of a tort'. Be that as it may, the Commonwealth appears to have been the proper respondent to the proceedings by virtue of its position as the employer of the appellant. In any event, the Commonwealth accepts that if the actions of the AFP amounted to unlawful discrimination, it is liable for any compensation that might be awarded pursuant to s 46PO(4)(d) of the HREOC Act. 7 The Magistrate did not identify the source of power to direct 'The Australian Federal Police' to make an apology and the issue was not raised on the appeal. In view of the outcome of the appeal, however, it is not necessary to consider this issue further. the contentions 8 It must be said that it is not altogether easy to follow the grounds on which the appellant seeks to challenge the Magistrate's findings and conclusions. The written and oral submissions recount in some detail the rather unfortunate history of the appellant's relationship with the AFP since 1997. However, the submissions do not identify clearly the errors said to have been made by the Magistrate insofar as he rejected the appellant's claims. 9 As we followed the argument, the appellant contended that the Magistrate should have found that the Commonwealth (through the AFP) had discriminated against her by 'fail[ing] to acknowledge that the psychiatric condition which the Appellant suffered was compensable when overwhelming expert opinion… pointed to the contrary.' The submission appeared to be that had such a finding been made, it would have led the Magistrate to conclude that the Commonwealth had discriminated against the appellant by failing to provide rehabilitation to enable her to recover and return to employment. 10 It was pointed out to the appellant's counsel during the hearing that in order to establish disability discrimination it is at least necessary to show that the AFP had treated the appellant less favourably than it would have treated its other employees, in circumstances that were the same or not materially different. Counsel for the appellant initially argued that this could be established simply from the fact that the medical reports unanimously acknowledged that the appellant had a serious depressive illness and recommended some form of rehabilitation. After further consideration, however, he acknowledged that it would require evidence that the AFP would have treated other employees with diagnosed medical problems (presumably not at that stage recognised by Comcare as employment caused) differently. Counsel for the appellant further acknowledged that no evidence had been led before the Magistrate to show that the AFP had provided rehabilitation or similar services to employees suffering from conditions other than depressive illness and that the appellant would need leave to amend the notice of appeal to raise this ground. Ms Henderson, who appeared for the Commonwealth, objected to leave being granted, on the ground that had the issue been raised before the Magistrate, the Commonwealth might have wished to adduce evidence. In these circumstances, the Court refused leave to amend. 11 The appellant also challenged the Magistrate's refusal to award compensation for the unlawful discrimination he found to have occurred. The appellant's counsel submitted that, while the task of assessing compensation for loss of a chance was difficult, the Court was obliged to undertake it. 12 Finally, the appellant challenged the Magistrate's failure to award costs in her favour, contending that costs should have followed the event. 13 The Commonwealth's cross-appeal challenged the Magistrate's finding that the AFP had discriminated against the appellant by withholding from the Panel information concerning her illness. Ms Henderson submitted that his Honour's conclusion was fatally flawed primarily, because he had made no finding that information had been withheld on the ground of the appellant's disability as required by s 5(1) of the Disability Discrimination Act. Rather, she submitted, the Federal Magistrate had actually found that the information had been withheld on the basis that it was irrelevant. She argued that the Disability Discrimination Act could not require an employer to disclose information about an employee's health that it considered to be irrelevant to the question of whether that employee should be offered a further contract of employment. the legislation 14 Section 46PO(1) of the HREOC Act provides that if a complaint has been terminated by the President under s 46PH (as the appellant's complaint was), the complainant may apply to the Federal Magistrates Court or to the Federal Court alleging unlawful discrimination by one or more of the respondents to the terminated complaint. If the Court is satisfied that there has been unlawful discrimination, it may make such orders (including a declaration of right) as it thinks fit: s 46PO(4). The orders specifically mentioned include an order requiring the respondent to pay to an applicant damages by way of compensation for any loss or damage suffered because of the conduct of the respondent (s 46PO(4)(d)) and an order requiring a respondent 'to perform any reasonable act… to redress any loss or damage suffered by an applicant' (s 46PO(4)(b)). 15 The objects of the Disability Discrimination Act are set out in s 3, as follows: '(a) to eliminate, as far as possible, discrimination against persons on the ground of disability in the areas of: (i) work, accommodation, education, access to premises, clubs and sport; and (ii) the provision of goods, facilities, services and land; and (iii) existing laws; and (iv) the administration of Commonwealth laws and programs; and (b) to ensure, as far as practicable, that persons with disabilities have the same rights to equality before the law as the rest of the community; and (c) to promote recognition and acceptance within the community of the principle that persons with disabilities have the same fundamental rights as the rest of the community.' 16 The expression 'disability' is defined in s 4 of the Disability Discrimination Act. However, as there is now no dispute that the appellant suffered from a disability, in the form of a depressive illness, it is not necessary to extract the definition. 17 Section 15 of the Disability Discrimination Act provides as follows: '(1) It is unlawful for an employer or a person acting or purporting to act on behalf of an employer to discriminate against a person on the ground of the other person's disability…: (a) in the arrangements made for the purpose of determining who should be offered employment; or (b) in determining who should be offered employment; or (c) in the terms or conditions on which employment is offered. (2) It is unlawful for an employer or a person acting or purporting to act on behalf of an employer to discriminate against an employee on the ground of the employee's disability…: (a) in the terms or conditions of employment that the employer affords the employee; or (b) by denying the employee access, or limiting the employee's access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment; or (c) by dismissing the employee; or (d) by subjecting the employee to any other detriment. … (4) Neither paragraph (1)(b) nor (2)(c) renders unlawful discrimination by an employer against a person on the ground of the person's disability, if taking into account the person's past training, qualifications and experience relevant to the particular employment and, if the person is already employed by the employer, the person's performance as an employee, and all other relevant factors that it is reasonable to take into account, the person because of his or her disability: (a) would be unable to carry out the inherent requirements of the particular employment; or (b) would, in order to carry out those requirements, require services or facilities that are not required by persons without the disability and the provision of which would impose an unjustifiable hardship on the employer.' 18 Two points should be made immediately about s 15. First, it is only unlawful for an employee to discriminate against a person on the ground of the other person's disability. Secondly, s 15(4) appears to have played no part in the proceedings determined by the Magistrate. 19 Section 5 deals with the concept of discrimination on the ground of disability. It provides as follows: '(1) For the purposes of this Act, a person (discriminator) discriminates against another person (aggrieved person) on the ground of a disability of the aggrieved person if, because of the aggrieved person's disability, the discriminator treats or proposes to treat the aggrieved person less favourably than, in circumstances that are the same or are not materially different, the discriminator treats or would treat a person without the disability. (2) For the purposes of subsection (1), circumstances in which a person treats or would treat another person with a disability are not materially different because of the fact that different accommodation or services may be required by the person with a disability.' 20 Although s 6 of the Disability Discrimination Act is not directly relevant to this case, it should be noted that it expands the circumstances in which a person can be said to discriminate against another on the ground of a disability. Section 6 provides as follows: 'For the purposes of this Act, a person (discriminator) discriminates against another person (aggrieved person) on the ground of a disability of the aggrieved person if the discriminator requires the aggrieved person to comply with a requirement or condition: (a) with which a substantially higher proportion of persons without the disability comply or are able to comply; and (b) which is not reasonable having regard to the circumstances of the case; and (c) with which the aggrieved person does not or is not able to comply.' 21 Section 10 addresses the situation where an act is done both because of the aggrieved person's disability and for other reasons: 'If: (a) an act is done for 2 or more reasons; and (b) one of the reasons is the disability of a person (whether or not it is the dominant or a substantial reason for doing the act); then, for the purposes of this Act, the act is taken to be done for that reason'. background facts 22 The appellant became an officer in the Commonwealth Police (as the AFP was then known) on 27 March 1978. On 20 August 1990, her position was converted to a fixed term appointment, expiring on 25 August 2000. 23 Prior to December 1997, the appellant had an excellent record with the AFP. In that month, an incident occurred which involved a very sharp disagreement between the appellant and more senior officers at the Adelaide office of the AFP. The appellant disagreed strongly with an operational decision, left the office and, at the direction of her doctor, did not return to work. In fact, she did not return to work after 17 December 1997. 24 In consequence of a formal grievance submitted by the appellant on 12 January 1998, an internal investigation was undertaken into allegations made by her. The investigation concluded on 30 April 1998 that the allegations had no foundation. The appellant then wrote a letter to Senator Vanstone seeking further review of the grievances the subject of the internal investigation report. This prompted a further investigation by AFP internal security and audit, which concluded on 14 July 2000 that her allegations were unsubstantiated. 25 Shortly after the first internal investigation report was completed, on 10 May 1998, the appellant claimed compensation under the Safety Rehabilitation Compensation Act 1988 (Cth) ('SRC Act') for a 'major depressive disorder'. That claim was rejected on 20 November 1998. Following internal reconsideration, Comcare affirmed the decision to refuse compensation on 16 April 1999. The appellant challenged that decision in the Administrative Appeals Tribunal ('AAT'). On 13 June 2001, the AAT set aside the decision and decided that Comcare was liable to pay compensation to the appellant from 17 December 1997 until 6 October 1999. The latter date was selected because the AAT found that any depressive symptoms, which the appellant may have had on and after that date, could not be attributed to the particular work difficulty she had experienced in 1997. Rather, the symptoms, as at October 1999, related to the stress and anxiety of the various legal proceedings and the appellant's concerns about her alienation from her colleagues. 26 In the meantime, on 25 June 1999, the appellant applied to take three months leave without pay. This request was refused. On 29 September 1999, the AFP coordinator for the southern region directed the appellant to present herself for duty at the AFP Adelaide office. The letter stated that failure to attend would be interpreted as an intention to resign from the AFP. It appears that this direction was subsequently withdrawn. 27 Following some attempts at mediation, the General Manager, Professional Development, wrote to the appellant on 3 March 2000. He advised the appellant as follows: 'I have considered all aspects of your AFP employment and hold concerns that there has occurred a fundamental and irrevocable breakdown in the employment relationship, such that I have lost confidence in your continued suitability to remain a member of the AFP.' The letter invited the appellant, should she seek reappointment, to provide written submissions in relation to the concerns expressed in the letter. 28 After some further correspondence, the General Manager, Finance and People Management, wrote to the appellant's solicitors on 19 July 2000, providing particulars of what was said to have been the fundamental and irrevocable breakdown in the employer relationship. By letter dated 29 July 2000, the appellant made detailed written submissions responding to the particulars of concern provided by the AFP. These were supplemented by further submissions on 6 August 2000. 29 On 22 August 2000, a delegate of the Commissioner wrote to the appellant advising that it had been decided not to reemploy her at the completion of her current contract, which was due to end on 25 August 2000. 30 On 3 September 2000, the appellant requested a review of this decision by the Panel. The Panel was established pursuant to an agreement between the AFP and the Australian Federal Police Association. Its functions were to consider matters referred to it by the Commissioner or by the National Secretary of the Association and to make recommendations to the Commissioner in respect of those matters. In this instance, the members were an independent Chairman, a Deputy Commissioner of the AFP and a representative of the Association. 31 On 19 October 2000, the appellant made written submissions to the Panel. The Panel had the documents that had been before the primary decision-maker. The appellant, her professional reporting confidante and two other AFP officers gave oral evidence to the Panel. 32 On 30 October 2000, the Panel made a written recommendation to the Commissioner. The report of the panel noted that there were: 'a number of features of this matter which might perhaps have been handled better. It is possible that a better solution to this matter might have been achieved. We point to the fact that in 1998 [the appellant] sought to leave the AFP and her offer to do so was declined. Her complaints about the alleged incompetence of the Management of the Adelaide Office at the time were considered but her identity was disclosed…. [I]t would appear that such disclosure represents a breach of normal procedures for which there is no explanation available to the panel…. It is trite to observe that this is a difficult matter to decide. What we have attempted to do is to consider the matter on balance and to attempt to reach a conclusion which is consistent with the best interests of all concerned. If the panel were to recommend [that the appellant] should be reemployed at this stage and if such a recommendation were to be adopted, we are far from satisfied that it would be in the best interests of the AFP or [the appellant].' On balance, the Panel concluded that it was impossible to make a recommendation for the appellant's reemployment 'particularly at this time'. It added, however, that the AFP had some responsibility to her and suggested that further counselling should be made available to her by a professionally competent body in order to assist her future employment prospects. 33 The Panel concluded its report as follows: 'We wish to make it clear that our reason for not recommending [the appellant's] re-employment relates to our view that it would be impossible for her to resume her normal employment and to resume a contract of employment on a basis which would be satisfactory to all concerned. In other words, the conclusion we have reached is that there has been not only a breakdown in the employment relationship, but a breakdown of such magnitude that it is highly unlikely that the damage can be repaired.' 34 On 1 November 2000, the Acting Commissioner of the AFP accepted the recommendation of the Panel. 35 On 26 October 2001, prior to the Panel making its written recommendation, the appellant lodged a complaint with the Human Rights and Equal Opportunity Commission ('HREOC') in relation to alleged discriminatory conduct by the AFP. That complaint was augmented on 11 February 2002. The President of HREOC terminated the complaint on 28 February 2002, pursuant to s 46PH(1)(f) of the HREOC Act, on the ground that she was satisfied that the subject matter of the complaint had been adequately dealt with by another statutory body. The President had regard, in particular, to the decision of the AAT and to the decision of the Panel. 36 On 22 March 2002, the appellant filed the application in the Federal Magistrates Court under the HREOC Act seeking compensation and other relief against the Commonwealth. The judgment of the Court was delivered on 26 June 2003. A separate judgment on costs was delivered on 16 July 2003. the judgment of the magistrates court 37 The Magistrate noted that the appellant claimed that she had been discriminated against, contrary to s 15(1)(a) and (b) of the Disability Discrimination Act, by the AFP's refusal to re-employ her. She also claimed that the AFP had discriminated against her, contrary to s 15(1)(d) of the Disability Discrimination Act, by failing to implement a return to work program for her or to provide adequate counselling. 38 His Honour found that the appellant suffered from a depressive illness and that this illness constituted a 'disability'. She had suffered from the disability from 17 December 1997, the day she left the workplace. These findings are not in dispute. 39 The Magistrate quoted a passage from the AAT's reasons in the compensation proceedings under the SRC Act, as follows: 'The [AAT] comments that the AFP adopted a poor attitude with respect to the rehabilitation and support of the applicant. There is no evidence of a suitable return to work programme being considered at any stage. The AFP provided entirely inadequate support by way of counselling, which clearly should have been ongoing throughout the entire period. The [AAT] gained the impression from Ms Peisley's evidence [an AFP officer] that the AFP simply sat on its hands and waited to see what the applicant might do, rather than be proactive to attempt to assist the applicant. Mr Mannow [another AFP officer] contacted the applicant off his own bat, and whilst he is to be commended for that, it is a pity that his superiors did not initiate further and more intense assistance. Had such occurred, the situation in which both parties now find themselves may have been averted.' 40 The Magistrate rejected the appellant's contention that the conduct referred to in the AAT's reasons was discriminatory. After tracing in some detail the communications between the appellant and the AFP and the counselling services provided to her, the Magistrate concluded that: 'the conduct of the AFP is explicable by reasons other than disability discrimination. First, the AFP knew that [the appellant] was considering whether or not to resign and it was reasonable to give her time to consider her options. Secondly, the AFP was distracted by various grievances and complaints made by her which required investigation. Thirdly, although the AFP in some part or other of its organisation must have been aware of the medical reports concerning [the appellant], the AFP in Adelaide, which was responsible for making decisions concerning her future was, for most of the period, either kept in the dark by [the appellant], or led by the decisions and advice from Comcare to believe that her condition was not compensable and, by implication, not serious.' 41 The AFP had taken reasonable steps to assist the appellant to 'work through' her illness and to decide whether or not she wanted to return to work. Management could have done more, but their failure to do so was based not on her disability but on their belief that she had no disability. That belief turned out to be erroneous, but that did not become clear until the AAT's decision in June 2001: 'The conduct of the AFP, while it may merit some criticism, was not discriminatory. The AFP would have treated an able employee who was believed to be a malingerer no better than it treated [the appellant].' 42 The Magistrate accordingly found that the AFP did not discriminate against the appellant in relation to her conditions of employment. 43 The second aspect of the appellant's claim related to the failure of the AFP to reemploy her on the termination of her fixed contract of employment. On the basis of evidence given by the Chairman of the Panel, the Magistrate found that there could be no serious allegation that its 'decision' (sic– recommendation) was discriminatory. The decision of the Panel was 'unimpeachable' and provided an effective independent review of the previous decision made by AFP management. The decision itself was 'clearly based on the irretrievable breakdown of the employment relationship' and was unrelated to the health of the appellant. 44 The Magistrate identified a third question for consideration. This was whether the Panel was 'fully and properly informed of all material considerations by the AFP'. The Magistrate found that AFP management had taken a decision not to inform the Panel of the detail concerning the appellant's medical condition 'on the basis that it was irrelevant having regard to the advice from Comcare about the lack of a compensable injury'. The recommendation to this effect was put before the Panel which accepted and acted upon it. His Honour considered, however, that the AFP's recommendation was 'erroneous': 'In the first place, the relevant issue was not whether [the appellant] had a compensable injury for the purposes of the [SRC] Act but, rather, whether she suffered from an illness which impacted upon her capacity to work for the AFP. In addition, [the appellant's] illness was relevant to a consideration of whether the apparent breakdown of the employment relationship was irretrievable. The breakdown in the employment relationship might have been retrievable if [the appellant] could be expected to return to sound mental health.' 45 The Magistrate acknowledged that the appellant could have put forward the relevant material. But her reluctance to do so was understandable. In his Honour's view: 'the AFP was under an obligation to put before the review committee information concerning [the appellant's] illness. Its failure to do so left the review committee under the impression that [the appellant] was simply a disgruntled employee who had, by her own actions, irretrievably broken the employment relationship. Information about [the appellant's] condition would have more clearly explained the breakdown in the employment relationship and would have enabled the review committee to better consider whether that relationship could be restored. It could be expected in the ordinary course of events that the AFP would put before the review committee everything relevant to the performance of the task before it. In this case the AFP failed to do so. In failing to do so the AFP treated [the appellant] less favourably than it could be expected to have treated an able bodied employee. In my view, this amounts to a breach of s 15(1)(a) of the DDA in relation to the arrangements made for the purpose of determining who should be offered continuing employment in the AFP. The AFP may have formed the view that [the appellant] was a malingerer, but the review committee needed to make its own judgment about all relevant facts and circumstances. The conduct of the AFP in withholding information about [the appellant's] medical condition put [her] in a less favourable position [than] she would have been in if she had not suffered from a disability.' 46 The Magistrate went on to consider whether, at the time the AFP decided not to disclose the appellant's medical history to the Panel, she in fact suffered from a disability. He found that she did. 47 Finally, his Honour addressed the appellant's claims for compensation. He pointed out that the only discrimination he had found lay in the arrangements made for the decision on the appellant's continuing employment. He found that even if the appellant's full medical details had been put before the Panel, it was probable that the same decision would have been reached. The AFP's conduct in withholding the medical evidence caused the appellant to lose the chance that the Panel might have reached a different view. The Magistrate accepted, however, that the chance that the Panel would have reached a different inclusion was 'very small. It is probably less than 10 per cent and, in my view, it is impossible to value…. I find that [the appellant] has suffered no reasonable economic loss by reason of [the] discrimination'. 48 His Honour further found that although the appellant had suffered a great deal of emotional trauma following her departure from work, it would not have diminished even had the discrimination not occurred. Indeed, the withholding of the information protected her from distress. Accordingly, she had not suffered any non-economic loss meriting the award of damages. reasoning operation of the disability discrimination act: purvis V new south wales 49 The operation of the Disability Discrimination Act was recently considered by the High Court in Purvis v New South Wales (2003) 202 ALR 133 ('Purvis'), decided after the Magistrate delivered judgment in the present case. In Purvis, the appellant brought proceedings alleging that educational authorities had discriminated against his foster child, contrary to s 22 of the Disability Discrimination Act, on the ground of the child's disability. The child, aged 12, had exhibited violent behaviour at school in consequence of a condition attributable to brain damage suffered in infancy. The school principal and the Department of Education determined that the student should be enrolled in a special school and should be excluded from the school he was attending. By majority (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; McHugh and Kirby JJ, dissenting), the High Court held that the exclusion of the student did not constitute discrimination on the ground of his disability, since the educational authority would have treated a non-disabled student exhibiting the same behaviour in the same way. 50 The joint judgment of Gummow, Hayne and Heydon JJ in Purvis identified three issues in the appeal (at 178 [191]-[193]). First, was the student's disability to be regarded as the disorder from which he suffered, or as the disturbed behaviour that resulted from the disorder? Secondly, was the comparison required by s 5(1) of the Disability Discrimination Act between the way the authority treated the child and the treatment that would have been accorded to a student who was not disabled but who had acted as the student had acted? Or was the comparison to be made with a non-disabled student who had not exhibited violent behaviour? Thirdly, there was an issue as to the relationship that had to exist between the disability and the alleged discriminatory conduct on the part of the educational authority. Their Honours resolved the second issue in a manner fatal to the student's case. 51 The joint judgment pointed out that the Disability Discrimination Act operates differently than other anti-discrimination legislation. The Sex Discrimination Act 1984 (Cth) and the Racial Discrimination Act 1975 (Cth), for example, require that people not be treated differently on the ground of sex or race; difference in sex or race is identified generally as an irrelevant consideration (at 180 [198]). By contrast, 'disability discrimination legislation necessarily focuses upon a criterion of admitted difference' (at 180 [199]). Hence the need for comparisons to be made with another person or group of persons 'with whom it is useful and relevant to draw the comparison which is implicit in describing one person as "different" or "disabled" or "disadvantaged"' (at 180 [200]). 52 Their Honours also pointed out that the form of the Disability Discrimination Act differs from disability discrimination legislation in other countries. Considerable care had to be taken, therefore, in applying what had been said about the aims or effect of that legislation to the construction of the Australian legislation (at 181 [206]). 53 For present purposes, their Honours' comments on the operation of s 5(1) of the Disability Discrimination Act are important. They said this (at 183 [213]-[214]): 'Section 5(1) of the Act requires comparison between the treatment which the discriminator gives, or proposes to give, to the aggrieved person and the treatment that the discriminator would give, or would propose to give, to a person without the aggrieved person's disability "in circumstances that are the same or are not materially different". If that comparison reveals that the disabled person was treated less favourably, the further question which must be asked is whether that was because of the disabled person's disability. Section 5(1), therefore, requires equality of treatment between the disabled and those who are not. Attention is invited to how the discriminator "treats or would treat a person without the disability" (emphasis added). The "comparator" identified by s 5(1) is "a person without the disability". The comparison that is to be made is of the treatment given or proposed to be given to the disabled person and the treatment of a person without the disability "in circumstances that are the same or are not materially different". Recognising that s 5(1) requires comparison with the treatment that would be given to a person without the disability is critical to the proper application of the Act.' (Emphasis in original.) 54 The joint judgment then asked what is meant by the reference in s 5(1) to 'circumstances that are the same or are not materially different' (at 184 [217]). While s 5(2) amplifies the operation of that expression, it cannot be read as requiring the provision of different accommodation or services (at 184 [218]): 'there is no textual or other basis in s 5 for saying that a failure to provide such accommodation or services would constitute less favourable treatment of the disabled persons for the purposes of s 5'. 55 The student's argument was that his disturbed behaviour was part of his disability. The appropriate comparison was therefore said to be with a non-disabled person, whose behaviour was not affected by a similar disability. The required comparison, according to this argument, involved excluding all the circumstances constituting the disability. The joint judgment rejected this argument (at 185 [222]-[224]): 'It may readily be accepted that the necessary comparison to make is with the treatment of a person without the relevant disability. Section 5(1) makes that plain. It does not follow, however, that the "circumstances" to be considered are to be identified in the way the appellant contended. Indeed, to strip out of those circumstances any and every feature which presents difficulty to a disabled person would truly frustrate the purposes of the Act. Section 5(2) provides that the relevant circumstances are not shown to be materially different by showing that the disabled person has special needs. The appellant's contention, however, went further than that. It sought to refer to a set of circumstances that were wholly hypothetical – circumstances in which no aspect of the disability intrudes. That is not what the Act requires. In requiring a comparison between the treatment offered to a disabled person and the treatment that would be given to a person without the disability, s 5(1) requires that the circumstances attending the treatment given (or to be given) to the disabled person must be identified. What must then be examined is what would have been done in those circumstances if the person concerned was not disabled. The appellant's argument depended upon an inversion of that order of examination. Instead of directing attention first to the actual circumstances in which a disabled person was, or would be, treated disadvantageously, it sought to direct attention to a wholly hypothetical set of circumstances defined by excluding all features of the disability. … There may be cases in which identifying the circumstances of intended treatment is not easy. But where it is alleged that a disabled person has been treated disadvantageously, those difficulties do not intrude. All of the circumstances of the impugned conduct can be identified and that is what s 5(1) requires. Once the circumstances of the treatment or intended treatment have been identified, a comparison must be made with the treatment that would have been given to a person without the disability in circumstances that were the same or were not materially different.' (Emphasis in original.) 56 Thus the circumstances to be considered in making the comparison required by s 5(1) included but were not limited to the student's violent behaviour. According to the joint judgment, s 5(1) presented two questions (at 186 [225]): * How, in those circumstances would the educational authority have treated a person without the student's disability? * If the student's treatment was less favourable than the treatment that would be given to a person without the disability, was that because of the student's disability? 57 The Commissioner's decision in favour of the disabled student was flawed because it failed to identify the circumstances which led to his treatment. There had been no determination of how a person without the disability would have been treated in circumstances that were the same or not materially different from the circumstances surrounding the student's treatment. 58 Although it was unnecessary to consider the third issue, the joint judgment briefly addressed the requirement in s 5(1) of the Disability Discrimination Act that the aggrieved person be treated less favourably because of that person's disability. Some authorities had taken the view that the phrase 'on the ground of' did not require an examination of intention or motive (for example, Waters v Public Transport Corporation (1991) 173 CLR 349, at 359-360, per Mason CJ and Gaudron J), while the House of Lords in James v Eastleigh Borough Council [1990] 2 AC 751, had treated as decisive the aim of the council in acting as it did. The joint judgment made this comment (at 187 [236]): 'For present purposes, it is enough to say that we doubt that distinctions between motive, purpose or effect will greatly assist the resolution of any problem about whether treatment occurred or was proposed "because of" disability. Rather, the central question will always be – why was the aggrieved person treated as he or she was? If the aggrieved person was treated less favourably was it "because of", 'by reason of', that person's disability? Motive, purpose, effect may all bear on that question. But it would be a mistake to treat those words as substitutes for the statutory expression "because of".' 59 Callinan J agreed with the joint judgment 'with respect to the "comparator" issue and the bearing that their Honours' construction of s 5(1) of the Act has on it' (at 197 [273]). 60 Gleeson CJ held that the comparison required by s 5(1) of the Disability Discrimination Act was with a non-disabled student who exhibited violent behaviour. The statute required a comparison with a student without the disability, not a student without the behaviour (at 137 [11]). 61 His Honour also held that the ground of the authority's action in relation to the disabled student was that student's violent conduct and the principal's concern for the safety of other students and staff members. In identifying the basis of an impugned decision, he considered it is proper to take account of the objects of the Disability Discrimination Act and the scope and purpose of the legislation (at 138 [14]). A decision-maker may therefore identify and act on a threat to the safety or welfare of persons for whom the decision-maker is responsible. 62 McHugh and Kirby JJ in dissent took a different view from the majority on a number of issues. In particular, their Honours held that the circumstances of the alleged victim of discrimination must be excluded from the circumstances of the comparator insofar as those circumstances are related to the prohibited ground (at 162 [119]). Since the disabled student's disability gave rise to the behaviour, it was incorrect to regard the appropriate comparator as one who exhibited the behaviour that the disabled student did. The proper comparator was a student who did not misbehave. 63 Their Honours took the view (at 171 [160]) that in determining whether there has been discrimination 'on the ground of' the alleged victim's disability, 'it is necessary to consider why the discriminator acted as he or she did, [but] it is not necessary for the discriminator to have acted with a discriminatory motive'. The focus must be on the 'real reason' for the act. 64 The disabled student had been treated less favourably because of his behaviour. Since his behaviour was a manifestation of his disability, he had been discriminated against on the ground of his disability. It was not to the point that the principal may have had a benevolent motive in seeking to transfer the student to a special school. the cross-appeal 65 It is convenient to consider first the cross-appeal in the light of the principles stated in Purvis. It follows from the language of ss 5 and 15 of the Disability Discrimination Act that a finding of unlawful discrimination could properly have been made in the present case only if * the treatment accorded to the appellant was less favourable, in circumstances that are the same or are not materially different, than the treatment the AFP would have accorded to an AFP officer without the appellant's disability; and * the treatment accorded to the appellant was 'because of [her] disability' (that is, because of the depressive illness from which she suffered). 66 The Commonwealth's argument on the cross-appeal focused upon the latter requirement. Ms Henderson contended that the Magistrate had simply made no finding that the AFP's decision (or recommendation) not to divulge details of the appellant's medical condition to the Panel was because of her disability. 67 This contention is, in our view, plainly correct. The Magistrate criticised the AFP's recommendation to the Panel that the details of the appellant's medical condition were irrelevant. His Honour pointed out that the issue was not, as the AFP apparently thought, whether the appellant had a compensable injury for the purposes of the SRC Act. He also pointed out that the appellant's illness was relevant to a consideration of whether the apparent breakdown of the employment relationship was irretrievable. The Magistrate thought that the AFP was 'obliged' to put the material before the Panel. While the AFP may have thought that the appellant 'was a malingerer', the Panel needed to make its own judgment. 68 It is, however, one thing for the AFP to have misunderstood its responsibilities to the Panel or to the appellant (if that is what the Magistrate intended to convey). It is quite another to conclude that the AFP's actions were 'because of' the appellant's depressive illness. The Magistrate made no such finding. 69 In Purvis, there was disagreement as to whether the motives of the alleged discriminator should be taken into account in determining whether that person has discriminated against another because of the latter's disability. Gummow, Hayne and Heydon JJ thought that motive was at least relevant. Gleeson CJ thought that motive was relevant and, perhaps, could be determinative. McHugh and Kirby JJ thought motive was not relevant. All agreed, however, that it is necessary to ask why the alleged discriminator took the action against the alleged victim. 70 In the present case, therefore, it was necessary for the Magistrate to ask why the AFP had withheld information about the appellant's medical condition from the Panel and to determine whether (having regard to s 10) the reason was the appellant's depressive illness. His Honour did not undertake that task and therefore failed to address a question which the legislation required him to answer if a finding of unlawful discrimination was to be made. His decision was therefore affected by an error of law. 71 Ordinarily an error of law of this kind would result in the proceedings being remitted to the Magistrate's Court for the necessary factual findings to be made. In this case, however, the findings made by his Honour are inconsistent with a conclusion that the AFP's recommendation that the medical information not be disclosed to the Panel was made because of the appellant's disability. The Magistrate found that the AFP in Adelaide, which was responsible for making decisions concerning the appellant's future, was led by the advice of Comcare to believe that his condition was not compensable and therefore not serious. The AFP's failure to do more to assist the appellant 'was based not on [the appellant's] disability but, rather, on a belief that she did not have one'. 72 The Magistrate also quoted a minute prepared by an AFP officer for the AFP's General Manager, Finance and People Management, dated 10 August 2000. This recorded the following: '[The appellant] made a worker's compensation claim to Comcare in relation to her illness. The principal grounds given in support of the claim are generally similar to those given in support of her allegation against then GMCR and DOCR. Comcare has twice rejected the claim and she has appealed this decision to the AAT. A hearing is set down for 21 to 23 August 2000 in Adelaide. As you are aware a settlement offer has been made by the AFP but to date has not been accepted. As Comcare advice to the AFP is that no compensable injury exists I suggest the issues and medical evidence in relation to [the appellant's] claimed illness are not relevant to your considerations as to her suitability for engagement as an employee.' His Honour found that this recommendation was put before the Panel and accepted by it. Although finding that the recommendation was 'erroneous', he did not suggest that the minute did not accurately record the view that the details of the appellant's medical condition were irrelevant to the deliberations of the Panel. Indeed, the Magistrate specifically found that AFP management made the decision not to give the Panel more detailed information about the appellant's medical condition because the information was thought to be irrelevant. 73 In view of these findings, it would not be open to the Magistrate to conclude that the AFP's conduct in not disclosing details of the appellant's medical condition to the Panel was because of the appellant's depressive illness. On the contrary, the findings make it clear that the AFP acted as it did because its officers thought that the appellant was not seriously disabled. In short, the AFP acted as it did not because of the appellant's disability, but for other reasons. 74 For these reasons, the cross-appeal must be allowed. 75 The Commonwealth's submissions on the cross-appeal did not challenge the Magistrate's finding that the AFP's conduct in withholding information about the appellant's medical condition put her in a less favourable position than she would have been in had she not suffered from a disability. Had the finding been challenged, it would have been necessary to follow the approach mandated by s 5(1) of the Disability Discrimination Act. As Purvis shows, s 5(1)requires the circumstances attending the treatment of the disabled person to be identified. What is then to be examined is what the alleged discriminator would have done in those circumstances if the person concerned had not been disabled. 76 The Magistrate did not approach the matter this way. Rather, he seems to have concluded that the appellant had been put in a less favourable position than if she had not been disabled simply because she had lost the opportunity of putting evidence concerning her medical condition before the Panel. The circumstances attending the AFP's treatment of the appellant would seem to have included the AFP's genuine belief that the appellant, despite her claims to have suffered from a serious depressive illness, did not in fact have such an illness. That belief was in fact mistaken, but it explains the AFP's decision to regard the information concerning the appellant's medical condition as irrelevant to the question of her re-employment. This suggests that the appropriate comparator was an able-bodied person who claimed to be disabled, but whom the AFP genuinely believed (correctly, as it happens) had no relevant disability. If this analysis is correct, it seems that the AFP treated the appellant no less favourably than, in circumstances that were the same or were not materially different, it would have treated a non-disabled officer. 77 Since the point was not fully argued it is not necessary to express a final view on it. the appeal Refusal to Re-Employ 78 The appeal against the Magistrate's decision that the failure to reemploy the appellant was not because of her disability is closely related to the subject of the cross-appeal and so it is convenient to deal with this ground of appeal first. The Magistrate's decision reflects two interrelated findings. First, the Panel's decision was based on its view (independently of the medical evidence) that the employment relationship between the appellant and the AFP had irrevocably broken down. According to his Honour, there could be no serious allegation that the decision was discriminatory (by which we take his Honour to mean that the Panel's decision was not based on the appellant's disability). Secondly, the Panel's decision was 'on its face unimpeachable' and provided an 'effective independent review of the decision previously made by the AFP management'. 79 Counsel for the appellant contended in oral argument that the Panel's conclusion was based on the appellant's absence from work and that this absence in turn was a manifestation of her depressive illness. Thus, so it was argued, the decision not to reemploy her discriminated against her on the ground of her disability. 80 The Magistrate found that the appellant's absence from work for a period of over two years was 'clearly important in establishing [the] breakdown' of the relationship between herself and the AFP. If the Disability Discrimination Act makes it unlawful to refuse re-employment to someone because of their lengthy absence from work, where that absence is due to a disability, the appellant's submission would have force. The difficulty is that the appellant must establish that the AFP treated her less favourably, in circumstances that are the same or are not materially different, than it treated or would have treated a non-disabled person. The approach of the majority in Purvis makes it clear that the circumstances attending the treatment of the disabled person must be identified. The question is then what the alleged discriminator would have done in those circumstances if the person concerned was not disabled. 81 Here, the appellant was not reappointed because the history of her dealings with the AFP, including her absence from work for nearly three years, showed that the employment relationship had irretrievably broken down. There is nothing to indicate that in the same circumstances, the AFP would have treated a non-disabled employee more favourably. On the contrary, the fact that the Panel did not know of the appellant's medical condition indicates very strongly that it would have refused to reemploy a non-disabled employee who had been absent from work for a long period and whose relationship with the AFP had irretrievably broken down. 82 For these reasons, the Magistrate has not been shown to have erred insofar as he concluded that the AFP did not discriminate against the appellant on the ground of her disability. Failure to Provide Adequate Counselling or Rehabilitation 83 As has been noted, the Magistrate rejected the appellant's claim that the AFP unlawfully discriminated against her on the ground of her disability by failing to provide her with sufficient counselling and support to deal with her depressive illness. His Honour found that the AFP's conduct (or failure to act) was 'explicable by reasons other than disability discrimination'. Although his Honour did not frame this finding in the precise language of s 5(1) of the Disability Discrimination Act, clearly enough he considered that the AFP did not act as it did 'because of [the appellant's] disability', but for other reasons. 84 The appellant's counsel did not specifically challenge this finding. The thrust of the appellant's argument was that the AFP had refused to act on medical reports supplied by or on behalf of the appellant to AFP management. But we were not taken to any evidence that the AFP had declined to provide support to the appellant because she suffered from a depressive illness or other disability. As the Magistrate found, the AFP acted in the way it did, for three reasons: it wanted to give the appellant time to consider her position; it was distracted by the appellant's various grievances and complaints; and the AFP in Adelaide, acting on its understanding of Comcare's advice, did not believe that the appellant had a serious disability. Given that the central question is why the appellant was treated as she was (Purvis, at187), the answer, on the Magistrate's findings, is: 'for reasons other than her disability'. 85 It may be that the appellant's submissions on the appeal proceeded on the unstated assumption that ss 5 and 15 of the Disability Discrimination Act require an employer to provide different or additional services for disabled employees. If this were correct, the failure to provide a seriously depressed employee with appropriate counselling services might constitute less favourable treatment for the purposes of s 5(1). Purvis, however, firmly rejects such a proposition. It is true that s 5(2) provides that a disabled person's need for different accommodation or services does not constitute a material difference in judging whether the alleged discrimination has treated a disabled person less favourably than a non-disabled person. However, s 5(2) cannot be read as saying that a failure to provide different accommodation or services constitutes less favourable treatment of the disabled person for the purposes of s 5(1): Purvis, at 164 [218], per Gummow, Hayne and Heydon JJ; at 158 [104], per McHugh and Kirby JJ. 86 The appeal must therefore be dismissed. CONCLUSION 87 The appeal must be dismissed and the cross-appeal allowed. The declaration and order for a written apology by the learned Magistrate on 26 June 2003 must be set aside. In lieu therefore, an order must be made dismissing the application. 88 The appellant must pay the costs of the appeal and cross-appeal in this Court. The costs order made by the Magistrate on 16 July 2003 must be set aside. In lieu thereof, an order must be made that the appellant pay the Commonwealth's costs of the proceedings in the Magistrates Court. I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment herein of this Honourable Court. Associate: Dated: 5 May 2004 Counsel for the Appellant: GA Britton Solicitor for the Appellant: TF Owen & Co Counsel for the Respondent: RM Henderson Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 24 February 2004 Date of Judgment: 5 May 2004	12,127
federal_court_of_australia:fca/single/2000/2000fca0716	decision	commonwealth	federal_court_of_australia	text/html	2000-05-23 00:00:00	Caterpillar Inc v John Deere Ltd [2000] FCA 716	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2000/2000fca0716	2024-09-13T22:48:58.209592+10:00	FEDERAL COURT OF AUSTRALIA Caterpillar Inc v John Deere Ltd [2000] FCA 716 PATENTS – particulars of non-infringement Federal Court Rules O 10 r 1(1), O12 r (1)(b) CATERPILLAR INC v JOHN DEERE LTD and OTHERS NO VG 739 OF 1997 HEEREY J 23 MAY 2000 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 739 OF 1997 BETWEEN: CATERPILLAR INC Applicant AND: JOHN DEERE LTD and OTHERS Respondent JUDGE: HEEREY J DATE OF ORDER: 23 MAY 2000 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The respondents within 28 days file and serve particulars of non-infringement identifying which of the matters identified in pars 1 to 115 of the affidavit of Stepehn Marcus Stern sworn 18 April 2000 the respondents will dispute at trial. 2. The respondents pay the applicant's costs of the motion by notice dated 18 April 2000. 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 739 OF 1997 BETWEEN: CATERPILLAR INC Applicant AND: JOHN DEERE LTD and OTHERS Respondent JUDGE: HEEREY J DATE: 23 MAY 2000 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The applicant claims that the respondents have infringed its patent for a tractor. The respondents deny infringement and allege invalidity. 2 The applicant by a notice of motion dated 18 April 2000 seeks an order that the respondents deliver particulars of non-infringement, alternatively that the applicant have leave to administer interrogatories. This application has been precipitated by the applicant's delivery of a notice to admit which sought admission of some 115 features of the respondents' vehicle: for example, (1) that the Deere tractor is a belt-laying vehicle, (2) the Deere tractor is a work vehicle. The respondents have declined to provide any admissions. Their case in response to the notice of motion is set out in the affidavit of Mr Ryan, sworn 18 May 2000, and has been supplemented by the arguments of counsel. 3 In par 10 of his affidavit Mr Ryan, in referring to examples given by Mr Stern in his affidavit on behalf of the applicant of simple facts which the respondents have refused to admit, says: "Subject to obtaining all necessary expert assistance and instructions the respondents do not presently anticipate disputing these facts at trial. However, it is not appropriate given the technical nature of the admissions sought, particularly when it is anticipated that many of them may be the subject of serious dispute, to seek now to compel such admissions from the respondents." 4 As expanded by senior counsel for the respondents in the course of argument, that really amounted to an assertion that the respondents could not and should not be required to provide any particulars at all. The applicant had to "prove everything". If this resulted in unnecessary cost, senior counsel for the respondents said, they would have to wear that by way of a costs order. I do not think this stand is acceptable in the context of the case management which this Court has adopted for many years. It is in everybody's interests, not least the Court itself, to ensure that the issues really in dispute are identified as early as possible. 5 The preferred remedy which the applicant seeks is particulars. I am satisfied the Court has jurisdiction to make such an order, either under the general power conferred by O 10 r 1(1), or under O 12 r 5(1)(b) which enables particulars to be ordered of "a statement of the nature of the case on which (a party) relies." 6 It is said that some of the claims in the applicant's patent are ambiguous. If that be so, I see no reason why the particulars could not state what the respondents assert to be the meaning of the claim in question and the grounds on which it is said that their vehicle does not infringe. The construction of the claims is not a matter for expert evidence although evidence can be given as to particular terms. Thus it is not a reason for delaying proper particulars to say that there has to be expert evidence as to the construction of the claims. 7 So I will make an order that the respondents within 28 days file and serve particulars of non‑infringement identifying which of the matters identified in pars 1 to 115 of the notice to admit, being exhibit SMS1 to the affidavit of Stephen Marcus Stern sworn 18 April 2000, that the respondents will dispute at trial. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: Counsel for the Applicant: Mr D Shavin QC with Mr G S Clarke Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondents: Mr J Beach QC with Mr G Fitzgerald Solicitor for the Respondents: Davies Collison Cave Date of Hearing: 23 May 2000 Date of Judgment: 23 May 2000	1,187
federal_court_of_australia:fca/single/2011/2011fca0574	decision	commonwealth	federal_court_of_australia	text/html	2011-05-31 00:00:00	Paddy v Northern Territory of Australia [2011] FCA 574	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2011/2011fca0574	2024-09-13T22:48:58.246743+10:00	FEDERAL COURT OF AUSTRALIA Paddy v Northern Territory of Australia [2011] FCA 574 Citation: Paddy v Northern Territory of Australia [2011] FCA 574 Parties: JIMMY PADDY ON BEHALF OF THE GAJERRONG-PULTHURU GROUP, THE GAJERRONG-NGALINJAR GROUP, THE GAJERRONG-GURRBIJIM GROUP, THE GAJERRONG-DJARRADJARRANY GROUP v NORTHERN TERRITORY OF AUSTRALIA and BULLO RIVER PTY LTD (ACN 009 592 536) File number: NTD 8 of 2010 Judge: MANSFIELD J Date of judgment: 31 May 2011 Catchwords: NATIVE TITLE – Consent Determination – requirements under s 87 of the Native Title Act 1993 (Cth) – agreement of parties – prescribed body corporate Legislation: Native Title Act 1993 (Cth) Native Title Amendment Act 2009 (Cth) Cases cited: Griffiths v Northern Territory (2006) 165 FCR 300 cit ed Lovett on behalf of the Guditjmara People v State of Victoria [2007] FCA 474 considered Cox on behalf of the Yungngora People v State of Western Australia [2007] FCA 588 cited Munn for and on behalf of the Gunggari People v State of Queensland (2001) 115 FCR 109 cited Smith v State of Western Australia (2000) 104 FCR 494 cited Date of hearing: 31 May 2011 Place: Jinumum Walk Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 15 Counsel for the Applicant: P Broughton Solicitor for the Applicant: Northern Land Council Counsel for the First Respondent: S Brownhill and J Laurence Solicitor for the First Respondent: Northern Territory of Australia Counsel for the Second Respondent: N Johansen Solicitor for the Second Respondent: Ward Keller IN THE FEDERAL COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY GENERAL DIVISION NTD 8 of 2010 BETWEEN: JIMMY PADDY ON BEHALF OF THE GAJERRONG-PULTHURU GROUP, THE GAJERRONG-NGALINJAR GROUP, THE GAJERRONG-GURRBIJIM GROUP, THE GAJERRONG-DJARRADJARRANY GROUP Applicant AND: NORTHERN TERRITORY OF AUSTRALIA First Respondent BULLO RIVER PTY LTD (ACN 009 592 536) Second Respondent JUDGE: MANSFIELD J DATE OF ORDER: 31 MAY 2011 WHERE MADE: JINUMUM WALK THE COURT NOTES THAT: A. On 28 July 2010 the Applicant made a native title determination application over the land and waters within the bounds of the Bullo River Pastoral Lease (Perpetual Lease 1071). B. The Applicant and the Respondents to this proceeding have reached agreement as to the terms of a proposed determination of native title in relation to the land and waters covered by the Application. C. Pursuant to ss 87(1)(a)(i) and 87(1)(b) of the Native Title Act 1993 (Cth) (the Act) the Parties hereby file with this Court their agreement in writing (the proposed Determination). The external boundaries of the area subject to the proposed Determination are described in Schedule A of the proposed Determination and depicted on the map comprising Schedule B of the proposed Determination (Determination Area). D. Pursuant to ss 87 and 94A of the Act the terms of the Parties' agreement involve the making of consent orders for a determination that native title exists in relation to the Determination Area as provided by the proposed Determination. E. The Parties acknowledge that the effect of making the proposed Determination is that the members of the native title claim group, in accordance with the traditional laws acknowledged and the traditional customs observed by them, be recognised as the native title holders for the Determination Area as provided by the proposed Determination. F. The Parties request that the Court hear and determine this proceeding in accordance with their agreement. THE COURT BEING SATISFIED that a determination of native title in the terms of the Determination in respect of the proceeding would be within the power of the Court and, it appearing to the Court appropriate to do so, pursuant to s 87 of the Act and by the consent of the parties: THE COURT ORDERS THAT: 1. There be a determination of native title in terms of the Determination set out below. 2. The native title is not to be held on trust. 3. An Aboriginal corporation whose name is to be provided within 12 months, or such further time as the Court may allow, is: (a) to be the prescribed body corporate for the purposes of s 57(2) of the Act; (b) to perform the functions outlined in s 57(3) of the Act after becoming a registered native title body corporate. 4. There be no order as to costs. 5. The parties have liberty to apply for the following purposes: (a) to establish the precise location and boundaries of the public works and adjacent land and waters identified in relation to any part or parts of the Determination Area referred to in Schedule D of this Determination; (b) to establish the precise location of the boundaries of land on which the improvements referred to in Schedule D of this Determination have been constructed and any adjacent land or waters the exclusive use of which is necessary for the enjoyment of the improvements; and (c) to establish whether any of the improvements referred to at Schedule D of this determination have been constructed unlawfully. THE COURT DETERMINES THAT: The Determination Area 1. The Determination Area is the land and waters described in Schedule A and depicted on the map comprising Schedule B. 2. Native title exists in those parts of the Determination Area identified in Schedule C. 3. Native title does not exist in those parts of the Determination Area identified in Schedule D. The native title holders 4. The land and waters of the Determination Area comprise the whole or part of four estates, which are held respectively by the members of the following four estate groups: (a) the Gajerrong-Pulthuru group; (b) the Gajerrong-Ngalinjar group; (c) the Gajerrong-Gurrbijim group; (d) the Gajerrong-Djarradjarrany group. These persons, together with the Aboriginal people referred to in clause 6 hereof, are collectively referred to as 'the native title holders'. 5. Each of the estate groups referred to in clause 4 hereof includes persons who are members of the group by reason of: (a) patrilineal descent; (b) his or her mother, father's mother or mother's mother being or having been a member of the group by reason of patrilineal descent; (c) having been adopted or incorporated into the descent relationships referred to in (a) or (b) hereof. These persons are collectively referred to as 'the estate group members'. 6. In accordance with traditional laws and customs, other Aboriginal people have rights and interests in respect of the Determination Area, subject to the rights and interests of the estate group members, such people being: (a) members of estate groups from neighbouring estates; (b) spouses of the estate group members. 7. Each of the estate groups referred to in clause 6(a) hereof includes persons who are members of the group by reason of: (a) patrilineal descent; (b) his or her mother, father's mother or mother's mother being or having been a member of the group by reason of patrilineal descent; (c) having been adopted or incorporated into the descent relationships referred to in (a) or (b) hereof. The native title rights and interests 8. The native title rights and interests of the estate group members that are possessed under their traditional laws and customs are, subject to the traditional laws and customs that govern the exercise of the native title rights and interests by the native title holders, non-exclusive rights to use and enjoy those parts of the Determination Area identified in Schedule C being: (a) the right to travel over, to move about and to have access to those areas; (b) the right to hunt and to fish on the land and waters of those areas; (c) the right to gather and to use the natural resources of those areas such as food, medicinal plants, wild tobacco, timber, stone and resin; (d) the right to take and to use the natural water on those areas, and for the sake of clarity and the avoidance of doubt this right does not include the right to take or use water captured by the holders of Perpetual Pastoral Lease 1071; (e) the right to live, to camp and for that purpose to erect shelters and other structures on those areas; (f) the right to light fires on those areas for domestic purposes, but not for the clearance of vegetation; (g) the right to conduct and to participate in the following activities on those areas: (i) cultural activities; (ii) cultural practices relating to birth and death, including burial rites; (iii) ceremonies; (iv) meetings; (v) teaching the physical and spiritual attributes of sites and places on those areas that are of significance under their traditional laws and customs; (h) the right to maintain and to protect sites and places on those areas that are of significance under their traditional laws and customs; (i) the right to share or exchange subsistence and other traditional resources obtained on or from those areas; (j) the right to be accompanied on to those areas by persons who, though not native title holders, are: (i) people required by traditional law and custom for the performance of ceremonies or cultural activities on the areas; (ii) people who have rights in relation to the areas according to the traditional laws and customs acknowledged by the estate group members; (iii) people required by the estate group members to assist in, observe, or record traditional activities on the areas; (k) the right to conduct activities necessary to give effect to the rights referred to in (a) to (j) hereof. These native title rights and interests do not confer on the estate group members possession, occupation, use and enjoyment of the Determination Area, to the exclusion of all others. 9. The native title rights and interests of the native title holders referred to in clause 6 hereof that are possessed under their traditional laws and customs are, subject to the traditional laws and customs that govern the exercise of the native title rights and interests by the native title holders, non-exclusive rights to use and enjoy those parts of the Determination Area identified in Schedule C being: (a) the right to travel over, to move about and to have access to those areas; (b) the right to hunt and to fish on the land and waters of those areas; (c) the right to gather and to use the natural resources of those areas such as food, medicinal plants, wild tobacco, timber, stone and resin; (d) the right to take and to use the natural water on those areas, and for the sake of clarity and the avoidance of doubt this right does not include the right to take or use water captured by the holders of Perpetual Pastoral Lease 1071; (e) the right to camp on those areas; (f) the right to light fires on those areas for domestic purposes, but not for the clearance of vegetation; (g) the right to conduct activities necessary to give effect to the rights referred to in (a) to (f) hereof. These native title rights and interests do not confer on the native title holders referred to in clause 6 hereof possession, occupation, use and enjoyment of the Determination Area, to the exclusion of all others. Other interests in the Determination Area 10. The nature and extent of other interests in relation to the Determination Area are the interests, created by the Crown or otherwise, as follows: (a) in relation to NT portion 1587, the interests of the Bullo River Pty Ltd under Perpetual Pastoral Lease 1071; (b) the rights and interests of Telstra Corporation Limited: (i) as the owner or operator of telecommunications facilities within the Determination Area; (ii) created pursuant to the Post and Telegraph Act 1901 (Cth), the Telecommunications Act 1975 (Cth), the Australian TelecommunicationsCorporation Act 1989 (Cth), the Telecommunications Act 1991 (Cth) and the Telecommunications Act 1997 (Cth), including rights: (A) to inspect land; (B) to install and operate telecommunications facilities; and (C) to alter, remove, replace, maintain, repair and ensure the proper functioning of its telecommunications facilities; and (iii) for its employees, agents or contractors to access its telecommunications facilities in, and in the vicinity of, the Determination Area, in the performance of their duties; (iv) under any licence, access agreement, or easement relating to its telecommunications facilities in the Determination Area; and (v) in relation to its freehold estate in NT Portion 3740; (c) in relation to NT portion 1587 the rights of Aboriginal persons (whether or not native title holders) pursuant to the reservation in favour of Aboriginal peoples contained in the pastoral lease, identified in ss 38(2)-(6) of the Pastoral Land Act 1992 (NT); (d) the rights of Aboriginal persons (whether or not native title holders) by virtue of the Northern Territory Aboriginal Sacred Sites Act 1989 (NT); (e) rights of access by an employee, servant, agent or instrumentality of the Northern Territory or Commonwealth, or other statutory authority as required in the performance of statutory duties; (f) the interests of persons to whom valid and validated rights and interests have been: (i) granted by the Crown pursuant to statute or otherwise in the exercise of executive power; or (ii) otherwise conferred by statute; 11. To the extent, if at all, that the exercise of the native title rights and interests referred to in clauses 8 and 9 conflicts with the exercise of the rights and interests of the persons referred to in clause 10, the rights and interests of the persons referred to in clause 10 prevail over, but do not extinguish, the native title rights referred to in clauses 8 and 9. Other matters 12. There are no native title rights and interests in: (a) minerals (as defined in s 2 of the Minerals (Acquisition) Act (NT)); (b) petroleum (as defined in s 5 of the Petroleum Act (NT)); (c) prescribed substances (as defined in s 3 of the Atomic Energy (Control of Materials) Act 1946 (Cth) and/or s 5(1) of the Atomic Energy Act 1953 (Cth)), in the Determination Area. 13. The native title rights and interests are subject to and exercisable in accordance with the valid laws of the Northern Territory of Australia and the Commonwealth of Australia. 14. The native title rights and interests are for the personal or communal needs of the native title holders which are of a domestic or subsistence nature and not for any commercial or business purpose. 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 A Description of Determination Area The Determination Area comprises the following areas of land: 1. NT portion 1587, being land the subject of Perpetual Pastoral Lease 1071; 2. NT portion 3740, being land the subject of the grant of an estate in fee simple to Telstra Corporation Limited. Schedule B Map of Determination Area Schedule C Areas where native title exists The areas of land and waters in respect of which the native title rights and interests in clauses 8 and 9 apply are: 1. NT portion 1587, being land the subject of Perpetual Pastoral Lease 1071, except those parts thereof referred to in Schedule D. Schedule D Areas where native title does not exist Native title rights and interests have been wholly extinguished in the following areas of land and waters: 1. NT portion 3740, being land the subject of freehold estate granted to Telstra Corporation Limited; 2. Those parts of the Determination Area covered by public works (including adjacent land or waters as defined in s 251D of the Act) which were constructed, established or situated prior to 23 December 1996 or commenced to be constructed or established on or before that date, including but not limited to: (a) public roads, whether rural roads, arterial roads or national highways; (b) community and pastoral access roads which are not otherwise public roads; (c) gravel pits adjacent to the roads referred to at paragraphs (a) and (b) hereof used to maintain those roads; (d) access roads or tracks to the public works referred to in this clause; (e) Government bores and associated infrastructure including bores used for the establishment, operation or maintenance of public and other roads; (f) river and rain gauges; (g) transmission and distribution water pipes and associated infrastructure; (h) sewer pipes, sewer pump stations and associated infrastructure; and (i) electricity transmission lines, towers, poles and associated infrastructure; 3. In relation to NT portion 1587, those parts of the Determination Area covered by pastoral improvements including but not limited to: (a) a homestead, house, sheds, and buildings including: (i) Leslie Lake stock camp; (ii) 22 Mile Gorge Camp; (iii) Aircraft hangar; (iv) Generator shed; (v) Guest units; (vi) Machinery shed; (vii) Main homestead; (viii) Staff quarters with adjoining "donga" located at main homestead complex; (ix) Staff Amenities located at main homestead complex; (x) Storage shed; (xi) Truck Shed; and (xii) Workshop located at main homestead complex; (b) bores including: (i) 6 Mile bore located 50m to the West of the main road alongside the 6 Mile yards; (ii) Bull Creek bore located 50m from Bull Creek yards; (iii) Dingo Creek bore located 200m East of Dingo Creek approximately 5km off the main road; (iv) Fault Line bore close to the end of the Victoria River fault line; (v) Homestead bore East located approximately 2km East of the workshop; (vi) Homestead bore located near the workshop; (vii) Lesley Lake bore located on the hill South of the lake; (viii) Lloyd Creek bore located 500m North of the Lloyd Creek crossing; (ix) No. 2 bore approximately 2km Northwest by West of homestead; and (x) Nutwood bore located 500m off the road to Bull Creek; (c) turkey nests including a turkey nest located in the Eastern corner of Bullrush paddock; (d) squatters tanks including: (i) 6 Mile tank located next to the 6 Mile bore and yards; (ii) Bull Rush tank located in the Eastern corner of Bullrush paddock; (iii) Homestead tank located at the homestead workshop building; (iv) No. 2 bore tank next to No. 2 bore and No. 2 bore holding paddock; and (v) Nutwood Paddock tank located at the end of Nutwood water pipe in the lower end of Nutwood paddock; (e) constructed dams and/or constructed stock watering points including: (i) 22 Mile dam located next to Bubble spring and 22 Mile yards; (ii) Boab Tree dam located in the Southern end of Boab Tree paddock; (iii) Bullo River dam located at the end of the Bullo River airstrip; and (iv) Victoria River Paddock dam located at the Eastern end of Victoria River paddock. (f) stockyards including: (i) 22 Mile yard located next to Bubble spring on the main road; (ii) 6 Mile yard located next to 6 Mile bore along the main road; (iii) Alligator Hole yard located approximately 16km Southwest by South of homestead on the main road; (iv) Bull Creek yard next to Bull Creek bore and Bull Creek holding paddock; (v) Homestead yard 500m East of the homestead; (vi) Lesley Lake yard located at the Southern end of Lesley Lake; (vii) Lloyd Creek yard located north of the Lloyd Creek gravel quarry; (viii) Lloyd Creek yard located adjacent to Lloyd Creek bore; (ix) New Yard Creek yard located at the Southern end of New Yard paddock; (x) Paperbark yard located North at the Western end of Paperbark paddocks; and (xi) Upper Bull Creek yard located 200m East of Bull Creek spring; (g) trapyards including: (i) Bull Creek trap located next to Bull Creek yards; (ii) Lesley Lake trap surrounds Lesley Lake; (iii) Lloyd Creek trap surrounds Lloyd Creek gravel quarry; (iv) Packsaddle trap located North of Peter Creek; (v) Paperbark trap located North of the Paperback Swamp; (vi) Turkey Nest trap located on the Eastern corner of Bullrush paddock; and (vii) Turtle Hole trap located East of the main road at Turtle Hole; (h) airstrips including the homestead airstrip located 100m West of homestead. The areas described by 3(a)-(h) comprise land on which the improvements have been constructed prior to the date of this determination, and any adjacent land or waters the exclusive use of which is necessary for the enjoyment of the improvements. 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 NORTHERN TERRITORY DISTRICT REGISTRY GENERAL DIVISION NTD 8 of 2010 BETWEEN: JIMMY PADDY ON BEHALF OF THE GAJERRONG-PULTHURU GROUP, THE GAJERRONG-NGALINJAR GROUP, THE GAJERRONG-GURRBIJIM GROUP, THE GAJERRONG-DJARRADJARRANY GROUP Applicant AND: NORTHERN TERRITORY OF AUSTRALIA First Respondent BULLO RIVER PTY LTD (ACN 009 592 536) Second Respondent JUDGE: MANSFIELD J DATE: 31 MAY 2011 PLACE: JINUMUM WALK REASONS FOR JUDGMENT Introduction 1 The application the subject of this proceeding is for a determination of native title rights and interests in favour of the native title holders of land and waters within the bounds of the Bullo River Pastoral Lease (Perpetual Pastoral Lease 1071) in the Northern Territory. It is made under the Native Title Act 1993 (Cth) (Native Title Act). 2 The application is one of six applications being heard and determined together because they are geographically proximate. They are all in the north western section of the Northern Territory, more or less abutting the border with Western Australia, and just to the west of Timber Creek. There has been a determination of native title in relation to the township of Timber Creek. That occurred after an extensive hearing: Griffiths v Northern Territory (2006) 165 FCR 300. 3 One of the objectives of the Native Title Act is the resolution of claims for the recognition of native title by agreement. That has been facilitated by the amendments to s 87 by the Native Title Amendment Act 2009 (Cth). It is very appropriate, therefore, that this application and the related applications have resulted in the parties agreeing to the terms of orders to be made by consent pursuant to s 87 of the Native Title Act. 4 The Bullo River Pastoral Lease, the area over which the proposed consent determination will be granted is an area of about 1627 km2. It is described in more detail in the map which is Attachment B to the determination. The other areas over which the related determinations are to be made also encompass the areas of particular pastoral leases. They are: the application of Raymond Long (on behalf of the Miriuwung Larru Group, the Miriuwung-Mambitj Group, Miriuwung-Gudim Group, Malangin-Yunurr-Jurtakal) over the area of the Auvergne Pastoral lease, covering an area of some 4142 km2; the application of Riley Rosewood (on behalf of the Miriuwung Larru Group, the Miriuwung-Mambitj Group, the Miriuwung-Gudim Group, the Malngin-Yunurr-Jurrtakal) over the area of the Rosewood Pastoral Lease, covering an area of some 2768 km2; the application of Button Jones (on behalf of the Miriuwung-Damberal Group, the Miriuwung B-Nyawam Nyawam Group, the Miriuwung-Gudim Group, the Ngarinyman-Nyiwanawam Group) over the area of the Newry Pastoral Lease, covering an area of some 2467 km2; the application of Maurice Simon (on behalf of the Gajerrong-Wadanybang Group, the Gajerrong-Gurrbijim Group and the Gajerrong-Djarradjarrany Group) over the area of the Legune Pastoral Lease, covering an area of some 1788 km2; the application of Ronnie Carlton (on behalf of the Muriuwung-Nyawam Nyawam Group, the Miriuwung-Bindjen Group, the Gajerrong-Gurrbijim Group, the Gajerrong-Djarrdjarrany Group, the Gajerrong-Djandumi Group, the Gajerrong-Wadanybang Group) over the area of the Spirit Hills Pastoral lease, covering an area of some 3766 km2. 5 The total area encompassed by the six determinations is in excess of 16,500 km2, a very considerable area. 6 The preamble to the Native Title Act recognised, on behalf of all people of Australia, that the Aboriginal peoples of Australia inhabited this country for many many years prior to European settlement, and that the Aboriginal peoples had been progressively dispossessed of their lands. It recorded that, by the overwhelming vote of the people of Australia, the Constitution was amended to enable laws such as the Native Title Act to be passed, to facilitate the recognition by our shared legal system of the native title rights and interests in their land. This is an occasion when the Court is to make orders declaring that the groups of Aboriginal persons set out above were and are the traditional owners of that land. By the Court's orders, the Australian community collectively recognises that status. It is important to emphasise that the Court's orders do not grant that status. The Court is declaring that it exists and has always existed at least since European settlement. 7 The Applicant has filed the following documents which have been signed by the parties: (a) Minute of Proposed Orders and Determination of Native Title by Consent dated 13 May 2011 (Minute); (b) Statement of Joint Agreed Facts of the Parties in Support of the Minute of Proposed Orders and Determination of Native Title over the Bullo River Pastoral Lease by Consent dated 13 May 2011; and (c) Joint Submissions of the Parties in Support of the Minute of Proposed Orders and Determination of Native Title by Consent. B. Section 87 of the Native Title Act 8 Section 87 of the Native Title Act provides that the Court may make a determination of native title by consent over an area covered by a native title application and without holding a hearing where: (a) the period specified in the notice given under s 66 of the Native Title Act has ended (s 87(1)); (b) there is an agreement between the parties on the terms of an order of the Court in relation to the proceedings (s 87(1)(a)(i)); (c) the terms of the agreement are in writing and are signed by or on behalf of the parties and filed with the Court (s 87 (1)(b)); (d) the Court is satisfied that an order in, or consistent with, those terms would be within its power (s 87 (1)(c)); and (e) the Court considers that it would be appropriate to make the order sought (ss 87(1) and (2)). 9 The focus of the Court in considering whether the orders sought are appropriate under ss 87(1) and (2) is on the making of the agreement by the parties. In Lovett on behalf of the Gunditjmara People v State of Victoria [2007] FCA 474 North J stated at [36]-[37] that: The Act [Native Title Act] is designed to encourage parties to take responsibility for resolving proceeding without the need for litigation. Section 87 must be construed in this context. The power must be exercised flexibly and with regard to the purpose for which the section is designed. In this context, when the court is examining the appropriateness of an agreement, it is not required to examine whether the agreement is grounded on a factual basis which would satisfy the Court at a hearing of the application. The primary consideration of the Court is to determine whether there is an agreement and whether it was freely entered into on an informed basis: Nangkiriny v State of Western Australia (2002) 117 FCR 6; [2002] FCA 660, Ward v State of Western Australia [2006] FCA 1848. Insofar as this latter consideration applies to a State party, it will require the Court to be satisfied that the State party has taken steps to satisfy itself that there is a credible basis for an application: Munn v Queensland (2001) 115 FCR 109; [2001] FCA 1229. 10 Therefore, the Court does not need to embark on its own inquiry of the merits of the claim made in the application to be satisfied that the orders sought are supportable and in accordance with the law: Cox on behalf of the Yungngora People v State of Western Australia [2007] FCA 588 at [3] per French J. However, it might consider that evidence for the limited purpose of being satisfied that the State is acting in good faith and rationally: Munn for and on behalf of the Gunggari People v State of Queensland (2001) 115 FCR 109 at [29]-[30] per Emmett J. See also Smith v State of Western Australia (2000) 104 FCR 494 at [38] per Madgwick J: State governments are necessarily obliged to subject claims for native title over lands and waters owned and occupied by the State and State agencies, to scrutiny just as carefully as the community would expect in relation to claims by non-Aborigines to significant rights over such land. C. The application of s 87 to the Application 11 I am satisfied that the requirements of s 87 of the Native Title Act have been satisfied in the present case. In particular: (a) the period specified in the notice given under s 66 ended on 2 February 2011 (s 87(1)); (b) the parties have reached an agreement as to the terms of a determination of native title (s 87(1)(a)(i)); (c) the parties have recorded their agreement in the Minute (s 87 (1)(b)); (d) an order in terms of or consistent with the proposed orders would be within the Court's power because: (i) the application is valid and was made in accordance with s 61 of the Act; (ii) the application is for a determination of native title in relation to an area for which there is no approved determination of native title (s 13(1)(a)); (iii) the proposed orders comply with ss 94A and 225 of the Native Title Act (s 87 (1)(c)); and (e) it is appropriate that the Court make the orders sought because: (i) all parties are legally represented; (ii) the Northern Territory as First Respondent obtained searches of land tenure and mining and other relevant interests to determine the extent of "other interests" within the proposed determination area and provided copies of those searches to all parties; (iii) the Second Respondent, the holder of Perpetual Pastoral Lease 1071, provided all parties with a list of pastoral improvements on Perpetual Pastoral Lease 1071 which affect native title; (iv) the Parties have agreed the nature and extent of interests in relation to the determination area and those interests are described in paragraph 10 and Schedules C and D of the Minute (s 225(c)); (v) there are no other proceedings before the Court relating to native title determination applications that cover any part of the area the subject of the Application which would otherwise require orders to be made under s 67(1) of the Act (ss 87(1) and (2)); (vi) the Northern Territory as First Respondent has played an active role in the negotiation of the consent determination. In doing so, the Northern Territory, acting on behalf of the community generally, having had regard to the requirements of the Native Title Act and having conducted a thorough assessment process, is satisfied that the determination is justified in all the circumstances. 12 That assessment process has included the production and assessment of extensive material to show the connection of the claim group with the country covered by the Bullo River Pastoral Lease. The material included that prepared by Andrew McWilliam and Wendy Asche anthropologists engaged on behalf of the Applicant and addressed the Northern Territory's Minimum Connection Material Requirements for Consent Determinations dated 6 May 2009. It was then considered by the First and Second Respondents. The First Respondent sought advice about that material from another anthropologist Basil Sansom. The First Respondent raised various matters about that material with the Applicant and subsequently addressed those matters. Ultimately, the parties reached agreement that the native title claim group named in Schedule A of the Application and in the Connection Material are the persons who hold the claimed native title rights and interests in the Determination Area. That primary material has been filed. In my view, it clearly justifies the approach taken by the First and Second Respondents. 13 Accordingly, it is appropriate to make the proposed orders which recognize: (1) that the claim group comprises a society united in and by their acknowledgement and observance of a body of accepted traditional laws and customs; and (2) that the present day body of accepted laws and customs of the society in essence is the same body of laws and customs acknowledged and observed by the ancestors or members of the society adapted to modern circumstances; and (3) that the acknowledgment and observance of those laws and customs has continued substantially uninterrupted by each generation since sovereignty, and that the society has continued to exist throughout that period as a body united in and by its acknowledgment and observance of those laws and customs; and (4) that the claim group still possesses rights and interests under the traditional laws acknowledged and the traditional customs observed by them, and that those laws and customs give them a connection to the land. 14 There is one aspect of the proposed determination upon which it is necessary to comment. Section 55 of the Native Title Act requires the Court, either at the time of the Determination or as soon as practicable after it, to make such determinations as are required by ss 56 and 57 of the Native Title Act. They respectively relate to holding the native title on trust and with the non-trust functions of prescribed bodies corporate. The proposed determination provides that the native title is not to be held on trust. It provides for an Aboriginal corporation to be nominated to the Court within 12 months or such further time as the Court may allow to be the prescribed body corporate for the purposes of s 57(2) and to perform the functions outlined in s 57(3) of the Act after becoming a registered native title body corporate. The Court, of course, must act in accordance with s 55, so it anticipates that those steps will be taken following the Determination in a timely manner and certainly within the 12 month period specified. There would need to be persuasive reasons why the Court should allow further time having regard to the terms of s 55. 15 For the reasons given, the Determination is now made. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate: Dated: 31 May 2011	7,797
federal_court_of_australia:fca/single/2012/2012fca0595	decision	commonwealth	federal_court_of_australia	text/html	2012-06-08 00:00:00	Foley v Gunns Limited ACN 009 478 148 [2012] FCA 595	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2012/2012fca0595	2024-09-13T22:48:59.236039+10:00	FEDERAL COURT OF AUSTRALIA Foley v Gunns Limited ACN 009 478 148 [2012] FCA 595 Citation: Foley v Gunns Limited ACN 009 478 148 [2012] FCA 595 Parties: SEAN FOLEY (IN HIS OWN RIGHT AND AS REPRESENTATIVE OF THE GROUP MEMBERS) v GUNNS LIMITED ACN 009 478 148 File number: NSD 499 of 2011 Judge: PERRAM J Date of judgment: 8 June 2012 Catchwords: PRACTICE AND PROCEDURE – Discovery – application for suspension of discovery – whether an order shifting the costs of discovery might be appropriate – whether changing the procedure by which discovery is provided is inappropriate when the initial procedure is well advanced Legislation: Rules of the Supreme Court 1883 (UK) O 31, rr 25-27 Daniell's Chancery Practice (Stevens and Sons, 8th ed, 1914) Date of hearing: 18, 30 May 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 16 Counsel for the Applicant: N Hutley SC, M Pesman Solicitor for the Applicant: Maurice Blackburn Counsel for the Respondent: S Nixon Solicitor for the Respondent: Ashurst Australia IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 499 of 2011 BETWEEN: SEAN FOLEY (IN HIS OWN RIGHT AND AS REPRESENTATIVE OF THE GROUP MEMBERS) Applicant AND: GUNNS LIMITED ACN 009 478 148 Respondent JUDGE: PERRAM J DATE OF ORDER: 8 JUNE 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The respondent's interlocutory application be dismissed. 2. The respondent pay the applicant's costs as taxed or agreed. 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 499 of 2011 BETWEEN: SEAN FOLEY (IN HIS OWN RIGHT AND AS REPRESENTATIVE OF THE GROUP MEMBERS) Applicant AND: GUNNS LIMITED ACN 009 478 148 Respondent JUDGE: PERRAM J DATE: 8 JUNE 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 14 February 2012 I made orders regulating the provision by Gunns of discovery of its documents to Mr Foley's solicitors. Gunns now seeks to be relieved until further order of the burden of further compliance with those orders. 2 This is an investor class action. Discovery has been an involved affair consisting, thus far, of two stages. The first stage was conducted under the auspices of orders which, in their original form, were made by Emmett J on 8 July 2011. This first stage resulted in the discovery of 2,732 documents to Mr Foley's solicitors. To identify those documents it was necessary for those involved to review in excess of 80,000 documents of which 27,234 were subject to detailed review. In all the cost to Gunns was $387,000. 3 Discussions then took place between the parties with respect to the provision of a second stage of discovery. The parties were unable to agree on the categories but following a mediation with the Hon. Kevin Lindgren QC consensus was achieved. This resulted in consent orders which I obediently made on 14 February 2012. Appended to the orders was an agreement which I was asked to, and did, note. The orders and the relevant part of the agreement are as follows: THE COURT ORDERS THAT: 1. The respondent will use reasonable endeavours to give verified discovery of the categories of documents listed in Annexure A (the second tranche of discovery) by 4pm on 26 April 2012. 2. The respondent will deliver the second tranche of discovery by way of periodic batches not larger than 2,000 documents per batch. 3. The applicant will provide the respondent with particulars of the group member Trade Data by 23 February 2012. 4. The matter be re-listed for further directions on 1 May 2012 at 9:30 am. THE COURT NOTES THAT: (i) The parties acknowledge that the precise number of respondent's documents to be reviewed in order to complete the second tranche of discovery is presently unknown and accordingly it is possible that the respondent may need to seek additional time to complete the second tranche of discovery and serve a list of documents in accordance with Rule 20.17. (ii) If the respondent believes it will require additional time to fulfil the second tranche of discovery obligations, it will notify the applicant immediately. In doing so the respondent will inform the applicant of: (a) the number of documents that have been reviewed to that point in time; (b) the number of documents remaining to be reviewed; and (c) a genuine estimate as to the additional time required to complete the second tranche of discovery and serve a verified list of documents. (Emphasis in original.) 4 I will not set out the precise discovery categories. It suffices to say that there were twelve categories contemplated. 5 The task of providing this discovery has proved somewhat larger than Gunns' attorneys anticipated. A total of a further 210,000 additional documents have been uplifted from Gunns. This pool has been interrogated using keyword searches. Each of the twelve categories has associated with it a particular set of such keyword searches. At the time of the delivery of Gunns' brief 54,539 documents had been subjected to detailed review. By the time of the conclusion of the hearing it appeared that there remained perhaps another 147,421 documents to be subject to detailed review. The cost to Gunns of the second stage to the date of the brief was $215,000 and the cost of discovery as a whole is now in excess of $600,000. 6 Where this went, according to Mr Nixon of counsel, who put Gunns' case with considerable force and clarity, was this: the amount that this process was costing when weighed in the balance against the amount the class members might ultimately recover revealed the presence of disproportion. Indeed, he submitted that at least at the date of the brief Mr Foley had not provided any statement of what the claim was worth at all. 7 When the matter was first called on Mr Pesman of counsel submitted that the claim was worth potentially in the vicinity of $35-75 million and the costs of discovery had to be seen in that light. His basic point, however, was that the parties had reached an agreement about these matters following a mediation and Gunns could not walk away from that agreement just because it now found the burden of its promises tiresome. 8 Gunns submissions made plain that they only sought discharge of the orders of 14 February 2012 as a last resort. They also suggested two possible intermediate solutions: first, that Mr Foley might pay for discovery himself hereafter; or, secondly, that I might submit the parties to more discussions. These points need to be viewed in light of the fact that the class action brought in Mr Foley's name is funded by IMF and that it has indemnified Mr Foley against costs orders. 9 During the course of the initial hearing I was disposed to see very significant attractions in the first intermediate course and in a variation that required Gunns and Mr Foley to share the costs of discovery. By making those seeking discovery pay for it, at least in the first instance, there could be an efficient aligning of interests. Those responsible for specifying the breadth of the discovery process would be responsible also for the cost resulting from that breadth. 10 Because of the serious implications of taking that course I stood the matter over to permit Mr Foley's attorneys to put a more substantive argument against the proposal. 11 When the hearing reconvened Mr Hutley of senior counsel then appeared with Mr Pesman. 12 Conveniently, the parties were in agreement that the Court did have power to order the party seeking discovery to pay for it and it was not on this question that issue was joined. Instead, Mr Hutley's principal argument had four aspects. First, it would be unsound to approach the way discovery was being conducted on a different basis to the way in which it had already been conducted in this particular case. Decisions had been taken on one basis and it would not be fair to switch horses mid-stream. Secondly, the manner in which the hearing had played out meant that there was not before the Court the materials which would be necessary to consider whether the power should be exercised. Thirdly, and related in a sense to the second point, there were difficult issues about the relationship which would exist, if the orders were made, between Mr Foley (and his supporters) and Gunns' solicitors. What, might occur for example, if Mr Foley's supporters thought that Gunns solicitors were working inefficiently? How might their attitude to privilege be approached? Funding by one party of the costs of another's lawyers was not uncommon but generally arose in situations of common interest privilege. To yoke with fiscal bindings one party to the other party's attorneys was a course filled with unforeseeable perils. Finally, the proposed course was highly novel and was not lightly to be embraced. Mr Nixon, on the other hand, submitted that Mr Hutley was largely jumping at shadows. 13 On balance, and not without some hesitation, I think Mr Hutley's arguments should be accepted. There may well be complexities about the structure of such an arrangement which cannot readily be foreseen on the state of the evidence. It may be that those difficulties might be resolved by ordering the party seeking discovery to put up security for its costs, which appears to have been the practice in the latter part of the nineteenth century and in the earlier part of the twentieth: Daniell's Chancery Practice (Stevens and Sons, 8th ed, 1914, Vol I at 575) ('Under the existing practice of the Court, the giving of security for costs is in general a necessary preliminary to the obtaining of discovery, whether by interrogatories or by production of documents'). This procedure was governed by the Rules of the Supreme Court 1883 (UK), O 31, rr 25-27. But I do not think I should decide that now. Nor do I think, on balance, that it would be fair to change the rules half way through the process. 14 There remains then the principal question of what should be done with the categories which are still to be processed. These are categories 3-5 and 7-9. 15 The difficulty with Gunns' position is, I think, twofold. First, as the orders (and agreement) of 14 February 2012 make clear, it was understood by both parties that the scope of the regimè they were submitting to was unknown. They agreed between themselves that if there were more documents than anticipated the solution would lie, not in a revisitation of the question of whether discovery should be narrowed, but in the provision instead of more time. The present application is contrary to the solution the parties appear already to have agreed. Secondly, there is no evidence that either party is prejudiced by the expense in the sense that it cannot be borne or recovered ultimately from the opposing party. 16 In that circumstance the appropriate result is that the application be dismissed with costs as taxed or agreed. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 8 June 2012	2,529
federal_court_of_australia:fca/single/2008/2008fca1081	decision	commonwealth	federal_court_of_australia	text/html	2008-07-22 00:00:00	Bell IXL Investments Ltd v Life Therapeutics Ltd [2008] FCA 1081	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2008/2008fca1081	2024-09-13T22:49:02.035662+10:00	FEDERAL COURT OF AUSTRALIA Bell IXL Investments Ltd v Life Therapeutics Ltd [2008] FCA 1081 CORPORATIONS – shares – allotment – powers of directors – allotment for ulterior purpose Ashburton Oil NL v Alpha Minerals NL (1971) 123 CLR 614 Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co NL (1968) 121 CLR 483 Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 BELL IXL INVESTMENTS LIMITED v LIFE THERAPEUTICS LIMITED, AEGIS PARTNERS LIMITED and BELL POTTER NOMINEES LIMITED VID 432 of 2008 FINKELSTEIN J 22 JULY 2008 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 432 of 2008 IN THE MATTER OF LIFE THERAPEUTICS LIMITED BETWEEN: BELL IXL INVESTMENTS LIMITED Plaintiff AND: LIFE THERAPEUTICS LIMITED, AEGIS PARTNERS LIMITED and BELL POTTER NOMINEES LIMITED Defendants JUDGE: FINKELSTEIN J DATE OF ORDER: 22 JULY 2008 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Until further order, Bell Potter Nominees Limited be and it is hereby restrained from exercising (whether by proxy or otherwise) the right to vote that attaches to its shares in Life Therapeutics Limited. 2. Any further affidavit on which the parties propose to rely in relation to the relief that should be granted be filed and served on or before 4.15pm on 28 July 2008. 3. The parties exchange further short Outlines of Submission on or before 4.15pm on 30 July 2008. 4. The further hearing of this proceeding be adjourned to 31 July 2008. 5. Costs reserved. 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 432 of 2008 IN THE MATTER OF LIFE THERAPEUTICS LIMITED BETWEEN: BELL IXL INVESTMENTS LIMITED Plaintiff AND: LIFE THERAPEUTICS LIMITED, AEGIS PARTNERS LIMITED and BELL POTTER NOMINEES LIMITED Defendants JUDGE: FINKELSTEIN J DATE: 22 JULY 2008 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The plaintiff, Bell IXL Investments Limited, holds the largest parcel of shares in the capital of the first defendant, Life Therapeutics Limited (LFE). It acquired those shares on the ASX between 14 May and 4 June 2008, at an average price of $0.085 per share. Bell IXL's shares together with those of its associate, K Pagnin Pty Ltd, represent about 10.17 per cent of the issued capital. After its initial series of acquisitions Bell IXL lodged a notice of substantial shareholding and on 12 June 2008 it gave notice that it would convene a meeting of LFE shareholders to consider replacing the board. The meeting will be held on 23 July 2008. Recently LFE allotted a parcel of shares to Bell Potter Nominees Limited, the third defendant, at an issue price of $0.07 per share. The allotment gives Bell Potter 13.04 per cent of the voting shares and reduces the plaintiff's interest to 8.85 per cent. Bell IXL contends that the allotment is invalid and seeks an order that the register of members be rectified. The ground upon which the relief is sought is that the power to allot shares was not exercised bona fide in the interests in LFE but for the illegitimate purpose of keeping the directors in office. 2 LFE is a holding company. Through its US subsidiaries LFE collects and sells blood plasma. It employs 420 people who work out of 12 plasma collection centres in a number of US cities. The operations are not profitable. In the half year ended 31 December 2006 LFE lost US$8 million. During the same period last year (2007) it lost US$1.2 million. The decrease in losses was in part due to increased revenues. In the main, however, it resulted from the sale for US$5.9 million of two collection centres. 3 In December 2007 the then directors of LFE retained Camino Capital Pty Ltd to provide the company with strategic advice including advice in relation to the sale of assets. On 17 December 2007 Camino advised that LFE should dispose of the entirety of its business. The obvious purchaser was Octapharma AG, a Swiss company that was LFE's largest customer. Mr Riddell, a director of Camino, commenced negotiations with Octapharma. This resulted in an offer on 12 February 2008 that Octapharma purchase the plasma centres and associated assets for US$45.6 million plus stock at valuation, less any amount charged on the assets. 4 Around this time (February 2008) Mr Bellman (who later became chairman) and Mr Milne replaced the former directors. The new directors decided that LFE should not accept the Octapharma offer. Still, something had to be done. LFE's financial position was precarious. In the absence of a sale of assets the group was insolvent and would be wound up. The new directors decided to continue negotiations with Octapharma to see whether a better arrangement could be achieved. 5 Within two weeks a new arrangement was concluded. It consisted of three separate agreements. First there was a management agreement pursuant to which Octapharma was appointed to manage the US operations. Second was a loan agreement under which Octapharma agreed to provide a US$37.1 million loan facility which would be used to pay existing debts and under which Octapharma agreed to lend LFE an amount equal to the operating costs of the US subsidiaries less the revenue received. Finally there was a put and call option which, subject to shareholder approval, gave Octapharma the option to purchase the shares in the US subsidiaries. The exercise price was around US$47.1 million. 6 The effect of the arrangement was that before any sale of the US subsidiaries to Octapharma, LFE had funds to pay out its creditors with a resulting balance of approximately US$16 million of loan funds which it could draw down, and Octapharma was responsible for managing the US operations. If the sale of the US subsidiaries goes ahead, LFE would be required to repay its loan to Octapharma which would leave it with a balance of about $7 or $8 million in cash on my calculation and no other assets. 7 LFE paid out its creditors with the loan funds. It drew down the balance and placed the money on deposit with its banker. There was good reason to draw down the full amount under the loan facility. The rate of interest payable under the loan agreement was between 2 and 3 per cent, reflecting prevailing US interest rates. Funds deposited in an interest bearing account with an Australian bank attracted a much higher rate. 8 Following the announcement of the Octapharma transaction, Messrs Bellman and Milne discussed with Mr Riddell the desire of LFE to raise further capital. They told him that they wanted LFE to raise between $5 and $20 million which, together with the funds on hand following the completion of the sale of the US subsidiaries, would allow the company to pursue other ventures. Both Mr Bellman and Mr Milne had in mind that LFE would become an "investment vehicle". This required further capital. They asked for Comino's assistance. 9 Mr Riddell discussed a possible investment in LFE with Mr Currie of Zeus Capital Limited, a London investment bank. Zeus operates in the capital raising market and was looking to invest funds in the Asia-Pacific region. There was a telephone call between Messrs Bellman, Milne and Currie in March or April 2008. Nothing was agreed. Towards the end of April, Comino's retainer was terminated. 10 Octapharma exercised its call option on 11 April 2008. This imposed an obligation on LFE to convene a meeting of its shareholders as soon as possible to consider whether they would approve the sale. LFE has retained PricewaterhouseCoopers to provide an independent expert's report and Ernst & Young to produce an investigating accountant's report. It is anticipated that the reports will be to hand by the end of July and that the shareholder meeting will be held in early August 2008. 11 On 1 May 2008 another director joined the board of LFE. Ms Calhoun, who has experience in human resources and employee relations, was introduced to LFE by one of its consultants, Mr Sharp. She was told that the company was considering what to do following the sale of its US assets. She was also told that the company wanted to raise finance. Ms Calhoun spoke with Mr Bellman who confirmed what she had been told by Mr Sharpe. She agreed to be appointed a director. 12 The directors (now Messrs Bellman and Milne and Ms Calhoun) discovered on 19 or 20 May 2008 that Bell IXL had acquired a substantial shareholding in LFE. They were concerned that Bell IXL might want to take control of the company. Ms Calhoun said there "was a view that [taking control] probably was Bell's intention". She also said the directors had "been caught on the hop" by Bell IXL's acquisition. The directors' suspicion about Bell IXL's motives were confirmed when on 23 May 2008 LFE received the requisition for the meeting that will consider replacing the board with Bell IXL's nominees. 13 There was a directors' meeting on 20 May 2008. The minutes make no mention of Bell IXL. They do, however, record a resolution that at future meetings there will be tabled a "Top Twenty Shareholder Report, Shareholder Movement Report [and] all notices of changes in substantial shareholdings." Presumably the directors did not again want to be "caught on the hop". 14 On the same day as the meeting Messrs Bellman and Milne met Mr Booth of Asandas, a licensed stock broker. The meeting had been arranged by Mr Milne. He had known Mr Booth for some years. Before the meeting Mr Milne told Mr Booth that he and Mr Bellman had recently become directors of LFE, that LFE conducted a blood plasma business in the United States which had been "sending the company to the wall", that the business had been sold at a price which would leave the company with about US$27 million and that LFE was "looking for investors who might provide capital to the company for on-going activities in the future." 15 The meeting was held in Asandas' office in Sydney. Mr Bellman and Mr Booth were in attendance. Ms Calhoun did not go. She had been told that the purpose of the meeting was to discuss a capital raising. Ms Calhoun knew "in general terms" that Mr Bellman and Mr Milne were looking to obtain extra finance with the assistance of a financial adviser. She was happy to leave it to them to deal with the matter. In any case, Ms Calhoun had flown in from Perth to attend the board meeting and had to return later that day. She said if she had not needed to return to Perth she would probably have attended the meeting. 16 It is important to establish precisely what was said at the meeting. While three people attended only two, Mr Bellman and Mr Booth, have given evidence. I do not know why Mr Milne was not called. And Mr Booth tried to give the appearance of having only a vague recollection of the discussions. 17 According to his affidavit Mr Booth was told that LFE's business "had been running down" but that if shareholders approved the Octapharma transaction "the company would have a future". He was also told that once the Octapharma transaction was completed there would be other opportunities for the company to consider. Importantly he said he was told that the company "did not want to touch the … Octapharma monies (held by the company as cash on deposit) as if shareholders did not approve the transaction, the company's overall position would be even worse [than it already was]." For this reason, LFE had to raise additional funds. Mr Booth also remembers being told that the company had a large shareholder who held about 7 per cent of the issued stock. 18 Mr Booth made notes of the meeting. They record the number of shares LFE had on issue, the then current share price, details of what seem to be head office expenses and the expected receipts from the Octapharma transaction. There is a note in the top right hand corner which reads: "280 - 8% - 50%" It is not clear what this note is intended to record. Mr Booth said he could not remember. 19 Mr Booth had in mind approaching Aegis Partners Limited, an investment group operating out of London, as a potential investor in LFE. Mr Booth had previously dealt with Mr Waller, an Aegis representative. At approximately 6.02pm on 3 June 2008, Mr Booth sent an email to Mr Waller. The contents of the email are important so I will set it out in full. The email reads: "AW, Suggest you have a look @ LFE, listing in OZ, I know the fellow well there, same situation sort of as Acclaim, Big Pile of Cash and liquids, Capped at 9 million, with 18 in cash, sitting at Stgeorge cash mgmt, The directors have few shares and want to do a placement to hold on, 15%, They have a group who has bought 7% and obviously want the shell We could do this 15%, they said board seat no problem and change of activity no problem, they don't want to lose their shell, Call me at home 61 2 9363 4828 TB" 20 This email is important both for what it says and for what it does not say. First, I will deal with the omissions. There are several things a prudent investor would want to know about a company in which he was being offered a 15 per cent stake. They include such basic information as what the company does, and what are its assets and liabilities. In the case of LFE a prudent investor would also want to know something about the Octapharma deal and the likelihood of it being approved by shareholders. He might also want to know what would happen to LFE if the sale of the US subsidiaries was not approved by shareholders. Not only would a prudent investor want to know these things a sensible adviser would provide that kind of information. The email contains none of this information. Mr Booth did not have a satisfactory explanation for the omissions. He did say he thought Mr Waller would make his own enquiries. I do not believe that is what Mr Booth believed. 21 I do believe that if an investor was being asked to take up shares in a "cash box" type company to assist management in maintaining control he might only be told enough to establish there is sufficient cash in the company to get back the purchase price. Although no price is mentioned in the email, the clear implication is that LFE has sufficient capital to enable Aegis to recover the purchase price if things go wrong and it is wound up. 22 Enough was said in the email to attract Mr Waller's interest. He replied to Mr Booth within three hours stating: "Let's do it boss". 23 When Bell IXL obtained a copy of the email in response to a subpoena served on Asandas, it likely thought that its tender would result in success in the case. The legal principles involved are not in dispute. Directors of a company are only entitled to issue shares for reasons that relate to a purpose of benefiting the company: Ashburton Oil NL v Alpha Minerals NL (1971) 123 CLR 614, 640; Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co NL (1968) 121 CLR 483, 493. Raising capital when there is a need for additional funds is a legitimate purpose. Conversely, raising capital by the issue of voting shares for purposes, or for the predominant purpose, of buttressing the position of directors is an illegitimate use of the directors' power: Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285, 289. If the email reflects what Mr Booth was told by Messrs Bellman or Milne, the placement was not intended to benefit LFE. Its purpose was to keep the directors in office. 24 On this score, however, Mr Bellman says that Mr Booth got it wrong. His evidence is that he did not tell Mr Booth that shares were to be issued so that the directors would not "lose [control of] the shell". He said that matter played no part in his discussions with Mr Booth. Mr Bellman said that apart from telling Mr Booth about the Octapharma transaction he told him he was looking for investors so that LFE could "move forward into the future". He said that he had in mind two rounds of capital raising. According to the ASX Listing Rules, subject to certain exceptions a listed company is only permitted to issue up to 15 per cent of its capital unless it obtains shareholder approval. An allotment of 15 per cent of the capital on LFE would raise only around $1.35 million. This would not be enough to cover LFE's annual operating expenses. It is for that reason Mr Bellman said he was contemplating two rounds of capital raising. In reality, even a second round without shareholder approval would not raise enough for investment purposes. To avoid the listing rule restriction LFE would need to make a pro rata offer to existing shareholders. Mr Bellman said that a pro rata issue would be "a highly desirable way to go" but that it is "a stretch" to think such a strategy might have worked, given the fall in LFE's share price since most investors bought in. Nothing that Mr Bellman has said suggests that he would seriously consider such a course. 25 Moreover, it is surprising that Mr Bellman does not remember telling Mr Booth the company was anticipating two rounds of funding. Mr Booth said nothing about it in his affidavit. If, as Mr Bellman would have it, there was a need for further capital to fund LFE's future operations, surely this would have been discussed. 26 On the other hand, as I have said, the emergence of a substantial shareholder was discussed. Mr Booth was told that someone had acquired 7 per cent of the company. Although pressed by Mr Shaw who appeared for the plaintiffs, he was not able to give details of what was said. He was also pressed by Mr Shaw to explain why he told Mr Waller that the directors wanted to hold onto the company, that they did not want to lose the shell and that they were willing to give a board seat to the person who took a placement. But Mr Booth could not explain why he had written these things. He was adamant that he had not been told "directly" what he had written. He could not, though, explain what was said that led him to form the view that what he had written was the position taken by the directors. 27 I am sure that Mr Booth was not guessing what the directors' motives were in seeking an investor. A broker of 24 years experience (which is how long Mr Booth has been in the industry) would not make the statements he did to a prospective investor unless he was confident they were true. I have no doubt that Mr Booth recorded what he was told or what was properly to be inferred from the comments made by Mr Bellman or Mr Milne. The impression I have of Mr Booth's evidence on this aspect is that he did not want to answer questions in a way that would harm LFE's case. I should say that if Mr Booth was at any time told that LFE did not want to spend borrowed money to meet current expenses (in fact I doubt that he was told this), that comment was made in the context of exploring an excuse for a small capital raising. 28 Nothing I have said is intended to indicate I reject Mr Bellman's evidence that he wanted to create a future for LFE and to achieve that future it was necessary to complete the Octapharma transaction and to raise additional capital. The completion of the sale was well underway when Bell IXL appeared on the register. A capital raising was a step that would logically be undertaken after the completion of the sale because in the unlikely event that shareholders voted against the sale there would be no need for any additional capital. The presence of Bell IXL had the potential to thwart Mr Bellman's intentions. I think Ms Calhoun hit the nail on the head when, in answer to the question, "[T]he directors wanted to keep control of the company, didn't they?", she replied: "The directors would probably like to finish what they started in the company. That was probably more the motivation, yes." Put differently, while Mr Bellman's general objective was to further the interests of LFE, his immediate object was to ensure that the directors were not removed so that the general objective could be achieved. 29 Several events confirm my view that what motivated the share issue was Mr Bellman's desire to keep himself and the other directors in office. The first requires reference to further facts. I have already pointed out that Mr Waller took only three hours to decide to take the placement. He appears to have made his decision without any detailed investigation of LFE. In his email Mr Booth offered to discuss the proposed placement by phone. Mr Waller did not bother to make the call. That suggests that the placement was not a normal commercial investment. This is confirmed by the speed with which Aegis executed the subscription agreement. The document was prepared by LFE and sent to Mr Booth on 12 June 2008. It was immediately sent on to Aegis. Aegis executed the agreement and returned it the same day without negotiating any of the terms. Not only is this unusual, it suggests that the parties wanted to complete the placement as a matter of urgency. 30 The next event is the retainer by LFE of Global Proxy Solicitation Pty Ltd. GPS is an organisation that provides "strategic shareholder communications advice and programs". It helps a company ensure that its shareholders "are aware and clearly informed about the merits of any proposals [put by the directors]." It encourages shareholders to "vote in favour of each resolution" put by the board. GPS was appointed on 13 June 2008, the day after the subscription agreement was executed. It was paid $60,000 on account of its fees. Mr Bellman said that GPS was appointed to assist the company obtaining shareholder approval for the Octapharma sale. It transpired, however, that GPS was also soliciting shareholders to vote against the resolution to remove the board. This came to light on the last day of the trial. Mr Bellman said this work was performed under a separate retainer with the directors. The problem with this evidence is that the first Ms Calhoun knew that it was being asserted that the directors had retained GPS was shortly before she began her evidence on the final day of the hearing. 31 It may be that one purpose for retaining GPS was to encourage shareholders to approve the Octapharma deal. Another, and perhaps more immediate purpose, was to prevent Bell IXL obtaining control of LFE. 32 Finally there are Mr Bellman's dealings with Bell Potter. It turned out that Aegis did not take up any shares in LFE. Instead, on about 9 July 2008 it instructed Bell Potter to take the placement and allocate the shares between its clients. It seems common ground that none of the clients (perhaps with the exception of one) is associated with Aegis. When Mr Bellman learned that the shares were to be taken by Bell Potter he discussed the matter with Mr Baguley, an officer of Bell Potter. He followed up the discussion with an email which read: Further to our conversation, we understand you are sending the substantial shareholder notice today. Also, can you please look at getting the proxy forms completed as well. We don't want to risk leaving this to the last minute Thanks & Regards………………..Wayne 33 I am sure Mr Bellman had in mind receiving a proxy from Bell Potter that would support the existing board at the forthcoming meeting. In his evidence Mr Bellman said that preparing the proxy form was merely "completing the transaction with Bell Potter". It was much more than that. Mr Bellman was wanting to secure a favourable vote from Bell Potter. It is likely that Bell Potter had agreed that it would vote against the removal of the board. That is why Mr Bellman did not want "to risk leaving this [the return of the proxy form] to the last minute." 34 The result is that I must find that the share placement was for an ulterior purpose. I will hear the parties on the precise orders that should be made. In the meantime, as the shareholders' meeting will be held tomorrow I will restrain Bell Potter from exercising the right to vote that attaches to its shares. I certify that the preceding thirty-four (34 numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. Associate: Dated: 22 July 2008 Counsel for the Plaintiff: C Shaw Solicitor for the Plaintiff: Pointon Partners Counsel for the First Defendant: D J O'Callaghan SC R G Craig Solicitor for the First Defendant Johnson Winter & Slattery Date of Hearing: 14 & 15 July 2008 Date of Judgment: 22 July 2008	5,532
federal_court_of_australia:fca/single/2020/2020fca1480	decision	commonwealth	federal_court_of_australia	text/html	2020-10-14 00:00:00	Promsopa v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1480	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2020/2020fca1480	2024-09-13T22:49:02.141681+10:00	Federal Court of Australia Promsopa v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1480 Appeal from: Promsopa v Minister for Immigration & Anor [2020] FCCA 546 File number: WAD 53 of 2020 Judgment of: ALLSOP CJ Date of judgment: 14 October 2020 Catchwords: MIGRATION – appeal from decision of Federal Circuit Court – where appellant granted partner visa – where visa subsequently cancelled under s 109 of the Migration Act 1958 (Cth) after Department became aware that appellant was no longer in a genuine relationship with her sponsor at the time the visa was granted and thus did not comply with s 104 – where decision affirmed on review by Administrative Appeals Tribunal – where application for judicial review dismissed by Federal Circuit Court – where appellant self-represented – where Tribunal questioned appellant about potential breach of the law – whether Tribunal should have administered a warning about the appellant's right to invoke the privilege against self-incrimination – whether Tribunal failed to afford appellant procedural fairness – appeal allowed MIGRATION – appeal from decision of Federal Circuit Court – where appellant granted partner visa – where appellant has a young child who is an Australian citizen and was born in Australia – where father of child is a temporary resident in Australia – where visa subsequently cancelled under s 109 of the Migration Act 1958 (Cth) after Department became aware that appellant was no longer in a genuine relationship with her sponsor at the time the visa was granted and thus did not comply with s 104 – where decision affirmed on review by Administrative Appeals Tribunal – where application for judicial review dismissed by Federal Circuit Court – whether Tribunal's decision to affirm visa cancellation decision affected by jurisdictional error – whether Tribunal failed to take best interests of the child into account as a primary consideration – appeal allowed Legislation: Administrative Appeals Tribunal Act 1975 (Cth) s 62 Migration Act 1958 (Cth) ss 104, 107(1), 109, 357A, 359, 360, 371 Migration Regulations 1994 (Cth) reg 2.41 Cases cited: Alfred v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 457 COT15 v Minister for Immigration and Border Protection (No 1) [2015] FCAFC 190; 236 FCR 148 CPK20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 825 Davis v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 791 DQM18 v Minister for Home Affairs [2020] FCAFC 110 DUE20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1187 DXQ16 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1184 Griffin v Pantzer [2004] FCAFC 113; 137 FCR 209 Jabbour v Secretary, Department of Home Affairs [2019] FCA 452; 269 FCR 438 Kohli v Minister for Immigration and Border Protection [2018] FCA 540; 74 AAR 433 Meneses v Directed Electronics OE Pty Ltd [2019] FCAFC 190; 273 FCR 638 Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; 264 CLR 421 Minister for Immigration and Citizenship v Khadgi [2010] FCAFC 145; 190 FCR 248 Minister for Immigration, Local Government and Ethnic Affairs v Gray [1994] FCA 225; 50 FCR 189 Minister of State for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; 183 CLR 273 Perez v Minister for Immigration and Multicultural Affairs [2002] FCA 450; 119 FCR 454 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 Reid v Howard [1995] HCA 40; 184 CLR 1 Sorby v the Commonwealth of Australia [1983] HCA 10; 152 CLR 281 SZHWY v Minister for Immigration and Citizenship [2007] FCAFC 64; 159 FCR 1 Taveli v Minister for Immigration, Local Government and Ethnic Affairs [1989] FCA 175; 86 ALR 435 Teoh v Minister for Immigration and Ethnic Affairs [1994] FCA 182; 49 FCR 409 Vaitaiki v Minister for Immigration and Ethnic Affairs [1998] FCA 5; 150 ALR 608 WAJR v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 106; 204 ALR 624 Wan v Minister for Immigration and Multicultural Affairs [2001] FCA 568; 107 FCR 133 Division: General Division Registry: Western Australia National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 82 Date of hearing: 6 October 2020 Counsel for the Appellant: Mr M G S Crowley with Mr H W Glenister Solicitor for the Appellant: William Gerard Legal Pty Ltd Solicitor for the First Respondent: Mr P R Macliver Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: The Second Respondent filed a submitting notice save as to costs. ORDERS WAD 53 of 2020 BETWEEN: NONGYAO PROMSOPA Appellant AND: MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent order made by: ALLSOP CJ DATE OF ORDER: 14 OCTOBER 2020 THE COURT ORDERS THAT: 1. The appellant be granted leave to appeal. 2. The appeal be allowed. 3. The orders of the Federal Circuit Court of Australia made on 11 February 2020 be set aside and in lieu thereof it be ordered that: (a) The decision of the second respondent be set aside. (b) The matter be remitted to the second respondent for re-hearing and determination according to law. (c) The first respondent pay the applicant's costs. 4. The first respondent pay the appellant's costs of the application for leave to appeal and of the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT ALLSOP CJ: 1 This is an appeal against orders made by the Federal Circuit Court of Australia delivered on 11 February 2020 dismissing the appellant's application for judicial review of a decision of the second respondent, the Administrative Appeals Tribunal. The Tribunal had affirmed the decision of a delegate of the first respondent (the Minister) to cancel the appellant's Partner (Class BC) (Subclass 100) visa (Partner Visa). 2 The appellant, Ms Promsopa, is a citizen of Thailand. Ms Promsopa met her sponsoring partner, Mr Potter, who is an Australian citizen, in March 2011. The couple were married in Bangkok in September 2012. Ms Promsopa applied for a Partner (Class UF) (Subclass 309) visa (Provisional Partner Visa) and a Partner Visa in December 2012, both of which were sponsored by Mr Potter. Ms Promsopa was granted a Provisional Partner Visa in April 2013 and she arrived in Australia in May 2013. 3 In December 2014, Ms Promsopa lodged further information electronically in support of her Partner Visa. As part of that application, Ms Promsopa signed a declaration to the effect that she would inform the Department in writing immediately if she became aware of any change in circumstances (including change of address) or if there was any change in relation to information she had provided in or with the application, while her application was being considered. 4 Ms Promsopa says that her relationship with Mr Potter ceased in January 2015. Around or just after this time, Ms Promsopa commenced a relationship with Mr Walker, a citizen of the UK who is residing in Australia on a temporary visa. 5 Ms Promsopa was granted a Partner Visa in March 2015. 6 In October 2015, Ms Promsopa gave birth to a child, the father of whom is Mr Walker. The child is an Australian citizen. 7 In October 2016, the relationship between Ms Promsopa and Mr Walker ended. Ms Promsopa states that the relationship ended because Mr Walker drank alcohol heavily and subjected her to abuse and violence. 8 Almost three years later, in June 2018, the Minister sent Ms Promsopa a notice of intention to consider cancellation of her visa under s 109 of the Migration Act 1958 (Cth) (the Act). Ms Promsopa did not respond to that notice. 9 In July 2018, Ms Promsopa's visa was cancelled under s 109 of the Act by a delegate of the Minister on the basis that Ms Promsopa failed to comply with s 104 of the Act by failing to notify the Department of a relevant change in her circumstances prior to the grant of her visa. Ms Promsopa applied to the Tribunal for review of this decision in August 2018. 10 In October 2018, the Tribunal invited Ms Promsopa to comment on information provided to it by Mr Walker and to otherwise provide information about the issues to be considered by the Tribunal. Ms Promsopa provided a written response and documents to the Tribunal later that month, including a number of documents relevant to the Family Court proceedings between Ms Promsopa and Mr Walker. 11 In January 2019, Ms Promsopa attended a hearing before the Tribunal. Ms Promsopa appeared unrepresented, with the assistance of an interpreter. On 7 January 2019, the Tribunal affirmed the delegate's decision to cancel Ms Promsopa's visa. 12 On 11 February 2020, the Federal Circuit Court of Australia dismissed Ms Promsopa's application for judicial review of the Tribunal's decision. Ms Promsopa appeals that decision in this Court. The Tribunal's reasons 13 After outlining the relevant background and law, the Tribunal commenced its reasons (at [6]–[8]) with consideration of whether the notice issued by the Minister in June 2018 complied with the requirements in s 107 of the Act and, at [9]–[17], whether the Ms Promsopa failed to comply with s 104. The Tribunal found that the notice was validly issued in accordance with s 107 and that there was non-compliance with s 104, as described in the notice. The appellant does not challenge these findings. 14 The Tribunal then turned to consider whether the visa should be cancelled pursuant to s 109(1). The Tribunal had regard to each of the "prescribed circumstances" set out in reg 2.41 of the Migration Regulations 1994 (Cth), being: a) the correct information; b) the content of the genuine document (if any); c) whether the decision to grant a visa or immigration clear the visa holder was based, wholly or partly, on incorrect information or a bogus document; d) the circumstances in which the non-compliance occurred; e) the present circumstances of the visa holder; f) the subsequent behaviour of the visa holder concerning his or her obligations under Subdivision C of Division 3 of Part 2 of the Act; g) any other instances of non-compliance by the visa holder known to the Minister; h) the time that has elapsed since the non-compliance; i) any breaches of the law since the non-compliance and the seriousness of those breaches; j) any contribution made by the holder to the community. 15 At [20]–[22], the Tribunal found that the decision to grant the visa was based, wholly or partly, on incorrect information; Ms Promsopa was granted a Partner Visa on the basis of being in a spousal relationship with the sponsor. The correct information, which the Minister ought to have been informed of, was that the relationship had ended by March 2015. 16 The Tribunal then considered the circumstances in which the non-compliance occurred. At [25], the Tribunal stated that it did not accept that Ms Promsopa was confused about her obligations to inform the Department of her change of circumstances; the existence of a genuine and an exclusive relationship was central to her eligibility for the visa. The Tribunal stated it was of the view that Ms Promsopa deliberately withheld her relationship breakdown in order to obtain the visa. 17 At [28]–[29], the Tribunal noted the following about Ms Promsopa's present circumstances: 28. The applicant states that she lives with her daughter. The child's father calls her daily and takes the child for a few days a week when he is not working. The applicant said that Mr Walker holds a temporary work visa. She said she does not know what would happen in the future but she believes he intends to apply for a permanent visa. The applicant said that if the visa is cancelled, she would return to Thailand with the chid but her former partner does not want that to happen. 29. The applicant states that the child's father was violent towards her and used to drink a lot before the child was born. He had never been violent towards the child. 18 At [33], the Tribunal considered whether Ms Promsopa had breached the law since the non-compliance, stating: The applicant told the Tribunal that she has not informed Centrelink about the changes in her visa status and the cancellation of her permanent visa, so she continues to receive Centrelink benefits as a permanent resident. The applicant's failure to inform Centrelink about her visa status, which may affect her eligibility for the Centrelink benefits, appears to be in breach of the law. In the Tribunal's view, it is a serious breach because it represents the applicant's lack of candour when dealing with a government agency. 19 After considering the prescribed circumstances, the Tribunal noted what the Full Court said in Minister for Immigration and Citizenship v Khadgi [2010] FCAFC 145; 190 FCR 248 to the effect that whilst the prescribed circumstances must be considered, they do not represent an exhaustive statement of the circumstances that might properly be relevant in any given case. In this respect, the Tribunal acknowledged at [36] that, if Ms Promsopa's visa was cancelled, she would be an unlawful non-citizen and may be detained or removed from Australia. The Tribunal noted that there may be certain restrictions on Ms Promsopa's future travel and future visa applications as a result of the cancellation, and she may also lose certain entitlements acquired from her status as a permanent resident. 20 The Tribunal further noted at [37] that there are no other persons whose visas would be subject to cancellation under s 140 of the Act; Ms Promsopa's child is an Australian citizen as she was born at the time Ms Promsopa held a permanent visa. 21 At [38]–[45], the Tribunal considered whether any international obligations would be breached as a result of the cancellation, such as non-refoulement obligations, family unity principles or the obligation to consider the best interests of the child: 38. There is no evidence, and the applicant does not claim that Australia has protection obligations towards her. The Tribunal does not consider that the cancellation would be in breach of Australia's non-refoulement obligations. 39. The applicant outlines in her submission to the Tribunal the relationship between her, the child and the child's father. She provided to the Tribunal evidence of the Family Court proceedings and the Parenting Orders. The applicant states that it is in the best interest of her child to have both parents living in the same country. The applicant provided to the Tribunal a copy of the Parenting Orders issued in January 2018 and other materials. 40. The applicant told the Tribunal that the child's father is not a permanent resident but plans to seek a permanent visa and may include the child in that application. The applicant states that the child's passport is with the Family Court and she is not able to remove the child from Australia. The Tribunal is mindful that the Family Court papers presented by the applicant show that the applicant travelled to Thailand in February 2017 and the child's passport was released for that travel but was to be returned to the Registry of the Family Court upon their return to Australia. That would indicate that the child did leave the country and was able to do that in the past. The applicant told the Tribunal that she needed the father's permission to leave the country with the child and that the child's father would not allow them to leave the country permanently. 41. The applicant states that she hopes the child will grow up in Australia and will receive an Australian education which is better. The applicant states that Australia has better systems, her daughter speaks English and gets along well with other children. The child will also have access to the Australian health system. 42. The Tribunal has considered the best interests of the child and acknowledges it is a primary consideration. The Tribunal accepts that the best interests of the child may be to have the presence of both parents and the Tribunal acknowledges that the order of the Family Court allows for both parents to have access to the child and to have certain parental responsibilities towards the child. The Tribunal also acknowledges the applicant's evidence that there may be travel limitations in relation to the child. The child's father has written to the Tribunal expressing his desire to be with the child and the Tribunal accepts that evidence, which is consistent with the applicant's own evidence that there is reasonable contact between the child and her father. 43. However, the Tribunal places weight on the fact that the child's father is not a permanent resident of Australia. While the applicant claims that Mr Walker intends to apply for a permanent visa, the Tribunal finds the applicant's evidence to be speculative and there is no evidence before the Tribunal to indicate that the application for permanent residence has been made, or that Mr Walker has been granted a permanent visa. It cannot be assumed that he will be granted such a visa in the future. That is, even if the cancellation is set aside, there is no guarantee that the child will be able to stay in Australia in the presence of both parents. If the cancellation is set aside and the applicant can remain in Australia, there is no guarantee that the child's father will remain in Australia. If the visa is cancelled, the applicant's daughter can remain in Australia as an Australian citizen, or she may travel to Thailand with the applicant or to the UK with her father. The applicant has not satisfied the Tribunal that the reinstatement of her visa would offer the only opportunity for the child to have the benefit of both parents in the same country. While the Tribunal acknowledges that there are Family Court orders in relation to the child, the Tribunal is mindful that such orders will only apply while the child's parents reside in Australia. Should Mr Walker not obtain – or choose not to pursue – an Australian permanent visa, the family would need to make other arrangements to enable the child to spend time with both parents. 44. As for the child having a better environment, education, healthcare and other benefits in Australia, the Tribunal is not satisfied that same benefits would not be available to her in Thailand. The applicant's claims that Australia has better systems are generalised and the applicant has not satisfied the Tribunal that her daughter would be denied access to adequate services in Thailand. 45. The Tribunal has formed the view that the cancellation of the visa would not adversely affect the child's best interests because the child's father does not have a right to reside in Australia permanently and the family would need to make arrangements to enable both parents to have access to the child. 22 The Tribunal then summarised its position at [47]–[50], coming to its ultimate conclusion at [51]: 47. The Tribunal has considered the totality of the applicant's circumstances. The Tribunal has formed the view that the applicant did not comply with s.104 of the Act because she failed to inform the Department about the changes in her circumstances. The correct information is that the applicant's relationship with the sponsoring spouse had ended before the applicant was granted the Partner visa and the decision to grant the visa was based on a circumstance which was no longer in existence. 48. There are no other known instances of non-compliance and considerable time has passed since the non-compliance. The Tribunal has formed the view that the applicant had deliberately withheld information from the Department about her relationship with the sponsor because the Tribunal does not accept the applicant's evidence that she was confused or was unaware of her obligation to inform about the breakdown of her relationship. The Tribunal also notes that there are other breaches of the law as the applicant's evidence is that she has not informed Centrelink about her visa status. The Tribunal finds that the applicant has not been truthful in her dealings with these government agencies. 49. The Tribunal acknowledges that certain hardship would be caused by the cancelation of the visa and if the applicant were required to leave the country because arrangements may need to be made in relation to the child and access to the child by both parents. As noted above, the Tribunal places weight on the applicant's evidence that the child's father is not a permanent resident of Australia and whatever arrangements are presently in place in relation to the child may need to be reconsidered unless he is granted a permanent visa. The Tribunal has formed the view that the best interests of the child would not be adversely affected by the cancellation. However, if the Tribunal were wrong in this assessment, and if it is determined that the best interests of the child do require that the visa not be cancelled, the Tribunal places greater weight on the fact that the information that was the subject of the s.104 obligation was central to the applicant's eligibility for the visa. That is, if the applicant informed the Department that her relationship with the sponsoring spouse ended in February 2015, before she was granted the permanent visa, the applicant would not have been entitled to the grant of the visa. The Tribunal is also mindful that the child is an Australian citizen only because the applicant was a permanent resident at the time of the child's birth and she was not entitled to be a permanent resident. The applicant's failure to inform the Department about changes in her circumstances affected not only the applicant's visa eligibility but also her daughter's eligibility for the Australian citizenship. The Tribunal finds that the breach was significant. 50. In the Tribunal's view, the nature of the breach and the circumstances in which the noncompliance occurred, outweigh other considerations. 51. The Tribunal has decided that there was non-compliance by the applicant in the way described in the notice given under s.107 of the Act. Further, having regard to all the relevant circumstances, as discussed above, the Tribunal concludes that the visa should be cancelled. The Federal Circuit Court decision 23 There were three grounds raised in the amended application of appeal in the Federal Circuit Court, two of which are relevant to this appeal. Grounds 2 and 3 were: 2. The Tribunal failed to have regard to relevant information, failed to provide procedural fairness to the Applicant and/or constructively failed to exercise its statutory review obligation by failing to consider the Applicant's claim that the father of the Applicant's child (Father and Child) would not facilitate the relationship between the Applicant and the Child, and the Applicant would not be in a position to enforce her right to parental responsibility for the Child if the Applicant was not present in Australia, thereby falling into jurisdictional error. 3. The Tribunal failed to have regard to relevant information, failed to provide procedural fairness to the Applicant and/or constructively failed to exercise its statutory review obligation by failing to consider the Applicant's claim that the Father had exposed the Child to harm and risk, and that there was an ongoing risk of harm to the Child by the Father, thereby falling into jurisdictional error. 24 The primary judge summarised the claims referred to in the grounds at [41] as: a) Mr Walker would not facilitate the relationship between her and the child if she were to go to Thailand without the child, and she would not be in a position to enforce the current orders if that occurred; and b) Mr Walker had in the past exposed the child to harm and risk and that there was therefore an ongoing risk of harm to the child by Mr Walker if the child were not to live with the Applicant. 25 The claims were made by Ms Promsopa in October 2018 in response to the Tribunal's invitation to provide information. The primary judge outlined the substance of the claims made by Ms Promsopa at [37]–[39]: 37. At Court Book, page 223, the Applicant provided a statement which contained her version of events which was submitted was sent in response to the letter that is at Court Book, page 180. In that statement the Applicant said that Mr Walker was not complying with the current Court orders and that he had taken the child for five days a week for three weeks and told the Applicant that he will come and get her if he is not working. The Applicant noted that she had contacted Legal Aid for advice about this issue. 38. Further, in the statement, the Applicant said that, since her visa was cancelled, Mr Walker and his partner have said that they can help her if she agrees with them about contact with the child. She said that Mr Walker says that his present partner is better for the child than the Applicant herself. She said that Mr Walker constantly asked her about her visa and says that he will take care of the child full time in Australia. She said that Mr Walker told her that if she goes back to Thailand that they will help her come back. She says that she believes that Mr Walker and his partner are trying to control her and get her to leave Australia so that Mr Walker can have the child full time and not have to pay her child support which is $650.00 a month. 39. She said that she believes Mr Walker wants her to be kicked out of Australia and for the child to live with him full time. She said that if she were in Thailand she does not believe that Mr Walker will comply with any Court orders they have for shared care between them. She said that she worries that if her visa remains cancelled that Mr Walker could take the child to Scotland, and if the Applicant is in Thailand, she does not believe she would have the power or money to pay a lawyer to fix this. She says that she does not believe that she will be able to get Mr Walker to return the child to her. 26 The primary judge also noted that Ms Promsopa had provided to the Tribunal an affidavit she had sworn in the course of the Family Court proceedings between Ms Promsopa and Mr Walker, in which she outlined the harm that she said had been perpetrated, and had the potential to be further perpetrated, upon her. 27 The primary judge held at [45] that the Tribunal had not specifically engaged with either of the two claims, but that both of the claims "really fit within the ambit of the best interests of the child". The primary judge stated at [46]–[49]: 46. … The Tribunal has acknowledged that the best interests of the child are that both parents reside in the same country. 47. If both parents reside in the same country, then that is the answer to the claims; not only the two that the Applicant has identified, but really all of the claims that she has made in the response she has given to the Tribunal, and what is contained in her affidavit in the parenting matter. I note that the affidavit in the parenting matter raised concerns, and those concerns were addressed by the orders that the Applicant entered into by consent. 48. It seems to me that there is no need for the Tribunal to go through and identify each specific claim that may have been made out of the material that was put to it, if it has identified what remedy would be able to answer such a claim. In this case, every claim that the Applicant made was able to be answered by the acknowledgement that the best interests of the child were for both parents to be living in the same country. This is why, at paragraph 46, the Tribunal says "The applicant has not raised any other matters for consideration". 49. Having come to that conclusion the Tribunal says at paragraph 49 that it had "formed the view that the best interests of the child would not be adversely affected by the cancellation". This is a view that was open on the evidence before the Tribunal. It seems to me that there is no jurisdictional error. 28 The primary judge then addressed the Tribunal's comments at [49] of its reasons, that even if the best interests of the child would be adversely affected by the cancellation, the Tribunal considered that those considerations were outweighed by the seriousness of the breach of s 104. In dismissing grounds 2 and 3 of the appeal, the primary judge concluded at [51] that it was "clear that even if the Tribunal had made an error, it is not an error which could have realistically affected the final decision". The appeal to this Court 29 Ms Promsopa filed a notice of appeal in March 2020. An amended notice of appeal was filed in September 2020 after Ms Promsopa obtained pro bono legal representation. The amended notice of appeal in this Court set out five grounds of appeal: 1A. The learned primary Judge erred in not finding that the second respondent's (AAT) decision to affirm the delegate's cancellation decision was vitiated by a denial of procedural fairness in requiring the appellant to answer questions calculated to elicit answers incriminating the appellant, or exposing her to a penalty, without informing the appellant of her right to invoke privilege under ss 62(4) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) or under the general law. 2A. The learned primary Judge erred in not finding that the AAT's decision to affirm the delegate's cancellation decision was vitiated by a constructive failure to exercise jurisdiction in its treatment of the best interests of the appellant's Australian citizen child (born October 2015), or erred in finding that that finding was 'open on the evidence' (CB 324 at [49]), or erred in not finding that the treatment of the best interests of the child was unreasonable. 3A. The learned primary judge erred in finding at [48] that the AAT was not required to identify each specific claim that may have been made' because all were 'answered by the acknowledgment that the best interests of the child were for both parents to be living in the same country'. 4A. The learned primary Judge erred in not finding that the AAT's decision to affirm the delegate's cancellation decision was vitiated by a denial of procedural fairness in that the review was conducted in such a way, or was attended by such circumstances, as may invite in the mind of a fair-minded, informed, neutral lay observer that the AAT may not have approached the review with a mind open to persuasion. 5A. The learned primary Judge erred in finding that any error of law was not jurisdictional for want of 'materiality' because of the AAT's reasoning that 'even if the best interests of the child would be adversely affected by the cancellation, the Tribunal considers that those considerations are outweighed by the gravamen of the breach of s 104 of the Act' (AB 324 [50]-[51]). 30 Ground 4A is not pressed. 31 Ms Promsopa requires leave to advance grounds 1A and 4A, as neither ground was raised in the Court below. The Minister opposed the grant of leave to rely upon these proposed grounds and ground 2A so far as it exceeded the grounds put below. He accepted that a key consideration was whether it was in the interests of justice to grant leave. Ms Promsopa was represented by different pro bono solicitors and counsel at the hearing before the Federal Circuit Court. Ms Promsopa has sworn an affidavit setting out her experiences with her former solicitors and counsel. It is unnecessary to set out this evidence in any detail. The new grounds appear to have merit, and the effect of deportation will involve a young child who is an Australian citizen. Further, ground 1A concerns the question of when a Tribunal member should administer a caution to self-represented applicants regarding their right to invoke the privilege against self-incrimination, an issue which may be important to the general conduct of future Tribunal proceedings. It is in the interests of justice to allow Ms Promsopa to advance these new grounds. Leave is granted. Ground 1A 32 The amended notice of appeal contained the following particulars in relation to ground 1A: 1A.1 The AAT sought to elicit material not already before the AAT going to whether the appellant had breached other provisions of Australian law by questioning the appellant about 'not informing Centrelink about the changes in [her] circumstances and [her] eligibility for Centrelink payments [which] may be another breach of the law' (AB 299) and whether she had been 'paying taxes' while in Australia (AB 299); 1A.2 The AAT did not inform the appellant of her right to invoke privilege under s 62(4) of the AAT Act or under the general law, and did elicit an admission that she had not informed Centrelink of her change in circumstances, resulting in an adverse finding that the appellant 'appears to be in breach of the law' being a 'serious breach' demonstrating 'the applicant's lack of candour when dealing with a government agency' (AB 255 [33]); 33 The relevant exchange arose in the course of the Tribunal questioning Ms Promsopa "one by one" (see line 138 of the transcript) about each of the prescribed circumstances in reg 2.41. The Tribunal addressed the "correct information" circumstance (reg 2.41(a)) at lines 140–162 of the transcript and the "circumstances of non-compliance" (reg 2.41(d)) at lines 163–165. The questions complained of by Ms Promsopa arose in the course of the Tribunal asking about Ms Promsopa's present circumstances (reg 2.41(e)), at lines 169–204: MEMBER: Well, I don't really know much about your present circumstance in terms of family, in terms of work, in terms of settlement. What ... can you, can you mention any of these things to me? APPLICANT: (through interpreter) OK, so, Since my visa was cancelled, I didn't have the permission to work. Prior to that, I was working as a cleaner, but I can't work anymore. So, my sole, um, income right now is from Centrelink payments. There's no one in my life right now, so I'm alone, just looking after my kid, so that's all I've been doing, just looking after my kid well. MEMBER: Sorry, what kind of Centrelink payment? APPLICANT: (through interpreter) Um I think, um, single mother payment and payment for low income family. MEMBER: But you're not a permanent resident [Applicant speaking at the same time], sorry, you're not a permanent resident. Do you not need to be a permanent resident to receive those payments? APPLICANT: (through interpreter) Because I didn't tell Centrelink about this changes. Because if I told Centrelink I'm not sure where I'm gonna end up in Australia. MEMBER: Sorry are you saying that Centrelink doesn't know you're not a permanent resident, and they are making payments to you even though you are not entitled to those payments? APPLICANT: (through interpreter) OK, so because I've been here for six years, my understanding, I'm still a permanent resident, um I'm not lying to Centrelink it's on the genuine, on my genuineness that I'm telling them that, um, that I'm still a permanent resident. MEMBER: What you're, what you're saying to me makes no sense whatsoever. You know that your visa has been cancelled - that's the reason you have come to the Tribunal - so I think you know quite well that you are not a permanent resident, and that's the reason you told me you're not working. If you know that you can't work, I don't know why it wouldn't occur to you that you're no longer a permanent resident. APPLICANT: (through interpreter) Yes, that's right, I haven't been working. Since my visa was cancelled, I haven't worked. MEMBER: But you know you are not allowed to work because your visa is cancelled because you are no longer a permanent resident. Why did you not inform Centrelink about it? APPLICANT: (through interpreter) Um, it's my fault, I'll tell Centrelink after the interview today, I didn't know that I needed to inform Centrelink about this changes. MEMBER: You do realise it's a serious offence under the m [sic], under the Australian laws to be receiving payments that you're not entitled to? APPLICANT: (through interpreter) I just, I just know that today. MEMBER: So you didn't think it was a problem for you to receive payments as a permanent, on the basis of you being a permanent resident when you know that you're not a permanent resident? APPLICANT: (through interpreter) Um, it really, if if I would have known about this, I would have told Centrelink already … 34 After asking further questions about Ms Promsopa's present circumstances, the Tribunal enquired about any other instances of non-compliance with immigration requirements (reg 2.41(g)) and the time passed since non-compliance (reg 2.41(h)) (see lines 317–325). The Tribunal then addressed the circumstance of "breaches of the law since the non-compliance" (reg 2.41(i)), returning to the topic of the Centrelink payments at lines 326–335: MEMBER: I will consider any breaches of the law since the non-compliance, and the seriousness of those breaches. It seems to me that not informing Centrelink about the changes in your circumstances and your eligibility for Centrelink payments may be another breach of the law. What would you like to say about that? APPLICANT: (through interpreter) I really didn't know that I need to tell Centrelink that my permanent residency has been cancelled. MEMBER: I do find it quite hard to accept that you, that it didn't occur to you that if you are receiving Centrelink payments on the basis of being a permanent resident, and you are no longer a permanent resident, you have to inform Centrelink about the changes in your circumstances. APPLICANT: (through interpreter) Yep, I admit to, to my guilt. 35 Ms Promsopa was unrepresented before the Tribunal and answered questions with the assistance of an interpreter. 36 The privilege against self-incrimination is a fundamental common law right: Sorby v the Commonwealth of Australia [1983] HCA 10; 152 CLR 281 at 294 (Gibbs CJ), 309 (Mason, Wilson and Dawson JJ) and 311 (Murphy J); Reid v Howard [1995] HCA 40; 184 CLR 1 at 11–12 (Toohey, Gaudron, McHugh and Gummow JJ); and Meneses v Directed Electronics OE Pty Ltd [2019] FCAFC 190; 273 FCR 638 at [85]–[87]. It is not merely a rule of evidence available in judicial proceedings but is available generally, even in a non-curial context, as the foundation of an entitlement not to answer a question: Griffin v Pantzer [2004] FCAFC 113; 137 FCR 209 at [44]. The Tribunal is not bound by the rules of evidence, but this does not allow a Tribunal to require a witness to answer questions which exposes her or him to self-incrimination. The privilege against self-incrimination has also been recognised in statute, most particularly in ss 62(3) and 62(4) of the Administrative Appeals Tribunal Act 1975 (Cth). Also, s 371(2)(c) of the Act provides that it is an offence for a witness to fail to answer a question of the Tribunal for the purposes of a review under Pt 5 of the Act. Section 371(3), however, provides an exception to this offence where "answering the question might tend to incriminate the person". 37 The Tribunal may deny an unrepresented party procedural fairness if its questioning strays into matters about which the unrepresented party could invoke the privilege against self-incrimination without warning the person: Kohli v Minister for Immigration and Border Protection [2018] FCA 540; 74 AAR 433 per Flick J at [33]–[34], citing SZHWY v Minister for Immigration and Citizenship [2007] FCAFC 64; 159 FCR 1 at [74]–[77], [112] and [160]–[169] where the Full Court found that the Tribunal may deny an unrepresented party procedural fairness in circumstances where it fails to advise the party of the right to invoke client professional privilege. In Kohli, Flick J concluded that the Tribunal failed to advise the appellant of his right to invoke the privilege in respect of questioning about whether he had been driving unlawfully and his involvement in a possible theft. Nevertheless, his Honour held that the failure by the Tribunal occasioned the appellant no practical injustice because he was under no continuing risk of being charged with any unlawful driving offence relating to the events described in the cross-examination, and he denied any wrongdoing in respect of the theft. The evidence going to either or both of the matters also assumed little relevance in the ultimate reasoning and conclusion of the Tribunal. On that basis, Flick J at [39] dismissed the appeal ground, finding that the appellant (who was "well-educated (albeit unrepresented)") was not deprived of any meaningful opportunity to be heard by reason of any failure to advise him as to his rights against self-incrimination. That description does not fit the appellant here. 38 The Minister submitted that the Tribunal was entitled to undertake the line of questioning set out above at [33] and [34] without issuing a caution about self-incrimination because Ms Promsopa first raised the issue of her receiving Centrelink payments unprompted in response to a question about her present circumstances. Accordingly, the Minister submitted, it was not the questioning by the Tribunal that led to the disclosure of the offence. Whilst Ms Promsopa did state that her "sole income right now is from Centrelink payments", counsel for Ms Promsopa submitted that the Tribunal could not have reached the conclusions it did at [33] of its reasons in relation to breaches of the law without the information proffered by Ms Promsopa in response to the Tribunal's further questioning (apparently deliberately and pointedly) about the type of Centrelink payments she was receiving and her knowledge about the requirement to be a permanent resident in order to be eligible to receive those payments. I accept this submission. 39 Whilst the Tribunal does not explicitly state which law it believes Ms Promsopa breached, it is quite clear that the Tribunal is referring to s 66A(2) of the Social Security (Administration) Act 1999 (Cth). Section 66A(2) requires a person who is in receipt of a social security payment to inform the Department of Social Services within 14 days of any event or change in circumstances which might affect that person's eligibility for that payment. Section 66A renders those who fail to inform the Department of a change in their circumstances liable to prosecution under Pt 7.3 of the schedule to the Criminal Code Act 1995 (Cth), typically the offence of obtaining a financial advantage by deception in s 134.2(1) or obtaining a financial advantage in s 135.2(1) of the Code. 40 As highlighted by counsel for Ms Promsopa, the offence of obtaining a financial advantage in s 135.2(1) of the Code contains a mental element. To make out the offence it must be shown that there was an omission of information as to which there was a duty to supply and the omission was done while knowing or believing that the person was not eligible to receive that financial advantage: s 135.2(1)(ab). Likewise, to establish the offence of obtaining a financial advantage by deception in s 134.2(1) of the Code it is necessary to prove the defendant obtained the financial advantage dishonestly. 41 The questioning by the Tribunal from line 182 onwards was directed to this mental element and the admissions elicited from Ms Promsopa may constitute at least a partial confession to the offence under s 134.2(1) or s 135.2(1). Ms Promsopa could have properly invoked her privilege against self-incrimination and declined to answer the Tribunal's questions from line 182 onwards as to whether she knew she was not eligible to receive the Centrelink payments. The Tribunal ought to have warned Ms Promsopa about her right to invoke the privilege against self-incrimination. 42 The Minister submitted that the failure by the Tribunal to advise Ms Promsopa of her right to invoke the privilege against self-incrimination occasioned her no practical injustice because the evidence about her failure to advise Centrelink assumed little relevance in the ultimate reasoning and conclusion of the Tribunal. The Minister also submitted that, for this same reason, the error does not amount to jurisdictional error. I reject these submissions. The answers elicited from Ms Promsopa from line 182 onwards allowed the Tribunal to conclude at line 326 of the transcript, and [33] of its reasons, that Ms Promsopa had breached the law. It is clear that the Tribunal considered this a "serious breach" of the law: see lines 198–199 of the transcript, set out above, and [33] of the Tribunal's reasons. The Tribunal at [33] of its reasons concluded that it is a "serious breach" because it "represents the applicant's lack of candour when dealing with a government agency". Thus it clearly made a judgment upon her honesty which could not have been made without the deliberate and pointed questioning to which I have referred. The Centrelink payments were referred to again at [48] of the Tribunal's reasons, as part of the Tribunal's concluding remarks which start at [47] and are set out in full above at [22]. Directly after finding in [48] that Ms Promsopa "deliberately withheld information from the Department about her relationship", the Tribunal stated: The Tribunal also notes that there are other breaches of the law as the applicant's evidence is that she has not informed Centrelink about her visa status. The Tribunal finds that the applicant has not been truthful in her dealings with these government agencies. 43 The Tribunal concluded at [50] that the "nature of the breach and the circumstances in which the non-compliance occurred, outweigh other considerations". It is clear from the progression of the Tribunal's concluding remarks that the "circumstances in which the non-compliance occurred" includes the Tribunal's finding that Ms Promsopa is untruthful in her dealings with government agencies. Thus, plainly, the finding that Ms Promsopa had breached the law, supported by the evidence elicited from her during the hearing, was material to the Tribunal's ultimate conclusion. 44 Further, contrary to the circumstances that faced Flick J in Kohli, there is nothing before me to suggest that Ms Promsopa was not under an ongoing risk of being charged with the offences referred to by the Tribunal in its questioning and, by line 335 of the transcript, after persistent questioning by the Tribunal Ms Promsopa admitted to her knowledge of having to inform Centrelink of changes in her circumstances. 45 In these circumstances, I am satisfied that ground 1A should succeed. The Tribunal was required to inform Ms Promsopa of her right to refuse to answer questions before it embarked on the questioning of the kind seen at line 182 of the transcript. Ms Promsopa was treated unfairly. The Tribunal's failure to give that warning caused Ms Promsopa not just practical, but real, injustice. The finding was material to the Tribunal's ultimate conclusion and the evidence procured left Ms Promsopa liable to prosecution under the Code. The Tribunal's decision should be set aside and the matter remitted to the Tribunal for a hearing in which Ms Promsopa is afforded procedural fairness. Grounds 2A, 3A and 5A 46 Grounds 2A, 3A and 5A all relate to the Tribunal's consideration of the best interests of the child and the materiality of that consideration to the Tribunal's ultimate conclusion. 47 The amended notice of appeal contained the following particulars in relation to ground 2A: 2A.1 The AAT asked itself the wrong question of whether it was in the best interests of the child to be in the same country as both parents ('may be to have the presence of both parents' at AB 256-257 [42]), but the correct question was whether the cancellation was, or was not, in the best interests of the child; 2A.2 The AAT failed to consider that the immediate legal consequence of affirming the delegate's decision would be that the appellant would be taken into immigration detention, separating the child (who could not be detained) and her mother, effectively indefinitely; 2A.3 The AAT failed to recognise that, in the absence of either parent having an entitlement to reside in Australia, the child would alienate the child from her 'homeland' and lose the 'protection and support, culturally and medically, and in the many other ways evoked by, but not confined to, the broad concept of lifestyle' (Vaitaki v Minister for Immigration and Ethnic Affairs (1998) 150 ALR 608) 2A.4 The AAT failed to engage with the appellant's claim that were she to be returned to Thailand without her child, the appellant would not practically be in a position to effectuate contact with the child, especially where the father was antipathetic to such contact (ground 3 below); 2A.5 The AAT failed to engage with the appellant's claim that the child's father was an abusive and violent alcoholic and represented a risk to the child which would be un-ameliorated if the appellant were returned to Thailand (ground 3 below); 2A.6 The AAT's lack of satisfaction 'that the reinstatement of [the appellant's] visa would offer the only opportunity for the child to have the benefit of both parents in the same country' (AB 257 [43]) was illogical or unreasonable, because that was the only or most likely possibility on the evidence before it; 2A.7 No reasonable decision-maker, on a correct understanding of the law, could have concluded that it was in the best interests of the child that the appellant's visa be cancelled (resulting in the appellant's immediate detention and removal from Australia). 48 During the hearing of the appeal, counsel for Ms Promsopa identified three ways in which the Tribunal erred in its approach to the best interests of the child. First, it was submitted that the Tribunal failed to assess properly the best interests of the child and thus denied Ms Promsopa procedural fairness in accordance with Minister of State for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; 183 CLR 273. Secondly, in failing to assess properly the best interests of the child, the Tribunal purported to apply non-statutory Ministerial guidelines but misconstrued or misunderstood the task, to the effect that what was applied was not the policy but something else. Counsel for Ms Promsopa submitted that this amounts to legal unreasonableness in the sense discussed by Robertson J in Jabbour v Secretary, Department of Home Affairs [2019] FCA 452; 269 FCR 438 at [89]–[91], citing Taveli v Minister for Immigration, Local Government and Ethnic Affairs [1989] FCA 175; 86 ALR 435 at 453 and Minister for Immigration, Local Government and Ethnic Affairs v Gray [1994] FCA 225; 50 FCR 189 at 208 per French and Drummond JJ. Thirdly, the Tribunal failed to consider in its decision information provided by Ms Promsopa in response to its written invitation, contrary to s 359 of the Act. I will deal with each of these submissions after first identifying the approach taken by the Tribunal when considering the child's best interests. 49 The Tribunal considered the best interests of Ms Promsopa's child at [39]–[45] of its reasons, set out above at [21]. The Tribunal acknowledged that the best interests of the child was a primary consideration: [42]. The Tribunal accepted that the best interests of the child "may be to have the presence of both parents". The Tribunal acknowledged the Family Court orders in place, the evidence that there "may be travel restrictions in relation to the child" and the father's desire to be with the child. At [43], the Tribunal placed weight on the fact that the child's father is not an Australian citizen and there was, therefore, "no guarantee that the child will be able to stay in Australia in the presence of both parents". The Tribunal stated it was not satisfied that cancellation of the visa would provide the only opportunity for the child to have both parents in the same country. If the father returned to the United Kingdom the family would have to make arrangements to enable both parents' access to the child. At [44], the Tribunal briefly addressed Ms Promsopa's claims that the child would have a better environment, education and healthcare in Australia, stating: [T]he Tribunal is not satisfied the same benefits would not be available to her in Thailand. The applicant's claims that Australia has better systems are generalised and the applicant has not satisfied the Tribunal that her daughter would not be denied access to adequate services in Thailand. 50 Ms Promsopa made a number of claims in relation to the best interests of her daughter, who was approximately three and a half years old at the time of the Tribunal hearing. In response to the Tribunal's written invitation to provide information, issued in accordance with s 359 of the Act, Ms Promsopa made the following claims: (1) The father poses a number of risks to the child due to his conduct which included verbally abusive behaviour in the child's presence, heavy consumption of alcohol which had previously endangered the child, and violent behaviour, both in a domestic and general context (AB 196–198, 202–206, 224). (2) Ms Promsopa believes that the father's desire is to have her leave the country so that he may have full-time care of the child. She believes that if she were to leave Australia without the child, the father would not comply with any court orders allowing for shared care and that she would not have the resources available to her in Thailand to remedy this in court. The result of which being that she would be permanently separated from the child (AB 225). (3) The child will get a better education in Australia than what Ms Promsopa would be able to afford in Thailand. The child attends day care and crèche and has many friends (AB 226). (4) Ms Promsopa wants the child to have a good relationship with her father, which will be facilitated by the child remaining in Australia. It is in the child's best interests to have both parents living in the same country (AB 226). (5) Ms Promsopa and the father have entered into final parenting orders. They have equal shared parental responsibility for the child who lives with Ms Promsopa except for weeks which the father is not rostered for work (AB 230). The final parenting orders contain restrictions on the child's travel outside Australia and the child's passport is held by the Family Court of Western Australia Registry (AB 232). 51 By s 359(1), in making its decision the Tribunal was obliged to have regard to the information provided by Ms Promsopa in response to the written invitation. 52 At the hearing before the Tribunal and in response to questions from the Tribunal, Ms Promsopa provided the following additional information: (1) The child is an Australian citizen (line 232 of the transcript). (2) The father is a temporary resident of Australia seeking a pathway to permanent residency (AB 297). (3) If Ms Promsopa's visa remained cancelled, she would seek to take the child with her to Thailand, however, the father will not agree to that (AB 297). Ms Promsopa would require the consent of the father to relocate with the child to Thailand (AB 300). (4) There are no plans in place between Ms Promsopa and the father for what will happen regarding the parenting of the child if either parent is required to leave Australia (AB 297). (5) The child speaks English (AB 302). (6) Australia has better healthcare and is safer than Thailand (AB 302). 53 As explained above, the Tribunal expressly stated that it considered the best interests of the child and acknowledged that it was a primary consideration. Thus the question is whether, by its reasons, the Tribunal can be shown to have erred in its consideration of the best interests of the child. 54 The Full Federal Court decisions of Vaitaiki v Minister for Immigration and Ethnic Affairs [1998] FCA 5; 150 ALR 608 and Wan v Minister for Immigration and Multicultural Affairs [2001] FCA 568; 107 FCR 133 provide guidance on how a Tribunal is to give proper, genuine and realistic consideration to the best interests of children affected by the decision. In Wan, the Full Court found that the failure of the decision maker to identify anywhere in his written reasons what the best interests of the children indicated, was of particular significance: see Wan at [26]. The Full Court at [30] set out elements of the best interests of the children which had not been elucidated by the Tribunal: that the children as citizens of Australia would be deprived of the country of their own and their mother's citizenship and "of its protection and support, socially, culturally and medically, and in the many other ways evoked by, but not confined to, the broad concept of lifestyle", citing Vaitaiki at 614; the resultant social and linguistic disruption of their childhood as well as the loss of their homeland; the loss of educational opportunities available to the children in Australia; and their resultant isolation from the normal contacts of children with their mother and mother's family. 55 As I said in Perez v Minister for Immigration and Multicultural Affairs [2002] FCA 450; 119 FCR 454 at [118], the interests of the children are considerations in respect of their human development – their health, including their psychological health and happiness, their social and educational development as balanced, nurtured young citizens of this country. This is not a check list, but an illustration of the kinds of considerations relevant to these young people which form their best interests in connection with a decision of the Minister. 56 I note that the Tribunal at [49] of its reasons made some concerning remarks about the citizenship of Ms Promsopa's child and the means by which she obtained citizenship. The child is a citizen of Australia. There is no reason to distinguish her from any other child who is a citizen of Australia. Her best interests should be assessed in accordance with her status as an Australian citizen. 57 As identified in Ms Promsopa's submissions to this Court, if Ms Promsopa's visa is cancelled and she has to return to Thailand with or without her child, her child would either be deprived of the country of her birth and citizenship and the lifestyle it provided, have her childhood disrupted in a social and linguistic sense and lose regular contact with and guidance from her father, or be deprived of contact with and the opportunity for the love, presence and guidance by her mother and primary carer in circumstances where it is claimed that the father poses a risk to the child and is antipathetic to facilitating any relationship between mother and child. 58 The Tribunal briefly addressed the consequences of Ms Promsopa's child returning with her to Thailand, finding that it was not satisfied that the same benefits regarding environment, education and healthcare would not be available to her in Thailand. The Tribunal, however, did not consider at all the impact that Ms Promsopa's visa cancellation would have on the child if the child were to stay in Australia following Ms Promsopa's departure. On Ms Promsopa's evidence, there was a real possibility that this might occur because Ms Promsopa would need the consent of the child's father to take her to Thailand and this was not or may not be forthcoming. The Tribunal apparently afforded no significance to the child's loss of regular contact with, and opportunity for guidance by, her mother, or the disruption to the child's life which would flow from her primary caregiver's inability to live in the country. These matters are relevant, indeed central, to the consideration of the child's best interests. This is a young child, at an age (now 5 years) at which all aspects of her mental, physical, social and educational wellbeing and development could be enhanced by the presence of her mother. 59 Ms Promsopa made a number of claims in relation to the best interests of her child that were not dealt with by the Tribunal. Two such claims were identified by the primary judge: that the father of Ms Promsopa's child would not facilitate the relationship between Ms Promsopa and her child and Ms Promsopa would not be in a position to her enforce her right to parental responsibility if she were not in Australia; and that the father of Ms Promsopa's child had exposed the child to harm and risk and there was an ongoing risk of harm to the child by the father. These claims were relevant and ought to have been considered when assessing the best interests of the child. The finding that the best interests of Ms Promsopa's child would not be adversely affected by her visa being cancelled was not made on the basis of any engagement with these claims or with the wider question to which I have referred. Instead, the Tribunal took a one-dimensional approach to the child's best interests, focusing almost entirely on the fact that the father held a temporary visa. In this respect the Tribunal failed to have proper regard to the detriment to the child caused by the decision to cancel Ms Promsopa's visa. 60 The Tribunal identified that it would be in the best interests of Ms Promsopa's child to have both of her parents in the same country. The fact that the father of the child is in Australia on a temporary visa led the Tribunal to conclude that the best interests of the child would not be adversely affected by cancellation of Ms Promsopa's visa. With respect, I have difficulty accepting that this is a logical conclusion. The base possibility that the child's father may have to one day leave Australia and arrangements would have to be made to facilitate the child's relationship with him does not excuse the Tribunal from failing to consider properly the factors outlined above. Here, the Tribunal acknowledged that the best interests of the child was a primary consideration. In doing so, it was required to give proper, genuine and realistic consideration to the best interests of the child. The one-dimensional approach taken by the Tribunal in its reasons did not satisfy this requirement. Application of Teoh 61 Counsel for Ms Promsopa submitted that the Tribunal was obliged to give primary consideration to the best interests of Ms Promsopa's child in deciding whether to affirm the decision to cancel her visa, citing Teoh (1995) 183 CLR 273. This obligation arose due to the legitimate expectation that the Tribunal would not act inconsistently with art 3(1) of the Convention on the Rights of the Child without prior notice: Teoh 183 CLR 271–292 (per Mason CJ and Deane J). 62 The Minister submitted that Teoh was not applicable to decisions made under s 109 of the Act. In oral argument counsel for the Minister argued that the procedural fairness requirements propounded in Teoh only apply to decisions where the Minister or his delegate has an unfettered discretion and s 109 did not contain an unfettered discretion because the Minister or his delegate had to be satisfied of the criteria in subss (a), (b) and (c). I reject that submission. The power to cancel a visa under s 109 is discretionary; the section makes clear that after the Minister decides that there was non-compliance under s 108, considers any response by the visa holder and has regard to any prescribed circumstances, the Minister may cancel the visa. 63 The Minister also submitted that a failure to consider properly the best interests of the child cannot amount to jurisdictional error because it was not a "mandatory consideration". The Minister refers to two decisions of the Full Court of this Court in support of this argument: Khadgi (2010) 190 FCR 248 and COT15 v Minister for Immigration and Border Protection (No 1) [2015] FCAFC 190; 236 FCR 148. The Full Court in Khadgi stated that the factors set out in reg 2.41 were mandatory considerations that must be taken into account by the Minister. The Court noted at [68] that the list of factors is not an exhaustive statement of the factors that the Minister might properly consider to be relevant in any given case. That case says nothing on the application of Teoh to s 109. The Minister relies on [28] of COT15 where the Court held that the "present circumstances of the applicant" within the meaning of reg 2.41(e) "is not apt to refer to obligations which Australia owes to other countries under treaty". Again, this passage in COT15 does not shed light on the application to s 109 of the procedural fairness requirements the subject of Teoh. 64 The nomenclature of "legitimate expectation" has, since, Teoh, fallen out of favour in Australia: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1. A more "modern" way of expressing the principle derived from Teoh may be found in the judgment of Gaudron J at 183 CLR 305: There is a want of procedural fairness if there is no opportunity to be heard on matters in issue. And there is no opportunity to be heard if the person concerned neither knows nor is in a position to anticipate what the issues are. That is also the case if it is assumed that a particular matter is not in issue and the assumption is reasonable in the circumstances. In my view and for the reasons already given, it is reasonable to assume that, in a case such as the present, the best interests of the children would be taken into account as a primary consideration and as a matter of course. That being so, procedural fairness required that, if the delegate were considering proceeding on some other basis, she should inform Mr Teoh in that regard and give him an opportunity to persuade her otherwise. It did not, however, require her to initiate inquiries and obtain reports about the future welfare of the children and, in this respect, I agree with the judgment of Mason CJ and Deane J. 65 Ms Promsopa relied upon the Full Court decisions of Vaitaiki and Wan, which both applied Teoh. In Wan, the applicant had been refused a permanent residence (general-spouse) visa on character grounds. He was married to an Australian citizen and was father to two children who were also Australian citizens. Applying Teoh, the Full Court set aside the Tribunal's decision because the Tribunal had not identified what were the best interests of the child, nor had it treated the factor as a primary consideration. The Full Court in Wan also applied the earlier Full Court decision in Vaitaiki. In that case the appellant, who had three older children and three younger children, had been convicted of a number of offences and an order for his deportation had been made. The Full Court set aside the decision of the Tribunal because it failed to apply Teoh correctly. It should be noted that the Tribunal only had the benefit of the reasons of the Full Court of the Federal Court in Teoh v Minister for Immigration and Ethnic Affairs [1994] FCA 182; 49 FCR 409, but the High Court in Teoh expressed similar views to that of the majority in the Full Court when it upheld that Court's decision. At the second hearing before the Tribunal, the Tribunal decided that procedural fairness had been afforded to the appellant by the act of re-hearing. The Full Court in Vaitaiki set aside that second Tribunal decision. Burchett J expressed the test from Teoh in the following manner at 612: In Teoh, the majority of the High Court held, in respect of circumstances not relevantly distinguishable from the present, that if a decision were to be given by an administrator which did not accord with the principle that the best interests of any children concerned were to be a primary consideration, the administrator would first be required to give adequate notice and an opportunity for the presentation of a case against the taking of such a course. This, in the view of Mason CJ and Deane J (at CLR 291-2) was because Australia's ratification of the United Nations Convention on the Rights of the Child created a legitimate expectation, so as to attract the principle of natural justice, that administrators would act in conformity with the Convention … 66 Justice Burchett held that the Tribunal had not given the best interests of the appellant's children primary consideration, stating at 616: However, the tribunal did proceed to give consideration to the facts, and it is necessary to examine its further reasons to see whether, despite its protestations about the validity of its earlier reasons, and the statements to which I have referred, it did in reality take account of the children's best interests as it was required to do by law. In my opinion, it was certainly required to take them into account, at least as very significant matters, for more than one reason. In the first place, as no notice had been given within the meaning of the majority judgments in Teoh, it was required to take the best interests of the children into account as a primary consideration. That requirement and the legitimate expectation from which it sprang were reinforced, in the circumstances of the second hearing before the tribunal, by the fact that the earlier decision had been set aside, and the matter remitted for determination according to law, on the very basis that the law required, and the parties were agreed, that in the absence of notice to the contrary the best interests of the children must be treated as a primary consideration. There was no foundation for the tribunal's statement, which misunderstands Teoh that procedural fairness had been afforded to the applicant merely by the holding of a hearing. In addition, and for reasons explained by Gaudron J, at the least the substantive law required the interests of young children who were Australian citizens to be taken into account as very significant matters. The view should not be entertained that, when Parliament provided for the assertion of community interests under the former s 55, it excluded from those interests the well-being of the community's weakest and most vulnerable members, who are also its future. 67 Justice Branson agreed with Burchett J. Her Honour held at 630 that the proper focus of the Tribunal must be to identify the result in all the circumstances that would overall be conducive to the best interests of the child. 68 In the recent decision of DXQ16 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1184, Steward J held that the Tribunal in reviewing decisions of the Minister to cancel the appellants' visas under s 109 was bound to take into account the best interests of the appellants' two children. In coming to this conclusion, his Honour stated that he was bound by the decisions of Wan and Vaitaiki but noted at [34]–[35] that the Full Court in Vaitaiki may have expressed the principle more broadly than Mason CJ and Deane J in Teoh: The decisions of Wan and Vaitaiki bind me, although there may be a question as to whether Vaitaiki's precedential force is diminished in the event their Honour's reasoning relied upon an expression of principle that was agreed between the parties: Coleman v. Power (2004) 220 C.L.R. 1 at 44-45 [79] per McHugh J. In my very respectful view, on one possible view Vaitaiki misstates the principle to be derived from the judgment of Mason C.J. and Deane J. in Teoh. Their Honours in Teoh specifically did not state that a decision maker is bound to take into account the best interests of any children as a primary consideration. That was because Art. 3(1) did not (and does not) form part of the domestic law of Australia. This is made clear in the passage I have set out above from page 291 of the reasons. Rather, a decision maker is obliged to give notice if she or he intends to act inconsistently with the Convention. The giving of notice affords the applicant with an opportunity to answer it. In this way, the error in Teoh may be characterised as a breach of procedural fairness. Vaitaiki perhaps expresses the principle differently. Burchett J. decided that a decision maker was bound to take into account the best interests of the children, unless she or he had given notice that she or he would not do so. Branson J., perhaps on one view, went even further. Her Honour decided that a decision maker more generally was bound to consider the best interests of the children. Neither expression of the principle ostensibly requires the presence of a finding that a decision maker had first proposed to act inconsistently with the Convention; it was sufficient that she or he in fact had so acted. If that is so, it may be the case that this type of error should not really be characterised as a breach of procedural fairness; rather it appears to have transformed into an error of law arising from a failure to take into account a relevant consideration. A possible consequence of the way the test is expressed in Vaitaiki is that a decision maker who mistakenly fails in her or his reasons to consider the best interests of a child as a primary consideration, or who otherwise by her or his reasons is shown to have misunderstood that obligation, will still be found to have breached the rules of procedural fairness even though, in such a case, there is nothing which such a decision maker could relevantly give notice about. For example, a decision maker might earnestly seek to apply Art. 3(1) of the Convention, but fail to give the best interests of a child the correct degree of primacy. Based on Vaitaiki, such a decision maker may possibly have failed to provide procedural fairness, and will thus have erred at law. 69 In DXQ16, the Minister submitted that all of the decisions of this Court and of the Full Court relied upon by the appellants occurred in different statutory contexts where there was no equivalent to s 422B and s 425 of the Act. Section 425(1) states that the Tribunal must invite the applicant to appear before the Tribunal to give evidence and present arguments. Section 422B states that the Division in which s 422B is set out is taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with. In response, the appellants submitted that the Teoh ground fell within the Tribunal's obligation to afford procedural fairness in s 425 and that it followed that the argument did not offend the reach of s 422B. Alternatively, s 422B was expressly limited in its field of operation to the matters dealt with by Div 4 of Pt 7 of the Act. The Teoh ground was not one of those matters. The appellants relied on a statement by French J in WAJR v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 106; 204 ALR 624 at [58]–[59], a case which concerned a Tribunal which had not disclosed its concerns about the genuineness of certain documents to the applicant: Section 425 requires the tribunal to invite an applicant to give evidence and to present arguments relating to the issues arising in relation to the decision under review. On one view, the genuineness of the appellant's documentary evidence was an issue raised by the tribunal itself and of which the appellant was given no prior notice nor an opportunity to comment before the tribunal made its decision. If that characterisation be correct, then the tribunal's failure to invite the appellant to make submissions on whether the letters relied upon were genuine, or forgeries, or concoctions, was a failure to comply with s 425. A failure to conduct a hearing of the kind contemplated by s 425 in my opinion would amount to a failure to comply with the obligation imposed by that section upon the tribunal to invite an applicant to participate in such a hearing. That obligation is so central to the conduct of the tribunal process that it necessarily conditions the power to make an adverse decision on review. A failure to comply with s 425 will therefore amount to jurisdictional error and be amenable to the issue of constitutional or prerogative writs on the principles set out in Plaintiff S157/2002 v Commonwealth (2003) 195 ALR 24. If it be the case that s 425 has no application to the issue raised in this appeal — that is the question whether the tribunal was obliged to invite comment on an adverse conclusion not implicitly or explicitly an issue in the hearing, then s 425 does not deal with that matter and the requirements of procedural fairness are not excluded in respect of it by s 422B. This may appear to apply a narrow construction to s 422B. 70 In finding that Teoh was applicable to decisions made under s 109 and setting aside the Tribunal's decision, Steward J said the following at [53]: In relation to the first ground, I have already mentioned that I consider myself bound to follow the decisions of this Court concerning what Teoh decided, including Vaitaiki. I also, very respectfully, consider that I should follow the reasoning of French J. in WAJR. The better view is that the Teoh ground, being part of the obligation to provide procedural fairness, is either subsumed within s. 425 or is not a matter dealt with by Div. 4 of Pt. 7 of the Act (although, I again mention that it may, on one view, possibly be odd to characterise the type of error identified in Vaitaiki as one going to procedural fairness). Finally, I do not consider that the fact that the statutory context before me differs from the statutory contexts considered in the decisions relied upon by the appellants relevantly affects how the Teoh ground should have been considered by the Tribunal. That is because there was no dispute before me that the decisions of the Tribunal were, to use the terminology of the Convention, actions concerning children. 71 The equivalent provisions to s 422B and s 425 which are applicable to the present appeal are s 357A and s 360 in Div 5 of Pt 5. I respectfully agree with his Honour's conclusions and also consider myself bound to follow the cases referred to by his Honour. Given the one-dimensional approach taken by the Tribunal to the assessment of the best interests of the child, explained above, the Tribunal has failed to consider properly the best interests of the child and has thus failed to afford Ms Promsopa the procedural fairness required by Teoh. Alternative bases for jurisdictional error 72 I also consider that the Tribunal breached the natural justice requirements afforded by Div 5 of Pt 5 of the Act by failing to have regard in its decision to the information provided by Ms Promsopa in response to its written invitation issued under s 359. The Tribunal was obliged to have regard to any information given in response to that invitation. As discussed above, the Tribunal in its assessment of the best interests of the child did not deal with Ms Promsopa's claims that: (a) The father of the child would not facilitate the relationship between her and the child if she were to go to Thailand without the child, and she would not be in a position to enforce the current orders if that occurred; and (b) The father of the child had in the past exposed the child to harm and risk and that there was therefore an ongoing risk of harm to the child by the father if the child were not to live with Ms Promsopa. 73 As identified by the primary judge, these matters fell within the ambit of the best interests of the child. They are matters which ought to have been considered in the Tribunal's assessment of the child's best interests. There was no apparent regard paid to them. To deal with the label "best interests of the child" is not to deal with the substance of the informing considerations that were contained within the information provided. 74 It may also be possible to characterise the Tribunal's error as legal unreasonableness in the sense discussed by Robertson J in Jabbour. The Tribunal considered the best interests of the child in the context of considering matters set out in the Department's Procedural Advice Manual PAM3 'General visa cancellation powers' (the Policy). The Policy, according to the Tribunal, "refers to matters such as the consequences of cancelling the visa, international obligations and any other relevant matters". The best interests of the child were considered as part of the Tribunal's assessment, in accordance with the Policy, of "whether any international obligations would be breached as a result of the cancellation, such as non-refoulement obligations, family unity principles or the obligation to consider the best interests of the child". Counsel for Ms Promsopa submitted that in failing to assess properly the best interests of the child the Tribunal failed to apply properly the Department's policy guidelines. 75 The remarks of Robertson J in [89]–[90] were made in the context of a request under s 351 for the Minister to substitute for a decision of the Tribunal a decision that is more favourable to the applicant. The relevant policy document was a Ministerial guideline which described the types of cases that should be referred to the Minister. It was in this context that Robertson J observed at [89] that "departure from non-statutory Ministerial guidelines may give rise to action liable to be set aside on judicial review, for error of law, where at least a decision-maker, not bound to apply a policy, purports to apply it as a proper basis for disposing of the case in hand or misconstrues or misunderstands it, so that what is applied is not the policy but something else". Justice Robertson's comments were obiter; his Honour ultimately concluded that legal unreasonableness was not made out. Justice Robertson's decision has been considered by other single judges of this Court in the context of reviews of decisions by delegates not to refer matters to the Minister for intervention under s 351 and s 417 of the Act: see Alfred v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 457 at [32] (Mortimer J); CPK20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 825 (Mortimer J); DUE20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1187 (O'Bryan J); and Davis v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 791 (O'Callaghan J). The application of his Honour's comments to other statutory contexts outside of the context of Ministerial intervention under s 351 and s 417 has not yet been considered. 76 In a number of these single judge reviews, the Minister has submitted that Robertson J's remarks in Jabbour were wrong, but the Court has found it unnecessary to consider the correctness of the decision: see DUE20 [2020] FCA 1187 where O'Bryan J held at [31] that it was unnecessary to consider the correctness of Jabbour because it could not be said that the delegate's decision lacked an evident and intelligible justification; and Davis [2020] FCA 791 where O'Callaghan J found at [6] that it was unnecessary to consider the correctness of Jabbour because the impugned decision of the delegate was not legally unreasonable. In Alfred, Mortimer J at [22] approved the principles stated in Jabbour in the context of a request for Ministerial intervention under s 417, but found no legal error in the delegate's decision. 77 Given my findings above in relation to the application of Teoh and s 359 of the Act, and the limited consideration and application so far of Robertson J's remarks in Jabbour, it is unnecessary to reach a conclusion that the failure to properly consider the best interests of the child in accordance with Department policy amounts to legal unreasonableness. Materiality 78 The Minister submitted that even if the Tribunal failed to have proper regard to the best interests of Ms Promsopa's child, that error is not material given [49] and [50] of the Tribunal's reasons. The Minister submitted that these paragraphs make it apparent that even if the best interests of Ms Promsopa's child did require that the visa not be cancelled, the Tribunal's view was that the nature of the breach and the circumstances in which non-compliance occurred outweighed other considerations, including the best interests of the child. Thus, the Minister submitted, the test outlined by the High Court in Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; 264 CLR 421 at [45], namely whether, if the decision-maker had not made the error identified, that "could realistically have resulted in a different decision", was not satisfied. 79 The Minister's submission fails to recognise that the weighing exercise undertaken by the Tribunal in [49] and [50] was done so in the context of the conclusions it made in respect of the content or substance of the child's best interests. As discussed above, the Tribunal failed to consider a number of important claims in its assessment of the best interests of the child; its conclusion as to what was in the best interests of the child, and the factors that informed that conclusion, were reached without considering all legally necessary material involved. When the Tribunal stated that it would place greater weight on the failure under s 104 "if it were wrong in this assessment" it was referring to its conclusion that the best interests of the child would not be adversely affected by the cancellation. This is not a reference to the correctness or otherwise of the underlying findings made by the Tribunal in relation to the content and circumstances affecting the child's best interests. The "best interests of the child" is not merely a label; it is an important subject informed by a number of different factors and considerations as to different aspects of the child's wellbeing, many of which were left unremarked upon by the Tribunal. The weight to be given to the best interests of the child is dependent upon the substance of those best interests and the factors that have informed them. The decision maker failed to address and to give proper consideration to aspects which properly informed the best interests of the child. The substance of the best interests is different to what the decision maker understood it to be. The weight to be given to those best interests in the Tribunal's ultimate assessment of whether to cancel the visa or not will also be different. It is in this respect that the Tribunal's error is material; if the Tribunal had properly addressed and then assessed the best interests of the child and had not, in its one-dimensional analysis, incorrectly ascertained the substance of the best interests, then the weight to be given to the best interests of the child in the Tribunal's ultimate reasoning and conclusion could have been different. 80 As submitted by counsel for Ms Promsopa, there is no indication by the Tribunal in [49] as to how or why it could be wrong about the best interests of the child, which factors in relation to the interests of the child militated in favour of not cancelling Ms Promsopa's visa and how or why this would be inevitably outweighed by the gravamen of Ms Promsopa's breach of s 104 of the Act. One is left to speculate as to how the various factors were weighed. If the assessment had been properly undertaken, and Ms Promsopa's claims had been taken into account in that assessment, then the child's best interests may have weighed more heavily against the cancellation of the visa and that could have realistically resulted in a different ultimate decision. 81 I also note the recent remarks of Bromberg and Mortimer JJ in DQM18 v Minister for Home Affairs [2020] FCAFC 110 at [113]–[117] about the application of the materiality test set out by the High Court in SZMTA where questions of weight are involved. It is unnecessary for my consideration to deal with those matters. 82 For these reasons, grounds 2A, 3A and 5A should also succeed. I make the following orders: 1. The appellant be granted leave to appeal. 2. The appeal be allowed. 3. The orders of the Federal Circuit Court of Australia made on 11 February 2020 be set aside and in lieu thereof it be ordered that: (a) The decision of the second respondent be set aside. (b) The matter be remitted to the second respondent for re-hearing and determination according to law. (c) The first respondent pay the applicant's costs. 4. The first respondent pay the appellant's costs of the application for leave to appeal and of the appeal. I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Chief Justice Allsop. Associate: Dated: 14 October 2020	18,968
federal_court_of_australia:fca/single/2009/2009fca0488	decision	commonwealth	federal_court_of_australia	text/html	2009-05-13 00:00:00	Media Ocean Limited v Optus Mobile Pty Limited (No 4) [2009] FCA 488	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2009/2009fca0488	2024-09-13T22:49:03.368494+10:00	FEDERAL COURT OF AUSTRALIA Media Ocean Limited v Optus Mobile Pty Limited (No 4) [2009] FCA 488 MEDIA OCEAN LIMITED and MEDIATEL AUSTRALIA PTY LIMITED v OPTUS MOBILE PTY LIMITED NSD 242 of 2009 PERRAM J 13 MAY 2009 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 242 of 2009 BETWEEN: MEDIA OCEAN LIMITED First Applicant MEDIATEL AUSTRALIA PTY LIMITED Second Applicant AND: OPTUS MOBILE PTY LIMITED Respondent JUDGE: PERRAM J DATE OF ORDER: 13 MAY 2009 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Paragraphs 21, 21A, 23 and 24 of the further amended statement of claim be struck out but that leave be granted to the applicants to replead those paragraphs in accordance with his Honour's reasons. 2. The applicants file and serve a second further amended statement of claim by 1 pm on Thursday 14 May 2004. 3. The applicants file and serve an affidavit explaining the need for expedition by 6 pm on Thursday 14 May 2009, and post a copy of that document in eCourt. 4. The respondent post in eCourt any submissions on expedition by 10 am on Friday 15 May 2009. 5. Costs be costs in the cause. 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 242 of 2009 BETWEEN: MEDIA OCEAN LIMITED First Applicant MEDIATEL AUSTRALIA PTY LIMITED Second Applicant AND: OPTUS MOBILE PTY LIMITED Respondent JUDGE: PERRAM J DATE: 13 MAY 2009 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The respondent ("Optus") applies to strike out paragraphs 21 to 25 of the further amended statement of claim. It is useful to begin with the complaints about paragraph 21A. That paragraph provides (particulars omitted): By reason of the preceding paragraph, at all material times up to 15 January 2009, Optus has impliedly represented to Plan Customers that Optus would apply the definition of "international call" and "international voice call" in the Post Paid Agreements, the Pre-paid Agreements, the SME Agreements and the Business Agreements consistently. 2 The words "would apply the definition" direct attention to paragraph 21 which is in these terms: Further or in the alternative to paragraphs 13 to 20 above, at all material times up to 15 January 2009, the Post Paid Agreements, the Pre-paid Agreements, the SME Agreements and the Business Agreements all contained the same definition of "international call" or "international voice call", namely the terms "international call" or "international voice call". 3 The answers to the particulars which have been provided make plain that the various agreements do not contain a definition of the expressions "international calls" or "international voice calls". Optus submitted that in those circumstances, there could hardly be an implied representation about the application of such a definition as alleged by paragraph 21A. 4 This submission is, I think, sound. Mr Kunç SC, who appeared with Mr Bova for the applicants, accepted that what paragraphs 21 and 21A were seeking to allege was that there was an implied representation that Optus would apply the terms "international call" and "international voice call" consistently between different classes of customers. In that circumstance, the appropriate course is to strike out paragraphs 21 and 21A and to grant leave to replead them so that they refer not to a "definition" but to a "term". 5 Mr McHugh SC, who appeared with Mr Potts for Optus, also submitted that there was a difficulty with the word "apply" in that a definition is not something which is susceptible to discretionary application. While there is force in that criticism, I think an allegation that Optus applied the terms differently is sufficiently clear to discharge the function served by a pleading, namely, putting the opposite side on notice of the case it has to meet. 6 It is then useful to turn to paragraph 21C. It provides (particulars omitted): Contrary to the representation pleaded in paragraph 21A above, Optus did not and continues not to apply the definition of "international call" and "international voice call" in the Post Paid Agreements, the Pre-paid Agreements, the SME Agreements and the Business Agreements consistently. 7 Mr McHugh's submission was that this could not render the representation as to non-differential treatment misleading or deceptive. Paragraph 21C does not, in terms, allege misleading or deceptive conduct. However, the matters referred to in paragraph 21C, amongst others, are said to constitute misleading and deceptive conduct in paragraph 23. The representation referred to in paragraph 21A was a representation as to future conduct, as the pleading in paragraph 21B shows, and the critical inquiry is, therefore, whether the representation was made with reasonable grounds rather than whether the representation ultimately turned out to be true. It follows that Mr McHugh's point is correct – paragraph 21C does not falsify paragraph 21B. 8 However, paragraph 21C is also picked up by paragraph 21D(a) which, by reason of paragraph 23A, results in paragraph 21C also alleging unconscionable conduct. Mr McHugh's objection, well-founded as it is in relation to misleading and deceptive conduct, does not operate in relation to unconscionability. 9 The proper course in those circumstances is not to strike out paragraph 21C itself but to strike out the reference to paragraph 21C in paragraph 23. Textually this cannot be achieved by the application of a blue pencil. I will, therefore, strike out paragraph 23 in its entirety but grant leave to replead it without the reference to paragraph 21C. 10 Optus submitted that the unconscionability claim in paragraph 23A could not, in any event, be permitted to go forward. That claim has four elements: first, it repeats the claim based on the representation as to the uniform application of the terms "international calls" and "international voice calls" (paragraph 21D(a)); secondly, it pleads the non-uniform application of those terms (paragraph 21D(a) and paragraph 21C); thirdly, it pleads a representation to customers that the terms would be approached in the same way (paragraph 21D(b)); fourthly, it pleads the differential treatment of customers. 11 At the pleading level, I accept that those allegations are arguably sufficient to constitute unconscionable conduct. It may well be unconscionable to treat customers who are relevantly similar in ways which are different vis-à-vis those customers. It is less clear that it is unconscionable vis-à-vis the applicants. However, Mr Kunç put the case on the basis that, as a trade competitor of Optus, his clients were entitled to restrain Optus' unconscionable conduct towards its own customers. He called in aid of that submission an analogy with the approach in trade competitor cases to s 52 of the Trade Practices Act 1974 (Cth) and passing off: see Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526. On that basis, it seems to me that the unconscionability claim may proceed. 12 However, Optus also submitted that there were difficulties with the loss and damage pleaded in paragraph 24. As explicated by particulars that loss and damage claim was as follows: The Applicants receive income by reference to the number of minutes Plan Customers use the Media Ocean Services. The Respondent's conduct has resulted in Plan Customers who were using or would have used the Media Ocean Services not doing so. But for the Respondent's conduct, Plan Customers who were using the Media Ocean Services would have continued to do so and other Plan Customers would have commenced using the Media Ocean Services, thereby resulting in a continued growth in the Applicants' business. Accordingly, the Applicants have suffered both a loss in income and have been deprived of additional income which they contend they would have earned as a result of foreseeable growth in the use by Plan Customers of the Media Ocean Services. 13 Assuming that the conduct of Optus was unconscionable in the sense discussed above leads to some difficulties at the level of causation. The measure of the applicants' loss should be the difference between its position but for the unconscionable conduct and its current position. This requires the positing of a counterfactual in which the unconscionable behaviour did not occur. Granted that the unconscionable behaviour is constituted by discriminatory treatment in the present case, the counterfactual would require the positing of a uniform approach to the terms "international calls" and "international voice calls". But a uniform approach does not tell one whether the particular customers who were charged the higher rate would have been charged a lower rate or vice versa – that is, all the customers might have been uniformly charged either the international rate or the local rate. If it be the latter then loss was suffered; if the former then it was averted. The pleading addresses this question obliquely by assuming that the allegation that the paying customers who have left the applicant's services (or who have not joined them) have done so because of a higher rate imposed. I would be prepared to read the particulars to paragraph 24 in that fashion. I do not think that, so understood, there is a pleading issue. 14 Nor am I prepared to strike out this claim because the process of calculation is to be left to expert evidence. The substance of the loss claimed is made clear: it is the loss of revenue from those who have ceased using the applicants' services and those who have never taken up such services. The precise manner in which such losses are actually proved is a matter for evidence; the applicants have signalled what is to be proved. 15 A more serious difficulty, however, afflicts the claim based on the representation as to consistent treatment in paragraph 21A. Had that representation not been made (the appropriate counterfactual) what would have occurred? This involves asking what would have occurred if Optus had not represented that it would approach the terms "international calls" and "international voice calls" uniformly. The applicants claim the lost revenue from those customers who, confronted with higher rates, have either ceased using the applicants' services or have never taken them up in the first place. But what would those customers have done if they had not been told that Optus would treat international calls and international voice calls uniformly? The answer is known – what caused the customers not to use the applicants' services was the fact that Optus charged them the higher rate. That fact occurs in the counterfactual scenario as well. What this means is that the cause of the applicants' loss is not the making of the representation about the uniform treatment but, instead, the actual way it charged customers. 16 The fallacy of this part of the applicants' claim is the assumption that an expectation measure of damages is appropriate in the context of a claim for misrepresentation under s 52, an assumption which, in the context of non-contractual misrepresentations, is not warranted: Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 503-504 [16]-[17] per Gaudron J (with whom Gummow J agreed at 525 [90]), 512-513 [41]-[42] per McHugh, Hayne and Callinan JJ. The applicants in a non-contractual misrepresentation case are entitled to damages to put them in the position they would have been in had the representation as to consistent treatment not been made. What they seek instead is damages to put them in the position they would have been in had the representation been true. Such a claim is not maintainable under s 52. 17 The loss and damage claim as pleaded in relation to misleading and deceptive conduct is clearly not maintainable. Accordingly I will strike out paragraph 24 and grant leave to replead the paragraph in terms which do not connect it to the claim based upon s 52. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 13 May 2009 Counsel for the Applicants: Mr F Kunç with Mr CN Bova Solicitors for the Applicants: Marque Lawyers Counsel for the Respondent: Mr RG McHugh SC with Mr JAC Potts Solicitors for the Respondent: Minter Ellison Date of Hearing: 12 May 2009 Date of Judgment: 13 May 2009	2,825
federal_court_of_australia:fca/single/2020/2020fca0383	decision	commonwealth	federal_court_of_australia	text/html	2020-03-23 00:00:00	DTF17 v Minister for Immigration and Border Protection (No 2) [2020] FCA 383	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2020/2020fca0383	2024-09-13T22:49:03.466284+10:00	FEDERAL COURT OF AUSTRALIA DTF17 v Minister for Immigration and Border Protection (No 2) [2020] FCA 383 Appeal from: Application for judicial review: DTF17 v Minister for Immigration and Border Protection [2018] FCCA 2666 File number: NSD 2152 of 2018 Judge: STEWART J Date of judgment: 23 March 2020 Catchwords: MIGRATION – application for the grant of constitutional writs under s 39B of the Judiciary Act 1903 (Cth) in relation to a decision of the Federal Circuit Court dismissing the applicant's application for extension of time under s 477 of the Migration Act 1958 (Cth) – whether judicial review application has merit – whether jurisdictional error by Federal Circuit Court– application dismissed Legislation: Judiciary Act 1903 (Cth) s 39B Migration Act 1958 (Cth) Part 7AA; ss 473CA, 473CB, 473DA, 473GB, 476A, 477 Cases cited: AAM17 v Minister for Immigration, Citizenship, Migrant Services & Multicultural Affairs [2019] FCA 1951 BVD17 v Minister for Immigration & Border Protection [2019] HCA 34 CNC15 v Federal Circuit Court of Australia [2018] FCAFC 204 CQR17 v Minister for Immigration & Border Protection [2019] FCAFC 61 CQX18 v Minister for Home Affairs [2019] FCA 386 CQX18 v MHA [2019] FCAFC 142; 372 ALR 137 DMI16 v Federal Circuit Court of Australia [2018] FCAFC 95; 264 FCR 454 DTF17 v Minister for Immigration & Border Protection [2019] FCA 2074 EMJ17 v Minister for Immigration & Border Protection [2018] FCA 1462 Kirk v Industrial Court of NSW [2010] HCA 1; 239 CLR 531 Minister for Immigration & Border Protection v AMA16 [2017] FCAFC 136; 254 FCR 534 Minister for Immigration & Border Protection v SZMTA [2019] HCA 3; 264 CLR 421 MZABP v Minister for Immigration & Border Protection [2015] FCA 1391; 242 FCR 585 MZABP v Minister for Immigration & Border Protection [2016] FCAFC 110 Re Minister for Immigration & Multicultural & Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 SZTES v Minister for Immigration & Border Protection [2015] FCAFC 158 SZVDC v Minister for Immigration & Border Protection [2018] FCAFC 16; 259 FCR 154 Tang v Minister for Immigration & Citizenship [2013] FCAFC 139; 217 FCR 55 Wei v Minister for Immigration & Border Protection [2015] HCA 51; 257 CLR 22 Date of hearing: 6 March 2020 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 39 Counsel for the Applicant: The applicant appeared in person with the assistance of an interpreter Counsel for the First Respondent: G Johnson Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: The second respondent filed a submitting notice save as to costs Counsel for the Third Respondent: The third respondent did not appear ORDERS NSD 2152 of 2018 BETWEEN: DTF17 Applicant AND: MINISTER FOR IMMIGRATION AND BORDER PROTECTION First Respondent IMMIGRATION ASSESSMENT AUTHORITY Second Respondent JUDGE STREET IN HIS CAPACITY AS A JUDGE OF THE FEDERAL CIRCUIT COURT Third Respondent JUDGE: STEWART J DATE OF ORDER: 23 March 2020 THE COURT ORDERS THAT: 1. The application filed on 15 November 2018 is dismissed. 2. The applicant is to pay the first respondent's costs. THE COURT DIRECTS THAT: 1. The Immigration Assessment Authority be removed as a respondent to the application. 2. The third respondent be renumbered as the second respondent and be re-styled as The Federal Circuit Court of Australia. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT STEWART J: Introduction 1 This is an application in which the applicant seeks the grant of the constitutional writs of mandamus and certiorari directed to the Federal Circuit Court of Australia so as to quash orders of that Court. Those orders were made on 13 September 2018 dismissing the applicant's application for an extension of time under s 477(2) of the Migration Act 1958 (Cth): DTF17 v Minister for Immigration & Border Protection [2018] FCCA 2666. The extension of time was sought for an application for judicial review of a decision of the Immigration Assessment Authority. That decision affirmed a decision of a delegate of the Minister for Immigration and Border Protection refusing to grant the applicant a Temporary Protection (Class XD) visa. 2 For the reasons given by Perram J in CQX18 v Minister for Home Affairs [2019] FCA 386 at [2]-[5], the Authority should not be a party to this proceeding, and neither should the judge of the Circuit Court who made the decision in question. The proper parties are the Minister and the Circuit Court. I will make directions accordingly. Background 3 The applicant is of Tamil ethnicity from Eastern Sri Lanka. He states that during the 2010 and 2011 elections in Sri Lanka he was a supporter of the Tamil National Alliance (TNA) political party. On multiple occasions the applicant was apparently threatened and harassed by members of a rival group, Tamil Makkal Viduthalai Pulikal (TMVP), as a result of his support of the TNA. He fears harm from the TMVP if he returns to Sri Lanka. 4 On 22 March 2017, a delegate of the Minister refused the applicant's claims for a Temporary Protection Visa. The matter was then referred to the Authority for review by operation of s 473CA of the Act. A representative of the Minister notified the Authority that s 473GB of the Act applied to a certain document because it was provided to the Minister in confidence. Before the Immigration Assessment Authority 5 On 13 July 2017, the Authority affirmed the decision of the delegate of the Minister to refuse the applicant a protection visa. The Authority accepted the applicant's claims that he was involved with the TNA and was threatened by members of the TMVP. The Authority also accepted that there is a real chance that the applicant will be targeted for serious harm by the TMVP if he returns to Eastern Sri Lanka. However, the Authority found that the applicant would not face a serious chance of harm outside of Eastern Sri Lanka and so would be able to relocate to another area of Sri Lanka and he would not be at risk. The Authority went on to reject the applicant's other claims on the basis of an imputed association with the Liberation Tigers of Tamil Eelam, discrimination as a Tamil, illegal departure, failed asylum seeker status and for complementary protection. Before the Federal Circuit Court 6 A proceeding in the Circuit Court for the quashing of the decision of the Authority was commenced on 21 August 2017. The proceeding was brought four days outside the 35 day period imposed under s 477(1) of the Act. The applicant sought an extension of time under s 477(2) of the Act. Section 477(2)(b) relevantly provides that an extension of time order is to be granted where the Circuit Court is satisfied that it is necessary in the interests of the administration of justice to make the order. 7 The matter was heard on 13 September 2018. The applicant explained to the Circuit Court judge that the reason for the delay was because of his financial difficulty in paying the Court filing fee. The Circuit Court judge found that the delay was not substantial. The judge went on to state that if there was otherwise merit in the grounds of the application, the Court would have extended time. 8 The prospective application for review advanced three unparticularised grounds of review: 1. Immigration Assessment Authority made a jurisdictional error. 2. The applicant family had lengthy involvement with LTTE. 3. If he send back he will be persecuted. (sic) 9 The judge dealt with each ground of the application in turn and ultimately determined not to grant an extension of time by reference to the lack of sufficient merit in the grounds advanced in the application. For each ground the Circuit Court judge stated that the relevant ground "lacks sufficient merit to make necessary an extension of time in the interests of the administration of justice." 10 Orders dismissing the extension of time application were made on 13 September 2018. Reasons for judgment were also delivered orally on 13 September 2018 but, as will be seen, written reasons were not published until 14 December 2018. Judicial Review Proceedings 11 The judicial review application in this Court was filed on 15 November 2018, together with an affidavit. The affidavit identifies two grounds of review, namely: Ground One: Jurisdictional Error – The primary judge erred by failing to give and/or publish reasons for dismissing the Applicant's Application for an extension of time leading to a conclusion that the primary judge failed to consider the Applicant's application and as such failed to exercise jurisdiction. Particulars a. On 13 September 2018, the Primary Judge made orders dismissing the Applicant's application for an extension of time in the Matter. On 4 October 2018, the Primary Judge's Associate advised the Applicant via his counsel that the reasons will be published in 2-4 weeks. As of the date of this application, the Primary Judge has not published the reasons for dismissing the Matter. Ground Two: Jurisdictional Error – The Primary Judge failed to consider or find that the Authority failed to turn its mind to whether it thinks it appropriate to disclose any matter contained in the 473GB certificate to the referred applicant and as such failed to exercise the discretionary powers conferred on it pursuant to s 473GB(3) within the bounds of legal standard of reasonableness. Non-disclosure of the existence of the certificate and the factors that influenced the exercise of its discretion under 473GB(3), undermined the Applicant's participation in the proceeding such that the Applicant was denied procedural fairness, leading to an Authority decision that was plainly unjust and lacking an evident and intelligent justification. Particulars a. The Certificate was issued on 23 March 2017 [CB 224]. The Certificate was review material and the Authority had regard to Certificate. b. The Authority has a discretion whether or not to disclose the certificate under section 473GB(3). Consequently, the Authority was required to effect a satisfactory compromise between the demands of disclosure and the need for confidentiality. The Authority exercised its discretion under 473GB(3) unreasonably in that it failed to disclose the existence of the certificate or the factors that influenced the exercise of its discretion. (sic) 12 By s 476A(3)(a) of the Act, no appeal lies to this Court against the order of the Circuit Court under s 477(2) to refuse the application for an extension of time. It is doubtless for that reason that the applicant has been forced instead to seek relief by way of review of the decision of the Circuit Court in the original jurisdiction of this Court under s 39B(1) of the Judiciary Act 1903 (Cth). As will be seen, the absence of an appeal procedure, whether by way of right or only by leave, is relevant to the applicant's first ground of review. 13 The jurisdiction of this Court to hear and determine an application under s 39B(1) of the Judiciary Act for review of a decision of the Circuit Court under s 477 of the Act was confirmed in Tang v Minister for Immigration & Citizenship [2013] FCAFC 139; 217 FCR 55 at [11]. 14 Jurisdictional error comprises the principal basis on which the remedies provided in s 39B(1) of the Judiciary Act will issue: Kirk v Industrial Court of NSW [2010] HCA 1; 239 CLR 531 at [56]); DMI16 v Federal Circuit Court of Australia [2018] FCAFC 95; 264 FCR 454 at [38]. Because an application under s 39B(1) of the Judiciary Act is not an appeal, its success depends upon the applicant being able to demonstrate jurisdictional error on the part of the Circuit Court judge; it will not suffice to demonstrate any jurisdictional error on the part of the Authority as may be sufficient for an appeal: SZTES v Minister for Immigration & Border Protection [2015] FCAFC 158 at [50]. 15 On 6 December 2019, the date previously listed as the hearing date, I heard an application by the applicant for an adjournment. On that date I delivered judgment in DTF17 v Minister for Immigration & Border Protection [2019] FCA 2074 granting an adjournment and relisting the matter for hearing on 6 March 2020. The procedural history of the matter and the reasons for its delay since 2018 are set out in the reasons for that judgment. 16 By the time the matter came on for hearing again on 6 March 2020, the applicant had not amended his grounds of review. He appeared before me self-represented with the assistance of an interpreter who interpreted between the English and Tamil languages. Ground 1: Publishing of reasons 17 On 14 December 2018, the Circuit Court judge published written reasons for the decision made on 13 September 2018 to dismiss the application. The reasons had been delivered ex tempore when the orders were announced. Even if there was some general basis for the absence of the publication of reasons within a certain timeframe constituting jurisdictional error, upon publication the materiality of such a ground fell away, c.f. CQX18 v Minister for Home Affairs [2019] FCA 386 per Perram J at [15]-[19]. Put differently, although the Circuit Court's reasons had not been published at the time the review application was filed on 15 November 2018, they were published approximately a month later which event overtook the complaint that no written reasons had been furnished. 18 Although not specifically raised by ground 1, in fairness to the applicant, who was self-represented before me, I will also consider whether the late publication of the written reasons was a denial of procedural fairness. 19 Since there was no possibility of appealing against the judgment of the Circuit Court, the late publication of reasons cannot have affected any ability to frame an appeal within any applicable time limit. There is nothing before me to suggest that the kind of issues that arose in AAM17 v Minister for Immigration, Citizenship, Migrant Services & Multicultural Affairs [2019] FCA 1951 or CQX18 v MHA [2019] FCAFC 142; 372 ALR 137 arise in this case. 20 In short, I do not see any realistic basis for it to be contended that the lateness of the provision of written reasons gives rise to any jurisdictional error in the nature of procedural unfairness. 21 In the circumstances, review ground 1 must fail. Ground 2: The s 473GB Certificate 22 The s 473GB certificate ground was not advanced by the applicant in the Circuit Court. The Circuit Court judge was thus not in a position to consider whether jurisdictional error on the part of the Authority arose from the non-disclosure by the Authority of the s 473GB certificate in his consideration of the extension of time application. 23 The applicant asserts that the Circuit Court failed to consider, or find, that the Authority failed to turn its mind to the disclosure of the s 473GB certificate and failed unreasonably to exercise its discretionary powers under s 473GB(3). The applicant asserts that he was denied procedural fairness as a consequence. 24 Under s 473CB(1)(c) of the Act, the Secretary to the Minister must provide to the Authority any material in the Secretary's possession or control which is considered by the Secretary to be relevant to the review. 25 The Minister concedes in this case that neither the s 473GB certificate, nor the document identified in the certificate (an identity assessment form relating to the applicant) were provided to the Authority by the Secretary as required under s 473CB of the Act. 26 The Minister concedes that he cannot maintain an argument that the Authority considered exercising its discretion under s 473GB(3) of the Act, as it had neither the relevant certificate nor the identity assessment form in its possession. As the Authority was never provided with the certificate or the identity assessment form, the occasion for the exercise of the discretion under s 473GB(3) never arose. 27 This review ground will be established if the Circuit Court judge was bound by procedural fairness to have regard to the failure of the Authority to inform the applicant of the certificate when the Circuit Court exercised jurisdiction under s 477(2) of the Act. Section 477(2) of the Act does not expressly state what factors needed to be considered, either in considering the interests of the administration of justice, or in the exercise of the discretion: SZTES at [29]. It is clear that under s 477 of the Act a relevant factor to the determination by the Circuit Court to grant an extension of time includes whether the applicant has demonstrated, at an fairly impressionistic level, that the proposed grounds of review are reasonably open: MZABP v Minister for Immigration & Border Protection [2015] FCA 1391; 242 FCR 585 at [62]-[63] (approved on appeal in MZABP v Minister for Immigration & Border Protection [2016] FCAFC 110 at [38] and in CNC15 v Federal Circuit Court of Australia [2018] FCAFC 204 at [39]-[40]). 28 The applicant's argument is essentially that had he known about the s 473GB certificate at the time of his application before the Circuit Court he would have argued that there was jurisdictional error in the Authority because he had not been made aware of the existence of the certificate by the Authority and was thus denied procedural fairness by the Authority (see SZVDC v Minister for Immigration & Border Protection [2018] FCAFC 16; 259 FCR 154 at [69]). The applicant submits the denial of the opportunity to make this argument out as reasonably open before the Circuit Court was thus a denial of procedural fairness. 29 However, whether or not that is so depends on whether the argument could possibly have been successful before the Circuit Court, i.e. could 'practical injustice' have resulted? See Re Minister for Immigration & Multicultural & Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at [37]-[38]. 30 The question then becomes whether, realistically, the Authority's decision was affected by jurisdictional error due to a failure by the Secretary to provide to the Authority relevant material as required under s 473CB of the Act. 31 The point at which the Secretary must form a state of mind of relevance as to the applicable documents for the purposes of s 473CB(1)(c) is at the time of referral of the matter to the Authority: Minister for Immigration & Border Protection v AMA16 [2017] FCAFC 136; 254 FCR 534 at [73]; EMJ17 v Minister for Immigration & Border Protection [2018] FCA 1462 at [41]. 32 The identity assessment form is a Department form which outlines various findings of an assessing Identity Officer in relation to the applicant. The form records that based on research and interview the assessment of the applicant's identity is "Identity as claimed". It could only have been relevant to the issue of the applicant's identity – which was not a matter of any dispute before the Authority. 33 A breach of procedural fairness does not amount to jurisdictional error unless it is material, and it can only be material to a decision if compliance could realistically have resulted in a different decision: Minister for Immigration & Border Protection v SZMTA [2019] HCA 3; 264 CLR 421 at [2]-[3], [45]. The question of the materiality of the breach is an ordinary question of fact in respect of which the applicant bears the onus of proof: SZMTA [4], [46]. 34 I find that the identity assessment could not have made any difference to the Authority's decision. The identity assessment form is an innocuous document that is not relevant to any issue that the Authority considered and decided adversely to the applicant. 35 The Minister also concedes that the s 473GB certificate itself was not given to the Authority. Again, the Minister submits that even on the assumption of relevance under s 473CB(1)(c) of the Act, in the circumstances, any non-compliance by the Secretary in providing the certificate to the Authority was not material having regard to the issues on the review. 36 To the extent that s 473GB(2) of the Act was engaged in the present case and the Authority had been aware of the s 473GB certificate, the High Court in BVD17 v Minister for Immigration & Border Protection [2019] HCA 34 at [2] and [35] has confirmed that procedural fairness does not oblige the Authority to disclose the fact of notification under s 473GB(2)(a) to a referred applicant in a review under Pt 7AA. 37 In the circumstances, even if the point relying on the s 473GB certificate had been raised before the Circuit Court, it could not have succeeded. Ground 2 must accordingly fail. The applicant's new document 38 The applicant tendered a letter dated 19 December 2019 addressed to "To Whom It May Concern". It is, in effect, a positive letter of reference as to the applicant's character, and it asserts that he will be in danger if he returns to Sri Lanka. The applicant said that the letter is from his Village Headman. As compelling as the letter is, it has no relevance to the matters that I am called upon to decide – it is not relevant to the question of whether the Circuit Court judge was in jurisdictional error. Conclusion 39 In the circumstances, the application falls to be dismissed. The costs should follow the result. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stewart. Associate: Dated: 23 March 2020	4,899
federal_court_of_australia:fca/single/2019/2019fca1842	decision	commonwealth	federal_court_of_australia	text/html	2019-11-12 00:00:00	The Wilderness Society (Tasmania) Inc v Minister for the Environment [2019] FCA 1842	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca1842	2024-09-13T22:49:03.572717+10:00	FEDERAL COURT OF AUSTRALIA The Wilderness Society (Tasmania) Inc v Minister for the Environment [2019] FCA 1842 File number: TAD 45 of 2018 Judge: MORTIMER J Date of judgment: 12 November 2019 Catchwords: ENVIRONMENT LAW – application for judicial review of a referral decision made under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) – where a delegate of the Minister decided under s 75 of the Act that the proposed action was not a "controlled action" – where delegate adopted Departmental brief as reasons for decision – whether delegate's decision involved an error of law or misdirection due to erroneous view of Act's requirements, including task under s 75 – where delegate relied on assessment of proposed action conducted by the Tasmanian Parks and Wildlife Service under the "Reserve Activity Assessment" (RAA) process – where delegate took into account mitigation and avoidance measures proposed by proponent under RAA process in deciding action was not a "controlled action" – whether non-compliance with s 77A of the Act – whether delegate was required to consider whether to exercise power in s 74A of the Act before making decision under s 75 – application allowed Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5, 11, 13 Environment Protection and Biodiversity Conservation Act 1999 (Cth) ss 12, 15A, 18, 18A, 19, 32, 33, 38, 74A, 74AA, 75, 77, 77A, 85, 131A, 134, 321, 322 Environment Protection and Biodiversity Conservation Regulations 2000 (Cth) reg 4.03, Schs 2, 5 Environmental Management and Pollution Control Act 1994 (Tas) Land Use Planning and Approvals Act 1993 (Tas) National Parks and Reserve Management Act 2002 (Tas) ss 19-28, 48, 51 State Policies and Projects Act 1993 (Tas) Convention for the Protection of the World Cultural and Natural Heritage, opened for signature 16 November 1972,1037 UNTS 151 (entered into force 17 December 1975) arts 1, 2 Cases cited: Akpata v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 65 Animals' Angels e.V. v Secretary, Department of Agriculture [2014] FCAFC 173; 228 FCR 35 Anvil Hill Project Watch Association Inc v Minister for Environment and Water Resources [2008] FCAFC 3; 166 FCR 54 Ayan v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 7; 126 FCR 152 Friends of Leadbeater's Possum Inc v VicForests [2018] FCA 178; 260 FCR 1 Minister for Environment and Heritage v Queensland Conservation Council Inc [2004] FCAFC 190; 139 FCR 24 Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; 241 CLR 594 Queensland Conservation Council Inc v Minister for the Environment and Heritage [2003] FCA 1463 Secretary, Department of Primary Industries, Parks, Water and Environment v Tasmanian Aboriginal Centre Incorporated [2016] FCAFC 129; 244 FCR 21 Stambe v Minister for Health [2019] FCA 43; 364 ALR 513 Tarkine National Coalition Inc v Minister for the Environment [2015] FCAFC 89; 233 FCR 254 Tasmanian Aboriginal Centre Incorporated v Secretary, Department of Primary Industries, Parks, Water and Environment (No 2) [2016] FCA 168; 215 LGERA 1 Triabunna Investments Pty Ltd v Minister for Environment and Energy [2019] FCAFC 60 Triabunna Investments Pty Ltd v Minister for the Environment and Energy [2018] FCA 486; 160 ALD 243 Yasmin v Attorney-General of the Commonwealth of Australia [2015] FCAFC 145; 236 FCR 169 Date of hearing: 26 March 2019 Date of last submissions: 24 May 2019 Registry: Tasmania Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 182 Counsel for the Applicant: Mr E M Nekvapil Solicitor for the Applicant: Environmental Defenders Office (Tasmania) Inc Counsel for the Respondent: Ms A Mitchelmore with Ms F I Gordon Solicitor for the Respondent: Australian Government Solicitor ORDERS TAD 45 of 2018 BETWEEN: THE WILDERNESS SOCIETY (TASMANIA) INC Applicant AND: MINISTER FOR THE ENVIRONMENT Respondent JUDGE: MORTIMER J DATE OF ORDER: 12 november 2019 THE COURT ORDERS THAT: 1. The notice signed on 31 August 2018 and given and published under s 77 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act), relating to the decision made on 31 August 2018 by the respondent's delegate that the action the subject of the EPBC Act Referral 2018/8177 is not a controlled action, be set aside with effect from the date of these orders. 2. On or before 4 pm on 26 November 2019, the parties are to submit to the Court a proposed form of order, reflecting the Court's reasons for judgment and which directs the respondent about the form of notice which must be issued under s 77 of the EPBC Act, and the time in which the notice should be published. 3. If a proposed form of order cannot be agreed between the parties, on or before 4 pm on 26 November 2019, the parties are each to submit a proposed form of order, together with submissions of not more than two pages as to why the Court should accept the form of order proposed. 4. The parties are to confer and attempt to agree on any further appropriate relief in respect of ground 3 of the application for judicial review, taking into account the Court's reasons and the relief granted in relation to ground 2. 5. Any agreed submissions as to any further relief in respect of ground 3 are to be filed on or before 4 pm on 26 November 2019. 6. In the absence of an agreed position: (a) the applicant is to file and serve submissions on the appropriate form of relief in respect of ground 3, limited to five pages, on or before 4 pm on 3 December 2019; and (b) the respondent is to file and serve submissions on the appropriate form of relief in respect of ground 3, limited to five pages, on or before 4 pm on 10 December 2019. 7. Subject to any further order, the question of any further appropriate relief will be determined on the papers. 8. The respondent pay the applicant's costs of and incidental to the proceeding, to be fixed by way of an agreed lump sum. 9. In the absence of agreement as to an appropriate lump sum for the applicant's costs, the question of an appropriate lump sum be referred to a Registrar. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MORTIMER J: 1 This is an application for judicial review of a decision of a delegate of the respondent made on 31 August 2018. By that decision, the delegate determined that a proposed action by Wild Drake Pty Ltd (Wild Drake) was not a controlled action, for the purposes of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). 2 For the reasons set out below, the application substantially succeeds. Factual background 3 The factual background to the delegate's decision is not in dispute. The material which was before the delegate was also not in dispute, including material about the nature and content of the proposed action. The respondent's submissions also set out some of the factual background, and the applicant did not appear to cavil with that summary. I have based this section on the respondent's submissions and the material before the delegate. 4 Wild Drake proposed to construct and operate a small-scale tourist operation on Halls Island, Lake Malbena, which is north-east of Derwent Bridge, Tasmania. Halls Island is located within the Walls of Jerusalem National Park in the Meander Valley region of the Tasmanian Wilderness World Heritage Area, which I abbreviate in these reasons to "TWWHA". 5 In a summary prepared for the delegate, the action proposed by Wild Drake was described in the following terms: Wild Drake Pty Ltd (the proponent) is proposing to develop a small tourism operation on a private leasehold property on Halls Island in Lake Malbena in the Tasmanian Wilderness World Heritage Area (TWWHA). The proposal would see the establishment of a standing camp to accommodate a maximum of six visitors for four day stays. Visitors would arrive by helicopter from Derwent River Bridge and there would be a maximum of 30 tours per year. Activities proposed include kayaking, hill-walking, bushwalking, cultural interpretation, wildlife viewing and citizen science opportunities. 6 For transport, it was proposed that there be constructed a helicopter landing site on the mainland opposite Lake Malbena, in the TWWHA Central Highlands region and outside of the Walls of Jerusalem National Park. It was proposed visitors would walk approximately 100 m from the helipad to the edge of Lake Malbena and would cross the lake in a row boat to Halls Island. 7 The information given to the delegate expressly noted that the proponent had plans to develop a "second stage" of its tourism operation. That "second stage", so described, involved the development of walking routes to the nearby Mt Oana, as well as to an Aboriginal heritage site. Wild Drake planned to conduct what it described as "cultural interpretation activities" at this site. As I note later on in these reasons, the "two stage" concept originated in an assessment of Wild Drake's proposal by the Tasmanian Parks and Wildlife Service (PWS). 8 Wild Drake's own description of its proposed action (which encompassed what subsequently became identified as "stage one" and "stage two") was: 1. Proposal: To construct and operate a small-scale Standing Camp on Halls Island, Lake Malbena, Tasmania. The primary theme of the project is one of cultural immersion, built around the Reg Hall and Walls of Jerusalem National Park narrative. This theme is to be enhanced by world-class interpretation of the listed Outstanding Universal Values found in the World Heritage area. Key target markets will be discerning travellers looking for new discoveries, deep heritage and strong narratives, natural encounters and lean luxury. Activities will include kayaking, hill-walking, bushwalking, cultural interpretation, wildlife viewing, and the chance to participate in choreographed 'citizen-science' style field trips with guest experts in the fields of science, art and culture. On-island activities will include continuing with the sixty-year history of poetry and art on the island, astronomy, botany, bird watching, and flora and fauna interpretation. The small-scale, niche operation is aimed at the very top-end of the market. Ensuring that the proposed activities and outcomes are sensitive to the environmental and social expectations of operations in the TWWHA (Tasmanian Wilderness World Heritage Area), the scale will be extremely low: a maximum of 30 trips annually, with just 6 customers per trip. 9 Activities in, and the protection and conservation of, the TWWHA are regulated by the Tasmanian Wilderness World Heritage Area Management Plan (2016). This Management Plan was developed under the National Parks and Reserve Management Act 2002 (Tas) (NPRM Act), and the brief to the delegate described the Management Plan as intended to "meet the requirements of the EPBC Act with respect to management plans for World and National Heritage properties". A management plan for the TWWHA is required by the Management Principles set out in Sch 5 of the Environment Protection and Biodiversity Conservation Regulations 2000 (Cth) (Regulations). The Management Plan divides the TWWHA into four area Management Zones: Visitor Service, Recreation, Self-Reliant Recreation (SRRZ) and Wilderness. 10 Wild Drake holds a lease over Halls Island. Its lease conditions require approval to be granted before commencing the proposed tourism operation within the SRRZ area. Permissible activities within the SRRZ include: commercial aircraft landing, bushwalking, camping, commercial tourism, standing camp accommodation, kayaking and the use of non-motorised vessels. Wild Drake also holds a licence issued by the PWS. The licence conditions also require Wild Drake to secure approval before commencing the proposed tourism operation. 11 The approval was expressed in both cases to relate to approval granted by the PWS under what is called a "Reserve Activity Assessment" (RAA). This is an administrative policy, managed by the PWS and referred to in the TWWHA Management Plan. It has no apparent statutory basis. The applicant made something of its administrative status, especially in relation to ground 1. I return to that issue in my consideration of ground 1 below. 12 A project can be assessed under the RAA process at any of four levels. Wild Drake's proposal was assessed at "level three", and therefore a number of additional assessments and studies were required to assess the potential impacts of the proposal. The mitigation measures Wild Drake was required to apply as a result of the PWS assessment, and the modifications to some of its operations (such as helicopter routes, to which I return below), were put to the delegate as matters that Wild Drake would undertake to implement, in order to mitigate or avoid any likely impacts on matters of national environmental significance. That Wild Drake's proposal was structured and considered by the delegate in this way also forms part of the applicant's judicial review challenge, especially on ground 1. 13 The RAA process required there to be an EPBC Act referral by the proponent. This is consistent with the terms of cl 3.02 of Sch 5 of the Regulations, which provides: Before the action is taken, the likely impact of the action on the World Heritage values of the property should be assessed under a statutory environmental impact assessment and approval process. 14 This was how Wild Drake came to make a self-referral to the Minister under the EPBC Act. The referral was considered and determined under s 75(1) of the EPBC Act by a delegate of the Minister. There was no dispute that the delegate was lawfully empowered to make a decision of this kind under s 75(1) of the EPBC Act. The brief to the delegate 15 The delegate received a detailed brief, with a large number of attachments. It is this brief, and its attachments, which form the material against which the applicant's grounds of judicial review are to be considered. It is necessary to describe what was in the brief to the delegate. 16 At the start of the brief, under the heading "Key Issues", were the following statements, reflecting the views and conclusions of those within the Department who were responsible for drafting the brief and recommendations to the delegate: The proposal is not likely to have a significant impact on matters of national environmental significance (MNES) including the: • Values of the Tasmanian Wilderness World and National Heritage Area (TWWHA); • Tasmanian Wedge-tailed Eagle (Aquila audax fleayi) (endangered); and • Alpine Sphagnum Bogs and Associated Fens (endangered) threatened ecological community (TEC). The proposal is locally contentious, with 132 individual public comments and 808 campaign submissions received on the referral. 17 Having described the location, and the proposed helicopter access by guests, in the terms I have set out at [5] above, the brief then stated: The proposed action involves the construction and operation of a standing camp over approximately 800m2 consisting of three pre-fabricated twin-share accommodation structures, (approx. 4m x 3m), communal kitchen (approx. 8m x 4m), associated buildings with complete-capture pod systems for removal of grey water and sewage, gas or electric heating, board walks between huts where required and non-motorised transport on Lake Malbena. Helicopter activities relating to construction, maintenance and re-supply of the standing camp will occur within the standing camp footprint, utilising an area of sheet rock for depositing and collection of goods via slings. The proposed tourist activities include kayaking, walking, cultural interpretation and wildlife viewing. 18 In describing the island itself, the brief set out one of the aspects of the island which was material to the referral; namely, the flora which was present: Halls Island, an area of approximately 10 ha, is located within Lake Malbena which is one of many lakes in the high alpine plateau area of the TWWHA. Vegetation comprises Eucalyptus subcrenulata forest and woodland (7.8 ha), highland low rainforest and scrub (1.18 ha), lichen lithosphere (0.18 ha), Athrotaxis selaginoides rainforest (0.03 ha) and Sphagnum peatland (0.6 ha). The Sphagnum peatland meets the definition for the EPBC Act listed endangered Alpine Sphagnum Bogs and Associated Fens TEC. 19 The recommendation made in the brief to the delegate was in the following terms: Under section 75 of the EPBC Act you must decide whether the action that is the subject of the proposal referred is a controlled action, and which provisions of Part 3 (if any) are controlling provisions for the action. In making your decision you must consider all adverse impacts the action has, will have, or is likely to have, on the matter protected by each provision of Part 3. You must not consider any beneficial impacts the action has, will have or is likely to have on the matter protected by each provision of Part 3. The Department recommends that you decide that the proposal is not a controlled action, because there are not likely to be significant impacts on any controlling provisions. The reasons for this recommendation are detailed further below. 20 The brief then set out the matters of national environmental significance which those Departmental officers drafting the brief had concluded were not engaged by the action because of any significant impact, or likelihood of significant impact, including: (a) the Tasmanian Wedge-tailed eagle, a listed threatened species; (b) the Alpine Sphagnum Bogs and Associated Fens TEC, a listed threatened ecological community; and (c) particular cultural and natural listed values for the TWWHA as a World Heritage area. 21 The brief set out, relevantly for each of these three matters, a number of "avoidance and mitigation measures" which the proponent had either proposed, or agreed, to undertake. In relation to the listed cultural values of the TWWHA, the brief also referred to consultation with the Tasmanian Aboriginal Heritage Council (AHC) about the proposed "stage two" of the tourist operation, which included visits to sites of cultural significance. However, the brief did not evaluate the impacts of this aspect of the operation: The Department notes that the stage 2 proposal to undertake cultural interpretation activities at an Aboriginal heritage site (away from the proposal site) is not part of the referred action. 22 This conclusion by the Department appears to have flowed from the division imposed during the RAA process. It is clear from the terms of this conclusion that no consideration was given to the potential application of s 74A of the EPBC Act. The absence of such consideration gives rise to ground 3 of the judicial review application. 23 The values and species listed at [20] above are the ones which have relevance to the applicant's grounds of judicial review. There were other listed threatened species mentioned in the brief, but none which are relevant to the grounds of judicial review, in the sense that no error is asserted in the delegate's consideration of the risks to those species. The delegate's decision 24 On 31 August 2018, the delegate signed the second page of the brief, indicating he agreed with the recommended decision. In correspondence to Wild Drake, two federal Ministers with relevant portfolios, the Director of the Tasmanian Environment Protection Authority (EPA) and the General Manager of the Tasmanian Department of Primary Industries, Parks, Water and Environment, the delegate described his decision that the proposed action by Wild Drake was not a controlled action as meaning the action: … does not require further assessment and approval under the EPBC Act before it can proceed. 25 In signing off on the brief, the delegate also indicated his agreement with the draft notice to be published under s 77 of the EPBC Act, constituting the public notification of his decision. There is no dispute that this was in fact the form in which the s 77 notice was published. Certain aspects of that notice should be set out. 26 The proposed action was described in the following terms: To construct and operate a small-scale tourist operation, including a standing camp on Halls Island, Lake Malbena, and helicopter access, approximately 20 kilometres north-east of Derwent Bridge, Tasmania, as described in the referral received by the Department on 28 March 2018… 27 The notice then indicated the proposed action was not a controlled action. No "particular manner" conditions were placed on Wild Drake in the notice, that being an available power under s 77A(1) of the EPBC Act, to which it will be necessary to return later in these reasons. 28 On 5 September 2018, the applicant sought reasons for the decision. 29 The delegate replied in a letter received by the applicant on 19 September 2018, which stated: My decision was based on my consideration of the referral decision brief, dated 31 August 2018, for the Halls Island project which was prepared by the Department of Environment and Energy. I considered that the information in this brief was sufficient for me to make a referral decision that the Halls Island project was not a controlled action. This correspondence and the brief are my statement of reasons. In making my decision, I considered all the information and matters contained in the briefing material referenced above. I agreed with the Department's advice, findings of fact and reasoning iterated in the briefing. On that basis, I decided that the Halls Island project was not a controlled action. (Footnote omitted.) The delegate's "statement of reasons" 30 While it is not a matter which arises directly from any of the applicant's grounds of review, it is appropriate to say something about this method of complying with what was recognised by the delegate to be his statutory obligation pursuant to s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). There may be no difficulty in a decision-maker adopting, as her or his own, reasons that have been drafted by another person, and indeed reasons which form part of a "brief" put before that decision-maker for the purpose of that person determining how, or whether, to exercise a statutory power: see generally my observations in Stambe v Minister for Health [2019] FCA 43; 364 ALR 513 at [67]-[75], and [85]. What is not, however, acceptable in my opinion is for the decision-maker to use this method and, as part of this method, to refer to documents which the person requesting the reasons cannot access. That is what occurred here, on the evidence of Mr Bayley for the applicant: ten out of the 20 attachments to the brief were not publicly available. Mr Bayley subsequently made a Freedom of Information request for "various documents relating to the Referral and the Decision", which I infer was made in order to obtain copies of those attachments not made available to the applicant. The request had not been responded to by the time the applicant issued proceedings. Of course, the ADJR Act contains a time limit for the issuing of proceedings as of right: see s 11. Frequently, a statement of reasons is an integral part of any judicial review application under the ADJR Act: that is one of the core purposes of s 13. 31 The statutory purpose was frustrated in this case. Section 13 requires a decision-maker to set out her or his findings on material questions of fact. It is difficult to see how that obligation was complied with in this case. It is even more difficult to see how it was complied with in circumstances where only some of the documents contained in the delegate's brief were available to the applicant. The brief contained recommendations only, which cannot be understood without reference to the source documents. At the very least, it would not be appropriate for this method to become an accepted one, unless the person requesting the reasons is provided with all the documents before the delegate in her or his "brief", in circumstances where the contents of the brief are asserted to have been adopted by the delegate and to reflect her or his reasons. However, for the following reasons, the practice adopted by the delegate may be problematic in any event. 32 There are further potential difficulties which need not be resolved, as the matter proceeded, under an apparently common position, that the contents of the letter, read with the brief, satisfied the applicant's request for reasons under s 13 of the ADJR Act. Whether or not that common ground is consistent with authorities of this Court, and of the High Court, is not a matter the Court has been asked to determine, but see Ayan v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 7; 126 FCR 152 at [53]-[57] (Allsop J, Jacobson J agreeing) and Akpata v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 65 at [52]-[59] (Lander J, Carr and Sundberg JJ agreeing). One factual matter which needs to be disentangled 33 The parties took as their starting point what was set out in the Department's brief to the delegate, and which the delegate adopted as his reasons, together with his correspondence. However, on closer examination of the Department's brief, and in considering how the World Heritage provisions in subdiv A of Div 1 of Pt 3 of the EPBC Act were engaged in this particular referral, some complexities have emerged. Those complexities concern how, precisely, what is described in the Departmental brief as the "values" of the TWWHA have been identified, and how they can be linked back to the definition of "world heritage values" in subss (3) and (4) of s 12 of the EPBC Act. 34 Section 12(3) of the EPBC Act provides: A property has world heritage values only if it contains natural heritage or cultural heritage. The world heritage values of the property are the natural heritage and cultural heritage contained in the property. 35 The terms "natural heritage" and "cultural heritage" are defined in s 12(4) of the Act by reference to the meanings given to them in the World Heritage Convention: Convention for the Protection of the World Cultural and Natural Heritage, opened for signature 16 November 1972, 1037 UNTS 151 (entered into force 17 December 1975). 36 Article 1 of the Convention describes the term "cultural heritage": For the purposes of this Convention, the following shall be considered as "cultural heritage": monuments: architectural works, works of monumental sculpture and painting, elements or structures of an archaeological nature, inscriptions, cave dwellings and combinations of features, which are of outstanding universal value from the point of view of history, art or science; groups of buildings: groups of separate or connected buildings which, because of their architecture, their homogeneity or their place in the landscape, are of outstanding universal value from the point of view of history, art or science; sites: works of man or the combined works of nature and man, and areas including archaeological sites which are of outstanding universal value from the historical, aesthetic, ethnological or anthropological point of view. 37 Article 2 goes on to describe the term "natural heritage": For the purposes of this Convention, the following shall be considered as "natural heritage": natural features consisting of physical and biological formations or groups of such formations, which are of outstanding universal value from the aesthetic or scientific point of view; geological and physiographical formations and precisely delineated areas which constitute the habitat of threatened species of animals and plants of outstanding universal value from the point of view of science or conservation; natural sites or precisely delineated natural areas of outstanding universal value from the point of view of science, conservation or natural beauty. 38 The brief to the delegate identified that the TWWHA is "inscribed on the World Heritage List under four natural (vii, viii, ix and x) and three World Heritage Area cultural (iii, v, vi) criteria". Those criteria form part of the selection criteria pursuant to which the World Heritage Committee determines whether a property is eligible for inclusion on the World Heritage List. On 15 May 2007, a determination was made by the then Minister for the Environment and Water Resources that, on the basis of those seven World Heritage criteria, the TWWHA met the corresponding criteria to enable its inclusion on the Australian National Heritage List (being a different and further protective mechanism). 39 The TWWHA Management Plan, which was attached to the delegate's brief, explains how the Tasmanian Wilderness came to be inscribed as a World Heritage property in the 1980s, including a description of the seven criteria which made it eligible for World Heritage status: Central to the Convention is the concept of Outstanding Universal Value (OUV). World Heritage properties are recognised as being exceptional or superlative on a global scale on the basis of the values within them, that is, those values are outstanding from a global perspective. To be considered of Outstanding Universal Value, a property needs to: • meet one or more of ten criteria; • meet the conditions of integrity; • if a cultural property, meet the conditions of authenticity; and • have an adequate system of protection and management to safeguard its future. … At the time of publication, the TWWHA was one of only two World Heritage properties to fulfil seven of ten criteria. Those criteria are: • (iii) to bear a unique or at least exceptional testimony to a cultural tradition or to a civilization which is living or which has disappeared; • (iv) to be an outstanding example of a type of building, architectural or technological ensemble or landscape which illustrates (a) significant stage(s) in human history; • (vi) to be directly or tangibly associated with events or living traditions, with ideas, or with beliefs, with artistic and literary works of outstanding universal significance; • (vii) to contain superlative natural phenomena or areas of exceptional natural beauty and aesthetic importance; • (viii) to be outstanding examples representing major stages of earth's history, including the record of life, significant on-going geological processes in the development of landforms, or significant geomorphic or physiographic features; • (ix) to be outstanding examples representing significant on-going ecological and biological processes in the evolution and development of terrestrial, freshwater, coastal and marine ecosystems and communities of plants and animals; and • (x) to contain the most important and significant natural habitats for in-situ conservation of biological diversity, including those containing threatened species of outstanding universal value from the point of view of science or conservation. 40 Chapter 2 of the TWWHA Management Plan, entitled "Statement of Values", provides a non-exhaustive summary of the "cultural, natural and socio-economic values of the TWWHA". It is apparent that the values of the TWWHA are identified by reference to the criteria set out at [39] above. The following information, contained in the brief to the delegate, also confirms that "examples of World Heritage values" for the TWWHA are sourced by reference to these seven criteria: The Tasmanian Wilderness is inscribed on the World Heritage List under four natural (vii, viii, ix and x) and three World Heritage Area cultural (iii, v, vi) criteria. Further information on the Tasmanian World Heritage area, including listing criterion, can be found at http://www.environment.gov.au/heritage/places/world/tasmanian-wilderness. The Department notes that when the Tasmanian Wilderness was listed in 1982, a Statement of Outstanding Universal Value was not required. A Statement of Outstanding Universal Value is the key reference for the future protection and management of the property. The Australian Government is working with the Tasmanian Government and technical advisory bodies to develop the Statement of Outstanding Universal Value. In the meantime, examples of World Heritage values that contribute to the property's Outstanding Universal Value are identified under each criterion. The Department has identified a range of listed values that are relevant to the proposed action, which have been used to guide the significant impact assessment… (Emphasis added.) 41 Notwithstanding the apparent intention to produce what seems to be an executive or administrative policy document described as a "Statement of Outstanding Universal Value", no such final policy document was before the delegate, as the brief indicated. Therefore, for the purposes of this proceeding, it appears that the parties have proceeded on the basis that the Department itself identified the "World Heritage" values of the TWWHA by reference to the seven World Heritage criteria set out at [39] above. The applicant's grounds of review Ground 1 42 The applicant contended that the delegate's decision involved an error of law or was affected by jurisdictional error because of the delegate's reliance on the impact assessment conducted by the PWS under the RAA process. That process, it contended, is one which has no statutory force and therefore any mitigatory measures which were imposed pursuant to the RAA, or might have been voluntarily assumed by Wild Drake in the related "Protected Matters Environmental Management Plan" (PMEMP) were, in effect, used as substitutes for the evaluation the delegate was required to make under s 75(1). The applicant contended such an approach allows s 75(1), and any non-statutory State process, to "displace" Pt 8 and Pt 9 of the EPBC Act. 43 The applicant relied on s 5(1)(f) of the ADJR Act to identify the purported error of law, and on the observations of Kiefel J (as her Honour then was) in Queensland Conservation Council Inc v Minister for the Environment and Heritage [2003] FCA 1463 (which is known as the Nathan Dam case) at [24], to the effect that an impugned decision could: … be said to have involved an error of law (s 5(1)(f)) because it was based upon an erroneous view of the Act's requirements. Ground 2 44 The applicant contended that once Wild Drake had proposed to adopt the mitigation and avoidance measures set out in the PMEMP, which recorded measures identified as part of the RAA process, this should have led the delegate to consider whether it was because the proposed action was going to be undertaken "in a particular manner" that it would not have any significant impacts, or likely significant impacts, on the three matters of national environmental significance. In turn, the applicant contended this meant the delegate should have considered whether the terms of s 77A applied. Ground 3 45 This ground has a similar premise to ground 2: a failure by the delegate to consider other aspects of the decision-making process set out in Pt 7 before making a decision under s 75(1). Ground 3 concerns the operation of s 74A. That section provides: 74A Minister may request referral of a larger action (1) If the Minister receives a referral in relation to a proposal to take an action by a person, and the Minister is satisfied the action that is the subject of the referral is a component of a larger action the person proposes to take, the Minister may decide to not accept the referral. (2) If the Minister decides to not accept a referral under subsection (1), the Minister: (a) must give written notice of the decision to the person who referred the proposal to the Minister; and (b) must give written notice of the decision to the person who is proposing to take the action that was the subject of the referral; and (c) may, under section 70, request of the person proposing to take the action that was the subject of the referral, that they refer the proposal, to take the larger action, to the Minister. (3) To avoid doubt, sections 73 and 74 do not apply to a referral that has not been accepted in accordance with subsection (1). (4) If the Minister decides to accept a referral under subsection (1), the Minister must, at the time of making a decision under section 75: (a) give written notice of the decision to the person who referred the proposal to the Minister; (b) publish in accordance with the regulations (if any), a copy or summary of the decision. 46 The factual basis for this argument lies in how the likely impacts of the "second stage" of the proposed action ought, on the applicant's argument, to have been factored into the delegate's decision. Relief 47 The applicant contended that if it succeeded on either of ground 1 or ground 3, the delegate's decision should be set aside. If it succeeded on ground 2, it contended the appropriate relief would be that the Minister should be compelled to amend, or re-issue, the s 77 notice. The Minister's response in summary Ground 1 48 The Minister's answer to this ground was essentially the one given on behalf of the Minister to the Full Court in Triabunna Investments Pty Ltd v Minister for Environment and Energy [2019] FCAFC 60. That is, in a decision under s 75(1), and as part of discharging the task of evaluating the adverse impacts of a proposed action, the delegate was entitled to look at any mitigation or avoidance measures proposed by Wild Drake, as those measures were described in the information before the delegate. If those measures affected any adverse impacts of the proposed action or their likely occurrence, and their extent, then the delegate was entitled to rely on those measures to decide the proposed action was not a controlled action. The Minister contended: There is nothing in the text of s 75(1) of the EPBC Act that requires the Minister not to consider such measures, nor does such a negative stipulation arise as a matter of necessary implication. (Original emphasis.) Ground 2 49 In answer to this ground, the Minister submitted, as the Minister did in Triabunna, that measures put forward as mitigation or avoidance measures can be considered as forming part of the "action" and therefore the s 77A(1) obligation is not enlivened. The Minister then submitted further or alternatively that the obligation was not enlivened because there were, in fact, no component decisions made in this case. Ground 3 50 The short answer the Minister gave to ground 3 was that s 74A(1) does not impose any duty to consider whether to exercise the power conferred by that section. In addition, the Minister submitted that on the evidence before the Court, the Court should not infer the delegate failed to consider whether the proposed action was part of a larger action and that s 74A was engaged. The parties' Triabunna submissions 51 When this matter was argued, a Full Court of this Court was reserved on Triabunna, a decision of some relevance to the issues in this proceeding. At the conclusion of the hearing the Court proposed, and the parties accepted, that it was appropriate, first, for no decision to be made in this proceeding until the Full Court's decision was handed down, and second, that the parties should have an opportunity to make supplementary submissions on the application of that decision to the grounds of review in this proceeding. The Full Court's decision in Triabunna was handed down on 15 April 2019, and the parties subsequently filed supplementary written submissions in accordance with orders made by the Court. Where appropriate, I deal with the parties' supplementary submissions, and the Triabunna decision, in my resolution of each ground of review below. I set out here a summary of the parties' contentions. 52 The applicant contended the Full Court's decision in Triabunna supported its submissions on ground 1, although this case is distinguishable because in Triabunna there had been express consideration of s 77A and there was no debate that the decision made was a "component decision". The applicant contended the reasons of each member of the Full Court accepted that the two concepts of "the action" and the "manner" in which an action is carried out have "definite legal content", so that it is not for the executive (through the Minister or a delegate) to determine what they mean, or what is included in them, in any given situation. The applicant submitted that were the Minister or a delegate simply able to consider all mitigation and avoidance measures as part of the action, s 77A "would be undermined". 53 In contrast, the Minister submitted that the primary significance of the Full Court's decision in Triabunna for this proceeding is in relation to ground 2, noting the applicant made no submissions about the effect of the decision on ground 2. In that regard, the Minister made two principal submissions. 54 First, the Minister accepted she could no longer press the contention that s 77A does not require specification of any manners that are "inherent components of the proposed action", and – properly – withdrew certain parts of her principal written submissions accordingly. 55 Second, the Minister accepted that she could no longer press an argument that there was, in fact, no component decision to enliven s 77A, and – again properly – withdrew other parts of her principal written submissions accordingly. The Minister contended that it was still essential to "consider whether any component decision was made and precisely what the terms of that decision were", so as to identify a correlation between reduction in significant impact and the manners in question, relying on Triabunna at [209] and [228]. 56 Nevertheless, the Minister maintained that not every part of the delegate's decision that referred to avoidance or mitigation measures could or should properly be characterised as a component decision. The Minister identified two component decisions in the delegate's reasons: (a) one relating to the impact of the proposed action on the threatened ecological community of Alpine Sphagnum Bogs and Associated Fens. The Minister now admits that the delegate decided that s 18 and s 18A, and s 12 and s 15A of the EPBC Act were not controlling provisions because the delegate believed that the action would be taken in accordance with the avoidance and mitigation measures set out in the PMEMP, and this meant the delegate believed the action would be undertaken in a "particular manner" for the purposes of s 77A; and (b) another relating to the impact of the proposed action on World Heritage natural criteria (viii), (ix) and (x), by reason of the potential contamination of Lake Malbena from construction and operations of the camp. The Minister now admits that the delegate decided that s 12 and s 15A of the EPBC Act were not controlling provisions because he believed the action would be taken in accordance with the avoidance and mitigation measures specified in the Wilderness Characteristics – Protected Matters Environmental Management Plan, so as to manage greywater, sewage and rubbish. The Minister therefore admits the delegate believed the proposed action would be undertaken in a "particular manner" for the purposes of s 77A. 57 The Minister did not make the same admissions about the way the delegate had approached any potential impacts on the Tasmanian Wedge-tailed eagle, or impacts associated with helicopter transport and visual impacts from the standing camp. Nor did the Minister make any similar admissions about what the delegate believed in terms of potential impacts on Indigenous archaeological sites (being TWWHA cultural values (iii), (iv) and (v)) from construction and operation of the camp. 58 The Minister disagreed with the applicant's emphasis on the effect of Triabunna on ground 1, save to accept that because of the admissions the Minister now makes, the delegate made one or more "component decisions", and that "then the obligation in s 77A(1) arose and was not satisfied". 59 The Minister also recognised that the Full Court's decision confirmed what the Minister submitted was common ground between the parties: namely that where a component decision has been made, but the decision has not been lawfully reflected in the s 77 notice, the appropriate relief is to order that the notice be amended and re-issued. Given the admissions made, the Minister accepted that relief should issue on ground 2, and submitted that "the appropriate relief would be the setting aside and re-issuing of the notice, specifying relevant manners". The applicant's reply submissions on Triabunna 60 Despite the Minister's admissions, the applicant's reply submissions did not embrace them. It instead submitted that: … the Department's reasons, which applied the same basic approach (the subject of ground 1) to all of the potential impacts, had nothing to do with s 77A. It is distinctly possible that the Department's approach in August 2018 reflected the approach of Kerr J at first instance in Triabunna (in April 2018). 61 The applicant submitted that the delegate's reasons "cannot be shoehorned into s 77A(1)". The "Nathan Dam" point 62 The Minister contended that the applicant raised a "new argument" at the hearing, relying on Kiefel J's decision (as her Honour then was) in the Nathan Dam case. The Minister contended that the circumstances of the proposed action in this case could not be compared with the circumstances in Nathan Dam, on the basis that the potential impacts of "the possible second stage" of this proposed action would not be "indirect consequences" of the first stage. The Minister also submitted: Moreover, in a context where all parties proceeded on the basis that any second stage would need to be separately referred under the EPBC Act, there is no question here of ignoring possible impacts which was a real concern in Nathan Dam. 63 In reply on this matter, the applicant contended, relying on Minister for Environment and Heritage v Queensland Conservation Council Inc [2004] FCAFC 190; 139 FCR 24 at [60] (the Full Court appeal of the Nathan Dam case), that the further activities that might occur if the first stage was approved "were clearly 'within the contemplation' of the proponent, having formed part of its original business plan". It contended the fact that the second stage could be assessed separately did not preclude it from being characterised and considered as an indirect impact. 64 Justice Kiefel's consideration of indirect impacts in Nathan Dam was a matter raised by the applicant in its principal written submissions: see [34]-[35]. I am not persuaded there was any "new argument" about it. However, I am also not persuaded this argument advances the applicant's judicial review application, as I explain below. Resolution 65 Where necessary to the resolution of each ground of review, I make findings of fact in relation to the way the parties sought to characterise aspects of the brief which the delegate adopted as part of his reasons for decision. 66 I have set out my opinion as to the structure of the EPBC Act in several previous decisions: Tasmanian Aboriginal Centre Incorporated v Secretary, Department of Primary Industries, Parks, Water and Environment (No 2) [2016] FCA 168; 215 LGERA 1 at [19]-[34]; Friends of Leadbeater's Possum Inc v VicForests [2018] FCA 178; 260 FCR 1 at [64]-[94]; and most recently in Triabunna at [93]-[108]. Although an appeal from my decision in Tasmanian Aboriginal Centre was allowed by the Full Court (see Secretary, Department of Primary Industries, Parks, Water and Environment v Tasmanian Aboriginal Centre Incorporated [2016] FCAFC 129; 244 FCR 21), the general structure of the legislative scheme which I described was not the subject of any criticism. I adhere to and adopt the opinions I expressed in those judgments. 67 It will be necessary to examine some particular aspects of the scheme which I have not dealt with in detail in these earlier decisions. Particular findings on statutory scheme The statutory task 68 The statutory task given to the Minister (or delegate) by s 75(1)(a) is to decide whether a proposed action "is a controlled action". 69 "Controlled action" is a defined term. Section 67 provides: An action that a person proposes to take is a controlled action if the taking of the action by the person without approval under Part 9 for the purposes of a provision of Part 3 would be (or would, but for section 25AA or 28AB, be) prohibited by the provision. The provision is a controlling provision for the action. 70 The definition given by the statute to "controlled action" requires the Minister or delegate, in order to discharge her or his statutory task under s 75(1)(a), to decide whether the taking of the action without approval under Pt 9 would be prohibited by a provision in Pt 3. 71 In what follows, and so as not to make the reasoning more complex than it needs to be, I put to one side the applicant's argument in ground 3 about "stage two" of Wild Drake's proposal. I have also assumed that the Department (and the delegate, by adopting the Department's brief) correctly identified the World Heritage cultural and natural values in issue in respect of Wild Drake's proposal: the applicant has not contended otherwise. 72 To apply what I have outlined in [68]-[71] above to the impugned decision, the delegate was required to determine whether: (a) the taking of the action by Wild Drake (described at [5], [17] and [26] above, and as described in the referral by Wild Drake and in the brief which was adopted by the delegate as his reasons); (b) without approval under Pt 9; (c) would be prohibited by, relevantly: (i) s 12(1), concerning declared World Heritage properties; or (ii) s 18, concerning listed threatened species and communities; or (iii) any of the applicable criminal offence provisions in Pt 3, eg s 15A or s 18A. 73 This is consistent with what was said by the Full Court about the concept of "controlled action" in Anvil Hill Project Watch Association Inc v Minister for Environment and Water Resources [2008] FCAFC 3; 166 FCR 54 at [26] (Tamberlin, Finn and Mansfield JJ). 74 Taking as an example the action description prepared by the Department and set out in these reasons at [5], in respect of the three matters of national environmental significance identified in the applicant's judicial review application, in order to make the determination set out at [72], the delegate was required to decide whether: (a) by Wild Drake developing a small tourism operation on Halls Island and establishing a standing camp to accommodate a maximum of six visitors for four day stays, where visitors would arrive by helicopter from Derwent River Bridge and there would be a maximum of 30 tours per year, and where visitors would engage in activities such as kayaking, hill-walking, bushwalking, cultural interpretation, wildlife viewing and citizen science opportunities; (b) there would be, or would likely be, a significant impact on: (i) the cultural and natural values of the TWWHA (specifically the relevant cultural values identified by the Department by reference to criteria (iii), (iv) and (vi) and the relevant natural values identified by the Department by reference to criteria (vii), (viii), (ix)); and/or (ii) the Tasmanian Wedge-tailed eagle species; and/or (iii) the threatened ecological community identified as Alpine Sphagnum Bogs and Associated Fens. The consequence of the statutory task 75 I accept the applicant's submission that, in construing and understanding the nature of the task of the Minister (or delegate), the statutory consequences of a determination that an action is not a controlled action are an important consideration. 76 Relevantly, s 12(2)(c) provides that the prohibition in s 12(1) does not apply if: … there is in force a decision of the Minister under Division 2 of Part 7 that this section is not a controlling provision for the action and, if the decision was made because the Minister believed the action would be taken in a manner specified in the notice of the decision under section 77, the action is taken in that manner[.] 77 Section 19(3)(b) is to the same effect, in relation to the prohibitions in s 18 and s 18A. 78 In its written submissions, the applicant described this as an "immunity". Whether or not this is an accurate description, the underlying point has some force. A decision under s 75 that an action is not a controlled action disengages the prohibitions in any relevant provision in Pt 3 in respect of that action. Otherwise, as the applicant submitted, in general terms the taking of an action remains governed by the conditions for its lawfulness set out in Pt 3, unless and until the taking of the action is approved under Pt 9, with or without conditions. I say "in general terms" because provisions such as s 12 (and its equivalents for other matters of national environmental significance) do recognise other circumstances in which the Pt 3 prohibitions are disengaged, or not engaged, such as whether any provisions in Pt 4 (titled "Cases in which environmental approvals are not needed") apply. However, in circumstances where a decision has been made under s 75, and provided the action is not undertaken in any materially different manner, then the effect of s 12(2)(c) and s 19(3)(b) is to disengage the protective effects of the Pt 3 prohibitions. Sections 74A and 77A 79 I agree with the applicant's written submissions at [30] that, in terms of the structure of the statutory scheme, consideration of whether s 74A applies to the action in question is a matter which comes before any decision under s 75. Consideration and application of s 74A may mean there is no s 75 decision. I also agree with applicant's written submissions at [32] that the s 77A power has to accompany a s 75 decision, because it is another way of deciding an action is not a controlled action. So much is now clear on the authority of the Full Court judgments in Triabunna. These propositions were not contested by the Minister. The RAA 80 The RAA has no status under the EPBC Act: this fact is not unimportant. The EPBC Act is, to say the least, a complicated legislative scheme. Legislative judgments have been carefully and thoroughly made about the circumstances in which the prohibitions in Pt 3 of the Act are either not to be engaged (see for example s 38 and my reasons for judgment in Friends of Leadbeater's Possum), or might be disengaged (a decision under s 75 that an action is not a controlled action being one example). 81 Part 4 sets out some of the substitute assessment processes recognised by the legislative scheme: A Ministerial declaration might be made under s 33, exempting an action from the need to be approved under Pt 9, but this will only occur where there is an "accredited management arrangement" or an "accredited management process": see s 32(a), and the definitions of these terms in s 33(2) and (2A). The taking of an action might be covered by a bilateral agreement between the Commonwealth and a State or Territory, on the basis that under such an agreement the Minister has accredited a management arrangement or an authorisation process. 82 The same is true of the broader, historical, exemption for the conduct of forestry operations: see my reasons in Friends of Leadbeater's Possum at [95]-[135]. 83 Further, if the taking of an action is to be assessed under Pt 8, after a decision made under s 75 that it is a controlled action, various levels of scrutiny can be applied to the action, including a State-based process: see s 85, and the reference to an accredited assessment process. 84 The point to be made is that Parliament, through this complex legislative scheme, has decided what kinds of substitute assessment processes will meet the standards required to protect matters of national environmental significance. State-based processes have an important role to play, but that role has been identified, or provided for, in the EPBC Act itself. 85 The RAA is not included in the legislative scheme of the EPBC Act. It does not occur under a bilateral agreement. As the applicant submitted, the Minister has entered into a bilateral agreement with Tasmania under Ch 3 of the Act. Schedule 1 to that bilateral agreement identifies three classes of action to which the bilateral agreement applies, defined by reference to assessments under specified provisions of the State Policies and Projects Act 1993 (Tas), the Environmental Management and Pollution Control Act 1994 (Tas), and the Land Use Planning and Approvals Act 1993 (Tas). The applicant submitted the RAA process was not done under any of those provisions, and I accept that submission. 86 Nor is the RAA an "accredited assessment process" conducted by the State of Tasmania. It is not a recognised substitute for a Pt 8 assessment. It is not, therefore, a process which is intended to enable the disengagement of Pt 8 and Pt 9. 87 Any conditions imposed under the RAA, or undertakings given by Wild Drake to the PWS pursuant to the RAA cannot, in law, be a substitute for the discharge of the Minister's (or delegate's) statutory task under s 75. Identifying the action for the purposes of this statutory task 88 In Triabunna, each of the judgments of the Full Court made some observations relevant to the question of how to identify the action for the purposes of the statutory task in s 75. 89 Justice Besanko emphasised the need to look carefully at the relevant facts (at [11]-[12], and [14]): In my respectful opinion, the answer lies in the facts. The question is whether the particular matters are capable of being characterised as particular manner requirements and then, importantly, whether the Minister believes that Part 3 is not a controlling provision for the action because the action will be taken in accordance with those particular matters. If yes, then those matters must be specified in the notice given under s 77 by reason of s 77A of the Act. Whether the matter is part of the initial proposal or added later by the applicant who identifies it as a mitigating feature is not to the point; it is its significance to the decision-making process which is important. The use of K-Grid and of bundled lines are certainly capable of being particular manner requirements. In my opinion, a close examination of the delegate's reasons indicates that the use of K-Grid and of bundled lines were reasons the delegate believed that ss 18 and 18A of the Act were not controlling provisions for the proposed action. The delegate made it clear in [34] of his reasons that the risks of entanglement, vessel strikes and noise disturbance would be significant in terms of impact and, therefore, engage ss 18 and 18A of the Act, but for the mitigating measures directed to those matters. In my opinion, [30] and [31] of the delegate's reasons make it quite clear that the use of K-Grid and of bundled lines were part of the measures which reduced the impacts of the action to a level below significant. …. As I have said, the approach of the primary judge as to the use of K-Grid, and the parties on the appeal both as to the use of K-Grid and of bundled lines, proceeded on that basis that they were important features of the proposed action. In light of the delegate's reasons, that approach is correct. It means, I think, that there is only one possible outcome in terms of the correct approach to the decision-making process and that is that the use of K-Grid and of bundled lines should be included in particular manner requirements in the notice under s 77 of the Act. 90 Ultimately, and despite the absence of any reference to s 77A in the brief to the delegate, the approach I have taken to the delegate's decision in this case is not dissimilar from Besanko J's approach in Triabunna. 91 At [49], Flick J emphasised that the regulatory requirement to "describe" a "proposed action" (in the Regulations) must be understood in the context of the scheme's provision for persons other than the proponent to make a referral: that is, it may well be a person other than the proponent who will be, for the purposes of Pts 8 and 9, describing the "action". 92 In my respectful opinion, what constitutes an action is not a subjective issue: it has to be objectively capable of being identified. It is a statutory concept, including a concept upon which criminal liability can turn. While it might be fact-dependent, ultimately, there must be a correct, and an incorrect, identification of an action in order for the scheme to operate: see my reasons in Triabunna at [193]. 93 While, as Flick J observed in Triabunna at [51], there may be no "legislative imperative" to describe the proposed action "with particularity", identification of the proposed action is critical to the legislative scheme, including the civil and criminal prohibitions in Pt 3. The concept of "action" in the legislative scheme is distinct from, and anterior to, the concept of the "impact", or consequences of an action. That distinction is also a key component of the scheme. That distinction could be obliterated, or rendered meaningless, if it was the case that an action could be defined down to its minutiae and could include all the mitigation or avoidance measures that might be necessary to avoid the likelihood of an impact. Mitigation or avoidance measures, agreement to refrain from taking an action in a particular manner, changes to the manner in which an action might be taken – all these matters might end up being specified in a s 77A decision, or they might end up as conditions if an action becomes a controlled action. But in my opinion one cannot escape the fundamental structure of the legislative scheme by seeking to incorporate into the concept of an "action" the very protections, through mitigation and avoidance measures, which the Act seeks to ensure are observed for matters of national environmental significance. The Act does not establish some kind of executive negotiation mechanism between a proponent, the Minister and her or his Department, away from public scrutiny, by which some agreement can be reached as to a suite of mitigation and avoidance measures so that it is only where a negotiated outcome cannot be reached that Pt 8 and Pt 9 are engaged. Ground 1 94 The applicant's submissions about the nature and relevant content and processes of the Management Plan for the TWWHA, including the RAA process, are set out at [43]-[60] of its principal written submissions, and the Minister's submissions did not in substance dispute what is in those paragraphs. I accept them. As well as the Management Plan, the regulatory mechanism employed in respect of the use of land in the TWWHA appears to be (relevantly) the grant of a lease or licence under s 48 of the NPRM Act and the potential to cancel that lease or licence under s 51, for – amongst other matters – breach of conditions. 95 The Management Plan purports to adhere to the requirements of s 321 and s 322 of the EPBC Act, concerning the management of World Heritage properties. Section 321 provides: 321 Co‑operating to prepare and implement plans (1) This section applies in relation to a property that is included in the World Heritage List. (2) The Commonwealth must use its best endeavours to ensure a plan for managing the property in a way that is not inconsistent with Australia's obligations under the World Heritage Convention or the Australian World Heritage management principles is prepared and implemented in co‑operation with the State or Territory. Note: The Commonwealth and the State or Territory could make a bilateral agreement adopting the plan and providing for its implementation. (3) Subsection (2) does not apply in relation to so much of a property as is in the Great Barrier Reef Marine Park. Note: A zoning plan must be prepared under the Great Barrier Reef Marine Park Act 1975 for areas that are part of the Great Barrier Reef Marine Park. In preparing a zoning plan, regard must be had to the Australian World Heritage management principles. 96 Thus, one of the purposes of the TWWHA Management Plan is the discharge of the Commonwealth's obligation under this provision, and in that discharge, compliance with its international obligations under the World Heritage Convention. The Plan states as much in the executive summary. These purposes are also reflected in Sch 5 of the Regulations. However, there is no suggestion by the terms of s 321 and s 322 of the EPBC Act that the existence of a management plan in World Heritage areas, nor an actor's compliance with it, is a method of avoiding, or disengaging, the controlled action provisions in Pt 8. 97 For the purposes of ground 1, the key point is that the functions and objectives of a management plan such as one made under ss 19-28 of the NPRM Act, and taking into account the lease and licence provisions in s 48, are obviously much broader. 98 As the brief to the delegate stated, and consistently with cl 3.02 of Sch 5 to the Regulations, the RAA process required an EPBC Act referral. It did not, in its terms, purport to be a substitute for the EPBC Act process: quite the contrary, it required a proponent such as Wild Drake to seek and obtain statutory permission to take an action under the EPBC Act. That is a critical fact which should not be overlooked: the RAA process did not purport to be of the same character as a bilaterally accredited process, or any other substitute process for which the EPBC Act provides and for which it accordingly provides an exemption. The brief also stated that the RAA process "will be finalised after the EPBC Act referral decision, and assessment if required has been completed…". 99 In my opinion the brief, adopted by the delegate as his reasons, made it clear that the delegate believed the action could be taken without a significant impact on any of the identified matters of national environmental significance only if it was carried out in a particular manner. Indeed, in my opinion the brief, standing as the delegate's reasons, indicated that the delegate's belief incorporated a number of aspects about how the action needed to be carried out, in order to avoid any likelihood of significant impact. I note that unlike Triabunna, this is not a situation where the delegate made any finding about actual significant impact and then how to avoid it. This is a decision centring on the "likelihood" of significant impact, rather than the formation of a view there would be such an impact. 100 The following matters have contributed to the finding of fact I make about how the delegate's reasons (ie the brief) should be interpreted. 101 Despite the conduct of the RAA, and the imposition of a series of conditions on Wild Drake through that process, the Department sought further information on the delegate's behalf from Wild Drake. That information was set out in a letter which was contained in Attachment B1 to the delegate's brief, and relevantly stated: Our initial examination of your referral indicates that there is insufficient information to allow us to consider all the relevant issues. To assist the Department in making a decision on the referral, please provide the following information: • identification of the values of the Tasmanian Wilderness World Heritage Area that may be impacted by the proposed action; • management measures proposed to avoid and mitigate impacts on the identified values, including increased fire risk; • survey information for the helipad site; • location of proposed walking paths from the helipad to the boat launch; • the system proposed to manage waste (including waste water and sewage) on Halls Island; • measures to be imposed under local and state government approvals; and • conditions attached to the current Halls Island leasehold. 102 These were all material issues, most of which went directly to the consideration of any adverse impacts on the applicable Pt 3 matters (see s 75(2)). 103 The result of this request was, amongst other material, the submission by Wild Drake of the PMEMP for the proposed action. In the introduction, the PMEMP described its overall purpose as: … to ensure that the impact and avoidance strategies and procedures prescribed in the Halls Island Consideration of MNES, potential impacts, avoidance and mitigation measures are identified, encapsulated and implemented within the proposed activities and actions. 104 The Halls Island Consideration of MNES, potential impacts, avoidance and mitigation measures was another document provided by Wild Drake in response to the Department's request for further information. It is a document of substantial length, which as part of its title indicated its purpose was to address "potential impacts, avoidance and mitigation measures". The document identified each relevant World Heritage value, and other matters of national environmental significance (such as the presence of threatened flora and fauna) and in respect of each, set out the potential impacts, the level of risk, the consequences of those potential impacts, the measures which would be taken to manage or avoid the potential impacts, and the contended risk and likelihood of significant impact if those measures were taken. Although the extracts are lengthy, it is necessary to set out three examples, so that the detail can be understood, as it is the method which these extracts reveal, and the delegate's acceptance of what was in this document, that informs how the applicant contends the delegate misunderstood his task under s 75(1), for the purposes of ground 1. The delegate's acceptance of these measures, in the terms they are expressed, is also important to my conclusion that the delegate did, in fact, form a belief about the "particular manner" in which the action would be carried out. 105 The first example relates to one of the TWWHA's World Heritage values: Value: Criteria ix; Values representing significant ongoing geological processes, biological evolution and man's interaction with his natural environment Matter: Impacts to relatively undisturbed landscape. Potential impacts (to establish the likelihood of a significant impact on MNES): Disturbance from infrastructure and on-island use. Likelihood Low. Built-infrastructure will be located in an area with existing human-habitation / structures and use (modified apparent naturalness). Consequence: Disturbance to the relatively undisturbed landscape. Risk: Low. Mitigation and management measures Existing measures (RAA, lease and licence conditions) to be fully adopted • RAA Step 6 Activity controls # 4.1.3.1, 4.1.3.2, 4.1.4.1, 4.1.5.1, 4.1.8.1, 4.2.3.3, 4.2.3.4, 4.2.5.1 and implement all RAA Step 8 Conditions 1) 4.1.3.1: (Geoconservation) Camp will be installed using hand-tools / battery operated tools only. Minimal ground disturbance, no excavations or changes to water-courses. 2) 4.1.3.2: (Western Tasmania Blanket Bogs) Sites are avoided. Any interaction with sites will involve minimal ground disturbance, perforated decking and boardwalking. 3) 4.1.4.1: (Landscape & Viewfield) Sympathetic building material selection, no reflective materials, muted bush tones. 4) 4.1.5.1: (Wilderness and wild rivers, NWI (National Wilderness Inventory) 14+) Restrict maximum group sizes of 6 customers, restrict number of commercial trips to 30 per year. Sympathetic building designs and scale. Adhere to strict flight path and impact minimisation prescriptions in Attachment 10. 5) 4.1.8.1: (Water quality / CFEV (Conservation Freshwater Ecosystem Values) Values) Installation of complete-capture sewage and greywater pods. Greywater will be back-loaded with each trip, for disposal outside of the TWWHA. Sewage will be collected annually in pods and emptied off-site. 6) 4.2.3.3: (Recreational values, established uses) Minimise helicopter use, use helicopter route as described which avoids recorded & formal walking routes, and all significant recreational fishing waters. Restrict annual trip (booking) numbers during peak season (Oct-May) to 25 trips. Adhere to impact minimisation prescriptions in Attachment 10. • Step 8 Conditions: 7) (Wilderness Character) Prepare and comply with an Operations Plan to include: 'Fly Neighbourly Advice and identified flight path between Lake St Clair and helipad. Conditions are also to be incorporated into the lease and licence. Adhere to helicopter prescriptions in Attachment 10 to minimise point-impacts. • Lease and Licence conditions including: 12.4, A2.2(d,l,k,l,m), A2.4(a), A2.5(d), A3.8d(i), A3.8e(l,ii), B1.2(c), B1.2(f), C2.2, C4(A, Bii, Bvii, Bviii, Bix, BxiiC) 8) 12.4: Compliance with management objectives. The Operator must not do anything that is inconsistent with the management objectives (for the purposes of the Act (National Parks and reserves Management Act 2002 Tas)) applicable in respect of the Land. 9) A2.2 (d,l,k,l,m): (l) the design must minimise environmental impacts through: (i) appropriate footprint design and techniques for the three accommodation huts and the communal kitchen hut, with exact locations and size of huts to be determined in conjunction with the (Tas) Minister; (ii) the use of a selection of products, materials and methods that reduce or minimise impacts (including in respect of water use, waste production and generation); and (iii) the development and implementation of actions to ensure that the natural and heritage values of the Park are preserved. (m) all kitchens, toilets and bathrooms must be designed with a complete capture system. All grey and black waste water must be removed from the Land regularly and disposed of at a Central Highlands Council approved disposal facility. (k) the design must maximise the retention of existing vegetation and topography. (i) materials used in external surfaces of the Development must be low-visibility in colour and similar to surrounding vegetation (including a mixture of timber and steel materials in muted bush tones). (d) the design must protect and present the values of the setting in which the Development is to occur, including in respect of the selection of materials and scale of buildings being complementary and sensitive to the surrounding environment (including vegetation type) with a reduced visual impact. 10) A2.4 (a) l,ii: The Operator must prepare an operations manual detailing the operational practices of the Operator in respect of both the Approved Use and the Licensed Activities (Operations Manual). The Operations Manual must include: (i) details of the FNA (Fly Neighbourly Advice) and an identified flight path between the identified area of Lake St Clair and the Conservation Area (helipad), including ensuring a standard operating procedure of over-flying potential (*wedge tail eagle) nesting habitat by approximately 1000m altitude where possible (except for the end points of the flight), travelling along the pre-determined route of minimum likelihood of nests and avoiding tight manoeuvres and hovering (including ensuring that any flight path is not within a 1km line of sight of known eagles nests and that any flight does not include any 'view' of the nest); (ii) impact mitigation measures which are noted in the North Barker Flora and Fauna Assessment dated 21/11/2016, for Riverfly RIV002: A 2.5(d): Construction Environmental Management Plan (d) details of how impact mitigation will be managed including the development of site management plan dealing with listed species and communities of the island, risk mitigation measure and supervision 11) A3.8d (l): The Operator must ensure that any helicopter used in connection with the construction and/or operation of the Development: (i) uses the flight path provided by the Lessor to ensure minimal airtime and minimal impacts on other users of the area; 12) A3.8e (l,ii): (e) Except for emergency situations, helicopters: (i) must not be operated at frequencies greater than those from time to time approved in writing by the Minister; and (ii) must operate substantially in accordance with any applicable operations schedule from time to time approved in writing by the (Tas) Minister. 13) B1.2(c,f): B1.2 General Obligations (c) to comply with all requirements and recommendations of the FNA (as may be amended generally or in respect of the Business only where such amendments are agreed between the parties acting reasonably) at all times during the Term including ensuring the recommended flight paths and altitude requirements are followed at all times when the helicopter is operating (provided that in the event of any inconsistency between the FNA and any requirements of CASA or relevant legislation the requirements of CASA or relevant legislation will take precedence to the extent of the inconsistency); (f) discourage smoking from occurring on the Land and within the Park generally but in the event smoking occurs the Operator must ensure that appropriate butt storage is provided and all butts are removed from the Land and disposed of appropriately. 14) C2.2: At all times while on a Activity the Operator must use all reasonable endeavours to ensure that the environment and ecology of the Licensed Area is in no way damaged by the Experience Guides and Clients including ensuring all staff and Clients clean, dry and disinfect any waders or equipment prior to accessing the Land and the Licensed Area. 15) C4 (A, Bii, Bvii, Bviii, Bix, BxiiC): C4 Transport Service (a) The Operator must not operate or use, or arrange for the operation or use of, a helicopter within the Park except in accordance with this clause C4. (b) The Operator may operate or use, or arrange for the operation or use, of a helicopter within the Park subject to the following provisions: (ii) ensure that the flight path enclosed at Attachment B 'Flight Paths' is followed at all times; (vii) complies with the FNA including ensuring a standard operating procedure of over-flying potential nesting habitat by approximately 1000m altitude where possible (except for the end points of the flight), travelling along the pre-determined route of minimum likelihood of nests and avoiding tight manoeuvres and hovering (including ensuring that any flight path is not within a 1km line of sight of known (wedge tailed) eagles nests and that any flight does not include any 'view' of the nest); (viii) unless otherwise agreed in writing by the (Tas) Minister, helicopters must only land and take-off from the recognised landing pad, the final location to be determined in accordance with Schedule A; (ix) except for helicopter operations required for the construction of the Development or in respect of emergency situations, helicopters must only be used for supply and servicing runs in respect of a Land or in connection with maintenance of the Operator's Improvements and in accordance with the approved Operations Manual in accordance with clause A2.2; (xii) except where necessary because of overriding safety considerations, the Operator must ensure that helicopters: (c) are operated in a manner that minimises noise and disturbance to other users of the Park; • Additional proponent proposed measures 16) The Standing Camp site will be rested from commercial activities for the period June-September annually (4 months), with the minor allowance of up to 5 commercial trips (20days) during this period, as per RAA approvals. Risk after mitigation and management measures are in place: Low. Appropriate Standing Camp design and siting ensures that infrastructure does not impact on areas relatively undisturbed landscape. Low volume helicopter use and impact mitigation measures ensure that impacts on other users of the landscape is minimised. Likelihood of a significant impact: Low – no significant visual or physical impacts from Standing Camp infrastructure, and minimal impacts from associated site usage. 106 The second also relates to a World Heritage value: Value: Criteria X – Values of the most important and significant habitats where threatened species of plants and animals of outstanding universal value from the point of view of science and conservation still survive. Matter: Habitats where threatened species of plants and animals of outstanding universal value from the point of view of science and conservation communities' and species of conservation significance still survive (eg: sphagnum peatland, Athrotaxis selaginoides rainforest). Potential impacts (to establish the likelihood of a significant impact on MNES): Trampling & track formation related to on-island activities and proposed walking routes from helipad to lake edge. Likelihood: Low-Moderate. Consequence: Damage to the integrity of susceptible features arising from trampling, track formation and subsequent erosion. Risk: Moderate. Mitigation and avoidance measures Existing measures (RAA, lease and licence conditions) to be fully adopted • RAA Step 6 Activity controls # 4.1.1.1, 4.1.1.3, 4.1.1.4, 4.1.3.1, 4.1.3.2 and implement all RAA Step 8 Conditions 1) 4.1.1.1: Adopt all mitigation measures prescribed in the avoidance of trampling (on-island) within the Flora and Fauna Assessment: a. Avoid routes through MSP's, or facilitate passage across MSP's by installing raised, perforated boardwalking. Risk is mitigated. b. Education and supervision during trips, in relation to avoidance of trampling. c. Siting of standing camp among ORO or WSU communities. d. Create visitor exclusion zones, excluding visitors from sensitive communities MSP, RKP and Pherosphaera hookeriana communities (see Site Plan Map). 2) 4.1.1.3: Install raised, perforated boardwalk along area of existing impact. 3) 4.1.1.4: Ensure on-island routes/tracks avoid Pherosphaera hookeriana. Where existing routes pass by this species (near the natural rock landing), use short lengths of boardwalk to ensure clear walking route that avoids plant species. Education and supervision to re-enforce impact mitigation. Utilise no-access areas for visitors, see Site Plan Map including exclusion zones. 4) 4.1.3.1: Camp will be installed using hand tools / battery-operated tools only. Minimal ground disturbance, no excavations or changes to water-courses. 5) 4.1.3.2: Blanket bog sites are avoided. • Step 8 Conditions: 6) Implement all avoidance and mitigation measures outlined in the Flora and Fauna Assessment; prepare a Construction Environmental Management Plan (CEMP) covering the construction phase, to be approved by the PWS. 7) Through the CEMP, make staff and contractors working on Halls Island aware of the location of threatened plants and threatened native vegetation communities to ensure no inadvertent impact to these natural values. 8) Flag work area to avoid inadvertent disturbance of threatened plants (Pherosphaera hookeriana pines) during construction. Include in CEMP. 9) Locate the Halls Island landing such that these plants do not need to be removed, but if this is not practicable or safe, and any of these threatened pines need to be taken, then a permit to take under the Threatened Species Protection Act 1994 will be required from PCAB prior to any impact. • Lease and Licence conditions including A2.3, A2.4 (ii), A2.5(d), C2.2 10) A2.4 Operations Manual (b) The Operator must prepare an operations manual detailing the operational practices of the Operator in respect of both the Approved Use and the Licensed Activities (Operations Manual). The Operations Manual must include: (ii) impact mitigation measures which are noted in the North Barker Flora and Fauna Assessment dated 21/11/2016, for Riverfly RIV002, including: (A) avoiding MSP - Sphagnum peatland, RKP - Athrotaxis selaginoides rainforest and Pherosphaera hookeriana locations (the Operator, where necessary, can apply to construct boardwalks over locations not specified in the RAA, which application will be subject to the written consent of the Minister including any necessary further assessment); (D) using continual education and supervision as part of the overall interpretation and presentation of the Land to ensure minimal impact. 11) A2.5: Construction Environmental Management Plan - The Operator must, before making any application for Development Approval to the Central Highlands Council and/or undertaking any Development Works on the Land prepare a plan ('Construction Environmental Management Plan'), in a form and substance satisfactory to the Minister, to deal with the following matters: (d) details of how impact mitigation will be managed including the development of site management plan dealing with listed species and communities of the island, risk mitigation measure and supervision; 12) C2.2 Management of the Environment: At all times while on an Activity the Operator must use all reasonable endeavours to ensure that the environment and ecology of the Licensed Area is in no way damaged by the Experience Guides and Clients including ensuring all staff and Clients clean, dry and disinfect any waders or equipment prior to accessing the Land and the Licensed Area. • Additional proponent proposed measures 13) Additional on-site assessments (30 May 2018) have identified a suitable helicopter landing location (see Helipad Site 2 - Proposed Helipad and access to Halls Island Vegetation Survey 20 May 2018) consisting of naturally exposed bedrock. It is the intention of the proponent to use this area as the Helicopter Landing Site (HLS) without the requirement for added infrastructure (subject to HLS approval from helicopter contractors and meeting applicable CASA regulations). Should infrastructure (formed helipad) be required due to OH&S and/or CASA requirements, a raised perforated deck shall be installed at Site 2, as per Flora and Fauna Assessment impact mitigation prescriptions. 14) Walking route from heli-landing site to the lake-edge shall follow the sclerophyll forest / open plain edge as prescribed in the Flora and Fauna Assessment addendum. When using the route between the western plain edge, and the lake edge, customers and guides shall use fan-out walking techniques to avoid trampling and track formation. Incorporate into CEMP / Operations Manual. 15) Traversing of susceptible poorly drained habitats including sphagnum, blanket bogs and wetlands shall be avoided through the CEMP / Operations Manual Risk after mitigation and avoidance measures are in place: Low. Activities that could result in trampling are mitigated, and activities that could lead to track formation are avoided. Likelihood of a significant impact: Negligible-low. Avoidance measures, along with mitigation measures such as education and supervision result in a negligible to low risk of significant impact. 107 The third example relates to one of the key threatened flora species: Community / species: Alpine Sphagnum bogs and Associated Fens - MSP Potential impacts (to establish likelihood of a significant impact on MNES): Trampling & track formation related to on-island activities and proposed walking route to and from helipad Likelihood: Low-moderate. Consequence: Damage to the integrity of susceptible soils arising from trampling, track formation and subsequent erosion. Risk: Low-moderate. Mitigation and avoidance measures Existing measures (RAA, lease and licence conditions) to be fully adopted • RAA Step 6 Activity controls # 4.1.1.1, 4.1.1.3, 4.1.3.1, and implement all RAA Step 8 Conditions 1) 4.1.1.1: Adopt all mitigation measures prescribed in the avoidance of trampling (on-island) within the Flora and Fauna assessment: (a) Avoid routes through MSP's, or facilitate passage across MSP's by installing raised, perforated boardwalking. Risk is mitigated. (b) Education and supervision during trips, in relation to avoidance of trampling (c) Siting of standing camp among ORO or WSU communities. (d) Create visitor exclusion zones, excluding visitors from sensitive communities MSP, RKP and Pherosphaera hookeriana communities (see site map) 2) 4.1.1.3: Install raised, perforated boardwalk along area of existing impact (through MSP) 3) 4.1.3.1: Camp will be installed using hand tools / battery-operated tools only. Minimal ground disturbance, no excavations or changes to water-courses. • Step 8 Conditions: 4) Implement all avoidance and mitigation measures outlined in the North Barker Flora and Fauna assessment report; prepare a Construction Environmental Management Plan (CEMP) covering the construction phase, to be approved by the PWS. 5) Through the CEMP, make staff and contractors working on Halls Island aware of the location of threatened plants and threatened native vegetation communities to ensure no inadvertent impact to these natural values. 6) Flag work area to avoid inadvertent disturbance of threatened plants (Pherosphaera hookeriana pines) during construction. Include in CEMP. 7) Locate the Halls Island landing such that these plants do not need to be removed, but if this is not practicable or safe, and any of these threatened pines need to be taken, then a permit to take under the Threatened Species Protection Act 1994 will be required from PCAB prior to any impact. • Lease and Licence conditions including A2.3, A2.4 (ii), A2.5(d), C2.2 8) A2.4 Operations Manual (a) The Operator must prepare an operations manual detailing the operational practices of the Operator in respect of both the Approved Use and the Licensed Activities (Operations Manual). The Operations Manual must include: (ii) impact mitigation measures which are noted in the North Barker Flora and Fauna Assessment dated 21/11/2016, for Riverfly RIV002, including: (A) avoiding MSP - Sphagnum peatland, RKP - Athrotaxis selaginoides rainforest and Pherosphaera hookeriana locations (the Operator, where necessary, can apply to construct boardwalks over locations not specified in the RAA, which application will be subject to the written consent of the Minister including any necessary further assessment); (D) using continual education and supervision as part of the overall interpretation and presentation of the Land to ensure minimal impact. 9) A2.5: Construction Environmental Management Plan - The Operator must, before making any application for Development Approval to the Central Highlands Council and/or undertaking any Development Works on the Land prepare a plan ('Construction Environmental Management Plan'), in a form and substance satisfactory to the Minister, to deal with the following matters: (d) details of how impact mitigation will be managed including the development of site management plan dealing with listed species and communities of the island, risk mitigation measure and supervision; ii C2.2 Management of the Environment: At all times while on an Activity the Operator must use all reasonable endeavours to ensure that the environment and ecology of the Licensed Area is in no way damaged by the Experience Guides and Clients including ensuring all staff and Clients clean, dry and disinfect any waders or equipment prior to accessing the Land and the Licensed Area. • Additional proponent proposed measures 10) Additional on-site assessments (30 May 2018) have identified a suitable helicopter landing location (see Helipad Site 2 - Proposed Helipad and access to Halls Island Vegetation Survey 20 May 2018) consisting of naturally exposed bedrock within a HHE (Eastern alpine heathland) community. It is the intention of the proponent to use this area as the HLS without the requirement for added infrastructure (subject to HLS approval from helicopter contractors and meeting applicable CASA regulations). Should infrastructure (formed helipad) be required due to OH&S and/or CASA requirements, a raised perforated deck shall be installed at Site 2, as per Flora and Fauna Assessment impact mitigation prescriptions. 11) Walking route from heli-landing site to the lake-edge shall follow the sclerophyll forest / open plain edge as prescribed in the Flora and Fauna Assessment addendum. When using the route between the western plain edge, and the lake edge, customers and guides shall use fan-out walking techniques to avoid trampling and track formation. Incorporate into CEMP / Operations Manual. 12) Traversing of susceptible poorly drained habitats including sphagnum, blanket bogs and wetlands shall be avoided through the CEMP / Operations Manual Risk after mitigation and avoidance measures are in place: Low. Activities that could result in trampling are mitigated, and activities that could lead to track formation are avoided. Likelihood of a significant impact: Negligible-low. Avoidance measures, along with mitigation measures such as education and supervision result in a negligible to low risk of significant impact 108 The PMEMP itself contained a series of "subplans" to address potential impacts from aspects of the action. For example, under the topic of "construction", the subplan described its objective in the following terms: The objective of this plan is to ensure that all impact avoidance and mitigation measures relating to MNES are identified and implemented prior to the commencement of construction. 109 The PMEMP then went sequentially through a number of other areas of potential impact (eg weed and hygiene, Indigenous heritage, species and communities of significance, fire). For "species and communities of significance", the relevant subplan stated the objective was: … to ensure that all risk related to the proposed activities are avoided, or mitigated. 110 Taking the threatened ecological community of Alpine Sphagnum Bogs and Associated Fens as an example, the subplan cross-referenced back to earlier sections of the PMEMP which set out "mitigation and avoidance measures" for trampling and track formation (being one of the primary potential impacts for this species). That earlier part of the PMEMP stated: 2.3 Trampling and Track formation avoidance To ensure that trampling, track formation and general disturbance of MNES species and communities is avoided and mitigated, the following measures will be fully adopted for use during the construction process: (a) Avoid routes through MSP's, or facilitate passage across MSP's by installing raised, perforated boardwalking. Risk is mitigated. (b) Education and supervision during trips, in relation to avoidance of trampling (c) Siting of standing camp among ORO or WSU communities. (d) Create visitor exclusion zones, excluding visitors from sensitive communities MSP, RKP and Pherosphaera hookeriana communities (see site map) (e) Install raised, perforated boardwalk along area of existing impact (MSP community south of Halls Hut) (f) Ensure on-island routes/tracks avoid Pherosphaera hookeriana. Where existing routes pass this species (eg: near the natural rock landing), use short lengths of boardwalk or similar appropriate mechanisms to ensure a clear walking route that avoids the plant species. Education and supervision to re-enforce impact mitigation. Utilise no-access areas for visitors, see Halls Island Preliminary Design Plan for Site Plan. (g) Camp will be installed using hand tools / battery-operated tools only. Minimal ground disturbance, no excavations or changes to water-courses. A small four-stroke generator may be used during the construction process to charge electric tools. This shall be located on the ORO terrain to minimise risk of fire etc. (h) A Construction Environment Management Plan (CEMP) shall be prepared in accordance with the current RAA and Lease requirements, and will ensure that staff and contractors working on Halls Island aware of the location of threatened plants and threatened native vegetation communities to ensure no inadvertent impact to these natural values. (i) Flag work area to avoid inadvertent disturbance of threatened plants (Pherosphaera hookeriana pines) during construction. Include in CEMP. (j) Locate the Halls Island landing such that threatened plants (Pherosphaera hookeriana pines) do not need to be removed. If this is not practicable or safe, and any of these threatened pines need to be taken, then a permit to take under the Threatened Species Protection Act 1994 will be required from PCAB prior to any impact. 111 The PMEMP and its associated documents, along with the referral, were considered by the Department's Heritage Branch. The delegate was informed in the brief at certain points of the view of the Heritage Branch. For example, in the conclusion of the section of the brief titled "World Heritage properties", the delegate was advised that: The Heritage Branch concludes that if the proposed avoidance, mitigation and management measures are implemented and adhered to, impacts to cultural heritage values, view fields and sites of exceptional natural beauty associated with the TWWHA, and impacts associated with trampling, fire, and the introduction of pests, weeds and pathogens, should be effectively mitigated. 112 The applicant submitted: The Brief's authors approached the s 75(1) question on the assumption that the Proponent would adopt the mitigation measures proposed in the PMEMP. In other words, they considered impacts as mitigated by the proposed measures, rather than considering the likely adverse impacts without mitigation. (Original emphasis.) 113 I accept that submission. It is apparent from the extracts above that the approach Wild Drake was, I infer, advised and encouraged by the Department to take to its referral was to put forward a case based on how any likely adverse impacts on matters of national environmental significance would be mitigated or avoided. The objective was to present a complete picture of sufficient mitigation and avoidance measures so as to persuade the delegate there was no likely significant or adverse impact on any matter of national environmental significance, if those mitigation and avoidance measures were implemented in the taking of the action. The delegate's discharge of the statutory task in s 75, I am persuaded, was not undertaken by consideration of the action alone – taking any of the descriptions of the action which I have set out earlier in these reasons. It was undertaken by consideration of the particular manner in which the action would be carried out, and the large and complex suite of mitigation and avoidance measures which Wild Drake proposed, many of which had also been proposed and accepted (at least for the purposes of "draft approval", as I note below) under the State's RAA process. 114 On the facts as they were before the delegate, the RAA process was incomplete and only "draft approval" had been received for "stage one" (the referral before the delegate). As I have already noted, on the facts before the delegate, Wild Drake was required by the RAA process to refer the proposed action under the EPBC Act. It could therefore not have been used as an assessment process if the action had been designated as a controlled action. Yet it was used to avoid a controlled action designation. 115 The Department treated the RAA as a substitute assessment process, and the delegate did the same by adopting the Department's reasoning. A clear example of this relates to the consideration of potential impacts on Indigenous heritage, and how they were dealt with in the brief. After referring to concerns expressed by the AHC about the "cultural interpretation site visits" Wild Drake proposed to undertake in the future, the brief stated: The cultural site visits referred to by the AHC are those that form part of the stage 2 proposal, are not part of this referral and have not been approved to proceed in the PWS RAA. 116 That is a clear example of the Department and the delegate treating the non-statutory, State-based RAA process as the de facto assessment process. The scheme of the EPBC Act does not contemplate that will occur, outside the methods (such as bilateral agreements) for which it provides. 117 The substantive reasoning aspects of the brief bear out this characterisation of the delegate's approach. In relation to the Tasmanian Wedge-tailed eagle, the brief identified two features under the heading "Avoidance and mitigation measures". First, what the PWS had identified as "management measures" (not circling around or hovering near eagles' nests or potential nests; to fly as highly, swiftly and directly over the nests as possible during breeding season (July-January); and to avoid flying within 1,000 m of the nests, horizontally or vertically, particularly from July-January)), as well as a voluntary code of practice developed by the PWS called "Fly Neighbourly Advice". Second, undertakings given by Wild Drake itself about "additional measures" to "further avoid disturbance impacts": namely, no flights within a 1 km line-of-sight of known eagles' nests, and that eagles observed in operational areas will be avoided; helicopter flights will not include a "viewing" of the nests; and that Wild Drake will adopt the flight route as prescribed in the "Wedge-Tailed Eagle Assessment" provided with Wild Drake's referral information, being a route that avoids interactions with known nesting sites and utilises an area with a low probability of eagle nests. 118 Relevantly to the grounds of review, a similar approach was taken in respect of the Alpine Sphagnum Bogs and Associated Fens threatened ecological community, and to the World Heritage cultural and natural values which were to be protected. 119 In my opinion, and save for what I set out at [129]-[130] below, the approach taken by the delegate would have surrendered the statutory task, and control of the taking of the action, to an incomplete, non-statutory State process, outside the EPBC Act. It would not have been the task contemplated by s 75; it would have been a different task, and one not authorised by the EPBC Act. 120 As the applicant submitted in reply, the delegate's decision meant that s 12(2)(c) and s 19(3) of the EPBC Act were engaged and Wild Drake was not exposed to injunctive or other procedures to enforce compliance with the prohibitions in Pt 3. Those prohibitions had been disengaged by the s 75 decision. Taking some hypothetical examples, the applicant submitted Wild Drake could thereby decide to vary the flight path of the helicopters, including flying lower (which may significantly impact any Wedge-tailed eagles in the vicinity), or might decide to conduct more than the 30 permitted visits per year (which may significantly impact on the wilderness values of the area), and the s 75 decision would render such changes, and such conduct, unregulated by the EPBC Act. In contrast, if the action had been a controlled action, and the measures proposed by Wild Drake, and set out in the RAA, had been imposed as conditions under s 134 of the EPBC Act, the Minister and the Department would have retained an ability to monitor and regulate any such changes and conduct. That ability was surrendered. 121 The Minister submitted at [32] of her principal written submissions, in a theme which ran throughout those submissions, that: An action that was taken without the mitigation measures which were considered as part of the action that was the subject of the referral would be at risk of being characterised as different to the action that was the subject of the controlled action decision and be liable to enforcement action under a provision of Part 3 of the EPBC Act. In those circumstances, the Minister could also potentially call the action in under s 70 of the EPBC Act. 122 Of course, by this time, the conduct may have occurred and any adverse impacts may be too late to remedy. It is insufficient to point to possible remedial powers or the need for another round of allegations and counter allegations about whether the prohibitions in Pt 3 have been contravened. That is not how the EPBC Act is intended to operate. It is not intended to facilitate granular arguments to be made after potentially damaging conduct has occurred about whether an action is the same action or a different one to that which was approved. The fact that in a situation such as this, such granular arguments would be occurring in the context of a decision under s 75 that the action was not a controlled action at all would make the matter extremely difficult and complicated. That is not a workable solution to the problem which has arisen due to the approach taken by the Department and the delegate. 123 Further, the Minister's reliance on the fact that other State-based approvals were required (eg under the Land Use Planning and Approvals Act 1993 (Tas)) before the action could be taken by Wild Drake does not ameliorate the situation. In several respects, the EPBC Act contemplates (and requires) coordination between State and Commonwealth assessment and approval processes: see Tarkine National Coalition Inc v Minister for the Environment [2015] FCAFC 89; 233 FCR 254 [3]-[17], [50] and [57]-[58]. The conditions power also expressly contemplates such co-ordination: see ss 134(3)(c), (3C) and (4)(a). 124 A further factor which supports this approach is the focus of the assessment processes in Div 3 of Pt 8, and of the decision-making requirements in Pt 9 (especially s 131A) on public participation and comment. Some of the assessment processes available under Div 3 of Pt 8 involve high degrees of public participation, such as an environmental impact statement or a public inquiry. The applicant submitted in reply: The purposes of the Act are informed by the treaty obligations to which it gives effect, including (relevantly to the present case) articles 4 and 5 of the World Heritage Convention and articles 8 and 14 of the Biodiversity Convention. Article 14[(1)](a) of the Biodiversity Convention requires Australia, as far as possible and as appropriate, to "[i]ntroduce appropriate procedures requiring environmental impact assessment of its proposed projects that are likely to have significant adverse effects on biological diversity with a view to avoiding or minimizing such effects and, where appropriate, allow for public participation in such procedures". Parts 5, 8 and 9 of the Act, and s 75(1), are integral components of the means by which Parliament has chosen to give effect to that obligation. 125 I accept that submission. The EPBC Act intends there to be a level of public participation. Its subject-matter is the protection and conservation of matters of national environmental significance. Their protection is a matter in which the Australian community has an interest, a fact the legislative scheme recognises. 126 The Regulations do require a proponent to supply information about mitigation measures in its referral, and although public submissions were invited (and were made) at the s 75 stage in respect of Wild Drake's referral, what is not intended by the scheme is that a de facto assessment process be conducted by the Department, in negotiation with a proponent and out of public view. Subject to the power in s 77A, what is being assessed under the statutory task in s 75 is the adverse impacts of the action, not the adverse impacts of the action once all avoidance and mitigation measures have been applied. Any other approach deprives the public of the participation the World Heritage Convention contemplates will be applied to the protection and conservation of World Heritage values in listed properties. 127 At [79] of its principal written submissions, the applicant contended (omitting footnotes): The protective purposes of the Act are undermined if mitigation measures can be taken into account under s 75(1) as to whether there are likely to be significant impacts. If the Delegate's approach were appropriate, it would not make sense to have a bilateral agreement as a substitute for assessing environmental impacts, or to contemplate the Commonwealth approval picking up State conditions. Instead, the State could assess the impacts and impose conditions under applicable State legislation, and the Minister could then consider whether the impacts, as assessed and then controlled under the State legislation, were likely to be significant impacts. (Original emphasis.) 128 There is force in this submission. There is a sense that the Department's approach, including its communications with the proponent prior to the recommendation made to the delegate, was not focussed on assessing the impacts of the action as it was outlined, but rather on discussing with the proponent what mitigation or avoidance measures might be taken so as to reduce the level of potential adverse impacts. As a pathway towards a component decision under s 77A, or as part of considering what kind of assessment process under Pts 8 or 9 should be undertaken, that process may well be legitimate and consistent with the scheme of the EPBC Act. If the Department's approach goes beyond this, then I agree with the applicant it can tend to frustrate the entire scheme of the EPBC Act. While administrative negotiations might avoid a longer, more complex, public and perhaps more resource intensive assessment process, it is not a course of conduct which the EPBC Act contemplates as an entire substitute for use of the mechanisms for which the Act provides so as to regulate the taking of an action. Through a complex and prescriptive piece of legislation, Parliament has identified which substitute assessment and regulatory processes can be applied to the taking of an action which may engage Pt 3 of the EPBC Act. It has done so with precision. Outside those processes, what is available to the decision-maker (not the Department) is a decision under s 75 that the matter is a controlled action and the imposition of regulatory control through that process, or a component decision under s 77A. 129 However, I do not ultimately reach the conclusion on ground 1 which might be suggested from what I have set out above. That is because the appropriate way to interpret the brief, consistently with the legislative scheme, is to see the decision through the lens of s 77A, as a component decision or decisions. Consistently with at least some aspects of the Minister's supplementary written submissions, I have concluded that what the delegate was in reality deciding was that he believed the action would not be likely to have a significant impact if carried out in a certain manner. In its outcome in terms of the content of the s 77 notice, the decision did not reflect this belief, and that is why ground 2 succeeds. 130 There will be a point beyond which the approach taken by the Department (and, I infer, an approach the Department encouraged the proponent to take) must inevitably result in a decision under s 75 being wholly set aside. That will occur where it is not possible to find that the decision-maker "believed" there would be no significant impact or no likelihood of significant impact because the action would be carried out in a particular manner. After some reflection, I have concluded that the better characterisation of what the delegate did is the one I have set out at [129]. I do not consider the delegate adopted an approach which entirely frustrated or avoided the statutory scheme. Ground 2 131 The structure and content of the brief plainly suggests that the delegate did form a belief that ss 12, 15A, 18 and 18A were not controlling provisions for Wild Drake's action because the action would be taken in a particular manner. All of the materials to which I have referred under ground 1, in terms of the way the adverse impacts were identified, and the mitigation or avoidance measures then nominated, point to that conclusion. 132 The Minister has, in her supplementary submissions, conceded this to be the case in respect of only two matters of national environmental significance: the Alpine Sphagnum Bogs and Associated Fens threatened ecological community, and the World Heritage natural criteria (viii), (ix) and (x) as they related to potential contamination of Lake Malbena from construction and operations. 133 I accept that concession, but I consider it does not go far enough, and it fails to recognise or give sufficient weight to the structure and reasoning of the brief as a whole, at least on the other matters of national environmental significance which were material or critical to the delegate's decision: namely the remainder of the World Heritage values, and the impacts of the proposed action on the Tasmanian Wedge-tailed eagle. 134 On the latter, the brief stated: The locations of most active Wedge-tailed Eagle nests are known and recorded by the Tasmanian Department of Primary Industries, Parks, Water and Environment (DPIPWE). Mapping included in the referral indicates known nesting sites approximately 2 km from Halls Island and 4 km from the proposed helicopter flight route. 135 One might make the point that a problematic premise of this approach is that, first, there are apparently no undiscovered Wedge-tailed eagle nests and second, there are not likely to be any new nests discovered, whether because of destruction or abandonment of existing nests, or for other reasons. The material does not indicate whether any specific searches had been undertaken for other (otherwise unidentified) nest sites, nor how practical it would be to continue a 1 km exclusion zone around any new nests, nor whether the very presence of the camp might inhibit eagle pairs seeking out and constructing new nests, being, as the materials described them, "timid nesters". 136 Putting that matter to one side, what the finding extracted at [134] above does demonstrate is that the flight path to be taken by the helicopters transporting guests and supplies, including supplies to build the camp, would be critical to the question of adverse impact on the Tasmanian Wedge-tailed eagle, especially during the breeding season. The mitigation and avoidance measures which I have set out at [105] above, and indeed those set out in the brief itself, indicate that there would be adverse impacts if the measures were not taken. That is inherent in the nature of the measures: for example, it is assumed that circling or hovering above nests or potential nests, or "viewing" nests, would be adverse impacts. That is why they are proscribed. There could only have been a need to proscribe viewing of nests because it was otherwise a likely consequence of flying tourists around the area, who might wish to see local wildlife. The identified measure to fly "high, swiftly and directly" over nests during the breeding season indicates that at some point on their route, helicopters would be flying over nests (at least, en route to the camp area). They were to be required to do so "swiftly", "directly" and at height. That is because the proscription assumes if they did not, there may be an adverse impact. All these matters go to the obvious significant impact of the potential disruption of the breeding cycle of an endangered species. The structure of the brief discloses that the delegate believed it was the taking of the action in this particular manner which resulted in s 18 not being a controlling provision in respect of the Tasmanian Wedge-tailed eagle. Even if, as the brief stated, and the Minister contended, at the time of the delegate's decision there were no known nests within the area of the proposed action, nor within 1 km of the proposed flight path, that is no more than a "point in time" position, in circumstances where the subject-matter to be protected is an active (and, the legislative scheme must be assumed to direct itself to, recovering and expanding) breeding population whose nest use may not remain static. 137 In relation to the other World Heritage values, the structure and approach of the brief was the same, and the same conclusion should be reached. To recap, the brief identified the following values as being relevant to the proposed action: • Cultural – iii, iv and vi: disturbance impacts to Indigenous archaeological sites from construction and operations; • Natural – vii: impacts associated with noise from the helicopter transporting and visual impacts from the standing camp; • Natural – viii, ix and x: impacts to ecological and biological systems from trampling of vegetation, unmanaged fires, introduction of pests, weeds and pathogens, sediment and erosion, and contamination of Lake Malbena from construction and operations. 138 As to the cultural values (criteria (iii), (iv) and (vi)), the brief stated: Based on advice from Aboriginal Heritage Tasmania (AHT) provided in the referral, the proponent considers there is a low probability of Aboriginal heritage being present on or adjacent to Halls Island. 139 The applicant did not dispute this contention by Wild Drake was open. However, what the brief also recognised, implicitly, and what the material before the delegate (especially from the AHC) recognised expressly, is that any disturbance or interference with matters of cultural significance to the Aboriginal community would be highly detrimental. In its submission regarding Wild Drake's proposal, which was attached to the delegate's brief, the AHC described the importance of a recently re-discovered heritage site, affected by Wild Drake's "stage two" proposal. For present purposes, it is the depth and weight of potential adverse impact which the submission describes that matters: Sites such as these are rare, highly significant and hold immeasurable value for Aboriginal people. Their protection is paramount and their significance far outweighs any potential short term gains from tourism or other activities. 140 Through emphasis placed on what was called the "An Unanticipated Discovery Plan", the brief recognised the level of importance of any discovered Aboriginal site or "relic" during the construction and operation of the project. The implementation of the "An Unanticipated Discovery Plan" was a requirement under the RAA process. The brief stated: The An Unanticipated Discovery Plan includes ceasing disturbance works in the event Aboriginal relics are found, the application of temporary buffers and assessment by suitable experts. 141 The brief noted that Wild Drake had "committed to the implementation of an Indigenous Heritage – Protected Matters Environmental Management Plan (IH EMP)". It also noted that the IH EMP required "implementation of the requirements of An Unanticipated Discovery Plan". 142 This is what allowed the brief to conclude: … the measures proposed in the I[H]-EMP will ensure impact is avoided should relics be found during construction or operations. 143 In my opinion, what is clear is that without a plan of this nature, the delegate believed there could be an adverse impact if any sites or relics were discovered. That is in the context, as the AHC submission made clear, that the site Wild Drake was proposing to take visitors to as part of the proposed "stage two" was a recently re-discovered site. Thus, the prospect of more sites, or relics, or artefacts, being discovered was real. 144 In my opinion, the brief disclosed that the delegate believed it was the taking of the action in this particular manner, with the application of the "An Unanticipated Discovery Plan", implemented under the IH EMP, which resulted in s 12 and s 15A not being controlling provisions in respect of the identified World Heritage cultural values. 145 As to the first natural value (criterion (vii)), the brief adopted the same approach. It set out a number of avoidance and mitigation measures for the noise impacts of the action (especially from the helicopter usage, and tourist numbers), and measures to avoid impacts on aesthetic values by reason of the design, location and construction of the camp. It was these matters which led to the delegate concluding any impacts from noise, on aesthetic values and any visual impacts could be avoided. It is obvious from the content of this aspect of the reasons that different designs for the camp were adopted, or different configurations for helicopter flights, because the delegate believed there could otherwise have been adverse impacts to a significant level. 146 As the applicant noted at [53] of its principal written submissions, paragraph 8.2 of the TWWHA Management Plan deals specifically with wilderness values, and states: … [t]he intrinsic value of wilderness was a key element in the advocacy for the protection and listing of the TWWHA. Its continuing integrity is therefore an important social value for many people. It is a central element in what many people value with respect to the TWWHA as a whole, and in effect it is often viewed as the principal value of the TWWHA. 147 Avoiding impacts on intrinsic wilderness values is no mechanical exercise. That is no doubt why Wild Drake spent so much time in its referral, and in its supplementary information, attempting to persuade the Department and the delegate that it could take this action in a way which was sensitive to the wilderness values of the area. The delegate accepted that could be done, but only if the specified range of mitigation and avoidance measures were taken – which is just another way of saying the action would be undertaken in a particular manner. 148 As to the second set of natural values (criteria (viii), (ix) and (x)), the same observation can be made, although the brief acknowledged there was a substantial overlap in the applicable avoidance and mitigation measures with the measures put forward for the Alpine Sphagnum Bogs and Associated Fens threatened ecological community. The brief made findings such as: The proponent has provided avoidance and mitigation measures to avoid or reduce trampling, fire risk and introduced species or disease impacts. These are the same as described for the TEC above. The proponent will not be excavating for construction and will be making no changes to watercourses. The boat jetty is a natural rock slab and this will avoid eroding soil at the lakes edge. 149 This indicates that what Wild Drake would not do (or should not be permitted to do) was just as important to the delegate's belief about no adverse impacts to a likely significant level as Wild Drake's positive conduct. If watercourses were to be changed, then I consider, reading the decision as a whole, it is likely that would have been found to be a likely significant impact in this particular region. Therefore, belief that the proponent would take the action in a particular manner by not engaging in certain conduct (eg changing a watercourse) was also part of the delegate's approach. 150 Plainly, as the brief set out and the Minister now concedes, the measures taken to avoid contamination of Lake Malbena were "particular manner" measures. They were said to be: The proponent has included measures to avoid contamination of the surrounding environment, including Lake Malbena. These measures are included in the Construction - Protected Matters Environmental Management Plan (C EMP) and the WC EMP [Wilderness Characteristics – Protected Matters Environmental Management Plan] including through: • installation of complete-capture sewage and greywater pods; • back-loading of greywater with each trip, for disposal outside of the TWWHA; • annual collection of sewage in pods to be emptied off site; • ensuring that all rubbish generated is properly collected and stored in a manner that it cannot be accessed by animals and properly disposed of at an authorised waste disposal site at the end of each stay; • use of recyclable, compostable and/or reusable containers and wrappers wherever possible, no use of plastic bags or single use plastic bottles; and • minimal ground disturbance and no excavations or changes to water-courses. 151 In summary, in my opinion all of the three sets of World Heritage values at [137] above were only identified as not engaging the controlling provisions in ss 12 and 15A because of the delegate's belief that the action would be undertaken in a particular manner – the integers of that "manner" being set out in the brief. 152 The applicant submitted in its supplementary reply submissions that another way to interpret the brief is to read it as adopting the approach of Kerr J at first instance in Triabunna Investments Pty Ltd v Minister for the Environment and Energy [2018] FCA 486; 160 ALD 243, especially given that the delegate's decision was made in August 2018 and Kerr J's judgment was handed down in April 2018. Justice Kerr's approach was not endorsed by the Full Court. I do not agree that this is the correct interpretation of the brief. Putting the outcome of the exercise of power under s 75 to one side, the structure of the brief did not approach the mitigation and avoidance measures as inherent parts of the action. It separated them out. That is apparent from the descriptions of the action which I have extracted above. The brief plainly acknowledged it was the specified mitigation measures which would reduce or avoid the adverse impacts of the action. It treated the two as separate. Ground 3 153 I accept the applicant's submission that a decision whether s 74A(1) is engaged is "logically anterior" to a decision under s 75. The Minister did not appear to dispute this. Rather, she made two points: first, that the applicant has not discharged its onus of proving no consideration had been given to the application of s 74A(1); and second, that the Minister in any event had no duty to consider whether this provision was engaged. Onus and its discharge 154 I accept the Minister's submission that the applicant bears the onus of establishing, on the balance of probabilities, the error for which it contends; namely that the delegate did not consider whether s 74A(1) was engaged: see Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; 241 CLR 594 at [67] (Gummow J, Heydon and Crennan JJ agreeing). 155 The material before the delegate, to which I have referred above, makes it clear, and I find, that Wild Drake had planned, and proposed, a second aspect to its development on Halls Island. The Department and the delegate knew about the second aspect because it was referred to in the brief. Indeed, as I noted at [115] above, it was used as a reason for not addressing some potential adverse impacts that the delegate considered would only arise if Wild Drake proceeded with that aspect. 156 The Minister submitted this state of awareness on the part of the Department and delegate means the Court could not infer the delegate omitted to consider s 74A(1). I disagree. There was no reference at all to s 74A(1) in the brief, or in the material attached to it. In addition are the following matters: (a) In the brief to the delegate, next to the words "Recommended Decision", there were only three options: NCA (no controlled action); NCA (pm) (no controlled action on the basis of a particular manner) and CA (controlled action). A s 74A decision was not even listed as an option. (b) The brief noted the referral described the proposed action as "stage one" and noted expressly that "[w]hile not part of this referral", there were certain different "stage two" activities. This is the point at which, if it was considered, one would have expected to see a reference to s 74A(1). However, there was no such reference. (c) Later in the brief, it referred expressly to stage two being "progressed separately". This is another point at which one would have expected to see a reference to s 74A(1), if the delegate was indeed being put on notice of a need to consider that provision. 157 What must be recalled in this context is the unusual situation where the brief has, in substance, been transformed into the delegate's reasons. Different considerations might apply to an independently prepared set of reasons, in the usual way. Here, however, the first and principal purpose of the brief was to advise and inform the delegate, in order that he could make a decision. This purpose strengthens the expectation that if the delegate was being asked to turn his mind to s 74A(1), the brief would have said so. 158 I find the delegate did not consider s 74A(1). 159 The next question is whether that failure to consider whether to exercise the power in s 74A(1) involves an error of law, and one which means the s 75 decision should be set aside. In its amended originating application, the applicant did not identify what kind of error it contended this failure constituted. The applicant's written submissions did not characterise the error either. In oral submissions, counsel for the applicant contended that there was a duty to consider the application of s 74A, in the circumstances of this case at least, because of what was raised in the referral material. As I understood it, counsel submitted the applicant need not go further than that, and the Court need not decide whether in every circumstance there would be a duty to consider the application of s 74A prior to making a decision under s 75. 160 I agree that the latter question need not be answered. Whether or not s 74A imposes a duty to consider if an action forms part of a "larger action" will be a question of statutory construction: see Animals' Angels e.V. v Secretary, Department of Agriculture [2014] FCAFC 173; 228 FCR 35 at [87] (Kenny and Robertson JJ, Pagone J agreeing). As the Full Court's decision revealed, the question may be a complex one. 161 However, what the Full Court also made clear in Animals' Angels at [89], by reference to a passage from SZGUR, is that in a particular case a failure to consider exercising a discretionary power conferred on a repository may amount to a legal error, and indeed an error affecting the jurisdiction of the repository of the power. In SZGUR, French CJ and Kiefel J (as her Honour then was) said at [22] (with my emphasis added): The question whether s 427(1)(d) imposes a legal duty on the Tribunal to consider whether to exercise its inquisitorial power under that provision was answered in the negative by the Full Court of the Federal Court in WAGJ v Minister for Immigration and Multicultural and Indigenous Affairs. The Court held that absent any legal obligation imposed on the Tribunal to make an inquiry under s 427(1)(d) "[b]y a parity of reasoning … there is no legal obligation to consider whether one should exercise that power". That view is correct. That is not to say that circumstances may not arise in which the Tribunal has a duty to make particular inquiries. That duty does not, when it arises, necessarily require the application of s 427(1)(d). (Footnotes omitted.) 162 An error of the kind to which their Honours referred, arising in the particular circumstances of a given case, might be characterised in a number of different ways, depending on the statutory scheme involved, and the jurisdiction of the supervising court. It could be legal unreasonableness. It could be a failure to perform the statutory task of merits review. It could be the overlooking of a matter material to the performance of the statutory task in a given case. 163 In the present case, I am satisfied the particular facts and circumstances before the delegate meant that he should have considered the application of s 74A, but failed to do so. In terms of characterising the nature of the error, I consider it can be properly described as a failure to perform the statutory task required of the delegate under s 75 in the circumstances of this particular referral and the information provided to the delegate, given that the discretionary power in s 74A is an express part of the statutory scheme, and is a power of relevance only before a decision has been made under s 75. 164 Regulation 4.03(1) of the Regulations requires a referral to contain the information set out in Sch 2 to the Regulations, unless it is unreasonable to expect it to be included (reg 4.03(2)). Clause 4.01(i) of Sch 2 provides that a description of the proposed action must include "whether the action is a component of a larger action". 165 In its referral, Wild Drake complied with this requirement (with my emphasis in bold and underlined, and including some typographical errors): 1.15 Is this action part of a staged development (or a component of a larger project)? Yes 1.15.1 Provide information about the larger action and details of any interdependency between the stages/components and the larger action. The State Government level RAA approval has been broken into two parts. This EPBC self referral only pertains to Stage One activities. Stage 1 Activities, which are fully approved at the State level through the RAA process and subject to this EPBC self-referral: - All developments and activities on Halls Island - Helipad - Walking route between the helipad and Halls Island - The use of non-motorised watercraft on Lake Malbena; and - Helicopter flight path Stage 2 activites (not subject to this EPBC self-referral) requiring additional State assessment and approval include: - Proposed walking routes to Mt Oana - Proposed walking route to, and proposed cultural interpretation activities at the Aboriginal heritage site listed in the RAA (location details are not publicly identified in this table due to sensitvities, but are available to DOE assessment officers through the attached commercial-in-confidence RAA). - Any additional walking routes The proposed walking routes will require a natural values assessment (to be performed by Northbarker), and the proposed activities relating to Aboriginal cultural are reliant on the proponent further contacting, engaging and consulting with the Aboriginal Heritage Council (AHC), and the Aboriginal communities, outlining the details of the proposed development, and any proposed plans for activities including site visits, cultural heritage interpretation and planned access to Country projects. The development and commencement of Stage 1 activities and infrastructure is not relient on Stage 2 activities. 166 Thus, there was no equivocation from Wild Drake about its intention to undertake the actions described in "stage two". It was indicating that it, as the proponent, did not consider the taking of that action to be part of its referral. When it is recalled it was required to self-refer under the EPBC Act as part of the RAA process, that position is explicable. 167 Indeed, the facts are stronger than this, as the applicant submitted. Originally, when putting its proposal to the PWS, Wild Drake put the proposal as a single proposal. In the RAA application, under the heading "Proposed activities include", the following was set out (omitting references to coordinates and including some typographical errors in the original): • Kayaking on Lake Malbena – operations will meeting Marine And Safety Tasmania (MAST) requirements. • A half-day walk up Mount Oana…adjacent to the Lake Malbena shoreline. This is adjacent to the Self-Reliant / Wilderness Zone boundary however we believe that the dry-sclerophyll and rock habitat found on the northern face is traversable without creating any significant impacts. Exact route to be determined with an on-site Flora and Fauna specialist in liaison with PAWS, and walks to be GPS tracked and reported annually for monitoring. See appendix Halls Island Maps, Map 4. • Day-trip walks to Mary Tarn Aboriginal cultural site…A number of routes will be developed to minimise the use of any single route, and fan-out walking techniques will be used. Day-trips to Mary Tarn will again be tracked by GPS, and reported annually for monitoring. Areas of sensitive plant communities including Sphagnum listed in the Flora and Fauna Assessment will be avoided, and hard-wearing forest-edges along with well-drained grasslands will be used as the preferred area of travel. See appendix Halls Island Maps, Map 5 for matrix of walking routes. Aboriginal cultural interpretation is reliant on input, permission and facilitation from the wider Tasmanian Aboriginal Communities. • European cultural interpretation at archaeological sites (chimney stack and horse paddock on southern side of Lake Loretta… • On-island European cultural interpretation built around the Reg Hall and Walls of Jerusalem story. • On-island passive activities (i.e. un-guided walking within WSU communities and boardwalking, to be defined in operations manual). • Occasionally fly fishing specific activities around lakes Malbena, Loretta, Mary Tarn, Nugetena, as well as Eagle Lake and Kita Lake. Eagle and Kita Lake lay within ~ 100 metres of the self-reliant boundary, and prescribed impact-minimisation walking strategies will be used (eg fan-out, sticking to high and rocky ground etc) as per our existing fishing operations in the self-reliant and wilderness zone further south at Lake Ina. Furthermore, trip numbers to Kita Lake will capped at six per annum to minimise any potential or perceived impacts, and all trips will be GPS logged, and reported annually should monitoring be required. See appendix Halls Island Maps… (Emphasis added.) 168 It was the PWS, not Wild Drake, which split the proposal, for the purposes of the RAA, into two parts. The copy of the RAA documentation in the Court Book indicates the proposal was divided into two stages under that process, in particular at "Step 8 – Draft Final Determination" where it is stated: "This RAA proposal has been broken into two stages of activities. Stage 1 has been approved, whilst stage 2 activities require additional assessment and approval". 169 Therefore, the clarity in Wild Drake's answer "yes" in the referral to the question whether the action was part of a staged development, or a component of a larger project, can be fully understood. From its perspective, the development at Halls Island certainly was all one action. It was the PWS which split the action into two stages during the RAA process. Under the heading "Stage 2 Activities" in Step 8 of the RAA documentation in the Court Book, the PWS stated that those activities required further assessment prior to approval in order to identify potential impacts on "natural and cultural" values and to facilitate further engagement and consultation between Wild Drake, the AHC and the Aboriginal community on matters concerning "Aboriginal heritage". 170 Even if it were otherwise, the purpose and operation of s 74A(1) are not to be confined by the proponent's perspective on whether a "stage" of an action is likely to be "separate" or not. Even more so, they are not to be confined by the perspective of those administering a non-statutory process contemplated under a State management plan. The whole purpose of s 74A is to engage the Minister (or delegate) in the question of whether there is in reality a larger action, which needs to be assessed as a whole, and if so, to compel a referral of the larger action under s 74A(2). In the alternative, the Minister may decide, having considered the matter, there is not any larger action, or even if there is, that it is nevertheless appropriate for part of the action to proceed for consideration under s 75. 171 Separating an action into components may affect the length and complexity of any process under the EPBC Act. It may also lead to the Minister (or delegate) failing to appreciate the true level of impact of an action; or failing to understand how mitigation measures proposed to be taken (or which might be imposed) will operate in a context where further, and subsequent, action(s) are planned or proposed. In a case such as the present, where activities are described as occurring over two stages, a proponent may secure permission for one set of activities and then, once those activities are established, be in a quite different position to negotiate to undertake a second set of activities. That is, in effect, where the delegate's decision has placed Wild Drake. What these matters highlight, on facts such as those arising in the present case, is the need for consideration of whether, in reality, there is only one "action", even if a proponent presents the action as activities designed to occur in stages. The present case is probably an apposite example. On any view of the material before the delegate, the activities Wild Drake proposed in what the RAA process separated out as "stage two" were an extension of "stage one": taking tourists to different places, but still from the base at Halls Island. I do not say that to find in any way that the delegate was bound to find s 74A was engaged, but rather to illustrate that the facts of this referral provide a good example of the situation where there would be a real, not fanciful, question about whether s 74A(1) was engaged, and one to which the delegate should have turned his mind, in order properly to perform his statutory task under s 75. 172 Although, at times, the applicant's submissions appeared to suggest the Court should find that the error was a failure to apply the terms of s 74A, as expressed in the amended originating application and in the bulk of submissions, I have understood the error to be identified as a failure to consider whether s 74A was engaged. That is how the Minister's submissions also appear to have understood the alleged error. 173 In the circumstances of this particular referral, and taking into account the answers given by Wild Drake in the referral to questions expressly designed to direct attention to the operation of s 74A, I find that the delegate's failure to consider whether s 74A(1) was engaged meant that the delegate's exercise of power under s 75 was affected. Section 74A can only operate prior to a decision being made under s 75: it has a "once off" effect. 174 Whatever the delegate might have determined about leaving "stage two" of the Halls Island action out of consideration for the purposes of s 75, the fact as I have found it is that he was not advised to consider it, and did not do so. That error materially affected the exercise of power under s 75, because one of the two options under s 74A was to decide not to accept the existing s 75 referral at all: the implication in s 74A(1) being that a proponent would be required to submit a referral containing the entire proposal, and then the s 75 exercise would be quite different. 175 Given the nature of the material before the delegate, the potential application of s 74A was squarely raised. In those factual circumstances, the delegate could not perform his task under s 75 without giving consideration to the terms of s 74A. The "once off" character of s 74A contributes to the materiality of the delegate's omission to consider its role on the facts of this case. Further, the terms of s 74AA(1)(d) also indicate that a decision whether or not to accept a referral under s 74A is a step the legislative scheme expects the Minister to consider in an appropriate case. 176 If it were otherwise, the Minister would be able, arbitrarily, to determine the circumstances in which she or he might examine if the action is part of a larger action, even if that matter had been expressly drawn to her or his attention by the proponent in the referral documentation (as the documentation requires). I do not consider the scheme intends such a disorderly result. 177 With respect, the authorities on which the Minister relied concern quite different circumstances. Authorities such as Yasmin v Attorney-General of the Commonwealth of Australia [2015] FCAFC 145; 236 FCR 169 concern whether relief in the nature of mandamus is available to compel a decision-maker to do what the decision-maker has either failed or positively refused to do. In Yasmin at [89], the Full Court also emphasised that the question whether a power carries with it a duty to consider its exercise is very much context dependent. In the present statutory context, I have not concluded one way or the other, whether the power in s 74A carries with it a duty to exercise it in every case. Rather, I have concluded that on the facts, the application of s 74A to this action was squarely raised, and therefore needed to be determined as part of the s 75 task. 178 As I noted at the start of these reasons, there was a debate between the parties about the use to which the applicant sought to put the Nathan Dam case. Having rejected the Minister's contention that this was a new argument, I otherwise accept the Minister's submission that the present situation, especially in relation to ground 3, is quite different. Nathan Dam concerned the nature of indirect impacts. The error identified by ground 3 concerns whether the delegate performed the statutory task. The nature of the impacts of "stage two" of Wild Drake's action was beside the point. The question was whether in the circumstances the delegate was required to determine if he was satisfied the referred action was part of a larger action, or not. I have decided he was. Relief on ground 3 179 Having decided that the applicant's contentions on ground 3 should be upheld, there is a question about the appropriate relief to be granted. That question arises in light of the relief I have decided should flow in respect of ground 2 (that is, of the kind ordered by the Full Court in Triabunna), and in light of my rejection of the applicant's argument that the erroneous approach by the delegate to s 75 should lead to a setting aside of the delegate's decision under s 75. One option for consideration is whether there can be a remitter to the delegate for the purposes of considering whether he is satisfied s 74A is engaged, and whether, if he is so satisfied, the discretion there conferred should be exercised. There are no doubt other options. There is also a question whether this can be done without setting aside the s 75 decision. The applicant may wish to press for a setting aside of the s 75 decision. The parties should be given an opportunity to agree on relief, and in the absence of agreement, to make short submissions on the matter. Conclusion 180 Ground 2 succeeds. Ground 1 does not succeed in its terms, but only because of the way I have understood the delegate's decision. Ground 3 succeeds on the facts, but the parties should be heard on the question of relief, given the Court's conclusion on ground 2. 181 The Court's orders as a consequence of ground 2 succeeding will reflect the orders made by the Full Court in Triabunna, although the parties will be given an opportunity to propose an appropriate formulation of the order relating to the contents of the s 77 notice. 182 The applicant has substantially succeeded and the usual order for costs should be made. I certify that the preceding one hundred and eighty-two (182) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. Associate: Dated: 12 November 2019	31,181
federal_court_of_australia:fca/single/1999/1999fca0395	decision	commonwealth	federal_court_of_australia	text/html	1999-04-09 00:00:00	Australian Colliery Staff Association v Queensland Mines Rescue Service [1999] FCA 395	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca0395	2024-09-13T22:49:08.187851+10:00	FEDERAL COURT OF AUSTRALIA Australian Colliery Staff Association v Queensland Mines Rescue Service [1999] FCA 395 INDUSTRIAL LAW - appeal against decision of Industrial Magistrate - whether promotion and transfer or a new contract of employment - whether place/location of employment was a term of employment - whether transfer of locality was a term of employment - meaning of "reduction of hands" for the Coal Mining Industry (Permanent Mines Rescue Staff) Award 1991 - discussion of distinction between employment relationship and the contract of employment. MINING LAW - consideration of the legislative history of the Coal Mining Act in particular coal mining rescue services. WORDS AND PHRASES - "reduction of hands". Coal Mining Industry (Permanent Mines Rescue Staff) Award 1991 Queensland cl 25 Workplace Relations Act 1996 (Cth) Coal Mining Act 1925 (Qld) s 76 Coal Legislation Amendment Act 1997 (Qld) Jones v Associated Tunnelling Co Ltd [1981] IRLR 477 cited, distinguished O'Brien v Associated Fire Alarms Ltd [1968] 1 WLR 1916 cited Byrne v Australian Airlines Ltd (1995) 185 CLR 410 followed Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 327 cited BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 cited Gunton v Richmond upon Thames London Borough Council [1981] 1 Ch 448 cited AUSTRALIAN COLLIERY STAFF ASSOCIATION v QUEENSLAND MINES RESCUE SERVICE QG102 OF 1998 COOPER J BRISBANE 9 APRIL 1999 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG102 OF 1998 BETWEEN: AUSTRALIAN COLLIERY STAFF ASSOCIATION Applicant AND: QUEENSLAND MINES RESCUE SERVICE Respondent JUDGE: COOPER J DATE OF ORDER: 9 APRIL 1999 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The order of the Industrial Magistrate at Ipswich made on the 21 August 1998 dismissing the complaint of the Australian Colliery Staff Association be set aside. 2. The matter be remitted to the Industrial Magistrate at Ipswich for hearing in accordance with law and these reasons. 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 QG102 OF 1998 BETWEEN: AUSTRALIAN COLLIERY STAFF ASSOCIATION Applicant AND: QUEENSLAND MINES RESCUE SERVICE Respondent JUDGE: COOPER J DATE: 9 APRIL 1999 PLACE: BRISBANE REASONS FOR JUDGMENT 1 On 27 May 1998 the Australian Colliery Staff Association ("the Complainant") filed a complaint and summons against the Queensland Mines Rescue Service Ltd ("the Defendant") in the Industrial Magistrates Court at Ipswich, Queensland. The complaint alleged that the Defendant, in breach of the Coal Mining Industry (Permanent Mines Rescue Staff) Award 1991 Queensland ("the Award") had, as employer of one Malcolm John Parsons, failed to pay to the employee severance pay under clause 25(a)(i) and retrenchment pay under clause 25(b)(i) of the Award. The Complainant sought imposition of penalties pursuant to s 178(1) of the Workplace Relations Act 1996 (Cth) ("the Act") and an order pursuant to s 178(6) of the Act for payment of the sums allegedly due for severance and retrenchment pay. 2 On 27 July 1998 the Defendant served a defence to the complaint and summons. Attached to the document and marked "Attachment A" was a copy of what was described as "Mr Parsons original letter of appointment to the then Brigade dated 10 April 1989". Also attached and marked "Attachment B" was a copy of what was described as a "subsequent letter dated 11 August 1993 confirming the appointment of Mr Parsons as Superintendent with the organisation". Copies of relevant clauses of the Award were attached as "Attachment C". 3 The Defendant, by its defence, pleaded that Mr Parsons' employment had not been terminated and that he had not been retrenched in consequence of the employer deciding upon a reduction of hands. It pleaded that Mr Parsons remained in employment and that he had been relocated from Booval, near Ipswich to Blackwater, Queensland retaining his current classification of Superintendent. 4 In the final paragraph of its defence the employer made application for the proceedings to be struck out on the basis that there had been no termination and no reduction of hands and that in consequence no entitlements under clause 25 had become payable. 5 The Complainant, on 29 July 1998, filed a reply to the defence. The essence of the Complainant's reply was that Mr Parsons was employed as the Station Superintendent at Booval and the contract of employment did not entitle the employer to direct the employee to transfer from Booval to Blackwater. Termination of the employment at the Booval location when the Booval Mines Rescue Station was closed because there were no longer underground coal mines to serve, was, the Complainant contended, termination of the employment in circumstances which gave rise to entitlements under clause 25 of the Award. 6 The Complainant filed an affidavit of Mr Parsons which had exhibited to it a copy of an advertisement for Station Superintendent with the Queensland Mines Rescue Brigade ("the Brigade") to work from its Booval Station. The affidavit also had exhibited to it a copy of the letter of offer dated 11 August 1993 together with a position description for "Superintendent Booval" which Mr Parsons received from the State Manager of the Brigade. Additionally, there was exhibited correspondence between the Defendant and the Complainant relating to closure of the Booval Mine Rescue Station and the Collinsville Mine Rescue Station and the transfer of employees from those stations to Blackwater or Dysart Mine Rescue Stations and correspondence between Mr Parsons and the Defendant. 7 Before the Industrial Magistrate on 11 August 1998, the parties wished to have determined as a preliminary point whether clause 25 of the Award applied and whether Mr Parsons thereby had an entitlement to be paid under the clause. In this respect it was not intended by the parties that Mr Parsons would give evidence or be cross-examined on his affidavit. Rather, it appears that the parties intended that the issue be decided on the proper construction of the documents attached to the defence and to Mr Parsons' affidavit, including the Award, and upon other documents provided by them to the Industrial Magistrate. It also appears that the parties were content to make submissions as to commonly accepted facts where no objection was taken by either party. A copy of page 1685 of the Queensland Government Gazette No 90 of December 1988 was also provided to her Worship. The Industrial Magistrate agreed to such a course, although the failure to call sworn evidence was a matter of comment in her Worship's reasons for decision. 8 In the result the Industrial Magistrate dismissed the complaint. In doing so, she said in part : "It is asserted on Mr Parsons behalf, that as he was appointed as station superintendent at Booval, and that if that station closed, he was then effectively made redundant. And that in essence, he could not be forced to take, what amounts to a compulsory transfer. I was not provided with any evidence about Mr Parsons view of what the initial employment contract was, and why he thought his employment was only at Booval, and nowhere else, or why he thought transfer was not an issue. I have to say that the letter appointing Mr Parsons, dated 11 August 1998, from the Queensland Mines Rescue Service, clearly says that he was appointed as a superintendent with this organisation, that is, the Mines Rescue Service. It then goes on to say, that he will be located to the suburb of Booval, as station superintendent. It was submitted by the complainant that this was a clear indication that Booval could be regarded as his only place of employment. That argument does not carry much weight with me. The letter states, in unequivocal terms, that he was appointed as a superintendent with the organisation. Frankly, I view the matter as merely a promotion of Mr Parsons, within the organisation, bearing in mind, that he had previously been employed with that organisation as an instructor. I also note, that in the Government Gazette in December 1998, notification was published, that pursuant to the provisions of the Coal Mining Act of 1925 to 1981, it had been approved that the State of Queensland shall be one locality for mines rescue purposes. I think this adds further problems to Mr Parsons argument, that his appointment could only be regarded as being to a specific area. The award itself, is silent on the subject of transfer, and I do not think that silence can be inferred, as being supportive of an argument, that therefore, transfers cannot be compulsorily made or offered. It is silent, and that neither supports, nor precludes the possibility of a transfer. ..... In my view, and as I have already stated, Mr Parsons was employed as a superintendent of the Queensland Mines Rescue Service. He carried out those duties at Booval station, but if he was required by his employer, to carry out those duties elsewhere, then in my view, he must do so. It is not my view of the information before me, that it was a fundamental condition of his contract of employment, that those duties were only to be carried out in Booval. There is no evidence or other information, that the duties in Booval, are any different, or more or less specialised, than those of any other superintendent, carried out at any other mines rescue station in this state. Mining operations are generally carried out in the more remote parts of this country. And it would not have been entirely unforeseeable, that at some time, he might have been invited to go elsewhere. I think it is also some factor to be taken into account, in relation to the United Rubber decision, that many of the employees in that case, gave evidence of the difficulties in travel, from their present places of residence, to carry out their duties, some eighty or so kilometres away. Whilst certainly, there is a personal dislocation for Mr Parsons, it seems on the information, which is before me, that those costs will be met by the service, and that therefore, there is not additional cost incurred in this transfer. Well, certainly, there is no evidence of that before me. There is also no evidence which suggests that Mr Parsons, at the time of his contract of employment coming into existence, advised his employers, that he was only available to work in Booval, and not elsewhere, or that his employers told him, that he would only ever have to work in Booval. Further, there is no evidence that if he had been aware of the possibility of being transferred at some time in the future, for whatever reason, he would not have taken the job. If there were some evidence to that effect, then this matter may have taken on a different result. In all of the circumstances, I am not satisfied that the complainant has discharged the onus of proof. And accordingly, I dismiss the complaint " 9 The Complainant appealed to this Court pursuant to s 422(1) of the Act against the order dismissing the complaint. The grounds of appeal are : (a) The learned Magistrate erred in finding that the provisions of clause 25 of the Coal Mining Industry (Permanent Mines Rescue Staff) Award 1991 did not apply to Mr Parsons' employment contract. (b) The learned Magistrate erred in not applying the provisions of clause 25(a)(iv) of the Coal Mining Industry (Permanent Mines Rescue Staff) Award 1991 by placing an onus on the Respondent of establishing that services of Mr Parsons were not terminated because of a reduction of hands by the Respondent. (c) The learned Magistrate erred in finding that the State of Queensland was one locality for mines rescue purposes. (d) The learned Magistrate erred in giving insufficient or no weight to a relevant consideration, that being that Mr Parsons was being relocated a distance of 800 kilometres from Ipswich. (e) The learned Magistrate erred in concluding that Mr Parsons could be required by the Queensland Mines Rescue Service to carry out his duties at a location away from the Booval Station. (f) The learned Magistrate erred in concluding that it was not a fundamental condition of Mr Parsons' employment contract that his duties were only to be carried out in Booval. (g) The learned Magistrate erred in not finding that there was a reduction of hands pursuant to s 25(b)(i) of the Coal Mining Industry (Permanent Mines Rescue Staff) Award 1991. 10 On the hearing of the appeal the Complainant sought to file a further affidavit of Mr Parsons again exhibiting all the documents which the parties had placed before the Industrial Magistrate and seeking to address the issues her Worship raised as not having been addressed by evidence from Mr Parsons in the hearing below. 11 The material was available at the time of the hearing below. That hearing was conducted on an agreed basis which would not involve the calling of witnesses. For reasons which are set out later, Mr Parsons' oral evidence on the subjects identified by the Industrial Magistrate are not relevant in circumstances where the terms and conditions of the employment are contained in written documents and where the location of the employment is ascertainable on the proper construction of the documents. Leave to call fresh evidence on the appeal is therefore denied. 12 The legislative history of the establishment and operation of mine rescue stations is relevant to the matrix of background facts against which Mr Parsons was employed by the Queensland Mines Brigade. 13 By s 76 of the Coal Mining Act 1925 (Qld) as amended, the Minister established by Order published in the Gazette, rescue stations in localities defined in the Order for the purpose of affording first aid in case of accident in any coal mine situated within the locality so defined. There was also power to constitute in the Order a committee of management which had power, subject to the approval of the Minister, to appoint such officers and to do such things as were necessary for the efficient management and control of the rescue station. The committee of management was empowered to sue and be sued in the name of "The Committee of the Rescue Station at ..." and to have vested in it ownership of the rescue station and of all the equipment, appliances and ambulances as were necessary for the operation of the rescue station. Section 76 also provided: "There shall be continuously in attendance at such rescue station such and so many persons as the Minister directs, trained in first aid and holding certificates of competency in that behalf approved by the Minister." 14 The rescue stations originally established were owned and operated locally by committees of management established in respect of a particular station for a particular locality. The power under s 76 of the Coal Mining Act 1925 (Qld) as amended contained a power to redefine a locality in any subsequent Order. 15 In 1979, s 76 of the Coal Mining Act 1925 - 1976 (Qld) was amended to delete the existing s 76 and to substitute in lieu a new s 76. The new s 76 provided, so far as is presently relevant : "76(1) The Minister may, by notification published in the Gazette, establish a locality or a number of localities for the purposes of this section and may in like manner dissolve or alter the boundaries of any locality so established. A locality established for the purposes of this section shall be defined as the Minister thinks fit in the notification by which it is established or by which its boundaries are altered. A locality established for the purposes of this section may be wholly within the limits of the State or wholly within an area outside such limits in which the laws of the State may lawfully be made to apply or partly within such limits and partly within such area. Each locality declared by the Minister for the purposes of section 76 of the Coal Mining Act 1925 (as amended from time to time), prior to the commencement of the Coal Mining Act Amendment Act 1979, shall continue in being until it is dissolved or its boundaries are altered pursuant to this section. (2) In a notification by which he establishes a locality or in a subsequent notification published in the Gazette that refers to that locality, the Minister may direct that there shall be established for that locality a rescue brigade or a number of rescue brigades and may, in the same or a subsequent notification published in the Gazette, constitute a committee of management for the control and upkeep of each rescue brigade established or to be established and may in like manner dissolve a rescue brigade or a committee of management so established or constituted. Each rescue station and committee of management established pursuant to section 76 of the Coal Mining Act 1925 (as amended from time to time) prior to the commencement of the Coal Mining Act Amendment Act 1979 shall continue in being as a rescue brigade and a committee of management of that brigade respectively until it is dissolved or, as the case may be, re-constituted pursuant to this section. ..... (4) The function of a rescue brigade shall be to afford assistance in the case of emergency in any coal mine situated in the locality in which the brigade is established or situated in any other locality or place whether within or outside the State in such cases as are approved by the committee of management constituted for the brigade. The committee of management constituted for the rescue brigade shall ensure that there is at all times available through the brigade a sufficient number of suitably qualified and trained persons suitably equipped to allow the brigade to properly discharge its function." 16 The committee of management was to be known as "The Committee for the Rescue Brigade at ..." and was given the power to sue and be sued and through its members to hold the property of the rescue brigade. 17 On 5 December 1988 by Order published in the Queensland Government Gazette No 90 at page 1685 the Minister for Mines and Energy made the following orders : "IN pursuance of the provisions of section 76 of the Coal Mining Act 1925 - 1981, it has been approved - (a) that as of 1st January, 1989, all previous localities and committees of management for mines rescue brigades are dissolved; (b) that the State of Queensland shall be one locality for mines rescue brigade purposes; (c) that there be established for the new locality a rescue brigade entitled Queensland Mines Rescue Brigade; (d) that those persons named in the Schedule hereto constitute the committee of management for the newly declared Queensland Mines Rescue Brigade." 18 The Order had the effect of dissolving all previous localities established under s 76 of the Coal Mining Acts 1925 - 1981 and dissolving all existing committees of management for mine rescue brigades. The Minister then established a new locality for the purpose of s 76 which consisted of the whole of the State of Queensland and established a single rescue brigade for the new locality, ie the whole State. The effect of the Order was to centralise the functions of all previous brigades into one new brigade and to impose a duty under s 76(4) on the new brigade to ensure that at all times there was available through the brigade a sufficient number of qualified, trained and equipped persons to afford assistance in the case of an emergency in any coal mine situated in the State. Although management and control of coal mine emergency assistance in Queensland was centralised in one rescue brigade, the location of the coal mines which were previously being served by local rescue brigades from a local mines rescue station and the statutory duty, required that the Brigade operate and station employees and equipment in such a way and in such physical relationship to the coal mines as to be capable of providing timely and proper assistance in the case of emergency. 19 In 1997, by the Coal Legislation Amendment Act 1997 (Qld), the Coal Mining Act 1925 (Qld) was amended. The amendments included the omission of s 76 (Act No 62, 1997 s 6). There was inserted into the Coal Mining Act 1925 (Qld) a new Part 4A entitled "Mines Rescue". The system for the provision of mine rescue services was changed to enable mine owners to obtain mine rescue services under a mine rescue agreement with an accredited corporation. The function of an accredited corporation was contained in s 103N which provided : "103N An accredited corporation has the following functions - (a) providing the following services ('mines rescue services') - (i) helping each underground mine owner who is a party to a mines rescue agreement with the corporation to provide a mines rescue capability; (ii) providing mines rescue training programs; (iii) providing staff and equipment to comply with subparagraphs (i) and (ii) and the performance criteria; (b) complying with the performance criteria; (c) reporting to the Minister under section 103P on its compliance with the performance criteria." 20 Under the transitional provisions for Part 4A the committees of management and the rescue brigades, established under s 76 of the Coal Mining Act 1925 (Qld) as amended, were abolished (s 129) and the property of them vested in the first accredited corporation (s 130). The first accredited corporation was the Defendant. Employees of the former brigades, which in reality meant employees of the Brigade, by the operation of s 134 of the Coal Mining Act 1925 (Qld) as amended, became employees of the first accredited corporation. Section 134 of the amended Act provided : "134(1)A person employed by a former entity immediately before the changeover day becomes an employee of the first accredited corporation. (2) The person has the right against the corporation to all existing and accruing rights of employment that the person had immediately before the changeover day against the former entity. (3) However, after the changeover day the rights are subject to any employment law. (4) For any employment law, the person's period of employment with the former entity is taken to be an equivalent period of employment with the corporation. (5) In this section - 'employment law' means the Workplace Relations Act 1997 or any other law that applies to the rights or entitlements of a person as an employee of the corporation." 21 The new provisions commenced to operate on 1 January 1998 (Sub Leg No 419) and on that date Mr Parsons became an employee of the Defendant with all existing and accruing rights of employment that he had previously had against the Brigade. 22 I turn to the documents which were before the Industrial Magistrate and the common facts. 23 Mr Parsons' employment with the Brigade commenced in 1989 at the time when the Brigade had become the brigade responsible for the provision of rescue services to all underground coal mines in Queensland. 24 The letter of employment of Mr Parsons by the Brigade dated 10 April 1989 said, so far as is presently relevant : "Further to my telephone advice, I would now confirm your appointment of 'Instructor' with this organisation and, on behalf of my committee, extend to you our good wishes for the future. As discussed, you will be initially located in the township of Middlemount and be directed by Mr D Ryan, Superintendent, Dysart Rescue Station to whom you will report to. ..... No specific hours of duty are set out. Training sessions may be held during the day or evening. Termination may be given by either party giving one months clear notice. A position description is attached to this letter. Would you please confirm on the second copy of this letter your acceptance of the offer and conditions and advise of the date when you intend to commence." 25 The position description document was not attached to the copy letter before the Industrial Magistrate. 26 The advertisement for the superintendent position in 1993, the Industrial Magistrate was advised, appeared in the Australian and Courier Mail newspapers and thus was a position open to all qualified applicants, and was not one restricted to existing employees of the Brigade. The advertisement provided :- " MINES RESCUE The Queensland Mines Rescue Brigade provides a quality service to the Coal Mining Industry of Queensland in the areas of Training, Maintenance of Rescue Equipment and preparedness for response to a Rescue Operation in emergency situations. The Brigade is seeking the services of a STATION SUPERINTENDENT To co-ordinate and participate in activities from our BOOVAL STATION, located near the city of Ipswich. The salary package will be in accordance with 'The Coal Mining Industry (Permanent Mines Rescue Staff), 1991, Queensland. The successful applicant would have: · A minimum of a 2nd Class Certificate of Competency as defined by the Coal Mining Act 1925 - 1981 or relevant Mines Rescue Qualifications and experience. · An understanding of The Queensland Mining Industry including the Legislative and Structural changes taking place in the Industry · An ability to communicate with Industry personnel in a confident manner on all facets of Mines Rescue from both a local as well as a State perspective. · Be community minded and dedicated to continually providing a service to the needs of the Industry, Community and Brigade. · Have proven leadership and organisational skills. · Be willing to positively contribute to a pro-active Organisation that seeks continuing improvement in performance and service. This position calls for a team orientated person willing to, and capable of, fulfilling the needs of this challenging and dynamic position. Written applications should be marked 'Confidential' and be addressed to reach: MR TERRY KEENE STATE MANAGER QUEENSLAND MINES RESCUE BRIGADE PO BOX 156, DYSART QLD 4745 By Friday 16 July, 1993" 27 The letter of appointment to Mr Parsons dated 11 August 1993, so far as is presently relevant, stated : "Further to my verbal offer, I now confirm your appointment of Superintendent with this organisation, commencement date being 23rd August 1993. On behalf of the Management Committee, I would like to extend to you, our good wishes for the future. As discussed, you will be located to the suburb of Booval (situated in the township of Ipswich) as Station Superintendent. As Superintendent you will report directly to myself. ..... No specific hours of duty are set out, as training sessions may be held during the day, evening or weekend. Termination may be given by either party, with provision of one month's clear notice. A position description is attached to this letter. Should you intend accepting the terms and conditions of this appointment, please complete the attached page and return it to head office as soon as possible." 28 The document attached to the letter stated : "POSITION DESCRIPTION -- SUPERINTENDENT BOOVAL -- 1. Co-ordinate and/or conduct where appropriate, Mines Rescue Training in the local area. 2. Co-ordinate and/or conduct station equipment and property maintenance. 3. Co-ordinate and/or conduct Mines Rescue Competitions. 4. Of at least three intervals per year, liaise personally with all local underground and open cut Mine Managers. 5. Provide monthly reports and other necessary reports, in a timely and professional manner. 6. Ensure that the Mines Rescue Station performs within budget parameters. 7. Act in a professional and outwardly positive manner at all times, to promote the Brigade, its Committee, Staff and Members. 8. Maintain an effective level of active membership, at the Booval Mines Rescue Station. 9. provide a Service to the Mines Rescue Organisation in the areas of: · Test & repair of selected equipment, · Perform selection & trial of new equipment, with assistance of Station Superintendents, · Prepare and circulate a bi-monthly, state wide newsletter. 10. Promote external commercial activities, where appropriate and approved." 29 Paragraph 3 of the defence filed by the respondent in the Industrial Magistrates Court, pleaded : "3. The QMRS has recently closed two rescue stations due to the fact that there are no underground mining operations in the immediate vicinity, the stations being principally established to provide rescue services for underground mines." 30 That statement was common ground before the Industrial Magistrate. 31 On 15 April 1998 the State Manager of the Defendant wrote to the Secretary of the Complainant in the following terms : "Re: Rationalisation of the QMRS At the Board of Directors Meeting held in Brisbane on Friday March 27th an updated strategic plan was submitted for members consideration, this strategic plan was endorsed by the Board for QMRS. Part of this plan covers the rationalisation of the Mines Rescue Service and an 'Action Plan' was agreed regarding the mothballing or possible sale of assets at Collinsville and Booval Stations and the relocation of staff from the above stations to Dysart and Blackwater. This rationalisation would allow for mines presently served by Collinsville or Booval to be supported from Dysart or Blackwater stations. This system is proposed to be effective from April 30th 1998. Consequently, mines affected by this change would continue to be supported by QMRS staff in training and equipment from Dysart and Blackwater stations. It should be noted that initial mine Inertisation Training will commence on April 27th and cease on May 22nd 1998. This training will involve significant staff and mine trainees in training during the period of transfer, and we request you [sic] support and understanding during this period. The rationalisation plan will maintain efficiencies and minimise costs to industry in providing a Mines Rescue capability to industry in accordance with the QMRS strategic plan. The Staff at Collinsville and Booval have been offered employment at Dysart and Blackwater respectively with no loss of earnings or conditions. It is intended that both members will operate out of Collinsville and Blackwater from April 30th, 1998 and relocation of families will follow thereafter, subject to satisfactory accommodation being obtained in Dysart and Blackwater." 32 On 21 April 1998 the Defendant wrote to Mr Parsons, as follows : "Dear Mal, This is to formally advise you that following the decisions of the Board of Directors, you will cease operations at Booval Station by or on the 30th April, 1998. Your new base is Blackwater Station where you will continue your duties as proposed as well as other requirements as agreed by Lester Anderson, Superintendent, Blackwater Station. Once suitable accommodation is procured your family will be relocated to Blackwater." 33 Clause 25 of the Award states : " 25 - SEVERANCE AND RETRENCHMENT PAY Severance pay (a)(i) Subject to paragraph (ii) hereof an employee whose services are terminated by the employer on medical grounds or because of a reduction of hands shall be entitled to receive from his employer severance pay calculated at the rate of one ordinary week's pay for each completed year of employment at the station. (ii) An employer who no later than seven days after the date of termination of employment obtains or causes to be made available for the employee other work which the employee is competent to perform at a mine situated within reasonable distance of the employee's place of abode, which may reasonably be regarded as permanent and at which an employer agrees to treat service given by the employee at the mines rescue station as being service given to that employer for the purpose of severance pay shall not then be liable for payment to the employee of severance pay as provided in paragraph (i) hereof. (iii) Where the employee has obtained work on terms of paragraph (ii) hereof within seven days of the termination of employment the employer notwithstanding absence of action by him to obtain such work shall be deemed to have satisfied the requirement of paragraph (ii) hereof. (iv) The onus of establishing that the services of the employee were not terminated by the employer on medical grounds or because of a reduction of hands shall be upon the employer. Retrenchment Pay (b)(i) Subject to paragraph (ii) hereof, when a reduction of hands is decided upon by an employer respondent to this award by reason of technological change (either at the station or at mines in the area served by the station), market forces (either directly affecting the station or indirectly affecting the station by operating on mines in the area serviced by the station) or diminution of reserves at mines in the area served by the station, an employee notwithstanding the provisions of Clause 5 herein shall receive one month's (four working weeks) notice of retrenchment and in addition to the payment required to be made under paragraph (a)(i) hereof shall be entitled to receive from the employer retrenchment pay calculated at the rate of two ordinary week's pay for each completed year of employment with a minimum payment notwithstanding the length of employment of two ordinary weeks pay. (ii) An employer who no later than seven days after the date of termination of employment obtains or causes to be made available for the employee other work which the employee is competent to perform at a mine or mines rescue station within the district, which may reasonably be regarded as permanent and at which an employer agrees to treat service given by the employee at the mines rescue station as being service given to that employer for the purpose of severance and retrenchment pay, shall not be liable for payment to the employee of severance and retrenchment pay as provided in paragraph (i) hereof. Provided that an employee may elect to take employment at any mines rescue station in Queensland beyond the district on the terms herein before recited and by so doing will surrender entitlement to severance and retrenchment pay as provided in paragraph (i) hereof. (iii) No payment to an employee under the provisions of paragraph (ii) hereto shall, with respect to the retrenchment payment component, exceed the amount that the employee would receive had the employee remained in the employ of the station until the age of 60 years." 34 The structure of the clause is that paragraphs (a)(i) and (b)(i) create an entitlement to severance and retrenchment pay respectively when the conditions contained in the paragraphs exist. 35 No severance pay and no retrenchment pay is payable by the employer if the conditions contained in (a)(ii) or (a)(iii) and (b)(ii) respectively are satisfied. 36 If the employer contends that a termination of employment was for a reason other than one based on medical grounds or a reduction of hands and thus for a reason which does not given an entitlement to severance pay, the onus is on the employer to establish that fact (paragraph 25(a)(iv)). 37 Was Mr Parsons appointed to a position at the Booval Mines Rescue Station for the purposes of clause 25 of the Award, and were his services at that station terminated by a reduction of hands? 38 The Defendant submitted before the Industrial Magistrate and on this appeal that the employment of Mr Parsons with the Brigade was employment which involved an entitlement in the employer to station him at any location in Queensland from time to time as the employer chose to satisfy its operational needs. This, the Defendant submitted, flowed from the reorganisation of mine rescue services in 1988 which created the Brigade and from the original letter of appointment which stated that Mr Parsons would be "initially located" at Middlemount. The move to Booval, the Defendant submitted, was to be characterised as a promotion and transfer within the rescue service. The transfer to Blackwater was, the Defendant submitted, merely a transfer to a new location in consequence of an organisational restructure. 39 The Industrial Magistrate held that Mr Parsons was employed to a position as a supervisor within an organisation and that he was required to work at such locations as his employer might from time to time direct. In coming to that conclusion, her Worship relied upon the words in the letter to Mr Parsons of 11 August 1993 "... confirm your appointment of superintendent within this organization", his previous employment as an instructor at Middlemount, the terms of the Government Gazette made in December 1988, that mining operations are generally carried on in the more remote parts of the country and that Mr Parsons failed to give evidence as to why he considered his employment was located at Booval and not elsewhere. She also concluded that the Award was silent on the question of transfer from one location to another. 40 In my view the Industrial Magistrate erred in the conclusion which she reached. The matters relied on by her do not, as a matter of construction or in themselves, support the drawing of such a conclusion. 41 In the present case the contract of employment is contained in the letter from the Brigade to Mr Parsons of 11 August 1993 together with the position statement attached to the letter and the written form of acceptance signed by Mr Parsons and dated 12 August 1993. That was the common position of the parties and the basis upon which they put the question of the application of clause 25 of the Award before the Industrial Magistrate for her determination. Those documents are to be construed against the relevant background circumstances. The relevant background circumstances are the advertisement, the circumstances of Mr Parsons at the time the offer of employment was made to him, and the terms of the Award which was applicable to the employment offered. 42 The advertisement placed by the Brigade in the Australian and Courier Mail newspapers was made to the world at large; it was not one made to existing employees of the Brigade only. The advertisement did not call for applications for a general position of superintendent with the Brigade. The advertisement was location specific. It was for the position of Station Superintendent at the Booval Mines Rescue Station that applications were sought. The advertisement did not state that the employment also involved compulsory transfer to other locations for indefinite periods at the direction of the employer. 43 Mr Parsons was, at the time of the advertisement, employed by the Brigade at Middlemount as an instructor. He had been employed in 1989. His letter of appointment dated 10 April 1989 stated that he was appointed as an "'Instructor' with this organisation ..." and that his appointment was "... initially located in ... Middlemount." However, in respect to the employment vacancy advertised in the newspaper he was objectively in no different position to any other person applying for the position. The requirements of the position advertised were different to those he was then in and were to be undertaken at a different and distant location. 44 As a matter of construction, the Award is concerned with employment which is "service given by the employee at the mines rescue station" (clauses 25(a)(ii), 25(b)(ii)) and relates to the provision of services to "mines in the area served by the station" (clause 25(b)(i)). Severance pay, if payable, is "calculated at the rate of one ordinary week's pay for each completed year of employment at the station" (clause 25(a)(i)). Examples can also be found in clauses dealing with rosters and shifts whereby the employment revolves around the operation of a mines rescue station serving mines within a defined area. 45 There is also in clause 25 a relationship between the place of employment at which work is performed and the place of residence of the employee. This operates where it is sought to provide or arrange alternative employment in the case of a termination falling within clause 25(a)(i), in order to avoid a liability to pay a severance payment. The alternative employment must be "at a mine situated within a reasonable distance of the employee's place of abode". An offer of work which does not satisfy this requirement is not for the purposes of the Award a true substitute for the employment terminated. The similar provision in clause 25(ii) where it is sought to avoid a liability for retrenchment pay requires that the substitute employment must be at "a mine or mines rescue station within the district". In this context "district" means the region or locality of vaguely defined limits referrable to the place at which or in which the previous employment was provided and performed. 46 In my view the Award generally is concerned with employment at a particular mines rescue station and the employment with which clause 25 is concerned is employment at a particular mines rescue station which is terminated in the circumstances provided in clauses 25(a)(i) and 25(b)(i). The creation of the Brigade in December 1988 did not do away with the existing statutory scheme of mine rescue stations serving particular mines within an area. Rather, the management and operation of those stations were placed administratively in a single organisation which carried on its operations at various locations throughout the State and to achieve that end, the State was declared a single locality for the purposes of the Coal Mining Act 1925 (Qld) as amended. However, at an operational level the scheme remained and operated locally which is reflected in the concept of employment at particular mines rescue stations which underlies the Award. The Award was made in 1991 as a consent award in proceedings between the Complainant and the Brigade and one may infer with a complete understanding on their part of the organisational changes introduced in December 1988. 47 Clause 5(b) of the Award relating to the employee's duty under the contract of employment is, in the context of the Award, confined in its operation to work at the particular mines rescue station where the employee works and includes work that is reasonably peripheral to it. The Award contains no express provisions as to compulsory transfer and relevantly contains no entitlements in respect of the costs associated with such a transfer. It was not argued below or on appeal that clause 24A, dealing with the introduction of major change in the workplace, empowers or evidences a power to compulsorily transfer employees from one location to another. 48 Finally, the right of an employee otherwise entitled to severance and retrenchment pay to elect or not to elect to take employment at a mine or mines rescue station beyond the district thereby surrendering the entitlements as provided in clause 25(b)(ii), is inconsistent with a coercive power in the employer to direct the employee to transfer to a location outside the district in consequence of an organisational change which would otherwise give entitlements to employees under clause 25. 49 The letter of 11 August 1993, and the position statement which accompanied it, contain no express term of the employment offered which made the place of the employment at any location in the State of Queensland at which the Brigade provided a mines rescue service, and, for such period of time at any such place, as the employer may from time to time determine. The words "... confirm your appointment of Superintendent with this organization ..." do not mean that mobility at the direction of the employer is a condition of the appointment. The phrase merely indicates the classification or category of the position within the structure of the organization and the category for the purposes of the Award in identifying applicable pay and other entitlements. Nor do the words "... you will be located to the suburb of Booval ..." mean "... or to any other location the Brigade may determine from time to time." They mean no more than that the location of the work to be performed is Booval and the work to be performed at that location is specified in the position statement for the Station Superintendent of the Booval Mines Rescue Station. The position statement accompanying the letter is location specific to the Booval Mines Rescue Station and relates to the position of Station Superintendent to that station. 50 That the terms and conditions of the employment are to be found in the letter of 11 August 1993 and position description is plain from the concluding paragraph of the letter, which stated : "Should you intend accepting the terms and conditions of this appointment, please complete the attached page and return it to head office as soon as possible." 51 The attached page, which Mr Parsons signed and returned, stated : "I understand and accept the terms and conditions of employment as detailed in this letter." 52 Any evidence of Mr Parsons as to what he considered the location of his employment to be and as to the permanency of his employment at that location, in the context of an employment contract the terms of which had been reduced to writing, would have been irrelevant and inadmissible. Where the contract makes no express provision as to where the work is to be performed and it is necessary to imply such a term (Jones v Associated Tunnelling Co Ltd [1981] IRLR 477 at 480), evidence of pre-contractual discussions, the nature of the employment and the impact of transfer on the employee will be admissible as evidence going to the need for such a term to give the contract business efficacy and as to what the content of the implied term should be. But this is not such a case. The failure of Mr Parsons to give such evidence in those circumstances cannot sustain a conclusion that the employment contract contained a mobility requirement obliging Mr Parsons to move from Booval to such other location as the Brigade should determine for an indefinite period. Nor does the circumstance of the creation of the Brigade in 1988, Mr Parsons' prior employment with the Brigade, or the carrying out of mining operations in remote areas, require a construction of the documents which defines the location of the employment as at all locations at which the Brigade provides mine rescue services. 53 In my view, on the proper construction of the documents containing the offer of the Brigade and the acceptance of Mr Parsons, Mr Parsons was employed under a new contract of employment which superseded the previous contract of employment he held with the Brigade. Under the new contract he was employed to fulfil the duties attaching to the position of Station Superintendent at the Booval Mines Rescue Station. The place of his employment under the new contract was at the Booval Mines Rescue Station. It was not necessary to imply in this contract any term as to the place of employment in order to give the contract business efficacy. The new contract of employment did not contain an express mobility requirement which would permit compulsory transfer. The Defendant was bound by the terms of this contract of employment when Mr Parsons became an employee of it by the operation of the 1997 amendments to the Coal Mining Act 1925 (Qld) as amended. 54 In the absence of an express mobility requirement it was for the Defendant to make out the requirements for the implication of such a term: O'Brien v Associated Fire Alarms Ltd [1968] 1 WLR 1916. In that regard it was for it to establish that a mobility clause of the type contended for satisfied the requirements for the implication of such a term: Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 422. These requirements are detailed in Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 327 at 347 and BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283. In my view the Defendant cannot satisfy the test because on the material before the Industrial Magistrate it cannot be said that such a term is not inconsistent with the express terms of the contract which provided for employment at the Booval Mines Rescue Station. Nor can it be said that a mobility requirement is necessary to give business efficacy to the contract of employment for work at Booval. The employment contract is effective without it and in consequence no implication of a further term will be made. It is not sufficient that such a requirement may be reasonable: Codelfa Constructions at 346. 55 Did the Defendant terminate Mr Parsons' services at the Booval Mines Rescue Station? In my view it did and the termination took effect as and from 1 May 1998. Notice of the termination is contained in the letter of 21 April 1998 set out earlier in these reasons and the Defendant's letter of 1 May 1998 which contained the following : "As the Booval station is closed as of today, you are hereby instructed not to enter those premises after today without my prior permission. As arranged, you are expected to attend for duty at Blackwater on Tuesday 5 May 1998, bearing in mind that Monday is a public holiday. If there are any problems in relation to travel or accommodation please contact me urgently on my mobile (0419 797 216). If you do not attend for work at Blackwater as instructed, your pay will be stopped from that time and your continued employment with QMRS will be considered further. The QMRS has tried to be as reasonable as possible under the circumstances but the point has been reached where the Booval station has been closed and the current vacant position in Blackwater, that has been retained for you, must be filled." 56 The services of Mr Parsons at Booval were terminated when he was directed not to attend at Booval Station and to cease duties as Station Superintendent at Booval. The closure of the station at Booval on 1 May 1998 had the practical effect of abolishing the position held by Mr Parsons and the work functions which went with it. As and from 1 May 1998 Mr Parsons was, by the conduct of the Defendant, dismissed as the Station Superintendent of the Booval Mines rescue Station and closed out of the opportunity to earn wages by the provision of his services at that station. 57 The dismissal of Mr Parsons and the denial of the opportunity to him to provide services may or may not have constituted a repudiation by the Defendant of its contract of employment with Mr Parsons. However that may be, for present purposes, the question is whether delivery of the letters and the closing out of Mr Parsons from the Booval Mines Rescue Station terminated the employment relationship which previously existed between Mr Parsons and the Defendant, as distinct from the contract of employment, and thereby terminated the services of Mr Parsons within the meaning of clause 25(a)(i) of the Award? The distinction between the contract of employment and the employment relationship was affirmed by the High Court in Byrne v Australian Airlines Ltd where the joint majority (Brennan CJ, Dawson and Toohey JJ) said (at 427 - 428) : "... It does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract. That was accepted by both the majority and minority in Automatic Fire Sprinklers Pty Ltd v Watson (See also Turner v Australasian Coal and Shale Employees Federation (1984) 6 FCR 177 at 191 - 192 and Siagian v Sanel Pty Ltd (1994) 122 ALR 333 at 342 - 345). As Latham CJ said (Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 454): 'An employer terminates the employment of a servant when he dismisses him, though, as I say hereafter, such a dismissal does not put an end to the contract between the parties. An argument that a dismissal because wrongful was a nullity was raised and rejected in both Williamson's Case [Williams v The Commonwealth] (1907) 5 CLR 174 at 185 and Lucy's Case [Lucy v The Commonwealth] (1923) 33 CLR 229 at 237, 248, 249, 252, 253." And as Dixon J said (Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 469) : There is nothing in the general law preventing the wrongful dismissal of a servant operating to discharge him from service, notwithstanding that he declines to accept the dismissal as absolving him from further performance but keeps the contract open and remains ready and willing to serve.' In England, the position was for a time not so clear, although the view taken in Australia appears now to be accepted there (See Gunton v Richmond-upon-Thames London Borough Council [1981] Ch 448). Of course, even if an employee who is wrongfully dismissed chooses to keep the contract of employment on foot, he or she cannot claim remuneration in respect of any period after the wrongful dismissal because the right to receive remuneration for services is dependent upon the services having been rendered (See Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 465; Gunton v Richmond-upon-Thomas London Borough Council [1981] 1 Ch 448 at 468). The employee is also under a duty to mitigate any damage (Gunton v Richmond-upon-Thames London Borough Council ]1981] 1 Ch 448 at 468). Moreover, a court will not, save in exceptional circumstances, order specific performance of a contract of personal service. The possible continuation of the contract of employment after a wrongful dismissal will, therefore, ordinarily be of no real significance (However, cf Hill v C A Parsons & Co Ltd [1972] Ch 305; Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227) as it will for all practical purposes be at an end." 58 The relationship of employer and employee is broken when the employer dismisses the employee, excludes the employee from his or her previous employment and refuses to thereafter accept the services which the employee has previously rendered: Gunton v Richmond upon Thames London Borough Council [1981] 1 Ch 448 at 474. 59 In the context of the proceedings in the Industrial Magistrates Court, the relevant legal issue was whether the termination of the employment relationship created an entitlement under clause 25 of the Award and if it did, whether there had been a breach of the Award by the Defendant in failing to pay the entitlement. If there had been a breach of the Award, the Complainant, under s 178 of the Act, was entitled to initiate proceedings seeking, amongst other things, payment of the entitlements due to Mr Parsons (s 178(6)). Whether Mr Parsons additionally had an action against the Defendant for damages for breach of the contract of employment was irrelevant to the proceedings before the Industrial Magistrate. The enforcement by the Complainant of the Award provisions does not rely upon the existence of the contract of employment, nor on any breach of it. The Award provisions are enforceable independently of contract being binding and enforceable by virtue of the statutes under which they are made: Byrne v Australian Airlines at 419, 455 - 457. 60 In my view as a matter of fact and law Mr Parsons ceased to be an employee of the Defendant on 1 May 1998, notwithstanding that his contract of employment remained on foot on that date. It was not necessary as was submitted on behalf of the Defendant that Mr Parsons elect to accept what he regarded as a wrongful repudiation of his employment contract and resign on the basis of a constructive dismissal before his services were terminated for the purposes of clause 25 of the Award. Accordingly, the commencement of the proceeding in the Industrial Magistrates Court was not premature. 61 The Complainant and Mr Parsons, as appears from the transcript of proceedings before Commissioner Hodder, took the view that there was a dispute as to whether the Defendant was entitled to direct Mr Parsons to transfer to Blackwater and as to whether he was in consequence of the closure of the Booval Mines Rescue Station entitled to payments under clause 25 of the Award and that the dispute fell within clause 33 of the Award. Clause 33(a) requires that there be no stoppage of work by either the employer or the employee because of the existence of a dispute which, if not settled, would proceed in accordance with the grievance procedure. Mr Parsons advised the Defendant that conformably with clause 33, he would do the work at Blackwater but without prejudice to his rights under clause 25 of the Award to receive severance and retrenchment payments and to contend that he was not obliged to take up employment at Blackwater unless he voluntarily chose to do so. 62 As appears from the following exchange before Commissioner Hodder and the exchange between the Bench and the advocates in the Industrial Magistrates Court, that arrangement was accepted by the Defendant. In the Commission it was said : "THE COMMISSIONER: And obviously there is also this problem with his employment. MR GILLESPIE: Yes, and Mr Parsons is on a without prejudice basis, Commissioner, working out of Blackwater for the time being. THE COMMISSIONER: Yes. MR GILLESPIE: So that the operations are not hampered. THE COMMISSIONER: Yes. Well that can be maintained, Mr Gillespie, I would assume. MR GILLESPIE: Yes, not a problem. THE COMMISSIONER: Very well. So that is without prejudice to either parties' rights, in that sense, the continuation of that practice. MR GILLESPIE: Yes, providing that it does not go on for too long, that is the only - - - THE COMMISSIONER: Yes, well what are you calling too long? MR GILLESPIE: Well, I mean Mr Norris is saying that they will make a decision what way they want to proceed within a week. THE COMMISSIONER: Yes. MR GILLESPIE: Well that is fine." In the Industrial Magistrates Court it was said : "MR NORRIS: The question of the offer and acceptance of a new employment contract, right and whether Mr parsons has continued to work on a without prejudice basis to assist the service in effect doesn't arise. BENCH: No, well I don't think that's an issue is it Mr Gillespie? The fact that he's continued to work? MR GILLESPIE: No, no that was without prejudice. BENCH: Yes, oh yes. MR GILLESPIE: We accepted that. BENCH: Oh yes - no well I accept that part of it. MR GILLESPIE: Yes." 63 The conduct of the parties after 1 May 1998 was by their agreement without prejudice and irrelevant to the claim for payment under clause 25. The consequence is that performance of duties at Blackwater and the payment of wages in respect of those services is not to be treated as maintaining or restoring the employment relationship for the purposes of clause 25 or to be the provision of alternative employment for the purposes of the clause. 64 As I have indicated, in my view clause 25(a)(i) and 25(b)(i) relate to a termination of an employee's services at the mines rescue station at which the employee is employed. The question then arises as to what meaning in that context ought to be given to the phrase "reduction of hands". The meaning of the term in another industrial award cannot control its meaning in the context of this Award. In my opinion the term in clauses 25(a) and 25(b) means a reduction of hands at a mines rescue station. This follows, in my view, from the operation of clauses 25(a)(ii) and 25(b)(ii) where the obligation to pay the entitlement can be avoided by obtaining employment with another employer, respectively, within a reasonable distance of the place of abode or within the district of the mines rescue station. That is, the clause is concerned with loss of employment at a particular mines rescue station which is the place at which the employee is contracted to work by a reduction of hands at that place. A reduction of hands for the purposes of clause 25(a)(i) occurs when the size of the existing workforce at a mines rescue station is reduced by terminating the services of some or all employees employed at that location. For the purposes of clause 25(b)(i) there is the additional requirement that the reduction of hands is decided upon by the employer "... by reason of technological change (either at the station or at mines in the area served by the station), market forces (either directly affecting the station or indirectly affecting the station by operating on mines in the area serviced by the station) or diminution of reserves at mines in the area served by the station." In the view that I take as to the meaning of the term in clause 25, it is not necessary that there be a reduction in the total number of employees employed by the Defendant in its business as a whole before there is a reduction of hands as the Defendant contended. 65 The Industrial Magistrate in the view which she took on the issue of termination and mobility, did not deal with the question of the operation of clause 25(b)(i). The material goes no further than establishing that there are no longer underground coal mines being operated in the area previously served by the Booval Mines Rescue Station and that it was for this reason that the station closed. There is no material why the underground mines ceased to operate in the area. To attempt to choose whether it was for any of the reasons specified in clause 25(b)(i), and which, on the present material is to speculate, which the court may not do. 66 The issue before the Industrial Magistrate was whether the services of Mr Parsons had been terminated by a reduction of hands and whether clause 25 of the Award may thereby operate in favour of Mr Parsons. It was not a full hearing of the complaint and summons. Although the claim for the imposition of penalties had been dropped, the balance of the relief sought remained on foot, notwithstanding that it was the hope of the parties that the matter could be resolved between them if it was found that clause 25 operated. 67 In my view, for the above reasons, the Industrial Magistrate erred in dismissing the complaint and summons on the ground that there was no termination of Mr Parsons' services by the Defendant in the circumstances put before her Worship as agreed facts by the parties. The proper course is to set aside the order dismissing the complaint and to remit the matter to the Industrial Magistrate for hearing in accordance with law and these reasons. Having regard to the way the matter was conducted before the Industrial Magistrate, the issue as to the reason for the closure of the underground coal mines was treated very much as a secondary issue in comparison to the question of whether there had been a termination of Mr Parsons' employment due to a reduction of hands. If the parties are not in agreement on this issue, the Complainant should be at liberty to call evidence on the issue together with all other issues outstanding under the complaint. 68 Neither party contended that this was an appropriate case for the making of a costs order and none was sought. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cooper. Associate: Dated: 9 April 1999 Counsel for the Applicant: D R Kent Solicitor for the Applicant: Nall Payne Counsel for the Respondent: G C Martin SC Solicitor for the Respondent: Minter Ellison Date of Hearing: 26 November 1998 Date of Judgment: 9 April 1999	13,226
federal_court_of_australia:fca/single/2020/2020fca0057	decision	commonwealth	federal_court_of_australia	text/html	2020-02-04 00:00:00	Dickerson (Administrator), in the matter of McWilliam's Wines Group Ltd (Administrators Appointed) [2020] FCA 57	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2020/2020fca0057	2024-09-13T22:49:08.310797+10:00	FEDERAL COURT OF AUSTRALIA Dickerson (Administrator), in the matter of McWilliam's Wines Group Ltd (Administrators Appointed) [2020] FCA 57 File number: NSD 92 of 2020 Judge: YATES J Date of judgment: 4 February 2020 Catchwords: CORPORATIONS – application by administrators for extension of convening period for second meeting of creditors under Corporations Act 2001 (Cth) s 439A – where investigations into companies incomplete – where administration complex – consideration of potential benefit to creditors Legislation: Corporations Act 2001 (Cth) Insolvency Practice Rules (Corporations) 2016 (Cth) Cases cited: Mighty River International Limited v Hughes [2018] HCA 38; 92 ALJR 822 Date of hearing: 4 February 2020 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 28 Counsel for the Plaintiffs: Mr D Krochmalik Solicitor for the Plaintiffs: HWL Ebsworth Lawyers ORDERS NSD 92 of 2020 IN THE MATTER OF MCWILLIAM'S WINES GROUP LTD (ADMINISTRATORS APPOINTED) ACN 000 024 108 AND MOUNT PLEASANT WINES PTY LTD (ADMINISTRATORS APPOINTED) ACN 000 024 813 GAYLE DICKERSON, TIM MABLESON AND RYAN EAGLE IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF MCWILLIAM'S WINES GROUP PTY LTD (ADMINISTRATORS APPOINTED) ACN 000 024 108 AND MOUNT PLEASANT WINES PTY LTD (ADMINISTRATORS APPOINTED) ACN 000 024 813 First Plaintiffs MCWILLIAM'S WINES GROUP LTD (ADMINISTRATORS APPOINTED) ACN 000 024 108 Second Plaintiff MOUNT PLEASANT WINES PTY LTD (ADMINISTRATORS APPOINTED) ACN 000 024 813 Third Plaintiff JUDGE: YATES J DATE OF ORDER: 4 February 2020 THE COURT ORDERS THAT: 1. The Originating Process dated 3 February 2020 be returnable instanter. 2. Pursuant to s 439A(6) of the Corporations Act 2001 (Cth) (Act), the date of the convening period as defined by s 439(A)(5) of the Act for the second meeting of the creditors of each of the second plaintiff, McWilliam's Wines Group Ltd (Administrators Appointed) ACN 000 024 108, and the third plaintiff, Mount Pleasant Wines Pty Ltd (Administrators Appointed) ACN 000 024 813, (together, the Companies), be extended up to and including 31 July 2020. 3. Pursuant to s 447A(1) of the Act, Pt 5.3A of the Act is to operate in relation to the Companies such that, notwithstanding s 439A(2) of the Act, the second meeting of the creditors of the Companies under s 439A of the Act may be convened at any time before, or within five (5) business days after, the end of the convening period as extended by Order 2 above, provided that the first plaintiffs give notice of the meetings to eligible creditors of the Companies (including the persons claiming to be creditors of the Companies) at least five (5) business days before the meeting. 4. Pursuant to s 447A(1) of the Act, Pt 5.3A of the Act is to operate such that the requirement on the first plaintiffs, pursuant to ss 75-225(1) and 75-15 of the Insolvency Practice Rules (Corporations) 2016 (Cth) (IPR), to issue notices of the meeting of creditors of the Companies under s 439A(1) of the Act (the Notice) will be validly given to creditors of the Companies by reason of the following steps having been taken at least five (5) business days before the meeting: (a) where the first plaintiffs: (i) have an email address for a creditor, by sending the Notice by email to each such creditor; (ii) do not have an email address for a creditor or have received notification of non-delivery of a notice sent in reliance on (i) but have a postal address for the creditor, by sending the Notice by posting a copy of it to the postal address for each such creditor; (iii) do not have an email address for a creditor or a postal address, by sending or communicating the Notice to the creditor in any other way provided for by the Act or the IPR; and (b) by causing the Notice to be published on the Australian Securities and Investments Commission (ASIC) published notices website at https://insolvencynotices.asic.gov.au. 5. Within two (2) business days after the making of these orders, the first plaintiffs are to provide notice of these orders to: (a) all creditors of the Companies (including the persons claiming to be creditors of the Companies): (i) in the manner prescribed by Order 4(a) above; and (ii) by publishing a notice on the KPMG website at https://home.kpmg/au/en/home/services/advisory/deal-advisory/services/restructuring/creditors-shareholders/mcwilliams-wines-group.html; and (b) ASIC. 6. The plaintiffs have leave to apply for any further extension of the convening period as extended by Order 2 above at any time before that period expires. 7. Liberty to apply be granted to any person claiming to be interested, including any creditor of the Companies (including a person claiming to be a creditor of the Companies) or ASIC, who can demonstrate sufficient interest to vary or discharge these orders upon three (3) business days' notice being given to the plaintiffs and to this Court. 8. The plaintiffs' costs and expenses of and incidental to this application be costs and expenses in the administration of the Companies and be paid from the assets of the Companies. 9. 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 (Revised from transcript) YATES J: 1 The first plaintiffs are the joint and several administrators (the administrators) of the second plaintiff, McWilliam's Wines Group Ltd ACN 000 024 108 (administrators appointed) (McWilliam's), and the third plaintiff, Mount Pleasant Wines Pty Ltd ACN 000 024 813 (administrators appointed) (Mount Pleasant). They were appointed on 8 January 2020, pursuant to s 436A of the Corporations Act 2001 (Cth) (the Act). They seek orders, pursuant to s 439A(6) of the Act, extending the convening period for the second meeting of creditors of each company to 31 July 2020. If the convening periods are not extended, the administrators must convene the meetings by 6 February 2020 and the meetings must be held by 13 February 2020. 2 The application is supported by the affidavit of Gayle Dickerson, made 3 February 2020. Ms Dickerson is one of the administrators. 3 McWilliam's is an unlisted public company, whose members are members of the McWilliam family and their relatives. It is the ultimate holding company of Mount Pleasant. The two companies, which comprise the McWilliam's Group (the Group), operate as a vertically integrated wine producer and distributor of wine products nationally and internationally. The Group has an extensive portfolio of vineyard and winery operations in the New South Wales Riverina and Hunter Valley regions, which are conducted under the "McWilliam's" and "Mount Pleasant Estate" brands. 4 The Group is one of Australia's top 10 wine producers, measured by revenue. Accounts for the year ended 30 June 2018 record that the Group's gross sales revenue was approximately $115 million. For the year ended 30 June 2019, the Group's recorded gross sales revenue was approximately $97 million. The Group's assets include the business as a going concern, including two major standalone winery operations; stock at hand; water rights; and a portfolio of leasehold and freehold assets relating to the vineyard, winery and warehouse properties. Since their appointment, the administrators have continued to trade the Group's business. 5 The first meeting of creditors of each company required by s 436(E) of the Act was held on 20 January 2020. The meetings were held concurrently. In her affidavit, Ms Dickerson deposed that a committee of inspection was formed for each company. At the hearing of this application, counsel for the administrators submitted that this was incorrect and that the minutes of the relevant meetings indicate that a committee was only formed in respect of McWilliam's. 6 In her affidavit, Ms Dickerson gave an account of the administrators' investigations, the conduct of the administrations to date, and of the Group's financial position. The administrators hold the preliminary view that the Group is cash flow insolvent. I say "preliminary view" because Ms Dickerson has made it clear in her affidavit that the administrators have not been able to complete their investigations in this regard. I note, for example, that the directors of each company are yet to provide a Report on Company Activities and Property for the reasons discussed in Ms Dickerson's affidavit, which include difficulties caused by the recent bushfire activity. I further note that the administrators are still in the process of obtaining and assessing valuations of the Group's assets; determining employee entitlements; preparing a trading cash flow; determining retention of title claims; meeting with the Group's financiers; attending to creditors' calls and the calls of other interested parties; reviewing the Group's accounts; and ascertaining the existence of claims. 7 The administrators have advanced a number of reasons for why an extension of the convening periods is necessary. 8 First, due to the size and complexity of the Group's business and operations, it is necessary for the administrators to carry out further investigations into the extent of the available assets of the Group, including potential civil and statutory claims available to them, and to seek to resolve disputes which have arisen about the ownership of some of the Group's assets. It is also necessary for them to investigate further a number of asserted liabilities of the Group. Ms Dickerson has expressed the view that these matters cannot realistically be concluded within the time presently available to the administrators. 9 Secondly, the administrators are of the view that it is in the creditors' best interests that they continue to trade the Group's business with a view to realising the maximum value for that business and the Group's assets as a going concern. 10 I note that, as part of continuing to conduct the Group's business, the administrators have sourced, and committed to pay, growers to grow the '2020 Vintage' of wine to be produced by the Group. The '2020 Vintage' is expected to be completed by the middle to end of March 2020, with payments to be made by the administrators to the growers in three instalments in May, June and September 2020. 11 The administrators have also disclaimed a lease held by McWilliam's of a warehouse at Chullora in New South Wales. To that end, they have given their consent under s 440B(2) of the Act to the landlord, Pipeclay Lawson Ltd, to take possession of the property. 12 Further, the administrators have taken steps to repay in full the amount of a debtor finance facility that was triggered upon their appointment. 13 Thirdly, the administrators require time to pursue a going concern sale of the Group's business. To this end, they have engaged and entered into an exclusive Agency Agreement with Colliers International (NSW) Pty Ltd (Colliers) to act in relation to the sale. They have received advice that, for a business of the size and turnover in question, a timeframe extending to a possible sale with exchange of contracts in late April to early May 2020 would be warranted to maximise the prospect of receiving the highest sale price. 14 To date, a large number of informal expressions of interest have been received from local and overseas parties in relation to the sale of the whole or part of the Group's business. Based on those expressions of interest, Colliers have advised the administrators that an extended completion date may need to be considered. If, for example, a further 60-day period for the settlement process were to be negotiated, then completion of a successful sale in late June or early July 2020 is a prospect. In her affidavit, Ms Dickerson said that once an agreement for sale is in place, the administrators propose to enter into negotiations with the successful purchaser and key stakeholders, such as landlords and equipment lessors, for the assignment of leases. It can be anticipated that this too will take time. 15 Fourthly, an extension of the convening periods would allow time for the formulation, proposal and consideration of a deed of company arrangement (DOCA) which, of course, might emerge independently of the sale process, or be part of or complementary to it. The administrators have not received any formal DOCA proposal as yet. Ms Dickerson has expressed the view that it is too early in the administrations for such a proposal to emerge. 16 Fifthly, as matters presently stand, the administrators are unable to form the opinions required by r 75-225 of the Insolvency Practice Rules (Corporations) 2016 (Cth). 17 Ms Dickerson has expressed the view that additional time is required, given the scope and complexity of the Group's operations, to allow these investigations to be completed. Understandably, the administrators' efforts to date have been concentrated on identifying the Group's assets and liabilities, trading the business, and preparing a sale of business campaign. 18 The simple fact is that at the present time, their ability to provide meaningful recommendations to the creditors on the future course of the two companies has been limited. In her affidavit, Ms Dickerson said that the administrators expect that after completing their investigations and undertaking the other steps to which I have referred, they will be in a much better position to provide the creditors of the companies with meaningful information as to the Group's financial position and the likely return to creditors in a winding up, and to make a recommendation to creditors concerning the decisions to be taken by them at the second meetings. 19 In her affidavit, Ms Dickerson expressed the view that an extension of the convening periods is unlikely to adversely affect the interests of secured, employee and unsecured creditors. I note that, at the first meetings of creditors, the creditors were informed of the likely need for an extension of the convening periods by approximately six months. I also note that the creditors were similarly informed by a circular sent to them dated 23 January 2020. Ms Dickerson said that, at the time of making her affidavit, no opposition to such an extension has been voiced. 20 As to the secured creditors, the Group's main secured creditor, Margaret River Wine Production Pty Ltd (MRWP), has been specifically contacted by the administrators and given notice of this application. MRWP has not made any express response, but the evidence before me indicates that it supports the sale process being carried out by the administrators. I note in this connection that it has sought and been granted an extension of the decision period in which it might seek to enforce its security. As yet, it has given no indication that it will enforce that security and, whilst I recognise that that remains a possibility, the present position is that the administrators will continue to be in control of the sale process they envisage. 21 The administrators have contacted five of the Group's landlord creditors. At the present time, there has been no opposition from those creditors to the extension that is sought. I note that the present application has not been raised specifically with the committee of inspection. In her affidavit, Ms Dickerson said that each member of the committee was, however, present at the first meetings of creditors, and none expressed an objection to the convening periods being extended. 22 The administrators' investigations to date have revealed that the companies are not subject to any legal proceedings, winding up proceedings or enforcement actions, potential claims, or litigation in respect of which they, their creditors or any other party would be prejudiced as a result of the administrations being prolonged. 23 The principles on which the Court proceeds in applications to extend the convening period for the second meeting of creditors of a company in administration have been discussed in a number of cases. These principles are not contentious. They are well established and no point would be served by me surveying them here. At root is the Court reaching an appropriate balance between the legislature's expectation that an administration be a relatively speedy and summary process, and the countervailing factor that, in a given case, undue speed should not prejudice sensible and constructive actions directed to maximising a return to creditors. 24 In this connection, I note that the objects of Pt 5.3A of the Act, as set out in s 435A, are to maximise the chances of a company or as much as possible of its business continuing in existence or if that is not possible, to result in a better return for the company's creditors and members than would result from immediate winding up. I would add that, provided the evidentiary case for an extension has been properly prepared, as is the case here, and there is no evidence of material prejudice to those affected by the moratorium imposed by the administration, the courts have exhibited a willingness to act on an administrator's estimate of time, where that is shown to have been supported on a reasonable basis: Mighty River International Limited v Hughes [2018] HCA 38; 92 ALJR 822 at [73] per Nettle and Gordon JJ. 25 I am satisfied that an extension of the convening periods is warranted in the present case. The only question is: how long should the extensions be? The administrators seek a period of approximately six months. That is a lengthy extension. However, in the present case, I accept that the administrations are of some complexity and that there is virtue in taking whatever steps are necessary to maximise the return to creditors. 26 I am particularly mindful of the professional advice that the administrators have received, which informs them that in order to achieve its potential, a sales campaign of the Group's business will take some months and that an extended settlement period following a successful sale is a prospect. I also accept that until an opportunity is given to achieve a sale, the administrators will not be in a position to give a meaningful and informed recommendation to the creditors as to the companies' fates. Further, I take into account that (at least to date) no creditors have come forward to oppose any extension of time. 27 Finally, I note Ms Dickerson's evidence that the administrators intend to convene the second meetings of creditors at the first opportunity following a sale of the business or, failing such sale, at the earliest possible opportunity so that those meetings may be held earlier than the latest possible time during the extended periods that are sought. 28 In the circumstances, I propose to accede to the administrators' request. However, in accordance with usual practice, I will grant liberty to any person with sufficient interest to move the Court to vary or discharge the orders I propose to make. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate: Dated: 19 February 2020	4,170
federal_court_of_australia:fca/single/2011/2011fca1317	decision	commonwealth	federal_court_of_australia	text/html	2011-11-14 00:00:00	Murgha on behalf of the Combined Gunggandji Claim v State of Queensland [2011] FCA 1317	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2011/2011fca1317	2024-09-13T22:49:08.598766+10:00	FEDERAL COURT OF AUSTRALIA Murgha on behalf of the Combined Gunggandji Claim v State of Queensland [2011] FCA 1317 Citation: Murgha on behalf of the Combined Gunggandji Claim v State of Queensland [2011] FCA 1317 Parties: LESLIE VIVIAN MURGHA AND STEWART ERIC HARRIS ON BEHALF OF THE COMBINED GUNGGANDJI CLAIM v STATE OF QUEENSLAND, CAIRNS REGIONAL COUNCIL, YARRABAH ABORIGINAL SHIRE COUNCIL, BLACK AND WHITE (QUICK SERVICE) TAXIS PTY LTD ACN 009 754 705, ERGON ENERGY CORPORATION LIMITED, MILES ELECTRONICS PTY LTD, SEVEN NETWORK (OPERATIONS) LIMITED, SOUTHERN CROSS MEDIA AUSTRALIA PTY LTD, TELSTRA CORPORATION LIMITED and MICHAEL CONNOLLY, VANCE HENRY GORDON, PERCY AND ALF NEAL, DARRYL RALPH POLLARD, ELAINE MARINA POLLARD AND ALLAN MIMO YEATMAN File number: QUD 6013 of 2001 Judge: DOWSETT J Date of judgment: 14 November 2011 Date of hearing: 14 November 2011 Place: Brisbane Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 6 Solicitor for the Applicant: Mr M Doré of North Queensland Land Council Counsel for the First Respondent: Ms H Bowskill Solicitor for the First Respondent: Crown Law Counsel for the Second Respondent: The Second Respondent did not appear Solicitor for the Third Respondent: Ms K Ward of Bottoms English Solicitors Solicitor for the Fourth and Fifth Respondents: Mr C Graham of MacDonnells Law Counsel for the Sixth Respondent: The Sixth Respondent did not appear Counsel for the Seventh Respondent: The Seventh Respondent did not appear Counsel for the Eighth Respondent: The Eighth Respondent did not appear Solicitor for the Ninth Respondent: Ms C Lawrence of Blake Dawson Counsel for the Tenth Respondents: The Tenth Respondents did not appear IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 6013 of 2001 BETWEEN: LESLIE VIVIAN MURGHA AND STEWART ERIC HARRIS ON BEHALF OF THE COMBINED GUNGGANDJI CLAIM Applicant AND: STATE OF QUEENSLAND First Respondent CAIRNS REGIONAL COUNCIL Second Respondent YARRABAH ABORIGINAL SHIRE COUNCIL Third Respondent BLACK AND WHITE (QUICK SERVICE) TAXIS PTY LTD ACN 009 754 705 Fourth Respondent ERGON ENERGY CORPORATION LIMITED Fifth Respondent MILES ELECTRONICS PTY LTD Sixth Respondent SEVEN NETWORK (OPERATIONS) LIMITED Seventh Respondent SOUTHERN CROSS MEDIA AUSTRALIA PTY LTD Eighth Respondent TELSTRA CORPORATION LIMITED Ninth Respondent MICHAEL CONNOLLY, VANCE HENRY GORDON, PERCY AND ALF NEAL, DARRYL RALPH POLLARD, ELAINE MARINA POLLARD AND ALLAN MIMO YEATMAN Tenth Respondents JUDGE: DOWSETT J DATE OF ORDER: 14 NOVEMBER 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. leave be given to amend the Form 1 application for determination of Native Title in this matter in accordance with the further amended Form 1 which forms Annexure MEED3 to the affidavit of Martin Edwin Ellis Doré filed contemporaneously herewith to this interlocutory application; and 2. time for bringing this interlocutory application be abridged to the extent necessary. 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 6013 of 2001 BETWEEN: LESLIE VIVIAN MURGHA AND STEWART ERIC HARRIS ON BEHALF OF THE COMBINED GUNGGANDJI CLAIM Applicant AND: STATE OF QUEENSLAND First Respondent CAIRNS REGIONAL COUNCIL Second Respondent YARRABAH ABORIGINAL SHIRE COUNCIL Third Respondent BLACK AND WHITE (QUICK SERVICE) TAXIS PTY LTD CAN 009 754 705 Fourth Respondent ERGON ENERGY CORPORATION LIMITED Fifth Respondent MILES ELECTRONICS PTY LTD Sixth Respondent SEVEN NETWORK (OPERATIONS) LIMITED Seventh Respondent SOUTHERN CROSS MEDIA AUSTRALIA PTY LTD Eighth Respondent TELSTRA CORPORATION LIMITED Ninth Respondent MICHAEL CONNOLLY, VANCE HENRY GORDON, PERCY AND ALF NEAL, DARRYL RALPH POLLARD, ELAINE MARINA POLLARD AND ALLAN MIMO YEATMAN Tenth Respondents JUDGE: DOWSETT J DATE: 14 NOVEMBER 2011 PLACE: BRISBANE REASONS FOR JUDGMENT 1 In these proceedings the Gunggandji people seek a Native Title determination pursuant to the Native Title Act 1993 (Cth) (the "Act"). Prior to 23 November 2004 the applicant consisted of three people; Mr Frederic Noble, Mr Stewart Harris and Mr Leslie Murgha. At a meeting held on 23 November 2004 it was proposed that Mr Noble be removed as a member of the claim group. The claim group decided that such decisions were for the elders. The elders held a separate meeting and decided that Mr Noble should be removed. They then informed the claim group accordingly. Subsequently, on 31 March 2005 I made an order which reflected such removal. In particular, I ordered that the applicant hereforth consist of the following persons acting jointly: Leslie Vivian Murgha; and Stewart Eric Harris. 2 Mr Harris died on 5 August 2010. Since that time there has been at least one meeting of the claim group to authorise Indigenous Land Use Agreements ("ILUAs") in connection with the Native Title application. There have also been numerous meetings of various working groups concerned with aspects of the claim. However, until the present time no formal step has been taken to change the composition of the applicant. The affidavit of Robert Carson Patterson filed in support of the substantive application indicates that Mr Harris represented his family as an elder. 3 I am now asked by Mr Murgha to remove Mr Harris as an applicant so that the application can proceed to a consent determination, presently scheduled for December of this year. It is said that Mr Murgha is entitled to make the application, exercising the powers conferred upon him as one of the persons comprising the applicant. Authority for this proposition is said to be derived from the decision of Mansfield J in Lennon v State of South Australia [2010] FCA 743 and Dodd on behalf of the Gudjala People Core Country Claim #1 v State of Queensland [2011] FCA 690, a decision of Logan J. Both decisions seem to me to be, however, inconsistent with a decision of Siopis J in Sambo & Ors v Western Australia & Ors (2008) 172 FCR 271. The matter was also addressed in earlier decisions of Spender and Kiefel JJ, but those decisions predated amendments to s 66B of the Act which, to my mind, render them of little assistance for present purposes. 4 Unfortunately I prefer the reasoning of Siopis J to that of Mansfield and Logan JJ. In my view s 66B now prescribes the method to be adopted in seeking to change the composition of the applicant in a Native Title application. I can see no justification for implying a power vested in a surviving member of an applicant to change its composition merely upon the basis that the terms of the applicant's existing authorization do not expressly exclude such an application from the extent of its authority. I accept that a claim group could authorise a surviving member of the applicant to make such an application, but I see no proper basis for inferring that this was the intention of the claim group. Were the matter to be resolved purely upon the evidence as to the terms of the original authorization I would be inclined to the view, following the decision of Siopis J, that the claim group must authorise any application for the removal of Mr Harris as an applicant or, more correctly, authorizing Mr Murgha to act alone. 5 However, as I have said, there has been a meeting of the claim group since the death of Mr Harris. I have no difficulty in inferring that those attending were aware of his death. In those circumstances it is reasonable to infer that they intended that Mr Murgha continue as the sole applicant and authorized him to take such steps as might be necessary in order to regularise his position. For that reason I am willing to proceed upon the basis that he has been authorised pursuant to s 66B to make the present application. I proceed accordingly. It may be arguable that the conduct of the members of the claim group, in allowing the matter to proceed, indicates their understanding of the original authorization, but it is not necessary to consider that matter further. 6 There will be an order in terms of para 1 of the interlocutory application and a further order that time for bringing the interlocutory application be abridged to the extent necessary. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 15 December 2011	2,223
federal_court_of_australia:fca/single/2018/2018fca1160	decision	commonwealth	federal_court_of_australia	text/html	2018-08-08 00:00:00	Domino's Pizza Enterprises Limited v Precision Tracking Pty Ltd (No 7) [2018] FCA 1160	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca1160	2024-09-13T22:49:10.433156+10:00	FEDERAL COURT OF AUSTRALIA Domino's Pizza Enterprises Limited v Precision Tracking Pty Ltd (No 7) [2018] FCA 1160 File number: NSD 516 of 2016 Judge: ROBERTSON J Date of judgment: 8 August 2018 Date of hearing: Determined on the papers Date of last submissions: 1 August 2018 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: No Catchwords Number of paragraphs: 9 Counsel for the Applicant/First Cross-Respondent to the First Cross-Claim: Mr A Coleman SC with Mr TD Cordiner QC Solicitor for the Applicant/ First Cross-Respondent to the First Cross-Claim: DLA Piper Australia Counsel for the Respondents/ Cross-Claimant of the First Cross-Claim/Cross-Respondent to the Second Cross-Claim: Mr RJ Webb SC with Dr AR Hughes Solicitor for the Respondents/Cross-Claimant of the First Cross-Claim/Cross-Respondent to the Second Cross-Claim: Allens Counsel for the Second Cross-Respondent to the First Cross-Claim/Cross Claimant of the Second Cross-Claim: Mr J Collins Solicitor for the Second Cross-Respondent to the First Cross-Claim/Cross Claimant of the Second Cross-Claim: Clayton Utz ORDERS NSD 516 of 2016 BETWEEN: DOMINO'S PIZZA ENTERPRISES LIMITED (ACN 010 489 326) Applicant AND: PRECISION TRACKING PTY LTD (ACN 133 616 369) First Respondent VLADIMIR LASKY Second Respondent NATHAN PARROTT (and others named in the Schedule) Third Respondent AND BETWEEN: PRECISION TRACKING PTY LTD (ACN 133 616 369) Cross-Claimant of the First Cross-Claim AND: DOMINO'S PIZZA ENTERPRISES LTD (and another named in the Schedule) First Cross-Respondent to the First Cross-Claim AND BETWEEN: NAVMAN WIRELESS AUSTRALIA PTY LTD (ACN 123 981 457) Cross-Claimant of the Second Cross-Claim AND: PRECISION TRACKING PTY LTD (ACN 133 616 369) Cross-Respondent to the Second Cross-Claim JUDGE: ROBERTSON J DATE OF ORDER: 8 AUGUST 2018 THE COURT ORDERS THAT: 1. Each party bear its or his own costs of the interlocutory application filed on 30 May 2018. 2. Those costs are to include the costs of the respondents' application for an order that the applicant pay the respondents' costs of the interlocutory application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT ROBERTSON J: 1 On 19 June 2018 I made orders and gave reasons in relation to an interlocutory application brought by Domino's to amend its pleadings and for further discovery: Domino's Pizza Enterprises Limited v Precision Tracking Pty Ltd (No 6) [2018] FCA 910. 2 At [39] of those reasons, I said: I will, if necessary, hear the parties in relation to costs. I indicate that my present provisional view is that, in light of the mixed success of the parties on Domino's interlocutory application, there should be no order as to costs of the interlocutory application except that Domino's should pay Precision Tracking's costs, if any, thrown away by reason of the amendments to the pleadings which I have allowed. 3 Orders 8 and 9 were in the following form: 8. Subject to order 9, each party bear its or his own costs of the interlocutory application fled on 30 May 2018. 9. If any of the parties wishes to contend for a different costs order, they are to notify my associate and the other parties and thereafter directions will be made for the exchange of short written submissions and the determination of that issue on the papers. 4 On 24 July 2018, the respondents gave notice pursuant to order 9 that they wished to contend for a different costs order to that in order 8. 5 Having considered the respondents' submissions on costs dated 25 July 2018 and Domino's submissions in answer dated 1 August 2018, including the correspondence referred to at [5.1] of those submissions in answer, I have concluded that the parties had mixed success on Domino's interlocutory application, leaving aside order 7 made on 19 June 2018 that the applicant was to pay the respondents' costs thrown away, if any, by reason of the amendments I did allow. Order 7 was not the subject of leave to contend for a costs order different to the order I indicated provisionally I would make. 6 The order I make is: Each party bear its or his own costs of the interlocutory application filed on 30 May 2018. 7 This leaves for consideration the disposition of the parties' costs of the application by the respondents for their costs. 8 In my opinion the costs of the application for a costs order should form part of the disposition of the costs of the interlocutory application and accordingly each party should bear its or his own costs in that respect. The views I provisionally expressed were just that, provisional, and I do not consider that any different disposition of the argument about costs is warranted. 9 The orders that I make therefore are: 1. Each party bear its or his own costs of the interlocutory application filed on 30 May 2018. 2. Those costs are to include the costs of the respondents' application for an order that the applicant pay the respondents' costs of the interlocutory application. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson. Associate: Dated: 8 August 2018 SCHEDULE OF PARTIES NSD 516 of 2016 Respondents Fourth Respondent: ALEXANDER GREEN Fifth Respondent: DELIVERY COMMAND PTY LTD Cross-Respondents Second Cross-Respondent to the First Cross-Claim NAVMAN WIRELESS AUSTRALIA PTY LTD (ACN 123 981 457)	1,437
federal_court_of_australia:fca/single/2012/2012fca0132	decision	commonwealth	federal_court_of_australia	text/html	2012-02-21 00:00:00	Olde, in the matter of Blueleaf Food Group Pty Ltd (Administrators Appointed) [2012] FCA 132	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2012/2012fca0132	2024-09-13T22:49:10.888939+10:00	FEDERAL COURT OF AUSTRALIA Olde, in the matter of Blueleaf Food Group Pty Ltd (Administrators Appointed) [2012] FCA 132 Citation: Olde, in the matter of Blueleaf Food Group Pty Ltd (Administrators Appointed) [2012] FCA 132 Parties: QUENTIN JAMES OLDE AND MATT JOHN ADAMS IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF BLUELEAF FOOD GROUP PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 141 912 165 and BLUELEAF FOOD GROUP PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 141 912 165 File number: NSD 263 of 2012 Judge: JACOBSON J Date of judgment: 21 February 2012 Catchwords: CORPORATIONS – extension of time to convene a second meeting of creditors of company in voluntary administration Legislation: Corporations Act 2001 (Cth), ss 439A , 447A Cases cited: Lucas v Queensland Maintenance Services Pty Ltd (Administrators Appointed), in the matter of Queensland Maintenance Services Pty Ltd (Administrators Appointed) [2012] FCA 49 Mentha, in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed)(ACN 008 667 285) [2010] FCA 30 Date of hearing: 21 February 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 24 Counsel for the Plaintiffs: Mr Newton Solicitor for the Plaintiffs: Kemp Strang IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 263 of 2012 IN THE MATTER OF BLUELEAF FOOD GROUP PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 141 912 165 QUENTIN JAMES OLDE AND MATT JOHN ADAMS IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF BLUELEAF FOOD GROUP PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 141 912 165 First Plaintiff BLUELEAF FOOD GROUP PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 141 912 165 Second Plaintiff JUDGE: JACOBSON J DATE OF ORDER: 21 FEBRUARY 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. That this application be made returnable forthwith. 2. Pursuant to s 439A(6) of the Corporations Act 2011 (Cth) (the Act) the period within which the Administrators of Blueleaf Food Group Pty Limited (the Company) must convene a meeting of the creditors of the Company pursuant to s 439A of the Act be extended up to and including 29 May 2012. 3. Pursuant to s 447A(1) of the Act the meeting of the creditors of the Company required by s 439A of the Act may be held at any time during the period comprising the convening period as extended and the period of 5 business days after the end of the convening period, notwithstanding the provisions of s 439A(2) of the Act. 4. Liberty to be granted to the First Plaintiffs to apply to the Court for any further extensions of the convening period referred to in Order 1 at any time prior to 29 May 2012. 5. Liberty be granted to any person affected by these orders to apply, on not less than 48 hours notice, to the Plaintiffs in writing, to vary or discharge these orders. 6. The Administrators are entitled to be indemnified out of the assets of the Company for the costs of this application pursuant to s 443D of the Act and/or an order that the costs of this application be paid out of the assets of the Company. 7. The Plaintiffs give notice of these orders to the Company's creditors by means of a circular posted to the Company's creditors by ordinary post or email sent no later than 7 March 2012. 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 263 of 2012 IN THE MATTER OF BLUELEAF FOOD GROUP PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 141 912 165 QUENTIN JAMES OLDE AND MATT JOHN ADAMS IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF BLUELEAF FOOD GROUP PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 141 912 165 First Plaintiff BLUELEAF FOOD GROUP PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 141 912 165 Second Plaintiff JUDGE: JACOBSON J DATE: 21 FEBRUARY 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application under s 439A(6) and s 447A of the Corporations Act 2001 (Cth) (the "Act") to extend the convening period for the second meeting of creditors of the company, required to be held under s 439A(1) of the Act, and for associated orders. 2 The application is supported by an affidavit sworn by Mr Quentin James Olde, who is one of the administrators of the company Blueleaf Food Group Pty Limited (the "Company"). Mr Olde was appointed as joint administrator of the company together with his partner, Mr Adams, on 1 February 2012. 3 The Company is a food processing and packaging enterprise which has three major customers. I need not refer to them in detail, the nature of the business is described fully in Mr Olde's affidavit. 4 The Company gave a floating charge over the whole of its assets to a secured creditor, GE Commercial Corporation (Australia) Pty Limited ("the secured creditor"). There are a number of other security interests registered as disclosed in a search of the personal property securities register, as stated in Mr Olde's affidavit. 5 On 1 February 2012, when the Company entered administration, it employed 36 staff. However, since then a number of the employees have been made redundant and there are now 29 employees who are continuing to run the business operations of the Company. 6 The Company holds a lease of the premises from which it conducts its business at Chullora. Although the Company had not paid any rent on its three-year lease, which commenced on 5 September 2011, the lessor holds bank guarantees for an amount equivalent to 9 months rent plus outgoings. 7 Since the date of administration the administrators have written to the lessor with a proposal for continuing to lease the premises, and the administrators have indicated they will pay the rent for which the Company is liable. 8 There are a substantial number of creditors of the Company. Mr Olde has identified 192 creditors. However, based on the administrator's review of the Company's accounts, it appears unlikely that there will be sufficient realisations to achieve any return to creditors other than to the secured creditor. 9 The secured creditor does not object to the administrators making the application, and the lessor has also been notified of today's application and has not made any adverse comment in relation to the application for an extension of time to convene the meeting. 10 The administrators have resumed production on the production lines of the Company's business and have obtained commitments from the major customers of the business to continue to take supplies for at least two months. This enables the administrators to have the comfort of being able to have some time to determine whether the business can be sold as a going concern. 11 The administrators consider that the commitments that have been given are likely to continue and ensure the ability of the Company to trade until it is sold. Importantly, the likelihood of the existing 29 employees retaining a job appears to be maximised by the administrators securing a successful sale of the business. 12 The administrators conducted the first meeting of creditors on 13 February 2012, pursuant to s 436E of the Act. The creditors who attended the meeting indicated they did not wish to form a committee of creditors. However, Mr Olde informed them that he intended to apply to the court to extend the convening period for the second meeting. No creditor present at the first meeting sought to be heard in opposition to the application which Mr Olde foreshadowed for an extension of the convening period. 13 The last day for the convening period of the second meeting of creditors, in accordance with s 439A(5) of the Act, is 29 February 2012, so that the present application is made during the period referred to in that subsection. 14 The basis upon which the administrators seek an extension of time is set out in [34]ff of Mr Olde's affidavit. 15 The administrators seek an extension of time for a period of three months within which to convene the second meeting. The principle basis upon which the extension is sought is for a sale of the business on a going concern basis, which is thought to be likely to generate a better return than the sale of the Company's plant and equipment in isolation to the remainder of the business. There are a number of other reasons set forth, but I need not repeat them. 16 Significantly, on 11 February 2012 and 14 February 2012 the administrators placed advertisements in the Australian Financial Review advertising for expressions of interest for the sale of the business as a going concern. The administrators have now received 35 expressions of interest and they have prepared an extensive information memorandum which Mr Newton tendered in evidence this morning. The information memorandum is a detailed and comprehensive document. And it shows the nature and extent of the work which the administrators have undertaken to date. 17 The extension of time for a period of three months is for a period which is within that which has been recognised in the authorities that have dealt with applications such as this. 18 One of the matters which the administrators may need to investigate, and for which they ought to have sufficient time to do so, is the transfer of the business to the Company from the sole shareholder of the Company, which is AAB Holdings Pty Limited ("Holdings"). It appears from Mr Olde's affidavit that Holdings "transferred" the business to the Company, including all debtors and creditors, on 1 July 2010. This event occurred approximately four months after the incorporation of the Company. 19 The administrators also wish to investigate whether the transfer has had any effect on debtors and creditors and whether Holdings remains the employer or joint employer of the employees. 20 In Mr Olde's opinion, the extension of the convening period which is sought will not unduly prejudice any relevant stakeholders other than the redundant employees. He says it is in the best interests of the secured creditor that the Company continue to trade and that the ongoing arrangements with the company's customers mean that the Company is able to continue supply of processing and packaging, which will provide additional certainty, hopefully, to achieve the maximum value for the Company's business and assets as a going concern. 21 As I have said, the lessor will benefit by receiving rent at least for the time being. The existing 29 employees will also benefit from the receipt of wages and from the prospects of continued employment if the business can be sold as a going concern. The only adverse effect of the extension appears to be that there will be delay as to the ability of the redundant employees to lodge claims with the General Employee Entitlements and Redundancy Scheme (known by the acronym GEERS) should the creditors resolve that the company be wound up at the second meeting of creditors. 22 The principles which have been applied in relation to the exercise of power to extend the convening period were summarised in a decision of McKerracher J in Mentha, in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) (ACN 008 667 285) [2010] FCA 30 at [15]ff. I referred briefly to the authorities in a recent decision in Lucas v Queensland Maintenance Services Pty Ltd (Administrators Appointed), in the matter of Queensland Maintenance Services Pty Ltd (Administrators Appointed) [2012] FCA 49 at [9]ff. I do not need to repeat what I said in that case or to seek to yet again synthesise the authorities which have already been comprehensively reviewed in the Supreme Court of New South Wales in the various decisions which are cited in these applications. 23 It is sufficient for me to say that I am satisfied that in the present case the administrators have proved that there is a substantial ground for the exercise of the court's jurisdiction to grant an extension. There is a sufficient degree of complexity to justify the extension for a period of three months sought by the administrators. I will therefore make orders in accordance with paragraphs 1 to 6 of the originating process that was filed today. 24 In addition to the orders set out in paragraphs 1 to 6 of the originating process, I will order that the first plaintiffs give notice of these orders to the company's creditors by means of a circular to be posted or emailed to the creditors by ordinary post or email, sent no later than 7 March 2012. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 21 February 2012	2,884
federal_court_of_australia:fca/single/2000/2000fca0420	decision	commonwealth	federal_court_of_australia	text/html	2000-04-04 00:00:00	Commissioner of Taxation v Industrial Equity Ltd [2000] FCA 420	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2000/2000fca0420	2024-09-13T22:49:11.356781+10:00	FEDERAL COURT OF AUSTRALIA Commissioner of Taxation v Industrial Equity Ltd [2000] FCA 420 APPEAL – judgment setting aside notice by Commissioner of Taxation under s 264 Income Tax Assessment Act 1936 (Cth) and ordering Commissioner to pay costs – subsequent notice answered – appeal by Commissioner – motion to stay appeal TAXATION – income tax – notice by Commissioner of Taxation under s 264 Income Tax Assessment Act 1936 (Cth) – whether notice can validly require attendance before "any or all" of several named persons and the Commissioner – whether notice uncertain Income Tax Assessment Act 1936 (Cth) s 264 Taxation Administration Act 1953 (Cth) s 8 Leibler v Air New Zealand Ltd [1998] 2 VR 525 considered Beitseen v Johnson (1989) 28 IR 336 cited Mayne Nickless Ltd v Transport Workers Union of Australia [1998] FCA 984 cited Unity APA Ltd v Humes Ltd (No 2) [1987] VR 474 cited Minister for Immigration and Ethnic Affairs v Baker (1997) 73 FCR 187 cited Wouters v Deputy Commissioner of Taxation (1988) 20 FCR 342 considered Watson v Commissioner of Taxation (1999) 99 ATC 5313 discussed COMMISSIONER OF TAXATION AND ANOR v INDUSTRIAL EQUITY LIMITED AND ANOR N 1339 of 1999 HILL, HEEREY AND HELY JJ 4 APRIL 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1339 OF 1999 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: COMMISSIONER OF TAXATION FIRST APPELLANT J M KILLALY DEPUTY COMMISSIONER OF TAXATION SECOND APPELLANT AND: INDUSTRIAL EQUITY LIMITED FIRST RESPONDENT GREGORY KINGSTON COTTAM SECOND RESPONDENT JUDGE: HILL, HEEREY AND HELY JJ DATE OF ORDER: 4 APRIL 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The motion to strike out or permanently stay the appeal be dismissed. 2. The appeal be allowed. 3. The first respondent pay the appellants' costs of the motion and appeal. 4. The appellants pay the respondents' costs at first instance. 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 1339 OF 1999 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: COMMISSIONER OF TAXATION FIRST APPELLANT J M KILLALY DEPUTY COMMISSIONER OF TAXATION SECOND APPELLANT AND: INDUSTRIAL EQUITY LIMITED FIRST RESPONDENT GREGORY KINGSTON COTTAM SECOND RESPONDENT JUDGE: HILL, HEEREY AND HELY JJ DATE: 4 APRIL 2000 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT 1 The appellants, the Commissioner of Taxation ("the Commissioner") and Mr Killaly ("the Deputy Commissioner") appeal to the Court from the judgment of a judge of this Court relating to two applications which were brought by Industrial Equity Limited and Gregory Kingston Cottam (both together referred to in this judgment as "the Recipients of the Notices"). 2 The first application was numbered N 1213 of 1999. It sought, inter alia, a declaration that a notice ("the First Notice")dated 10 September 1999 purporting to be given under s 264 of the Income Tax Assessment Act 1936 (Cth)("the Act") and signed by the Deputy Commissioner was invalid. The second application was numbered N 1227 of 1999. In it the Recipients of the Notices sought, inter alia, a declaration that a notice dated 25 October 1999 ("the Second Notice"),purporting to be given under s 264 of the Act and likewise signed by the Deputy Commissioner, was invalid. 3 The learned primary judge set aside the Second Notice and dismissed the proceedings relating to the First Notice. In each case he ordered the respondents to the proceedings to pay the costs of the application. 4 The Commissioner and Deputy Commissioner appealed in respect of each application. However the Commissioner subsequently withdrew the appeal so far as it related to the First Notice. The present appeal, therefore, is concerned only with the Second Notice. 5 Industrial Equity Limited ("IEL") filed a notice of motion in the appeal seeking orders that the appeals be struck out or permanently stayed. In support of the motion the solicitor for IEL deposed that yet another notice had been issued by the Commissioner on 2 November 1999, that is to say shortly after judgment was delivered and that the second respondent had answered that notice and responded to all questions asked of him. The First Notice had been superseded by the Second Notice and the time for compliance with the Second Notice had passed, with the consequence, it was said, that but for the issue of costs, the appeal had no further practical significance and should accordingly be struck out or stayed. The second respondent, it was said in any event submitted to any order the Court might make in relation either to the application or the appeal, other than an order for costs. This, perhaps ambiguous, position was clarified on the hearing of the motion to be that the second respondent wished to make no submission either in respect to the decision of the learned primary judge or in respect to the appeal, including submissions relating to costs. 6 Before dealing with the motion it is necessary to set out the background to the original application so far as is relevant to the present appeal. The background to the appeal 7 The First Notice was, as a matter of fact, not the first time the Commissioner had attempted to exercise powers to obtain information from the recipients of the notice. There had been an earlier notice dated 30 June 1999 addressed to Mr Cottam. Compliance with that notice was not pressed. The First Notice, that is to say the notice dated 10 September 1999, was in fact revoked. The proceedings for judicial review in respect of it were largely concerned with an attempt to obtain reasons for the notice being issued. As the appeal in respect of that notice has been discontinued it is unnecessary to refer further to that notice. 8 The Second Notice was in the following form: "Pursuant to paragraph 264(1)(b) of the Income Tax Assessment Act 1936, I, James Michael Killaly require you to attend and give evidence on oath – 1. concerning the income or assessment of: (i) Arthur Yates & Co Limited for the year ending 30 June 1991; (ii) Burnley Finance Amsterdam BV, Seymour Finance BV, and Wilbur Enterprises Limited for the years ending 30 June 1991 and 30 June 1992, and (iii) the entities and/or persons listed in Schedule A for the years ending 30 June 1991 to 30 June 1994 inclusive, 2. at the Australian Taxation Office, 100 Market Street, Sydney. 3. on Thursday 28 October 1999 at nine o'clock in the forenoon and until you are excused from further attending. 4. before any or all of Ms Jan Farrell, Ms Jillian Saint, Mr Frank Breen and Mr John Sheldon whom I authorise for that purpose and myself. The powers of the Commissioner of Taxation under section 264 of the Income Tax Assessment Act 1936, have been delegated to me pursuant to an instrument of delegation under section 8 of the Taxation Administration Act 1953." [Schedule A being a list of companies] The judgment appealed from 9 As already indicated his Honour set aside the Second Notice. Two matters arose for decision in respect of that notice. The first was whether a notice could, as a matter of construction of s 264, validly be given under s 264(1)(b) that requires attendance before both a person authorised by the Commissioner and the Commissioner (or person exercising by delegation the powers and functions of the Commissioner). The second associated question was whether a notice under s 264(1)(b) must specify particular persons before whom the recipient must attend, rather than specifying "any or all" of the persons before whom attendance was required. Put another way the question was whether the notice in the present case was uncertain. 10 The judgment dealt only with the first of these questions. His Honour indicated, however, an inclination to find the notice invalid on the second ground as well as the first. 11 After referring to cases in which it had been held that the word "or" was disjunctive in some contexts and not in others, his Honour said at paragraph 18: "In my opinion, the section does contain a true alternative as submitted by counsel for the applicants. I have considered each of the cases to which reference has been made, and, beyond the general proposition that "or" may sometimes not be a true disjunctive, I find little assistance in construing this section. The only direct guidance to be gleaned from these authorities is, if anything, in favour of the applicants. In Wouters (supra) [v Deputy Commissioner of Taxation (NSW) (1988) 20 FCR 342] their Honours noticed an argument by counsel for the appellants to the following effect, at 348-9: 'However, they argue that there is here an expression of a contrary intention; the provision for attendance before "any officer" is an alternative to attendance before the Commissioner. The Commissioner is necessarily a single person. So, according to counsel, the intention of Parliament was examination by a single person; …' Although the construction contended for by counsel for the appellants in that case was not acceded to, their Honours said nothing to cast doubt upon the foundation for that particular submission." The motion 12 Having heard the motion we indicated that we were of the view that the appeal should not be stayed. We said that we would deliver reasons later. The following are our reasons. 13 In a case where no controversy at all exists between the parties to an appeal, there will be no "matter" within the meaning of that expression in Chapter III of the Constitution and thus no jurisdiction for the Court to proceed with the hearing of an appeal. It is, however, accepted by the parties in the present case that there remains a controversy as to whether the order for costs at first instance was correctly made. The determination of that question necessarily involves the Court determining who is entitled to succeed, that is to say the substantive merits of the appeal. 14 It may be – it is unnecessary to decide in this case – that the Court has a discretion not to proceed to hear and determine an appeal where there is a controversy between the parties but the interests of justice require that, for some other reason, the appeal should not proceed. The question whether there is such a discretion arose in the Court of Appeal in Victoria (where the constitutional issue had no bearing) in Leibler v Air New Zealand Ltd [1998] 2 VR 525. The Court of Appeal held, however, that if there were such a discretion it should not, in the circumstances of that case, be exercised in favour of dismissing or staying the appeal. 15 In the circumstances of the present appeal we too do not need to decide whether a discretion exists. We also do not think it necessary in this case to determine whether, for this purpose, there is any distinction to be drawn between industrial cases (where cost orders are usually not made) and other cases where cost orders are: cf Beitseen v Johnson (1989) 29 IR 336 and Mayne Nickless Ltd v Transport Workers Union of Australia [1998] FCA 984. 16 In the present case there is an existing controversy as to costs and there is an appeal brought by the Commissioner and Deputy Commissioner as of right. To the extent there is a discretion which the Court might exercise, factors weighing against its exercise are that the present appeal involves an issue of construction having a significance beyond the immediate rights of the present parties and there are serious arguments capable of being advanced as to the correctness of the judgment, which can be disposed of quite shortly. For these reasons we were of the view that we should proceed with the hearing of the appeal. The substantive appeal 17 Section 264(1)(b) of the Act provides relevantly: "The Commissioner may by notice in writing require any person, whether a taxpayer or not, including any officer employed in or in connexion with any department of a Government or by any public authority: (a) ... (b) to attend and give evidence before him or before any officer authorized by him in that behalf concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto." 18 For the purposes of the appeal we accept a construction of the subparagraph, when considered in the light of s 8 of the Taxation Administration Act 1953 that the word "him" where first appearing in s 264(1)(b) includes a person (not being the Commissioner himself) who acts as the delegate of the Commissioner pursuant to a delegation under s 8 of the Taxation Administration Act. No argument to the contrary was put. 19 Ordinarily the word "or" where used in a statute will be disjunctive. But whether this is the case will depend upon the context in which the word appears, context including for this purpose the legislative intention. Examples of cases where the word "or" was held not to be disjunctive include: Unity APA Ltd v Humes Ltd (No 2) [1987] VR 474 at 481, Minister for Immigration and Ethnic Affairs v Baker (1997) 73 FCR 187 at 194-5. As the latter case indicates, the word "or" may, in an appropriate context mean "or as well". In a case such as the present, if the context requires it the word "or" could signify "and/or". The issue is whether when a statute refers to A or B the statute is referring to, on the one hand, A or B or bothor merely A or B but not bothon the other. 20 In our view the present context does not suggest that the word "or" is used so as to indicate that attendance may be required before either a person or persons authorised on the one hand or the Commissioner on the other, but not before both a person or persons authorised and the Commissioner. There is no rational explanation why Parliament would intend to produce that result. All persons before whom attendance is required act in the same interest and are part of the same organisation. As this Court held in Wouters v Deputy Commissioner of Taxation (1988) 20 FCR 342,the Commissioner may under s 264(1)(b) require attendance before more than one authorised officer. There could be no logic in a construction which accepts as valid a notice requiring attendance before two or more officers but invalid if one of those officers is the Commissioner himself. 21 It becomes necessary, therefore, to consider the alternative basis for invalidity not ultimately decided by the learned primary judge. The alternative argument proceeds upon the basis that the recipient of the notice might be uncertain as to before whom the recipient is to appear. A similar argument failed in Watson v Commissioner of Taxation (1999) 99 ATC 5313. The notice in that case required attendance "before either or both Stanley Robert Loader and Robert Mason, whom I authorise for the purpose". Heerey J in holding the notice to be valid said at paragraph 25: "But I think the present notice is perfectly clear. To comply with the notice the recipient has to attend at the stated time and place before one or other of Mr Loader and Mr Mason, or before both of them. If she attends before either, she has complied with the notice. If both are present, she has also complied." 22 In our view the same may be said of the present notice. To comply with it the recipient has to attend at the stated time and place before one or more of the persons nominated in the notice including Mr Killaly. 23 It follows that the appeal should be allowed. It was common ground that if the Court was of this view the orders made by the learned primary judge should be set aside and in lieu thereof it should be ordered that the application should be dismissed. Costs 24 Industrial Equity Limited has been unsuccessful on the motion for a stay and should pay the costs of it. The costs at first instance should follow the event. The respondents advanced arguments before the primary judge which have now been held to be erroneous. The Commissioner was entitled to lodge and prosecute his appeal and IEL at no time consented to the appeal being allowed. IEL should pay the costs of the appeal. We make no order as against Mr Cottam so far as the costs of the appeal are concerned because, at the outset, he consented to any order the Court should make with respect to it. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 4 April 2000 Counsel for the First and Second Appellants: A Robertson SC and I Young Solicitor for the First and Second Appellants: Australian Government Solicitor Counsel for the First and Second Respondents: N J Williams Solicitor for the First and Second Respondents: Blake Dawson Waldron Date of Hearing: 21 February 2000 Date of Judgment: 4 April 2000	3,860
federal_court_of_australia:fca/single/2019/2019fca1268	decision	commonwealth	federal_court_of_australia	text/html	2019-08-15 00:00:00	Spice Chest Pty Ltd v MacDonald [2019] FCA 1268	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca1268	2024-09-13T22:49:11.468827+10:00	FEDERAL COURT OF AUSTRALIA Spice Chest Pty Ltd v MacDonald [2019] FCA 1268 File number: NSD 397 of 2019 Judge: GLEESON J Date of judgment: 15 August 2019 Catchwords: PRACTICE AND PROCEDURE – application for default judgment – where respondents have not appeared before Court – originating process and statement of claim taken to be served – applicant entitled to make default application CORPORATIONS – misleading or deceptive conduct – whether first respondent contravened s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) – where pleaded facts do not support pleaded representations – applicant not entitled to default judgment against first respondent CORPORATIONS – unjust enrichment – where funds were not used for the purpose that they were advanced – failure of consideration – applicant entitled to default judgment against second respondent Legislation: Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAA, 12BAB, 12DA, 12GF, Bankruptcy Act 1966 (Cth) s 54C Corporations Act 2001 (Cth) s 601AB Property Law Act 1974 (Qld) s 56 Federal Court Rules 2011 rr 5.01, 5.02, 5.22, 5.23, 5.32, 8.06, 10.31, 10.32, 16.32 Uniform Civil Procedure Rules 2005 (NSW) r 14.12(1)(f) Cases cited: Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1; (2001) 204 CLR 559 Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979 Spangaro v Corporate Investment Australia Funds Management Ltd [2003] FCA 1025; (2003) 47 ACSR 285 Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 Date of hearing: 16 May 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Economic Regulator, Competition and Access Category: Catchwords Number of paragraphs: 70 Counsel for the Applicant: Gilbert Tsang Solicitor for the Applicant: Aubrey Brown Lawyers Counsel for the Respondents: There was no appearance for the Respondents ORDERS NSD 397 of 2019 BETWEEN: SPICE CHEST PTY LTD (ACN 610 547 147) Applicant AND: TROY SCOTT MACDONALD First Respondent VISION PROJECT GROUP PTY LTD (ACN 160 724 434) Second Respondent JUDGE: GLEESON J DATE OF ORDER: 15 August 2019 THE COURT ORDERS THAT: 1. Default judgment be given against the second respondent in the sum of $1,130,067.00. 2. The second respondent pay the applicant's costs of the application for default judgment against the second respondent. 3. Otherwise, the interlocutory application filed 2 May 2019 be dismissed. 4. Liberty be granted to the applicant's lawyers to approach the associate to Gleeson J to have the proceeding listed for a case management hearing no later than 30 September 2019. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GLEESON J: 1 By interlocutory application filed on 29 April 2019, the applicant (Spice Chest) applied for default judgment against the respondents in an amount of $1,130,067.00. 2 Rule 5.23(2)(b) of the Federal Court Rules 2011 (Rules) provides: If a respondent is in default, an applicant may apply to the Court for: ... (b) if the claim against the respondent is for a debt or liquidated damages – an order giving judgment against the respondent for: (i) the debt or liquidated damages; and (ii) if appropriate, interest and costs in a sum fixed by the Court or to be taxed; ... 3 Rule 5.23(2)(c) provides: If a respondent is in default, an applicant may apply to the Court for: ... (c) if the proceeding was started by an originating application supported by a statement of claim, or if the Court has ordered that the proceeding continue on pleadings — an order giving judgment against the respondent for the relief claimed in the statement of claim to which the Court is satisfied that the applicant is entitled. 4 By r 5.22, a party is in default if the party fails to: (a) do an act required to be done, or to do an act in the time required, by these Rules; or (b) comply with an order of the Court; or (c) attend a hearing in the proceeding; or (d) prosecute or defend the proceeding with due diligence. 5 By r 5.01, a party or the party's lawyer must attend the Court on the return date fixed in the originating application. 6 By r 5.02, a respondent who has been served with an originating application must file a notice of address for service, in accordance with Form 10, before the return date fixed in the originating application. 7 By r 16.32, a respondent must file a defence, in accordance with Form 33, within 28 days after service of the statement of claim. 8 In support of the application, Spice Chest relied upon the affidavits of: (1) Ben Hughes, law clerk, affirmed 29 April 2019 and 15 May 2019; (2) Wendy Hastie, licensed commercial agent, sworn 29 March 2019 and 15 May 2019; and (3) Andrew Wilson, solicitor, affirmed 10 April 2019. 9 Neither of the respondents appeared before the Court on Spice Chest's application for default judgment. Relevant legal principles 10 In Speedo Holdings BV v Evans (No 2) [2011] FCA 1227, the Court outlined a number of principles relevant to the discretion to enter default judgment, including the following (at [20]-[25]) (citations omitted): [20] First, the power ... remains discretionary. ... Just as the discretion must be exercised [cautiously] where it is the applicant that is in default ... the same caution must be exercised where it is the applicant who is seeking orders as against a defaulting respondent. … [22] Second, the discretionary power to enter a default judgment is enlivened when (as in the present case) an applicant applies to the Court for an order. Rule 5.23(2) provides that where a respondent is in default "an applicant may apply to the Court". ... [23] Third, there is a difference in the terms in which the ambit of the power conferred by the former r 3(2)(c) ("the relief... that the applicant appears entitled to on the statement of claim") and the wording of the current r 5.23(2)(c) ("the relief claimed in the statement of claim to which the Court is satisfied that the applicant is entitled"). Notwithstanding that difference in language, the requirement imposed is not that an applicant prove by way of evidence the claim sought to be advanced; the requirement is that the Court needs to be "satisfied" on the face of the statement of claim that the applicant is entitled to the "relief" claimed. ... The facts as alleged in the statement of claim are deemed to have been admitted by a respondent. ... [24] Fourth, to be satisfied that an applicant "is entitled" to the relief claimed in the statement of claim, the Court needs to be satisfied that "each element of the relevant civil wrong involved is properly and discretely pleaded in the statement of claim". ... [25] Fifth, in addition to the facts alleged in a statement of claim, the Court may permit recourse to limited further evidence. But it may not admit evidence which would alter the case as pleaded. 11 In Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979, I recorded out the following relevant principles at [10]-[14]: [10] The condition in rule 5.23(2)(c) of the Rules, that the Court be satisfied that the applicant is entitled to relief before judgment is entered against the respondent, does not require proof by way of evidence of the applicant's claim, although evidence may be adduced: Australian Competition and Consumer Commission v Dataline Net AU Pty Ltd (2006) 236 ALR 665, [2006] FCA 1427 at [44]; Yeo v Damos Earthmoving Pty Ltd, Re Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129 at [9]. [11] However, the applicant must demonstrate, on the face of the statement of claim: a. a claim for relief sought; and b. that the court has jurisdiction to grant that relief. See Luna Park Sydney Pty Ltd v Bose [2006] FCA 94 at [20]. [12] An applicant will appear to be entitled to the relief sought in the statement of claim if each element of the relevant civil wrong is properly and discretely pleaded: Macquarie Bank Ltd v Seagle [2005] FCA 1239; (2005) 146 FCR 400 at [24]; Macquarie Bank Ltd v Seagle (2008) 79 IPR 7, [2008] FCA 1417 at [20]. [13] The Court may permit recourse to further limited evidence but cannot admit evidence that would alter the case as pleaded: Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 at [25] ("Speedo"). [14] If an order for relief under rule 5.23(2)(c) is made, it gives the applicant a special privilege to gain judgment without proof of the applicant's claim – a severe disadvantage to the respondent. As a result, the rules governing default judgment are strictly construed and the discretion must be exercised cautiously: Clayton v Thomas C Denton & Co Pty Ltd [1972] VicRp 5; [1972] VR 46 at 49; Speedo at [20]. Are the respondents in default? 12 Spice Chest contended that the respondents are in default of each of rr 5.01, 5.02 and 16.32. 13 Dealing with r 16.32 first, in order to demonstrate default, Spice Chest is first required to demonstrate service of the statement of claim. 14 The statement of claim was served on the second respondent (VPG) on 21 March 2019, as evidenced by Ms Hastie's 29 March 2019 affidavit. 15 On 11 April 2019, I made an order pursuant to r 10.24 of the Rules, relevantly that the originating process dated 8 March 2019 (comprising the application, the statement of claim and the genuine steps statement, all filed on 15 March 2019) be served on the first respondent (Mr MacDonald) by way of an email to a specified address and by post to two postal addresses. 16 The statement of claim was served on Mr MacDonald by letters dated 12 April 2019 and by an email sent on 12 April 2019 in accordance with the 11 April 2019 order. 17 The 11 April 2019 order did not specify when the documents would be taken to be served: cf. r 10.24(c). By r 10.32, a document that is served on a person under r 10.31 is taken to be served on the person, relevantly: (a) if the document was sent by pre-paid post—on the fourth business day after the document was sent; or … (c) if the document was sent by electronic communication—on the next business day after the document was sent. 18 Rule 10.31 provides for service of a document "that is not required to be served personally". In this case, the statement of claim was not required to be served personally on Mr MacDonald by reason of the 11 April 2019 order. 19 Accordingly, the statement of claim is taken to be served on Mr MacDonald on 15 April 2019 in respect of its communication by way of email and 18 April 2019 in respect of its service by post. 20 Taking the later date (in Mr MacDonald's favour), it follows that Mr MacDonald was required by r 16.32 to file a defence to the statement of claim by 16 May 2019 and VPG was similarly required to file its defence by 18 April 2019. 21 Neither respondent has filed a defence. 22 At the time that Spice Chest filed its default judgment application, VPG was in default within the meaning of r 5.22(a) by reason of its non-compliance with r 16.32. In addition, VPG was in default within the meaning of r 5.22(a) and r 5.22(c) by reason of its non-compliance with r 5.01 and r 5.02 set out above because it did not attend the Court on the return date fixed in the originating application, which was 11 April 2019 and, having been served with the originating application, it did not file a notice of address for service, in accordance with Form 10, before 11 April 2019. 23 At the time that Spice Chest filed its default judgment application, Mr MacDonald was in default within the meaning of r 5.22(c) by reason of his non-compliance with r 5.01 because of his failure to attend the return date fixed in the origination application. That non-compliance occurred in the context of Spice Chest's failure to serve the originating documents prior to the return date, as required by r 8.06, which in turn occurred because of Spice Chest's inability to locate Mr MacDonald. Rule 5.02 has no relevant application because Mr MacDonald was not served with the originating application prior to 11 April 2019. 24 In the end, I am satisfied that Spice Chest was entitled to make its default judgment application pursuant to r 5.32(2) because each of the respondents was in default of r 5.22(a) and r 5.22(c) at the time that the application was made. Spice Chest's claim 25 The originating application claims the following relief, on the grounds stated in the statement of claim: (1) $1,130,067 due and payable as a debt, or alternatively in damages or in equitable damages, or in damages under s 12GF of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). (2) Damages for economic loss under s 12GF of the ASIC Act. (3) Damages for unjust enrichment. (4) Damages for monies had and received. (5) A guarantee in a form to be settled by the Court and executed by the "respondent" in favour of Spice Chest. (6) Interest. (7) Costs. 26 The statement of claim refers to the following relevant parties: (1) The applicant, Spice Chest, which is alleged to be the trustee of the "Chilli Asset Trust No 1" (Trust) pursuant to a trust deed dated 3 February 2016, and which allegedly undertook the pleaded conduct in its capacity as trustee of the Trust. The sole director and secretary of Spice Chest is Marcus Nicholls. (2) The first respondent, Mr MacDonald, who was allegedly a residential property investor and developer and who had an agent named Blair Harding. (3) The second respondent, VPG, a company of which Mr MacDonald was allegedly sole director, company secretary, shareholder and agent, and Mr Harding was an agent. (4) Pine056 Pty Ltd (company A), another company of which Mr MacDonald was allegedly sole director, company secretary, shareholder and agent. Company A was deregistered on 23 March 2018 pursuant to s 601AB of the Corporations Act 2001 (Cth). (5) Rich132Pty Ltd (company B), also a company of which Mr MacDonald was allegedly sole director, company secretary, shareholder and agent. Company B was deregistered voluntarily on 25 January 2017, on the application of Mr MacDonald under s 601AB. (6) Lot 49 Pinelands Street Pty Ltd (company C), a company of which Mr MacDonald is the sole shareholder, formerly the sole director and company secretary and the son of the current sole director and company secretary. Company C allegedly undertook and completed the subdivision and property development of 49 Pinelands Street Loganlea, Queensland (49 Pinelands development). 27 The statement of claim alleges that Mr MacDonald and Mr Nicholls made an oral agreement on 6 April 2016 to the effect that: (1) Spice Chest would advance funds, by way of a loan, to one or more of the companies used by Mr MacDonald as vehicles for property developments (defined as the "Loan"); (2) the security for the loan would include Mr MacDonald giving to Spice Chest a personal guarantee, by which he guaranteed the repayment of funds advanced by Spice Chest (guarantee representation); and (3) in consideration for the loan, Spice Chest would receive an "agreed percentage" of the net profits made on the property developments towards which funds advanced under the loan were applied. 28 The statement of claim pleads that, at the time when the agreement was made, Mr MacDonald made the following three representations: (1) a false representation that company A and company B had property developments underway on the land comprising lot 133 on RP112930 (lot 33 development) and lot 57 on RP112929 (lot 57 development); (2) that funds advanced by Spice Chest would be used to finance these developments; and (3) that, in consideration for financing these developments, Spice Chest would receive a 20% share in the net profit of these developments and would be allocated a corresponding 20% shareholding in company A and company B. 29 It is not clear why the "agreed percentage" is not identified as 20% in the pleading of the oral agreement but, rather, as a separate representation. 30 It is alleged that the oral agreement was "reduced to a written contract" dated 14 April 2016 and titled "Acknowledgement of Terms" in the following terms, annexed to the statement of claim: On behalf of Pine056 Pty Ltd ACN 609 040 780 and Rich132 Pty Ltd ACN 608 768 430 (the Companies), I confirm the following terms: 1. The Companies are currently undertaking two developments at 13 - 17 Pinelands Street Loganlea and 77 - 81 Richards Street Loganlea respectively (the Developments); 2. The trustee of the Chilli Asset Trust No. 1 will invest the sum of $1,180,067.00 in the developments as follows: (a) $140,000.00 - 7 days after the date of this letter; and (b) $1,040,067.00 - 21 days after the date of this letter. 3. In return for the investment set out above, the trustee of the Chilli Asset Trust No.1 will receive upon finalisation of Developments a 20% share of profit as set out in item 5 below; 4. The trustee of the Chilli Asset Trust No. 1 will be provided with the following security: (c) [sic] issue to the trustee of the Chilli Asset Trust No 1 of 3 shares in each of the Companies representing a 20% interest in each of the Companies; and (d) Personal guarantee of Troy Scott MacDonald. Our accountant has been instructed to commence the process of issuing the shares. 5. Profit will be calculated and paid as follows: (a) As determined by the director(s) (acting reasonably on the advice of the Companies' accountant) after the final lot in the development(s) is sold, all debts relating to the developments are paid; and (b) Method of payment will be in accordance with how the Companies' accountant advises is best for the Companies (e.g. shareholder dividend or otherwise). Please accept this letter as confirmation and undertaking on behalf of the Companies of the terms agreed between us. Yours faithfully [signed] Troy Scott MacDonald Sole Director of Pine056 Pty Ltd ACN 609 040 780 and Rich132 Pty Ltd ACN 608 768 430 Please confirm your agreement with these terms by signing below: [signed] Marcus Nicholls[.] 31 I note that this document refers to "investing" funds, rather than lending, and does not refer to repayment of a loan. Nevertheless, the pleading continues with repeated references to the alleged loan of funds by Spice Chest, apparently pursuant to the oral agreement by use of the term "Loan" referred to above. 32 It is next alleged that Mr MacDonald knew that, in deciding to advance funds, Spice Chest (through Mr Nicholls) would, and did, rely on the guarantee representation and the terms of the written contract; and that Mr MacDonald directed Spice Chest to pay the advance under the Loan to the bank account of VPG. 33 It is then alleged that, relying on the guarantee representation and the terms of the written contract, Spice Chest advanced $1,180,067 "under the Loan" to VPG "on behalf of Mr MacDonald" by bank transfers of $140,000 on 15 April 2016 and $1,040,967 on 17 May 2016. 34 Spice Chest alleges that it agreed to a recommendation that property development to be financed by the "Loan" would instead be "a project a few doors down", that is, the 49 Pinelands development, rather than the lot 133 development and the lot 57 development, with the return due to Spice Chest to increase from 20% to 27% of net profit. 35 However, it is alleged, at no time did Mr MacDonald (or Mr Harding, on behalf of Mr MacDonald or any relevant company) inform Spice Chest that neither company A nor company B had a role in developing the 49 Pinelands development, but that the funds advanced "under the Loan" were instead "allocated by" Mr MacDonald to company C. 36 Further, it is alleged, at no time has Mr MacDonald performed the guarantee representation by providing the applicant with a written guarantee. 37 Based on these alleged facts, the statement of claim contends that: (1) Mr MacDonald is estopped from denying there exists between him and Spice Chest a binding agreement in the terms of the guarantee representation. (2) In the alternative, para 4 of the written contract amounts to a "memorandum or a note of a promise" within the meaning of s 56(2) of the Property Law Act 1974 (Qld) made in writing by Mr MacDonald, and in the premises is enforceable as a contract of guarantee against Mr MacDonald. 38 Next, the statement of claim pleads the following additional facts. 39 On 3 April 2018, Mr MacDonald caused $50,000 to be paid to Spice Chest by bank transfer, in part repayment of the Loan. 40 By letter of demand to Mr MacDonald dated 2 October 2018, Spice Chest demanded, inter alia, the repayment "under his guarantee" of the amount advanced "under the Loan". 41 Mr MacDonald has not responded to Spice Chest's letter of demand, and nor have company C nor VPG responded to "that letter of demand". 42 Based on these alleged facts, the statement of claim contends that the amount of $1,130,067 is due and payable to the applicant by Mr MacDonald as a debt "under the guarantee". 43 Further, the statement of claim contends that, by reason of Mr MacDonald's refusal to make payment under the guarantee, Spice Chest has suffered loss and damage in the amount of $1,130,067, being the full amount of the loan less the part repayment already made. In support of this contention, the statement of claim states that Spice Chest cannot recover from company A or company B since they are both deregistered. 44 Next, the statement of claim pleads the following facts in support of a claim for damages under s 12GF of the ASIC Act: (1) Mr MacDonald's conduct pleaded in the statement of claim was conduct undertaken by him in trade or commerce. (2) The written contract was a facility through which Mr MacDonald (which I take to be a mistake, the intended reference being Spice Chest) made a financial investment intended to generate a financial return to Mr MacDonald and was thus both a financial product within the meaning of s 12BAA of the ASIC Act and a financial service under s 12BAB(1AA) of the ASIC Act. (3) Mr MacDonald's conduct was misleading or deceptive or likely to mislead or deceive, in contravention of s 12DA of the ASIC Act in that: (a) Mr MacDonald made the guarantee representation but did not provide the guarantee; (b) Mr MacDonald made the three representations set out at [28] above, but did not cause any shares to be allocated as required by para 4 of the written contract; (c) Mr MacDonald omitted to inform Spice Chest that the funds advanced under the loan were "allocated away" from company A and company B to company C. (d) In contravention of s 12DA of the ASIC Act, VPG: (i) aided, abetted, counselled or procured Mr MacDonald's contravention at (a); (ii) was otherwise, directly or indirectly, knowingly concerned in, or party to, Mr MacDonald's contravention at (a); or (iii) otherwise conspired with Mr MacDonald to contravene s 12DA of the ASIC Act. (By way of particulars to this contention, Spice Chest refers to Mr MacDonald's positions as VPG's director, company secretary, and shareholder, and also its agent, and contends that Mr MacDonald's knowledge is to be imputed to VPG.) (4) The conduct pleaded has caused the applicant loss and damage in an amount comprising: (a) $1,130,067; and (b) further damages corresponding to the loss of a share of profits. (5) By reason of these matters and s 12GF of the ASIC Act, Mr MacDonald and VPG are jointly and severally liable to the applicant for loss and damage. 45 Further, the statement of claim contends that, in the circumstances, VPG has been unjustly enriched by the receipt of the loan or, alternatively, the loan is money had and received by VPG to the benefit of Spice Chest. Jurisdiction 46 The statement of claim includes a claim under the ASIC Act. I accept that, where the Court has jurisdiction to determine a matter of a particular kind, it has accrued jurisdiction to determine the whole of the controversy: Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1; (2001) 204 CLR 559. Accordingly, I am satisfied that the Court has jurisdiction to determine the whole of the controversy the subject of the statement of claim. Is Spice chest entitled to default judgment Against Mr MacDonald? 47 On the face of the statement of claim, Spice Chest transferred $1,180,067 to VPG "on behalf of Mr MacDonald" and at his direction, and in reliance on the guarantee representation and the terms of the written contract which refers to developments being undertaken by company A and company B. Rather than providing the loan funds to company A and company B, Mr MacDonald caused the loan funds to be used for the development of the 49 Pinelands development, which was a project owned by company C. 48 Ultimately, counsel for the applicant, Gilbert Tsang, did not rely on the claim in debt based on a guarantee given by Mr MacDonald, in the absence of any written guarantee of the kind required by s 56 of the Property Law Act and the allegation that Mr MacDonald did not provide a written guarantee. 49 Further, there is no pleading of consideration to support a guarantee. In this regard, there is an alleged representation that, in consideration for financing the relevant developments, Spice Chest would receive a 20% share in the net profit of these developments but no reference is made to the guarantee as consideration for the advance of loan funds. 50 There is an alternative pleading that para 4 of the written contract is enforceable as a contract of guarantee against Mr MacDonald. Section 56(2) of the Property Law Act provides: (2) A promise, or memorandum or note of a promise, in writing shall not be treated as insufficient for the purpose of this section merely because the consideration for such promise does not appear in writing or by necessary inference from a written document. 51 In the written contract, the promise is to provide the trustee with the "following security … personal guarantee of Troy Scott MacDonald". The obligation secured, or to be secured by the guarantee is not clearly specified in the written contract. As noted above, the written contract does not refer to the sum of $1,180,067.00 as a loan, or mention its repayment. Rather, the written contract referred to a 20% share of profit as the "return for the investment". Accordingly, I am not satisfied on the face of the statement of claim (supplemented by the written contract) that the written contract contains an enforceable guarantee by Mr MacDonald of a principal obligation owed by company A and company B to repay the sum of $1,180,067.00. 52 The second claim against Mr MacDonald is for damages pursuant to s 12GF of the ASIC Act. 53 Section 12GF provides relevantly: (1) A person who suffers loss or damage by conduct of another person that contravenes a provision of Subdivision C (sections 12CA to 12CC) or Subdivision D (sections 12DA to 12DN) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention. … (1B) Despite subsection (1), if: (a) a person (the claimant ) makes a claim under subsection (1) in relation to: (i) economic loss; or (ii) damage to property; caused by conduct of another person (the defendant ) that was done in contravention of section 12DA; and (b) the claimant suffered the loss or damage: (i) as a result partly of the claimant's failure to take reasonable care; and (ii) as a result partly of the conduct referred to in paragraph (a); and (c) the defendant: (i) did not intend to cause the loss or damage; and (ii) did not fraudulently cause the loss or damage; the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant's share in the responsibility for the loss or damage. Note: Subdivision GA also applies proportionate liability to a claim for damages under this section for a contravention of section 12DA. 54 Section 12GF applies where a person who suffers loss or damage by conduct of another person that contravenes, relevantly s 12DA of the ASIC Act. 55 Section 12DA(1) provides that a person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or likely to mislead or deceive. 56 Section 12BAB(1)(b) provides relevantly that a person provides a "financial service" if they deal in a financial product. 57 Section 12BAA(1)(a) provides that relevantly, subject to s 12BAA(8), a "financial product" is a facility through which, or through the acquisition of which, a person makes a financial investment. Section 12BAA(4) provides, for the purposes of s 12BAA, that a person "makes a financial investment" in certain circumstances. A note to s 12BAA(4) gives the following example of an action that constitutes making a financial investment under s 12BAA(4): (a) A person paying money to a company for the issue to the person of shares in the company (the company uses the money to generate dividends for the person and the person, as a shareholders, does not have control over the day-to-day affairs of the company). 58 Paragraph 29 of the statement of claim pleads: The Contract was a facility through which the first respondent [Mr MacDonald] made a financial investment intended to generate a financial return to the first respondent and was thus both a financial product within the meaning of section 12BAA of the [ASIC Act] and a financial service under section 12BAB(1AA) of the ASIC Act. 59 As noted earlier, I assume that para 29 was intended to plead that the written contract was a facility through which Spice Chest made a financial investment etc. This allegation is inconsistent with the earlier pleading which, on three occasions, alleges that the relevant funds were advanced "under the Loan". By r 16.06, a party must not plead inconsistent allegations of fact or inconsistent grounds of claims except as alternatives. As Spice Chest has not pleaded para 29 in the alternative, I do not consider that it is entitled to default judgment on the basis that the funds advanced were a financial investment within the meaning of s 12BAA, rather than a loan. 60 In any event, I do not accept that any of the three alleged contraventions of s 12DA are capable of constituting misleading or deceptive conduct on the facts pleaded. As to the first alleged contravention, the guarantee representation is a representation about a future matter. The statement of claim does not plead facts from which it could be concluded that Mr MacDonald did not have reasonable grounds for making the representation. As to the second alleged contravention, any omission by Mr McDonald to cause the allocation of shares is not capable of being characterised as misleading or deceptive. To the extent that it is suggested that the representation to cause the allocation of shares was misleading or deceptive, the pleading is insufficient for the same reason as for the first alleged contravention. As to the third alleged contravention, the pleading is insufficient to support a finding that the alleged loss was "by" Mr MacDonald's omission to inform Spice Chest that the funds advanced under the loan were "allocated away" to company C. 61 Accordingly, I am not satisfied that Spice Chest is entitled to default judgment against Mr MacDonald. In any event, where Mr McDonald's only default prior to the filing of the interlocutory notice was to fail to comply with r 5.01 in circumstances in which he had not yet been served with the originating process, I would been very reluctant to exercise the discretion in favour of default judgment against him. 62 After judgment was reserved, Spice Chest's lawyers sent to the Court a Notice of Declaration of Intention to Present a Debtor's Petition (Suspension of Creditor Enforcement) issued by the Australian Financial Security Authority in respect of Mr MacDonald pursuant to s 54C of the Bankruptcy Act 1966 (Cth). Spice Chest's lawyers confirmed that, if default judgment was granted, Spice Chest would not seek to enforce that judgment during the stay period set out in the notice. 63 Spice Chest's lawyers also noted that the notice attached a summary of financial affairs of Mr MacDonald which identified an unsecured liability to Spice Chest in the amount of $1,130,067.00. Spice Chest did not seek leave to re-open the application for default judgment to tender the summary of financial affairs, or suggest that this apparent admission by Mr MacDonald provided a further basis for the default judgment sought. 64 Subsequently, Spice Chest's lawyers also informed the Court that, as at 1 July 2019, Mr MacDonald had not presented a debtor's petition. is Spice chest entitled to default judgment against VPG? 65 On the facts pleaded, I accept that VPG has been unjustly enriched by receipt of funds from Spice Chest. On the oral agreement, as pleaded, the amounts were to be advanced to company A and company B. On the written contract, Spice Chest agreed to invest the funds paid to VPG in developments then being undertaken by company A and company B. Spice Chest subsequently agreed that its funds would be used to finance the 49 Pinelands development but on the basis that its investment was in company A and company B. 66 On the facts pleaded, VPG applied Spice Chest's funds to its own use, without the consent of Spice Chest. Thus, Spice Chest's funds were advanced to VPG for a consideration which failed (Spangaro v Corporate Investment Australia Funds Management Ltd [2003] FCA 1025; (2003) 47 ACSR 285 at [51]) and VPG was unjustly enriched by the amount of the funds paid to it at Spice Chest's expense. 67 I am satisfied that the following three elements of the restitutionary claim was properly and discretely pleaded, namely: (1) The enrichment of VPG (statement of claim para 16); (2) The enrichment was at Spice Chest's expense (also statement of claim para 16); (3) The enrichment was unjust because the money paid by Spice Chest was for the purpose of investing in company A and company B but was used by company C in relation to which Spice Chest had no contractual relationship (statement of claim paras 9, 10, 16, 18 and 19). 68 Accordingly, I am satisfied that Spice Chest is entitled to an order that VPG pay to Spice Chest the amount claimed and, consequently, to default judgment in that sum. 69 As noted above, Spice Chest makes an alternative claim for relief paid on "money had and received by [VPG] to the benefit of" Spice Chest. This is a "common count", permitted in New South Wales by r 14.12(1)(f) of the Uniform Civil Procedure Rules 2005 (NSW). There is no analogous rule in the Rules. I am not satisfied that Spice Chest is entitled to default judgment on the basis of this claim. Conclusion 70 I will make an order giving judgment in Spice Chest's favour against VPG in the sum of $1,130,067.00. Costs should follow the event. Otherwise, the application for default judgment will be dismissed. Spice Chest's lawyers may approach my associate for a further case management hearing to be held not later than 30 September 2019. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate: Dated: 15 August 2019	8,311
federal_court_of_australia:fca/single/1999/1999fca1805	decision	commonwealth	federal_court_of_australia	text/html	1999-12-22 00:00:00	Commissioner of Taxation v Pilnara Pty Ltd [1999] FCA 1805	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca1805	2024-09-13T22:49:14.348989+10:00	FEDERAL COURT OF AUSTRALIA Commissioner of Taxation v Pilnara Pty Ltd [1999] FCA 1805 INCOME TAX – appeal from decision of judge to set aside an "off-shore information notice" issued by the Commissioner of Taxation to the respondent pursuant to s 264A of the Income Tax Assessment Act 1936 (Cth) – whether the statement of reasons provided pursuant to s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) disclosed any adequate basis for the belief that the information and documents requested were relevant to the assessment of the taxpayer – whether in making that finding a court is confined to the statement of reasons – whether the notice was required to recite material facts linking the information and documents sought to the assessment of the taxpayer – whether it was necessary for there to be a reasonable belief in the existence of all of the information and documents sought – respondent a trustee of a discretionary trust – respondent had resolved that all of the taxable income of the trust be distributed to a particular beneficiary – whether the Commissioner failed to take into account, as a relevant matter, whether the respondent could be a taxpayer in respect of any net income. Income Tax Assessment Act 1936 (Cth), s 264A SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 distinguished Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368 distinguished FH Faulding & Co Ltd v Commissioner of Taxation (1994) 54 FCR 75 referred to COMMISSIONER OF TAXATION v PILNARA PTY LTD N 731 OF 1999 WILCOX, HILL & CARR JJ 22 DECEMBER 1999 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 731 OF 1999 On appeal from a Judge of the Federal Court of Australia BETWEEN: COMMISSIONER OF TAXATION Appellant AND: PILNARA PTY LIMITED Respondent JUDGES: WILCOX, HILL & CARR JJ DATE: 22 DECEMBER 1999 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT: BACKGROUND 1 This is an appeal from a decision of a Judge of this Court to set aside a notice issued by the appellant, the Commissioner of Taxation, to the respondent pursuant to s 264A of the Income Tax Assessment Act 1936 (Cth) ("the Act"). Section 264A of the Act confers power upon the appellant to issue notices (referred to in the Act as "offshore information notices") to a taxpayer requiring the provision of information or documents relevant to the assessment of the taxpayer, being information or documents which are outside Australia and (in the case of information) which is within the knowledge of a person outside Australia. The question in the appeal is whether the primary judge erred in deciding that the s 264A notice issued to the respondent was invalid. By notice of contention, the respondent challenges the refusal of the primary judge to hold that s 264A is beyond the legislative power of the Commonwealth because it is inconsistent with Chapter III of the Constitution. The Facts 2 The respondent, Pilnara Pty Ltd, is the trustee of the Peabody Family Trust No. 2 ("the Trust"). On 2 March 1999 the Commissioner served an offshore information notice ("the Notice") on the respondent requesting the production of certain information and documents. The Notice contained a statement that the Commissioner believed that the information and documents were overseas and were relevant to the assessment of the respondent in its capacity as trustee of the Trust. 3 The information and documents were sought as part of a taxation audit being undertaken by the appellant's High Wealth Individuals Taskforce in relation to the tax affairs of Mr Terrence Peabody. 4 The subject matter upon which the request focussed was a company incorporated in the British Virgin Islands, Western Star International Limited ("WSIL"), in which the respondent, as trustee of the Trust, held one ordinary share. Information and documents were sought in respect of the period between 1 July 1993 and 30 June 1997. 5 Before the issue of the notice, there was an exchange of correspondence between the appellant and the respondent. 6 On 19 January 1999 the appellant wrote to the respondent as trustee for the Trust requesting information regarding the income years between 1 July 1993 and 30 June 1997. The information sought in relation to the affairs of the Trust included: · the name of the entity or entities in which the Trust held an interest and the nature of the interest held; · details of those entities including the place of incorporation (where the entity was a company), the address of its registered office, the postal address, the principal place of business, the principal assets (including investments), the principal activities, the number of shares on issue at each year end, the number of shares held by the Trust, a description of the rights attaching to each class of share, details of dividends declared and dividends received, credited or applied to the benefit of the Trust by the company; · details of loans received by the Trust from such entity, any loan funds advanced to the entity and the terms and conditions of any loans advanced or received · the amount of any debts forgiven by the Trust in relation to a debt owing by such entity; · details of any expenses met by the Trust on behalf of such entity; · the name of the representative of the Trust who either alone or together with other persons or entities was able to direct or influence the manner in which the entity acted; and · the name of the person or persons who controlled the affairs of the Trust. 7 The letter set out definitions of expressions such as "entity", "interest" and "controlled the affairs of the Trust". 8 On 29 January 1999 the respondent, by its tax agent, wrote to the appellant stating (in summary) that: · the Trust held an interest, comprising one ordinary share out of the 10,000 issued shares, in WSIL; · no dividends had been declared by WSIL; · WSIL was incorporated in, its registered office was located in, and its principal place of business was in the British Virgin Islands; · the principal assets and activities of the Trust were investment holdings and investment holding (respectively); · the Trust had received no loans from WSIL or made any loans to WSIL; · no debts of WSIL had been forgiven by the Trust; · no expenses of WSIL had been met by the Trust; · the Trust had not appointed a representative in connection with WSIL; and · the Trust was controlled by the trustee, Pilnara Pty Ltd. 9 On 11 February 1999 the appellant wrote to the respondent's tax agent seeking further information. The reply from the respondent's tax agent, dated 22 February 1999, stated that WSIL was incorporated on 28 January 1991 as Pozzolanic International Ltd. It took its present name on 17 February 1994. The directors of WSIL from 1 July 1993 to 30 June 1997 were Mr Wilfred K Timso and Mr John W Crawford. The administrative centre of the company was located in Hong Kong. The business performed by WSIL was that of an investment company. The major investment of WSIL was in a company called Western Star International Pte Ltd ("WSIPL"). The respondent's tax agent, who had been provided with the information regarding WSIL by Mr T E Peabody, was unable to provide the remainder of the information requested. That included a chart illustrating the entities with which WSIL was associated reflecting the respective ownership percentages held by each entity and the place of incorporation of each such entity, the names of the parties who held the remaining shares in WSIL, the names of representatives of WSIL with whom the Trust had had communication, and information as to what were the principal assets of WSIL. 10 The letter dated 22 February 1999 from the respondent's tax agent further stated that the Trust acquired one share in WSIL in 1991 as a minimal investment with the prospect of some future return. The Trust played no role in the affairs of WSIL and neither WSIL nor Pozzolanic International Ltd played a role in the affairs of Mr Peabody or his group. The Trust held no information as to the affairs of WSIL and the only information known by Mr Peabody was stated in the letter. 11 On 2 March 1999, Ms Darlene Dunne of the Australian Taxation Office prepared a submission to the relevant delegate of the appellant seeking the issue of the Notice. The submission identified the taxpayer as Pilnara Pty Ltd as trustee for The Peabody Family Trust No. 2. It described the information and/or documents sought as information concerning the ownership of, and business carried on by, WSIL and information as to the relationship between WSIL and other entities, in particular WSIPL "over which it appears to exercise control". The basis on which information and documents were regarded as relevant to the assessment of the respondent as trustee for the Trust was stated as being: "As it is believed that the Trust has 100% control (either direct or indirect) of the company, then profits flowing to the company which have not previously been subject to comparable tax in an overseas jurisdiction, should be attributed as income back to Australia and assessed to the Trust. However, without any clear understanding of the role played by the company in the structure, it is impossible to consider either the evidentiary or factual circumstances behind the Trusts' [sic] involvement with the company's activities offshore. Despite attempts to elicit information regarding the Trust's interest in the Western Star business in Canada, and its related interests in interposed entities in the British Virgin Islands and Singapore, only negligible information has been disclosed by the Trust or Mr Peabody.… it is considered that Mr Peabody and a number of entities over which he exercises control may not be meeting their proper tax liability. Without the relevant disclosure of these interests or activities, it is impossible to determine the extent to which tax is being avoided or control is being exercised by Mr Peabody or his family. Basis on which there is reason to believe that the information and/or documents are held outside Australia: Advice has been received that the only information that is known in relation to the company has been provided by the Trust. Apart from that information, no further information is held by the Trust (or presumably Mr Peabody). Therefore, the only possible source of information is the company itself. This information and documentation would either be retained in its registered office in the British Virgin Islands or in its administration centre in Hong Kong. … Other comments: In a letter dated 22 February 1999, the Trust (Mr Peabody appears to have in fact provided this information on behalf of the Trust) has advised that no further information can be provided in relation to the company. This is a cause of concern for this office. It is the role of the HWI Taskforce to review the income tax affairs of taxpayers where there is an apparent lack of correlation between assessable income and assets owned or controlled. In the case of Mr Peabody, he has returned a taxable income of $74,100 in his income tax return for the year ended 30 June 1997. Net assets held or controlled by Mr Peabody have been estimated at 100's of $M's." 12 Following the submission, a delegate of the appellant authorised the issue of a notice to the respondent under s 264A. A memorandum made by the delegate on 2 March 1998 read as follows: Taxpayer The Peabody Family Trust No. 2 Ms Dunne is conducting an audit of Mr Terrence Peabody and associated entities. This audit is being conducted as a part of the High Wealth Taskforce Programme. In order to ascertain information concerning the affairs of The Peabody Trust No. 2 Ms Dunne has found it necessary to issue a notice under Sec 264A of the Income Tax Assessment Act. I have been advised that other methods of obtaining the required income have proved unsatisfactory. Prior to reading the notice and submission prepared by Ms Dunne, I have read Chapter 4 of 'Guidelines Access and Information Gathering Powers', published by the ATO in September 1996. I have also read the decision in FH Faulding & Co Ltd v FC of T 94 ATC 4867. I am concerned by the role played by Western Star International Limited and am of the view that this role is significant in ascertaining the taxation liability of The Peabody Family Trust No. 2. After discussing the matter with Ms Dunne, I have formed the view that the request for information and documents is reasonable. This material is relevant to the assessment of The Peabody Family Trust No. 2. 13 The relevant parts of the Notice are reproduced below: "To: Pilnara Pty Limited as Trustee for The Peabody Family Trust No. 2 c/- Mr Alan McNaughton 64 Hillsdon Road Taringa QUEENSLAND 4068 INCOME TAX ASSESSMENT ACT 1936 – SECTION 264A OFFSHORE INFORMATION NOTICE Having reason to believe that the information and documents described in the Schedules ("the Information") and ("the Documents") – 1. are relevant to the assessment of the The Peabody Family Trust No. 2 under the Income Tax Assessment Act 1936 ("the Act") for the years of income ended 30 June 1994 to 30 June 1997 ("Your Assessment") and 2. is information which- (a) is within the knowledge (whether exclusive or otherwise) of a person outside Australia; or (b) is recorded (whether exclusively or otherwise) in a document outside Australia; or (c) is kept (whether exclusively or otherwise) by means of mechanical electronic or other device outside Australia; and 3. the documents are outside Australia (whether or not copies are in Australia or, if the Documents are copies of other documents, whether or not those other documents are in Australia). Pursuant to section 264A of the Act I request you to give the Information which is relevant to the The Peabody Family Trust No. 2's Assessment and to make copies of the Documents which are relevant to The Peabody Family Trust No. 2's Assessment and to produce those copies- 4. to either or both Ms Darlene Dunne or Mr Chris Sonter, whom I authorise for the purpose, on my behalf, 5. at the Australian Tax Office at 100 Market Street, Sydney, New South Wales, 6. not later than 90 days after the date of service of this notice. … Schedule of Information required pursuant to section 264A of the Act "the Information" In relation to Western Star International Limited (WSIL), the following information is sought in respect of the period commencing 1 July 1993 and ending 30 June 1997 (unless stated otherwise):- 1. Other than the 1 share held by The Peabody Family Trust No. 2 in WSIL advise; (a) the names and addresses of all shareholders in WSIL, (b) where shares are held on trust or on behalf of another party, the names and addresses of the beneficial owners of the shares. 2. A list of all investments held by WSIL as at 30 June 1994, 30 June 1995, 30 June 1996 and 30 June 1997 including; (a) the names of all entities in which an interest is held, (b) where the interest in (a) above is in the nature of shares, state in relation to each entity; (i) the number of shares held, (ii) the value in Australian dollars of shares held (state whether this value is at cost, market or some other value), (iii) the class (ordinary or otherwise) of shares held, (c) each loan advanced by WSIL at interest, stating (i) the name of the individual or entity receiving the loan, (ii) the address of the individual or entity receiving the loan and (iii) the value in Australian dollars of each loan, (d) each loan advanced by WSIL at no interest, stating (i) the name of the individual or entity receiving the loan, (ii) the address of the individual or entity receiving the loan and (iii) the value in Australian dollars of each loan. 3. In relation to loans that have been advanced to WSIL, state as at 30 June 1994, 30 June 1995, 30 June 1996 and 30 June 1997; (a) the name of the individual or entity advancing the loan, (b) the address of the individual or entity advancing the loan, (c) the value in Australian dollars of each loan, (d) the interest rate applicable to each advance. 4. State whether WSIL conducted any investment, business or commercial activity in its own right, other than holding shares in Western Star International Pte Limited (WSIPL). If so, state what this activity was. 5. State what activities were performed on behalf of WSIL at International Trust Building, Wickhams Cay, Road Town, Tortola, British Virgin Islands. 6. State what activities were performed on behalf of WSIL at 11/F Tower 2, The Gateway, 25-27 Canton Road, Kowloon, Hong Kong. 7. State whether any gross income was derived, whether of a revenue or capital nature, by WSIL during the period 1 July 1993 to 30 June 1997. If so, (a) list each class of income (ie dividends, interest or other), (b) the amount of each class of income in (a) using Australian dollar values, (c) the date each item of income in (a) was received or credited. 8. In relation to 7 above, state the source of such income. Here, source refers to the identity of the individual or entity from whom the income was derived. 9. Name all positions held by each of the directors of WSIL with; (a) WSIL (positions other than as director), and (b) WSIPL. 10. State whether any of the directors of WSIL, acting in that capacity, were accustomed to taking instructions from or, acting in accordance with the wishes of or, influenced and/or directed in their decision making responsibilities by other individuals or entities. If so, provide the names of those individuals or entities who impacted on the decision making in this manner and state why they were involved. 11. To what extent are administrative and secretarial functions shared by WSIL and Pozzolanic (Holdings) HK Limited. If shared, state whether (i) staff, (ii) management and (iii) directors are common to both entities. 12. Describe the investment, business and commercial activities conducted by WSIPL. 13. State the total number of shares issued by WSIPL (by class). 14. List the names and addresses of all shareholders in WSIPL. 15. Identify each asset and liability held by WSIPL, together with its value in Australian dollars (stating whether the values are at cost, market or some other value). 16. A chart illustrating the ownership structure of all entities in which WSIL holds a direct or indirect interest, including the relative percentage interest held by WSIL in each of these entities. Schedule of Copies of Documents required pursuant to section 264A of the Act "the Documents" In relation to Western Star International Limited, the following copies of documents are sought in respect to the period commencing 1 July 1993 and ending 30 June 1997:- 17. Balance sheets for each financial year which relate to the period 1 July 1993 to 30 June 1997. 18. Profit and loss accounts or profit and loss statements for each financial year which relate to the period 1 July 1993 to 30 June 1997. 19. Copies of all minutes of the meetings of the directors. 20. Copies of the Articles of Association. 14 On 17 March 1999 the respondent requested the delegate, pursuant to s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act"), to furnish it with a written statement of reasons for his decision to issue the Notice. The statement provided by the delegate in response to that request was in the following terms: The Facts The material findings of fact that were taken into account in making the decision to issue the notice are set out as follows: 1. The taxation affairs of the taxpayer are subject to audit by the Australian Taxation Office. 2. The taxpayer acquired one ordinary share in Western Star International Limited (WSIL), a company which was incorporated in the British Virgin Islands, on 28 January 1991. 3. The British Virgin Islands is a non-comparable tax jurisdiction with which Australia does not have a double tax treaty. 4. The Australian Taxation Office is unable to access information or documents in relation to companies in the British Virgin Islands. 5. The taxpayer has continued to hold one share in WSIL since 1991. 6. The administration centre of WSIL is located in Hong Kong. 7. The directors of WSIL during the period 1 July 1993 to 30 June 1997 have been Mr Wilfred K Timso and Mr John W Crawford, both of whom are non residents of Australia for taxation purposes. 8. The actual business performed by WSIL is that of investment. 9. The taxpayer has not returned any income from its shareholding in WSIL. 10. The agent for the taxpayer, Mr Alan McNaughton, has advised that the trust is unaware as to the identity of the holder/holders of the remaining 9,999 shares on issue by WSIL. 11. Mr McNaughton has advised that the trust has no knowledge concerning the investment activities of WSIL. 12. The Commissioner of Taxation has enquired as to the circumstances under which WSIL was introduced to The Peabody Family Trust No. 2 as an investment vehicle. He was advised that there were 'no particular circumstances as it was a minimal investment at the date of acquisition with a prospect of some return in the future'. The Evidence The evidence or other material upon which the findings on material questions of fact are based, is set out as follows; 13. The income tax returns of the taxpayer for the years ended 30 June 1994 to 1997. 14. Letters issued to the taxpayer by the Commissioner of Taxation dated: (a) 19 January 1999, and (b) 11 February 1999. 15. Letters received from Mr McNaughton, in reply to the above correspondence, dated: (a) 29 January 1999, and (b) 22 February 1999. The Reasons for the Decision In his audit of the taxation affairs of the taxpayer, the Commissioner is concerned to determine whether all income from all sources has been returned by the taxpayer in order to assess its liability to income tax. The Commissioner has been advised that the taxpayer holds one share in WSIL, a company which is incorporated in the British Virgin Islands. The Commissioner has been further advised that the directors of WSIL are non residents of Australia and that the administration centre of the company is located in Hong Kong. In order to obtain further information concerning the activities carried on by WSIL, the Commissioner has made enquiries of the taxpayer but the taxpayer could not provide sufficient information to fully satisfy those enquiries. As WSIL, its directors and its administration centre are all situated overseas, I formed the view that information relevant to the assessment of the taxpayer is within the knowledge of the directors of WSIL, is recorded outside Australia and, that documents relevant to the assessment of the taxpayer are outside Australia. Without the information sought in the notice, the Commissioner is not in possession of full and complete knowledge that would enable him to properly consider the taxpayers liability to taxation. Accordingly, I decided to issue a notice seeking further information and documents pursuant to section 264A of the Act. Statutory Framework 15 Section 264A was introduced into the Act by s 48 of the Taxation Laws Amendment (Foreign Income) Act 1990 (Cth) ("the 1990 Act"). That Act made provision for a system of taxing foreign source income derived in low-tax countries by Australian controlled entities. 16 Section 264A(1) relevantly provides as follows: 264A(1) [Commissioner's request for information or documents] Where the Commissioner has reason to believe that: (a) information relevant to the assessment of a taxpayer is: (i) within the knowledge (whether exclusive or otherwise) of a person outside Australia; or (ii) recorded (whether exclusively or otherwise) in a document outside Australia; or (iii) kept (whether exclusively or otherwise) by means of a mechanical, electronic or other device outside Australia; or (b) documents relevant to the assessment of a taxpayer are outside Australia (whether or not copies are in Australia or, if the documents are copies of other documents, whether or not those other documents are in Australia); the Commissioner may, by notice in writing served on the taxpayer (which notice is in this section called the "offshore information notice"), request the taxpayer: (c) to give to the Commissioner, within the period and in the manner specified in the offshore notice, any such information; or (d) to produce to the Commissioner, within the period and in the manner specified in the offshore information notice, any such documents; or (e) to make copies of any such documents and to produce to the Commissioner, within the period and in the manner specified in the offshore information notice, those copies. 17 A refusal or failure to comply with a request set out in an offshore information notice is not an offence – see s 264A(22). However, ss 264A(10)-(17) provide: "(10) [Commissioner's power re admissibility in evidence] If the taxpayer refuses or fails to comply with the request or requests set out in the offshore information notice, then, except with the consent of the Commissioner: (a) if the information or documents to which the request or requests apply are only relevant to one issue concerning the assessment of taxpayer: (i) where the request, or any of the requests, apply to information – the information is not admissible in proceedings disputing the taxpayer's assessment; or (ii) where the request, or any of the requests, apply to documents – neither the documents, nor any secondary evidence of the documents, are admissible in proceedings disputing the taxpayer's assessment; or (b) if: (i) the information or documents to which the request or requests apply are relevant to 2 or more issues concerning the assessment of the taxpayer; and (ii) the refusal or failure of the taxpayer relates to information or documents that are relevant to any or all of those issues; the following provisions have effect: (iii) where the request, or any of the requests, apply to information – the information, to the extent to which it is relevant to the issue or issues mentioned in subparagraph (ii), is not admissible in proceedings disputing the taxpayer's assessment (iv) where the request, or any of the requests, apply to documents – neither: (A) the documents, to the extent to which they are relevant to the issue or issues mentioned in subparagraph (ii); nor (B) secondary evidence of the documents, to the extent to which the secondary evidence is relevant to the issue or issues mentioned in subparagraph (ii); are admissible in proceedings disputing the taxpayer's assessment. (11) [Matter to be considered by Commissioner] Without limiting the power conferred by subsection (10), where: (a) the taxpayer refuses or fails to comply with the request or requests set out in the offshore information notice; and (b) the refusal or failure of the taxpayer relates to some, but not all, of the information or documents to which the request or requests apply and that are relevant to a particular issue concerning the assessment of the taxpayer; the Commissioner, in exercising that power, must have regard to whether there is reason to believe that, because of the absence of that information or those documents, the remaining information or documents that are relevant to that issue are, or are likely to be, misleading. (12) [Foreign secrecy laws to be ignored] The Commissioner, in exercising the power conferred by subsection (10), must ignore the consequences (whether direct or indirect) of an obligation arising under a law of, or of a part of, a foreign country, in so far as that obligation relates to the secrecy of information or documents. (13) [Where Commissioner must give consent] In spite of anything in this section, the Commissioner must give a consent under subsection (10) in any case where a refusal would have the effect, for the purposes of the Constitution, of making any tax or penalty incontestable. (14) [Notice that Commissioner unlikely to give consent] Where, before the commencement of the hearing of proceedings disputing the taxpayer's assessment, the Commissioner forms both of the following views: (a) the view that the taxpayer has refused or failed to comply with the request or requests set out in the offshore information notice; (b) the view that the Commissioner is unlikely to give a consent under subsection (10) in relation to that request or those requests and in relation to those proceedings; the Commissioner must serve on the taxpayer a notice in writing setting out those views. (15) [Subsec (14) not complied with] A failure to comply with subsection (14) does not affect the validity of a decision under subsection (10). (16) [Reference to refusal or failure to comply] A reference in this section to a refusal or failure of a taxpayer to comply with a request includes a reference to a refusal or failure resulting from the taxpayer being incapable of complying with the request. (17) [Proceedings disputing assessment] A reference in this section to proceedings disputing the taxpayer's assessment is a reference to proceedings before a court or the Tribunal arising out of, or relating to, an objection against the assessment. The Decision at First Instance 18 The primary judge held that the Notice was invalid for three reasons. 19 Although the primary judge thought that the phrase "the assessment of a taxpayer", in s 264A(1), refers to "the whole process of ascertaining the amount of taxable income, rather than the completion of the process by issuing an assessment", he considered the statement provided under s 13 of the ADJR Act did not disclose any adequate factual basis giving reason for the statutory belief. He said: "The width of the notion of relevance and the width of the process of assessment mean that the basis of the respondent's satisfaction as to the nexus between information and assessment does not require a prima facie case as was submitted by the applicant. The respondent is correct in submitting that the threshold is not high, and that the nature of the power is essentially that of inquiry … However, there must objectively be reason for the Commissioner to have the relevant belief. This requires the existence of facts which are sufficient to induce that belief in a reasonable person … There is a statutory threshold. All that the s 13 Reasons amount to is that a taxpayer holds one share out of 10,000 shares on issue in a foreign corporation from which no income has been returned and is unable to provide any meaningful information about that corporation." (Citations omitted.)" 20 Having so found, his Honour added this (at para 20): "There may well be a proper basis for having reason to believe that the application of Part X of the Act might attribute assessable income to a taxpayer, so permitting the exercise of the power granted by s 264A. If so, that basis has not been demonstrated. It is not suggested that the s 13 Reasons can be supplemented by other material to overcome any deficiency in them. In coming to this conclusion, I have taken account of the respondent's point that documents such as s 13 Reasons (as with the Notices themselves) should not be subject to an over-technical or highly critical approach to construction, citing SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 at 370." 21 Secondly, the primary judge held that there was no proper factual basis disclosed to ground a reasonable belief in the existence of all of the information and documents which had been sought. In that regard his Honour said this (at para 29): "Whilst I agree with the respondent's submission that there is no need to know the precise content of information or documents, there must be a factual basis disclosed which enables the necessary reasonable belief to be formed. As the issue of the existence of the information and documents is not expressly dealt with in the s 13 Reasons, or indeed in the Submission, the information and documents sought must so obviously exist as not to require discussion. Whilst I consider this might well be so in relation to some of the information sought, it certainly does not follow in relation to much of it. Items 15 and 16 in the Schedule are the most obvious examples, but I do not know in what form the law requires the corporations in question to keep their affairs or what books and records must be maintained. It is not clear from the s 13 Reasons that the documents called for as items 17, 18, 19 and 20 exist. I do not suggest that my knowledge is the extent of the Commissioner's knowledge. He may well have knowledge of facts which would properly found a belief in the existence of much of that which is sought. However, again, that factual basis has not been disclosed but has been left to inference alone. I cannot draw that inference." 22 Thirdly, the primary judge held that the Notice did not disclose the necessary relationship between the information and documents sought and the matter in respect of which they were sought, applying the decisions of Full Courts of this Court in SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 at 370; and Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368. His Honour held that it was not sufficient to satisfy what was described in SA Brewing as the "entitlement disclosure condition" by simply identifying the taxation assessment of a party served with the notice. That link, so his Honour observed, was in any event inherent in the section itself. His Honour held that a sufficiently demonstrated link to Part X of the Act might be seen as an irreducible minimum. 23 The respondent, as applicant at first instance, raised a constitutional challenge to the validity of s 264A. His Honour, having stated that it was unnecessary to decide the constitutional question, indicated that he would have been disposed to follow the decision of Cooper J in FH Faulding & Co Ltd v Commissioner of Taxation (1994) 54 FCR 75, upholding the constitutional validity of s 264A. He did so on the basis that he was not convinced that Cooper J was plainly wrong; accordingly he would have been disposed to follow his decision as a matter of comity. His Honour made it clear that he had not formed any independent view about the matter of validity. THE APPEAL 24 The Commissioner's notice of appeal contained seven grounds. However, his counsel's written submissions grouped those grounds into only three points. Those three points corresponded to the three points upon which the primary judge made rulings. We will deal with the three points in a different order to the primary judge. It seems to us that the third point, which raises a question of construction of the section, logically comes first. 25 In addition to resisting the Commissioner's three points, the respondent continued to rely before us upon other grounds for the invalidity of the Notice which it had put to the primary judge, but which his Honour found it unnecessary to decide. Those included a contention that the respondent was not a "taxpayer" within the meaning of the Act, that the Commissioner had failed to take into account, as a relevant consideration, that the only taxpayer to whose assessment the information and documents could be relevant was the beneficiary under the trust who was presently entitled to its income, namely Western Star Trucks (Australasia) Pty Ltd and that the Notice was ambiguous, too wide and oppressive. We shall deal with those issues separately. 26 The respondent, by its amended notice of contention, contended that s 264A was beyond the legislative power of the Commonwealth, in that it was inconsistent with Chapter III of the Constitution. The entitlement disclosure condition (i) The appellant's point 27 The appellant challenged the primary judge's construction of s 264A as requiring a notice under the section to set out a sufficiently demonstrated link to Part X of the Act and also his Honour's finding that the Notice was invalid because it failed to set out the objective facts which linked the material sought with the assessment. We shall refer to that as "the entitlement disclosure condition". (ii) Appellant's Submissions 28 Counsel for the appellant submitted that there was neither an express nor an implied requirement in s 264A for a notice issued under that section to set out on its face the Commissioner's belief, or the underlying facts on which that belief was grounded. 29 In support of that submission, counsel referred us to the Second Reading Speech in which the Minister Assisting the Treasurer had described the bill for the 1990 Act as a major piece of anti-avoidance legislation authorising the Commissioner to issue an offshore information notice aimed at the timely provision of all the information and documents needed by him to get the full and correct picture of the transactions being examined. Given that policy, the nature of the power and the lack of penal consequences, it was argued no requirement of disclosure should be implied. It would be contrary to the policy reflected in the section to require the Commissioner to disclose what he knew before being allowed to ask for further information. Such a construction would stifle rather than facilitate the process of gathering information relevant to the assessment of a taxpayer. 30 Counsel for the appellant contended that his Honour's reliance on SA Brewing Holdings Ltd was misplaced. Cases under s 155 of the Trade Practices Act 1974 (Cth) are distinguishable because of the generality of the words in that section and the broad range of matters (contraventions) under that Act to which it applies. In contrast, the link between the material sought and the Commissioner's entitlement to request those materials was inherent in s 264A itself. The generality of the word "matter" in s 155 of the Trade Practices Act is to be contrasted with the specificity of the words "assessment of a taxpayer" in s 264A of the Income Tax Assessment Act. Moreover, in Pyneboard the Court expressly based its decision on the fact that a refusal or failure to comply with a s 155 notice was a punishable offence. 31 Counsel pointed out that, in relation to s 264 of the Act, it is sufficient to refer to a person's income or assessment: Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 528, 537, 541-542 and 547. They argued that the High Court's reasoning in that case should be applied to s 264A. (iii) Respondent's Contentions 32 Counsel for the respondent submitted that, in view of the serious evidentiary sanctions arising under s 264A(10), a notice has to be clear and unambiguous. Assuming, contrary to the respondent's submission, that the respondent or The Peabody Family Trust No. 2 could be a "taxpayer", counselsubmitted that the Notice was uncertain in that it failed to indicate any basis upon which the information and documents might be relevant to the assessment of the Trust under the Act for the years of income ended 30 June 1994 to 30 June 1997. Counsel contrasted the Notice to that issued in Faulding. They submitted that s 264A should be construed in a similar manner to the construction applied to s 155 of the Trade Practices Act in Pyneboard and SA Brewing. That approach would require that a notice identify with precision the connection between the information and documents that are sought and the assessment of the taxpayer. Counsel contended that the primary judge had correctly applied the principles in the s155 cases to s 264A. 33 Counsel for the respondent also submitted that the evidentiary sanction supported the view that the Parliament intended s 264A to be construed as imposing an entitlement disclosure condition similar to that required in respect of a notice issued under s 155 of the Trade Practices Act. They said it is important that a recipient of a notice under s 264A be informed as to the nature of the risk which it would face in failing to comply with it. The fact that s 264A did not have penal consequences was, so it was put, not to the point. The evidentiary sanction was both serious and adverse. (iv) Our Reasoning 34 The task at hand is, of course, to construe s 264A. The section does not contain an express requirement that any notice issued under it must contain an entitlement disclosure condition. The question is whether such a condition should be implied. 35 In our view, and with due respect to the primary judge, no such condition should be implied into s 264A. 36 We think that there are relevant distinctions between s 264A of the Income Tax Assessment Act and s 155 of the Trade Practices Act. 37 First, s 155 is concerned with a "matter" involving a contravention of the Trade Practices Act. There are many contraventions which might arise under that Act. That fact necessitates the implication of an entitlement disclosure condition in any notice issued under s 155. But s 264A of the Income Tax Assessment Act is only concerned with information and documents "relevant to the assessment of a taxpayer". 38 Secondly, the basis upon which the condition was implied in Pyneboard is absent in the present context. The implication in Pyneboard was expressed as being based on the circumstances that refusal or failure to comply with a notice issued under s 155 was punishable by imprisonment or fine (see p 374). 39 We acknowledge that the evidentiary exclusion in s 264A(10) may, on occasion, be a very serious matter. Accordingly we would not distinguish the s 155 cases solely on this basis. 40 There is, perhaps (as Mr A Robertson SC, senior counsel for the appellant pointed out), some irony in the fact that the Full Court in Pyneboard relied upon the decision of the High Court of Australia in Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499, a case which related to notices issued under s 264 of the Income Tax Assessment Act. It is clear from the statements of Gibbs ACJ at 525 and 528 and Mason J at 537 and 535 in that case, that it is sufficient for the purposes of a notice issued under s 264 that the notice refer to a person's income or assessment to show that the notice is within the power conferred by that section. See also Jacobs J at 541-542 and Murphy J at 547. We see no relevant distinction between the provisions of s 264 and s 264A on the question of the entitlement disclosure condition. In our view, the approach taken in Australia and New Zealand Banking Group Ltd should be applied to the present matter. Accordingly we hold that it is sufficient, for the purposes of s 264A, simply to identify the taxation assessment of a party served with a notice under that section. 41 In oral submissions, senior counsel for the respondent suggested that there might be some symmetry between subsections 264A(1) and (10), whereby it is necessary in a notice under s 264A(1) to identify the issues that will arise later under subs (10). However, the two subsections deal with different stages of the process. The first stage involves a request for information or documents. It can be seen as an investigation stage. Subsection (10) applies at the later stage when an assessment has been made and proceedings have been instituted in a court or tribunal to dispute that assessment. At that later stage, the issues between the parties may be different from the issues (if any) existing at the investigation stage. The subsection then renders inadmissible information and documents relevant to issues concerning that assessment which were previously requested but not provided. Subsection (1) should not be read in such a way as to require the Commissioner, at the investigation stage, to identify issues which may or may not arise much later when an assessment is made and is under challenge. There is nothing in the section or the statutory context to justify such an approach. Adequate factual basis for the belief (i) Appellant's Contentions 42 Counsel for the appellant accepted that the words "reason to believe" required that the Commissioner have an actual belief and there must be objective circumstances which showed that belief to be based on reasonable grounds. The words "relevant to the assessment of a taxpayer" meant, so it was submitted, no more than that the information or documents had a bearing upon or were connected with the taxpayer. The Commissioner was not bound to accept information already provided to him by the taxpayer. The primary judge's approach would require the Commissioner to form a belief on reasonable grounds not only as to the existence and location of information or documents relevant to ascertaining the taxpayer's taxable income (if any), but also that such information or documents were relevant to any notice of assessment which might result from that process. It was, so it was put, contrary to the proper construction of s 264A for the Commissioner to be required to anticipate the end point of the process of inquiry and investigation upon which he was engaged. 43 Further, counsel submitted that the primary judge appeared to have assumed that Part X of the Act applied only where the relevant Australian taxpayer had 100% control of the foreign company. That was a misconstruction of s 340 which, broadly speaking, defines a controlled foreign company as one where five or fewer Australian residents owned or were entitled to acquire 50% or more of the interests in the company being both direct and indirect interests of the resident and those of the resident's associates, or if those five or fewer residents had actual control of the company, regardless of their shareholding. It was sufficient that the Trust held one share in a foreign company and that the Commissioner's investigations to the point of deciding to issue the Notice were not conclusive as to the identity of the other shareholders. 44 Counsel for the appellant contended that the primary judge erred in assuming that the material on which he should base his judgment was confined to the statement of reasons given under s 13 of the ADJR Act. Those reasons, so the appellant submitted, were merely evidentiary. (ii) Respondent's Contentions 45 Counsel for the respondent submitted that the only material taken into account by the delegate as the basis for his reason to believe the matters referred to in s 264A(1) were: · The respondent's income tax returns for the years ended 30 June 1994 to 1997; · The letters dated 19 January 1999 and 11 February 1999 from the appellant to the respondent; and · The letters dated 29 January 1999 and 22 February 1999 from the respondent to the appellant. 46 Counsel contended that the s 13 Statement did not disclose that the delegate had reason to believe that the particular information and documents referred to in the Notice satisfied the condition specified in paragraph (a) or (b) of s 264A(1). The statement of reasons revealed no information or other material before the delegate upon which he could properly have had reason to believe that those conditions were satisfied in relation to the particular information and documents sought by the Notice. (iii) Our Reasoning 47 As can be seen from the above, it is common ground between the parties that, for the Notice to be valid, it was necessary for the Commissioner (or his delegate) subjectively to hold the relevant belief and also for there to be an objective reason for that belief. In relation to the latter requirement, the primary judge referred to the submission of 2 March 1999 and the statement of reasons given under s 13 of the ADJR Act, and said (at par 19): "The contrast between the Submission … and the s 13 Reasons is instructive. The Submission gives a rational, albeit very general, argument for issue of the Notice and includes material – both of fact and opinion, not included in the s 13 Reasons. Even so, the Submission is deficient in not stating any grounds or factual basis at all for the belief that the Trust has 100% control of the company, which is the fulcrum upon which the matter turns. An unsourced belief cannot be enough to induce the 'reason to believe' required by the section." 48 In our respectful opinion, his Honour was too restrictive in his construction of s 264A. In our view there was no need for the Notice to identify an issue arising under Part X. All that the section requires is that the information and documents sought are relevant to the assessment of a taxpayer, that is to say, in the words of the primary judge, "the whole process of ascertaining the amount of taxable income". 49 Although s 264A was introduced into the Act, by the 1990 Act, simultaneously with the introduction of Part X, we can see no reason for confining its scope to requesting off-shore information which may subsequently be relevant to the application of that Part. 50 Even if the scope of the section were so limited, we consider that there was an adequate factual basis for the statutory belief. The appellant knew that the respondent held a share in a foreign company. The identity of the other shareholders and the question of who controlled the company were, in our view, clearly relevant to whether that company was a controlled foreign corporation, which in turn was relevant to the assessment of the respondent (putting to one side for the moment whether the respondent was a relevant taxpayer or whether that factor had been taken into account). 51 We do not think that the Court is confined to the appellant's statement of reasons under s 13 of the ADJR Act when assessing whether there was an adequate factual basis for the statutory belief. In our view, any information which was actually or constructively before the decision-maker may be taken into account when making that assessment. That would include the submission of 2 March 1999. Belief in the existence of all of the information and documents (i) Appellant's Contentions 52 Counsel for the appellant submitted that as a matter of construction, it was not necessary that the delegate should have reached the appropriate belief as to each item of information and each document sought. Section 264A referred generically to "information" and "documents" and then referred back to "any such" information or documents. The words "any such" limited the information and documents requested to information and documents falling within the class of documents or information that the Commissioner believed on reasonable grounds were located overseas and were relevant to the assessment of the taxpayer. Counsel contended that the approach of the primary judge was inconsistent with the purpose of the section, which was to confer a wide information-gathering power, the only sanction for non-compliance being a possible inability on the part of the taxpayer to make use of documents or information falling within the terms of the Notice in later proceedings challenging a notice of assessment. All that was necessary was a belief, and an objective basis for that belief, that information or documents relevant to the assessment of the taxpayer were outside Australia and that the information and documents requested were within that class. (ii) Respondent's Contentions 53 Counsel for the respondent submitted that the primary judge had correctly interpreted s 264A(1) by applying an ordinary grammatical reading. The references to "such information" and "such documents" in para (c), (d) and (e) of s 264A(1) related back to the "information" and "documents" identified in paras (a) and (b) of that subsection. 54 Counsel contended that it would be inappropriate for the evidentiary sanction to operate in respect of particular information and documents which have not been the subject of a properly formed statutory belief. (iii) Our Reasoning 55 The primary judge noted that the Commissioner conceded that the words "any such" in paras (c) and (d) of s 264A(1) limit the information and documents requested to information and documents falling within the class of documents or information which the Commissioner believed, on reasonable grounds, were located overseas and were relevant to the assessment of the taxpayer; although counsel for the Commissioner had submitted to him that the Commissioner need have no belief as to the form or precise content of the information or documents. However, his Honour preferred the submission of Pilnara that the Commissioner (or his delegate) must reach the appropriate belief as to each item of information and each document sought. He found that there was no disclosed factual basis of a reasonable belief in the existence of each of the items of information and documents which had been sought. 56 In our view, there is nothing expressed or implied in s 264A which requires the Commissioner to believe in the existence of each item of information and each document which he seeks. It is necessary that the Commissioner have a belief as to each of the elements specified in para (a) or (b), as the case may be; but, if so, it is sufficient for the Commissioner to request the production of such information and/or such documents as fall within the relevant paragraph or paragraphs. 57 We add that, having examined the list of information and particular documents sought, and assuming, in the absence of evidence to the contrary, that the relevant foreign law is the same as Australian law, objectively speaking the information or documents are such as would be expected to exist. IDENTIFICATION OF THE RELEVANT "TAXPAYER" (i) The respondent's point 58 Counsel for the respondent pointed out that s 264A(1) requires the Commissioner to have reason to believe that the information and documents requested are "relevant to the assessment of a taxpayer". In the Notice it was stated that the Commissioner had reason to believe that the information and documents were relevant to "the assessment of The Peabody Family Trust No. 2" for the 1994 to 1997 years of income. 59 The respondent's point was that The Peabody Family Trust No. 2 was not a "taxpayer" within the meaning of that expression as defined in s 6(1) of the Act for the purposes of s 264A(1). Only the trustee of the Trust, or a beneficiary thereunder, could be a "taxpayer". 60 Counsel for the respondent also relied upon evidence of resolutions passed by the trustee of the Trust in each of the relevant years, to the effect that any "net income" of the Trust was distributed to a company called Western Star Trucks (Australasia) Pty Limited. Counsel submitted the Commissioner should have concluded from that material that the respondent would not be the person liable to be assessed on the income of the Trust in those years. It followed, said counsel, that the decision to issue the Notice should be set aside; the Commissioner had failed to take into account a relevant matter, namely, whether the respondent, as trustee of the Peabody Family Trust No. 2 could be liable to any income tax which might become the subject of an assessment as a result of information forthcoming as a result of the notice, or to put it another way whether the respondent was a person liable to pay tax on the net income of the identified trust estate. (ii) Our Reasoning 61 At the heart of the submission lie the provisions of Division 6 of the Act, and in particular s 96, which provides that, except as stated in Division 6 a trustee of a trust estate is not liable to income tax upon the income of the trust estate. 62 The scheme of Division 6 is, for present purposes, simple to explain where the trust estate is not a non resident trust estate. It is not suggested that the Peabody Family Trust No. 2 is a non-resident trust estate. Essentially, the question whether a trustee of a trust estate will be liable to tax depends upon two factors. The first is whether in respect of any part of the income of the trust estate there is no beneficiary presently entitled. The second, where in respect of the income of the trust estate there is a beneficiary presently entitled, is the question whether that beneficiary is under a legal disability. 63 Where there is a share of the income of the trust estate to which there is a beneficiary presently entitled, that beneficiary will be assessed and liable to pay the tax in respect of "that share of the net income of the trust estate", unless that beneficiary is under a legal disability: s 97. In consequence the trustee is not liable to pay tax in respect of that share. 64 Where there is a share of the income of the trust estate to which a beneficiary is presently entitled, but that beneficiary is under a legal disability, the trustee is liable to pay tax in respect of "that share of the net income of the trust estate": s 98. 65 Where there is a share of the income of the trust estate to which no beneficiary is presently entitled, then, and in respect of "that share of the net income of the trust estate" it will be the trustee who is assessed and liable to pay the tax. 66 It follows from the above principles that, before it is possible to conclude that any information or document the subject of a s 264A notice may be relevant to the assessment for tax of a trustee, it is necessary for the Commissioner to consider whether there is any part of the income of the trust estate to which no beneficiary is presently entitled, or, if there is any beneficiary who is presently entitled to the income of the trust estate, whether that beneficiary is under a legal disability. There is no suggestion in the statement of reasons provided by Mr Sonter that he gave any consideration to this matter. Yet, unless he did so he could not properly form the opinion that any information or document might be relevant to an assessment of Pilnara as trustee of the trust estate. 67 Reliance was placed upon resolutions of the directors of Pilnara made in each of the four income years in question. These resolutions were forwarded to the Commissioner in response to a request to supply them dated 27 October 1998. The resolutions were in identical form, other than the date they bore. Relevantly they read as follows: "DISTRIBUTION OF INCOME FOR THE YEAR It was resolved that the net income of the trust, if any, for the year ended 30 June 1997 be distributed as follows:- To Western Star Trucks (Australasia) Pty Ltd – 100% DEFINITION OF INCOME Income is calculated on the basis of taxable income in accordance with the provisions of the Income Tax Assessment Act 1936, as amended." 68 The tax returns lodged for the trust disclosed no income derived in any of the years of income ending 30 June 1995-7. It is possible that there was some foreign income derived in the year ending 30 June 1994. None of the tax returns suggested that there had been any distribution to any beneficiary. The trust deed itself is not in evidence in the proceeding. The evidence does not indicate whether a copy was in the possession of the Commissioner, although it is common practice for a copy to be provided with the first tax return of a trust. 69 The resolutions are curious, referring, as they do, to a distribution of "taxable income". Taxable income is the result of a calculation which requires the ascertainment of assessable income and the deduction therefrom of allowable deductions. While income capable of being sued for (or, as Kitto J described it in Union-Fidelity Trustee Co of Australia Ltd v Federal Commissioner of Taxation (1969) 119 CLR 177 at 188 "present title in possession to a share of the income of a trust estate") and thus capable of being the subject of present entitlement is included within assessable income, there are many examples of amounts which are made assessable income by virtue of the Act which are not capable of being the subject of present entitlement. Attributable income arising from the controlled foreign company provisions is one example. Such income is attributed to a shareholder (who may be a trustee) for taxation purposes precisely because it has not been the subject of a dividend to that shareholder but has been retained by the corporation. It could never be sued for in the year of income or be capable of present entitlement in any beneficiary of a trust who was a shareholder in the foreign controlled corporation. 70 Should the result of an inquiry reveal that there is attributable income which is to be included in the computation of "net income" under s 95 of the Act in a year of income, there would arise a discrepancy between the result of the computation of "net income" and the calculation of the income to which a beneficiary could be presently entitled pursuant to the provisions of the trust deed. That problem has been the subject of a number of decisions in this Court, the most recent of which is the decision of Sundberg J in Zeta Force Pty Ltd v Federal Commissioner of Taxation (1998) 84 FCR 70. 71 The view which has attained most support is the so called "proportionate view". Under this approach it is first necessary to determine whether any of the trust law income is the subject of present entitlement in a beneficiary or beneficiaries and then to include in the assessable income of that beneficiary or those beneficiaries the whole or the same share of the net income for tax purposes. On this view if, for example, Western Star Trucks (Australasia) Pty Ltd was presently entitled to the whole of the trust law income, then the whole of the net income would be included in that company's assessable income pursuant to s 97 and there would be no liability to tax capable of arising in the trustee. If Western Star Trucks (Australasia) Pty Ltd was presently entitled to half the trust law income, then half the net income would be included in that company's assessable income pursuant to s 97. Liability in respect of the other half would depend on whether or not some other beneficiary was entitled to it. 72 The alternative view would include only so much of the net income for tax purposes in the assessable income of a beneficiary as that beneficiary was actually presently entitled to and assess for tax any other part of the net income to the trustee as being income to which no beneficiary is presently entitled. 73 As has been pointed out on more than one occasion, neither construction of Division 6 is satisfactory from a policy perspective. The problem is made even more difficult where there is no income at all derived by a trust in a year of income which is capable of being distributed to a beneficiary but there is an amount included in the net income of the trust estate which is incapable of distribution, such as attributed income of a foreign corporation. That is a problem that has never been addressed by the cases. It may be that in such a case the proportionate view can not operate, for despite a resolution of the kind here, there being no trust law income there can never be a beneficiary of whom it can be said that that beneficiary is presently entitled to the income of the trust estate. So, it may be, that in such a case it is the trustee and the trustee alone who would be liable to tax, whichever view is taken of the two alternative approaches. 74 We do not think it appropriate in the present case to express a view as to the correctness of the proportionate approach as adopted by Sundberg J in Zeta Force for the matter was not fully argued before us. Nor would it be possible to resolve the question without reference to the trust deed. In so saying we would not wish it to be thought that we cast doubt on the correctness of Zeta Force. We also do not think it appropriate in the present case to seek to decide the difficult question of how Division 6 would operate where there was no trust law income in a year, but there was some amount included in the net income of the trust estate, for that is a question which has not yet arisen for decision. 75 Although we do not decide the matters just mentioned, we mention them to make the point that, where a s 264A notice is to be issued to the trustee of a resident trust estate, it is imperative that consideration be given to the question whether it is possible that the trustee will be the person liable for any tax that may be assessed on any income which may be revealed by responses to that notice. If the case is one where the trustee is incapable of being assessed for tax the notice would necessarily be invalid; it would not relate to the assessment, as a taxpayer, of the trustee. In the present case, it seems to be clear that this matter was not considered by the delegate. 76 Counsel for the Commissioner submitted this issue was not raised by Pilnara in its application, or its response to the Commissioner's request for particulars, nor was it a matter argued before the primary judge. There is some substance in the submission. The application refers in general terms to the delegate's failure to take into account relevant matters. However the particulars given in the application and in response to a request from the Commissioner's solicitor, hardly made clear that this question was to be argued. The matter was obliquely raised before the primary judge, as is clear from a perusal of the written submissions put before his Honour and the transcript of argument; although it seems the argument was rather put on the basis that, as a result of the resolutions, Western Star Trucks (Australasia) Pty Ltd was the only person who could be assessed to tax on any amount which might ultimately be found to be included in the net income of the trust estate in any relevant year as a result of the inquiries which the Commissioner wished to make. That submission is not necessarily correct as the above discussion makes clear. The true issue is the failure of the delegate to direct any attention to the question whether Pilnara could have any liability to tax under Division 6 of the Act in the light of the trust deed and the resolutions which purported to be made pursuant to it. 77 We think, in this case, the Commissioner might well have been able, and still be able, to establish whether the respondent could be the relevant taxpayer by giving consideration to documents already in Australia i.e. without issuing an offshore information notice. Given the potential effort and expense in complying with an offshore information notice (and the evidentiary exclusion for even involuntary non-compliance), it is not asking too much to expect the Commissioner to resolve that question before issuing a s 264A notice, perhaps by calling for documents within Australia, if not already to hand, or perhaps by obtaining them pursuant to a notice issued under s 264. 78 We are of the opinion that for this reason the decision to issue the notice was infected by error and in consequence the notice should be set aside. OTHER MATTERS RAISED BY THE RESPONDENT 79 The respondent raised five further matters. We shall summarise each of them and then deal with them en bloc. (i) The use of the word "require" 80 Counsel for the respondent submitted that the Schedules to the Notice purport to "require" the provision of information and documents and, for that reason, the Notice was beyond power, because the section only authorised the Commissioner to "request" the provision of information and documents. (ii) Uncertainty 81 Furthermore, the Notice, so it was submitted, was ambiguous and void for uncertainty in respect of the following matters: (a) it required a conversion into Australian dollars of the value of various assets and liabilities, but failed to indicate dates for that conversion; (b) it required conclusions of law as to whether activities were conducted "on behalf of" a company, whether shares in that company were "held on trust or on behalf of another party" and the ascertainment of the "beneficial owners of the shares"; (c) it required the classification of various kinds of income; (d) it required the identification of "gross income" and "whether of a revenue or capital nature"; (e) it required the identification of the "source" or "such income" in the sense of the identity of the person "from whom the income was derived"; and (f) it required the identification of interest both "direct or indirect" held by WSIL in other entities. (iii) The Width of the Notice 82 Counsel for the respondent submitted that in so far as the Notice requested or required the provision of "information", it did not seek information which resided in the minds of persons outside Australia or which was recorded or kept outside Australia. Instead it sought different information, namely the formulation by the respondent, in answer to the questions, of conclusions (whether of fact or law or mixed fact and law) to be drawn from the information identified by the section. The Notice was drawn in terms which requested or required the respondent to bring new information or documents into existence. For example, the Notice purported to require a valuation in Australian dollars and a chart. Section 264A did not authorise such a requirement: Fieldhouse v Deputy Commissioner of Taxation (1989) 25 FCR 187 at 194-5. (iv) Oppression 83 Counsel for the respondent submitted that the Notice was oppressive in requesting the provision of a substantial range and scope of information and documents, having regard to: · the fact that the respondent held only one out of 10,000 shares on issue in WSIL; · the appellant's acknowledgment that the information was all in the minds of persons overseas or was there recorded or kept; · the evidentiary sanction. 84 Counsel said the Commissioner had accepted that the respondent did not have the information or documents, but, had given no consideration as to how the respondent could obtain the information and documents from the persons who may have had them and who may have not been the same person in every case. There was nothing in the s 13 statement which indicated that the delegate gave any consideration to the impact of the request on the respondent and the respondent's ability to comply with it. (v) The place at which the information and documents were to be provided 85 The respondent submitted that the Notice was invalid because it was addressed to the respondent in Queensland and purported to require it to furnish the information and documents in Sydney. Section 264A was to be construed as containing an implication that the taxpayer should be in a position to comply with the Notice on the day on which he receives it. Our Reasoning 86 We do not think that there is substance in any of these points. We note that the word "request" was used in the main part of the Notice although the word "require" appeared in the Schedules. It seems to us to be clear that the word "require" was used in the sense of being needed rather than as a command. 87 Nor do we see ambiguity in the various matters such as conversion into Australian dollars and the like, set out above. The relevant dates are sufficiently identified in the Notice. There is no ambiguity in asking whether activities were conducted "on behalf of" a company, whether shares in that company were "held on trust or on behalf of another party" and seeking to ascertain the "beneficial owners of the shares". Similarly, in relation to the rest of the particularised complaints, we consider that what the Commissioner asked for is sufficiently clear. 88 We reject the submission that the Notice was too wide in the manner contended for by the respondent. It is not a ground of invalidity that the Notice requested valuations in Australian dollars, given that the relevance of that information was not, for the purposes of the argument, in issue. 89 The notice does seek information in the form of a chart illustrating the ownership structure of all entities in which WSIL holds a direct interest, including the relative percentage interest held by WSIL in each of those entities. In our opinion, when s 264A confers a power on the Commissioner to request the taxpayer to give information "… in the manner specified in the offshore information notice" it authorises a request that the information referred to above be given in the form of a chart. 90 As to oppression, it may well be that compliance with the Notice would involve considerable effort. But, in our view, so long as the Notice otherwise complies with the requirements of s 264A, oppression would not be a basis for invalidating it. The respondent has the choice of either complying with the statutory request or facing the consequences envisaged by subsection (10). This submission does not raise a ground of review. 91 As to invalidity said to arise out of the requirement that the information and documents be furnished in Sydney, we see no basis for the implication that the taxpayer should be in position to comply with a notice on the day on which he receives it. 92 In these days of instantaneous communication by fax and e-mail, and the availability of other means of rapidly conveying information and documents from one part of Australia to another, we do not think that it was impermissible for the appellant to address the Notice to the respondent in Queensland and require compliance with it by the furnishing of information and documents in Sydney. THE CONSTITUTIONAL ISSUE 93 In summary, the respondent contended that s 264A(10) was constitutionally beyond power for two reasons. First, because it was said to vest judicial power in the appellant. Secondly because, so it was put, the subsection perverted the exercise of judicial power by the Courts in two respects (requiring matters to be determined on false factual premises and by denying procedural fairness). The respondent submitted that s 264A(10) could not be read down to apply only to proceedings in the Administrative Appeals Tribunal. It was completely invalid. Furthermore, the subsection could not be severed from the remainder of s 264A with the result that the whole section was invalid. 94 As we have decided that the Notice should be set aside because the Commissioner failed to take into account a relevant consideration (whether the respondent was a person liable to pay tax on the net income of the identified trust estate), there is no need for us to resolve the constitutional issue. It would be undesirable for us to give an opinion by way of obiter dicta on such a matter. We shall not do so. Conclusion 95 For the foregoing reasons, the appeal should be dismissed, at least substantially. However, having regard to the fact that the only established ground of invalidity is one that was not squarely raised below, there is a question whether the Commissioner ought to be ordered to pay the whole of Pilnara's costs. For that reason, we will not make any formal order at this stage. If Pilnara seeks a costs order, in respect of either the proceedings before the primary judge or in respect of the appeal, it should notify the Court of the desired order, and lodge a submission in support, by 17 January 2000. The Commissioner should respond by 31 January 2000. The Court will consider any material lodged and then make formal orders. I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment of the Court. Associate: Dated: 22 December 1999 Counsel for the Appellant: Mr A Robertson SC with Mr S Gageler Solicitor for the Appellant: Australian Government Solicitor Counsel for the Respondent: Mr D H Bloom QC with Mr B J Sullivan SC and Mr G R Kennett Solicitor for the Respondent: Messrs Baker and Mackenzie Date of Hearing: 22 and 23 November 1999 Date of Judgment: 22 December 1999	16,061
federal_court_of_australia:fca/full/2006/2006fcafc0083	decision	commonwealth	federal_court_of_australia	text/html	2006-06-02 00:00:00	Australian Competition & Consumer Commission v Australian Competition Tribunal [2006] FCAFC 83	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2006/2006fcafc0083	2024-09-13T22:49:14.900827+10:00	FEDERAL COURT OF AUSTRALIA Australian Competition & Consumer Commission v Australian Competition Tribunal [2006] FCAFC 83 ADMINISTRATIVE LAW –judicial review – gas pipelines access law – application for review of decision of Australian Competition Tribunal to vary access arrangement drafted and approved by regulator – review function of the Tribunal – whether Tribunal erred in law as to construction and application of code – function of regulator – whether regulator incorrectly or unreasonably exercised discretion – calculation of reference tariff – factors to be considered in establishing initial capital base – depreciation methodology CONSTITUTIONAL LAW – co-operative legislative action of parliaments of the Commonwealth and the States – where Commonwealth administrative body or tribunal exercises functions under State law Constitution: ss 51, 61, 75, 77 Judiciary Act 1903 (Cth): s 39B Pipeline Authority Act 1973 (Cth) Trade Practices Act 1974 (Cth): Pt IIIA, ss 44ZZM, 44ZZMA, 44ZZMB, 44ZZOA Federal Court of Australia Act 1976 (Cth): s 23 Administrative Decisions (Judicial Review) Act 1977 (Cth): Sch 3, ss 5, 6, 8 Moomba‑Sydney Pipeline System Sale Act 1994 (Cth) Gas Pipelines Access (Commonwealth) Act 1998 (Cth): ss 16, 18, 19 Gas Pipelines Access (South Australia) Act 1997 (SA): Sch 1 ss 38, 39; Sch 2 ss 2, 3, 8 Gas Pipelines Access (NSW) Act 1998 (NSW): ss 10, 16, 18, 19, 21 Gas Pipeline Access Act 1998 (ACT): ss 6, 15, 20 Evidence Act 1958 (Vic): s 55 R v Hughes (2000) 202 CLR 535, considered Re Michael; Ex parte Epic Energy (WA) Nominees Pty Ltd (2002) 25 WAR 511, applied R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535, considered Re Cram; ex parte NSW Colliery Proprietors' Association Ltd (1987) 163 CLR 117, considered R v Cook; ex parte Twigg (1980) 147 CLR 15, cited R v Toohey; ex parte Northern Land Council (1981) 151 CLR 170, cited Application by GasNet Australia (Operations) Pty Ltd (2004) ATPR 41‑978, applied Application by Epic Energy South Australia Pty Ltd (2003) ATPR 41‑932, applied Morley v National Insurance Co [1967] VR 566, considered AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v AUSTRALIAN COMPETITION TRIBUNAL and EAST AUSTRALIAN PIPELINE LIMITED NSD 1191 OF 2004 FRENCH, GOLDBERG AND FINKELSTEIN JJ 2 JUNE 2006 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1191 OF 2004 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: AUSTRALIAN COMPETITION TRIBUNAL First Respondent EAST AUSTRALIAN PIPELINE LIMITED Second Respondent JUDGES: FRENCH, GOLDBERG & FINKELSTEIN JJ DATE OF ORDER: 2 JUNE 2006 WHERE MADE: MELBOURNE (HEARD IN SYDNEY) THE COURT ORDERS THAT: 1. The Australian Competition Tribunal decision of 19 May 2005 is set aside. 2. The parties are to file written submissions within seven days as to which, if any, portion of the reasons for the judgment of the Court should be treated as confidential on account of reference to confidential information before the Court. 3. The parties are to file submissions within seven days as to any consequential orders which should be made. 4. The second respondent is to 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 NEW SOUTH WALES DISTRICT REGISTRY NSD 1191 OF 2004 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: AUSTRALIAN COMPETITION TRIBUNAL First Respondent EAST AUSTRALIAN PIPELINE LIMITED Second Respondent JUDGES: FRENCH, GOLDBERG & FINKELSTEIN JJ DATE: 2 JUNE 2006 PLACE: MELBOURNE (HEARD IN SYDNEY) REASONS FOR JUDGMENT Introduction 1 Eastern Australian Pipelines Limited (EAPL) is the owner of the Moomba to Sydney Gas Pipeline. The pipeline is a facility which is covered by the National Third Party Access Code for National Gas Pipeline Systems. The Code gives effect to a National Competition Policy and a National Pipeline Access Agreement made between the Commonwealth, State and Territory Governments in 1995 and 1997 respectively. 2 Under the Code EAPL is required to propose an Access Arrangement for use of the pipeline system by third parties and to propose a Reference Tariff of charges for such use. The Australian Competition and Consumer Commission (the ACCC) which is designated as a Relevant Regulator under the Code did not approve EAPL's proposed Access Arrangement. Exercising its powers under the Code, it substituted its own arrangement incorporating a tariff based upon a lower Initial Capital Base (ICB) than that adopted by EAPL. 3 EAPL challenged the ACCC's decision in the Australian Competition Tribunal (the Tribunal). On 19 May 2005 the Tribunal varied the ACCC decision so far as it related to the ICB of the pipeline. 4 The ACCC instituted proceedings in this Court on 26 May 2005 for judicial review of the Tribunal's decision. For reasons which are now published, we are of the view that the Tribunal erred in its approach to the interpretation of the Code. We consider that the approach taken by the ACCC was correct in law and that the exercise of its discretion reaching the conclusions it did was reasonable. We will therefore set the Tribunal decision aside and invite submissions from the parties as to the consequential orders that should now be made. Factual and Procedural History 5 In 1971 the Australian Gas Company Limited (AGL) and the Coopers Basin Gas Producers (the Producers) entered into an agreement under which AGL was to build a gas pipeline from the Producers' treatment plant in Moomba, South Australia to Wilton, outside Sydney. AGL established a wholly owned subsidiary called East Australian Pipeline Corporation which it committed to complete the design, construction, operation and maintenance of the pipeline. 6 The proposal that AGL construct the pipeline was rejected by the Commonwealth Government through the Minister for Minerals and Energy in January 1973. Instead, the Commonwealth undertook to fulfil all obligations arising out of the contracts entered into for its construction and operation. The Commonwealth regarded the proposed pipeline as the first step in a broader plan to establish a national pipeline grid. The pipeline, including lateral lines, is referred to in these reasons as the MSP. 7 The Pipeline Authority Act 1973 (Cth) established the Pipeline Authority (the PA). The function of the PA was to manage the Commonwealth's responsibilities in relation to the pipeline. Under terms agreed between the PA, AGL and the Producers, the PA took over the construction, operation and maintenance of the MSP. The arrangement was reflected in a Deed of Covenant and Consent dated 17 May 1974 and a Haulage Agreement between AGL and the PA. The main pipeline was constructed by the PA between 1974 and 1976. Various lateral pipelines were constructed in 1981, 1987 and 1993. The PA was unable to earn commercial returns from the pipeline. By 1994 there had been, to quote the EAPL submissions, 'a massive under‑recovery of the cost of the pipeline over the first 18 years of the pipeline's life'. 8 In November 1993 the Commonwealth Government and AGL entered into the Moomba to Sydney Pipeline 51% Sale Agreement whereby AGL agreed to acquire a 51% interest in the MSP with the balance to be sold by tender. The successful tenderer was Gasinvest Australia Pty Ltd (Gasinvest), a joint venture between Canadian and Malaysian interests. AGL Pipelines (NSW) Pty Ltd and Gasinvest acquired 51% and 49% respectively of the issued shares in EAPL formed by the Commonwealth for the purposes of the sale. By an Asset Purchase Agreement dated 30 June 1994, EAPL agreed to purchase the pipeline for $534.3 million. The transfer of the assets from the PA to EAPL was effected on 30 June 1994 pursuant to the Moomba‑Sydney Pipeline System Sale Act 1994 (Cth). At the same time EAPL made an agreement with AGL Wholesale Gas Limited for the transport of gas. This was known as the Gas Transportation Agreement (GTA). Since June 2000 EAPL has been a subsidiary of the Australian Pipeline Trust (APT). The GTA ended at that time and gas is now transported for AGL, which is the MSP's most significant customer, under a Gas Transportation Deed. This case concerns the terms and conditions upon which EAPL is required to give access to third parties who wish to use the MSP for the transport of gas. That requirement derives from the National Gas Pipeline Access Scheme. The description of that Scheme follows. 9 Following the 1993 Hilmer Report, the 1995 National Competition Policy Agreement was made between the Commonwealth, State and Territory Governments. On 7 November 1997 the National Pipeline Access Agreement was signed between those Governments. The parties recognised that certain gas transmission pipeline systems are natural monopolies and require regulation in relation to the granting and terms of access. Pursuant to that agreement South Australia enacted a Gas Pipelines Access (South Australia) Act 1997 (SA) (the SA Gas Act). Schedule 1 to the Act is entitled 'Third party access to natural gas pipelines'. Schedule 2 sets out the 'National Third Party Access Code for Natural Gas Pipeline Systems'. Schedules 1 and 2 together comprise what is called the 'Access Law'. Schedule 2 is referred to as 'the Code'. The other States, the Northern Territory and the Australian Capital Territory enacted laws which adopted the provisions of the South Australian Act and applied the access law and Code as laws of those States and Territories. The Gas Pipelines Access (Commonwealth) Act 1998 (Cth) (Commonwealth Gas Act) applied to the adjacent area, the external areas (other than Norfolk Island and Antarctica) and the Jervis Bay territory. The Access Acts relevant to the present case are those of South Australia, New South Wales and the Australian Capital Territory. They are respectively: 1. The SA Gas Act 2. The Gas Pipelines Access (NSW) Act 1998 – the NSW Gas Act 3. The Gas Pipeline Access Act 1998 (ACT) – the ACT Gas Act. 10 The Code came into effect on 14 August 1998. The national regulatory scheme so adopted provides for regulation of access to and use of the pipelines by 'Relevant Regulators'. Functions were conferred on the ACCC. The Code also provides for a relevant Appeal Body which, according to the circumstances, can be the Tribunal. The term 'Service Provider' describes the owner and operator of pipelines. The Code applies to pipelines which are 'Covered' by it. 11 Where a gas pipeline is 'Covered' by the Code, the Service Provider is required to submit an 'Access Arrangement' to the Relevant Regulator setting out the policies and the basic terms and conditions under which third parties may obtain access to pipeline services. When it submits a proposed Access Arrangement, the Service Provider must also submit applicable Access Arrangement Information. This is to enable users and prospective users and the Relevant Regulator to form an opinion on whether the Access Arrangement complies with the Code. The Code prescribes matters which must be included in an Access Arrangement although any relevant matter may also be included. 12 An important component of the terms and conditions of the Access Arrangement is the Reference Tariff, which is the charge to third parties for using the pipeline. The basis for the calculation of the Reference Tariff for the MSP under the Access Arrangement proposed by EAPL was the focus of debate before the Tribunal and before this Court in the present case. The Reference Tariff must be designed to accord with the objectives and methodologies set out in s 8 of the Code. The objectives include replication of the outcomes of a competitive market. Total revenue to be derived from the pipeline is to be calculated according to one of the methodologies referred to in s 8.4 of the Code, namely Cost of Service, Internal Rate of Return or Net Present Value (NPV) of the asset. The ICB of the pipeline is an important element informing these methodologies and ultimately the determination of the Reference Tariff. The calculation of the ICB was a key issue in the present case as EAPL and the ACCC took significantly different approaches to it. 13 From the commencement of operation of the Scheme, the ACCC and the Tribunal were authorised to perform functions as Relevant Regulator and Relevant Appeals Body, respectively, under the access laws of the participating jurisdictions pursuant to s 44ZZM and s 44ZZOA of the Trade Practices Act 1974 (Cth) (the TPA). Those sections provided, until March 2004, that a State or Territory access regime could confer functions or powers on each of them. They were repealed by the Trade Practices Legislation Amendment Act 2003 (No 134) (Cth) and replaced with new ss 44ZZM, 44ZZMA and 44ZZMB. The new sections provided for the conferral of functions, powers and duties on the ACCC and the Tribunal under the State and Territory access laws in more elaborate terms intended to meet constitutional requirements for the exercise of State functions by Commonwealth bodies identified in the case of R v Hughes (2000) 202 CLR 535. The State and Territory Gas Acts continued to provide that the Commonwealth Minister, the ACCC, the National Competition Council (NCC) and the Tribunal have the functions and powers expressed to be conferred upon them under the Access Law. 14 An Access Arrangement submitted by a Service Provider must be approved by the Relevant Regulator before it can become operative under the Access Code. The approval process is governed by s 2 of the Code. The Relevant Regulator may approve a proposed Access Arrangement only if satisfied that it contains the various elements and meets the principles set out in ss 3.1 to 3.2 of the Code. The most significant of the necessary elements of an Access Arrangement are the Reference Tariff and Reference Tariff Policy for which ss 3.3 to 3.6 provide. They require the Relevant Regulator to ensure that in its opinion the Reference Tariff and Reference Tariff Policy of a proposed Access Arrangement comply with principles set out in s 8 of the Code. Where the Relevant Regulator is not satisfied that the requirements of the Code are met it must give the Service Provider the opportunity to submit a revised version. Where the Relevant Regulator is dissatisfied with a revision, it must draft and approve an Access Arrangement that, in its view, satisfies the requirements of the Code. 15 On 5 May 1999 EAPL submitted a proposed Access Arrangement to the ACCC for the MSP together with the applicable Access Arrangement information. It proposed a value for the ICB of $666.7 million based on what is called the Depreciated Optimised Replacement Cost (DORC) methodology. The DORC methodology involves an assessment of the Optimised Replacement Cost (ORC) of the asset, which in this case is the pipeline system. That value is to be depreciated by the remaining life of the asset. It is said to underpin the calculation of tariffs because it simulates the operation of a competitive market. It does this by setting tariffs at a level theoretically just short of that required to attract a new entrant competitor – Johnstone DJ, Replacement Cost Asset Valuation and Regulation of Energy Infrastructure Tariffs (2003) 39 Abacus 1. 16 EAPL's submission assumed a total economic life of 60 years for the Moomba to Wilton part of the pipeline and 80 years for newer, better protected parts of the system. EAPL's valuation of the MSP equated to its DORC calculation at that time. It used straight line depreciation to derive its DORC value from the ORC which it assessed at $1,058.6 million. Its value for ORC came from a report prepared by Venton & Associates Pty Ltd (Venton) on 20 June 1999. The report was entitled 'Optimised Design and Cost Estimate EAPL Pipeline Network'. Included in the Venton ORC estimate was a 10% contingency allowance on various cost factors. 17 On 28 April 2000 EAPL made an application to the NCC for revocation of coverage under the Code for the MSP main line. At about the same time EAPL submitted its proposed Access Arrangement for the Eastern Gas Pipeline (EGP) which was being constructed between Bass Strait and Sydney. It was completed on 17 August 2000. The effect of its construction was to create basin to basin competition as both Bass Strait and Moomba could supply gas into the Sydney market. AGL had applied in January 2000 to the NCC for a determination that the EGP be covered under the Code. The NCC recommended coverage in July 2000 and the recommendation was accepted by the Minister for Industry, Science and Resources (the Minister) on 16 October 2000. The owners of EGP, Duke Eastern Gas Pipeline Pty Ltd and associated companies applied to the Tribunal to reverse the Minister's decision. On 4 May 2001 the Tribunal reversed the Minister's decision and ordered that the EGP not be covered. 18 On 11 August 2000 APT, which had become the owner of EAPL, wrote to the ACCC advising that EAPL would be revising the Access Arrangement and the Access Arrangement Information it submitted in May 1999. 19 On 8 September 2000 the NCC recommended to the Minister that Coverage of the MSP not be revoked. The Minister accepted that decision on 16 October 2000. 20 On 21 September 2000, EAPL wrote to the ACCC about proposed revisions to the Access Arrangement which EAPL had under consideration. It indicated, inter alia, that the MSP could reasonably be expected to have a life of 80 years instead of the 60 years previously proposed and that it would be likely to be refurbished by recoating for that purpose. 21 The ACCC released a Draft Decision on the EAPL Access Arrangement on 19 December 2000. It proposed not to approve it. It proposed instead that the ICB should be fixed at $502.081 million based on a DORC of $539.1 million adjusted to take account of accumulated deferred taxes. 22 In June 2001 EAPL lodged a second application with the NCC for revocation of coverage over certain sections of the MSP. In doing so it relied upon the Tribunal's decision relating to coverage on the EGP. EAPL requested the NCC to consider the revocation of Coverage on the Moomba to Wilton pipeline and the Canberra lateral. 23 EAPL submitted a revised Access Arrangement on 30 April 2002. 24 On 23 August 2002 the Full Court of the Supreme Court of Western Australia delivered judgment in Re Michael; Ex parte Epic Energy (WA) Nominees Pty Ltd (2002) 25 WAR 511. EAPL made a submission to the ACCC in the light of Re Michael on 5 November 2002. It submitted an estimated value for DORC between $768 million and $972 million. EAPL submitted that as a result of the Re Michael decision the Draft Decision issued by the ACCC contained fundamental errors of law going to the determination of the ICB and hence to the basis of the Access Arrangement. A week later on 11 November 2002 the ACCC released an Issues Paper inviting comments on EAPL's submission and the implications of the Re Michael decision. On 4 December 2002 EAPL revised its estimated value of ICB based on reasonable expectations to a range of between $784 million and $998 million. In the meantime the NCC recommended to the Minister that Coverage of the MSP not be revoked. 25 The ACCC released a Final Decision on 2 October 2003 in which it decided not to approve the revised Access Arrangement. It depreciated ORC for the MSP on the basis of a 50 year asset life to 2000 and an 80 year asset life from 2000 onward. It 'kinked' the depreciation. It considered that $559.3 million was an appropriate value for the ICB. It did not maintain its earlier position in the Draft Decision that accumulated deferred taxes should be deducted from the DORC as part of the calculation of the ICB. The ACCC required that EAPL submit any revised Access Arrangement by 23 October 2003. 26 EAPL submitted its revised Access Arrangement on 23 October 2003. Between 23 October 2003 and 11 November 2003 it also made a number of submissions in response to the ACCC's Final Decision. 27 On 19 November 2003 the Minister released his decision that Coverage of the Moomba to Marsden section of the MSP should be revoked with effect from 11 December 2003. 28 On 8 December 2003 the ACCC released its Final Approval decision which was not to approve the further revised Access Arrangement. At the same time it approved its own Access Arrangement pursuant to s 2.20(a) of the Code. EAPL had decided not to incorporate that section of the pipeline from Wagga Wagga to Culcairn, known as the 'Interconnect', in its Access Arrangement. The ACCC in its Final Approval adopted an ICB value of $545.4 million which represented the ICB fixed in its decision of 2 October 2003, less the value of the Interconnect. 29 On 19 December 2003 EAPL applied to the Tribunal for review of the ACCC's Final Approval on various grounds. It contended that the ACCC had made errors in relevant findings of fact and/or exercised its discretion incorrectly or unreasonably in the circumstances. In particular it alleged that the ACCC exercised its discretion incorrectly when it ascribed a value of $545.5 million to the ICB and in its calculation of the Weighted Average Cost of Capital (WACC). The Tribunal heard the application over eight days in February, March and April 2004. 30 On 8 July 2004 the Tribunal published reasons for decision in which it held that the ICB proposed by the ACCC should be set aside. It held that the ICB should accord with DORC calculated upon ORC and should include a 7.5% contingency for omissions. The depreciation calculation should assume a life for the MSP as it stood and be based upon NPV calculated in relation to cost. The Tribunal then adjourned the application to enable the parties to consider its reasons and to propose orders to give effect to them. 31 On 4 August 2004 the ACCC filed an application in the Federal Court of Australia for an order of review of the Tribunal's decision. 32 On 18 March 2005 the Tribunal published additional reasons flowing from points of difference between the parties as to the manner in which its earlier reasons should be implemented. The points of difference concerned the method of depreciating ORC. The first was whether the assessment should be made from the point of view of a hypothetical new entrant (HNE) or an incumbent. The second was whether the discount should be at the rate of the WACC or at a risk free rate. The third was whether, if the WACC applied, it was to be calculated before or after tax. 33 The Tribunal held that the ICB should be based upon DORC with tax on an HNE basis and that the discount rate was to be post‑tax WACC. The ACCC had also provided a submission as to apportionment between Uncovered and Covered portions of the pipeline which were accepted by EAPL. The Tribunal ordered that the proceedings stand over to enable a minute of orders to be brought in. 34 On 19 May 2005 the Tribunal formally varied the decision of the ACCC so far as it related to the ICB of the pipeline. It held that the ACCC had erred in putting aside known valuation methodologies and devising a method of its own which adjusted the ORC in a novel fashion. It varied the ACCC's determination of the ICB from $545.43 million to $834.66 million. 35 On 26 May 2005 the ACCC filed an amended application for an order of review in the Federal Court. Its application invoked the original jurisdiction of the Court under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) and the Judiciary Act 1903 (Cth). It sought an order setting aside the Tribunal's decision and, alternatively, the issue of a writ of certiorari quashing that decision. In addition, and in the alternative, the ACCC sought declarations as to the validity of its calculation of the ICB in its Final Decision and Final Approval and that the Tribunal had acted ultra vires s 44ZZOA of the TPA. It also sought an order for mandamus compelling the Tribunal to deal with EAPL's application in accordance with law, and alternatively remitting the matter to the Tribunal for further determination in accordance with law. The Statutory and Regulatory Framework – The SA Gas Act 36 The SA Gas Act recites in its Preamble that the Council of Australian Governments agreed, in February 1994, to general principles of competition policy reform to enable third parties, in particular circumstances, to gain access to essential facilities. It recites also that the Council agreed to more specific proposals for the development of free and fair trade in natural gas. The Preamble recites the further agreement of the Commonwealth, the States and Territories in November 1997 to the enactment of legislation to establish a uniform national framework for third party access to all gas pipelines. The framework was to be one which: '(a) facilitates the development and operation of a national market for natural gas; and (b) prevents abuse of monopoly power; and (c) promotes a competitive market for natural gas in which customers may choose suppliers, including producers, retailers and traders; and (d) provides rights of access to natural gas pipelines on conditions that are fair and reasonable for the owners and operators of gas transmission and distribution pipelines and persons wishing to use the services of those pipelines; and (e) provides for resolution of disputes.' 37 The Code is defined in s 9 in the terms set out in par (b) of the preceding definition of Gas Pipeline Access Law. Statutory Framework – The Access Law – Schedule 1 to the SA Gas Act 38 Schedule 1 of the SA Gas Act sets out various definitions in s 2. It defines the term 'Relevant Regulator', inter alia, thus: '(a) in relation to a transmission pipeline, or a matter concerning a transmission pipeline or service provider of a transmission pipeline, means the ACCC;' Paragraphs (b) and (c) of the definition deal with the circumstances in which the 'local Regulator' is the Relevant Regulator. They are not material for present purposes. The Relevant Appeals Body is also defined and under par (a) of that definition is: 'in relation to a decision of the Commonwealth Minister or the ACCC, the Australian Competition Tribunal.' 39 Part 2 of Schedule 1 refers to the Code. It provides, in s 5, that a provision of the Code inconsistent with the provision of the Access Law other than the Code or of an Act of the legislature is of no effect to the extent of the inconsistency. Section 6 of Pt 2 of Schedule 1 provides that the Code may be amended by agreement between the relevant Ministers of the Australian Governments. 40 Part 3 of Schedule 1 deals with pipelines and is not material for present purposes. Part 4 deals with the arbitration of access disputes. Section 31 provides that a party may appeal 'to the Court' on a question of law from a determination of an arbitrator under Pt 4. The Court there referred to is defined in s 9 of the SA Gas Act as the Supreme Court. Section 32 prevents persons from bringing civil proceedings in respect of a matter arising under the Act except in accordance with Pts 5 or 6 of the Act. This is said not to affect the right of a person to apply for an order for review under the ADJR Act (s 32(4)(b)). 41 Part 6 of Schedule 1 deals with administrative appeals. It provides for persons affected by a decision to be able to apply to a relevant body to review a decision of the Relevant Regulator. 42 Where the Relevant Regulator makes a decision under the Code to approve the Regulator's own Access Arrangement or the Regulator's own revisions of an Access Arrangement in place of an Access Arrangement or revisions submitted for approval by a Service Provider, a Service Provider, inter alia, may apply to the Relevant Appeals Body for a review of the decision (s 39(1)). 43 The grounds upon which a Service Provider may apply to the Relevant Appeals Body for a review of the decision of the Relevant Regulator are set out in s 39(2) thus: '(2) An application under this section – (a) may be made only on the grounds, to be established by the applicant – (i) of an error in the relevant Regulator's findings of facts; or (ii) that the exercise of the relevant Regulator's discretion was incorrect or was unreasonable having regard to all the circumstances; or (iii) that the occasion for exercising the discretion did not arise; and (b) in the case of an application under subsection (1), may not raise any matter that was not raised in submissions to the relevant Regulator before the decision was made.' 44 There are limitations upon the range of matters which may be considered by the Relevant Appeals Body and these are set out in s 39(5) thus: 'The relevant appeals body, in reviewing a decision under this section must not consider any matter other than – (a) the application for review and submissions in support of the application (other than, in the case of an application under subsection (1), any matter not raised in submissions to the relevant Regulator before the decision was made); (ab) the relevant access arrangement or proposed access arrangement or revision or proposed revision of an access arrangement, together with any related access arrangement information or proposed access arrangement information; (ac) in the case of an application under subsection (1a) – any notice of a proposed variation of Reference Tariff within an Access Arrangement Period given by the service provider to the relevant Regulator under the Code; (ad) any written submissions made to the relevant Regulator before the decision was made; (c) any reports relied on by the relevant Regulator before the decision was made; (d) any draft decision, and submissions on any draft decision made to the relevant Regulator; (e) the decision of the relevant Regulator and the written record of it and any written reasons for it; (f) the transcript (if any) of any hearing conducted by the relevant Regulator.' 45 There is an Appendix to Schedule 1 which contains miscellaneous provisions relating to interpretation. According to s 1 of that Appendix its application may be displaced wholly or partly by a contrary intention appearing in the Law. Section 7 requires purposive interpretation thus: '(1) In the interpretation of a provision of this Law, the interpretation that will best achieve the purpose or object of this Law is to be preferred to any other interpretation. (2) Subclause (1) applies whether or not the purpose is expressly stated in this Law.' 46 Section 8 of Appendix 1 sets out extrinsic material to which consideration may be given in the interpretation of a provision of the Law if it is ambiguous or obscure. Statutory Framework – The Access Code – Schedule 2 to the SA Gas Act 47 Schedule 2 comprises the Access Code. The Code, as it stood at the relevant time, for the purpose of these proceedings, is the Code at November 1997, the original Code having been subject to six amending agreements. The Introduction to the Code, which does not form part of it but which may be considered in its interpretation, states by way of overview: 'Under the Code, the owner or operator of a Pipeline that is Covered under the Code is required to lodge an Access Arrangement with the Relevant Regulator. The Access Arrangement is similar in many respects to an undertaking under Part IIIA of the Trade Practices Act and is designed to allow the owner or operator of the Covered Pipeline to develop its own Tariffs and other terms and conditions under which access will be made available, subject to the requirements of the Code. The Relevant Regulator will seek comments on the Access Arrangement and then may either accept it or reject it and specify amendments it requires to be made to the Access Arrangement. If rejected, the Access Arrangement must be modified and resubmitted. Under certain circumstances, the Relevant Regulator may draft and approve its own Access Arrangement. The legislation which implements the Code provides for administrative review of certain regulatory decisions made under the Code.' 48 The Introduction describes important features of the Code as including, inter alia: '. Coverage – the mechanism by which Pipelines (including distribution systems) become subject to the Code; . reliance on an up‑front Access Arrangement outlining Services and Reference Tariffs applicable to a Covered Pipeline; . pricing principles; …' 49 Section 1.1 of the Code provides that each pipeline listed in Schedule A is a Covered Pipeline from the date of the commencement of the Code. The transmission pipelines in New South Wales and the Australian Capital Territory covered by the Code are set out in Schedule A and include the Moomba to Sydney pipeline system. 50 At the time of the ACCC's Final Decision on 8 October 2003 the entire MSP except for the Interconnect was Covered. However on 19 November 2003 the Minister for Industry, Tourism and Resources revoked Coverage of the section of the pipeline between Moomba and Marsden. That decision was to take effect on 11 December 2003. Because of an application for review of the Minister's decision, which was subsequently withdrawn, it did not take effect until 20 April 2004. The ACCC's Access Arrangement was drafted to accommodate a partial revocation of Coverage. It appears that the ACCC took the view that the Access Arrangement would continue to apply to such parts of the pipeline as continued to be Covered once the Minister's decision took effect. That view was not challenged. The ACCC, in its submissions, said that the revocation of coverage of a significant section of the pipeline was relevant to the present proceeding only to the extent that the figures referred to in much of the material before the Tribunal and in the Tribunal's reasons for decision pertained to the entire MSP. The parties however had agreed on the appropriate methodology (and the consequential results) of adjusting the relevant figure to account for the partial revocation. Revocation of Coverage is dealt with in ss 1.24 to 1.39 of the Code. It is not necessary to set them out in any detail for present purposes. 51 Section 2 of the Code deals with Access Arrangements. Again there is an italicised introduction which is not part of the Code, but which may be referred to for its interpretation, which gives an overview of the Access Arrangement process. That has already been outlined sufficiently for present purposes. 52 The substantive provisions of s 2 of the Code provide, inter alia: '2.2 If a Pipeline is Covered, the Service Provider must submit a proposed Access Arrangement together with the applicable Access Arrangement Information for the Covered Pipeline to the Relevant Regulator: (a) within 90 days after the Pipeline becomes Covered under section 1.19 or 1.21 if the Covered Pipeline is not described in Schedule A; or (b) within 90 days after the commencement of the Code if the Covered Pipeline is described in Schedule A. … 2.5 An Access Arrangement may include any relevant matter but must include at least the elements described in sections 3.1 to 3.20. 2.6 Access Arrangement Information must contain such information as in the opinion of the Relevant Regulator would enable Users and Prospective Users to understand the derivation of the elements in the proposed Access Arrangement and to form an opinion as to the compliance of the Access Arrangement with the provisions of the Code. 2.7 The Access Arrangement Information may include any relevant information but must include at least the categories of information described in Attachment A.' 53 There then follow provisions for public consultation and for the approval process by the issue from the Regulator of a draft decision. The Relevant Regulator is required to consider any submissions received by the specified date (s 2.15). The Service Provider may, after the date of the draft decision, resubmit the Access Arrangement revised to incorporate or substantially incorporate amendments specified by the Relevant Regulator in its draft decision or otherwise address matters identified by the Relevant Regulator in its draft decision as reasons for requiring the specified amendments (s 2.15A). 54 Provision is made for the final decision by the Relevant Regulator. The Relevant Regulator is required to provide a copy of its final decision to, inter alia, the Service Provider (s 2.17). If it decides not to approve the Access Arrangement the Service Provider must, by a date specified by the Relevant Regulator, submit a revised Access Arrangement (s 2.18). If the Service Provider submits a revised Access Arrangement the Relevant Regulator must issue a further final decision which either approves or does not approve the revised Access Arrangement (s 2.19). If the Service Provider does not submit a revised Access Arrangement as required or the Relevant Regulator does not approve any revised Access Arrangement submitted under s 2.19, the Relevant Regulator must (s 2.20): '(a) in the case of an Access Arrangement submitted under section 2.2, draft and approve its own Access Arrangement, instead of the Access Arrangement proposed by the Service Provider; or (b) in the case of an Access Arrangement submitted voluntarily under section 2.3, not approve the Access Arrangement.' 55 The Code sets out in s 2.24 the matters which the Relevant Regulator must take into account in approving a proposed Access Arrangement and provides for review as specified in s 39 of the Gas Pipelines Access Law. 56 Section 3 of the Code deals with the content of Access Arrangements. In particular, and relevantly to the present application, ss 3.3 to 3.5 inclusive provide for Reference Tariffs and Reference Tariff Policy thus: '3.3 An Access Arrangement must include a Reference Tariff for: (a) at least one Service that is likely to be sought by a significant part of the market; and (b) each Service that is likely to be sought by a significant part of the market and for which the Relevant Regulator considers a Reference Tariff should be included. 3.4 Unless a Reference Tariff has been determined through a competitive tender process as outlined in sections 3.21 to 3.36, an Access Arrangement and any Reference Tariff included in an Access Arrangement must, in the Relevant Regulator's opinion, comply with the Reference Tariff Principles described in section 8. 3.5 An Access Arrangement must also include a policy describing the principles that are to be used to determine a Reference Tariff (a ReferenceTariff Policy). A Reference Tariff Policy must, in the Relevant Regulator's opinion, comply with the Reference Tariff Principles described in section 8.' Section 3.6 requires Access Arrangements to include the terms and conditions on which the Service Provider will supply each Reference Service. Those terms and conditions must in the Relevant Regulator's opinion be reasonable. 57 Access Arrangement periods accepted by the Relevant Regulator may be of any length. However if the period is more than five years the Relevant Regulator is not permitted to approve the Access Arrangement without considering whether mechanisms should be included to address the risk of forecasts upon which the terms of the Access Arrangement are based and approved, proving to be incorrect (s 3.18). 58 Section 7 of the Code deals with general regulatory and miscellaneous provisions. Section 8 sets out Reference Tariff Principles. The substantive provisions commence at s 8.1 which provides: '8.1 A Reference Tariff and Reference Tariff Policy should be designed with a view to achieving the following objectives: (a) providing the Service Provider with the opportunity to earn a stream of revenue that recovers the efficient costs of delivering the Reference Service over the expected life of the assets used in delivering that Service; (b) replicating the outcome of a competitive market; (c) ensuring the safe and reliable operation of the Pipeline; (d) not distorting investment decisions in Pipeline transportation systems or in upstream and downstream industries; (e) efficiency in the level and structure of the Reference Tariff; and (f) providing an incentive to the Service Provider to reduce costs and to develop the market for Reference and other Services. To the extent that any of these objectives conflict in their application to a particular Reference Tariff determination, the Relevant Regulator may determine the manner in which they can best be reconciled or which of them should prevail.' 59 Under s 8.2, the Relevant Regulator must be satisfied in determining to approve a Reference Tariff and Reference Tariff Policy that the revenue to be generated from the sales or forecast sales of all services over the Access Arrangement period should be established consistently with the principles and according to one of the methodologies contained in s 8 generally (s 8.2(a)). Generally speaking the manner in which a Reference Tariff may vary within an Access Arrangement period through the implementation of a Reference Tariff Policy is within the discretion of the Service Provider. This is subject to the Relevant Regulator being satisfied that the manner of variation of the Reference Tariff is consistent with the objectives set out in s 8.1. 60 Section 8.4 sets out methodologies for the calculation of total revenue: '8.4 The Total Revenue (a portion of which will be recovered from sales of Reference Services) should be calculated according to one of the following methodologies: Cost of Service: The Total Revenue is equal to the cost of providing all Services (some of which may be the forecast of such costs), and with this cost to be calculated on the basis of: (a) a return (Rate of Return) on the value of the capital assets that form the Covered Pipeline or are otherwise used to provide Services (Capital Base); (b) depreciation of the Capital Base (Depreciation); and (c) the operating, maintenance and other non‑capital costs incurred in providing all Services (Non‑Capital Costs). IRR The Total Revenue will provide a forecast Internal Rate of Return (IRR) for the Covered Pipeline that is consistent with the principles in sections 8.30 and 8.31. The IRR should be calculated on the basis of a forecast of all costs to be incurred in providing such Services (including capital costs) during the Access Arrangement Period. The initial value of the Covered Pipeline in the IRR calculation is to be given by the Capital Base at the commencement of the Access Arrangement Period and the assumed residual value of the Covered Pipeline at the end of the Access Arrangement Period (Residual Value) should be calculated consistently with the principles in this section 8. NPV: The Total Revenue will provide a forecast Net Present Value (NPV) for the Covered Pipeline equal to zero. The NPV should be calculated on the basis of a forecast of all costs to be incurred in providing such Services (including capital costs) during the Access Arrangement Period, and using a discount rate that would provide the Service Provider with a return consistent with the principles in sections 8.30 and 8.31. The initial value of the Covered Pipeline in the NPV calculation is to be given by the Capital Base at the commencement of the Access Arrangement Period and the assumed Residual Value at the end of the Access Arrangement Period should be calculated consistently with the principles in this section 8. The methodology used to calculate the Cost of Service, an IRR or NPV should be in accordance with generally accepted industry practice. However, the methodology used to calculate the Cost of Service, an IRR or NPV may also allow the Service Provider to retain some or all of the benefits arising from efficiency gains under an Incentive Mechanism. The amount of the benefit will be determined by the Relevant Regulator in the range of between 100% and 0% of the total efficiency gains achieved.' Section 8.4 allows for the use of other methodologies providing that the resultant total revenue can be expressed in terms of one of the methodologies described in s 8.4 (s 8.5). 61 Where the prescribed methodologies yield a range of values for Total Revenue the Relevant Regulator may have regard to financial and operational performance factors to select a figure. 62 The principles for establishing the Capital Base for the Covered Pipeline when a Reference Tariff is first provided for a Reference Service, are set out in ss 8.10 to 8.14. Sections 8.10 to 8.12 provide: '8.10 When a Reference Tariff is first proposed for a Reference Service provided by a Covered Pipeline that was in existence at the commencement of the Code, the following factors should be considered in establishing the initial Capital Base for that Pipeline: (a) the value that would result from taking the actual capital cost of the Covered Pipeline and subtracting the accumulated depreciation for those assets charged to Users (or thought to have been charged to Users) prior to the commencement of the Code; (b) the value that would result from applying the "depreciated optimised replacement cost" methodology in valuing the Covered Pipeline; (c) the value that would result from applying other well recognised asset valuation methodologies in valuing the Covered Pipeline; (d) the advantages and disadvantages of each valuation methodology applied under paragraphs (a), (b) and (c); (e) international best practice of Pipelines in comparable situations and the impact on the international competitiveness of energy consuming industries; (f) the basis on which Tariffs have been (or appear to have been) set in the past, the economic depreciation of the Covered Pipeline, and the historical returns to the Service Provider from the Covered Pipeline; (g) the reasonable expectations of persons under the regulatory regime that applied to the Pipeline prior to the commencement of the Code; (h) the impact on the economically efficient utilisation of gas resources; (i) the comparability with the cost structure of new Pipelines that may compete with the Pipeline in question (for example, a Pipeline that may by‑pass some or all of the Pipeline in question); (j) the price paid for any asset recently purchased by the Service Provider and the circumstances of that purchase; and (k) any other factors the Relevant Regulator considers relevant. 8.11 The initial Capital Base for Covered Pipelines that were in existence at the commencement of the Code normally should not fall outside the range of values determined under paragraphs (a) and (b) of section 8.10. … 8.12 When a Reference Tariff is first proposed for a Reference Service provided by a Covered Pipeline that has come into existence after the commencement of the Code, the initial Capital Base for the Covered Pipeline is, subject to section 8.13, the actual capital cost of those assets at the time they first enter service. A new Pipeline does not need to pass the tests described in section 8.16(a).' There are further provisions relating to the calculation of the ICB after the expiry of an Access Arrangement, the increase of the Capital Base for a Covered Pipeline to recognise additional capital costs incurred in constructing or acquiring new facilities and the determination of tariffs by reference to forecast capital expenditure and new facilities investment (ss 8.14 to 8.22). 63 The Rate of Return which is used in determining a Reference Tariff is covered in ss 8.30 and 8.31 which provide: '8.30 The Rate of Return used in determining a Reference Tariff should provide a return which is commensurate with prevailing conditions in the market for funds and the risk involved in delivering the Reference Service (as reflected in the terms and conditions on which the Reference Service is offered and any other risk associated with delivering the Reference Service). 8.31 By way of example, the Rate of Return may be set on the basis of a weighted average of the return applicable to each source of funds (equity, debt and any other relevant source of funds). Such returns may be determined on the basis of a well accepted financial model, such as the Capital Asset Pricing Model. In general, the weighted average of the return on funds should be calculated by reference to a financing structure that reflects standard industry structures for a going concern and best practice. However, other approaches may be adopted where the Relevant Regulator is satisfied that to do so would be consistent with the objectives contained in section 8.1.' 64 Section 10 of the Code contains interpretation provisions and it is useful to have regard to certain of those definitions, which are as follows (s 10.8): '"Access Arrangement" means an arrangement for access to a Covered Pipeline that has been approved by the Relevant Regulator. "Access Arrangement Information" means information provided by a Service Provider to the Relevant Regulator pursuant to section 2.2, 2.3, 2.9, 2.28 or 2.30. "Access Arrangement Period" means the period from when an Access Arrangement or revisions to an Access Arrangement take effect (by virtue of a decision pursuant to section 2) until the next Revisions Commencement Date. … "Capital Base" has the meaning given in section 8.4. … "Coverage/Covered" means, in relation to a Pipeline or part of a Pipeline, that that Pipeline or part of a Pipeline is subject to the provisions of this Code pursuant to sections 1.1, 1.13, 1.20 or 1.21. … "Reference Tariff" means a Tariff specified in an Access Arrangement as corresponding to a Reference Service and which has the operation that is described in sections 6.13 and 6.18. … "Reference Tariff Policy" has the meaning given in section 3.5. … "Relevant Appeals Body" has the meaning given in the Gas Pipelines Access Law. … "Relevant Regulator" has the meaning given in the Gas Pipelines Access Law.' Statutory and Regulatory Framework – the ACT Gas Act 65 Section 6 of the ACT Gas Act provides: '6. The Gas Pipelines Access Law applies as a Territory law and, as so applying, may be cited as the Gas Pipelines Access (ACT) Law.' 66 By s 15, jurisdiction is purportedly conferred on the Federal Court with respect to civil and criminal matters arising under the Gas Pipelines Access (ACT) Law. Where cross boundary pipelines are concerned, s 20 provides that the action taken under the Gas Pipelines Access legislation of a scheme participant in whose jurisdictional area a part of the pipeline is situated will be taken also to be action under the Gas Pipelines Access legislation of each other scheme participant in whose jurisdiction area a part of the pipeline is situated. Statutory and Regulatory Framework – the NSW Gas Act 67 The NSW Gas Act applies the SA Gas Act as a law of New South Wales which may be referred to as the Gas Pipelines Access (New South Wales) Law. Section 10 confers upon the Commonwealth Minister, the ACCC, the NCC and the Tribunal '…the functions and powers conferred or expressed to be conferred on them respectively under the Gas Pipelines Access (New South Wales) Law.' 68 By s 16 jurisdiction is said to be conferred on the Federal Court in the following terms: '16. Jurisdiction is conferred on the Federal Court with respect to: (a) civil and criminal matters arising under the Gas Pipelines Access (New South Wales) Law, and (b) applications made to the Federal Court under the Administrative Decisions (Judicial Review) Act 1977 of the Commonwealth, as applying as a law of this State under section 18 or 19.' 69 Section 18 of the New South Wales Act provides that the ADJR Actof the Commonwealth applies as a law of New South Wales to any matter arising in relation to a decision of a Code body under the Gas Pipelines Access (New South Wales) Law as if that law were an enactment within the meaning of the ADJR Act and not a law of New South Wales. For the purposes of the application of the ADJR Act as a law of New South Wales, a matter arising in relation to a decision of a Code body under the Gas Pipelines Access (New South Wales) Law is taken to be a matter arising in relation to the laws of the Commonwealth in the same way as if the Gas Pipelines Access (New South Wales) Law were a law of the Commonwealth. It is taken not to be a matter arising in relation to the laws of New South Wales. 70 The ADJR Act is also said to apply as a law of New South Wales to any matter arising in relation to a decision of a Code body under the Gas Pipelines Access legislation of another scheme participant as if that legislation were an enactment within the meaning of the ADJR Act and not a law of the other scheme participant (s 19(1)). There are similar provisions as in the ACT Act in respect of actions in relation to cross boundary pipelines (s 21). The Act schedules the Access Law and the Code. Statutory Framework – The Gas Pipelines Access (Commonwealth) Act 1998 71 The Commonwealth Gas Act, as already noted, applies the Access Law to the adjacent areas in respect of the States and Territories, Jervis Bay and the external territories other than Norfolk Island and Antarctica. 72 The Act confers jurisdiction on the Federal Court with respect to civil and criminal matters arising under the Gas Pipelines Access (Commonwealth) Law (s 16(1)). It also purports to confer and authorise the exercise of jurisdiction conferred on the Federal Court by the Gas Pipelines Access legislation of scheme participants other than the Commonwealth, with respect to matters arising under the Gas Pipeline Access Laws and applications made to the Federal Court under the ADJR Act 'as applying under that legislation as a law of that scheme participant' (s 16(2)). 73 Any decision of a Code body under the Gas Pipelines Access (Commonwealth) Law or regulations is to be taken to be a decision under an enactment within the meaning of the ADJR Act (s 18(1)). The ADJR Act is also said to apply to (s 19(1)): '… any matter arising in relation to a decision of a Code body under the gas pipelines access legislation of a scheme participant other than the Commonwealth as if that legislation were an enactment within the meaning of that Act and not a law of that scheme participant.' 74 Section 19(2) provides: 'For the purposes of the application of the Administrative Decisions (Judicial Review) Act 1977, a matter arising in relation to a decision of a Code body under the gas pipelines access legislation of a scheme participantother than the Commonwealth: (a) is taken to be a matter arising in relation to laws of the Commonwealth in the same way as if that legislation were a law of the Commonwealth; and (b) is taken not to be a matter arising in relation to laws of that scheme participant.' The Commonwealth Gas Act also effected amendments to other Statutes to facilitate the national scheme. These amendments are set out in Schedule 1 and are effected by section 3. The Act also introduced, via Schedule 1, new provisions into the TPA authorising the ACCC and the Tribunal to perform functions and exercise powers conferred on them by laws of the Commonwealth or of the States or Territories establishing an access regime. These provisions are set out in the next part of these reasons. Statutory Framework – The Trade Practices Act 1974 (Cth) 75 Section 30(1) of the TPA provides that the Trade Practices Tribunal that existed immediately before s 30(1) commenced, continues to exist as the Australian Competition Tribunal. Part IIIA of the TPA deals with access to services. It binds the Crown in right of the Commonwealth, the States, the Australian Capital Territory and the Northern Territory (s 44E). Division 8 of Pt IIIA deals, inter alia, with the conferral of functions or powers, and more recently the imposition of duties, upon the ACCC and the Tribunal by State access regime laws. 76 As it stood prior to 1 March 2004, Div 8 contained two provisions relevant for present purposes. They were introduced by Schedule 1 of the Commonwealth Gas Act. Section 44ZZM provided that the ACCC may perform any function conferred on it by and for the purposes of a law of the Commonwealth or of a State or Territory that establishes an access regime, and exercise any power either conferred by that law to facilitate the performance of that function or which is necessary or convenient to permit that function to be performed (s 44ZZM(1)). Such functions or powers were to be conferred in accordance with a relevant agreement between the Commonwealth or the State or Territory concerned (s 44ZZM(2)). Section 44ZZOA provided for the performance of functions and the exercise of powers by the Tribunal under other access regimes. 77 Division 8 was amended by the Trade Practices Legislation (Amendment) Act 2003 (No 134 of 2003) which amendments relevantly came into effect on 1 March 2004. They were designed to ensure that the provisions of the TPA authorising the conferral of functions or powers or the imposition of duties on Commonwealth authorities including the ACCC and the Tribunal, by laws of the States or Territories, would meet the constitutional requirements set out in Hughes which is discussed later in these reasons. The amending Act repealed ss 44ZZM and 44ZZOA. It inserted a new s 44B which defined 'State or Territory access regime law' to mean: '(a) a law of a State or Territory that establishes or regulates an access regime; or (b) a law of a State or Territory that regulates an industry that is subject to an access regime.' and also inserted ss 44ZZM, 44ZZMA and 44ZZMB which made provision for the way in which duties may validly be imposed upon the ACCC or Tribunal under a State or Territory access regime law. Statutory Framework – The ADJR Act 78 The ADJR Act provides for judicial review of the classes of decision to which the Act applies. It is one of the bases upon which the ACCC invokes the jurisdiction of the Federal Court in the present proceeding. 79 The terms 'decision to which this Act applies' is defined in s 3. The definition of 'enactment' which also appears in s 3 includes: '(ca) an Act of a State, the Australian Capital Territory or the Northern Territory, or a part of such an Act, described in Schedule 3; …' The reference to Schedule 3 in the definition of enactment and Schedule 3 itself were introduced by the Jurisdiction of Courts Legislation Amendment Act 2000 (No 57 of 2000). The relevant parts of Schedule 3 introduced into the ADJR Act by that amending legislation are as follows: '1. What this Schedule does This Schedule describes Acts of the States, the Australian Capital Territory and the Northern Territory, and parts of such Acts, that are enactments for the purposes of this Act. 2. State, ACT and NT Acts, and parts of such Acts, that are enactments The following are enactments for the purposes of this Act: … (d) The Gas Pipelines Access (South Australia) Act 1997 of South Australia, or an Act of another State or of the Australian Capital Territory or the Northern Territory that applies Schedule 1 to that South Australian Act as a law of that other State or of that Territory;' 80 The Explanatory Memorandum to the Bill that became the amending Act stated, inter alia: 'As a result of the decision in Re Wakim, the purported adoption by States of the ADJR Act fails entirely. The object of the amendments to the ADJR Act is to restore the pre‑Wakim system of judicial review, as it applied to Commonwealth officers and authorities performing functions under State law, but as Federal rather than State jurisdiction. The amendments in the Bill to the ADJR Act will extend the Act's operation as Commonwealth law to conduct and decisions taken by Commonwealth officers and authorities under powers and functions conferred by specified classes of State or Territory laws. A new Schedule 3 will be added to the ADJR Act which will list those classes of laws. As noted above, the High Court has recognised that, in general, where a Commonwealth officer or authority exercises a power or function validly conferred by a State law, the officer or authority remains a Commonwealth officer or authority, amenable to federal judicial review (Re Cram (1987) 163 CLR 117). The amendments will mean that where a State or Territory law confers functions or powers on a Commonwealth officer or authority, and the law is one of a class listed in new Schedule 3, the Commonwealth ADJR Act will apply as Commonwealth law to those functions or powers. Since the jurisdiction conferred on the Federal Court will be federal jurisdiction, the Federal Court will be able to undertake ADJR review.' 81 Section 8(1) of the ADJR Act relevantly confers jurisdiction on the Court in the following terms: '8(1) The Federal Court has jurisdiction to hear and determine applications made to the Federal Court under this Act.' Statutory Framework – Judiciary Act 1903 (Cth) 82 Section 39B of the Judiciary Act confers jurisdiction on the Federal Court as follows: '(1) Subject to subsections (1B), (1C) and (1EA), the original jurisdiction of the Federal Court of Australia includes jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth. (1A) The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter: (a) in which the Commonwealth is seeking an injunction or a declaration; or (b) arising under the Constitution, or involving its interpretation; or (c) arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.' The EAPL Revised Access Arrangement – 30 April 2002 83 The revised EAPL Access Arrangement sent to the ACCC on 30 April 2002 was the version to which the ACCC responded when it published its Final Decision in October 2003. The history of subsequent exchanges between EAPL and the ACCC was set out earlier. EAPL also provided a further Revised Access Arrangement Information document on 7 July 2003 and a final revised Access Arrangement and Access Arrangement Information document on 23 October 2003 in the wake of the ACCC's Final Decision. 84 The MSP was defined in the revised Access Arrangement to comprise the main pipeline from Moomba to Wilton, lateral pipelines from Dalton to Canberra, Young to Lithgow, Young to Wagga Wagga and Burnt Creek to Griffith. As mentioned previously the pipeline from Wagga Wagga to Culcairn was referred to as the 'Interconnect'. The Moomba to Wilton pipeline, the Wagga lateral, the Canberra lateral and the Interconnect were jointly designated the 'Main Line' in the Access Arrangement. The northern lateral and the Griffith lateral were jointly referred to as 'Regional Laterals'. All of the pipelines other than the Interconnect were Covered Pipelines under the Code. The Interconnect was treated as part of the Main Line for the purposes of the Access Arrangement. 85 The categories of service offered under s 5 of the revised Access Arrangement comprised: (a) a Reference Service for firm transport designated the Firm Service; and (b) a Negotiable Service with negotiable tariffs and negotiable terms and conditions. The services were described in more detail in ss 6 and 9. EAPL said it would provide the Firm Service under the Transportation Agreement on terms and conditions consistent with the Access Arrangement including the principles. 86 In s 8.2 EAPL stated the principles applicable to the development of its Reference Tariffs. 87 In s 8.5 it was stated that the ICB was allocated between the separate pipelines comprising the MSP. If at the time of a review of the Access Arrangement any one or more of the pipelines had ceased to be a Covered Pipeline then the Capital Base as at 1 July 2000 for those pipelines which remained covered would be the amounts set out in a table. EAPL's Further Revised Access Arrangement Information – July 2003 88 Further revised Access Arrangement Information was provided to the ACCC by EAPL in July 2003. In s 3.1.2 EAPL discussed its calculation of DORC: 'DORC has been calculated by reference to the NPV methodology for deriving DORC from ORC. This forward‑looking methodology is consistent with the methodology and meaning of DORC as set out in the Commission's Draft Statement of Regulatory Principles and the 1998 Final Decision on the Victorian gas transmission system now owned by GasNet. It is also consistent with the evidence accepted by the WA Supreme Court in the Epic Decision and with the view expressed by the Commission's consultants.' 89 The economic written down value of the MSP which reflected past under‑recoveries of depreciation and return on assets was said, at s 3.1.3, to reflect the original intention that the pipeline's costs would be recovered over its life with early under‑recoveries being recouped in later years. Based on the ACCC's calculation of the economic written down value of $1,291 million at 30 June 1994 EAPL estimated a value of $1,700 million at 30 June 2000. The ACCC's Final Decision – 2 October 2003 90 In its Final Decision the ACCC set out a table identifying differences between various elements of the EAPL proposal as amended and the ACCC's final decision. Differences relevant for present purposes were as follows: Elements EAPL's Proposal ACCC's Final Decision DORC $972m $715m Based on the NPV of the first 'n' years' cash flows of a new entrant in a hypothetically contestable market where 'n' is the remaining life of the existing asset. Based on 'straight line depreciation' methodology for deriving DORC from ORC. ICB $779m $559m Based on EAPL's 'reasonable expectations under the prior regulatory regime'. Represents the NPV of EAPL's cash flows at 1998. ORC written down on basis of a 50 year asset life, the deprecation rate assumed by EAPL in the past. Tariff methodology, tariff path and forecast revenue NPV methodology NPV methodology Price path approach to setting tariffs using the CPI‑X mechanism. Price path approach to setting tariffs using the CPI‑X mechanism. X factors and average nominal revenues specified. Higher X factors and lower average nominal revenue per year over the Access Arrangement Period set out. Costs allocation and tariff setting EAPL proposed allocating costs between two pipeline systems: the main line and regional laterals. Only one Reference Tariff was proposed, and this tariff was divided into a capacity and throughput charge. The Final Decision accepts the approach proposed by EAPL. 91 The ACCC's Final Decision then addressed key issues. The first of these, grouped together, were Reference Tariff methodology, tariffs and revenue. The ACCC observed that as the NPV and price path methodologies used by EAPL are set out in the Code, it could have no objection to their use. It did, however, have concerns with individual parameters proposed by EAPL and had adopted different values for the ICB, rate of return, non‑capital costs and volumes. 92 The ACCC referred to EAPL's submission, based on s 8.10(g) of the Code, that the ICB should be valued at $779 million based upon 'reasonable expectations under the prior regulatory regime'. The ACCC did not accept that an ICB of $779 million was underpinned by the previous regulatory regime or that it formed part of the 1994 Sale Agreement with the Australian Government. It did not consider that EAPL's figure satisfied the criteria in s 8.10(g). It went on: 'For the purposes of the Final Decision the Commission considers that the appropriate value for the ICB is $559.3 million. This valuation is based on the optimised replacement cost (ORC) of the assets, which the Commission has, over the period 1976 to 2000, depreciated on the basis of a 50 year asset life (the life assumed in the past by EAPL for depreciation purposes). Future depreciation charges, however, are based on an 80 year asset life, which EAPL submitted is now the useful life of the MSP and which the Commission has accepted. In determining the value for the ICB, the Commission has placed significant weight on section 8.10(f) of the Code which provides for consideration to be given to the basis on which tariffs have been (or appear to have been) set in the past, economic depreciation and historical returns. The Commission did not consider it appropriate to revalue the asset base upwards as a result of the variation to the useful life from 50 to 80 years. Revaluations upwards as a result of extensions to the useful life of an asset would result in the asset owner more than recovering its efficient costs over the life of the asset.' 93 Following a detailed discussion of its Draft Decision, submissions in response to it and its responses to those submissions, the ACCC set out its conclusions on the question of the ICB. It began by observing that s 8.11 of the Code provides that the value of the ICB should not normally fall outside the value of Depreciated Actual Cost (DAC) and DORC. It did not consider that the circumstances of the MSP would warrant a value outside this range. To support its valuation of the ICB at $559 million it gave 'considerable weight' to s 8.10(f) of the Code. It took as a starting point the value of ORC which it depreciated on the assumption of a 50 year asset life to 2000 consistent with the useful asset life previously assumed by EAPL. For the period from 2000 onwards the ACCC accepted and used the 80 year life, which EAPL had submitted was the current useful life of the system. This involved what was described as a 'kinked' depreciation. 94 The ACCC said that, having regard to all the relevant factors in s 8.10 of the Code, it considered that a value for the ICB of $559 million best satisfied the objectives contained in s 8.1. It considered that three criteria of s 8.1 were particularly relevant. They were: recovery of efficient costs (s 8.1(a)), replicating the outcomes of a competitive market (s 8.1(b)) and not distorting investment decisions (s 8.1(d)). The ACCC noted the relationship between ss 8.1(a) and 8.1(b) and comments of the Full Court in Re Michael that over time prices in a competitive market would replicate efficient costs. 95 The ACCC did not consider that a DAC of $100 million would satisfy ss 8.1(a) and 8.1(b) given the policy of the previous owner, which was the Australian Government, not to earn a commercial rate of return. It then said: 'In addition, the Commission does not consider that a value equal to DORC of $715 million and based on an 80 year life is appropriate, since a 50 year life has been assumed in the past. If the useful life of an asset changes at a particular point in time it is appropriate that the residual value of the asset would then be depreciated over the revised useful life. However, an extension to the useful life should not necessarily lead to an upward revision of the asset value. To do so would allow the asset owner to recover more than the efficient costs of the asset over the life of the asset.' The ACCC considered that a value for the ICB of $559 million based on the useful asset life assumed at 50 years in the past and future depreciation charges based on the current assumed life of 80 years would best allow EAPL to recover efficient costs over the expected life of the pipeline and would replicate the outcomes of a competitive market. 96 The ACCC referred to other matters which it considered supported its conclusion that a value of $559 million best satisfied the s 8.1 criteria. They were as follows: 1. The loss of market share to the EGP. 2. The similarity of tariffs derived from an ICB value of $559 million to those that would be derived under the Hypothetical New Entrant Test (HNET). 97 The ACCC said that the Western Australian Full Court, in Re Michael, had found that the price paid by a Service Provider in acquiring a pipeline prior to the Code was a relevant factor as it could be considered the Service Provider's investment in the asset. Although the ACCC did not consider the price paid by EAPL in 1994 formed the basis of the ICB, the value of the ICB determined by the ACCC would provide EAPL with the opportunity to recover the price it paid after taking account of depreciation and capital expenditure to that date. EAPL's Final Revised Access Arrangement and Access Arrangement Information – 23 October 2003 98 The final revised Access Arrangement submitted by EAPL offered the same services as its preceding Access Arrangement but different tariff calculations for the alternative Coverage hypotheses. 99 It set out tariffs for the period 1 January 2004 to 30 June 2009. The revised Access Arrangement submitted on 30 April 2002 had set out tariffs for the period 1 October 2002 to 30 June 2008. At the time of the final revised Access Arrangement 1 July 2009 was the anticipated date at which revisions would commence. 100 The revised Access Arrangement Information submitted on 29 October 2003 was described in its preamble 'as partially revised' and as addressing: '1. The Commission's requirement to amend the Access Arrangement Information to reflect the removal of the Interconnect from the Access Arrangement; and 2. EAPL's proposed change to the Access Arrangement period.' The ACCC's Final Approval – 8 December 2003 101 After considering EAPL's final revised Access Arrangement the ACCC was not satisfied that it had incorporated all the amendments specified in the Final Decision. The ACCC was also not satisfied that EAPL had substantially incorporated or otherwise addressed its reasons for requiring the amendments. Acting pursuant to s 2.19(c) of the Code, the ACCC made a further Final Decision not to approve the final revised Access Arrangement submitted by EAPL on 23 October 2003. Pursuant to s 2.20(a) of the Code the ACCC drafted and approved its own Access Arrangement for the MSP. 102 As described in its Executive Summary, the form of the Access Arrangement approved by the ACCC under s 2.20(a) closely followed that proposed by EAPL which was deliberately drafted to accommodate a partial revocation of Coverage. Like EAPL's proposed Access Arrangement, the ACCC's Access Arrangement was expressed to apply to 'such parts of the MSP as are covered'. The tariffs were expressed without reference to geographic location but on a distance basis. 103 The ACCC set out a tabular overview of differences between its Final Decision, the EAPL final revised Access Arrangement and the ACCC's Final Approval. That table disclosed the ACCC's acceptance of EAPL's decision to remove the Interconnect from the Access Arrangement. The difference between the values adopted in the ACCC's Final Decision and its Final Approval reflected that removal. This had flow‑on effects to other parameters such as capital expenditure, non‑capital costs, depreciation, revenue and the tariff path. The ICB adopted in the ACCC's Final decision was $559 million. In EAPL's revised proposal it was $756.9 million and in the ACCC's Final Approval it was $545.4 million. The depreciation was shown as $10.5 million on EAPL's revised proposal and $63.8 million in real 2003 dollars in the ACCC's Final Approval. EAPL proposed a return on equity of 11.5%. The ACCC's Final Approval had a return on equity of 11.35%. EAPL's benchmark rating was BBB, that of the ACCC was BBB+. The ACCC also rejected EAPL's claims for a cash flow allowance of $6.73 million for equity issuance, debt raising and asymmetric risk. The remaining differences are not central to the present proceedings. 104 In discussing the ICB in its Final Approval the ACCC noted EAPL's rejection of its value of $559.3 million calculated in July 2003 dollars. The ACCC did not agree with EAPL's arguments and did not consider that it had addressed the concerns raised in the Final Decision. The value of ICB at $545.4 million (real July 2003) reflected the ACCC's Final Decision ICB less the value of the Interconnect. 105 The ACCC accepted EAPL's depreciation methodology in the Final Decision, but did not accept its schedule of depreciation charges. Under the economic depreciation approach proposed by EAPL, depreciation was the residual after other costs were deducted from revenue. Accordingly, the differences in the level of depreciation charges proposed by EAPL and the ACCC could be attributed to the differences in the input factors that comprised the revenue requirements such as the value of the ICB. 106 In relation to the WACC, the ACCC observed that EAPL had accepted an equity beta of 1, forecast inflation and the ACCC's estimation of the effective tax rate. However EAPL had expressed concerns about the terms of the risk free rate and the credit rating assumed for the derivation of the debt margin. EAPL had further submitted that it should receive additional allowances for equity issuance, debt raising and asymmetric risk. The ACCC disagreed with the arguments put forward by EAPL in relation to the risk free rate and its contention that the 10 year bond rate should form its basis instead of rates matching the length of the regulatory period, which was the ACCC's requirement. EAPL's contentions did not undermine the arguments put forward in the Final Decision in support of a BBB+ benchmark. 107 The ACCC maintained its position that the appropriate construction of DORC from ORC was reached by using a straight line approach. It relied upon the reasons given in its Final Decision. EAPL had maintained its earlier arguments that the NPV approach advocated by Agility Management Pty Ltd (Agility) in August 2000 was more appropriate. EAPL had also quoted from a report prepared by National Economic Research Associates (NERA) in connection with the New Zealand Commerce Commission's Gas Control Inquiry in which report NERA stated: 'These recent statements by NERA suggest that the Commission's reliance on NERA's 2002 Report in regard to the difficulties and uncertainties in the cost‑based calculation [NERA's approach to DORC] may have been misplaced.' The ACCC considered that reference to NERA's report in relation to the New Zealand Commerce Commission inquiry had been taken out of context and that EAPL's conclusion was unfounded. It noted that neither itself nor EAPL considered that the ICB should be established at the value of DORC. 108 The ACCC said that in establishing the value of ORC it excluded the 10% contingency allowance which EAPL had included. It considered that the inclusion of an allowance for contingencies might be appropriate when a firm was estimating the costs of constructing a new pipeline. It did not consider that the inclusion was appropriate in determining, for regulatory purposes, the value of ORC of an existing pipeline. The ACCC referred to the observation in the Venton report that it is industry practice for 'known but not identified items' to be allowed for in an item called 'contingency'. The ACCC said: 'Rather than identify and quantify each of these unspecified items, Venton has applied an across‑the-board 10 per cent as an average cost to cover these items. Venton provided only a few examples of areas which justify the inclusion of a contingency factor.' 109 The ACCC saw EAPL's submission of 23 October 2003 as asserting that the ACCC did not rely on two of the factors mentioned in s 8.10(f), namely the basis for past tariffs and historical returns, but focused solely on the matter of economic depreciation. EAPL argued that the ACCC had erred in its consideration of economic depreciation by having regard to the accounting concept of depreciation rather than the economic concept. The ACCC, in its Final Approval, considered this to be an inaccurate characterisation of its decision. It had regard to s 8.10(f) as a whole and had not restricted its analysis in the manner suggested by EAPL. 110 EAPL had submitted that the proper application of s 8.10(f) required the ACCC to have regard to an economic written down value which it estimated at $1,700 million. This was the initial cost of the MSP less economic depreciation to date. The ACCC considered EAPL's proposed written down economic value of $1,700 million. However it gave it little weight in establishing the value of the ICB. 111 The ACCC said that its Final Decision gave weight to the fact that until the year 2000 EAPL assumed a useful life of 50 years for the pipeline. EAPL had said that the ACCC ought not to have given weight to the 50 year asset life assumed by it as this was used for accounting purposes only. The ACCC said: 'Notwithstanding EAPL's comments, the Commission considers that the 50 year asset life is the basis on which tariffs appear to have been set since 1994. It is clear from EAPL's statutory accounts that EAPL assumed a useful life of 50 years (32.5 years remaining useful life) for the MSP to 2000. Moreover, EAPL's "reasonable expectations" valuation, which represented EAPL's estimated future cash flows as at 1998, is based on an assumed asset life of 50 years. The Australian National Audit Office also noted that estimates of the value of the MSP at the time of the 1994 sale were based on the assumption of a 50 year life.' The ACCC thought that the evidence suggested that the assumed 50 year life was not just an accounting convention as argued by EAPL, but had represented the expected life of the pipeline. The fact that the assumed life was now 80 years could be attributed to factors such as the increasing prospect of Moomba becoming a hub for northern gas and the extension of the technical life of the Moomba to Wilton main line through refurbishment. 112 In relation to the 'reasonable expectation' criterion under s 8.10(g) of the Code, the ACCC acknowledged EAPL's submission that the appropriate ICB was represented by the NPV of the cash flows that EAPL would have reasonably expected under the prior regulatory regime which it asserted was at least $784 million. The ACCC had rejected this argument as appeared from the Final Decision. It proceeded on the basis that s 8.10(g) required consideration of reasonable expectations only where they were brought about or underpinned by the prior regulatory regime. The ACCC continued to believe that this was the appropriate construction of that provision. 113 For the purposes of its approved Access Arrangement the ACCC established a value for the ICB of $545.4 million. It stated that: 'In establishing the value of the ICB the Commission considered all the factors in section 8.10 of the Code and weighed them in accordance with the objectives of section 8.1. The Commission considers that a value for the ICB of $545.4 million (real July 2003) best satisfies the requirements of the Code. The Commission's revised access arrangement is drafted accordingly.' The Application for Review before the Tribunal 114 The application began with a global statement in paragraph 2 that the ACCC had made errors in relevant findings of fact and that further, or in the alternative, it had exercised its discretion incorrectly or unreasonably in all the circumstances. In the event the contentions advanced in the application all related to the incorrect and/or unreasonable exercise of discretion. 115 EAPL set out a number of contentions in the application which were particularised in some detail about the ways in which the ACCC was said to have exercised its discretion incorrectly and/or unreasonably. The first group of contentions in paragraph 11 of the application attacked the ACCC's exercise of its discretion as incorrect and/or unreasonable by reference to its decisions, that in the calculation of Reference Tariffs: '(a) the initial capital base (ICB) should be set at $545.4 m; (b) the weighted average cost of capital (WACC) and associated parameters should be based on a return on equity of 11.35%, a risk free rate for a term of 5.5 years and a benchmark rating of BBB+, and should not take into account additional allowances for equity issuance, debt raising and asymmetric risk; (c) the management fee payable to Agility and the marketing fee payable to Petronas would not be incurred by a prudent service provider acting efficiently and should be excluded from non‑capital costs; and (d) the initial prices should be 0.03605 c/GJ/km for capacity and 0.00226 c/GJ/km for throughput for the Mainline and 0.04839 c/GJ/km for capacity and 0.00304 c/GJ/km for throughput for the Regionals and that the X factors to be used in the price path adjustment mechanism should be 1.6% for the mainline and 0.6% for the regionals.' 116 Paragraph 12 attacked the exercise of the ACCC's discretion in the terminology and content of specific clauses of its Access Arrangement. Paragraph 13 specifically attacked the ACCC's exercise of discretion in setting the ICB at $545.4 million in that: '(a) when applying section 8.10(b) of the Code the Commission did not take into account, or adequately take into account, the Depreciated Optimised Replacement Cost (DORC) of the MSP determined by applying a net present value depreciation methodology; (b) the Commission wrongly determined the DORC of the MSP by using a straight line depreciation methodology; (c) further or in the alternative, the Commission failed to take into account, or adequately take into account, as required by section 8.10(c) of the Code, the value of the MSP determined by applying a net present value depreciation methodology to the optimised replacement cost (ORC); (d) in determining the ORC of the MSP the Commission wrongly rejected the allowance of 10% recommended by Venton and Associates; (e) the Commission failed to properly interpret or apply the factors section 8.10(f) of the Code requires the Commission to take into account; (f) further or in the alternative, the Commission failed to take into account the fact that different pipelines within the MSP were constructed at different times and have different asset lives; (g) the Commission failed to take into account, or adequately take into account, EAPL's reasonable expectations as required by section 8.10(g) of the Code; (h) the Commission wrongly relied upon NERA's calculation of prices purportedly derived by use of the hypothetical new entrant test (HNET) as a relevant factor to be taken into account under section 8.10(k) of the Code; (i) the Commission otherwise failed to properly interpret and apply the factors the Code requires the Commission to take into account, including the factors specified in sections 2.24 and 8.1, and failed to appropriately balance those various factors.' 117 Paragraph 14 attacked the ACCC's exercise of discretion in setting the WACC and associated parameters on the basis that: '(a) the risk free rate should have been based on at least the 10 year bond rate and not the 5 year bond rate; (b) the allowance for the cost of debt should have been based on a BBB credit rating and not a BBB+ credit rating; and (c) allowances should have been made for the costs of debt and equity issuance and asymmetric risk.' 118 The Tribunal was asked to vary the decision of the ACCC by substituting for the ICB and WACC determined by the ACCC those proposed by EAPL in its Access Arrangement dated 23 October 2003. An order was also sought to allow the management fee payable to Agility and the marketing fee payable to Petronas as non‑capital costs. It sought an order varying the decision of the ACCC by using 'appropriate initial prices and X factors for the mainline and for the regionals in the price path adjustment mechanism'. 119 Further orders relating to variation of particular clauses of the ACCC's Access Arrangement were also sought. The Tribunal's Reasons for Decision 120 Notwithstanding the broad scope of the grounds of the application the parties had agreed upon particular issues to be determined before the Tribunal. The Tribunal organised its consideration of those matters under three headings as follows: 1. Initial Capital Base 2. ORC 3. Credit Rating 121 In considering the ACCC's approach to the fixing of the ICB the Tribunal said that 'much of the mystery surrounding the establishment of an ICB for an existing pipeline disappears if there is concentration upon the terms of the Code, with the assistance of the Overviews where appropriate'. After setting out the relevant provisions of the Code the Tribunal said (at [13]): 'The ICB is entirely a creature of the Code and what it is and what it does is defined by the Code. It is one integer in a complex of integers used to arrive at an appropriate Reference Tariff. Whilst there is a considerable amount of discretion built into the system for both the operator and the ACCC, each of them, and the Tribunal, is bound by the Code.' 122 The Tribunal's first point was that, by virtue of s 8.12 of the Code, the actual capital cost of a new pipeline when it first enters service is the ICB for that pipeline as '[I]t is assumed that the operator will build the pipeline in the most cost efficient manner'. Its second point was that the ICB as established is not altered or reset save for particular adjustments provided for by the Code such as new facilities investment, capital contributions and capital redundancy. The Tribunal said at [15]: 'The ICB remains the same amount once established although the capital base as such may be adjusted from time to time in accordance with the provisions of ss 8.14‑8.29'. 123 Importantly the Tribunal found that there is no indication in the Code that there is to be discrimination in principle between the operators of existing pipelines and the operators of new pipelines. Given that the ICB is the actual cost of a new pipeline it could be assumed that the objective of the Code in relation to an existing pipeline is to attribute to it a value consistent with that principle. The Code does not contemplate either a subsidy of consumers by fixing an artificially low figure or a bonus to operators by providing an artificially high figure. 124 We observe that although there may not be any indication in the Code that there is to be discrimination in principle between the operators of existing as opposed to new pipelines, that is not to say that the determination of the ICB of an existing pipeline is to be made in the same way as the determination of the ICB of a new pipeline. Indeed, ss 8.10 and 8.11 provide a different method of determining the ICB of an existing pipeline than ss 8.12 and 8.13 provide for the determination of the ICB of a new pipeline. 125 Although the Tribunal said that 'it is fundamental that the ICB is the actual cost of a new pipeline', the structure of ss 8.10 and 8.11 and the factors to be considered in those provisions do not support that proposition. 126 The Tribunal referred to s 8.11 of the Code which requires that s 8.10(a) and (b) will normally set the range of values within which a value pursuant to s 8.10 is to be selected. The Tribunal contrasted DAC, which is a deduction from actual experience and looks back, with DORC, which arrives at an hypothetical value and looks forward. It took ORC as the starting point to ascertain DORC. The amount defined by ORC is depreciated to what might be called a second‑hand value principally because the optimised pipeline would last longer than the existing pipeline. The critical issue in the case as the Tribunal saw it was the method of calculation of that depreciation. 127 The Tribunal said that it follows from s 8.10(c) and (d) that it is necessary to consider other well recognised asset valuation methodologies and to compare the advantages and disadvantages of each methodology under subpars (a), (b) and (c) before turning to the remaining subparagraphs. The factors to which the remaining subparagraphs direct attention could assist in the choice between methods or lead to some adjustment of the result of the chosen method. The Tribunal said (at [19]): 'Those factors would not normally (and perhaps would never) permit recognised valuation methods to be put to one side. In particular, those factors do not warrant departing from a quest for value and entering upon a quest for some form of justice or equity. If the Reference Tariff is capable of being 'tweaked' in that way, that is not to be done by tampering with the ICB. In unusual circumstances, one or more of those factors may have a significant effect upon the assessment of value.' (emphasis in original) 128 We have some difficulty with the Tribunal's identification of the relevant task before the ACCC as being 'a quest for value'. Although s 8.10(a), (b) and (c) refer to the ascertainment of 'the value …', the task to be undertaken is the establishment of a figure for the ICB. Ultimately the quest is not for the appropriate 'value' of the ICB but rather the determination of the figure to be attributed to it having regard to all the factors set out in s 8.10(a) to (k), some of which bear on its value and some of which do not. 129 The Tribunal referred to Re Michael as a case which, while not binding upon it, was entitled to considerable respect. The Tribunal said (at [20]): 'The reasons of Parker J (with whom the other members of the Court agreed) make a case for concluding that the exercise of that regulator's discretion was incorrect or unreasonable having regard to all the circumstances. The difficulty was that the Western Australian Supreme Court had no jurisdiction to intervene on that basis. It was necessary to find error sufficient to enable intervention in accordance with the principles of judicial review of administrative decisions. That was not easy where the Code gives the regulator a large area of discretion. That caused some straining of the construction of the Code and the result should be confined to the facts of the case.' The Tribunal was of the opinion that the facts in Re Michael were too far removed from those in the case before it to make it of any real value. 130 With respect, we do not accept that the Court's reasoning in Re Michael involved a strained construction of the Code. 131 At the threshold of its substantive reasoning, at [25], the Tribunal accepted the submission for EAPL that it was a fundamental error in principle for the ACCC to put aside known valuation methodologies and devise a methodology of its own which adjusted ORC in a novel fashion. The Tribunal found that this approach had no support in the Code or the material on the subject received by the ACCC and was properly described as 'idiosyncratic'. 132 The Tribunal accepted that ss 8.10 and 8.11 of the Code give considerable latitude to the ACCC in assessing the ICB. It acknowledged the limits on its own power to interfere. It accepted also that valuation is far from an exact science and that there is considerable room for choice and discretion in the task which will nearly always have aspects of estimation and approximation. Nevertheless an error in principle could always be reviewed (at [27]): 'It was incorrect and unreasonable to adopt a methodology which does not reflect the terms of the Code and which is not supportable in principle. We are satisfied that the ICB fixed by the Final Approval cannot stand and must be set aside. Before considering what course should be followed in view of this conclusion, we should deal with some of the points argued.' 133 The Tribunal could not discern any reasonable basis upon which reference to s 8.10(f) could justify the method of adjusting ORC chosen by the ACCC. The Final Decision in relation to that factor had dealt with three matters. It rejected a value based upon the economic depreciation of the MSP which would be somewhere between $1291 million calculated by the ACCC in its Draft Decision and $1700 million claimed by EAPL in its updated value. That rejection (even if correct) in the Tribunal's opinion provided no independent support for the choice made. The second matter was the ACCC's reliance on the proposition that a 50 year asset life had been assumed in the past. It was not clear to the Tribunal how this fitted with s 8.10(f). The most that could be deduced from material before the ACCC was that tariffs set for non‑AGL customers after 1994 may have been calculated on the basis of a 50 year asset life consistent with certain financial accounting records. The setting of that market tariff could not be assumed to have been done on a basis comparable with the way in which the Code sets a regulated tariff. There was no logical or rational link between the accounting treatment of depreciation in the past on the one hand, and the true estimate of the life of the pipeline in relation to the forward looking deduction of DORC from ORC on the other. The third matter was the loss of market share to EGP. Here again, the link with s 8.10(f) was difficult to detect. The Tribunal found no logical or rational connection between the actual and potential loss of market share to EGP on the one hand and the calculation of DORC from ORC on the other. 134 The Tribunal held that the ACCC had misconstrued s 8.10(f) of the Code. The factors in that section, considered together, pointed to a set of circumstances in which the combined effect of past history was such as to require a modification of normal valuation methods which might throw up an unreasonably high ICB which would cause an unreasonably high tariff. The ACCC did not apply that reasoning in the present case. The Tribunal saw no proper basis for doing so. It said (at [29]): 'When the past history of the operation of the MSP is considered as a whole, it is plain that the operation has been, and remains, seriously in debit which will never be recovered. Thus the users of the MSP have been subsidised at the expense of the operator of the pipeline. The tariff that was set following acquisition of the pipeline by EAPL can be assumed to be set at a more realistic level and is indeed at a level in excess of that proposed by the ACCC. Thus there would be no tariff 'shock' if the EAPL proposal were accepted. It is not possible to draw the conclusion that the few years of operation of the MSP by EAPL has caused such a gross over‑recovery of depreciation as to require offset in setting the ICB under the regulatory regime.' 135 The ACCC had taken the view that the tariff it proposed was consistent with the HNET tariff derived by NERA. However the Tribunal rejected that approach as a substitute for deriving the ICB in accordance with ss 8.10 and 8.11. 136 The Tribunal found substance in a submission by EAPL that the ACCC had reasoned to produce a predetermined ICB which would reflect the price paid for the pipeline by EAPL in 1994 on the basis that to allow a greater ICB would be to give a 'windfall' to the purchaser of the privatised asset. As the decision in relation to the ICB was to be set aside in any event it was not necessary for the Tribunal to come to any conclusion in relation to that contention. The Tribunal observed, perhaps somewhat unnecessarily in the circumstances, that it would be wrong of the regulator to justify a decision taken for a particular reason by reference to other reasons. It acknowledged the ACCC's duty to be conscious of the interests of parties other than the proponent of the Access Arrangement and to scrutinise carefully the information provided in support of it. The ACCC, it said, must also have regard to the legitimate business interests of the proponent and not put itself in an adversary position in relation to the proponent so that it might be perceived as a champion of other interests such as those of consumers. 137 The Tribunal observed that, for reasons explained in the Draft Decision of the ACCC, if the purchase by EAPL had been an arm's length transaction effected before the regulatory regime came into force, then the price paid might well have been a reliable guide to the second hand value of the existing pipeline as a relatively recent market transaction. Reference to that price would have been another well recognised asset valuation methodology within the meaning of s 8.10(c). But the purchase was not an arm's length transaction in that sense. The price paid was an unreliable guide to the true value of the pipeline at that time. The lack of an open and unconditional tender almost certainly meant that full capital value was not realised. In that sense the Tribunal accepted EAPL might be seen to have received a bargain or a windfall. However the primary quest under the Code was for a proper contemporaneous value from which to deduce a tariff that would replicate a hypothetical competitive market. It was not to provide subsidies to customers. 138 The Tribunal recognised that the ACCC was confronted with the unusual circumstance of the 'discovery' of a further 20 years' life of the main line to Wilton after Coverage and well after lodgment of the Access Arrangement, along with a new basis for deducing DORC from ORC. 139 The Tribunal saw the key to DORC as a comparison between the lifetime of the hypothetical optimised pipeline with the remaining life of the existing pipeline, not of some hypothetical partially optimised pipeline. It was said to be open to the ACCC to take the view that the existing MSP was to be considered as it stood, not as it might stand at some indeterminate time in the future after refurbishment. By the time that was to occur technology might have again changed in various ways. It would have been open to the ACCC to take the view that it would be appropriate to calculate DORC on the basis of the life of the pipeline as it stood, namely 60 years for the Moomba to Wilton section and 80 years for the Young to Culcairn section. That was EAPL's approach up to the change in ownership. The Tribunal's reading of the decisions of the ACCC indicated that were it not for the issue caused by the claimed extended life, DORC would be the preferred method of fixing the ICB. 140 The Tribunal said that if it were satisfied that straight line depreciation should be used to deduce DORC from ORC it would be inclined to avoid further delay in the matter and fix the ICB based upon DORC itself. However the theoretical underpinning of DORC had progressed over the years to the point where it could now be recognised that straight line depreciation was too crude a tool to be used where there was the opportunity for a more sophisticated analysis. The materials before the ACCC, including its own Draft Statement of Principles, recognised that a net present value approach was required for the most reliable result to be achieved, albeit based upon costs rather than revenue. The Tribunal recognised that there would always be differences of opinion about the application of these principles to a particular factual situation. Their resolution was the function of the ACCC, rather than the Tribunal. When the matter was reconsidered attention should be directed to the proper application of a NPV approach to depreciation. Where the value attributed to the ICB would have a continuing effect for the balance of the life of the pipeline, it was appropriate that there be a serious effort made to arrive at the correct result. 141 The Tribunal considered whether the Venton contingency of 10% was properly included in the calculation of ORC. It found the ACCC's reasoning on the exclusion of the contingency to go only to the quantum of Venton's estimate of the contingency and not to explain the exclusion of the contingency altogether. As there was material on quantum it was preferable, in the Tribunal's opinion, that it resolve that matter rather than send it back to the ACCC for reconsideration. It did not follow that the 10% contingency originally claimed by EAPL should be allowed in full. It referred to a letter from Venton of 12 May 2003 in which it was stated, inter alia: 'A more detailed analysis may show that 7.5% would have been a more appropriate allowance.' Absent any alternative percentage being advanced by any other expert in the field, the Tribunal was of opinion that the ORC should include an allowance for contingencies of 7.5%. 142 As to the credit rating, the parties were agreed that the Tribunal should determine whether the benchmark credit rating should be BBB or BBB+. EAPL had submitted that the ACCC was wrong and acted unreasonably, concluding that the BBB+ was the appropriate proxy credit rating because: (a) three of the four companies in the ACCC's table upon which it had relied had a BBB rating and one had an A rating; (b) the only reasonable conclusion to be drawn from the table was that EAPL should have been assigned a BBB not a BBB+ rating. The Tribunal accepted EAPL's submission. It held that the effect of the ACCC's decision was to distribute part of the A rating of AGL to the other three members of the class in a crude averaging exercise. It found no logic or reason for that approach and no material to suggest it had any support in the theory or practice of statistics. If AGL were put to one side, the only rational conclusion from the chosen class was that a rating of BBB was appropriate. The Application for Review 143 The application by the ACCC for review of the Tribunal's decision by this Court was said, on its face, to be made pursuant to and invoking the jurisdiction of the Federal Court under: '(1) Sections 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 ("ADJR Act") (by reason of, inter‑alia, sub‑paragraph 2(d) of Schedule 3 thereto together with the Gas Pipelines Access (South Australia) Act 1997, the Gas Pipelines Access (NSW) Act 1998 and the Gas Pipelines Access Act 1998 (ACT)); (2) further or alternatively, Sections 39B(1) and (1A)(a) and (c) of the Judiciary Act 1903; (3) further or alternatively, Section 15 of the Gas Pipelines Access Act 1998 (ACT); (4) further or alternatively, section 163A of the Trade Practices Act 1974; and (5) further or alternatively, the associated and accrued jurisdiction of this Court.' 144 There were some seven grounds of review, the first three of which were heavily particularised. There is no point in seeking to reproduce the grounds in detail here. It suffices to say that in summary they were as follows: 1. Error of law in the construction and application of ss 8.10 and 8.11 of the Code in the Tribunal's reasons for decision published on 8 July 2004. 2. Error of law in the approach taken by the Tribunal to its own review function under s 39(5) of the Access Law in its reasons published on 18 March 2005 and in its findings adverse to the ACCC in those reasons. 3. Taking into account irrelevant considerations relating to its observations on whether the ACCC had reasoned to a predetermined result. 4. Failure to take relevant considerations into account by reference to the terms of the Code and the evidence. 5. Findings made without any or any adequate evidence to support them. 6. Findings that were unreasonable and therefore an improper exercise of power. 7. Jurisdictional errors such that the decision was not authorised by s 39 of the Access Law and, alternatively, was beyond the power conferred by s 44ZZOA of the TPA. 145 The relief sought by the ACCC was an order setting aside the decision of the Tribunal and further and alternatively an order for a writ of certiorari quashing the decision. The ACCC also sought declarations that its calculation of the ICB in its Final Decision and Final Approval was valid and in accordance with ss 8.10 and 8.11 of the Code and that the Tribunal had acted ultra vires s 44ZZOA of the TPA and without jurisdiction. In the further alternative, an order for the issue of a writ of mandamus against the Tribunal was sought and further, or alternatively, an order remitting the matter to it for further determination in accordance with law. The Constitutional and Statutory Basis of the Functions Exercised by the ACCC and the Tribunal 146 The ACCC and the Tribunal in discharging their functions as Relevant Regulator and Appeal Body under the gas access law applicable in this case, do so under one or other of the South Australia, New South Wales or ACT Gas Acts. The Commonwealth Gas Act applies only to the adjacent areas and certain territories not relevant for present purposes. There is no suggestion that the ACCC or the Tribunal was acting under that Act. 147 The proposition that administrative bodies set up under Commonwealth law can exercise functions conferred by State law as part of a co-operative legislative scheme is well established. R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 concerned the powers of the Coal Industry Tribunal constituted by complementary Commonwealth and State Acts and given powers and functions under both statutes. Mason J said (at 563): '…the Constitution, when it divides legislative powers between the Parliaments of the Commonwealth and the States, necessarily contemplates that there will be joint co‑operative legislative action to deal with matters that lie beyond the competence of any single legislature. As with an exercise of the executive power for a co‑operative purpose, Commonwealth legislative action for such a purpose is subject to the limitation that the end to be achieved and the means by which it is to be achieved are consistent with and do not contravene the Constitution. It is an integral element in joint legislation for a co‑operative purpose that a legislature, whether Commonwealth or State, can give its authority or office holder a capacity to receive additional powers and functions as may be conferred by another legislature.' 148 A Commonwealth administrative body or tribunal which lacks authority under Commonwealth law to exercise functions under State law, cannot validly be given such functions by unilateral State legislative action. In Duncan, Brennan J pointed out that if the Commonwealth Act had merely created the tribunal and vested federal powers in it without reference to State powers any attempt by a State Act to vest similar State powers in the same tribunal would fail. This would not be because of any constitutional incapacity in the Commonwealth tribunal to have and to exercise State power, but because the Commonwealth Act would be construed as requiring the tribunal to have and to exercise only such powers as the Commonwealth Parliament had chosen to vest in it. His Honour's observation was quoted in the majority joint judgment in Re Cram; ex parte NSW Colliery Proprietors' Association Ltd (1987) 163 CLR 117 at 127 as explaining '[t]he necessity for authorization under the Commonwealth Act for the Tribunal's exercise of powers conferred by the State Act …'. Duncan and Re Cram both concerned the Coal Industry Tribunal which derived its existence from Commonwealth and State statutes. However the reasoning that it required Commonwealth legislation authorising the exercise of State functions by a Commonwealth tribunal was equally applicable to a body set up under Commonwealth laws only. 149 When a Commonwealth law is purely permissive in relation to the exercise of State functions or powers absent the imposition of any correlative duties, then it seems that the exercise by the Commonwealth authority of functions under State law does not require support from any Commonwealth head of power. However the State law may purport to impose a duty on the Commonwealth authority. There can be no duty imposed by a State law upon a Commonwealth authority unless Commonwealth law authorises and thereby itself imposes the duty. In that event it seems a Commonwealth law, insofar as it imposes a duty to perform the functions or powers purportedly conferred by State law, must be referrable to a Commonwealth head of power. 150 These general observations are reflected in the judgment of the High Court in Hughes which concerned the conferral on the Commonwealth Director of Public Prosecutions of prosecutorial functions for offences under the former Corporations Law (WA). The Court set out two propositions (at 553): 'The first is that a State by its laws cannot unilaterally invest functions under that law in officers of the Commonwealth; the second is that a State law which purported to grant a wider power or authority than that the acceptance of which was prescribed by Commonwealth law would, to that extent, be inconsistent with the Commonwealth law and invalid under s 109 of the Constitution.' These propositions however did not provide any basis for the imposition by federal law upon Commonwealth officers of duties to perform functions or exercise powers created or conferred by State law. Such a federal law must be supported by a head of power. 151 In the Hughes case, as the Court observed at 553, what was involved in the relevant federal legislation was more than a consent or permission by the Commonwealth for the exercise by its officers of additional powers and functions derived entirely from State laws: 'These additional functions and powers are imposed by federal law as a matter of duty or obligation, lest there be an abdication of State authority with no certainty of its effective replacement.' In that case, as in the present, where there was an intergovernmental agreement, a Commonwealth law imposing duties upon Commonwealth officers or bodies to carry out functions under State law pursuant to the agreement might be seen as 'incidental to the execution of any power vested…in the Government of the Commonwealth…' within the meaning of s 51(xxxix) of the Constitution. The relevant power to which such legislation is arguably incidental is the executive power conferred by s 61 of the Constitution. In Hughes the Court quoted at 555 from the observations of Mason J in Duncan that the scope of the executive power: '… extends to entry into governmental agreements between Commonwealth and States on matters of joint interest, including matters which require for their implementation joint legislative action, so long at any rate as the end to be achieved and the means by which it is to be achieved are consistent with and do not contravene the Constitution.' 152 The Court in Hughes said at 555 that it is plain enough that s 51(xxxix) empowers the Parliament to legislate in aid of the exercise of the executive power but added the caveat that '… it would be another matter to conclude that this means that the Parliament may legislate in aid of any subject which the Executive Government regards as of national interest and concern …' 153 The Court found that the scope of the executive power and of s 51(xxxix) in aid of it, remained open to some debate which it was unnecessary to continue in that case. However the offences whose prosecution under State law was in issue related to the making of investments in the United States. The Commonwealth law under which the DPP prosecuted them was, in that context, supportable by the trade and commerce power under s 51(i) of the Constitution (trade and commerce with other countries, and among the States) and the external affairs power under s 51(xxix). The Court also observed, at 557, that the judgments in Duncan supported the proposition that the powers conferred upon the parliament by s 51(xxxv) (conciliation and arbitration) and s 51(xxxix) supported legislation to establish a tribunal to exercise federal and State powers where it might better achieve the objects of resolving and settling interstate disputes in the coal industry. 154 There is no constitutional challenge to the validity of the legislative arrangements under which functions and powers are conferred upon the ACCC and the Tribunal in connection with the administration of the SA Gas Act in the present case. The jurisdiction of the Court may, to some extent, be seen as linked to the valid conferral of those functions. It seems reasonable to say, without expressing any concluded view, that the powers and functions conferred upon the ACCC and the Tribunal under the State Gas Access Laws, both before and after the 2004 amendments to the TPA were supportable at least by reference to the interstate trade and commerce power in s 51(i) of the Constitution. The Jurisdiction of the Court 155 The power of the Commonwealth Parliament to confer jurisdiction on the Federal Court derives from s 77(i) of the Constitution. The matters in respect of which it may confer such jurisdiction, which are relied upon in these proceedings include: . any matter arising under laws made by the parliament (s 76(ii)); . any matter in which the Commonwealth or a person suing or being sued on behalf of the Commonwealth is a party (s 75(iii)); . any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer of the Commonwealth (s 75(v)). 156 Consideration of whether the Court has jurisdiction to hear and determine the ACCC's application must proceed upon the basis that the functions conferred upon the ACCC and the Tribunal under the gas pipelines access regime remain validly conferred. 157 The first source of jurisdiction asserted is that conferred upon the Court by s 8(1) of the ADJR Act. To attract that jurisdiction the application to the Court must relate to a decision of the Tribunal to which the Act applies within the meaning of that term as defined in s 3. The first requirement is that the Tribunal's decision was a decision of an administrative character. That is not in dispute. The second requirement is that the decision be made under a relevant enactment. In its application to the Tribunal EAPL stated that it applied under s 39(1) of the 'Gas Pipelines Access Law'. The relevant provision is s 39 of Schedule 1 of the SA Gas Act. The SA Gas Act was able to be invoked because the MSP passes through South Australia, New South Wales and the ACT. Each of the State and Territory Gas Acts provides that a decision taken under the Gas Pipelines Access legislation of one scheme participant is taken to be made under the Gas Pipelines Access legislation of each other scheme participant under which a part of the relevant pipeline is situated. In this case the Tribunal made its decision under the SA Gas Act and under the provisions of the Gas Access Law scheduled to it. Specifically the decision was made under s 38 of Schedule 1 to the SA Gas Act. 158 It can be stated in passing that the provisions of the NSW and ACT Gas Acts giving effect to the Tribunal's decision in NSW and the ACT did not alter the character of its decision as one made under the SA Gas Act. The attachment of legal consequences to that decision in New South Wales and the ACT does not make it a decision under the New South Wales or ACT statutes. 159 The Tribunal decision was made under a State law. Its power to make that decision depended ultimately upon the provisions of Pt IIIA of the TPA to which reference was made earlier. That power is not disputed. However it is questionable whether the decision could be treated as one made under the TPA. 160 The jurisdiction conferred upon the Federal Court by the ADJR Act covers administrative decisions made under a law of the Commonwealth and administrative decisions made by a Commonwealth authority under an enactment referred to in par (ca) of the definition of 'enactment'. The latter category applies to the Tribunal because it is a Commonwealth authority exercising a function conferred by a State law mentioned in Schedule 3, namely the SA Gas Act. Thus the Tribunal's decision is a decision to which the ADJR Act applies. 161 The constitutional source of the jurisdiction to review the Tribunal decision is to be found in s 75(iii) of the Constitution read with s 77(i). The Tribunal is named as a respondent to the application on the basis that orders are sought which will bind it even though it quite properly takes no substantial part in these proceedings. The matter before the Court is therefore a matter in which the Commonwealth is a party within the meaning of s 75(iii). On that basis the Court's jurisdiction under the ADJR Act is properly invoked. 162 The ACCC also invoked the jurisdiction conferred by s 39B(1) of the Judiciary Act 1903 (Cth) on the basis that it claims relief by way of mandamus against the Tribunal. Once the jurisdiction to grant mandamus is properly invoked, certiorari may be sought as ancillary relief under s 23 of the Federal Court of Australia Act 1976 (Cth): R v Cook; ex parte Twigg (1980) 147 CLR 15; R v Toohey; ex parte Northern Land Council (1981) 151 CLR 170. The persons comprising the members of the Tribunal are officers of the Commonwealth within the meaning of s 39B(1) even when carrying out functions under State law: Re Cram at 131. The ACCC also relies upon the fact that it seeks declaratory relief under s 39B(1A)(a). These submissions are accepted. The Court has jurisdiction to entertain the applications for mandamus and for declaratory relief and ancillary relief claimed by the ACCC pursuant to the provisions of the Judiciary Act. 163 The ACCC has demonstrated, for the reasons set out above, that the Court has jurisdiction to entertain its application for judicial review of the Tribunal's decision. The function of the ACCC as Relevant Regulator 164 It is desirable to have a clear picture of the role of the ACCC as Relevant Regulator in relation to Access Arrangements. Without canvassing again all of the provisions of the Code the steps which the ACCC may be required to take can be summarised as follows: 1. Receipt of Access Arrangements and Access Arrangement Information. 2. Verifying that the Access Arrangement Information enables Prospective Users to understand the derivation of elements in the proposed Access Arrangement and enables them to form an opinion about the compliance of the Access Arrangement with Code requirements (s 2.6). 3. Ensuring that Access Arrangement Information complies with the Code by requiring the Service Provider to make changes if necessary (s 2.9). 4. Notification of the Access Arrangement and Access Arrangement Information to interested persons and to the public (s 2.10). 5. Receipt and consideration of submissions on the proposed Access Arrangement (ss 2.11‑2.12). 6. Issue of a draft decision relating to approval of the Access Arrangement and amendments that are required to be made (s 2.13). 7. Receipt and consideration of submissions on a draft decision (s 2.15). 8. Issue of a final decision which either: (i) approves the Access Arrangement or a revised Access Arrangement consistent with the draft decision; or (ii) does not approve the Access Arrangement and sets a date for the submission of a revised version (s 2.16). 9. Approval by the Relevant Regulator of its own Access Arrangement if the Service Provider's Access Arrangement or revised Access Arrangement has not been approved (s 2.20). 10. When the Service Provider has not submitted an Access Arrangement from the outset, the Relevant Regulator may approve its own Access Arrangement (s 2.23). 11. The Relevant Regulator is required to take into account a number of factors in assessing a proposed Access Arrangement for approval or non‑approval (s 2.24). 165 In assessing an Access Arrangement proposal and deciding whether to approve it or not, the ACCC is not at large simply to substitute its own preferred Access Arrangement. In Application by GasNet Australia (Operations) Pty Ltd (2004) ATPR 41‑978 the Tribunal, on which Cooper J presided, held that it was beyond the power of the ACCC as Relevant Regulator not to approve a proposed Access Arrangement simply because it preferred a different Access Arrangement which it thought could better achieve the statutory objectives: '[30] This follows because the power of the Relevant Regulator to require amendments, or to itself draft and approve its own AA, does not arise until it is of the opinion that the AA proposed by the Service Provider does not comply with the Code, and in determining the question of compliance, it must act in accordance with s 2.24 of the Code….' This conclusion follows from the language of the Code. But once the threshold of non‑approval is properly crossed, the ACCC is at large in the content of its own Access Arrangement albeit it must be within the framework provided by the Code. 166 When considering its own Access Arrangement the role of the ACCC in establishing the ICB for a Covered Pipeline is illuminated by the discussion in Re Michael of the function of the Relevant Regulator in that case. Parker J, who wrote the judgment with which the other members of the Full Court agreed, observed that there are many points at which the principles enunciated in s 8 of the Code call for evaluation, the exercise of judgment, the formation of opinions and other exercises of discretion by the Regulator (at [73]). His Honour described the task of the Regulator under s 8.10 as not simply one of valuation. The task is to 'establish' the ICB. After referring to the various factors identified in s 8.10 his Honour said (at [74]): 'These various factors bring into account a number of matters which are not directly related to the value of the pipeline in the ordinary sense, and which by their nature require the consideration of disparate issues which may well tend in different directions. The process is more than one of mere valuation. There is, necessarily, a discretionary evaluation of what weight should be attached to each of these factors in the ultimate establishment of the Capital Base. Factor (k) enables the Regulator to take into account any other factor which the Regulator considers relevant, which in itself requires further evaluation and discretionary judgment by the Regulator.' 167 His Honour referred also to the principle stated in s 8.11 that the ICB 'normally should not fall outside the range of values determined under s 8.10(a) and (b).' He said (at [75]): 'There is obvious tension between the requirement of s 8.10 to consider factors (c)‑(k) in establishing the Capital Base and the provision in s 8.11 that, normally, the resulting Capital Base should not fall outside the range determined under factors (a) and (b). The process clearly involves the exercise of discretion in the weighing of divergent considerations.' His Honour added that the exercise of the Regulator's discretion would prima facie be guided by the objectives of the Code set out in s 8.1. These observations accurately reflect the nature of the process to be undertaken by the Relevant Regulator in formulating and approving its own Access Arrangement. 168 In summary, the way in which the Code defines the functions of the Relevant Regulator and their exposition in Re Michael and by the Tribunal in GasNet support the following general propositions about the nature of the Relevant Regulator's functions under the Code: 1. The Relevant Regulator administers the lodgment by Service Providers of Access Arrangements and Access Arrangement Information. 2. The Relevant Regulator invites and receives public and interested party responses to proposed Access Arrangements. 3. The Relevant Regulator supervises proposed Access Arrangements and Access Arrangement Information for compliance with the Code. 4. The Relevant Regulator may not substitute its own Access Arrangement for a proposed Access Arrangement or a revised version thereof unless of the opinion that the proposed Access Arrangement does not comply with the Code. 5. If of the opinion that a proposed Access Arrangement or revised version does not comply with the Code, the Relevant Regulator is empowered to formulate and approve its own Access Arrangement and is, subject to the Code, at large with respect to the terms of that Access Arrangement. 6. In establishing an ICB for the purposes of an Access Arrangement the Relevant Regulator necessarily makes discretionary decisions relating to the weight to be attached to various factors under the Code, the application of the principles established by the Code and the application of the rule that normally the ICB should not fall outside the range of values determined under s 8.10(a) and 8.10(b). The Review Function of the Tribunal 169 As appears from s 39 of Schedule 1 to the SA Gas Act, the role of the Tribunal in reviewing the ACCC's decision, upon application by a Service Provider, is constrained in two ways. The first constraint is imposed by the limited grounds upon which an application for review can be made. The second is imposed by the limited materials which can be considered by the Tribunal in exercising its review function. 170 The grounds upon which an application can be made to the Tribunal under s 39(1) are confined by s 39(2)(a) to: (i) error in the ACCC's findings of fact; (ii) that the exercise of the ACCC's discretion was incorrect or was unreasonable having regard to all the circumstances; (iii) that the occasion for exercising the discretion did not arise. It is also provided in s 39(2)(b) that an application under subs (1) may not raise any matter not raised in submissions to the ACCC before its decision was made. The constraints in s 39(2) are supported by the listing in s 39(5) of the matters which the Tribunal is permitted to consider. In effect, the Tribunal is limited by s 39(5)(ab) to (f), to the materials which were before the ACCC when it made its decision. It is also implicit in the limitation imposed by s 39(5)(a) that the Tribunal does not have an inquisitorial role in the conduct of a review. It cannot decide the matter on grounds or contentions not put before it by the parties to the review. The review which may be sought by a Service Provider under s 39 is narrower than the review which can be undertaken pursuant to s 38 on the application of other persons adversely affected by a decision of the ACCC as the Relevant Regulator: Application by Epic Energy South Australia Pty Ltd (2003) ATPR 41‑932. Against that background it is necessary to consider the grounds upon which review can be sought and the significance of their content to the nature of the review process. 171 The first ground is error in the Relevant Regulator's finding of facts. Given the limitations imposed by s 39(5) this is a ground which can only be made out by reference to the materials which were before the ACCC. Findings of facts may include findings of the following kind: 1. The existence of an historical fact being an event or circumstance. 2. The existence of a present fact being an event or circumstance. 3. An opinion about the existence of a future fact or circumstance. The ACCC's function under the Code involves assessment not only of historical and present facts but also of expert opinion on various matters relevant to the fixing of a Reference Tariff. The term 'findings of fact' should be interpreted broadly enough to be meaningful in relation to the function of the ACCC under review. It should encompass opinions formed by the ACCC based upon approaches to the assessment of facts or methodologies which it has chosen to apply. The question of what constitutes a finding of 'fact' varies according to the statutory context in which that word or like words are used. In the judgment of McInerney J in Morley v National Insurance Co [1967] VR 566 at 567, a question arose about what constituted a 'fact' for the purposes of s 55 of the Evidence Act 1958 (Vic) which makes admissible certain documents containing statements by deceased persons tending to establish any fact. McInerney J said: 'It may be that the phrase "a fact" must be given an expanded meaning equivalent to some matter in issue to be established in the proceedings. Indeed, Wigmore, in his work on Evidence, 3rd ed., vol 1, p. 1, para. 1, points out that, in one sense, "everything in the cosmos is a fact or a phenomenon". In my view, it would be contrary to the policy of the legislation to give a restricted meaning to the word "fact" so as to exclude a statement of opinion by an expert.' 172 In reaching findings of fact in this broad sense the ACCC will necessarily make choices of a discretionary character as was pointed out in Re Michael. An example is the choice between permitted methodologies for the calculation of total revenue mentioned in s 8.4 of the Code. Such a choice is not a finding of fact. Nor is a finding of fact in error because it is based upon the use of one methodology rather than another. The relative weight to be given to the factors set out in s 8.10 is also a matter of discretion rather than a finding of fact which can be impugned as such. 173 The ground of review that the exercise of the ACCC's discretion was incorrect or unreasonable having regard to all the circumstances does not concern findings of fact by the ACCC but rather the matters in respect of which it purportedly made choices permitted by the Code. Such choices include the nature of the Reference Service to be offered under the proposed Access Arrangement and the terms and conditions upon which it is to be offered. Within that framework there is the choice of methodology under s 8.4 and the weighing of relevant principles under s 8.1 and consideration of the factors under s 8.10. These matters are elements of the exercise of the discretion conferred upon the ACCC by the Code. 174 The discretion of the ACCC may be incorrectly exercised in the following ways: (i) Where its exercise is based upon a misconstruction or misapplication of the relevant principles (s 8.1), methodologies (s 8.4) or factors to be considered (s 8.10) in the Code. (ii) Where its exercise is affected by a failure to have regard to a mandatory relevant factor including any one or more of the requisite principles, methodologies or factors. (iii) When its exercise is affected by the pursuit of some purpose extraneous to the purposes for which Access Arrangements are provided under the Code. 175 Each of these matters is a traditional ground of judicial review. Where such a ground is made out in the context of an administrative review hearing, as distinct from a judicial review hearing, it is appropriate to describe the exercise of the discretion based upon such an error as 'incorrect'. It has been said on more than one occasion that the distinction between so called 'merits review' and judicial review is somewhat illusory. Error of law informing the exercise of a discretion goes as much to its merits as error of fact. In this case, however, factual error is covered by the first ground of review under s 39(2)(a). Where factual error is made out and the exercise of the discretion is based upon it, the exercise of the discretion may also be said to be incorrect. 176 The Tribunal has not been given a purely substitutive function in relation to the review of the ACCC's discretion. That is to say, if the ACCC has exercised its discretion on correct principles and if the particular exercise of the discretion was open to it within the framework of the Code, the Tribunal is not empowered to set aside that decision simply because it thinks another decision would have been preferable. This is emphasised by the provision in s 39(2)(a)(ii) of the ground of review based on unreasonableness. The exercise of a discretion is not unreasonable simply because another decision‑maker would have come to a different view. On the other hand unreasonableness in s 39(2)(a)(ii) is not limited to cases in which the exercise of the discretion was so unreasonable that no reasonable person could have so exercised it. 177 In Application by Epic Energy the Tribunal (Cooper J presiding) said (at [30]): 'Section 39(2)(a)(ii) is concerned with the correctness or unreasonableness of an exercise of discretion having regard to the circumstances relevant to the proper exercise of that discretion. Those circumstances are ones which are demonstrable from the matters to which the Tribunal may refer under s 39(5). For the purposes of the subsection, error is made out if it is demonstrated that the exercise of the discretion was so unreasonable on the basis of the matters available to the decision maker that no reasonable decision maker could ever come to it: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 223‑234. It also deals with the situation where the decision is so far outside the range of decisions open to a reasonable decision maker that it bespeaks of error even though the particular error cannot be identified: House v The King (1936) 55 CLR 499 at 505. For the purposes of s 39(2)(a)(ii) of GPA Law, correctness and reasonableness are to be determined by reference to applicable criteria contained in the Code applied to the matters which were before the relevant Regulator before the decision under review was made.' That passage does not limit the ground of unreasonableness to so called Wednesbury unreasonableness. It is compatible with the wider view of 'unreasonableness' which would pick up logical error or irrationality in the decision. The ACCC's submission which would limit the unreasonableness ground to so called Wednesbury unreasonableness is not accepted. 178 The concept of 'unreasonableness' imports want of reason. That is to say the particular discretion exercised by the ACCC is not justified by reference to its stated reasons. There may be an error in logic or some discontinuity or non sequitur in the reasoning. It may be that the decision has an element of arbitrariness about it because there is an absence of reason to explain the discretionary choices made by the ACCC in arriving at its conclusion. 179 The third ground, namely 'that the occasion for exercising the discretion did not arise' seems to suggest that a condition for the exercise of the ACCC's discretion had not arisen. It would be more broadly construed to encompass the proposition that, having regard to the nature of the Access Arrangement and Access Arrangement Information submitted by the Service Provider and their compliance with the provisions of the Code including its principles, methodologies and relevant factors, there was no justification for the ACCC to embark upon the exercise of substituting its own Access Arrangement for that proposed. 180 The Tribunal's approach to the operation of the Code, which is raised in ground 1 of the ACCC's application can now be considered against the preceding background. The Tribunal's Application of the Code 181 By its first ground of review the ACCC contended that the Tribunal erred in applying and interpreting ss 8.10 and 8.11 of the Code. It must be borne in mind that in order for the Tribunal to interfere in the ACCC's decision, EAPL was obliged under s 39(2) to satisfy the Tribunal that the ACCC had made an error in its finding of facts or that the exercise of its discretion was incorrect or unreasonable having regard to all the circumstances or that the occasion for exercising the discretion did not arrive. It appears from the Tribunal's reasons that underlying its process was its conclusion that the exercise of the ACCC's discretion was either incorrect or unreasonable. In reaching this conclusion the Tribunal analysed the Code in terms which satisfy us that it erred in law in its interpretation and application particularly of ss 8.10 and 8.11 of the Code. 182 In par [16] of its reasons the Tribunal stated: 'There is no indication in the Code that there is to be discrimination in principle between the operators of existing as opposed to new pipelines. As it is fundamental that the ICB is the actual cost of a new pipeline, it can be assumed that the objective of the Code in relation to an existing pipeline is to attribute to it a value that would be consistent with that principle.' This statement fails to pay sufficient attention to the various factors which s 8.10 requires to be considered in establishing the ICB for a Covered Pipeline that was in existence at the commencement of the Code. None of those factors are found in s 8.12 which provides, in relation to a Covered Pipeline that has come into existence after the commencement of the Code, that its ICB is, subject to s 8.13, the actual capital cost of the pipeline. The point is not so much that there is not to be discrimination in principle between the operators of existing as opposed to new pipelines but rather that the ICB of an existing pipeline is to be determined in quite a different manner from that of a new pipeline. The determination of the ICB of an existing pipeline under s 8.10 will vary from pipeline to pipeline depending upon the relative weight and consideration given by the regulator to the various factors set out in s 8.10. What is clear is that different principles apply to the determination of the ICB of a pipeline, depending upon whether it is an existing pipeline, in which case ss 8.10 and 8.11 apply, or whether it is a new pipeline, in which case ss 8.12 and 8.13 apply. 183 In par [19] of its reasons the Tribunal said: 'The next point to be noted is that it follows from s 8.10(c) and (d) that it is necessary to consider other well‑recognised asset valuation methodologies and then to compare the advantages and disadvantages of each valuation methodology applied under subparagraphs (a), (b) and (c) before turning to the other subparagraphs. Those other subparagraphs are considered in the light of the analysis of recognised valuation methods which the section assumes already to have taken place. The factors to which those other subparagraphs direct attention could assist in the choice between methods, or lead to some adjustment of the result of the chosen method. Those factors would not normally (and perhaps would never) permit recognised valuation methods to be put to one side.' It is implicit in this passage that the Tribunal was giving a primacy to the valuation methodologies set out in subpars (a), (b) and (c) and then allowing reference to the factors in subpars (e) to (k) to enable a final decision to be made as to the particular valuation method identified in subpars (a), (b) and (c) to be selected as the ICB, albeit with some adjustment. 184 This construction is not warranted by ss 8.10 and 8.11. In particular, as was stated in Re Michael (at [74]), the task of the ACCC was not 'simply one of valuation'. The process to be undertaken is one of establishing the statutory ICB, and it requires more than 'mere valuation' (Re Michael at [74]). Section 8.11 makes it clear that the figure for the ICB normally should not fall outside the range of values determined under subpars (a) and (b), but it does not follow that the figure so determined has to be referable to what the Tribunal called a 'recognised valuation'. If this were the task to be undertaken, s 8.11 would have no operation and would be inconsistent with the significance and primacy the Tribunal attached to subpars (a), (b) and (c). An ICB determined in accordance with s 8.10 does not have to be the equivalent of one or other of the valuation methodologies identified in subpars (a), (b) and (c). Put shortly, the factors in subpars (e) to (k) are not in every case subordinate to, or of lesser significance than, the factors in subpars (a), (b) and (c), although they only arise for consideration, as a matter of logical analysis after the values in subpars (a), (b) and (c) and their advantages and disadvantages have been considered in accordance with subpar (d). 185 In par [19] of its reasons the Tribunal said: 'In particular, those factors [in subpars (e) to (k)] do not warrant departing from a quest for value and entering upon a quest for some form of justice or equity.' (emphasis in original) Although the expression 'the value' appears in subparagraphs (a), (b) and (c) in s 8.10 it is not a correct analysis of s 8.10 to say that the ACCC is undertaking 'a quest for value'. As the Tribunal pointed out in par [13] of its reasons 'the ICB is entirely a creature of the Code'. In undertaking its task under s 8.10, the ACCC is undertaking a search to identify a subject defined by statute – 'the initial capital base'. This is not an expression of general use, nor is it an expression found in generally accepted accounting principles. It is unique to the Code and, in a sense, idiosyncratic to the Code. The expression 'the initial capital base' is not specifically defined as such. Section 10.8 of the Code defines 'Capital Base' as having 'the meaning given in section 8.4'. Its content can be determined from s 8.4(a) of the Code which defines the expression 'capital base' as being 'the value of the capital assets that form the Covered Pipeline or are otherwise used to provide Services'. In short, the quest under s 8.10 is to determine the figure or amount to be attributed to the ICB as defined in the Code. It is not a quest for a commercial or market valuation. 186 Section 8.10 of the Code recognises that the values derived from the application of the valuation methodologies referred to in subpars (a), (b) and (c) may be adjusted or varied depending upon the relative consideration and extent of that consideration given to the factors found in subpars (e) to (k) of s 8.10. The Tribunal recognised this when it said in par [19] of its reasons that the factors referred to in subpars (e) to (k) could lead to some adjustment of the result of the chosen method. However, we do not agree that it is correct to say as the Tribunal did 'those factors would not normally (and perhaps would never) permit recognised valuation methods to be put to one side'. Of course, s 8.11 of the Code must be taken into account, but that is not to say that the figures derived by reference to any of the methodologies referred to in subpars (a), (b) and (c) cannot be varied or altered depending upon the extent and weight of the consideration of the factors referred to in subpars (e) to (k). 187 The Tribunal recognised in par [20] the relevance of the decision of the Full Court in Re Michael. However, the Tribunal appeared to discount the cogency or acceptability of the Full Court's reasoning. This is found in the Tribunal's observation at par [20] of its reasons: 'That [the necessity to find error sufficient to enable intervention in accordance with principles of judicial review of administrative decisions] caused some straining of the construction of the Code and the result should be confined to the facts of the case. In our opinion the facts in that case are too far removed from the present facts to make the reasoning of any real value in resolving this case.' The Tribunal, as an administrative body, ought to have applied the reasoning of the Full Court which, in any event, we consider was of direct relevance and direct application to the issues before the Tribunal. 188 We agree, with respect, with the observations of the Full Court particularly at pars [73]‑[75] of the judgment of Parker J (with whom Malcolm CJ and Anderson J agreed) as to the discretionary nature of the task facing the ACCC: '[73] There are many points, however, at which the principles enunciated in s 8 call for evaluation, the exercise of judgment, the formation of opinion and other exercises of discretion by the Regulator. With particular reference to the establishment of the initial Capital Base for a Covered Pipeline that was in existence at the commencement of the Code, ss 8.10 and 8.11 provide ready examples of this. While s 8.10(a) and (b) specify two valuation methodologies, s 8.10(c) requires the Regulator to consider other well recognised valuation methodologies. Further, s 8.10(d) requires the Regulator to weigh the advantages and disadvantages of each methodology. Even were the task of the Regulator simply to strike a value for the pipeline, the evidence discloses that each of the s 8.10(a) and (b) methodologies is considerably influenced by subjective and discretionary factors, s 8.10(c) involves potentially a selection from range of methodologies, each of which influenced by further subjective and discretionary factors, and s 8.10(d) clearly calls for evaluation and judgment. [74] The task of the Regulator under s 8.10 appears not to be simply one of valuation, however, despite the reference to value in s 8.4(a). It is described in ss 8.8 and 8.10 as "establishing" the Capital Base. The factors identified in s 8.10(e)‑(j) require the Regulator to consider a variety of other considerations, including the basis on which past tariffs have been set; the historical returns to the service provider from the pipeline; the reasonable expectations of persons under the regulatory regime that applied to the pipeline prior to the commencement of the Code; and the price paid for any asset recently purchased. These various factors bring into account a number of matters which are not directly related to the value of the pipeline in the ordinary sense, and which by their nature require the consideration ofdisparate issues which may well tend in different directions. The process is more than one of mere valuation. There is, necessarily, a discretionary evaluation of what weight should be attached to each of these factors in the ultimate establishment of the Capital Base. Factor (k) enables the Regulator to take into account any other factor which the Regulator considers relevant, which in itself requires further evaluation and discretionary judgment by the Regulator. [75]Further, notwithstanding the variety of values and other factors which s 8.10 requires to be considered, there is the principle stated in s 8.11 that the initial capital base "normally should not fall outside the range of values determined under" s 8.10(a) and (b). There is obvious tension between the requirement of s 8.10 to consider factors (c)‑(k) in establishing the Capital Base and the provision in s 8.11 that, normally, the resulting Capital Base should not fall outside the range determined under factors (a) and (b). The process clearly involves the exercise of discretion in the weighing of divergent considerations.' 189 There is good reason for this approach. Clearly enough, one key object of the Access Code is to provide a reasonable tariff to the service provider. The assumption is that a reasonable tariff will produce allocative, productive and dynamic efficiencies in the gas market. But in the case of a pipeline in existence at the commencement of the Code there may be dynamic efficiency implications arising from the valuation of the capital base. For example, if the value is set too low this could reduce the incentives for investors to make future investments. If set too high inefficient investment decisions might be made. Moreover, too high a valuation may entrench excessive profits in the future. Thus a degree of flexibility is required. And, on the construction we prefer, that flexibility exists. 190 The Tribunal accepted in par [25] of its reasons the submission of EAPL that: '…it was a fundamental error in principle for the ACCC to put aside known valuation methodologies and devise a methodology of its own which adjusted ORC in a novel fashion. It was submitted that this had no support in the Code or the material on the subject received by the ACCC and is properly described as idiosyncratic.' In our view the Tribunal erred in so doing. It is not correct to say that the ACCC 'put aside known valuation methodologies'. Rather, the ACCC was accepting a known valuation methodology and giving consideration to other factors to which it was directed by s 8.10. 191 It is true that in its Draft Decision the ACCC had assessed DORC by reference to the manner in which the assets had been depreciated in the past which had been on the basis of an economic life of 50 years which the ACCC considered to be an appropriate basis for determining the value of DORC. It was pointed out to the ACCC after the Draft Decision was published that it was in error in this respect as DORC is a forward‑looking concept. Accordingly, the ACCC corrected this error in its Final Decision. 192 The ACCC's reasoning in its Final Decision was as follows: 'As mentioned earlier, the Commission's use of past rates of recovery of depreciation to determine a value for DORC has since received some criticism. The argument is that DORC is meant to be a forward‑looking concept and hence past depreciation is an irrelevant consideration. Whether this is correct or not, section 8.10(f) makes it clear, however, that the level of recovery of depreciation since EAPL acquired the pipeline and EAPL's assumption of a 50 year asset life may still be relevant factors in the Commission's determination of the value of the ICB. That is, even if the DORC methodology demands that depreciation is based on the revised asset life, the Code does not prevent the Commission taking into account the basis upon which the pipeline has been depreciated in the past in order to determine an ICB. Applying this approach to the revised ORC of $1092.9 million results in an asset valuation of $559.3 million. This figure has been calculated on the basis of a 50 year asset life to 2000, and from then an 80 year life (the useful life proposed by EAPL in 2000 and accepted by the Commission in the Draft Decision).' The ACCC expressed its final conclusion on its determination of the ICB as follows: 'For the purposes of the MSP access arrangement the Commission has determined a value for the ICB of $559 million. To support this valuation, the Commission has given considerable weight to section 8.10(f) of the Code, which requires the Commission to have regard to the basis on which tariffs have been set (or appear to have been set) in the past, the economic depreciation of the pipeline and historical returns to the service provider. The basis of the valuation is ORC, which the Commission has depreciated on the assumption of a 50 year asset life to 2000, consistent with the useful asset life previously assumed by EAPL. From 2000 onwards, the Commission has used an 80 year, the life which EAPL has submitted is the current useful life and which the Commission has accepted. Use of ORC is preferred to some historical measure of costs as ORC reflects the current costs of the assets and eliminates any redundant assets. … In addition, the Commission does not consider that a value equal to DORC of $715 million and based on an 80 year life is appropriate, since a 50 year life has been assumed in the past. If the useful life of an asset changes at a particular point in time it is appropriate that the residual value of the asset would then be depreciated over the revised useful life. However, an extension to the useful life should not necessarily lead to an upward revision of the asset value. To do so would allow the asset owner to recover more than the efficient costs of the asset over the life of the asset. Accordingly, the Commission considers that a value for the ICB of $559 million based on the useful asset life assumed in the past (50 years) coupled with future depreciation charges based on the current assumed life (80 years) best allows EAPL to recover the efficient costs over the expected life of the MSP and replicates the outcomes of a competitive market.' 193 In par [26] of its reasons the Tribunal stated: 'ORC is only utilised in this field as the starting point from which to deduce DORC. These are forward looking concepts and the 'depreciation' concerned is economic depreciation. There is no support for ORC to be adjusted to take account of past events particularly based upon accounting concepts of depreciation, and to do so is wrong in principle'. This observation misunderstands the range of factors to be considered under s 8.10 of the Code. Although DORC is a forward‑looking concept, that is not to say that the ORC, from which is derived the DORC, cannot be 'tweaked' or adjusted or varied by reference, for example, to the factors set out in subpar (f) of s 8.10 of the Code before reaching a final figure for the ICB, albeit one which uses a forward‑looking figure for depreciation after 2000. 194 It was also open to the ACCC to take into account the amounts EAPL had used for depreciation in the past in determining the extent of the adjustment to be made to ORC under s 8.10(f) of the Code in relation to 'the economic depreciation of the Covered Pipeline'. 195 In par [27] of its reasons the Tribunal was satisfied that 'the ICB fixed by the Final Approval cannot stand and must be set aside' because it was 'incorrect and unreasonable to adopt a methodology which does not reflect the terms of the Code and which is not supportable in principle'. We do not agree that the methodology adopted by the ACCC was incorrect or unreasonable. That methodology was in conformity with the terms of the Code. The ACCC had a considerable discretion in determining or establishing the ICB for the pipeline, albeit a discretion circumscribed by the factors set out in s 8.10(a) to (k) of the Code. 196 The error into which the Tribunal fell, in substance, was that it rejected the ACCC's determination of the ICB as an accepted or 'known' valuation methodology. Presumably the Tribunal, consistently with s 39(2) of the Access Law, determined that this approach by the ACCC was an incorrect or unreasonable exercise of discretion. However, s 8.10 of the Code does not require the establishing of the ICB solely by reference to a well recognised (adopting the expression in subpar (c) of s 8.10) or a known valuation methodology. True it is that the ACCC was obliged to 'consider' well recognised and established valuation methods but it was also obliged to 'consider' all the other factors set out in subpars (d) to (k) of s 8.10. At the end of the day the ICB established by the ACCC was not a valuation in accordance with the valuation methodology referred to in subpar (a) or (b) or another well recognised valuation methodology referred to in subpar (c) of s 8.10. Rather it was the determination or establishment of the ICB after having considered all the factors set out in subpars (a) to (k) of s 8.10. 197 The Tribunal approached the ACCC's use of, or reference to, s 8.10(f) of the Code in a somewhat ambivalent manner. It will be recalled that subpar (f) required the ACCC to consider: 'The basis on which Tariffs have been (or appear to have been) set in the past, the economic depreciation of the Covered Pipeline, and the historical returns to the Service Provider from the Covered Pipeline'. The Tribunal criticised the ACCC for rejecting a value based upon the economic depreciation of the pipeline. However, it was open to the ACCC to reject that value so long as it considered the economic depreciation of the pipeline in the sense of taking it into account, which it did. The ACCC was also criticised for concluding that a 50 year asset life had been assumed in the past. However, the Tribunal did not reject outright that conclusion but rather noted that 'it is not clear how this fits with s 8.10(f)'. And in discussing the ACCC's approach to the loss of market share to the EGP, the Tribunal only noted that 'the link with s 8.10(f) is difficult to detect'. 198 It may be correct, as the Tribunal has said in par [28] of its reasons that: 'There is no logical or rational link between the accounting treatment of depreciation in the past on the one hand and the true estimate of the life of the pipeline in relation to the forward looking deduction of DORC from ORC on the other.' However, the ACCC was not using the accounting treatment of depreciation in the past for the purpose of a forward‑looking deduction of depreciation in relation to DORC in the future. Rather, what the ACCC was doing was establishing a two stage method of determining the appropriate amount of depreciation; it was 'kinking' the depreciation. This it was entitled to do if it was so disposed. 199 It follows from this analysis that none of the available grounds upon which the Tribunal could interfere with the ACCC's determination of the ICB of the MSP had been made out. There was no error in the ACCC's findings of fact in relation to its determination of the ICB; nor was the exercise of the ACCC's discretion in reaching that determination incorrect or unreasonable having regard to all the circumstances. It was not suggested that the occasion for the ACCC's exercise of its discretion had not arisen. Conclusion 200 Having found in favour of the ACCC in relation to the first and principal ground of review, it is not necessary to give any detailed consideration to the remaining grounds. The question of the approach taken by the Tribunal to its review function has been subsumed in the general discussion relating to ground 1. The Tribunal's comments about whether the ACCC had reasoned to a predetermined result were obiter and did not have any effect on its decision. The remaining grounds raise no distinct issue which it is necessary to decide here in the light of our conclusions with respect to ground 1. 201 The Tribunal's decision will be set aside and submissions will be invited from the parties as to the orders that should be made in consequence of that decision. I certify that the preceding two hundred and two (201) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices French, Goldberg and Finkelstein. Associate: Dated: 2 June 2006 Counsel for the Applicant: J Beach QC and M Painter Solicitor for the Applicant: Deacons Counsel for the Second Respondent: J Gleeson S.C. and N L Manousaridis Solicitor for the Second Respondent: Middletons Date of Hearing: 17, 18 and 19 August 2005 Date of Judgment: 2 June 2006	35,139
federal_court_of_australia:fca/single/2011/2011fca0523	decision	commonwealth	federal_court_of_australia	text/html	2011-05-19 00:00:00	Maxwell-Smith v Donnelly [2011] FCA 523	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2011/2011fca0523	2024-09-13T22:49:15.589920+10:00	FEDERAL COURT OF AUSTRALIA Maxwell-Smith v Donnelly [2011] FCA 523 Citation: Maxwell-Smith v Donnelly [2011] FCA 523 Appeal from: Application for leave to appeal: Maxwell-Smith v Donnelly (No 2) [2011] FCA 259 Parties: INGE & EUGENE MAXWELL-SMITH v MAX CHRISTOPHER DONNELLY and S & E HALL PTY LTD File number: NSD 420 of 2011 Judge: BUCHANAN J Date of judgment: 19 May 2011 Catchwords: PRACTICE AND PROCEDURE – leave to appeal – issues dealt with in previous litigation – abuse of process – no prospect of success if leave to appeal was granted – leave to appeal refused Legislation: Bankruptcy Act 1966 (Cth) ss 30, 77, 162, 167, 179(1) Bankruptcy Regulations 1996 (Cth) Division 4 Federal Court of Australia Act 1976 (Cth) ss 24(1AAA), 24(1E), 25(2)(e) Federal Court Rules O 20 r 5 Cases cited: Bahonko v Sterjov [2007] FCA 1717 Dart v Norwich Union Life Australia Limited [2005] FCA 327 Davis v Insolvency and Trustee Service Australia (No 2) [2011] 190 FCR 437 Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Donnelly v Maxwell-Smith [2010] FCAFC 154 Hamod v New South Wales (2002) 188 ALR 659 Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 Kristoffersen v Department of Employment, Workplace Relations and Small Business [2002] FCAFC 269 Maxwell-Smith v Donnelly [2005] FCA 332 Maxwell-Smith v Donnelly [2006] FCAFC 150 Maxwell-Smith v Donnelly [2007] FCAFC 180 Maxwell-Smith v Donnelly [2008] HCASL 238 Maxwell-Smith v Donnelly [2010] FCA 474 Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 894 Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 1005 Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 1097 Maxwell-Smith v Donnelly (No 2) [2011] FCA 259 Maxwell-Smith v S & E Hall Pty Ltd [2002] FCA 25 Maxwell-Smith v S & E Hall Pty Ltd [2002] FCAFC 198 Maxwell-Smith v S & E Hall Pty Ltd [2003] FMCA 162 Maxwell-Smith v S & E Hall Pty Ltd [2003] FCA 953 Maxwell-Smith v S & E Hall Pty Ltd, in the matter of Maxwell-Smith [2004] FCA 840 Maxwell-Smith v S & E Hall Pty Ltd, in the matter of Maxwell-Smith [2004] FCA 1214 Maxwell-Smith v S & E Hall Pty Limited, in the matter of Maxwell-Smith [2006] FCA 825 Niemann v Electronic Industries Ltd [1978] VR 431 Pantzer v Wenkart (2006) 153 FCR 466 Re Luck (2003) 78 ALJR 177 Reid v Nairn (1985) 60 ALR 419 Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424 Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543 Date of hearing: 4 May 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 64 Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondents: Mr B Skinner Solicitor for the Respondents: Church & Grace IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 420 of 2011 BETWEEN: INGE & EUGENE MAXWELL-SMITH Applicants AND: MAX CHRISTOPHER DONNELLY First Respondent S & E HALL PTY LTD Second Respondent JUDGE: BUCHANAN J DATE OF ORDER: 19 MAY 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Leave to appeal against the orders made by Nicholas J on 25 March 2011 be refused. 2. The first respondent's costs in the administration, under the Bankruptcy Act 1966 (Cth), of the estates of the applicants include the costs, charges, expenses and remuneration of and incidental to the application for leave to appeal filed on 11 April 2011. 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 420 of 2011 BETWEEN: INGE & EUGENE MAXWELL-SMITH Applicants AND: MAX CHRISTOPHER DONNELLY First Respondent S & E HALL PTY LTD Second Respondent JUDGE: BUCHANAN J DATE: 19 MAY 2011 PLACE: SYDNEY REASONS FOR JUDGMENT Introduction 1 This judgment deals with an application for leave to appeal against a judgment of a judge of this Court, Nicholas J. The history of the dispute, and resulting litigation, between Mr and Mrs Maxwell-Smith and their original creditor and later their trustee in bankruptcy is long, complicated and in many respects unfortunate. There are 18 judgments in this Court and one in the Federal Magistrates Court of Australia ("the FMCA") dealing with the bankruptcy issues alone, as well as judgments elsewhere dealing with the underlying disputes. 2 Almost all of the contested issues in the litigation to date been decided adversely to the applicants. The dates of the decisions or judgments which have dealt with matters generally adversely to the applicants, may be summarised as follows: The building dispute Consumer Claims Tribunal 5 September 1996 NSW Supreme Court 13 November 1996 Consumer Claims Tribunal 29 August 1997 NSW Supreme Court 8 December 1998 NSW Court of Appeal 7 April 1999 High Court 30 November 1999 The bankruptcy notice Federal Court (Allsop J) 25 January 2002 Federal Court (Full Court) 31 May 2002 FMCA 22 April 2003 Federal Court (Moore J) 10 September 2003 Sequestration and annulment Federal Court (Moore J) 2 July 2004 Federal Court (Moore J) 17 September 2004 Application for an inquiry into trustee's conduct Federal Court (Wilcox J) 21 March 2005 Federal Court (Full Court) 27 October 2006 Federal Court (Allsop J) 8 June 2007 Federal Court (Full Court) 23 November 2007 3 Following the effective and (as will be seen) final resolution of the substantive matters at issue between Mr and Mrs Maxwell-Smith and the other parties, it remained necessary for the trustee's costs and remuneration to be assessed. That produced further disputation when those costs and remuneration were taxed by a Registrar of the Court. Nicholas J dealt with those matters in two judgments, on 14 May 2010 and 25 March 2011 respectively. His Honour's examination of those issues is not complete. However, it is the orders made to accompany the judgment of 25 March 2011 which have provoked the application for leave to appeal. 4 Before I can deal with that issue, it will be necessary to take some time to recount the overall history of the litigation. Then I can return more directly to the subject of the present application. The building dispute 5 Mr and Mrs Maxwell-Smith engaged S & E Hall Pty Ltd ("the creditor") to construct a home at 8c Surf Circle, Tura Beach, New South Wales. By late May 1996 there was disagreement between the parties about their respective rights. Mr and Mrs Maxwell-Smith lodged a complaint with the New South Wales Department of Fair Trading and initiated proceedings in the New South Wales Consumer Claims Tribunal ("the Tribunal"). The Tribunal ordered Mr and Mrs Maxwell-Smith to pay $7,012.55 to the creditor. The Maxwell-Smiths challenged that order in the Administrative Law Division of the Supreme Court of New South Wales ("the Supreme Court"). On 13 November 1996 orders were made by consent referring the matter back to a differently constituted Tribunal for a re-hearing. The Tribunal, on 25 February 1998, ordered the Maxwell-Smiths to pay the creditor the sum of $6,745.55. The Maxwell-Smiths again took proceedings in the Supreme Court. On 8 December 1998 the summons in the Supreme Court was dismissed with an order that the Maxwell-Smiths pay costs. 6 That was not the end of that part of the litigation, as I shall shortly indicate. However, it was the costs ordered on 8 December 1998 that provided the basis for a bankruptcy notice served by the creditor on Mr and Mrs Maxwell-Smith. The costs of the creditor were assessed at $11,282.12. They were then the subject of a judgment in the Local Court (Civil Claims) in the sum of $13,757.94 which was made up of the assessed costs of $11,288.12 plus costs and interest. The unsatisfied Local Court judgment later provided the reason for the bankruptcy notice. 7 After the summons to the Supreme Court against the second decision of the Tribunal was dismissed with costs, Mr and Mrs Maxwell-Smith sought leave to appeal to the New South Wales Court of Appeal. In April 1999 leave was refused with costs. They then sought special leave to appeal to the High Court. On 30 November 1999 that application was dismissed with costs. At this point, it may be concluded that the opportunities to challenge the creditor's claim, which had been upheld by the Tribunal, were exhausted. The Maxwell-Smiths were bound in law by the outcome of the litigation about that matter. The bankruptcy notice 8 The bankruptcy notice was issued on 26 March 2001. As I said earlier, it claimed an unsatisfied debt of $13,757.94. Having regard to the subsequent history, the sum involved was a trifling one both in absolute terms and with respect to its impact upon the financial affairs of Mr and Mrs Maxwell-Smith. Evidently, they saw the matter differently, at least at that time, and they refused to accept any obligation to meet the judgment debt in that amount, or to comply with the bankruptcy notice. Mr and Mrs Maxwell-Smith instead made an application to set aside the bankruptcy notice. The application to this Court to set aside the bankruptcy notice contained a counterclaim seeking damages of $105,000 (and costs) against the creditor. The counterclaim was based upon alleged improprieties by the creditor and his solicitor in connection with the proceedings before the Tribunal. On 25 January 2002 Allsop J dismissed the counterclaim. He viewed the proceedings in this Court as an attempt to re-litigate the matters which had been dealt with by the Tribunal. As I have indicated, such a course was not legally open, however strongly Mr and Mrs Maxwell-Smith may have wished to adhere to their own view of the merits of the dispute with their creditor. Allsop J said that the claims against the creditor were "without substance, vexatious and oppressive and an abuse of process". In addition to his dismissal of the counterclaim, Allsop J also dismissed the application to set aside the bankruptcy notice (Maxwell-Smith v S & E Hall Pty Ltd [2002] FCA 25). 9 There was an appeal. In a very short judgment the appeal was dismissed for the reason that Allsop J was "plainly correct" (Maxwell-Smith v S & E Hall Pty Ltd [2002] FCAFC 198). 10 Nevertheless, another application was made to set aside the bankruptcy notice. That application was heard by the FMCA and dismissed (Maxwell-Smith v S & E Hall Pty Ltd [2003] FMCA 162). The learned Federal Magistrate said (at [11]): 11. Mr and Mrs Maxwell-Smith have incurred substantial legal costs in the pursuit of justice as they see it. Perhaps they would have been better advised to meet the builder's claim in the first instance. In any event, those legal costs have been incurred and have not been paid. I am satisfied that those costs were properly assessed following the decision of the New South Wales Supreme Court. Following the assessment of the costs and entering of judgment in the Local Court the costs became due and payable. In the circumstances, I am not satisfied that a basis has been advanced to set aside the bankruptcy notice and I will dismiss the application. 11 A further appeal was filed in this Court. It was dealt with by Moore J on 10 September 2003 (Maxwell-Smith v S & E Hall Pty Ltd [2003] FCA 953). His Honour decided that the appeal should be dismissed. However he thought it appropriate "to ascertain whether I should make an order requiring the parties to mediate". His Honour said at [13]: 13 [T]he appellants presently appear to be heading down a path of further litigation in which liability for costs may arise which they have no capacity to manage or meet. Indeed that point may have already been reached. They also face the possibility of sequestration orders being made. The appellants informed me that their only significant asset was their retirement home (the building of which was the subject of the dispute before the Tribunal), they are pensioners and their income is thus limited. It would be unfortunate if some further attempt were not made to resolve all issues between the parties. However, it would probably not be productive to order mediation in this matter unless the parties agreed to engage in the process. It is for this reason I have made orders requesting the parties to advise whether they agree to mediation, and generally restricted the entry of these orders until this position is made clear. 12 There was no appeal available against the judgment of Moore J (sitting on appeal from the FMCA) (Federal Court of Australia Act 1976 (Cth) ("the FC Act") s 24(1AAA) as then applying). No application was made for special leave to appeal to the High Court. At this point, therefore, there was no further avenue of challenge available to the bankruptcy notice, which represented an unassailable foundation for the presentation of a creditor's petition, notwithstanding the tentative suggestion by Moore J that it may not be too late to attempt mediation. It will be noted that this suggestion was itself conditional upon acceptance by both parties that mediation should occur. That condition was not met. Sequestration and annulment 13 The attempt to provide an avenue for the consensual resolution of what was becoming an intractable dispute was, regrettably, to lead to further unfortunate events which were later referred to by Moore J in a judgment given on 2 July 2004 (Maxwell-Smith v S & E Hall, in the matter of Maxwell-Smith [2004] FCA 840). His Honour there recorded that, after his earlier judgment, the creditor had advised that it was not willing to engage in mediation but Mr and Mrs Maxwell-Smith said that they were prepared to do so. However, in the meantime, a creditor's petition based on the bankruptcy notice had been listed for a hearing before a Registrar. Mr Maxwell-Smith had requested that the hearing be delayed but the request had been dealt with equivocally in the Registry. The hearing, on 15 September 2003, went ahead. Mr and Mrs Maxwell-Smith did not appear. A sequestration order was made against the estates of Mr and Mrs Maxwell-Smith on that day. On 2 July 2004 Moore J concluded that Mr and Mrs Maxwell-Smith had been unwittingly denied natural justice. He annulled the bankruptcies. By this time, disputes had arisen between the Maxwell-Smiths and the trustee concerning his costs, charges and expenses, including his remuneration. Moore J ruled that the trustee was entitled to recover those amounts from the property of Mr and Mrs Maxwell-Smith. His Honour said (at [27]): 27 In this application, the applicants appear to challenge collaterally the costs, charges and expenses of the Trustee, including his remuneration. However, s 154(1)(b) creates a statutory entitlement or charge enforceable by the Trustee which I have no power to modify or alter. That section relevantly provides: If the bankruptcy of a person (in this section called the former bankrupt) is annulled under this Division: … (b) the Trustee may apply the property of the former bankrupt still vested in the Trustee in payment of the costs, charges and expenses of the administration of the bankruptcy, including the remuneration and expenses of the Trustee;… (emphasis original) It may possibly be that, as a matter of construction, the reference to costs, charges and expenses as well as remuneration should be treated as amounts reasonably incurred in the administration of the estate. Such a construction might be apt because, arguably, the section is not intended to confer on the Trustee a right to apply the former bankrupt's property for costs, charges and expenses arising from activities the Trustee should not have engaged in as part of the proper administration of the bankrupt's estate. In the present case, having regard to the material before me, I am not satisfied that any aspect of the administration of the bankrupts' estates could be characterised as conduct the Trustee should not have engaged in, including appearing in these proceedings represented by counsel. It will, of course, be open to the applicants to discuss with the Trustee, a scheme of the type raised by the Trustee's counsel at the hearing, namely the creation of some type of security over their home to enable the satisfaction of amounts due to the Trustee. Consistent with authority, the Trustee is entitled to his costs of this application: Re Gollan: Ex parte Gollan (1992) 40 FCR 38. 14 Although the bankruptcies had been annulled, that did not affect the right of the trustee to remuneration, or to his costs, charges and expenses arising from the administration of Mr and Mrs Maxwell-Smiths' estates. Recovery of those amounts was governed by the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act"). Mr and Mrs Maxwell-Smith had no legitimate ground of resistance to the trustee's rights in that regard, which were to be exercised against their estates, rather than them personally, unless the costs were improperly incurred. 15 Moore J, in his judgment on 2 July 2004 also referred to the original amounts owing to the creditor and said (at [28]): Unless those debts are satisfied, one can reasonably expect the applicants will continue to be involved in further legal controversy, with the real prospect of incurring future legal costs. 16 All parties (the trustee, the creditor and Mr and Mrs Maxwell-Smith) sought costs of the proceedings before Moore J. All applications were refused and his Honour ordered that there be no costs of the annulment application or the application for costs (Maxwell-Smith v S & E Hall Pty Ltd, in the matter of Maxwell-Smith [2004] FCA 1214). At this point, notwithstanding the additional burden to which Mr and Mrs Maxwell-Smith had been exposed as a result of the misunderstanding at the time the sequestration order was made, an opportunity existed for yet further costs to be avoided. The application for an inquiry 17 However, Mr and Mrs Maxwell-Smith were not prepared to let the matter rest. I am not concerned to criticise them for taking the matter further. That was a course open to them. But matters from this point must be seen in a context where there was no further challenge to the sequestration order available and no ground upon which to contest the fact that administration of Mr and Mrs Maxwell-Smiths' estates had generated costs which the trustee was entitled to recover. 18 The next step taken by Mr and Mrs Maxwell-Smith was to apply for an inquiry into the conduct of the trustee, Mr Donnelly and into the bankruptcies which had persisted, before their annulment, for about 10 months. Mr Donnelly prepared accounts setting out the amount claimed by him for remuneration and expenses, including amounts paid or payable by way of legal costs. The total amount of the costs claimed by the trustee exceeded $92,000. Mr and Mrs Maxwell-Smith challenged the amounts claimed and the trustee's conduct generally. The application for an inquiry into the trustee's conduct was dealt with by Wilcox J in a judgment delivered on 21 March 2005 (Maxwell Smith v Donnelly [2005] FCA 332). His Honour was not persuaded that a case had been made out of inappropriate conduct on the part of the trustee. His Honour said (at [22]–[24]): 22 The situation confronting Mr and Mrs Maxwell-Smith is most unfortunate. In saying that, I have in mind both the unsatisfactory Tribunal decision and the circumstances that led Moore J to annul the bankruptcy orders made against the applicants. Nonetheless, unless Mr Donnelly can be shown to have acted improperly in some way, or to have incurred unnecessary expense, or to be charging an unnecessary or excessive amount, he is entitled to his remuneration and to reimbursement of his expenses. 23 I see no basis for ordering an inquiry into Mr Donnelly's administration of the former bankrupts' estates. There has been full discussion today about each of the complaints made by Mrs Maxwell-Smith. There is no point in a fuller inquiry in relation to them. 24 As I say, the appropriate course now is for a detailed account of costs to be prepared and taxed. I hope it will then be possible for some arrangement to be made whereby that amount is paid out, perhaps by the former bankrupts obtaining a loan secured over the Tura Beach property. It would be a further misfortune if their unwillingness or inability to do this led to their home, or the Jindabyne property, being sold up. I hope that, even at this late stage, cooperation and commonsense will prevail. 19 His Honour's addition to the list of judicial reminders about the potential consequences of further litigation had no greater effect than the earlier ones. Mr and Mrs Maxwell-Smith decided to appeal Wilcox J's judgment. It became necessary for an extension of time to be granted. An order permitting them to file and serve a notice of appeal was made by Hely J on 8 June 2005. 20 Before the appeal was heard it became necessary for Mr and Mrs Maxwell-Smith to apply to the Court to set aside a further bankruptcy notice which had been issued against them by the creditor. In order to understand the way in which this came about it is necessary to go back in history for a short time. On 26 October 2000 the creditor had obtained a certificate of the taxed costs in the High Court. The amount allowed was $5,528.27. Five and a half years later the Official Receiver issued a bankruptcy notice on the application of the creditor based on that certificate. On 3 July 2006 Jacobson J set aside that bankruptcy notice as an abuse of process (Maxwell-Smith v S & E Hall Pty Limited, in the matter of Maxwell-Smith (2006) 233 ALR 81; [2006] FCA 825) as he was satisfied that the "purpose in issuing the bankruptcy notice was to put pressure on Mrs Maxwell-Smith to pay the debt rather than to genuinely invoke the Court's bankruptcy jurisdiction" (at [45]). 21 Meanwhile, the appeal against the orders made by Wilcox J on 21 March 2005 had been heard and on 27 October 2006 the appeal was allowed in part (Maxwell-Smith v Donnelly [2006] FCAFC 150). It is plain from the terms of the appeal judgment that there were matters advanced in support of the appeal which had not been the subject of complaint before Wilcox J. With one exception, the Full Court did not uphold the challenges to the decision made by Wilcox J. With respect to the matters which were not raised before Wilcox J, although those matters were identified by the Full Court it was felt inappropriate to deal with them. The Full Court said, in that respect (at [55]): 55 One complexity in this appeal is that the appellants were not represented before Wilcox J and provided his Honour with a large volume of material, but did not identify with clarity and precision in one document only, what conduct of the trustee the appellants criticised or challenged for the purposes of seeking an inquiry. It is apparent from the transcript of the proceedings before Wilcox J, that his Honour patiently and carefully sought to elicit from Mrs Maxwell-Smith what was the conduct about which the appellants made complaint. It is that conduct which his Honour discussed in his reasons for judgment. In the absence of the identification of further conduct of the trustee which might compel a conclusion that there should be an inquiry in relation to that conduct, we do not think it is appropriate to consider in this appeal the conduct relied on by Mr Brennan [who appeared pro bono for Mr and Mrs Maxwell-Smith] in his submissions which was not relied on below. This conclusion is fortified by the appellants making no application to amend either the originating process or the notice of appeal. Any such application would have enabled us to focus on whether raising additional matters was fair to all parties and appropriate in all the circumstances. 22 It was suggested in material filed in the present application for leave to appeal that some matters upon which Mr and Mrs Maxwell-Smith relied to suggest evidence of misconduct on the part of the trustee only became known to them in 2006 and 2007, after Wilcox J had dealt with the application for an inquiry. These matters were made known to counsel then appearing pro bono for Mr and Mrs Maxwell-Smith. Some matters were raised before the Full Court, and put aside as I have indicated. Nonetheless, those and other matters were available to be raised in the next stage of litigation, which is referred to hereunder. 23 The exception to the general conclusion that Wilcox J had not made any error, concerned a complaint made by Mrs Maxwell-Smith that she was prevented from departing on a cruise with her disabled grandson because Mr Donnelly had not given her permission to leave the country. The Full Court referred to that matter at [56] as follows: 56 The one matter which was discussed by his Honour which warrants further consideration, is the attempt of Mrs Maxwell-Smith to commence a cruise with her grandson on 20 May 2004. It is appropriate to set out precisely what his Honour said about this matter (at [16] to [18]): Finally, Mrs Maxwell-Smith feels extremely strongly about the fact that the trustee failed to give permission for her to depart, with her disabled grandchild, on an overseas cruise on 20 May 2004. Apparently, Mrs Maxwell Smith intended to speak to the trustee about this matter on 18 May. Although she saw Mr Donnelly on that day, she omitted to do so. She saw him again on 19 May, but again failed to raise the matter with him. She then apparently assumed there would not be a problem, because of something said to her by Ms Gallucci. So she presented herself and her grandson to the ship on 20 May but was denied entry. Despite an attempt by the captain of the ship to resolve the matter, Mrs Maxwell-Smith eventually had to be excluded from the ship because of the fact that she was on a Portwatch list maintained by the Australian Federal Police. I understand the embarrassment and anguish of Mrs Maxwell-Smith over this matter. Perhaps it could have been better handled by Mr Donnelly, but I have to say it seems to me the fault lay at least as much on the side of Mrs Maxwell-Smith, as on the trustee. She ought to have taken up the matter with Mr Donnelly well before the cruise was due to depart. In any event, this particular complaint has no financial aspect. There would be no point in having an inquiry in relation to that matter. 24 The Full Court decided that there should be an inquiry concerning the conduct of the trustee with respect to those events. The Full Court concluded on the following note (at [65]): 65 Because we have not expressed disagreement with the conclusions of Wilcox J on matters other than the appellants' contention relating to Mrs Maxwell-Smith's travel, it should not be assumed that we accept every comment his Honour made about the trustee's conduct or that, by implication, the fees, costs and disbursements presently charged by the trustee should be accepted in any taxation without careful consideration. We doubt, for example, that the trustee is entitled to payment for convening and attending a creditors' meeting after the bankruptcies were annulled. However these are matters for consideration during any taxation. 25 The Full Court decided (at [66]) that there should be no costs awarded to either party of the appeal, or of the proceedings before Wilcox J. 26 The inquiry which was directed by the Full Court was conducted by Allsop J who, in a judgment delivered on 8 June 2007 (Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 894), concluded that there was no basis for criticism of the conduct of Mr Donnelly. Allsop J dealt in detail with the background to the complaint made about Mrs Maxwell-Smith's desire to travel outside Australia with her grandson. It is evident that the trustee's administration was not without difficulty, occasioned in part by the sense of grievance which Mr and Mrs Maxwell-Smith felt. In his detailed discussion of the factual circumstances concerning Mrs Maxwell-Smith's attempt to leave Australia relying upon her passport (which should have been but had not been surrendered to her trustee as required by s 77 of the Bankruptcy Act Allsop J did not, in material respects, accept the version of events which had been advanced to Wilcox J by Mrs Maxwell-Smith. His Honour said (at [45]–[47]): 45 But, as the facts reveal here, Mr Donnelly was never really called upon to make a decision on an application by the bankrupt to travel. To say that that is what occurred on 20 May 2004 misunderstands and misconceives the position Mr Donnelly found himself in. He was called upon, without notice, in circumstances where he is entitled to say that the matter came as a surprise to him, to consider a conversation with a Federal Police Officer (who had been sent to the wharf to prevent Mrs Maxwell-Smith travelling) about allowing Mrs Maxwell-Smith to travel in circumstances where what Mr Donnelly knew was set out in [44] of his statement and in circumstances where it was not, nor could be understood as being, a request by the bankrupt herself. 46 Given the irregularity of the behaviour, the failure of the Maxwell-Smiths to give any notice whatsoever that Mrs Maxwell-Smith would be travelling, despite the apparent clear opportunity of the previous days, given the failure to attend the s 81 examination, whatever might be the explanation for that, given the taking out of the warrants whatever might be the status of those and the circumstances of lack of notice and surprise in which Mr Donnelly found himself, his decision was not one, in my view, that is open to the kind of criticism that is made of it. In particular, I think what is said in [47] of Mr Donnelly's statement is legitimate. 47 The kinds of consideration discussed by Deane J in Re Tyndall presuppose a request, otherwise regular, to travel. The circumstances here were highly irregular. As I have said, there was no application by Mrs Maxwell-Smith. She had given no notice. She could be seen as having possibly committed an offence in failing to deliver her passport and to have acted in an attempt to board the ship. In all the circumstances identified by Mr Donnelly in [42] to [47] of his statement, I think it is a misunderstanding of the position to say that he breached his obligation as a trustee by failing to only turn his mind to the question of the due administration of the estate. and (at [49]–[50]): 49 In my view, in all the circumstances, there was no miscarriage of discretion of the kind posited in address, there was no abuse of power, there was no act of mala fides, Mr Donnelly's actions in all the circumstances that he was placed in by others is not the subject of legitimate criticism. Of course he could have said, yes, it is all right for you to go, but he did not. If there is any responsibility for the most unfortunate events of 20 May 2004, they rest with others and not with Mr Donnelly or Mrs Gallucci. They should have been warned and told that overseas travel was desired. I have already expressed my view that I am prepared to accept Mrs Maxwell-Smith's evidence as honest as to why she thought she did not have to, but from Mr Donnelly's position, to attempt to criticise him in the serious way that has been done, in circumstances where he was given no notice whatsoever of the travel and in the other circumstances that I have described is, I think, somewhat unfair. 50 If Mr Donnelly had been given adequate notice for the decision, if the nature of the family trip had been explained to him, I have little doubt that with appropriate conditions of the kind imposed by Moore J in July, he would have consented to the travel. 27 In two subsequent judgments, delivered respectively on 6 July 2007 and 6 August 2007 (Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 1005 and Maxwell-Smith v Donnelly (in the matter of Inge and Eugene Maxwell-Smith) [2007] FCA 1097), Allsop J dealt with further issues concerning the costs of the proceedings before him to make it clear (applying Pantzer v Wenkart (2006) 153 FCR 466) that the trustee was entitled to all his costs, including remuneration. Mr and Mrs Maxwell-Smith appealed the costs order. The appeal was dismissed with costs (Maxwell-Smith v Donnelly [2007] FCAFC 180). One contention advanced in that appeal by Mr and Mrs Maxwell-Smith, which is important to note for present purposes, was that the trustee was not entitled to claim, out of their estates, any expenses incurred after the annulment of the bankruptcies. The Full Court (like Allsop J) regarded that contention to have been authoritatively rejected in Pantzer v Wenkart (at [43]–[44]) as the trustee had been drawn into litigation by Mr and Mrs Maxwell-Smith after the annulment of the bankruptcies. An application for special leave to appeal to the High Court was dismissed on 15 May 2008 ([2008] HCASL 238). 28 At this point there was no further legitimate avenue available to raise allegations of misconduct against the trustee in connection with the administration of Mr and Mrs Maxwell-Smiths' estates. Moreover, the proceedings in which those allegations had been made were ones which had been initiated by Mr and Mrs Maxwell-Smith and were ones to which the trustee was entitled, and in a practical sense obliged, to respond. Those proceedings had, finally, been decisively concluded against Mr and Mrs Maxwell-Smith. The proceedings to which I have referred had inevitably delayed finalisation of the trustee's administration. Mr and Mrs Maxwell-Smiths' property was still, legally, held by the trustee. Except to the extent that costs had been withheld (as they were in connection with the proceedings before Wilcox J and the consequent appeal) the trustee was, subject only to taxation, entitled to recover costs properly incurred in responding to the proceedings initiated against him by Mr and Mrs Maxwell-Smith. Again, those rights were exercisable against their estates, rather than against them personally. Taxation of the trustee's costs 29 The next important episode concerned the trustee's formal claims for his costs, charges and expenses incurred in the administration of Mr and Mrs Maxwell-Smiths' estates. Those costs, charges and expenses were sought pursuant to an order made by Moore J on 8 June 2007 (the same day as Allsop J disposed of the substance of the inquiry into Mr Donnelly's conduct). The order made by Moore J was made with the consent of Mr and Mrs Maxwell-Smith. It was in the following terms: The costs, charges and expenses of the administration of the former bankrupt estate of Eugene and Inge Maxwell-Smith, including the remuneration and expenses of the trustee, be taxed by a Registrar of the Court in accordance with Part 8 Division 4 of the Bankruptcy Regulations. 30 It is not disputed that power to make such an order is provided by s 30 of the Bankruptcy Act, although normally review of a trustee's remuneration would be carried out under the direction of the Inspector-General in Bankruptcy, subject to an appeal to this Court (see Bankruptcy Act ss 162, 167; Bankruptcy Regulations 1996 (Cth) Division 4). Taxation of the trustee's costs, charges, expenses and remuneration was carried out by a Registrar of the Court. Three certificates of taxation were provided. The trustee then sought orders to enforce the certificates of taxation. The orders sought included an order that Mr and Mrs Maxwell-Smith give vacant possession of their home (to allow it to be sold by the trustee). The trustee's notice of motion was dealt with by Nicholas J. To this point, two judgments have dealt with the trustee's notice of motion to enforce the certificates of taxation: (Maxwell-Smith v Donnelly [2010] FCA 474 and Maxwell-Smith v Donnelly (No 2) [2011] FCA 259). The second of those judgments was accompanied by the orders which Mr and Mrs Maxwell-Smith now wish to appeal. 31 In the first judgment, Nicholas J gave express consideration to the jurisdictional foundation for the proceedings before him (at [21]–[32]) and concluded that, despite the unconventional procedures to which the parties had consented in 2004, the Court had ample power to review the certificates of taxation, enforce them and, if necessary, to disallow improper, unreasonable or unnecessary charges. No party has challenged those conclusions. 32 In the first judgment, delivered on 14 May 2010, his Honour recorded (at [6]): Mr Donnelly filed 7 separate bills of costs which were taxed by a Registrar. The total amount claimed in these bills came to $435,254.16. On 6 April 2009 the Registrar delivered a decision allowing an amount of $392,482.72 and on the same date the Registrar signed 3 separate certificates of taxation. 33 His Honour referred to the amounts certified (which involved both trustee remuneration and disbursements and also solicitor charges and disbursements), in the following way (at [7]): 7 The picture painted by these numbers is alarming. The building dispute which culminated in Mr and Mrs Maxwell-Smiths' bankruptcies concerned a sum that was but a tiny fraction of the amount now claimed by the trustee. Moreover, most of the amount claimed by the trustee relates to remuneration earned and disbursements incurred after Mr and Mrs Maxwell-Smiths' bankruptcies were annulled. Mrs Maxwell-Smith contends, among other things, that these costs are the consequence of waste and recklessness by the trustee. Mr Donnelly, on the other hand, contends that his costs are the consequence of the querulous and uncooperative behaviour of Mr and Mrs Maxwell-Smith. 34 In the present proceedings, counsel for the trustee was at pains to emphasise that most of the costs were incurred after the annulment of the bankruptcies and as a result of the ongoing litigation (including appeals) initiated by Mr and Mrs Maxwell-Smith, which had eventually been decisively concluded against them. That contention must be accepted. It is apparent from a table set out at [6] of the judgment of Nicholas J of 14 May 2010 that the great bulk of the costs initially allowed by the Registrar were incurred between 1 August 2004 and 31 October 2007 (when the applicants were pursuing their proposal for an inquiry into the trustee's conduct) and that the significant bulk of those costs and expenses were legal costs to which the trustee became liable (over 70% of the amounts originally allowed by the Registrar on taxation). 35 As a result of his review, Nicholas J was satisfied that the trustee was "entitled to a total amount that is considerably less than what was allowed by the Registrar". There were three areas in which the trustee had claimed costs (which the Registrar had substantially allowed) which Nicholas J concluded required further attention. Those three areas concerned the costs of the proceedings before Wilcox J and the resulting appeal, solicitor's costs incurred by the trustee where the solicitor had charged a premium or "uplift fee" and remuneration, costs and expenses for the conduct of public examinations. 36 Nicholas J was persuaded that the amounts allowed by the Registrar on taxation should be substantially reduced. His Honour concluded that the trustee should not have been allowed his costs (including legal costs) of the application before Wilcox J and the costs of the appeal against the orders made by Wilcox J, although the trustee was entitled to claim his own remuneration with respect to those matters. His Honour also concluded that the trustee's solicitors were not entitled to charge the trustee a premium or uplift fee under the first and third of three costs agreements and the trustee's costs were not allowable to that extent. His Honour also concluded that claims for remuneration, costs and expenses associated with public examinations in the period after 1 March 2004 should not have been allowed. The consequent reduction, as will be seen, was very substantial. The matter was referred back to the Registrar to further review the bills of costs in the light of the reasons which his Honour gave. 37 The trustee then attempted to appeal against two aspects of the conclusions of Nicholas J that he should not be allowed particular elements of the costs, charges and expenses claimed by him. Leave to appeal was refused (Donnelly v Maxwell-Smith [2010] FCAFC 154). On this occasion the Full Court reinforced the direction of the earlier Full Court in 2006 that no party should have legal costs of the appeal against the order made by Wilcox J or of the proceedings before Wilcox J. The Full Court also upheld conclusions by Nicholas J in his first judgment that the trustee should not have the costs of work done in relation to public examinations of Mr and Mrs Maxwell-Smith after 1 March 2004. There was no challenge to the conclusion reached by Nicholas J on the question of the solicitor's claim for a premium or "up-lift fee". The trustee was ordered to pay costs of the appeal at his own expense. The result, therefore, of the proceedings before Nicholas J, and the Full Court, with respect to those matters was substantially favourable to Mr and Mrs Maxwell-Smith. But, nevertheless, there remained to be finally quantified the substantial costs which Nicholas J concluded the trustee was entitled to recover under the Bankruptcy Act. 38 Apart from the trustee's notice of motion seeking to enforce the certificates of taxation given by the Registrar, Mr and Mrs Maxwell-Smith had also filed a notice of motion which, in its amended form, sought the following orders: 1. Declare that S & E Hall Pty Ltd, the one and only creditor to the estate of the Applicants Eugene & Inge Maxwell-Smith, was aware that the Tribunal's Order in 1997 was flawed, and that he abused the legal process by issuing Bankruptcy Notices knowing that the estate was well and truly solvent and that he collaborated with the Trustee and informed him about the solvency. 2. Order that the Creditor pay compensation to the Applicants for the harm caused through his abuse of the legal process. 3. Order that the taxation was dealt with unsatisfactorily and that the Certificates of taxation numbered 1 to 3 in NSD 198/2004 filed on 6 April '09 will be dismissed, as the Taxation Officer ignored important evidence. 4. Order that the Trustee's costs, charges and expenses be waived due to the misleading, alleged fraudulent and unprofessional conduct of the Trustee and that the titles of the Jindabyne and Tura Beach properties are transferred back to the owners. 5. Order that compensation be paid by the Trustee, due of his misconduct and that a written apology to the Maxwell-Smith's family is published in the Merimbula News. 6. If the Court is unable to deal with the alleged denial of justice in the Federal Court and the abuse of the legal process by the creditor and the trustee, the Applicants move the Court to grant leave for the Federal Senate to conduct the Inquiry. 39 In his judgment of 14 May 2010, Nicholas J struck out paragraphs 1 and 2 (for reasons which he explained at [10]–[12]) and dismissed the balance of the notice of motion. There was no application made for leave to appeal against dismissal of the notice of motion filed by Mr and Mrs Maxwell-Smith. The orders now challenged 40 On 25 March 2011 Nicholas J delivered a second judgment. Following his Honour's earlier judgment, the Registrar had provided a report dated 5 November 2010. The Registrar had revised the total of all bills down from $392,482.72 to $273,717.41 (a further reduction of $118,765.31 – i.e. a total reduction of $161,536.75 from the amounts claimed by the trustee). The total reduction was, therefore, about 37%. Nicholas J recorded (at [4]): 4 The parties were given the opportunity to raise any issue they had with the Registrar's report. Neither the trustee nor Mrs Maxwell-Smith raised any such issue. 41 His Honour recorded that Mr and Mrs Maxwell-Smith had attempted to file a further application under s 179(1) of the Bankruptcy Act seeking $750,000 in compensation from the trustee and suspending his entitlement to costs, charges and expenses. His Honour allowed that application to be filed in court on 2 February 2011 but, in light of the earlier procedural history, including his Honour's earlier judgment, Nicholas J concluded that all but one aspect of the application should be dismissed pursuant to Order 20 rule 5 of the Federal Court Rules because the claims (save in that one respect) were unjustifiably vexatious and oppressive and an abuse of process. The exception to that conclusion concerned a refusal by the trustee to return title deeds to a property in Jindabyne. His Honour left that issue on foot and made orders requiring the provision of further particulars in support of the claim. 42 The orders which were made on 25 March 2011, for the reasons given in the judgment published on that day, were as follows: THE COURT DECLARES THAT: 1. The sum of the entitlements of Maxwell Christopher Donnelly (the Trustee) to remuneration, costs and expenses of his administration of the former bankrupt estates of Eugene Maxwell-Smith and Inge Maxwell-Smith (the Applicants) for the period 16 September 2003 to 21 May 2008 is $273,717.41. THE COURT ORDERS THAT: 2. The Applicants give vacant possession of the property known as 8B Surf Circle, Tura Beach, New South Wales (the Tura Beach Property) to the Trustee, or his duly authorised servants or agents, within 60 days of the date of this order. 3. The trustee file and serve an affidavit within 21 days of today specifying his estimate of such other amount as the Applicants might reasonably be required to pay on account of any additional remuneration, costs and expenses incurred in the administration of the Applicants' former bankrupt estates to which the Trustee may be found to be entitled including any additional remuneration, costs and expenses referable to the proposed sale of the Tura Beach Property. 4. The Trustee file and serve an affidavit within 28 days of today: (a) exhibiting a copy of any valuation obtained by him of the Tura Beach Property; (b) outlining the steps which he proposes to take in relation to the marketing and promotion of the Tura Beach Property. 5. There be no order as to costs of the taxation before the Registrar. 6. The Trustee's costs in the administration of the former bankrupts' estates include eighty-five percent (85%) of the Trustee's costs, charges and expenses of and incidental to the notices of motion filed 5 May 2009 (including as amended on 16 October 2009) and 20 August 2009. 7. Each party have liberty to apply on 5 days notice for the purposes referred to in paras 13, 15 and 16 of the reasons for judgment delivered today. 8. The application filed in Court on 2 February 2011 (the 2 February 2011 application) be dismissed in so far as it claims relief under s 179 of the Bankruptcy Act 1966 (Cth) in relation to the matters raised in paragraphs 1 – 5 (inclusive) and paragraphs 7 and 8 on pages 2 and 3. 9. The 2 February 2011 application, in so far as it claims relief under s 179 of the Act in relation to the matter raised in paragraph 6 on page 2, be stood over for directions to a date to be fixed. 10. The Applicants file and serve within 14 days a statement of particulars that specifies: (a) the details of the requests referred to in para 6 of the 2 February 2011 application (including whether those requests were written or oral or partly written and partly oral); (b) the details of the refusals referred to in para 6 of the 2 February 2011 application (including whether those refusals were written or oral or partly written and partly oral); and (c) the reasons why such refusals are alleged to have been unreasonable. THE COURT DIRECTS THAT: 11. A Registrar of the Court tax any further costs, charges and expenses of the Trustee incurred in administering the former bankrupt estates of the Applicants, including the costs specified in Order 6 above, as if it were a taxation in accordance with Part 8, Division 4 of the Bankruptcy Regulations 1966 (Cth). 43 Nicholas J contemplated that it might be possible for some arrangement to be made between the trustee and Mr and Mrs Maxwell-Smith which might avoid the need for their home to be sold. Accordingly, he discussed a basis upon which a stay of the order for possession (order 2) might be granted if satisfactory arrangements were made. His Honour said (at [15]): 15 I propose to grant Mr and Mrs Maxwell-Smith liberty to apply for the purpose of applying for a stay of the order for possession in the event that they are able to arrange a payment to the trustee in the amount of $273,717.41 together with such other amount as they might reasonably be required to pay on account of the trustee's additional remuneration, costs and expenses which are yet to be taxed. But there are two things I should say to Mr and Mrs Maxwell-Smith about this. First, I would need to be satisfied by evidence that they were willing and able to make such a payment before granting a stay of the order for possession. Secondly, they need to understand that if they want to avail themselves of the opportunity to reach an agreement with the trustee, they will need to move quickly. 44 The reasons why (except in respect of paragraph 6) the application filed on 2 February 2011 was dismissed were given at [27]–[39]. It is mainly, although not exclusively, to that matter which the present application for leave to appeal is directed. There is some overlap with the general question of costs because Mr and Mrs Maxwell-Smith contend, first, that costs should not be assessed until there is an inquiry into the trustee's conduct and, secondly, that such an inquiry will have the result that he is disentitled to many claimed costs, as well as being required to pay compensation. Leave to appeal 45 I may now come directly to the matter which is the subject of the present judgment. Mr and Mrs Maxwell-Smith have sought leave to appeal against the most recent judgment of Nicholas J delivered on 25 March 2011. The application for leave to appeal was not accompanied by any draft notice of appeal. The result was that it was not immediately clear exactly which orders, made by Nicholas J on 25 March 2011, the applicants wished to challenge. The position was clarified to some extent in various documents filed by Mrs Maxwell-Smith and further clarified by answers to questions during the hearing of the present application. 46 The application for leave to appeal was accompanied by an affidavit sworn by Mrs Maxwell-Smith. That affidavit contains a series of assertions/arguments many of which rehearse previous grievances and claims which have been dealt with by various judges of the Court. It is possible to discern from that affidavit an intention to challenge at least order 8 made by Nicholas J on 25 March 2011 (dismissing the bulk of the application filed on 2 February 2011). It appears to be the case also that Mrs Maxwell-Smith desires to take some issue with the way in which Nicholas J dealt with the question of the trustee's costs, charges and expenses but that was initially not readily apparent, especially in light of his Honour's observation (recorded above) that no issue had been taken with the Registrar's report dated 5 November 2010. 47 In a further affidavit filed on 28 April 2011, Mrs Maxwell-Smith made it clear that she desired to contend that the trustee's conduct should have been considered in the taxation proceedings. She alleged: In the taxation, the unprofessional conduct of Trustee MC Donnelly should have been considered. He created huge administration costs, knowing right from the beginning that our estate was well and truly solvent and he colluded with the creditor's law firm to the detriment of the debtors for whom he had responsibilities under the Bankruptcy Regulations 1996. The worst violation of duties was handing the court three times a deliberate false document in an attempt to hide his misconduct. 48 These allegations were made in support also of her complaint about dismissal of the bulk of the application which had sought a further inquiry under s 179 of the Bankruptcy Act. 49 A further "Sworn Statement on Leave to Appeal" was filed by Mrs Maxwell-Smith on 3 May 2011. It complains further about the trustee's charges, recites earlier history and concludes in the following way: 35. To avoid another miscarriage of justice, I request this Court, that leave to appeal is granted, "It is submitted that an inquiry may have the utility of certain orders being made restraining Mr Donnelly from seeking some or all of his legal costs, and to account for the losses his conduct has caused. There is also a public interest in trustees in Bankruptcy being seen to be open to scrutiny". 50 Mrs Maxwell-Smith's responses to my enquiries at the hearing of the present application seemed to suggest that the applicants wish to have leave to appeal against orders 1, 2, 3 (because it will generate further costs), 4 (because it will generate further costs), 6 and 8 which were made on 25 March 2011. For the purpose of further discussion I may concentrate on orders 1, 2, 6 and 8 which are the orders giving enforceable rights, imposing enforceable obligations or denying claims made, in a substantively final way. Orders 3 and 4 are procedural and impose no obligations on Mr and Mrs Maxwell-Smith. Leave for them to appeal against those orders could not possibly be justified in the present case. The next question to be addressed is whether leave to appeal against orders 1, 2, 6 and 8 is required, or whether there is an appeal as of right. 51 Order 8 (the order for dismissal of the bulk of the application filed on 2 February 2011) may be dealt with immediately. It was, on the authorities, an interlocutory order (see Re Luck (2003) 78 ALJR 177 at [9]). Leave to appeal is therefore required. The position concerning orders 1, 2 and 6 is less clear in the sense that the orders are definite and substantively final (even if subject to the possibility of a stay in the case of order 2) in their intended effect. Nevertheless, in my view, they are not (any of them) final orders in the sense that they finally dispose of a claim for relief or a cause of action. They are each only a step on the way to a final outcome. Each of the costs orders is an interim one. None finally disposes of even the question of the trustee's outstanding entitlements. Order 2 is also clearly intended to be the subject of further attention and, at the time the application for leave to appeal was filed and heard, was subject to the possibility it might never come into operative effect. 52 Each of the orders, however, is (if and when operative in the case of order 2) substantively final in its effect, in the sense that each imposes actual practical obligations, denies existing rights or refuses claims made. 53 Under s 25(2) of the FC Act an application for leave to appeal to the Court must be heard and determined by a single judge unless: (e) a Judge directs that the application be heard and determined by a Full Court; 54 It has been consistently held in this Court that there is no appeal from an order of a judge granting or refusing leave to appeal against an interlocutory judgment (see Reid v Nairn (1985) 60 ALR 419; Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424; Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543; Kristoffersen v Department of Employment, Workplace Relations and Small Business [2002] FCAFC 269; Hamod v New South Wales (2002) 188 ALR 659 (at [14]–[15]); Dart v Norwich Union Life Australia Limited [2005] FCA 327 (at [32]–[34]); Bahonko v Sterjov [2007] FCA 1717 (at [54]–[55])). An application for leave to appeal, therefore, must be assessed, in part, having regard to the potential consequences for an unsuccessful applicant for such leave. Tests have been developed to accommodate that issue and I shall refer to them shortly. 55 There is another matter to be taken into account. Section 24(1E) of the FC Act provides as follows: (1E) The fact that there has been, or can be, no appeal from an interlocutory judgment of the Court in a proceeding does not prevent: (a) a party from founding an appeal from a final judgment in the proceeding on the interlocutory judgment; or (b) the Court from taking account of the interlocutory judgment in determining an appeal from a final judgment in the proceeding. 56 Apart from the challenges which Mr and Mrs Maxwell-Smith desire to make to the orders so far made by Nicholas J it seems very likely, having regard to the past history of the matter, that there will be further challenges which arise once further orders are made dealing with the balance of proceedings before his Honour. Theoretically, a point should be reached in any proceedings where it may be said that a final order has been made. That point has not yet been reached, in the present case, for the reasons I have given. The prospect of speculating about when that might happen is an unattractive one. At one point I was attracted to the idea of attempting to find a way in which at least one opportunity would be presented for the applicants to ventilate all their outstanding grievances before a Full Court, to the extent that it was (if at all) legitimately open to them to do so. A way of permitting that possibility to arise would have been to refer the present application for leave to appeal to a Full Court under s 25(2)(e) of the FC Act. If that was done it might be possible to organise synchronised attention to the present, and perhaps future, challenges. On reflection I have decided that such a well-intended approach would be unfair to the trustee and, in fact, prejudicial to the interests of Mr and Mrs Maxwell-Smith. I shall explain why. 57 The tests to be applied in determining whether leave to appeal should be granted from an interlocutory decision were adopted in this Court in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 ("Decor") from the test in Niemann v Electronic Industries Ltd [1978] VR 431. The headnote to the report of Decor distils the tests in the following way: The tests to be satisfied are whether the decision at first instance was attended with sufficient doubt to warrant it being reconsidered and whether substantial injustice would result if leave were refused, supposing the decision at first instance was wrong. Nevertheless, there may be circumstances in which the tests are not appropriate for application by a court; for example leave is more readily granted where substantive rights, rather than points of practice, are at issue. 58 In Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 ("Johnson Tiles") French J (with whom Beaumont J and Finkelstein J each agreed) said (at [42]–[43]): 42. The application of the leave requirement should not involve the expenditure of significant intellectual energy on the distinction between final and interlocutory judgments. Admittedly that is a question "productive of much difficulty" — Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248 (Gibbs CJ). But the policy of the provision is plain enough. The time and resources of the Court and the parties should not lightly be taken up with appeals about decisions in connection with proceedings which do not finally determine the rights of the parties. In broad terms, of course, a judgment is treated as final if it finally disposes of the rights of the parties. Otherwise it is an interlocutory order — Hall v Nominal Defendant (1966) 117 CLR 23 at 439-440 (Taylor J, Owen J agreeing) and 443 (Windeyer J); Licul v Corney (1976) 180 CLR 213 at 225 (Gibbs J, Stephen, Jacobs and Mason JJ agreeing). Under that rubric there has been much taxonomic debate. But the policy supports a general principle, applicable with or without a statutory leave requirement, to the exercise of appellate jurisdiction, including that of the Federal Court even before the enactment of s 24(1A). The principle was expressed by the High Court in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 in terms that: " ... appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure." The policy supporting the principle was clearly stated by Jordan CJ in Re Will of Gilbert (1946) 46 SR(NSW) 318 at 323, and repeated with approval by the High Court in the Philip Morris case at 177: "... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretions in interlocutory applications from a judge in Chambers to a Court of Appeal." 43. Artificial distinctions may be drawn because of the requirement that the Court looks to the legal rather than the practical effect of the order in question — Carr at 248 (Gibbs CJ) 256 (Mason J). But such artificiality as may arise can be overcome by a sensible exercise of the discretion to grant leave informed by the underlying policy of that requirement. Interlocutory orders cover a spectrum from those concerned solely with the mechanics of case management and pre-trial preparation to those which may, for one reason or another, have a significant impact upon the scope and outcome of the proceedings. If the order, the subject of the application for leave to appeal, is concerned with the mechanics of the pre-trial process then the scales are likely to be weighted against the grant of leave. However if while interlocutory in legal effect it has the practical operation of finally determining the rights of the parties "a prima facie case exists for granting leave to appeal" — Ex parte Bucknell (1936) 56 CLR 221 at 225; Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400; Minogue v Williams [2000] FCA 125 at [18]. If a proceeding is dismissed because it is frivolous or vexatious or because no reasonable cause of action is disclosed the decision is treated as interlocutory. However leave will usually be granted in such a case if there is any doubt about the decision at first instance — Little v Victoria [1998] 4 VR 596 at 598-600 and 601 (Callaway JA, Buchanan JA agreeing). 59 As is apparent from these passages, the burden of the discussion was on the circumstances when it would be appropriate to grant leave to appeal against a decision which was not final in form. Leave to appeal was granted in Johnson Tiles. Johnson Tiles assists the applicants in the present case, so far as it goes. However, it does not remove the need, in the case of an interlocutory order, to show an arguable case of error. Nor does it remove the need (which may be closely related to the first aspect in some cases) to show that substantial injustice would occur if leave to appeal is not granted in a particular case. In Davis v Insolvency and Trustee Service Australia (No 2) (2011) 190 FCR 437 a Full Court (Keane CJ, Besanko and Perram JJ) said (at [10]): To obtain a grant of leave to appeal [the applicant] had to prove substantial injustice would ensue were leave not to be granted. That was a requirement directly flowing from Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 which is a rudimentary aspect of appellate practise. 60 Despite my initial attraction to the idea of ensuring that Mr and Mrs Maxwell-Smith had one further (perhaps last) opportunity to ventilate their grievances before a Full Court, I have decided, on reflection, that such a course cannot be justified and that it would not, in any event, be in their own interests if such a step was taken. 61 As I have endeavoured to explain, at each stage of the history of this litigation a point has been reached where no further avenue of challenge remained open to Mr and Mrs Maxwell-Smith and where any endeavour to persist in a challenge would almost inevitably invite rejection as vexatious and an abuse of process. That point was reached with respect to each of: the dispute with the creditor; the validity of the bankruptcy notice; the effectiveness of the sequestration order; the entitlement of the trustee under the Bankruptcy Act to costs, expenses and remuneration with respect to the administration of Mr and Mrs Maxwell-Smiths' estates; and allegations of misconduct on the part of the trustee during the course of his administration. Each of those matters has been dealt with to finality. None, in my view, is open to further litigation in this Court. 62 It was inescapable that Nicholas J would reject the bulk of the application filed in court on 2 February 2011, which again sought a review of the trustee's conduct in relation to matters which had earlier been addressed. In my view, in the light of the history I have recounted, there is no prospect that a Full Court would be persuaded, on an appeal against order 8, to allow Mr and Mrs Maxwell-Smith to re-open the issue of Mr Donnelly's conduct by way of inquiry under s 179 of the Bankruptcy Act. Any challenge to the certificate of costs (in its greatly reduced amount) also depends on allegations concerning the trustee's conduct. There is no other argument available to Mr and Mrs Maxwell-Smith, nor suggested by them, which would independently sustain an appeal against the costs orders, or the conditional order for possession (orders 1, 2 and 6). 63 The only result of granting leave to appeal (on any issue) would be, therefore, that the trustee would incur further costs which he would be entitled to recover from Mr and Mrs Maxwell-Smiths' property, to their distinct and further disadvantage. Reference of the application for leave to appeal to a Full Court would merely defer the inevitable, and also expose both the trustee and Mr and Mrs Maxwell-Smith to unnecessary costs. 64 As a result, leave to appeal should be refused. There is no basis in principle upon which to refuse to allow the trustee his costs of the application for leave to appeal. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. Associate: Dated: 19 May 2011	14,793
federal_court_of_australia:fca/full/2002/2002fcafc0202	decision	commonwealth	federal_court_of_australia	text/html	2002-06-25 00:00:00	WADA v Minister for Immigration & Multicultural Affairs [2002] FCAFC 202	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2002/2002fcafc0202	2024-09-13T22:49:15.695180+10:00	FEDERAL COURT OF AUSTRALIA WADA v Minister for Immigration & Multicultural Affairs [2002] FCAFC 202 MIGRATION - protection visa - whether Tribunal wrongly characterised applicant's case and thereby failed to consider his case based on political opinion – witness not present at hearing due to administrative oversight – Tribunal invited applicant to rely on written statement of witness – no statement supplied – whether Tribunal obliged to hear evidence of witness not present at hearing due to administrative oversight – whether Tribunal correctly applied "real chance" test – whether Tribunal entitled to rely on old sources of information – status of UNHCR Handbook Migration Act 1958 (Cth) ss 5(1), 36, 426(2), 426(3), 476(1)(e), 476(1)(g) W375/01A v Minister for Immigration & Multicultural Affairs [2002] FCA 379, [2002] FCAFC 89distinguished WACW v Minister for Immigration & Multicultural Affairs [2002] FCAFC 155 at [17] followed Office of the United Nations High Commissioner for Refugees Handbook on Procedures and Criteria for Determining Refugee Status 1992 APPELLANT WADA OF 2001 v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS W 574 of 2001 GRAY, RD NICHOLSON AND EMMETT JJ 25 JUNE 2002 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 574 of 2001 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: APPELLANT WADA OF 2001 APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS RESPONDENT JUDGES: GRAY, RD NICHOLSON AND EMMETT JJ DATE OF ORDER: 25 JUNE 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 574 of 2001 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: APPELLANT WADA OF 2001 APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS RESPONDENT JUDGES: GRAY, RD NICHOLSON AND EMMETT JJ DATE: 25 JUNE 2002 PLACE: PERTH REASONS FOR JUDGMENT THE COURT: Introduction 1 This appeal is from a judgment of a single judge of the Federal Court of Australia, dismissing an application for judicial review pursuant to s 476 of the Migration Act 1958 (Cth) ("the Migration Act") of a decision of the Refugee Review Tribunal ("the Tribunal"). The Tribunal affirmed a decision of a delegate of the respondent, the Minister for Immigration and Multicultural Affairs ("the Minister"), refusing to grant the appellant a protection visa. 2 Section 36 of the Migration Act provides that there is a class of visas to be known as protection visas. A criterion for a protection visa is that the applicant for the visa be a non-citizen in Australia to whom Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol. The term "Refugees Convention" is defined in s 5(1) of the Migration Act to mean the Convention relating to the Status of Refugees done at Geneva on 28 July 1951. The term "Refugees Protocol" is similarly defined to mean the Protocol relating to the Status of Refugees done at New York on 31 January 1967. It is convenient to call these two instruments together the "Convention". For present purposes, it is enough to say that the effect of the Convention is that Australia has protection obligations to a refugee as defined in the Convention, ie a person who: "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". 3 The appellant is a citizen of Iran. He arrived in Australia on 11 November 2000. On 27 March 2001, he lodged an application for a protection visa pursuant to the Migration Act. On 19 April 2001, a delegate of the Minister refused to grant a protection visa. The appellant applied to the Tribunal for review of that decision. On 15 June 2001, the Tribunal published a written decision and reasons for decision. The decision of the Tribunal was to affirm the decision not to grant a protection visa. The appellant applied to the Court for judicial review of the Tribunal's decision. On 5 December 2001, the learned primary judge dismissed the application for judicial review and ordered the appellant to pay the Minister's costs of the application. It is from that judgment that the appellant has brought this appeal. Because of the history of the matter, it is required to be dealt with in accordance with the provisions of s 476 of the Migration Act as they stood prior to amendments that came into operation on 2 October 2001. The appellant's claims 4 The appellant claimed to have a well-founded fear of being persecuted if he should return to Iran, by reason of his being an Arab Iranian, with past involvement in a political movement aimed at securing a separate Arab State and promoting Arab language and culture. His claims were stated in some detail in an interview with an immigration inspector on his arrival in Australia, a written application for a protection visa, written submissions in support of the application, a record of interview with an officer of the Department of Immigration and Multicultural Affairs, written submissions in support of his application to the Tribunal and oral evidence to the Tribunal at a hearing on 6 June 2001. The claims are set out in considerable detail in the reasons for decision of the Tribunal. For present purposes, it is not necessary to do more than summarise them. 5 The appellant was born at Ahwaz in Iran, and lived there until he left Iran in September 2000. He claimed that Arabs are deprived of their rights and cannot practise their customs freely in Iran. They cannot study in Arabic. While he was at University, the appellant wrote articles about Arabs and their violation of rights. He was detained for four days, accused of instigating Arab nationalism and was released after signing an undertaking. In 1997, he became associated with Khalgh Arab, an organisation fighting for the independence of Khuzestan, a province in the south of Iran in which Ahwaz is located. He was arrested in 1998. During his military service, he began organising political activities aimed at achieving social justice and Arab freedom. He and some friends established a group, linked with an Arab activist. 6 In July 1999, there was a meeting between city authorities and citizens to discuss the problems of Ahwaz. The meeting became unruly. Security forces raided the meeting and arrested the appellant and others. The appellant was detained for ten months, but was released because there were no allegations against him other than trouble-making at the meeting. 7 The appellant's group became involved in holding meetings, writing slogans and preparing leaflets and articles. They revealed information about an oil pipe explosion and the confiscation of Arab farmers' land. They instigated and helped in a strike. They had articles printed in an Ahwaz newspaper about oppression of Khuzestan Arabs. In 2000, they began a campaign against confiscation of Arab farmers' lands for the building of a power station. This led to a blockade of the site. That night the appellant was at a meeting in a house, which was raided by authorities. He escaped over rooftops, evading shooting. He escaped by swimming in a river. After five days he managed to reach his uncle's house. He learnt that two of his friends were killed in the clashes, everyone at the meeting was arrested and the authorities were after him. He decided to flee the country. His uncle helped him. He used a people smuggler and a false Iraqi passport. The Tribunal's reasons 8 As well as the information provided by the appellant, the Tribunal relied on information from a Lonely Planet guidebook on Iran, the Canadian Immigration and Refugee Board's Research Directorate, the Department of Foreign Affairs and Trade, the United Nations High Commissioner for Refugees and the World Minorities Group, and on the absence of information of a particular kind in the United States Department of State's Country Reports on Human Rights Practices. 9 In the course of its reasons for decision, the Tribunal said: "The applicant had wanted a witness to give evidence on his behalf. Through administrative oversight, the person concerned was not brought to the hearing. At the end of the hearing, I advised the applicant that if he wanted me to consider this person's evidence, a brief statement should be provided to the Tribunal within seven days. I did this because there was insufficient time to arrange for the witness to be conveyed from the detention centre to the hearing. I advised Dr Al Jabiri, the applicant's adviser, that he could also provide any final written submissions at this time. Dr Al Jabiri agreed to do so. I advised the applicant and Dr Al Jabiri that I would consider any statement provided and decide whether I needed to take oral evidence from the witness. However, no further evidence or submissions have been provided to the Tribunal. Dr Al Jabiri did, however, provide a further document to the Tribunal on 14 June 2001." 10 The Tribunal accepted that the appellant is an Iranian National and an Arab. It found, however, that he had fabricated claims in an attempt to bring himself within the definition of a refugee. It did not find him to be a credible or a reliable witness. The Tribunal found the appellant to be a well-educated man, apparently from a fairly affluent background, who speaks Persian, Arabic and reasonably good English. There was nothing in the way he gave evidence before the Tribunal to suggest that he is naive, deficient in understanding or easily intimidated. He impressed the Tribunal as a person who would ask questions to clarify the situation, if he were unsure of what he was being asked. 11 In the light of these findings, the Tribunal rejected the appellant's claims that he had been involved in political activities in Iran, had been imprisoned because of them, had narrowly avoided being arrested and had left Iran illegally. In his interview at the airport on arrival, the appellant had said that he had not been involved in any political activities or with any political groups. He also said that he had left Iran using a genuine Iranian passport. The appellant gave several reasons for the discrepancy between what he said at that interview and his later claims. The Tribunal rejected all of them. These reasons were that the appellant did not want the Australian Government to think he had left Iran illegally, he had heard that he should leave the details of his claims to the last interview, he feared that some information might be passed to the Iranian Government and the interpreter involved in the airport interview told him to keep his answers brief. The Tribunal accepted that, for a variety of reasons, asylum seekers may be reluctant to disclose full details of their claims on arrival in Australia. It found that reluctance quite understandable. It recognised that a record of interview may be inaccurate for a variety of reasons, including interpreting errors. The Tribunal said that, at times, it may be inappropriate to place weight on the record of such an interview. In the appellant's case, however, the interviewing officer specifically told him that he was expected to tell the truth during the interview, that the interview was his opportunity to provide any reasons why he should not be removed from Australia, and that if the information he gave at any future interview differed from what he said at the initial interview, this could raise doubts about the reliability of what he said. 12 The Tribunal also rejected specifically the appellant's account of his escape over rooftops from a raid on a meeting. It accepted that houses in Ahwaz have access to rooftops, but took the view that this is something that would be known to the authorities. If they wanted to raid a house and arrest all the occupants, the authorities would take steps to ensure that the access points to and from the house were appropriately secured. The Tribunal found the appellant's evidence of this incident "unconvincing". 13 On the basis of information from sources other than the appellant, the Tribunal found that there was a push for the independence of Khuzestan at the time of the revolution in Iran. Since then, Arab Iranians supported the Iranian Government during the Iran-Iraq war. There was no evidence of any current political push for autonomy by Arab Iranians. 14 The Tribunal dealt with a letter, produced by the appellant, from the Ahwazian Arab People's Democratic Popular Front, stating that the appellant "is a supporter of our organisation" and that his life is endangered as "he is sharing our political-social activities daily here in the United Kingdom and Europe". The Tribunal pointed out that the appellant had not claimed that he had ever been to the United Kingdom or Europe, so he could not have been involved in any political activities in such locations. The letter did not suggest that the organisation was active within Iran or that the appellant was involved in political activities in that country. If it were active in Iran, the organisation would be known to the agencies from which the Tribunal had received information. 15 Overall, the Tribunal was not satisfied that the appellant was ever involved in any political activities in Iran. It found that he had fabricated his claims in this regard in an attempt to create for himself the profile of a refugee. The Tribunal was not satisfied that he was ever detained by reason of political activities, or that he escaped from being arrested. It found that the chance that he would be involved in political activities in the future that would bring him to the adverse attention of the Iranian authorities was remote. It was not satisfied that the appellant had a well-founded fear of persecution for reasons of his political opinion. 16 The Tribunal did not accept that the appellant left Iran illegally. It found that he left Iran legally, using a genuine Iranian passport. The Tribunal was not satisfied that the appellant had a well-founded fear of persecution for a Convention reason arising out of the manner of his departure from Iran. It accepted that he had disposed of his Iranian passport on his way to Australia, but found that he could request the Iranian Embassy to issue him with a replacement travel document. There was no evidence that such a request would give rise to a well-founded fear of persecution for a Convention reason. 17 The Tribunal also considered whether the appellant had a well-founded fear of persecution merely because he was an Arab Iranian. It noted that the appellant speaks, reads and writes Arabic. On the appellant's evidence, there are two or three hours of Arabic language programs on television in Iran every day. The appellant's father farms the land he owns. Income from the family farm supports the family and is sufficient for the appellant's father to pay day labourers to work on the farm, to have paid the appellant's university fees and to support him in Australia. The appellant was able to gain entrance to and graduate from university. He was an officer during his military service. He obtained employment on completion of his military service. Overall, the appellant's evidence concerning himself and his family did not suggest that he had been disadvantaged by being an Arab. 18 The appellant had claimed that there are no newspapers in Arabic in Iran. The Tribunal referred to evidence that the Iranian Government Press Agency publishes a daily Arabic language newspaper. In response to this, the appellant claimed that newspaper was not available in Ahwaz. Even so, the Tribunal was of the view that the fact that the newspaper was published indicated that the Iranian authorities acknowledge that there are Arabic speakers in Iran and is prepared to provide them with at least some information in their own language. 19 The Tribunal referred to some evidence, dated 1996, that Arab activists in Iran alleged that the Government was trying to stamp out their culture. The Tribunal had not been able to locate any independent evidence indicating the specific nature of this allegation, nor any evidence suggesting that it was true. It accepted that many Arabs in Iran live in economically deprived conditions. Even if the appellant or his family were economically deprived, it would not follow that this would amount to persecution or that they had a well-founded fear of persecution for a Convention reason. 20 The Tribunal accepted that the appellant was involved in Arab cultural activities while at university. It did not accept that the activities had any political dimension. Nothing in the evidence before the Tribunal suggested that engaging in Arab cultural activities would lead to persecution. The Tribunal was not satisfied that the appellant was ever detained or otherwise harmed because he engaged in Arab cultural activities. It was not satisfied that the appellant was persecuted in the past because he was an Arab or that he had a well-founded fear of persecution for that reason. 21 The Tribunal also considered whether the appellant would fear persecution because he applied for refugee status in Australia. It found that the Iranian authorities would not take an adverse interest in a person merely because the person applied for refugee status abroad. The Tribunal was not satisfied that the appellant had a well-founded fear of persecution because he applied for refugee status in Australia. 22 The Tribunal was therefore not satisfied that the appellant was a person to whom Australia has protection obligations under the Convention. The application for judicial review 23 The appellant's original application to the Court contained handwritten grounds in the following terms: "a) There was no evidence or other material to justify the making of the decision that the applicant did not have a well-founded fear of persecution by reason of his political opinion, real or imputed if he returned to IRAN within the reasonably foreseeable future. b) The decision involved an error of law, being an error of law involving the incorrect interpretation of the applicable law of [sic] an incorrect application of the law to the facts as found by the Tribunal or both." The application thus invoked the grounds specified in s 476(1)(g) and (e) of the Migration Act. The primary judge's reasons 24 In his reasons for judgment, the learned primary judge noted that the appellant was not legally represented and that the submissions he made were of a factual nature, relating to the merits of the Tribunal's decision. Those submissions did not, in his Honour's opinion, raise any question of error of law or jurisdictional error on the Tribunal's part. His Honour said that he had scrutinised the papers and the Tribunal's reasons to see whether there was reviewable error. 25 The learned primary judge said that the Tribunal set out the relevant law correctly and that there was nothing later in its reasons to suggest that it did not apply the law as earlier recited. The essential basis for the Tribunal's decision was that it did not believe the appellant. The Tribunal gave reasons why it disbelieved the appellant. His Honour held that whether or not those were cogent reasons is not a matter for the Court. 26 His Honour also found that there was ample evidence or other material to justify the making of the decision that the appellant did not have a well-founded fear of persecution by reason of his political opinion, real or imputed, if he returned to Iran within the reasonably foreseeable future. Neither the appellant's submissions nor his Honour's examination of the papers disclosed any error of law. The Tribunal's conclusion that it was not satisfied that the appellant was a person to whom Australia has protection obligations under the Convention was open to it on the material before it. In his Honour's view, the Tribunal made no reviewable error, whether error of law or jurisdictional error. The grounds of appeal 27 The appellant's notice of appeal also contains handwritten grounds. They are as follows: "1 - The decision is contrary to law. 2 - The decision places the applicant at serious risk of being forcibly returned to Iran where he has a well-founded fears [sic] of being persecuted." 28 Before the hearing of the appeal, the appellant filed handwritten submissions. In them, he complained that the delegate of the Minister had wrongly classified him as not having been immigration cleared, and had therefore wrongly considered him only for a temporary protection visa, rather than for a permanent protection visa. He also complained of other aspects of the delegate's decision. 29 Also in his written submissions, the appellant referred to legal principles raised in W375/01A v Minister for Immigration & Multicultural Affairs [2002] FCA 379, [2002] FCAFC 89. In that case, the Court found as a fact that the asylum seeker had not failed to mention in his initial interview a claimed basis of his fear of persecution if returned to his home country. The Tribunal had therefore made an error in disbelieving him in relation to that claim; it had not dealt with the case put by the asylum seeker. The appellant sought to bring his case within those principles, even inviting us to listen to the tapes of his initial interview, as did the Full Court in that case. His point was that he was complaining that he had been persecuted for activities he characterised as cultural and educational, not as political, but the distinction was not understood. 30 The appellant's written submission included an argument that the failure to hear his witness, due to an "administrative oversight", amounted to an error on the part of the Tribunal, which he characterised as "a denial of natural justice with particularly serious consequences in circumstances where I fear for my life if I am forcibly returned to Iran." He also argued that the Tribunal and the learned primary judge had misapplied the "real chance" test and taken a wrong approach to a finding of risk of persecution if he were forcibly returned. He complained of reliance on the Lonely Planet guidebook and other materials dated between 1996 and 1998, and not attempting to corroborate these materials with more up to date country information available from the Department of Foreign Affairs and Trade and the Iranian authorities. He relied on a recent article in The Age newspaper about the fate of some Iranians forcibly returned to Iran from Australia, who were alleged to have been interrogated on arrival at Tehran airport and ordered to appear before the Iranian revolutionary tribunal. 31 The appellant appeared without legal representation and made oral submissions through an interpreter. Those submissions may be summarised as follows: · The appellant complained that his story was not accepted as the truth. · At the initial interview, he said that his problems were of a cultural and educational nature, and were not political. The lack of understanding of what he was putting was due to incomplete interpretation of his words. The difference between political activities and cultural or educational activities should be recognised and understood. The appellant could say that his activities were tribal or group activities, or even political activities. · He was unable to prove his case properly because his witness could not come to the Tribunal. He did not understand that he could have submitted a written statement of the witness after the hearing. · At the initial interview, the appellant did say that he would be prosecuted, imprisoned and possibly killed if he returned to Iran, but was not taken seriously. The article from The Age newspaper supported his claim. · People who have been tortured and persecuted severely have difficulty in interviews. They do not wish to bring back memories by talking about their experiences. If a refugee explains his fears and experiences, all should be considered. All the information the appellant had provided should be enough to be accepted for a protection visa in Australia. · Contrary to par 200 of the Office of the United Nations High Commissioner for Refugees Handbook on Procedures and Criteria for Determining Refugee Status ("the UNHCR Handbook"), the Tribunal placed great weight on the initial interview of the appellant at the airport. Several interviews are required before deciding if an asylum seeker is entitled to protection. · Contrary to par 203 of the UNHCR Handbook, the Tribunal did not give the appellant the benefit of the doubt. It did not recognise that it is impossible to provide documents and witnesses to substantiate all elements of a claim. Because there is no proof against what the appellant said, or the documents he produced, he is entitled to protection. Instead, he has been accused of lying and the documents he produced have been used against him, especially the letter he obtained from England, showing his involvement with the group. · There is no internationally accepted meaning of or explanation for cruelty. If any tribal, religious, educational, cultural or ideological activities are restricted, there is cruelty. Iran is a terrorist country whose government is the most cruel in the world at the moment. · The Tribunal claimed that the appellant was not fearful. How could it prove that? 32 The appellant's submissions did not expand upon the grounds of the appeal in terms of the grounds for judicial review specified in s 476(1) of the Migration Act, or in terms of any question of error on the part of the learned primary judge. The determination of the appeal 33 In a case such as this, it is important to understand the function of the Court. An application to the Court for judicial review of a decision of the Tribunal does not provide another opportunity for the applicant to repeat claims made to the Tribunal, and earlier, in the hope that they will be believed. The Court is confined by s 476 of the Migration Act to the grounds of judicial review specified in that section. Those grounds do not permit the Court to make findings of fact in relation to an applicant's claims different from those made by the Tribunal. The Court cannot substitute its own view of an applicant's credit for the view of the Tribunal. The Court's only function is to decide whether there has been some error on the part of the Tribunal falling within the grounds specified in s 476. 34 On appeal from a judgment of a single judge, the function of the Full Court is to decide whether the primary judge made any error on the material before that judge. Again, the Full Court cannot look at the facts and reach its own conclusions on the merits of a particular application for a visa. If the appeal is to succeed, it can only succeed on the basis that there was an error by the primary judge in reviewing the Tribunal's decision on the grounds specified in s 476 of the Migration Act. 35 Most of the appellant's written and oral submissions addressed the factual merits of the case. It was clear that the appellant was seeking to persuade the Court that the delegate of the Minister, or the Tribunal, should have granted him a protection visa. The Court cannot look at the matter on this basis. There is no indication that the appellant's case suffered at the Tribunal by reason of inadequate interpreting. He was represented at the hearing and his representative, Dr Al Jabiri, did not complain of problems with the interpreter. Nor did the appellant do so before the learned primary judge. The appellant's problem is that the Tribunal disbelieved some aspects of his claim and found that the aspects it did accept did not give rise to a real chance that the appellant would suffer persecution for a Convention reason if he were to return to Iran. Even if it were persuaded that the Tribunal should have taken a different view, the Court cannot overturn the Tribunal's decision for that reason. 36 To the extent to which the appellant sought to challenge the approach of the delegate of the Minister, the Court is unable to deal with his argument. As the appellant had the benefit of a full review of the delegate's decision by the Tribunal, any criticism of the delegate's decision is irrelevant. The task of the Tribunal was to deal with the appellant's application for a protection visa afresh, on the material before it, not simply to determine whether the delegate had made the right decision on the material before her. The task of the Court is to see whether the learned primary judge erred in dealing with the application for judicial review of the Tribunal's decision. 37 The case of W375/01A is different from the present. Unlike the asylum seeker in that case, the appellant did not claim that he had in fact said something in his first interview that the Tribunal found he had not said. The appellant's complaint was that, by describing his case as political, the Tribunal was misconstruing the nature of the claim he made. The Tribunal did ask itself the question whether the appellant could be entitled to protection because of his political opinion. Given the nature of the appellant's case, it was bound to do so. It also considered whether the appellant was entitled to protection on the basis of his race (which included his cultural activities and concerns). It rejected his claim in this respect because it found that there is no persecution of Arabs by reason of their race in Iran. In short, the Tribunal did not fail to deal with the case that the appellant put. It made use of the initial interview in one respect, namely as going to the credit of the appellant in putting elements of his case that he had not put in that interview. The appellant did not claim to have put in his interview the things that the Tribunal identified. There was no point in the Court listening to the tapes of the interview when the Tribunal had not failed to deal with some aspect of the appellant's case. 38 The absence from the Tribunal of the appellant's witness was a matter that the Tribunal sought to overcome by asking for a written statement of the witness's evidence. Although the appellant may not have understood the Tribunal's direction in this respect, he was represented at the hearing by Dr Al Jabiri. There is no indication that Dr Al Jabiri failed to understand that a written statement was required. It is significant that Dr Al Jabiri did submit a document to the Tribunal after its hearing, but did not submit a written statement of any witness. The Tribunal was not bound to hear the witness. Even if the appellant had given notice in accordance with s 426(2) of the Migration Act that he wished the Tribunal to take the oral evidence of the witness, the Tribunal would have been bound by s 426(3) to do no more than to take the appellant's wish into account. The appellant could not have been in a better position by attending the hearing and saying that he wished to call a witness. The Tribunal took into account the appellant's wish and took steps to satisfy it. It was the appellant, or his adviser, who failed to ensure that the witness's evidence reached the Tribunal in some form. 39 Nothing in the Tribunal's reasons for decision indicates that it misapplied the "real chance" test. It stated the test correctly and there is no indication that it failed to understand the law or to apply it properly. It considered all of the elements of the appellant's case. In rejecting some aspects of the appellant's evidence, it did so carefully, considering what weight it should give to the absence of some matters from the initial interview. 40 The Tribunal was entitled to take into account material from sources in 1996 and 1998. It does seem odd that the Tribunal would rely on a travel guide for information about the Iranian government's treatment of racial minorities, but the selection of the material on which it relies is a matter for the Tribunal. 41 The article from The Age newspaper was dated well after the Tribunal made its decision and after the learned primary judge had given his judgment. It is not something the Tribunal could have taken into account and not something that can be used to challenge the Tribunal's decision or to demonstrate error on the part of the judge. 42 The appellant's reliance on the UNHCR Handbook does not assist him. The UNHCR Handbook does not have legal status in Australia. By its own terms, it is intended to provide nothing more than "guidance" for government officials concerned with the determination of refugee status in States that are parties to the Convention. It cannot override the provisions of the Migration Act. See WACW v Minister for Immigration & Multicultural Affairs [2002] FCAFC 155 at [17]. 43 Like the learned primary judge, the Court has looked carefully at the Tribunal's reasons for decision. It is not possible to identify in those reasons any error that would fall within the grounds specified in s 476 of the Migration Act. The learned primary judge was correct to identify the Tribunal's view of the appellant's credit as the essential basis for its decision. His Honour was correct to say that the Tribunal was entitled to take the view it did of the appellant's credit on the material before it. His Honour was also correct in saying that there was ample evidence or other material to justify the making of the decision and that no error of law was revealed. 44 It is not possible for this Court to find that there was any error on the part of the learned primary judge, or of the Tribunal, falling within the grounds specified in s 476 of the Migration Act. Conclusion 45 As the appellant has been unable to establish any ground of appeal, the appeal must be dismissed. The appellant must be ordered to pay the Minister's costs of the appeal. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 25 June 2002 Counsel for the Appellant: The Appellant appeared in person Counsel for the Respondent: L A Tsaknis Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 23 May 2002 Date of Judgment: 25 June 2002	7,040
federal_court_of_australia:fca/single/1999/1999fca0208	decision	commonwealth	federal_court_of_australia	text/html	1999-03-04 00:00:00	Spalla v St George Wholesale Finance Pty Ltd [1999] FCA 208	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca0208	2024-09-13T22:49:18.539515+10:00	FEDERAL COURT OF AUSTRALIA Spalla v St George Wholesale Finance Pty Ltd [1999] FCA 208 ANTHONY PATRICK SPALLA, IRLMOND PTY LTD (RECEIVERS & MANAGERS APPOINTED) & APS (WHOLESALE) PTY LTD (RECEIVERS & MANAGERS APPOINTED) V ST GEORGE WHOLESALE FINANCE PTY LTD, ST GEORGE MOTOR FINANCE PTY LTD, ANDREW STEWART HOME & ANDREW WILLIAM BECK NO. V 74 OF 1999 JUDGE: FINKELSTEIN J PLACE: MELBOURNE DATE: 4 MARCH 1999 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 74 of 1999 BETWEEN: ANTHONY PATRICK SPALLA IRLMOND PTY LTD (RECEIVERS & MANAGERS APPOINTED) and APS (WHOLESALE) PTY LTD (RECEIVERS & MANAGERS APPOINTED) Applicants AND: ST GEORGE WHOLESALE FINANCE PTY LTD ST GEORGE MOTOR FINANCE PTY LTD ANDREW STEWART HOME and ANDREW WILLIAM BECK Respondents JUDGE: FINKELSTEIN J DATE: 4 MARCH 1999 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 Irlmond Pty Ltd (Irlmond), the second applicant, conducts the business of selling new and used motor vehicles under the name "Essendon Mitsubishi" pursuant to a franchise granted by Mitsubishi Motors Australia. APS Wholesale Pty Ltd (APS Wholesale), the third applicant, acts as the wholesaling arm for that business. The business is financed by St George Wholesale Finance Pty Ltd, the first respondent, and St George Motor Finance Ltd, the second respondent, each being a subsidiary of the St George Bank. 2 The manner in which finance is provided is as follows. Irlmond has entered into a bailment plan agreement with the financiers. The agreement is dated 21 February 1994. By that agreement, the financiers are to purchase motor vehicles when requested by Irlmond. Irlmond then takes possession of the vehicles as bailee and displays them for sale. Any offer to purchase a vehicle is received by Irlmond as agent for the financiers who may in their complete discretion sell the vehicle. It is not clear whether the sale is to the customer or to APS Wholesale who then sells the vehicle to Irlmond who in turn sells it to the customer. Upon the sale of a vehicle, Irlmond receives the purchase price for the account of the financiers. Out of those moneys, Irlmond is entitled to deduct its commission, being the difference between the price the customer pays for a vehicle and the price at which the vehicle was purchased by the financiers. 3 From time to time, motor vehicles are sold under an agreement whereby the payment of the purchase price is to be deferred for a period after the vehicle has been delivered. By a deferred payment agreement, also dated 21 February 1994, the obligation to pay the financiers the purchase price for those vehicles is deferred until the purchase price is received from the purchasers or 30 days from the date of the delivery of the vehicles, whichever first occurs. 4 The parties have agreed that there should be limits on the facility provided by the financiers. Those limits are that the financiers will at any one time purchase new vehicles to the value of $3.5 million, demonstration vehicles to the value of $350,000 and used vehicles to the value of $1.450 million. The limit on the value of new vehicles to be purchased includes an amount of $800,000 in respect of the deferred payment facility. Thus the "credit" available to Irlmond was agreed to be $5.3 million. 5 In order to secure its obligations under the bailment agreement and the deferred payment agreement, Irlmond has granted to the financiers a fixed and floating charge over its property. A like charge has been granted by APS Wholesale who has guaranteed the obligations of Irlmond. 6 By the end of 1994, Irlmond was in serious financial difficulty. Unsecured creditors were owed in excess of $2 million. The company needed to raise approximately $1 million in order to keep trading. St George Bank was requested to provide this money but only agreed to advance approximately $600,000. 7 Thereafter the business continued to struggle. Not only was it short of working capital, it was suffering trading losses. For example in the year ended 30 June 1997, the losses were of the order of $500,000. To cover the shortage of cash, Irlmond made use of the deferred delivery facility in a way not permitted by the agreements. What occurred was this. Irlmond allocated to the deferred delivery facility vehicles that had been sold and paid for. This enabled Irlmond to make use of the purchase price that had been received for these vehicles for a period of up to 30 days. According to the evidence, about one half of the facility was comprised of vehicles in respect of which the purchase price had been paid. 8 In the period from 1995 to September 1998, the level of the deferred delivery facility fluctuated between approximately $700,000 and $1.8 million of which, as I have said, approximately 50 per cent represented funds that should have been paid to the financiers. Since Irlmond was required to pay the purchase price of the deferred delivery vehicles within 30 days of those vehicles being allocated to the facility, Irlmond not only obtained up to 30 days' credit, but was able to roll over this credit from month to month. 9 Anthony Spalla, the first applicant, is the sole director and a shareholder of the corporate applicants. His evidence is that the financiers were well aware of the fact that Irlmond was making use of the deferred delivery facility in the manner described. According to Mr Spalla, he had discussed the use of the facility with officers of the financiers, in particular Wayne Phillips, Peter Beed and Danny Cahill. Mr Spalla said that each of these officers knew that the deferred delivery facility was being used in order to finance the day-to-day operations of the company's business. He says that not only did the officers of the financiers not object to what was happening, but that he was led to believe by them that the financiers would not require Irlmond to abide by the strict terms of the bailment agreement and the deferred payment agreement without reasonable notice. As at September 1998, the deferred delivery facility stood at around $1.9 million, over half of which represented funds that had been received by Irlmond that were being utilised for operating capital. 10 In September or October 1998, Mr Spalla met Mr Beed. Mr Spalla says that Mr Beed told him that: "We [presumably the corporate applicants and the financiers] have to come clean and tell Sydney the truth, but you'll have to go somewhere else." The reference to "Sydney" I take to be a reference to the St George Bank. The following day Mr Beed informed Mr Spalla that he should borrow funds to refinance the facilities that were being provided by the financiers. 11 As a consequence of these conversations, Irlmond discontinued its practice of treating vehicles that had been sold and paid for as part of the deferred delivery facility. The result was that, as disclosed by the November 1998 accounting, Irlmond was required to pay the financiers approximately $500,000 more than would otherwise have been the case. Irlmond did not have the funds to pay the total amount that was then due to the financiers. The shortfall between the amount that was paid and the amount that was payable according to the written agreements was around $1 million. 12 At a meeting that took place on either 25 or 26 November 1998, Mr Phillips served on Mr Spalla notices of demand under the debentures requiring the unpaid amounts to be paid. Mr Spalla says that when those demands were served, he was told that their service was "only a formality" and that the financiers did not intend to act upon the demands. In December 1998, Irlmond paid out the amount that was due to the financiers for the month of November 1998. 13 As a further consequence of the discussions of September or October 1998, Mr Spalla commenced negotiations with Capital Finance with a view to having that company take over the financing of Irlmond's business. Those negotiations continued until about mid-January 1999 when Capital Finance informed Mr Spalla that it was not willing to provide financial accommodation to Irlmond. 14 To appreciate the significance of what occurred in early 1999, it is necessary to mention one further aspect of the arrangements between Irlmond and the financiers. It was a feature of their dealings which does not appear to be in dispute. Although the bailment plan agreement required Irlmond to pay the purchase price received from the sale of motor vehicles within 48 hours of the receipt of those moneys, this timetable was not adhered to. What had been occurring for a number of years was that the financiers would conduct a monthly audit of motor vehicle sales and receipts, and Irlmond would pay the amount determined to be due as a consequence of that audit a short time thereafter. 15 In accordance with this practice, audits were conducted in December 1998 and January 1999. However, the evidence does not disclose the results of those audits. A further audit was conducted on 4 February 1999. According to the evidence of Mr Spalla and his accountant, Dean Still, this audit took place much earlier in the month than was usual. I infer from their evidence that a period of approximately four weeks would usually elapse between each audit and that period had not elapsed by the time of the audit of 4 February 1999. 16 Mr Still said that the audit disclosed that a number of vehicles that had not been accounted for. Apparently there were some 13 vehicles that had been sold and in respect of which payment had been received. Mr Still said that Mr Cahill requested that he be given a cheque for the sum of $310,458.41 in respect of those 13 vehicles. Mr Spalla said that he told Mr Cahill not to present the cheque because the account was not in funds. However, the cheque was presented for payment on 8 February 1999 and was dishonoured. It is arguable that this did not place Irlmond in default of its obligations under its various agreements with the financiers for the reason that the amount was not payable until after the usual monthly audit. 17 A further audit was conducted on 10 February 1999. This audit disclosed that Irlmond was indebted to the financiers in the sum of approximately $2,238,000. It is far from clear how the account had reached this level. I assume that one reason was that Irlmond was no longer using the deferred payment facility in accordance with past practices. Mr Still offered a further explanation. He said that between 4 February 1999 and 10 February 1999, Irlmond had received a large number of payments for vehicles that had been delivered during that period. He also said that the amounts were not required to be paid to the financiers until after the monthly audit in accordance with the practice that had been established. 18 It seems that all parties accepted that the debt that was in fact due to the financiers was greater than the amount disclosed by the audit of 10 February 1999. Mr Spalla thought that the debt was around $2.4 million to $2.5 million. Others were of the view that the debt might have been as high as $2.7 million or $2.8 million. On 12 February 1999, Mr Phillips telephoned Mr Spalla, and said, according to Mr Spalla, that unless the debt due to the financiers was immediately reduced to $2,238,000, the financiers would "close him up". In a discussion that occurred later on the same day, Mr Spalla informed Mr Phillips that he could not put further funds into the business and thus could not make the payment sought. However, by this time the financiers had appointed receivers over the property of the corporate applicants. The receivers are the third and fourth respondents to this proceeding. 19 The appointment of the receivers led to the commencement of this proceeding. The principal relief sought is a declaration that the receivers were not lawfully appointed and that they are trespassing on the corporate applicants' property. Damages for trespass are sought. The basis for the contention that the appointment of the receivers was unlawful is that by reason of the dealings between the parties that I have described, the bailment plan agreement was varied to the effect that Irlmond could use the deferred delivery facility to fund its operations. Alternatively it is alleged that Irlmond was induced to believe that its conduct would not constitute a breach of its obligations under the bailment plan agreement or the deferred delivery facility, and that the financiers would not depart from that position without giving the corporate applicants reasonable notice of their intention to do so. 20 The applicants now seek an interlocutory injunction pending trial restraining the receivers from selling the business. They do not seek to restrain the receivers from remaining in possession of the business in the meantime. In other words, the corporate applicants seek to have the business and its assets preserved in the event that they are successful at the trial and obtain an order that the receivers are trespassing upon their property. 21 The principles to be applied in determining whether interlocutory relief should be granted are well known and were the subject of only passing comment by counsel. In this type of application, it is necessary for a court to consider a variety of factors: the strength of the plaintiff's case, whether irreparable harm will be suffered by the plaintiff if relief is withheld, whether irreparable harm will be done to the defendant if the relief is granted, what is the "balance of convenience", a shorthand expression for an indefinable array of elements, and any other special factors that ought to be brought into consideration. The relevant weight to be given to each factor will depend upon the particular circumstances of the case. 22 What is the strength of the applicants' case? For the purpose of considering this question, I will act on the basis of Mr Spalla's evidence that officers of the financiers were aware of and had acquiesced in the use by Irlmond of the deferred delivery facility in the manner described for the purpose of enabling Irlmond to fund the day-to-day operations of its business. It is true that Mr Spalla's evidence in this regard is denied by the respondents' witnesses, but on an interlocutory application such as this, where the evidence is incomplete and that which has been given has not been tested, I will act on the applicants' evidence unless it is inherently improbable. 23 On that assumption, the applicants have made out a case, which is neither trivial nor insubstantial, that the use of the deferred delivery facility as a means of funding Irlmond's business would not be treated by the financiers as a breach of the bailment plan agreement and the deferred payment agreement. 24 I have considerable doubt whether this conduct could result in a variation of the terms of those agreements. For one thing, it is almost impossible to specify in what way the terms would have been amended. For example, what was to be the limit of the facility? What amounts could Irlmond add to the facility? Was it agreed that Irlmond could make use of the financiers' money for the duration of the bailment plan agreement or was it agreed that it could do so only until the financiers said that it could not? 25 Secondly, it is by no means evident to me that the persons who were aware that the facility was being conducted otherwise than in accordance with the terms of the written agreements had authority to bind the financiers to a variation of them. Thus, I do not know what position any of these officers held with the financiers. I do not know the scope of their actual or implied authority in relation to the affairs of the financiers, nor is there any evidence suggesting that the financiers held those officers out as having ostensible authority to amend the facility agreements. 26 But the facts could justify a finding that the financiers are estopped from contending that what had occurred was a contravention of the facility agreements, and a further finding that they could only restore the parties to their former position by giving reasonable notice to that effect. 27 A difficult question at the trial, assuming that the applicants can establish all of the material facts, will be what period of notice is reasonable in all the circumstances? In this regard, the applicants say that Irlmond should have been given somewhere between six and 12 months' notice; that being the time that would reasonably be required to find a substitute financier. However, it is to be remembered that the corporate applicants were advised in October 1998 to find a substitute financier, and although the notices of demand were served shortly thereafter, the receivers were not appointed until February 1999. I have no doubt that on the evidence thus far filed, the suggestion that financiers were required to give 12 months' notice is not sustainable. On the other hand I think that there is a reasonable case that could be made out that at least two to three months' notice would not be sufficient. 28 It is not for me to finally resolve this question. For present purposes, the only issue that I have to determine is whether a case has been made out that notice of around six months was required to be given. If such notice was required then the receivers were appointed prematurely. Although I do not reach this conclusion with any confidence, I accept the possibility that the applicants may be able to establish that this was the period of notice that should have been given. 29 Will the applicants suffer irreparable harm if the injunction is not granted? In cases where a plaintiff claims an interference with his property, injunctions are strongly favoured. A damages award in those circumstances amounts to an expropriation of property, and in such cases courts have commonly allowed injunctive relief even where the balance of convenience strongly favours the defendant. Here the applicants do assert a direct interference with their property and, in the absence of strong countervailing arguments, are prima facie entitled to an injunction. 30 Will irreparable harm be caused to the respondents if the injunction is granted? In ordinary circumstances a plaintiff's undertaking as to damages is designed to ensure that the defendant will not suffer as a result of the grant of the injunction. Here the applicants offer such an undertaking, but it is accepted by them that the undertaking is of no value. Their financial position is such that they can give no meaningful undertaking. 31 The applicants contend that this is of no consequence in this case because the respondents will not suffer any loss by reason of the grant of the injunction. I do not agree that this is so. In the first place the business conducted by Irlmond has been trading at a loss for some time, although the evidence does show that in the financial year ended June 1998 a small trading profit was derived. That business is now being conducted by the receivers, and it may be that they will also run it at a loss. If that is so and they are forced to continue to operate the business for a further period, because that will be the effect of the injunction that is sought, any losses that are being suffered will not be recoverable in the event that the applicants fail at trial. 32 There is another potential for financial loss. Mitsubishi Motors is presently entitled to terminate the franchise granted to Irlmond. It has indicated that it will not terminate that franchise before 15 March 1999 in order to enable the respondents to sell the goodwill of the business. If the business is not sold by then and the franchise is terminated there will be no goodwill for the receivers to sell. It appears that the goodwill is worth at least $1 million, although the applicants assert that it might have a greater value. 33 It is possible that Mitsubishi Motors might extend the period within which the business is to be sold if requested to do so. Mitsubishi Motors may even agree to stay its hand until the final resolution of this proceeding. As yet Mitsubishi Motors has not been requested to delay the termination of the franchise and so it is not clear how it will treat such a request. However, if no extension is granted, then the financiers will plainly suffer irreparable harm. 34 What is the balance of convenience or, to put the matter another way, does the benefit that the applicants will be given by the grant of the injunction outweigh the convenience to the respondents of withholding relief? Save for the potential of financial loss in operating the business and the possible loss of the goodwill, the respondents will not suffer any significant inconvenience if the injunction is granted. I anticipate that the trial of this action will take place within a month or so. A delay of that short a period would not detrimentally affect the respondents in any way so far as I am aware. 35 Are there any other facts that should be taken into account? There is one matter that I regard as being of great significance. The applicants relied upon an affidavit by Leslie Murray, an accountant, who has been involved in the retail motor industry for some 38 years. Mr Murray was asked to express an opinion on the possibility of Irlmond being able to refinance the bailment plan facility it has with the financiers. Mr Murray said that in his view, Irlmond would be able to refinance the business, but that it would take approximately six months to do so. However, Mr Murray made it clear that, in his view, in order to refinance the business the following requirements needed to be met: the writing off by St George of $1.150 million of the debt due to it, the provision of external capital probably of the order of $1 million, alternative finance and funds to supplement the working capital of the business. 36 If this is the true position, then the possibility of obtaining finance is remote. The financiers are unlikely to write off any part of the debt that is due to them. It is unlikely that an investor will inject capital of $1 million. If these two requirements are not met, I take Mr Murray to be saying that the business could not be refinanced. 37 If this was the only evidence on the point, the grant of an injunction would be futile and should not be issued. However, as it turns out, it is not the only evidence that deals with the issue. There is an affidavit by Nimrod Harell, the chief executive officer of First Secure Ltd, a business which is involved in buying and selling motor vehicle dealerships. Mr Harell says that he has spoken with Capital Finance, the company that had previously been approached by Mr Spalla to refinance the business. Mr Harell says that as a consequence of his discussions, he believes that if the Spalla family offer their family home as security, Capital Finance might agree to refinance the business. 38 I accept that some criticism of Mr Harell's affidavit is justified. He does not give a sufficient explanation for his opinion that finance might be available, nor does he explain in any detail the reason why Capital Finance might change its mind and provide that finance. However, for the purposes of this application, I cannot and do not reject Mr Harell's evidence. 39 What then is to be the result of this application? In balancing the relative risks of granting or withholding the remedy sought, I favour the view that the applicants' rights will be so impaired by the time of trial and final judgment, the result of which is impossible to predict, that the relief sought should be granted. However, I intend to grant that relief on the following basis. If the respondents make a bona fide request of Mitsubishi Motors to defer terminating the franchise agreement until after the trial of this action and Mitsubishi Motors refuses to grant that deferral, then I will discharge the injunction. Further, if the continuation of the business results in the receivers incurring personal liabilities which cannot be recouped from the revenue derived by them in conducting the business - that is, if the business is operating unprofitably - I will discharge the injunction unless the applicants provide adequate security to protect the receivers' position. The appropriate order for costs is that they shall be in the cause. 40 The parties should bring in short minutes of orders to give effect to these reasons and to provide for any directions that should be given in order to enable a speedy hearing to take place. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein Associate: Dated: 4 March 1999 Counsel for the Applicant: Mr P R Hayes QC Mr I D Martindale Solicitor for the Applicant: Feingold Partners P/L Counsel for the Respondent: Mr R Garratt QC Mr D Gilbertson Solicitor for the Respondent: Corrs Chambers Westgarth Date of Hearing: 2 and 4 March 1999 Date of Judgment: 4 March 1999	5,369
federal_court_of_australia:fca/single/2000/2000fca0677	decision	commonwealth	federal_court_of_australia	text/html	2000-05-12 00:00:00	Cook v Pasminco Ltd [2000] FCA 677	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2000/2000fca0677	2024-09-13T22:49:19.352642+10:00	FEDERAL COURT OF AUSTRALIA Cook v Pasminco Ltd [2000] FCA 677 PRACTICE AND PROCEDURE – Jurisdiction of Federal Court – claims of negligence and nuisance arising out of emission of allegedly noxious fumes which allegedly injured health of applicants – accrued jurisdiction – claims under Trade Practices Act 1974 (Cth) ss 75AD and 75AG that the emissions were "goods" "manufactured" by respondents and "supplied" by them "in trade or commerce" and that had a "defect". WORDS AND PHRASES – "goods" – "manufactured" – "in trade or commerce" – "supply" – "defect". Trade Practices Act 1974 (Cth) ss 75 AC, 75AD, 75AG Re Wakim; ex parte McNally (1999) 163 ALR 270, cited Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457, applied Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212, applied Fitzroy Motors Pty Ltd v Hyundai Automotive Distributors Australia Pty Ltd (1995) 133 ALR 445, followed WG & B Manufacturing Pty Ltd v Tesla Farad Pty Ltd [1999] FCA 1776, followed Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594, applied ROSLYN GAY COOK & ORS v PASMINCO LIMITED & ORS N 132 OF 2000 LINDGREN J 12 MAY 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 132 OF 2000 BETWEEN: ROSLYN GAY COOK First Applicant SAMANTHA JOY COOK (by her next friend ROSLYN GAY COOK) Second Applicant VICKI LEAH BLAD Third Applicant ASHLEIGH AGARS (by his next friend VICKI LEAH BLAD) Fourth Applicant AND: PASMINCO LIMITED First Respondent PASMINCO COCKLE CREEK SMELTER PTY LIMITED Second Respondent PASMINCO PORT PIRIE SMELTER PTY LIMITED Third Respondent JUDGE: LINDGREN J DATE OF ORDER: 12 MAY 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed as incompetent. 2. The proceeding be stood over to a date to be fixed for the hearing of submissions on 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 132 OF 2000 BETWEEN: ROSLYN GAY COOK First Applicant SAMANTHA JOY COOK (by her next friend ROSLYN GAY COOK) Second Applicant VICKI LEAH BLAD Third Applicant ASHLEIGH AGARS (by his next friend VICKI LEAH BLAD) Fourth Applicant AND: PASMINCO LIMITED First Respondent PASMINCO COCKLE CREEK SMELTER PTY LIMITED Second Respondent PASMINCO PORT PIRIE SMELTER PTY LIMITED Third Respondent JUDGE: LINDGREN J DATE: 12 MAY 2000 PLACE: SYDNEY REASONS FOR JUDGMENT (ex tempore) 1 The applicants sue the respondents arising out of alleged noxious emissions from their plants at Cockle Creek, near Newcastle, New South Wales, and Port Pirie in South Australia. All four applicants allege injury to their health. There is also a case made based on noise and vibrations but this is not of immediate concern. 2 The first applicant and her daughter, the second applicant, who is seven years old, live at Cockle Creek. The first applicant bought a house there in or about November 1990. The second applicant sues by her next friend, the first applicant. 3 The third applicant and the fourth applicant, who is eight years old, live at Port Pirie. The fourth applicant sues by his next friend the third applicant. 4 The second and third respondents are wholly owned subsidiaries of the first respondent. I need not distinguish between the three respondents. 5 The applicants seek an injunction and damages. 6 The action is brought as a representative proceeding under Part IVA of the Federal Court of Australia Act 1976 (Cth) but I need say no more of this aspect. 7 The applicants plead causes of action in negligence and nuisance and two statutory causes of action under the Trade Practices Act 1974 (Cth) ("the TP Act"). Paragraphs 5 and 6 of the amended statement of claim ("the Pleading") are as follows: "5. At all material times in the course of its business the Respondents wrongfully caused and permitted emissions of quantities of offensive, noxious and unwholesome smoke, fumes, vapours and gases, lead, sulphur dioxide and other pollutants (the 'emissions') from the lands [the lands refer to the two plants]. 6. The emissions were toxic to humans." 8 The claims in negligence and nuisance are then pleaded in paras 7 to 12 of the Pleading. 9 The claims under the TP Act are made under ss 75AD and 75AG of that Act and are pleaded in paras 13 to 19 of the Pleading as follows: "Claim under the Trade Practices Act - section 75AD. 13. Further and in the alternative, the emissions were goods manufactured by the Respondents and supplied by them to the Applicants. 14. The goods had a defect being a deleterious effect on human health. 15. As a result of the defect the Applicants suffered injuries. Claim under the Trade Practices Act - section 75AG. 16. Further and in the alternative, the emissions were goods manufactured by the Respondents and supplied by them to the Applicants. 17. The goods had a defect being an adverse effect on the safety of land, buildings or fixtures. 18. As a result of the defect land, buildings or fixtures acquired by the First Applicant were damaged. 19. The First Applicant used the land, buildings or fixtures for private use and suffered a loss as a result of the defect." 10 The respondents complain that the claims made under the TP Act cannot succeed and should not be permitted to proceed to trial, and that on that basis this Court lacks jurisdiction to entertain the common law causes of action in negligence and nuisance. Accordingly, on 21 March 2000, following service of the originating process and before the first directions hearing, the respondents filed a notice of conditional appearance and a notice of motion asking that the application be set aside. 11 In Re Wakim; ex parte McNally (1999) 163 ALR 270, decided by the High Court on 17 June 1999, that Court held subs 4(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 of the States, including New South Wales and South Australia,to be invalid. That subsection purported to invest this Court with jurisdiction in respect of "State matters". The expression "State matters" was defined so as to include, relevantly, claims in negligence and nuisance which arise under the common law of the States. 12 In the light of Wakim, it is clear that the applicants cannot rely on the cross-vesting legislationto give this Court jurisdiction to entertain their claims in negligence and nuisance. But are those claims within the "accrued jurisdiction" of this Court? They are if they form part of the one "matter" or "single juridical controversy" as federal claims which are within the Court's jurisdiction, but not if those federal claims are themselves "colourable" and "not genuine": Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 498-499 (Gibbs J); Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 (FC) at 219; Fitzroy Motors Pty Ltd v Hyundai Automotive Distributors Australia Pty Ltd (1995) 133 ALR 445 (IRCA/Wilcox CJ) at 450; WG & B Manufacturing Pty Ltd v Tesla Farad Pty Ltd [1999] FCA 1776 (unreported, Finkelstein J, 30 November 1999) at [11] and see Lane's Commentary on the Australian Constitution (1997), pp 516-517. 13 Apparently there is no dispute that this Court has jurisdiction in respect of claims made under ss 75AD and 75AG of the TP Act- see ss 86(1) and 75AS of that Act. Moreover, senior counsel for the respondents indicated that so far as his instructions went at that time, it would not be the respondents' contention that if the claims under the TP Act survived the present challenge, nonetheless the two common law claims lay outside the Court's accrued jurisdiction. 14 Are the federal claims here "genuine" and "non-colourable" or are they fabricated in order to bring the common law claims within the Court's jurisdiction? I would conclude that they are not genuine and are colourable and fabricated if they are obviously doomed to fail, at least unless there was evidence to the contrary. There is no evidence to the contrary here. 15 By their amended notice of motion filed on 9 May 2000 the respondents seek the following principal order: "That paragraphs 13 to 19 of the Amended Statement of Claim be struck out pursuant to Order 11 Rule 16 or Order 20 Rule 2(1) of the Rules of Court, and that the Amended Application be set aside pursuant to Order 9 Rule 7(1)(a) or the proceeding be dismissed as incompetent pursuant to Order 20 Rule 20(1) of the Rules of Court." 16 I do not find it necessary to discuss the terms of the rules referred to. There has been no issue but that the only basis on which the Court would have jurisdiction to hear and determine their claims based on negligence and nuisance is the Court's accrued jurisdiction. The question is whether the claims under the TP Act are "doomed to fail", "quite hopeless" or "clearly untenable", because if they are, I will conclude that they are "colourable", "not genuine" and "fabricated" and, therefore, that the accrued jurisdiction is not attracted. 17 Sometimes evidence led on the final hearing may falsify an initial impression that a case is hopeless. Counsel for the applicants says that this case should be allowed to proceed to final hearing and that the question of jurisdiction should be determined in the light of the evidence then adduced. He submits that the claims under ss 75AD and 75AG are genuine. 18 Section 75AD is as follows: "If: (a) a corporation, in trade or commerce, supplies goods manufactured by it; and (b) they have a defect; and (c) because of the defect, an individual suffers injuries; then: (d) the corporation is liable to compensate the individual for the amount of the individual's loss suffered as a result of the injuries; and (e) the individual may recover that amount by action against the corporation; and (f) ………………………………………………………………………." (emphasis mine). 19 Section 75AG is generally similar. It commences as follows: "If: (a) a corporation, in trade or commerce, supplies goods manufactured by it; and (b) they have a defect; and (c) because of the defect, land, buildings, or fixtures, ordinarily acquired for private use are destroyed or damaged; and (d) a person who: (i) so used; or (ii) intended to so use; the land, buildings or fixtures, suffers loss as a result of the destruction or damage; …" (emphasis mine). 20 For the purposes of the motion the same issues arise under both sections and can be stated as follows: (1) Could the emissions arguably be found to constitute "goods"? (2) Could the emissions arguably be found to have been "manufactured" by the respondents? (3) Could the emissions arguably be found to have been "supplied" by the respondents? (4) If so, could the emissions arguably be found to have been supplied by the respondents "in trade or commerce"? (5) Could the emissions arguably be found to have had a "defect"? 21 If I should answer any one of those five questions "No", the applicants' case could not succeed so long as it remains in this Court and the respondents would be entitled to have the proceeding summarily disposed of. 22 I have come to a clear view that the answer to each of the third, fourth and fifth questions is "No" and I do not find it necessary to answer the first and second questions. 23 I go first to the notion of "supply". Subsection 4(1) of the TP Act provides as follows: "Supply", when used as a verb, includes: (a) in relation to goods - supply (including re-supply) by way of sale, exchange, lease, hire or hire purchase; and (b) in relation to services - provide, grant or confer; ..." 24 It is true, as counsel for the applicants points out, that the definition is an inclusory one but it seems to me that an essential element of supply is that it is a bilateral and consensual process which has no application to a case such as the present one where the applicants' case is that the emissions were inflicted upon them without their consent. 25 The notion of "supply" in the TP Act is the counterpart of "acquire", which is defined in subs 4(1) in these terms: "'Acquire' includes: (a) in relation to goods - acquire by way of purchase, exchange or taking on lease, on hire or on hire-purchase; and (b) in relation to services - accept; ...". 26 The definitions of "supply" and "acquire" are symmetrical: a supply of goods must occur as part of a bilateral "transaction" or "dealing" under which the other party acquires them. Neither the applicants nor anyone else acquired the emissions. 27 No amount of evidence on the final hearing can alter the fact that the emissions did not move from the respondents to the applicants or anyone else as part of a consensual transaction or dealing. Accordingly, the applicants will not be able to prove that the respondents "supplied" the emissions. 28 Secondly, the supply must have occurred "in trade or commerce". The most recent authoritative exposition of this notion in the TP Act is to be found in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594. The High Court there held that the expression as it appears in s 52 of the Act does not refer merely to the broad field in which a corporation's general activities of a trading or commercial nature are carried on. Rather, the Court held that the misleading or deceptive conduct to which s 52 refers must occur as an aspect or element of activities or transactions which themselves have a trading or commercial character. 29 Counsel for the applicants correctly points out that the heading to Part V of the TP Act, "Consumer Protection", and the heading to Division 1 of that Part, "Unfair Practices", to both of which reference was made in Concrete Constructions, do not apply in the present case because, unlike s 52, ss 75AD and 75AG do not occur in Division 1 of Part V but in Part VA. I do not think, however, that this renders what the High Court said inapplicable to the present circumstances. Indeed, one might well think that it applies all the more obviously, since ss 75AD and 75AG speak of supplying goods in trade or commerce – a narrower concept than that of engaging in misleading or deceptive conduct in trade or commerce. In any event, their Honours said that it was the word "in" in the expression "in trade or commerce" that caused the composite expression to restrict the reference to "the central conception" of trade or commerce. 30 In my view, therefore, it is clear that the emissions were not supplied "in trade or commerce" and that no evidence on the final hearing can alter this conclusion. 31 The third matter concerns the word "defect" in ss 75AD and 75AG. According to the sections, it must be because of a "defect" which the goods have that the individual suffers injury or the land, buildings or fixtures are destroyed or damaged. Subsection 75AC(1) provides: "For the purposes of this Part [Part VA in which ss 75AD and 75AG occur], goods have a defect if their safety is not such as persons generally are entitled to expect." 32 That is, in order to succeed the applicants would have to show that the emissions were not as safe, because of a defect in them, as persons generally were entitled to expect them to be. But according to the Pleading the emissions were unsafe because they were true to their nature, not because they had a defect. The Pleading describes them as "offensive, noxious and unwholesome smoke, fumes, vapours and gases, lead, sulphur dioxide and other pollutants". As I suggested in the course of argument, it is a poison that does not do its deadly work that is defective rather than one that does. No evidence on the final hearing could alter the conclusion that it is not because of a defect in the emissions that they were not as safe as persons generally were entitled to expect. 33 I have also considered the respondents' submissions in relation to the word "goods" and "manufactured". While I think that there is much to be said for those submissions, I refrain from dealing with them. 34 From the applicants' viewpoint it will be thought unfortunate that they do not have access to the procedure which they have chosen, namely, that of the Representative Proceeding which is provided for in Part IVA of the Federal Court of Australia Act 1976 (Cth) and Order 73 of this Court's rules. Applying legal principle, however, I think it clear that the applicants' case is doomed to fail so long as it remains in this Court. It is better that this be determined to be the case now rather than later when legal costs have increased. 35 For the above reasons, the Court orders that the application be dismissed as incompetent. 36 The respondents have asked that orders as to costs not be made at this stage. The proceeding will be stood over to a date to be fixed for the hearing of submissions on costs. I certify that the preceding thirty six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 23 May 2000 Counsel for the Applicant: Mr J E Rowe Solicitor for the Applicant: Coleman & Greig Counsel for the Respondent: Mr B R McClintock SC with Mr D J Batt Solicitor for the Respondent: Arthur Robinson & Hedderwicks Date of Hearing: 9 May 2000 Date of Judgment: 12 May 2000	4,218
federal_court_of_australia:fca/single/2010/2010fca1082	decision	commonwealth	federal_court_of_australia	text/html	2010-10-04 00:00:00	Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No. 2) [2010] FCA 1082	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2010/2010fca1082	2024-09-13T22:49:19.831140+10:00	FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No. 2) [2010] FCA 1082 Citation: Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No. 2) [2010] FCA 1082 Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v CEMENT AUSTRALIA PTY LTD ACN 104 053 474, CEMENT AUSTRALIA HOLDINGS PTY LTD ACN 001 085 561, CEMENT AUSTRALIA (QUEENSLAND) PTY LTD FORMERLY QUEENSLAND CEMENT LTD ACN 009 658 520, POZZOLANIC ENTERPRISES PTY LTD ACN 010 367 898, POZZOLANIC INDUSTRIES PTY LTD ACN 010 608 947, CHRISTOPHER GUY LEON and CHRISTOPHER STEPHEN WHITE File number(s): QUD 295 of 2008 Judge: GREENWOOD J Date of judgment: 4 October 2010 Catchwords: PRACTICE AND PROCEDURE – consideration of applications for non-publication orders under s 50 of the Federal Court of Australia Act 1976 Legislation: Federal Court of Australia Act 1976, s 50 Cases cited: Australian Broadcasting Commission v Parish (1980) 29 ALR 228 – cited and quoted Hogan v Australian Crime Commission (2010) 240 CLR 651 – cited and quoted Betfair Pty Ltd v Racing New South Wales & Ors (No. 12) [2009] FCA 1519 - cited Betfair Pty Ltd v Racing New South Wales (No. 15) [2010] FCA 736 - cited Date of hearing: 1 October 2010 Date of last submissions: 1 October 2010 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 25 Counsel for the Applicant: Mr S Couper QC with Mr D Kelly SC and Mr M Hodge Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondents: Mr N Hutley QC, Ms S Brown, Ms R Higgins in the principal proceeding (Ms S Brown appearing on the application for non-publication orders) Solicitor for the Respondents: Gilbert and Tobin, Lawyers Counsel for Sunstate: Mr J Peden Solicitors for Sunstate: Flower & Hart Lawyers Solicitors for Millmerran: Freehills Lawyers, Mr B Strahorn IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 295 of 2008 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: CEMENT AUSTRALIA PTY LTD ACN 104 053 474 First Respondent CEMENT AUSTRALIA HOLDINGS PTY LTD ACN 001 085 561 Second Respondent CEMENT AUSTRALIA (QUEENSLAND) PTY LTD FORMERLY QUEENSLAND CEMENT LTD ACN 009 658 520 Third Respondent POZZOLANIC ENTERPRISES PTY LTD ACN 010 367 898 Fourth Respondent POZZOLANIC INDUSTRIES PTY LTD ACN 010 608 947 Fifth Respondent CHRISTOPHER GUY LEON Sixth Respondent CHRISTOPHER STEPHEN WHITE Seventh Respondent JUDGE: GREENWOOD J DATE OF ORDER: 4 OCTOBER 2010 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The applications for non-publication orders under s 50 of the Federal Court of Australia Act 1976 are adjourned for the submission of proposed orders. 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 QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 295 of 2008 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: CEMENT AUSTRALIA PTY LTD ACN 104 053 474 First Respondent CEMENT AUSTRALIA HOLDINGS PTY LTD ACN 001 085 561 Second Respondent CEMENT AUSTRALIA (QUEENSLAND) PTY LTD FORMERLY QUEENSLAND CEMENT LTD ACN 009 658 520 Third Respondent POZZOLANIC ENTERPRISES PTY LTD ACN 010 367 898 Fourth Respondent POZZOLANIC INDUSTRIES PTY LTD ACN 010 608 947 Fifth Respondent CHRISTOPHER GUY LEON Sixth Respondent CHRISTOPHER STEPHEN WHITE Seventh Respondent JUDGE: GREENWOOD J DATE: 4 OCTOBER 2010 PLACE: BRISBANE REASONS FOR JUDGMENT 1 During the course of pre‑trial preparation of the principal proceeding, non‑party discovery applications were made which resulted in orders for the production of classes of documents from third parties in accordance with a confidentiality regime reflected in the annexures to the particular orders. 2 Documents were produced in accordance with those orders, obtained on the application of the respondents, from Sunstate Cement Limited ("Sunstate"); Tarong Energy Corporation Limited and Tarong North Pty Limited (jointly called "Tarong"); Millmerran Operating Company Pty Limited and Millmerran Power Management Pty Limited (jointly called "Millmerran"); Transpacific Industries Pty Limited; Nucrush Pty Limited, Nucon Pty Limited and Nuash Pty Limited (all jointly called "Nucon"); Wagner Investments Pty Limited; Independent Fly Ash Brokers Pty Limited ("IFB"); Neilsons Concrete Pty Limited; and Mr Ron McLaren. 3 In addition, Fly Ash Australia Pty Limited informally produced particular documents to the respondents under an agreed confidential regime. 4 The respondents propose when opening their case, to tender, as part of their Confidential Tender Bundle, documents produced by those third parties under the confidentiality arrangements. In accordance with that regime, the respondents' solicitors gave notice to the third parties (or their lawyers) of the proposal to now put some of the confidential documents into evidence. They did so in accordance with the terms of the confidentiality regime so as to give third parties an opportunity to be heard on the question of whether they continued to assert confidentiality over any (or all) of the documents to be tendered and if so whether they proposed to seek any form of order designed to preserve the confidentiality of particular documents or information within them, from disclosure. 5 The Court indicated that it would deal with the question of any application for a non‑publication order under s 50 of the Federal Court of Australia Act 1976 by (or on behalf of) third parties as a preliminary matter (together with other preliminary matters) at the conclusion of the opening of the case by the applicant, the Australian Competition and Consumer Commission ("ACCC"). The trial of the action commenced on Monday, 27 September 2010. The applicant's counsel closed his opening address on Wednesday. On Thursday, 30 September 2010 Sunstate by its counsel proposed a final form of order arising out of discussions with counsel for the respondents and the counsel for the applicant. 6 Millmerran seeks, by its solicitors, orders in the same terms as those sought by Sunstate, in respect of its particular confidential documents produced under the relevant orders. 7 The respondents' solicitors have been advised by the other third parties that those parties continue to assert confidentiality over the documents produced under the confidentiality regime. Accordingly, since the respondents propose to put some of the third party documents into evidence, they seek (and they support the orders sought by Sunstate and Millmerran) an order restricting the publication of the evidence (the documents or information contained within them) on the footing that non‑publication of the evidence is necessary in order to prevent prejudice to the administration of justice. That prejudice is said to arise in this way. 8 In the principal proceeding the ACCC contends, put simply, that the respondents have contravened s 45 (or alternatively s 47) and s 46 of the Trade Practices Act 1974 (Cth) in the period from 30 September 2002 and 31 December 2006 arising out of conduct concerning the supply and acquisition in south east Queensland of unprocessed fly ash (from coal‑fired electricity generators – power stations) and the supply and acquisition of concrete‑grade fly ash or fine‑grade fly ash in the relevant product markets in south east Queensland. The claims involve an examination of the scope of the relevant markets; whether the particular respondents had a substantial degree of market power in the relevant market; whether that power was used in the way asserted for the contended proscribed purpose; whether the respondents acted in furtherance of a legitimate business purpose; and whether the relevant provisions of the particular agreements had upon entry into those agreements (or upon their being given effect to) the purpose or effect of preventing potential competitors from entering the relevant fly ash markets. That examination involves looking into the terms and conditions upon which the respondents acquired fly ash from power stations; bids, propositions put and pricing proposals made or discussed by rivals of the respondents to or with power stations; terms of supply by the respondents to concrete producers or re‑sellers and the terms of supply by rivals of the respondents to those buyers and other buyers in the relevant markets. 9 The confidential documents include documents relating to: · the costs of producing fly ash and other cementitious materials for third parties; · the costs of transporting fly ash for third parties; · the volume of fly ash produced by third parties; · whether importing fly ash was likely to produce an adequate return on investment; and · the price for fly ash purchased or sold by particular third parties. 10 As to Sunstate, some of its documents produced under the confidentiality regime are no longer subject to a claim of confidentiality. A list of 21 documents has been prepared over which confidentiality is asserted on the footing that the information is market‑sensitive and disclosure would prejudice Sunstate in its trade rivalry. I am satisfied that the documents fall into this category. Neither the respondents nor the ACCC contend to the contrary. 11 The question to be determined is whether I can be satisfied that non‑publication of the Sunstate documents set out in the schedule (now to be admitted into evidence) is necessary in order to prevent prejudice to the administration of justice. Although Bowen CJ in Australian Broadcasting Commission v Parish (1980) 29 ALR 228 spoke of the "exercise [of] the discretion under s 50", presumably having regard to the phrase "The Court may …", the High Court in Hogan v Australian Crime Commission (2010) 240 CLR 651 per French CJ, Gummow, Hayne, Heydon and Kiefel JJ, said this (at [33]): It may tend to distract attention from the particular terms of s 50 to describe the Federal Court as embarking upon the exercise of a "discretion" when entertaining an application under s 50 (Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124). Once the Court has reached the requisite stage of satisfaction, it would be a misreading of s 50 to treat it as empowering the Court nevertheless to refuse to make the order … 12 At [32], their Honours said this: If it appears to the Federal Court … to be necessary to make a particular order forbidding or restricting the publication of particular evidence … then the power of the Federal Court under s 50 is enlivened. The appearance of the requisite necessity … having been demonstrated, the Court is to implement its conclusion by making or vacating the order. The expression in s 50 "may … make such order" is to be understood in this sense. [emphasis added] 13 In the case of documents containing information relevant to trade rivalry in particular markets or in upstream or downstream markets of the market in issue, the litigation ought not to become the forum or a vehicle for trade‑sensitive disclosures. The administration of justice is concerned with quelling controversies between parties and the public has an interest in courts doing justice, according to law, in the disposition of each controversy. Disclosure of the Sunstate documents and information contained within those documents is likely to be damaging to Sunstate. It is necessary in the administration of justice that the proceeding be tried without bringing about that result: Hogan v Australian Crime Commission (supra); Betfair Pty Ltd v Racing New South Wales & Ors (No. 12) [2009] FCA 1519; Betfair Pty Ltd v Racing New South Wales (No. 15) [2010] FCA 736. 14 In a broader sense, the third parties have no interest in the controversy other than sharing in the public interest in the Court quelling the controversy between the particular parties by ensuring that justice is done. The third parties have produced their confidential documents relating to their own rivalrous conduct under compulsion. The Court has an interest in (and thus the administration of justice is served by) enabling cooperation from third parties in performing orders that concern documents a third party may well prefer not to produce at all. That is not to say that a claim of confidentiality by itself is enough. Each application will turn ultimately on its own circumstances judged against the background of the requirement for open justice undertaken in public: s 17, Federal Court of Australia Act. However, documents disclosing the content of prices and costs paid and incurred by trade rivals warrant a non‑publication order. 15 The proposed form of order concerning the Sunstate documents contemplates protocols addressing admission of the documents into evidence; how oral evidence will be dealt with; orders in relation to transcripts; and the release of the "Nominated Individuals" from confidentiality obligations in respect of those documents no longer the subject of a confidentiality claim by Sunstate. The order will be limited, in terms, "until earlier order". An order in similar terms will be made in relation to the Millmerran documents and the documents of the other third parties. The proposed form of order in Sunstate's application, subject to further discussion and the submission of a final form of order, is set out as a schedule to these reasons. 16 The final preliminary matter on this topic concerns an application by the respondents for a non‑disclosure order in relation to its own confidential documents incorporated within the ACCC's proposed tender bundle. The application is supported by an affidavit sworn by the general counsel and company secretary for the Cement Australia group of companies, Mr Constantine Gionis. The first to fifth respondents have isolated a number of documents (comprising three volumes in all) within the ACCC's tender bundle which they contend ought to be the subject of a non‑publication order. The documents are grouped into three categories identified by Schedules A, B and C to Mr Gionis's affidavit. The category 1 documents concern contracts with Cement Australia's customers including draft versions of those contracts. Category 2 contains contracts between Cement Australia and power stations for the acquisition of fly ash including draft versions of those contracts. Category 3 contains documents that disclose the way in which pricing and competitive rebates are calculated. The category 1 documents identify the terms and conditions of supply by Cement Australia to its customers and those details include all aspects of supply; the delivered prices at the time of execution of the agreements; cartage rates; and, importantly, the working operation of competitive rebate clauses. Mr Gionis describes this information as highly sensitive commercial information which would be of significant value to trade rivals and the disclosure of which would be prejudicial to the Cement Australia group of companies. 17 I accept that this is so. 18 The category 2 information concerns the terms and conditions upon which the Cement Australia respondents acquire fly ash from four power stations in Queensland for supply to its customers. The three agreements set out in Schedule B to Mr Gionis's affidavit in which the category 2 information lies discloses the current terms of the acquisition arrangements. Those terms include price escalation formulas for the prices paid to the power stations for fly ash (and, in one instance, the price to be paid to the power station at the time of the draft agreement). The draft agreements substantially reflect the agreements that were ultimately reached between the parties. The information concerning Cement Australia's pricing and the operation of its price escalation formulas are not publicly available and trade rivals would have an interest in understanding those terms and the way in which they operate between the participants. The terms and conditions not only concern the Cement Australia group of companies but engage information which concerns the power station suppliers of fly ash. 19 I am satisfied that the information is market‑sensitive as between trade rivals and ought not to be disclosed. 20 The third category concerns documents which record Cement Australia's pricing and competitive rebates or the foundation upon which rebates are available to particular parties and the method of calculation of the rebate. The particular documents which contain this information are internal Cement Australia emails that talk about the basis on which Cement Australia calculates a competitive rebate; agreements Cement Australia has with its shareholder customers which disclose the way in which competitive rebates and project prices are calculated; documents which disclose pricing and cartage rates to specific locations along the east coast of Australia; and a spreadsheet which discloses the basis upon which competitive rebates are calculated and whether a rebate might apply at all having regard to particular locations along the east coast of Australia. 21 The information contained in these documents is not in the public domain. Disclosure of the information might be used by competitors of the Cement Australia group of companies, customers and suppliers to damage Cement Australia in its trade rivalry in markets for cementitious materials. The particular concern is that knowledge of the foundation upon which rebates are calculated might enable competitors to engage in conduct which would have the effect of "trigger[ing] competitive rebates … which would not occur unless [competitors] understood the way in which pricing and competitive rebates are calculated". A number of the documents contained in Schedule C (comprising the category 3 information) have dates such as 2 May 2003 (email); 6 May 2003 (a spreadsheet); 2 June 2003 (Cement Supply Agreement); 6 April 2005 (email); 13 June 2005 (email). It might be thought that email exchanges and drafts of agreements (or the agreements in final form) which were generated (in some instances) between five and seven years ago ought not to attract a non‑publication order on the footing that they have lost their contemporary relevance. It might be thought that events in the market have moved on and non‑publication of this material is not necessary in order to prevent prejudice to the administration of justice. 22 I have examined a number of the documents falling within Schedule C and two things should be noted. First, the documents concern and discuss matters relating to rivalrous conduct between market participants. They therefore fall within that particular category of material. Secondly, although the material relates back some time, there remains an inter‑relationship between the current working operation of particular agreements, present market conduct and the documents in question. In other words, they throw up matters concerning formulas and ratios for the calculation of rebates; pricing formulas, information relating to customers and the relevance of particular plants, their location and the way in which rebate arrangements work. 23 The present proceedings ought not to become a vehicle for advantaging or prejudicing trade rivals in relation to rebate rivalry or other aspects of trade rivalry. 24 I am satisfied that it is necessary in order to prevent prejudice to the administration of justice that a non‑publication order be made. Counsel for the respondents will formulate a proposed order which will reflect a symmetrical approach to non‑publication having regard to the orders to be made concerning Sunstate, Millmerran and other third parties. 25 The draft Sunstate order is set out in the schedule below. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. Associate: Dated: 4 October 2010 SCHEDULE DRAFT SUNSTATE ORDERS THE COURT ORDERS THAT, UNTIL FURTHER ORDER: 1. The documents listed in subparagraphs (a), (b), (c), (d) and (e) below ("Confidential Sunstate documents") and all information contained within such documents ("Confidential Sunstate information") be the subject of restrictions as to publication as set out in this Order or until earlier Order. The Confidential Sunstate documents are: 1.1 confidential annexure A to the affidavit of Gareth Ward filed 16 October 2009; 1.2 Confidential annexures GAW-2, GAW-4 and GAW-5 to the affidavit of Gareth Ward filed 16 October 2009; 1.3 Confidential annexures JDN-5, JDN-7 and JDN-8 to the affidavit of Jason Nairn filed 15 October 2009 (being copies of Confidential annexures GAW-2, GAW-4 and GAW-5 referred to above); 1.4 documents titled "Bayswater Ash" dated April 2007 and "Callide Ash" dated April 2007; and 1.5 document titled "Sunstate Cement Ltd Average Sell Price for Flyash for April – June 2007" dated April/June 2007. 2. Prior to the tender by any party of any original or copy of any of the Confidential Sunstate documents, such document be marked on each page or stamped by the party with the words "Confidential Sunstate document for use in Court proceedings QUD295 of 2008". 3. All such Confidential Sunstate documents that are admitted into evidence: 1.6 be identified on any list of exhibits as such; and 1.7 not be further copied or reproduced, by any means, including by electronic or photocopy means or handwritten summary thereof. 4. Any oral testimony of any witness concerning the Confidential Sunstate documents or the Confidential Sunstate information be heard in camera ("Confidential testimony"). 5. Any transcript of the Confidential testimony be masked by the Court prior to release to the parties. 6. The transcript of Confidential testimony be made available to the solicitors for the parties on the basis that the transcript pages are Confidential documents, and the information in those pages Confidential information, within the meaning of those terms in the confidentiality regimes executed pursuant to the Order of this Court dated 23 December 2009, and the transcript pages be thereafter treated in accordance with the provisions of the confidentiality regimes. 7. Any witness, excluding Mr Gareth Ward and any Nominated Individual under the confidentiality regimes executed pursuant to the Order of this Court dated 23 December 2009, to whom Confidential Sunstate information has been disclosed, either before or during the trial of this proceeding, is hereby prohibited from communicating or publishing to any person any of the Confidential Sunstate information other than to a Judge of this Court for the purposes of these proceedings. 8. Each of the Nominated Individuals under the confidentiality regimes entered into pursuant to the Order of this Court dated 23 December 2009 be released henceforth from any obligations under those confidentiality regimes in respect of documents numbered 1 to 17 and 20 to 21 listed in paragraph 14 of the affidavit of Gareth Ward filed 30 September 2010, namely those documents listed in Annexure A hereto. 9. The First Respondent pay to Sunstate Cement Ltd its costs of and incidental to this Notice of Motion to be assessed on an indemnity basis if not otherwise agreed.	5,024
federal_court_of_australia:fca/single/1998/1998fca0665	decision	commonwealth	federal_court_of_australia	text/html	1998-05-20 00:00:00	Sterileair Pty Ltd v George Ralph Papallo [1998] FCA 665	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1998/1998fca0665	2024-09-13T22:49:20.300035+10:00	IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 3148 of 1996 BETWEEN: STERILEAIR PTY LIMITED Applicant AND: GEORGE RALPH PAPALLO BETWEEN: first respondent and: CATHERINE ANNE PAPALLO second Respondent george ralph papallo first cross-claimant catherine anne papallo second cross-claimant sterileair pty limited cross-respondent JUDGE: LEHANE J DATE OF ORDER: 20 may 1998 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Conditionally upon the applicant providing security in a form and in an amount (subject to order 2) to be determined, failing agreement between the parties, by the Court, for the judgment debt and for the respondents' costs of the appeal, orders 2 and 3 made on 5 May 1998 are stayed until the final determination of appeal proceedings NG 278 of 1998. 2. The amount of the security is to be calculated as a reasonable estimate of the costs of the respondents, calculated on the indemnity basis (a) in relation to the present application for a stay of proceedings and (b) in relation to the applicant's appeal from the orders of the Court made on 5 May 1998. 3. The stay is to take effect on and from the time when the security referred to in orders 1 and 2 is provided. 4. The parties have liberty to apply on one day's notice. 5. The costs of the motion are to be costs in 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 NEW SOUTH WALES DISTRICT REGISTRY NG 3148 of 1996 BETWEEN: STERILEAIR PTY LIMITED Applicant AND: GEORGE RALPH PAPALLO between: FIRST RESPONDENT AND: CATHERINE ANNE PAPALLO SECOND Respondent GEORGE RALPH PAPALLO FIRST CROSS-CLAIMANT CATHERINE ANNE PAPALLO SECOND CROSS-CLAIMANT STERILEAIR PTY LIMITED CROSS-RESPONDENT JUDGE: LEHANE J DATE: 20 may 1998 PLACE: SYDNEY EX TEMPORE REASONS FOR JUDGMENT I have before me a motion of the applicant by which it seeks a stay of certain orders made on 5 May 1998. The orders were final orders made following the conclusion of a trial and the delivery of reasons for judgment. The trial (simplifying matters considerably but not, I think, so as to distort the issues which arise on the motion) concerned a claim by the applicant for recovery of certain money which it had paid to the respondents in purported compliance with a document described as a loan agreement between the parties. The respondents cross-claimed for the amount which they alleged remained due under that document. In the course of final submissions, the applicant abandoned its claim but maintained its defence to the cross-claim. I held, however, that the respondents should succeed on the cross-claim. The result was, as reflected in the final orders made on 5 May, that the application was dismissed and, on the cross-claim, judgment was entered in favour of the respondents for a sum of $78,854.07, comprising a principal amount together with interest. I then ordered that the applicant pay the respondents' costs on the usual party and party basis. There was an order giving the respondents leave to apply for special costs from 20 August 1997 and finally there was an order for release to the respondents of an amount which had been deposited in the trust account of the applicant's solicitors by way of security for costs. That last order was not uncontroversial. It was, however, made after argument, and I understand has since been complied with. No issue now arises in relation to that last order, except, perhaps, that it should be recorded that, in the course of argument as to whether it should be made, the applicant did not press for a stay of the other orders. What the applicant now seeks is an order staying the operation of the second and the third orders of 5 May, that is the orders by which judgment was ordered in favour of the respondents on the cross-claim and by which the applicant was required to pay the respondents' costs. The stay is sought pending an appeal from the orders of 5 May, in circumstances where the applicant has, with great promptness, lodged a notice of appeal. No issue arises on the appeal as to my order dismissing the claims of the applicant in its application. The appeal is concerned solely with the cross-claim, and the grounds given attack the reasons for judgment on two bases: first, it is said, the reasons were wrong to the extent that they concluded that the document entitled "loan agreement" was not a sham and, secondly, it is said that the reasons were wrong to the extent that I held that the transaction of which that agreement represented part did not involve financial assistance of a kind prohibited by s 205 of the Corporations Law. It may be said of the two grounds that the former plainly involves significant issues of fact and evidence as well, perhaps, as some questions of law but that the latter may be characterised as involving a question of law as to the precise operation of provisions of the Corporations Law. That said, it should be recorded also that there was no suggestion that the grounds of appeal lacked substance. The somewhat unusual circumstances include the following. The applicant asserts, and there is no dispute about this, that it has no assets. There is evidence before me on the motion to that effect, and as to the circumstances in which the applicant ceased to have assets and ceased to trade. Some details, perhaps, are obscure but in substance the evidence is to the effect that the assets of the applicant were acquired by a company called Sterile Care Pty Ltd, the directors and shareholders of which are the directors and shareholders of the applicant. The assets were acquired for value, the value has been paid by credit to the applicant's bank account and has since been spent in meeting costs arising in the course of the present proceedings. It seems - though this sits somewhat oddly with the directors' report attached to the accounts of the applicant as at 30 June 1996 - that the applicant ceased trading, and Sterile Care Pty Ltd commenced trading, on about 30 June 1996. The applicant invoiced Sterile Care Pty Ltd for certain of its assets, particularly stock and raw materials, some days before 30 June 1996. Payment for the assets was, however, made considerably later. I do not think that anything particularly turns upon the timing of those events, except in one respect to which I shall return. The applicant having exhausted its funds in paying costs associated with the proceedings, further costs incurred for the same purpose were, according to the evidence of the applicant's general manager, advanced to the applicant by Sterile Care Pty Ltd. That company proposes to advance funds to the applicant to enable it to proceed with its appeal. The applicant has no other source of funds for that purpose. For present purposes, the result of the circumstances I have described may be summarised as follows. There are no assets of the applicant against which the respondents could levy any form of execution in order to obtain satisfaction of their judgment. The course which is available to them, and which they seek to pursue, is to make an application to wind up the applicant; they have already issued a statutory demand in order to commence proceedings of that kind. It was suggested, in submissions on behalf of the respondents, that it might be that, if the applicant were wound up, a liquidator would be able to take proceedings to set aside transactions or recover property so as to produce a fund from which the judgment in favour of the respondents could be satisfied, at least in part. Perhaps not surprisingly in the circumstances, there was no very precise evidence as to a basis upon which a liquidator might be able to obtain such a result. There was a suggestion made to the applicant's general manager, Mr Gunstone, in the course of his cross-examination by counsel for the respondents, that there was a discrepancy between the accounts of the applicant at 30 June 1996 as to the amount of cash at bank and the bank balance at that date stated in bank pass sheets, also in evidence. Undoubtedly there is a difference between the amounts stated in the account and in the bank pass sheets. Mr Gunstone was unable to explain the difference, but there appears to be no particular reason on the material before me to suspect that the reason might be a sinister one as opposed, perhaps, simply to a difference between the cash book and the bank balances. The prejudice that might be suffered by the respondents, therefore, if I were to grant a stay may I think be fairly stated in this way: that if the applicant is wound up later rather than sooner, the prospect of recovery in respect of certain transactions, particularly those occurring in about June 1996, may be impaired. Secondly, the respondents would be compelled to expend substantial sums of money in resisting the appeal in circumstances where not only is there no prospect of recovering any funds so expended but equally there is no prospect of recovering any part of the judgment debt which they have obtained. Thus, assuming the respondents to be successful in the appeal, they will simply have paid out more money likely to be wholly irrecoverable to defend a judgment most if not all of which will equally be irrecoverable. The claimed prejudice to the applicant (if a stay is not granted) may be stated in summary form in this way. There is no source of funds to maintain the appeal other than Sterile Care Pty Ltd. Sterile Care Pty Ltd will only provide funds to the applicant to meet its costs of the appeal. It cannot and will not provide funds to meet the judgment; it cannot and will not provide funds to a liquidator, assuming the liquidator were prepared to continue with an appeal, additional to the costs of the appeal which it would be prepared to advance to the applicant absent liquidation. Thus, if no stay is granted, the possibility of an appeal disappears. One might ask, as the respondents do ask, why in the circumstances does that matter? The answer given by the applicant is that it matters, not because of any return in monetary terms that the applicant might expect to recover if it were successful in the appeal. It matters, it is said, because winding up itself may be regarded as a serious prejudice; winding up itself is to be regarded as a prejudice to the applicant and may be prejudicial for those who have been concerned in the management of the applicant, particularly its directors, and if the judgment ought not stand then there is no reason why the applicant or its directors should suffer that prejudice. The applicant referred also to certain matters which occurred during the course of the proceedings leading up to the trial, and in earlier winding up proceedings instituted by the respondents against the applicant which, in the end, did not proceed. It is true that the applicant during the trial pointed to aspects of the conduct of the respondents, particularly in relation to the earlier winding up proceedings, which it said were unsatisfactory. It is true also that in my reasons for judgment delivered on 18 March 1998 I accepted that there were aspects of the respondents' conduct of the winding up proceedings which were not wholly satisfactory. The suggestion was, I think, that the conduct of the respondents had substantially increased the costs incurred in the course of the proceedings and therefore contributed to the current impecunious state of the applicant. I accept the argument of counsel for the applicant that the test I should apply is that laid down in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, particularly at 694, 695. That test has been adopted and applied by a Full Court of this Court in Powerflex Services Pty Ltd v Data Access Corporation (1996) 137 ALR 498. It has been followed also at first instance in this Court in Henderson v Amadio Pty Ltd (1996) 136 ALR 593. Broadly speaking the effect of those authorities is that special circumstances or extraordinary circumstances are not required to be shown before a stay will be granted pending appeal. The discretion is a broad and general one. The court will consider each application on its merits. There is some onus on the applicant for a stay to demonstrate that there are circumstances justifying the stay, but in the end the question is one which has been described in some of the cases as involving a balance of convenience and is concerned particularly with the relative prejudice to each of the parties, depending upon whether a stay is granted or withheld. In the rather unusual circumstances of this case, I accept, substantially for the reasons advanced by the applicant, that the winding up of the applicant should be regarded as a relevant prejudice; particularly, it would be likely in the circumstances to result in the appeal not proceeding. So far as the respondents are concerned, I am inclined to place little weight upon the consideration that a deferral of winding up may reduce the prospects of substantial recoveries which might otherwise be made by a liquidator. There is no material before me which points particularly to any clearly likely source of recovery and one is permitted, I think, to know from experience that proceedings of the sort contemplated are frequently difficult and almost always expensive; and in the present circumstances it is, I think, appropriate to form a tentative view that the prospect that they may be thought by a liquidator likely to prove worthwhile may be somewhat remote. On the other hand I do regard as an important consideration the fact that a stay is sought in circumstances where the respondents have recovered a judgment which, on the applicant's own evidence, cannot be satisfied and where successful resistance of an appeal would require the incurring of substantial further costs, in turn irrecoverable. Given that the benefit sought by the applicant from a stay is not, as the applicant's counsel described it, of a commercial kind (by which I take him to have meant a pecuniary kind), I do not think that the respondents should be put to that further expense without substantial protection by way of security. It was put to me in the course of argument that the questions of stay, and of security in the event of a stay, were separate questions which must be dealt with separately and successively. Counsel for the applicant conceded that, if a stay were granted, it would be appropriate to order the provision of security for the costs of the appeal. But he submitted that the question of security ought to be approached on the footing that, if the respondents were successful on the appeal, in the ordinary course they would recover their costs of the appeal on a party and party basis: accordingly any security afforded to the respondents ought to be calculated by reference only to the respondents' likely party and party costs of the appeal. That might, no doubt, be appropriate in a case where there is some prospect that if an appeal fails the respondent will obtain, at least in part, the fruits of its judgment. It must not be forgotten, however, that it is by no means uncommon for a stay to be made conditional upon some security given to a respondent for the judgment debt as well as for costs. Whether that is appropriate in any case depends, of course, upon the particular circumstances. In my view, in the present case, I ought not grant a stay unless the respondents have at least what may reasonably be regarded as adequate security for additional costs which they have incurred and will incur following the making of the orders of 5 May. In circumstances where all the applicant seeks to do, by the appeal, is relieve itself of a debt which I have found to be due which, in any event, it has no assets to meet, it would be wrong, in my view, to put the successful respondents further out of pocket in the event that the appeal fails. That necessarily leads, I think, to one of two results. One is that the stay would simply be refused; and I have hesitated over whether that is the appropriate order or whether, on the other hand, I should adopt what seems to me to be the alternative: that a stay would be granted, but conditionally upon the provision to the respondents of security both for their costs of the appeal and for the judgment debt, the amount of the security being calculated as a fair estimate of the costs of the respondents, calculated on the indemnity basis, in relation to the present application for a stay and in relation to the appeal. In the end, my conclusion is that if I make an order of that latter kind the respondents are adequately protected; and if that condition were met, then I think it would be appropriate to grant a stay. I shall hear the parties as to the precise form of the order but in substance what I propose is that I would stay the operation of orders 2 and 3 made on 5 May but on the condition as I have mentioned, and on the footing that the stay would take effect when the security has been provided. I contemplate that the amount and form of the security would, failing agreement between the parties, be determined by the Court. [DISCUSSION WITH COUNSEL ENSUED] I make the following orders: 1. Conditionally upon the applicant providing security in a form and in an amount (subject to order 2) to be determined, failing agreement between the parties, by the Court, for the judgment debt and for the respondents' costs of the appeal, orders 2 and 3 made on 5 May 1998 are stayed until the final determination of appeal proceedings NG 278 of 1998. 2. The amount of the security is to be calculated as a reasonable estimate of the costs of the respondents, calculated on the indemnity basis (a) in relation to the present application for a stay of proceedings and (b) in relation to the applicant's appeal from the orders of the Court made on 5 May 1998. 3. The stay is to take effect on and from the time when the security referred to in orders 1 and 2 is provided. 4. The parties have liberty to apply on one day's notice. 5. The costs of the motion are to be costs in the appeal. I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane Associate: Dated: 29 May 1998 Counsel for the Applicant: C.J. Bevan Solicitor for the Applicant: Schweizer & Co. Counsel for the Respondents: R.E. Dubler Solicitor for the Respondents: Corrs Chambers Westgarth Date of Hearing: 19 May 1998 Date of Judgment: 20 May 1998	3,964
federal_court_of_australia:fca/single/2002/2002fca1002	decision	commonwealth	federal_court_of_australia	text/html	2002-08-02 00:00:00	Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd [2002] FCA 1002	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2002/2002fca1002	2024-09-13T22:49:22.862108+10:00	FEDERAL COURT OF AUSTRALIA Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd [2002] FCA 1002 CHECKED-OUT PTY LTD v EAGLE EYE INSPECTIONS PTY LTD N169 OF 1999 EMMETT J 2 AUGUST 2002 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 169 OF 1999 BETWEEN: CHECKED-OUT PTY LTD (ACN 071 965 798) FIRST APPLICANT PHILIP JULIAN HARDCASTLE SECOND APPLICANT AND: EAGLE EYE INSPECTIONS PTY LTD (ACN 084 722 234) FIRST RESPONDENT JOSEPH WILLIAMS SECOND RESPONDENT WAYNE THOMAS COOK THIRD RESPONDENT TIMOTHY BOLLINS FOURTH RESPONDENT DEBORAH JEAN WILLIAMS FIFTH RESPONDENT PETER ADAMS trading as PETER ADAMS, SOLICITORS & ATTORNEYS SIXTH RESPONDENT KATARINA MUC trading as G.H. HEALEY & CO. BLACKTOWN and BRUCE McCANN trading as B.E. McCANN & CO., SOLICITORS SEVENTH RESPONDENT MARK KELADA trading as MARK KELADA SOLICITORS EIGHTH RESPONDENT MICHAEL QUINN trading as QUINNS SOLICITORS NINTH RESPONDENT JOHN MICHAEL NOYCE and GREGORY LAURENCE MARTIN trading as NOYCE LAWYERS TENTH RESPONDENT HENRY GRECH trading as GRECH PARTNERS SOLICITORS ELEVENTH RESPONDENT GREGORY PETER GUY trading as GUY & ASSOCIATES SOLICITORS TWELTH RESPONDENT JUDGE: EMMETT J DATE OF ORDER: 2 AUGUST 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. leave is granted to the applicant to carry on the proceeding without a solicitor for the purposes of resisting the notices of motion of the twelfth respondent, dated 12 November 2001; the sixth to eleventh respondents dated 4 December 2001; and the first to fifth respondents dated 4 December 2001 ("the dismissal motions"); 2. leave is granted for the applicant to be represented on the hearing of the dismissal motions by Mr Philip Hardcastle; 3. the notice of motion dated 24 July 2002 be otherwise dismissed; and 4. the applicant pay the respondents' costs of the hearing of the notice of motion dated 24 July 2002. 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 169 OF 1999 BETWEEN: CHECKED-OUT PTY LTD APPLICANT PHILIP JULIAN HARDCASTLE SECOND APPLICANT AND: EAGLE EYE INSPECTIONS PTY LTD (ACN 084 722 234) FIRST RESPONDENT JOSEPH WILLIAMS SECOND RESPONDENT WAYNE THOMAS COOK THIRD RESPONDENT TIMOTHY BOLLINS FOURTH RESPONDENT DEBORAH JEAN WILLIAMS FIFTH RESPONDENT PETER ADAMS trading as PETER ADAMS, SOLICITORS & ATTORNEYS SIXTH RESPONDENT KATARINA MUC trading as G.H. HEALEY & CO. BLACKTOWN and BRUCE McCANN trading as B.E. McCANN & CO., SOLICITORS SEVENTH RESPONDENT MARK KELADA trading as MARK KELADA SOLICITORS EIGHTH RESPONDENT MICHAEL QUINN trading as QUINNS SOLICITORS NINTH RESPONDENT JOHN MICHAEL NOYCE and GREGORY LAURENCE MARTIN trading as NOYCE LAWYERS TENTH RESPONDENT HENRY GRECH trading as GRECH PARTNERS SOLICITORS ELEVENTH RESPONDENT GREGORY PETER GUY trading as GUY & ASSOCIATES SOLICITORS TWELTH RESPONDENT JUDGE: EMMETT J DATE: 2 AUGUST 2002 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The applicant, by notice of motion filed on 24 July 2002, seeks orders as follows: 1. That the Court gives leave for Philip Julian Hardcastle to act for the applicant. 2. The applicant's address for service be permitted to be the home address of Anna Wilczak, currently 3/27 Norman Street, Fairy Meadow, 2159. 3. Any further or other orders of the Court deems fit. I permitted Mr Hardcastle to appear on behalf of the applicant on the hearing of the motion. I have treated the motion, in the absence of any other submission, as one for leave under Order 4 rule 14(2) of the Federal Court Rules ("Order 4 rule 14(2)"). Order 4 rule 14(2) provides as follows: "Except as provided by or under any Act, a Corporation may not, without the leave of the Court, commence or carry on any proceeding otherwise than by a solicitor." 2 The applicant was represented by a solicitor until the end of 2001 when the solicitor then on the record withdrew. Thereafter Mr Hardcastle has appeared on behalf of the applicant in interlocutory applications and directions hearings. 3 On 21 September 2001, I made orders for the provision of security by the applicant. In the course of my reasons for making those orders I outlined the nature of the proceedings. The applicant claims that Mr Hardcastle conceived and developed the method of providing and formatting building inspection reports and related documents that were used in connection with conveyancing transactions. The concept was that the applicant would provide a report of an inspection of a building that was the subject of a contract for sale. 4 The applicant asserts that the concept used computer programs and application software written and developed by Mr Hardcastle that facilitated the rapid, efficient and economical production of reports and related documents according to a standard format. The applicant also asserts that the concept utilised a marketing strategy devised by Mr Hardcastle that concentrated on promoting the applicant's services to firms of solicitors and conveyancers. 5 The applicant alleges that the first respondent, through the second to fifth respondents, infringed the applicant's copyright and that it has taken the benefit of confidential information of the applicant provided to it by those respondents. Those respondents have admitted breach of the fiduciary duty that they owed to the applicant, it being common ground that certain of them were employees of the applicant, and that, in that capacity, they engaged in business on behalf of the applicant with the sixth to the twelfth respondents (the "solicitor respondents"). 6 The solicitor respondents are partners in firms of solicitors who had dealings with the applicant and subsequently with the first respondent in relation to the provision of services consisting of building reports. The applicant asserts that the first respondent provided reports to solicitors, including the solicitor respondents, in a form that bears considerable similarity to the form of reports being provided by the applicant. 7 In my reasons of 21 September 2001, I outlined some of the history of the proceeding. It is clear enough from what I have said already that the case involves matters of some complexity of fact and of law. Mr Hardcastle, on behalf of the applicant, contended that leave should be given for him to represent the applicant because he is competent and because there is no conflict of interest. That, of course, is not the basis for granting the dispensation contemplated by Order 4 rule 14(2). 8 The accessibility of the Courts to any citizen is fundamental to the system of justice in any common law jurisdiction such as Australia. That ready accessibility should also be available to juristic persons such as corporations. However it has for long been regarded as appropriate that, where a trader decides to use a corporate form in which to carry on his business, for the advantages that flow from those arrangements, accessibility to the courts should be made conditional that the corporation be represented by a qualified legal practitioner. 9 That is not to say that, in an appropriate case, leave would be given for a corporation to be represented by someone other than a legally qualified practitioner. However, the task of persuading the Court that there is good reason for granting dispensation is imposed upon an applicant (see Molnar Engineering Pty Ltd v Burns 3 FCR 68 at 75). However, the approach evidenced by Order 4 rule 14(2) may be characterised as being more flexible than that to be found in the rules of the English High Court and those jurisdictions in Australia whose rules are formulated in accordance with the rules of the English High Court. 10 The considerations that should be taken into account in deciding whether or not to exercise the discretion in favour of a corporation are such things as financial incapacity, and the financial difficulties that might be created by the diversion, to the paying of legal expenses, of funds that might otherwise be available to meet the other commitments of a corporation. A fortiori, where the corporation has no funds at all, that is a relevant consideration. 11 It is also a relevant factor that the proceedings in question involve complex and difficult questions of fact and law and that those matters will be seriously put in issue by the respondent. Mr Hardcastle is not qualified as a legal practitioner. He has had some experience in the conduct of litigation personally and it is fair to say that he is an articulate person. However, it is also apparent that he lacks the experience that would be necessary for the litigation involving the issues that I have briefly described. 12 It is apparent from what I have said that Mr Hardcastle will be an essential witness for the applicant and it is apparent from the way in which the case has been conducted to date that the whole, or at least significant parts, of the evidence of Mr Hardcastle will be challenged and put in issue. 13 It would be very difficult for the Court to manage a trial without the assistance of any counsel representing the applicant other than Mr Hardcastle, who himself would be a principal witness for the applicant. The presentation and management of the litigation would be practically unworkable and would be substantially protracted without the assistance of solicitors and counsel (see Simto Resources v Normandy Capital 10 ACSR 776 at 782-783). 14 The evidence as to the financial position of the applicant and Mr Hardcastle is unsatisfactory, as is the evidence as to the financial position of Ms Wilczak, who is now the only director and shareholder of the applicant. The evidence before me on the earlier occasion indicated that the applicant does not presently have funds that would enable it to conduct the litigation without support from Mr Hardcastle and Ms Wilczak, or from some other outside source. On the other hand, as I indicated in my earlier reasons of August 1999, Ms Wilczak deposited the sum of $270,000 into a bank account of the applicant by way of unsecured loan. 15 As I indicated earlier, the conduct of this proceeding has been delayed significantly to date by pleading deficiencies no doubt arising out of the inexperience and lack of expertise of Mr Hardcastle as a person who is not legally trained. During those delays, funds that were available to the applicant have been expended in ways that I described in my earlier reasons. Those funds could have been made available for legal expenses for the conduct of the proceeding. Mr Hardcastle, however, preferred as I said, to pursue his activities as an inventor, thereby using up funds that might have been available for the use of this proceeding. I do not know whether it would be possible for the applicant to borrow money in order to conduct the proceeding. 16 In the course of argument, Mr Hardcastle indicated that he would propose to retain counsel to appear for the applicant during the time that he was being cross-examined. That indicates two things, first, a lack of comprehension, on the part of Mr Hardcastle, of what would be required: the impracticality of having counsel appear while one witness was being examined is obvious. It would be necessary for any assistance to be given by such counsel that he or she be retained well in advance to understand all of the issues and the evidence. 17 Secondly, it indicates that Mr Hardcastle has in mind some other possible source of funds. In the absence of evidence as to the inquiries that have been made to obtain legal assistance and the possible access to borrowing by the applicant, I do not consider that an appropriate case has been established for the grant of general leave under Order 4 rule 14(2). 18 Another consideration that has been raised concerns the access that might be necessary to confidential discovered documents of the first to the fifth respondents. When the applicant was being represented by a solicitor, there was an exchange of correspondence with the solicitors for the first to the fifth respondents in which it was acknowledged on behalf of the applicant that relevant computer records and computer data were the subject of confidentiality, which needed to be safeguarded. 19 The solicitor then acting for the applicant indicated that it would be necessary for such material to be examined by expert witnesses. No expert evidence has been filed on behalf of the applicant. However, Mr Hardcastle has made clear that if he were to represent the applicant it would be necessary for him to have access to the material produced by the first to the fifth respondents on discovery. He has proffered an undertaking on behalf of himself and Ms Wilczak not to use any confidential information for any purpose other than the litigation and that they would not carry out any business in the building inspection industry. 20 The state of the evidence concerning the confidential material is not particularly satisfactory. However, in the exchange of correspondence it appears to have been acknowledged, unequivocally, by the solicitor then acting for the applicant, that there was confidential material and that detriment was possible to the first to the fifth respondents by access being given to Mr Hardcastle. That is a factor that should be taken into account. I do not regard it as being critical and, by itself, probably would not have tipped the balance. It is, however, a consideration that is relevant. 21 There are, also before me, motions by all of the respondents for summary dismissal of the proceeding. Those motions are still to be heard. I consider that, in the light of the material to which I have referred, it is not appropriate to accede to any application for general leave under Order 4 rule 14(2). On the other hand, it could involve a miscarriage of justice if the applicant were deprived of the opportunity of being represented by Mr Hardcastle on the hearing of the summary dismissal applications. 22 I therefore propose to give leave for the applicant to carry on the proceeding otherwise than by a solicitor for the purpose of hearing and determination of the three notices of motion filed on 21 November, 5 December and 7 December 2001. However, I propose that the motion be otherwise dismissed. I should say that that determination would not necessarily preclude any subsequent application that might reasonably by brought on behalf of the applicant at some time in the future. That is not an invitation to make any further application simply because this one has failed. 23 But, if circumstances change in the future, it could be appropriate for the matter to be revisited. That, of course, would depend upon the outcome of the motions for summary dismissal. The question would only be relevant if those motions fail. It should be understood that, in making any comments about that, I am not intending to express any view as to the likely outcome of those motions. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 9 August 2002 Counsel for the Applicant: Mr Hardcastle appeared in person with Ms Wilczak Counsel for the 1st – 5th Respondents: Mr J. Drummond Solicitor for the 1st – 5th Respondents: Bateman Battersby Counsel for the 6th – 11th Respondents: Mr A. Fernon Solicitor for the 6th – 11th Respondents: Noyce Lawyers Counsel for the 12th Respondent: Mr B. Morris Solicitor for the 12th Respondent: Benjamin & Khoury Solicitors Date of Hearing: 2 August 2002 Date of Judgment: 2 August 2002	3,659
federal_court_of_australia:fca/single/1999/1999fca1530	decision	commonwealth	federal_court_of_australia	text/html	1999-11-04 00:00:00	Strickland v Native Title Registrar [1999] FCA 1530	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca1530	2024-09-13T22:49:23.044818+10:00	FEDERAL COURT OF AUSTRALIA Strickland v Native Title Registrar [1999] FCA 1530 NATIVE TITLE –registration of native title claim – application for review of decision refusing registration – compliance with statutory criteria for registration – nature of review of Registrar's decision – margin of appreciation for Registrar's judgment – overlapping applications with common membership – basis for identifying date when relevant application "made" – date of entry of overlapping application on Register – effect of transitional provisions – sufficiency of identification of area subject to native title – sufficiency of basis for asserted authority to bring application – identification of native title rights and interests asserted – factual basis for native title rights and interests asserted. Native Title Act 1993 (Cth) Native Title Amendment Act 1998 Cth) North Ganalanja Aboriginal Corporation v State of Queensland (1996) 185 CLR 595, cited Northern Territory v Lane (1995) 59 FCR 332, cited Kanak v National Native Title Tribunal (1995) 61 FCR 103, cited Daniels v Western Australia & Others [1999] FCA 686, approved Mabo v The State of Queensland (No 2) (1992) 175 CLR 1, cited Powder v Registrar National Native Title Tribunal [1999] FCA 913, followed Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, cited MARJORIE MAY STRICKLAND and ANNE JOYCE NUDDING on behalf of the Maduwongga People v THE NATIVE TITLE REGISTRAR and THE STATE OF WESTERN AUSTRALIA W6018 of 1999 FRENCH J 4 NOVEMBER 1999 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W6018 OF 1999 BETWEEN: MARJORIE MAY STRICKLAND and ANNE JOYCE NUDDING on behalf of the Maduwongga People Applicant AND: THE NATIVE TITLE REGISTRAR First Respondent THE STATE OF WESTERN AUSTRALIA Second Respondent JUDGE: FRENCH J DATE OF ORDER: 4 NOVEMBER 1999 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The decision of the First Respondent not to accept the claim in the combined Maduwongga native title determination application WG76 of 1997 for registration be set aside. 2. The First Respondent is directed to accept the claim in the combined Maduwongga native title determination application WG76 of 1997 for registration and to include details of the claim in the Register of Native Title Claims. 3. There be liberty to the parties to apply within ten days for any necessary ancillary orders. 4. There be liberty to apply within ten days by written submission on the question of 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 W6018 OF 1999 BETWEEN: MARJORIE MAY STRICKLAND and ANNE JOYCE NUDDING on behalf of the Maduwongga People Applicant AND: THE NATIVE TITLE REGISTRAR First Respondent THE STATE OF WESTERN AUSTRALIA Second Respondent JUDGE: FRENCH J DATE: 4 NOVEMBER 1999 PLACE: PERTH REASONS FOR JUDGMENT Introduction 1 Three native title applications covering land in the Goldfields area were lodged on behalf of the Maduwongga people by Marjorie May Strickland and Anne Joyce Nudding in April 1994, April 1995 and April 1998. All applications were lodged with the Native Title Registrar under the provisions of the Native Title Act 1993(Cth) as it stood prior to the Native Title Amendment Act 1998 (Cth) (the old Act). They were combined by order of this Court on 17 February 1999. The combined application was referred to the Native Title Registrar in accordance with the provisions of the Native Title Act 1993 as amended by the 1998 amendments (the new Act). It was referred for consideration of whether details of the claim in the application should be included in the Register of Native Title Claims. The Registrar's delegate declined to include the details in the Register on the basis that the application failed to meet one of the statutory conditions attaching to such registration under the new Act. That condition requires that there be no common membership between the native title claim group of the application under consideration and the native title claim group of any overlapping application which was already registered under the new Act when the subject application was made. 2 The applicants seek judicial review of the Registrar's decision, relying primarily on the statutory review process for which s 190D of the Act provides but invoking also, albeit somewhat academically, the Administrative Decisions (Judicial Review) Act 1975 (Cth) and s 39B of the Judiciary Act 1903. For all practical purposes the case has proceeded as an application for review under s 190D. 3 The State of Western Australia, which was joined as a respondent to the proceedings, concedes that the delegate's decision on the challenged point relating to overlapping applications reflected an incorrect construction of the relevant statutory condition. However, the State maintains that registration should have been declined on other grounds relating to the sufficiency of the information provided in the application and its supporting affidavit. These contentions raise questions of the proper construction of some of the statutory criteria for registration concerning the description of the land covered by the application, the authority of the applicants to bring the application, the description of the native title rights and interests asserted and the factual basis of that assertion. The constructional questions necessarily also require consideration of the broader purposes of the Act in relation to the registration of native title claims. 4 The Native Title Registrar while properly not adopting an adversarial position in relation to these proceedings has, at the request of the Court, provided submissions by way of assistance to the Court. Statutory Framework 5 By operation of the 1998 amendments to the Native Title Act all native title determination applications commenced on or after 30 September 1998 are instituted in the Federal Court. Native title applications which were lodged with the Register of Native Title under the Act as it stood before the amendments, and which had not been referred to the Federal Court under s 74 of the Act, became proceedings in the Federal Court by operation of the transitional provisions of the amendments. The relevant transitional provisions are set out in Part 3 of Schedule 5 of the Native Title Amendment Act 1998. 6 Division 3 of Part 2 of the Native Title Act sets out the conditions to be satisfied if future acts affecting native title are to be valid. Future acts are defined in s 233 of the Act and cover the making, amendment or repeal of legislation on or after 1 July 1993 and any other act that takes place on or after 1 January 1994. In the case of certain classes of future acts covered by ss 24IC and 24MD the validity of the acts depends upon satisfaction of the requirements of Subdivision P which affords to registered native title claimants what is broadly called a right to negotiate about certain classes of proposed future acts. Section 25, which is the first section in Subdivision P, sets out a convenient overview of its provisions: "(1) In summary, this Subdivision applies to certain future acts done by the Commonwealth, a State or a Territory that are of any of the following kinds: (aa) certain acts covered by section 24IC (which deals with permissible lease etc renewals); (a) certain conferrals of mining rights; (b) certain compulsory acquisitions of native title rights and interests; (c) other acts approved by the Commonwealth Minister. (2) Before the future act is done, the parties must negotiate with a view to reaching an agreement about the act. (3) If they do not reach agreement, an arbitral body, or a Minister, will make a determination about the act instead. (4) If the procedures in this Subdivision are not complied with, the act will be invalid to the extent that if affects native title. (5) States and Territories may make their own laws as alternatives to this Subdivision. The Commonwealth Minister must be satisfied as to certain matters before such laws can take effect." 7 Subdivision P applies to a future act if it falls into the relevant category and the act is done by the Commonwealth, a State or a Territory, designated "the Government party" (s 26(1)). Before such an act is done, the Government party must give notice of it in accordance with s 29. It must give notice to any registered native title claimant in relation to any land or waters that will be affected by the act. It must also notify other specified bodies and the public (s 29(3)). The Act defines "negotiation parties" who must negotiate with each other in good faith with a view to reaching agreement about the doing of the act or the doing of the act subject to conditions to be complied with by any of the parties. The negotiation parties are the Government party, any native title party and any grantee party. Native title parties include registered native title claimants in relation to the land and waters affected by the act and any person who, four months after the notification day prescribed by subs 29(4), is a registered native title claimant in relation to any of the land or waters affected by the act. There are other requirements and conditions which it is not necessary to canvass for present purposes. 8 By s 31 of the Act the Government party is required to give all native title parties an opportunity to make submissions to it in writing or orally regarding the act and the Government party, the native title parties and any grantee party must negotiate in good faith with a view to reaching agreement about the doing of the act. If six months have passed since the notification day without any agreement being reached, then any of the negotiation parties may apply to the arbitral body, in this case the National Native Title Tribunal, for a determination under s 38 in relation to the act. A determination under s 38 is a determination that the act must not be done or that it may be done or that it may be done subject to conditions to be complied with by any of the parties (s 38(1)). 9 The reference to these elements of the future act provisions of the Native Title Act is sufficient to indicate that registration of a native title claim confers upon the registered applicants important procedural rights. It constrains the ability of the State Government to proceed to do a valid future act until, in the case of those acts to which Subdivision P applies, it has negotiated an agreement with the applicants or secured an arbitral determination that the act may be done. 10 Many of the elements of the statutory scheme setting up the right to negotiate process were in place under the old Act. In the joint judgment in North Ganalanja Aboriginal Corporation v State of Queensland (1996) 185 CLR 595 it was said of the previous regime at 616: "…once an application for determination is accepted, the Act maintains the status quo between the registered native title claimant on the one hand and the Government and those having proprietary interests or seeking rights to mine on the other, unless the parties negotiate and agree on the resolution of their respective claims or a competent authority makes a binding decision." 11 The process of registration has been significantly changed as a result of the 1998 amendments. Prior to those amendments judicial construction of the old Act required that registration occur immediately upon lodgment of a claim with the National Native Title Tribunal (Northern Territory v Lane (1995) 59 FCR 332; Kanak v National Native Title Tribunal (1995) 61 FCR 103). The acceptance of claims which followed upon registration was treated as an ex parte process in which the Native Title Registrar was required to decide, on the face of materials provided by the applicants, whether or not to accept their claim. In so doing, the Registrar was not permitted to resort to extraneous material and, in particular, was not permitted to receive evidence or submissions from third parties – North Ganalanja Aboriginal Corporation (supra) at 620-621. 12 The statutory process of acceptance by the Registrar no longer exists as applications are now commenced as proceedings in the Federal Court. However, the Registrar is required to consider applications for native title determinations to decide whether they should be placed on the Register of Native Title Claims. Upon such registration the claims attract the right to negotiate outlined above. There is provision also for the registration test to be administered in respect of claims already on foot prior to the amendments even though, by virtue of their lodgment under the old Act, they were on the Register of Native Title Claims. It is unnecessary for present purposes to set out the various circumstances in which the registration test may be applied to pre-amendment claims. Suffice it to say that a very large proportion of pre-amendment claims may be subject to the Registrar's scrutiny for the purpose of determining whether or not they should remain on the Register. 13 A significant difference between the law as it stood prior to the amendments and the post-amendment law is that the Registrar must be satisfied of a number of conditions before a claim may be placed on the Register. Section 190A(6) provides: "The Registrar must accept the claim for registration if the claim satisfies all of the conditions in: (a) section 190B (which deals mainly with the merits of the claim); and (b) section 190C (which deals with procedural and other matters). In any other case, the Registrar must not accept the claim for registration." 14 The conditions relating to the merits of claims set out in s 190B require, inter alia: 1. Identification of the area subject to native title. (s 190B(2)) 2. Identification of the native title claim groups. (s 190B(3)) 3. Identification of the claimed native title. (s 190B(4)) 4. Demonstration of a factual basis for the native title claim. (s 190B(5)) 5. The Registrar must consider that prima facie at least some of the native title rights and interests claimed in the application can be established. (s 190B(6)) 6. At least one member of the native title group must have or previously have had a traditional physical connection with any part of the land or waters covered by the application or previously had and would reasonably have been expected currently to have a traditional physical connection but for things done by the Crown or a statutory authority of the Crown or a holder of a lease over any of the land or waters. (s 190B(7)) The application and accompanying documents must comply with the requirements of s 61A which forbids the making of applications where there have been previous native title determinations or exclusive or non-exclusive possession acts (s 190B(8)). Previous exclusive possession acts and previous non-exclusive possession acts are defined in ss 23B and 23F of the new Act. There is also a condition excluding registration in the case of applications in areas where native title rights and interests have been extinguished (s 190B (9)). Section 190C sets out the procedural conditions. These relate to the provision of all information and materials required for applications by ss 61 and 62 (s 190C(2)), the absence of any prior registered overlapping claims with common membership (s 190C(3)), the certification by a representative body of the authority of the applicants to bring the application (s 190C(4)) and requirements for uncertified applications (s 190C(5)). 15 It is convenient to set out the statutory provisions relevant to the contentions of the applicant in relation to the overlapping claims condition and those relevant to the other contentions raised by the State of Western Australia. 16 It is convenient to begin with s 62 which, in the relevant part provides: "62(1) A claimant application (see section 253): (a) must be accompanied by an affidavit sworn by the applicant: (i) that the applicant believes that the native title rights and interests claimed by the native title claim group have not been extinguished in relation to any part of the area covered by the application; and (ii) that the applicant believes that none of the area covered by the application is also covered by an entry in the National Native Title Register; and (iii) that the applicant believes that all of the statements made in the application are true; and (iv) that the applicant is authorised by all the persons in the native title claim group to make the application and to deal with matters arising in relation to it; and (v) stating the basis on which the applicant is authorised as mentioned in subparagraph (iv); and (b) must contain the details specified in subsection (2); and (c) not material for present purposes (2) For the purposes of paragraph (1)(b), the details required are as follows: (a) information, whether by physical description or otherwise, that enables the boundaries of: (i) the area covered by the application; and (ii) any areas within those boundaries that are not covered by the application; to be identified; (b) a map showing the boundaries of the area mentioned in subparagraph (a)(i); (c) details and results of all searches carried out to determine the existence of any non-native title rights and interests in relation to the land or waters in the area covered by the application; (d) a description of the native title rights and interests claimed in relation to particular land or waters (including any activities in exercise of those rights and interests), but not merely consisting of a statement to the effect that the native title rights and interests are all native title rights and interests that may exist, or that have not been extinguished, at law; (e) a general description of the factual basis on which it is asserted that the native title rights and interests claimed exist and in particular that: (i) the native title claim group have, and the predecessors of those persons had, an association with the area; and (ii) there exist traditional laws and customs that give rise to the claimed native title; and (iii) the native title claim group have continued to hold the native title in accordance with those traditional laws and customs; (f) if the native title claim group currently carry on any activities in relation to the land or waters – details of those activities;" (g) and (h) are not material for present purposes. Section 190B sets up "merits" conditions for registration. Relevant parts of the provision for present purposes are: "(1) This section contains the conditions mentioned in paragraph 190A(6)(a). (2) The Registrar must be satisfied that the information and map contained in the application as required by paragraphs 62(2)(a) and (b) are sufficient for it to be said with reasonable certainty whether native title rights and interests are claimed in relation to particular land or waters. . . . (4) The Registrar must be satisfied that the description contained in the application as required by paragraph 62(2)(d) is sufficient to allow the native title rights and interests claimed to be readily identified. (5) The Registrar must be satisfied that the factual basis on which it is asserted that the native title rights and interests claimed exist is sufficient to support the assertion. In particular, the factual basis must support the following assertions: (a) that the native title claim group have, and the predecessors of those persons had, an association with the area; and (b) that there exist traditional laws acknowledged by, and traditional customs observed by, the native title claim group that give rise to the claim to native title rights and interests; and (c) that the native title claim group have continued to hold the native title in accordance with those traditional laws and customs." Subsection (6) to (9) are not material for present purposes. 17 In s 190C, which deals with procedural and other conditions, it is provided: "(1) This section contains the conditions mentioned in paragraph 190A(6)(b). (2) The Registrar must be satisfied that the application contains all details and other information, and is accompanied by any affidavit or other document, required by sections 61 and 62. (3) The Registrar must be satisfied that no person included in the native title claim group for the application (the current application) was a member of the native title claim group for any previous application, if: (a) the previous application covered the whole or part of the area covered by the current application; and (b) an entry relating to the claim in the previous application was on the Register of Native Title Claims when the current application was made; and (c) the entry was made, or not removed, as a result of consideration of the previous application under section 190A. (4) The Registrar must be satisfied that either of the following is the case: (a) the application has been certified under paragraph 202(4)(d) by each representative Aboriginal/Torres Strait Islander body that could certify the application in performing its functions under that Part; or (b) the applicant is a member of the native title claim group and is authorised to make the application, and deal with matters arising in relation to it, by all the other persons in the native title claim group. (5) If the application has not been certified as mentioned in paragraph (4)(a) the Registrar cannot be satisfied that the condition in subsection (4) has been satisfied unless the application: (a) includes a statement to the effect that the requirement set out in paragraph (4)(b) has been met; and (b) briefly sets out the grounds on which the Registrar should consider that it has been met." Subsections (6) and (7) are not material for present purposes. 18 The concept of authorising the making of an application is defined in s 251B which provides: "For the purposes of this Act, all the persons in a native title claim group or compensation claim group authorise a person or persons to make a native title determination application or a compensation application, and to deal with matters arising in relation to it, if: (a) where there is a process of decision-making that, under the traditional laws and customs of the persons in the native title claim group or compensation claim group, must be complied with in relation to authorising things of that kind – the persons in the native title claim group or compensation claim group authorise the person or persons to make the application and to deal with the matters in accordance with that process; or (b) where there is no such process – the persons in the native title claim group or compensation claim group authorise the other person or persons to make the application and to deal with the matters in accordance with a process of decision-making agreed to and adopted, by the persons in the native title claim group or compensation claim group, in relation to authorising the making of the application and dealing with the matters, or in relation to doing things of that kind." Reference will also need to be made to the transitional provisions of the Amendment Act set out in Schedule 5 to that Act which provide, inter alia, that applications pending under the old Act at the time the amendments came into force are taken to have been made to the Federal Court. The relevant provisions of the Amending Act came into effect on 30 September 1998. 19 Finally it is important to bear in mind the main objects of the Act as defined in s 3, which provides: "The main objects of this Act are: (a) to provide for the recognition and protection of native title; and (b) to establish ways in which future dealings affecting native title may proceed and to set standards for those dealing; and (c) to establish a mechanism for determining claims to native title; and (d) to provide for, or permit, the validation of past acts, and intermediate period acts, invalidated because of the existence of native title." History of the Proceedings 20 The first Maduwongga native title determination application was lodged with the Native Title Registrar on 19 April 1994 by Marjorie Strickland and Anne Nudding. It was accepted, under s 63 of the Native Title At 1993 (Cth), as it then was, on 12 October 1995. The application was given the National Native Title Tribunal (NNTT) file number, WC94/3. Following unsuccessful attempts to resolve the matter through mediation, it was referred to this Court on 27 May 1998 and given the Court number WG63 of 1998. 21 The second Maduwongga native title determination application, by the same applicants, was lodged with the Native Title Registrar on 6 April 1995 and accepted under s 63 on 18 September 1995. It was given the NNTT file number WC95/11. Mediation proving unsuccessful in this matter also, it was referred to the Court under s 74 of the Act on 30 June 1997 and given the Court file number WAG76 of 1997. 22 A third Maduwongga native title determination application, again brought by the same applicants, was lodged with the Native Title Registrar on 8 April 1998. It was given the NNTT file number WC98/20. Pursuant to the amendments to the Native Title Act it became a proceeding in this Court on 30 September 1998 and was given the Court number WG6237 of 1998. Details of each of the applications were placed upon the Register of Native Title Claims. 23 On 3 July 1998, orders were made by Carr J whereby the application WG63 of 1998 (Maduwongga No 1) was consolidated with WG76/97 (Maduwongga No 2). The consolidated proceedings were thereafter to bear the Court file number "WG76 of 1997 and 63 of 1998". 24 On 28 January 1999 a motion was filed on behalf of the applicants in the consolidated proceedings moving for orders that the three Maduwongga proceedings be "combined" and the combined application be amended in accordance with a proposed amended application annexed to an affidavit filed in Court by the applicants' solicitor. Orders were also sought that the proceedings comprising applications WG76/1997 and WG63/1998 be consolidated. On the face of it the motion seems to have disregarded the consolidation order made by Carr J on 3 July 1998. The motion came on for hearing before Nicholson J who, on 17 February 1999, made orders revoking the consolidation order made by Carr J on 3 July 1998 and his Honour also ordered that WG76/1997 be amended so that it was henceforth combined with and included applications WG63/1998 and WG6237 of 1998. His Honour ordered that the three applications be combined and continued in and under the application number WG76 of 1997. WG76 of 1997 was amended to take the form set out in the proposed amended application annexed to the affidavit of the applicants' solicitor. 25 On 8 June 1999 a delegate of the Native Title Registrar decided, pursuant to s 190A of the Native Title Act, that the combined application should not be accepted for inclusion of details of the claims made under it in the Register of Native Title Claims. The basis upon which that decision was taken was that the application failed to comply with the requirements of s 190C(3). That provision requires that the Registrar be satisfied that no person included in the native title claim group for the application was a member of the native title claim group for another previous application already on the Register of Native Title Claims when the current application was made where the previous application was on the Register as a result of consideration under the provisions of s 190A. The relevant prior registered application was the Wongatha application, WG6005/98. It was said by the Registrar's delegate not to be in dispute that there are members common to each of the Maduwongga and Wongatha claims. There being persons common to the two applications and the previous application having been found to comply with s 190A of the Act, what remained to be considered was whether an entry relating to the claim in the previous application was on the Register of Native Title Claims "when the current application was made". The delegate's decision then turned on the meaning of the phrase "when the current application was made" which appears in s 190C(3). 26 In addressing that question he looked at the applications which had been combined into Maduwongga and into Wongatha respectively. He posed the question for himself whether any of the separate pre-combination Wongatha applications which overlapped any of the pre-combination Maduwongga applications were on the Register when any of the pre-combination Maduwongga applications were made. He found there were no pre-combination Wongatha claims that were on the Register before Maduwongga No 1 and 2. However, Maduwongga No 3 was registered on 8 April 1998. It was overlapped by five pre-combination Wongatha claims which were on the Register prior to 8 April 1998. There were therefore five applications now combined to form the Wongatha application which overlapped an application now combined to form the Maduwongga application and which were made and registered prior to that application being made. The Maduwongga combined application on that basis was found not to satisfy the conditions in s 190C(3). 27 An application for an order for review of the Registrar's decision was filed on 6 July 1999. The grounds of the application were: 1. The Registrar's delegate breached the rules of natural justice when the decision was made not to accept the Maduwongga claim for registration. 2. The delegate improperly exercised his power to decide not to enter the Maduwongga claim on the Native Title Register in that he exercised the power in a manner so unreasonable that no reasonable person could have so exercised the power. 3. The delegate improperly exercised the power conferred on it by the Native Title Act, s 202(4)(e), in that he failed to take into account a relevant consideration, namely that the combined Wongatha claim did not include the Maduwongga within the native title group of the combined Wongatha claim. The Operation of the Overlap Condition – Section 190C(3) 28 The overlap condition set out in s 190C(3) is to be read with s 190A(6) which provides inter alia that: "The Registrar must accept the claim for registration if the claim satisfies all of the conditions in: . . . (b) section 190C (which deals with procedural and other matters) In any other case, the Registrar must not accept the claim for registration." 29 "Any other case" includes a case in which any of the conditions in s 190C is not "satisfied". The condition in s 190C(3) is not satisfied if the Registrar is not satisfied that no person included in the native title claim group for the application under consideration was a member of the native title group for any previous application which answers the criteria set out in s 190C(3) (a), (b) and (c). To determine whether this condition is satisfied the Registrar can proceed first to identify any previous application covering the whole or part of the area covered by the current application. He would then have to determine whether there was an entry relating to the claim in the previous application which was on the Register of Native Title Claims when the current application was made. He would also have to ascertain whether that previous application had been considered under s 190A and whether, as a result of that consideration, the relevant entry was either made or, if pre-existing, was not removed pursuant to that consideration. 30 In the present case there was a number of applications which had overlapped the applications that were combined to form the combined Maduwongga application. A number of these overlapping applications were combined, by order of the Court on 22 January 1999, to form the combined Wongatha application which was given the lead Federal Court file no. WG 6005/98. Overall some twenty applications made up the combined Wongatha application. A further amendment was made to that combined application on 22 February 1999. The amended combined Wongatha application was considered under s 190A by the Native Title Registrar in accordance with his obligations under s 190A(1). It was accepted for registration pursuant to s 190A on 26 February 1999. That was the relevant date from which it could be said, in terms of s 190C(3)(b) that there was on the Register an "entry made or not removed as a result of consideration of the previous application under s 190A". The date of the registration decision with respect to the combined Wongatha application is taken from the Court file in relation to that application, which includes a copy of the decision of the delegate of the Native Title Registrar under s 190A. 31 The question that follows is whether it could be said that the combined Maduwongga application was "made" before or after that date. If the application were made before that date, then s 190C(3) could not apply to prevent its inclusion in the Register of Native Title Claims. For a subsection to operate there must be a s 190A tested entry in place on the Register in respect of the "previous" application at the time when the "current" application is made. 32 The Registrar's delegate approached this question by asking whether "any of the separate pre-combination Wongatha applications which overlapped any of the pre-combination Maduwongga applications were on the Register when any of those pre-combination Maduwongga applications were made". On any view, this was an erroneous test because it omitted to address the requirement that a relevant previous application must be on the Register "as a result of consideration of the previous application under s 190A". In this case, none of the previous applications relied upon by the delegate was the subject of consideration under s 190A prior to any of the pre-combination Maduwongga applications being made. So, even if the condition under s 190C(3) is applied to the various pre-combination applications as it was in this case, the condition must be satisfied. That is to say, the delegate erred in finding that the Maduwongga combined application did not satisfy the condition in s 190C(3). 33 The conclusion thus reached assumes the correctness of the delegate's approach in treating pre-combination applications as the relevant classes of current and previous applications for the purposes of s 190C(3). There is an underlying constructional question, however, which is not easy of resolution in relation to the combined applications namely – when was the "current application", ie that being considered under s 190A, "made" for the purposes of s 190C(3)(b)? 34 Section 13 of the new Act says that an "application may be made to the Federal Court under Part 3...for a determination of native title...". Section 61(1) sets out in tabular form the applications which it provides "may be made under this Division to the Federal Court and the person who may make each of those applications". These include native title determination applications. There is no express definition of the process of "making" an application, but subs 61(5) requires that an application must: "(a) be in the prescribed form; and (b) be filed in the Federal Court; and (c) contain such information in relation to the matters sought to be determined as is prescribed; and (d) be accompanied by any prescribed documents and any prescribed fee." 35 The above elements, in my opinion, together describe what is involved in making an application for the purpose of s 61. The only action, temporally defined, is the act of filing in the Federal Court. That is the time when a new application is "made" under the new Act. That is also the time when such an application is "made" for the purposes of s 190C(3)(b). In the case of an application given to the Registrar under the old Act, the transitional provisions apply. The relevant provisions are found in the table comprising Item 6 of Part 3 of Schedule 5 to the Amendment Act. In any cases of applications which had proceeded under the old Act up to and beyond the point where notification had been completed, the application was "taken to have been made to Federal Court". Where the application had been referred to the Federal Court under s 74 of the old Act, then it was "taken to have been made to the Federal Court" and the Federal Court was taken to have made an order under subs 86C(1) of the new Act that mediation cease (Schedule 5 Part 3 Item 8). The term "application is taken to have been made to the Federal Court" is defined in Item 36 of Schedule 5 thus: "(a) the application is to be treated as if it were made to the Federal Court under the relevant provisions of the new Act; and (b) the Native Title Registrar must give the application to the Federal Court, but section 63 of the new Act does not apply in relation to the application." 36 The condition imposed by s 190C(3) can only relate to previous applications overlapping a current application where the previous application has been the subject of an entry made on the Register or not removed from it as a result of consideration under s 190A. That process only came into existence on 30 September 1998. The making of applications must relate to applications actually made under the new Act or taken to have been made to the Federal Court by virtue of the transitional provisions. The earliest date upon which an application could be made or be taken to have been made to the Federal Court was 30 September 1998. The Native Title Registrar in considering s 190C(3)(b) will therefore be dealing with applications made under the new Act after 30 September 1998 or taken to have been made on that date. 37 The pre-combination Maduwongga applications are all taken to have been made on 30 September 1998 for this purpose. The combined application is not a new application. The new Act treats combination as a species of amendment (s 64(2)). It follows that in the case of a combination of old Act applications, the combined application, like its components, is taken to have been made on 30 September 1998. 38 A more difficult case may arise where a new Act application is combined with an old Act application or with an earlier or later new Act application or perhaps a mix of all categories. This may arise particularly in the case of so called "polygon" claims – lodged, for the purpose of quick registration, to coincide with the boundaries of a proposed mining tenement – where it is desired to combine them with a later application covering the whole of the asserted traditional country of the relevant native title claim group. The application to be tested for registration following combination is that which has been "amended" by the combination process. There may be judgments of degree to be made in identifying the relevant application for that purpose. The case is clear where a "country" application is combined with "polygon" applications. It is the "country" application, as so amended, which is tested for registration following amendment. The date upon which the country application was filed in the Federal Court in the case of a new Act application, or 30 September 1998 in the case of an old Act application, is the date it was "made" for the purposes of s 190C(3)(b). The approach I have indicated is reflected in the practice of the Court which designates one of a number of combined applications as the "lead application" although it is not suggested that that designation itself determines the issue. 39 For these reasons, in my opinion, the general approach adopted by the delegate requires reconsideration. It has led to refusal of registration on a wrong basis as already outlined in relation to the relevant date of entry on, or non-removal from, the Register of Native Title Claims. 40 The State, in its submissions, conceded that the Registrar was in error in his calculation of the relevant dates for the purposes of s 190C(3), albeit the State maintained that the current application, the combined Maduwongga application was "made" on 17 February 1999. That was the date of the combination order by Nicholson J. For reasons already stated, I do not accept that contention but the outcome is the same, that is, the application should not have been found not to satisfy the conditions of s 190C(3). The Applicants' Grounds of Review 41 The applicants' grounds of review have to do, in part, with the process adopted by the delegate in dealing with the question of overlap. Thus it was said that, in breach of the rules of natural justice, the delegate had taken account of the reasons for registration of the combined Wongatha application in making the decision under review and had done so without giving to the applicants an opportunity to comment upon those reasons or upon the content of the combined Wongatha application. A second natural justice complaint involved the assertion that the applicants had made a submission proceeding on an assumption that none of the pre-combination Wongatha applications was on the Register when the combined Maduwongga application was made. There was also said to have been an erroneous assumption of overlap of the claimant groups on the part of the applicants. The Registrar, it was said, should have informed the applicants that the decision was proceeding on a different assumption about the presence of pre-combination Wongatha claims on the Register when the Maduwongga application was made. 42 These matters, in my opinion, are academic, as are the other grounds relating to unreasonableness and improper exercise of power all of which relate to the delegate's application of the conditions imposed by s 190C(3) to the combined Maduwongga application. The State's Contentions 43 While conceding that the delegate erred in the construction of s 190C(3), the State contended that there were other grounds upon which he should have refused to include details of the combined Maduwongga application on the Register of Native Title Claims. The State sought to justify its position in raising these contentions, opposing registration of the claims in the combined Maduwongga application, by reference to the powers of the Court to deal with all matters in controversy between the parties so as to avoid a multiplicity of litigation. The State also referred to the provisions of s 28 of the Federal Court of Australia Act dealing with the powers of the Court in the exercise of its appellate jurisdiction. That element of its submissions was misconceived. This case does not involve an exercise of the appellate jurisdiction of the Court but rather, its original jurisdiction. The nature of the review process has been discussed by Kiefel J in Powder v Registrar, National Native Title Tribunal & Others [1999] FCA 913, with which I respectfully agree. After reviewing the provisions of the Act relating to the administration of the registration test her Honour there said: "The nature of the Registrar's decision, and the materials provided for, upon which it is based, is such as to be suitable for review in the administrative law sense. The function to be undertaken by the Registrar is not one which could readily be undertaken by the Court, which lacks necessary knowledge of other native title applications and would involve it in searches for information before fact-finding. There is no authorisation of a rehearing by the Court to be gleaned from the Act and the provisions surrounding those in question. What is provided for is a review of the legality of the Registrar's decision on the established grounds, and one which may be undertaken expeditiously, given the requirement that the Registrar furnish reasons as soon as possible." (par 34) 44 It is important to bear in mind in the review process the main objects of the Act set out in s 3 which are unchanged by the amendments and particularly the object relating to the protection of native title. It is also necessary to bear in mind the administrative character of the registration test and the time constraints under which it is to be applied. A significant margin of appreciation must be allowed for the experience and detailed administrative knowledge of the Registrar and his delegates in making the largely evaluative judgments on whether applications comply with the statutory conditions of registration. Their reasons are not to be scrutinised finally and minutely with an eye keenly attuned to error – Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287. 45 When it comes to entertaining the State's contentions adverse to registration, it should be accepted that, given the desirability of dealing expeditiously with registration questions, it is appropriate to consider in these proceedings whether there is some other basis, as suggested by the State, upon which registration of the claim in the combined Maduwongga applications should have been refused. If some such basis is identified then it may be appropriate to decline the relief sought by the applicants. I am not suggesting that such a course should be followed in all cases and it may be necessary in future to embody some provision in the Rules for a notice of contention to ensure full and adequate notice of the contentions of any party seeking to support the decision under review on grounds other than that upon which it was made. 46 Counsel for the applicants accepted that ultimately the Court has to make a discretionary decision on the question of relief and decide whether or not it would be futile to remit to the Registrar in light of any other error that might have been exposed upon the State's submissions. Identification of the Area Subject to the Native Title Determination Application 47 In the combined Maduwongga application the external boundaries of the claim were set out on a map attached to the application. The internal boundaries were defined as follows: "(1) The applicants exclude from the claim any areas covered by valid acts on or before 23 December 1996 comprising such of the following as are included as extinguishing acts within the Native Title Act 1993, as amended, or Titles Validation Act 1994, as amended, at the time of the Registrar's consideration: . Category A past acts, as defined in NTA s 228 and s 229; . Category A intermediate period acts as defined in NTA s 232A and s 232. (2) The applicants exclude from the claim any areas in relation to which a previous exclusive possession act, as defined in s 23B of the NTA, was done in relation to an area, and, either the act was an act attributable to the Commonwealth, or the act was attributable to the State of Western Australia and a law of that State has made provision as mentioned in s 23E in relation to the act. (3) The Applicants exclude from the claim areas in relation to which native title rights and interests have otherwise been extinguished, including areas subject to:- (a) an act authorised by legislation which demonstrates the exercise of permanent adverse dominion in relation to native title; or (b) actual use made by the holder of the tenure other than native title which is permanently inconsistent with the continued existence of native title. To avoid any uncertainty, the Applicants exclude from the claim areas the tenures set out in Schedule B1. 48 Schedule B1: B1.1 An unqualified grant of an estate in fee simple. B1.2 A Lease which is currently in force, in respect of an area not exceeding 5,000 square metres; upon which a dwelling house, residence, building or work is constructed; and which comprises- (1) a Lease of a Worker's Dwelling under the Workers' Home Act 1911-1928; (2) a 999 Year Lease under the Land Act 1898; (3) a Lease of a Town Lot or Suburban Lot pursuant to the Land Act 1933 (WA), s 117; or (4) a Special Lease under s 117 of the Land Act 1933 (WA) B1.3 A Conditional Purchase Lease currently in force in the Agricultural Areas of the South West Division under clauses 46 and 47 of the Land Regulations 1887 which includes a condition that the lessee reside on the area of the lease and upon which a residence has been constructed. B1.4 A Conditional Purchase Lease of cultivable land currently in force under Part V, Division (1) of the Land Act 1933 (WA) in respect of which habitual residence by the lessee is a statutory condition in accordance with the Division and upon which a residence has been constructed. B1.5 A Perpetual Lease currently in force under the War Service Land Settlement Schedule Act 1954. B1.6 A Permanent public work. B1.7 An existing public road or street used by the public. (4) Paragraphs (1) to (3) above are subject to such of the provisions of sections 47, 47A and 47B of the Act as apply to any part of the area contained within this application, particulars of which will be provided prior to the hearing but which include such areas as may be listed in Schedule L. (5) The claim is a combination of the claims in WAG 76 of 1997 (WC 95/11), WAG 63 of 1998 (WC 94/3) and WC98/20." 49 The State submits that in order for it to be said "with reasonable certainty whether native title rights and interests are claimed in relation to particular land or waters" as required by s 190B(2), the land or waters included in or excluded from the claim area should be described in such a way that legal judgment is not needed to determine whether an area is included or excluded. 50 The State objected generally to the description of excluded areas by category rather than by description of the land excluded itself or its depiction on a map. So the exclusion of land covered by Category A past acts, as defined in ss 228 and 229, was said to be inadequate because it potentially covered a broad range of matters. But in order to establish the existence of a Category A past act it is necessary first to show that there was at some time in the area affected by the act, native title cognisable by the common law, that the act which was invalid because of its effect on that native title and that it has been validated with the statutory consequence that native title has been extinguished in respect of it. The questions raised by that category of exclusion could not be resolved without substantial inquiry. The exclusion of areas covered by Category A past acts is, in the circumstances, an entirely reasonable concession. That concession is not to be attacked by suggesting that it leads to ill-defined internal boundaries. In my opinion the mode of description adopted in this case is consistent with the general rubric of "reasonable certainty" used in s 190B(2). The same reasoning applies to exclusions from the claimed area by reference to previous exclusive possession acts as defined in s 23B and by reference to acts authorised by legislation demonstrating the existence of permanent adverse dominion in relation to native title and by reference to actual use made by the holder of a tenure other than native title which is permanently inconsistent with the continued existence of native title. These are all appropriate concessions which render the application more rather than less certain. 51 In Daniels v State of Western Australia & Others [1999] FCA 686, Nicholson J referred to the requirements of s 62 relating to information identifying the area covered by the application and areas within its boundaries not covered by the application. His Honour said: "These requirements are to be applied to the state of knowledge of an applicant as it could be expected to be at the time the application or amendment to an application is made. Consequently a class or formula approach could satisfy the requirements of the paragraphs where it was the appropriate specification of detail in those circumstances. For example, at the time of an initial application when the applicants had no tenure information it may be a satisfactory compliance with the statutory requirement. A description of a class or formula character of an area of exclusion such as "areas affected by valid category A Past Acts" may be the fullest description that an applicant can give at the time of an application or application for amendment of an application. It is capable in the light of a subsequent determination of the nature and validity of those Acts of resulting in satisfaction of the legislatively prescribed criteria in s 62(2)(a). Whether that would be so on a later application for amendment when tenure information is available would depend on considerations such as those referred to in the following paragraphs." His Honour went on generally, albeit in the context of a motion for amendment of an application, to hold that whether a class or formula description satisfies the Act requires consideration by the Court in the light of evidence of consideration given to the relevant issues by the applicants and how feasible it was that greater certainty and detail could be provided consistently with the other requirements of the Act. 52 I respectfully agree with his Honour's approach. However, in the context of the registration test, the kind of judgment which his Honour was contemplating might be undertaken by the Court is undertaken administratively by the Registrar. It is necessarily evaluative in character within the general parameters laid down by the statutory provisions which the Registrar must apply. Having regard to the nature of review proceedings the Court should not interfere with the Registrar's assessment of the sufficiency of the description unless it is shown to be informed by some error of law or procedure. 53 The State argued that the identification of leases "currently in force" referred to in Schedule B1 would require interpretation as to whether the date impliedly referred to is the date of lodgment of the application or the date on which the matter comes on for hearing. As to that there is little room for doubt in my opinion, that the claim excludes areas covered by leases of the relevant category in force at the time the application is lodged, or if the exclusion is introduced by the amendment, the time at which the amendment is made. The question was also raised whether Item B1.1 excludes all freehold or only private freehold. On the face of it the exclusion applies to land covered by any grant of an estate in fee simple. An amendment of the application to limit the exclusion to private freehold would arguably constitute an expansion of the land area covered by it, which is not permissible under s 64. 54 Then it was said the operation of ss 47, 47A and 47B of the Native Title Act in their applicability to any given claim is a matter peculiarly within the knowledge of the applicants and should be set out with particularity in the application itself so that it is known whether exclusions do or do not apply to given areas. These sections of the Native Title Act provide for the disregard of prior extinguishment in relation to land covered by pastoral leases held by native title applicants, freehold land vested under legislation for the benefit of Aboriginal and Torres Strait Islander people and occupied by members of the native title claim group and vacant crown land occupied by members of the native title claim group. 55 In my opinion, it is unrealistic to expect a concluded definition of the areas subject to these provisions to be given in the application. Their applicability to any area will require findings of fact and law to be made as part of the hearing of the application. The Act is to be construed in a way that renders it workable in the advancement of its main objects as set out in s 3, which include providing for the recognition and protection of native title. The requirements of the registration test are stringent. It is not necessary to elevate them to the impossible. As to their practical application to a particular case, subject to the constraints imposed by the law, that is a matter for the Registrar and his delegates and not for the Court. Authorisation of Applicants 56 The combined Maduwongga application includes a statement in par A2 as follows: "The applicants are entitled to make this application as people authorised by the native title claim group to make the native title determination application." The affidavit of the applicants, which accompanies the application, includes statements by them: "(d) that they are authorised by all the persons in the native title claim group to make the application and to deal with matters arising in relation to it; and (e) they are so authorised by their descendants in accordance with a traditional custom acknowledged by the members of the native title claim group of younger generations respecting elder generations and elder generations having authority to make decisions and deal with matters relating to traditional interests in land and waters on their own behalf and on behalf of younger generations." The State submits that the Registrar cannot be satisfied that the requirements of s 190C(4)(b), read with s 251B, have been met as no grounds have been set out by which a process of decision making is identified. It is said that s 251B of the Act envisages that there is a "process of decision-making" which has been gone through in order to authorise the making of the claim on behalf of the claimant group. That process, it is submitted, can be either in accordance with traditional law and customs or, in the absence of such a process, agreed to by the group. What is not envisaged by s 251B, it is argued, is that authorisation is a process involving no consultation with the claim group. Hence there was no "authorisation" in accordance with the Native Title Act. 57 The affidavit attached to the application meets the requirements of s 190C(5)(a) which requires no more than a statement that the requirement of authorisation referred to in s 190C(4)(b) has been met. It is also required briefly to set out the grounds on which the Registrar should consider that it has been met. The insertion of the word "briefly" at the beginning of par 190C(5)(b) suggests that the legislature was not concerned to require any detailed explanation of the process by which authorisation is obtained. The sufficiency of the grounds upon which the Registrar should consider that the requirement has been met is primarily a matter for the Registrar. The specified grounds in this case constitute an assertion that as elders the two applicants have authority under traditional law and custom acknowledged by the members of the native title claim group to make decisions of this kind. The brevity of the assertion may be criticised and it might be thought consistent with the two applicants merely arrogating authority to themselves without any or any meaningful consultation with the members of the native title claim group. On the other hand, neither the Registrar nor this Court is in a position to reject the contention that all relevant authority is vested in the elders of the relevant native title claim group and that the applicants fall into that category. It is to be noted that s 190C(4) does not confine the Registrar to the statements made in the affidavit or the information provided in the application in reaching the relevant state of satisfaction. Nor is the Registrar so confined by subs 190C(5). In this case, the delegate, in his reasons for decision, said in connection with this ground: "Paragraph (e) of the affidavit provides a brief statement as to the basis for authorisation by the biological descendants of the applicants. These persons represent the totality of the native title claim group in the current application. The two applicants, Marjorie Strickland and Joyce Nudding are the oldest living descendants to be identified apical ancestors within the native title claim group (refer to the genealogy at Fig 3.4 of the report by McDonald Hales & Associates). The applicants have based their authorisation on the respect shown to elder generations under traditional custom to use their authority to make decisions on behalf of the group." In my opinion, the Registrar's delegate has reached a state of satisfaction on material available to him and it is not shown that he has been informed by any error in principle in so doing. Nor is it demonstrated that the formal requirements of subs 190C(5) have not been met. Nevertheless, this is a matter of considerable importance and fundamental to the legitimacy of native title determination applications. The authorisation requirement acknowledges the communal character of traditional law and custom which grounds native title. It is not a condition to be met by formulaic statements in or in support of applications. Nevertheless, I am satisfied that the requirements of the Act have been met in this case and that the Registrar has reached the state of satisfaction not only by reference to the assertions contained in the affidavit but also by reference to other anthropological material supplied to him. Adequacy of the Description of the Native Title Rights and Interests Claimed 58 The native title rights and interests claimed in the combined Maduwongga application are set out in Schedule E of that application in the following terms: "The native title rights and interests claimed are the rights to the possession, occupation, use and enjoyment as against the whole world (subject to any native title rights and interests which may be shared with any others who establish that they are native title holders) of the area, and any right or interest included within the same; subject to: (i) To the extent that any minerals, petroleum or gas within the area of the claim are wholly owned by the Crown in the right of the Commonwealth or the State of Western Australia, they are not claimed by the applicants. (ii) The applicants do not make a claim to native title rights and interests which confer possession, occupation use and enjoyment to the exclusion of all others in respect of any areas in relation to which a previous non-exclusive possession act, as defined in section 23F of the NTA, was done in relation to an area, and, either the act was an act attributable to the Commonwealth, or the act was attributable to the State of Western Australia and a law of that State has made provision as mentioned in section 23I in relation to the act; (iii) Paragraph (ii) above is subject to such of the provisions of sections 47, 47A and 47B of the Act as apply to any part of the area contained within this application, particulars of which will be provided prior to the hearing." The State contends that this description is no more than a statement by the applicants that they claim "the native title rights and interests that may exist, or that have not been extinguished, at law". It is submitted that s 62(2)(d) envisages a setting out of particular rights and interests in relation to particular land or waters, with a description of activities undertaken in exercise of those rights and interests so that they can be "readily identified" and presumably, help with resolution of issues raised with respect to, for instance, the issue of s 29 notices. The applicants, it is said, have provided a statement, not a description and the Registrar cannot be satisfied as required by s 190B(4). 59 The term "native title rights and interests" is defined in s 223 thus: "223(1) The expression native title or native title rights and interests means the communal, group or individual rights and interests of Aboriginal peoples or Torres Strait Islanders in relation to land or waters, where: (a) the rights and interests are possessed under the traditional laws acknowledged, and the traditional customs observed, by the Aboriginal peoples or Torres Strait Islanders; and (b) the Aboriginal peoples or Torres Strait Islanders, by those laws and customs, have a connection with the land or waters; and (c) the rights and interests are recognised by the common law of Australia." 60 The common law of native title and the Act which provides for its recognition and protection cannot be applied to distort traditional law and custom or the rights and interests which arise under such law and custom into convenient laundry lists of common law analogues. While the description of the native title rights and interests set out in this application may be seen as inconveniently broad, they are quite consistent with the assertion that the land in question is the traditional "country" of the applicants and the native title claim group which they represent. No doubt if the content of the native title rights and interests varied from one part of the land or waters covered by the application to another, then that variation would have to be particularised to comply with the requirements of s 62(2)(d). However such variation is not to be assumed. It cannot be said that a broad description fails to comply with the requirements of s 62(2)(d) of the Act. Reference to the terms of the determination of the High Court in Mabo v The State of Queensland (No 2) (1992) 175 CLR 1 shows that in an appropriate case native title rights and interests may be so broadly asserted and determined and the mere fact that there is a broad description proffered in the application does not mean that the rights broadly described cannot readily be identified within the meaning of s 190B(4). In Mabo the definition of the native title rights and interests declared by the court subject to certain exclusions was in the following terms: "…the Meriam people are entitled as against the whole world to possession, occupation, use and enjoyment of the lands of the Murray Islands." Again, the sufficiency of the native title rights and interests is a matter of which the Registrar must be satisfied. There is scope for evaluative judgment in an expeditious administrative process carried out by people with relevant specialist experience. It is not for the Court, in reviewing the Registrar's decision, to substitute its own view of the sufficiency of the native title rights and interests for those of the Registrar unless it can be shown that the Registrar's state of satisfaction is based upon some error of principle. 61 In my opinion this objection taken by the State, does not succeed. Factual Basis for Claimed Native Title 62 The State submits that in their application the applicants do no more than repeat the assertions set out in ss 62(2)(e) and 190B(5) of the Native Title Act rather than providing facts to support them. It is said the Registrar cannot therefore be satisfied that there is any factual basis provided to support the assertions made. The Registrar's delegate in addressing this condition went beyond the statements set out in the application and referred to an accompanying anthropological report which had been adopted in an affidavit of the applicants as prepared at their instructions and with their assistance. This report was relied upon to provide the factual basis for the assertions. Section 190B(5) does not limit the Registrar to consideration of the application in deciding whether the relevant state of satisfaction was reached and in my opinion unless it can be shown that he has erred somehow in principle in approaching the application of this condition, no basis has been disclosed for impugning the decision on grounds of non-compliance with the condition in s 190B(5). Conclusion 63 For the reasons which I have set out, the refusal to register the claims in the combined Maduwongga application was based upon an erroneous construction of s 190C(3) of the Act. Notwithstanding the State's contentions, there are no other grounds upon which refusal of registration could be maintained. In the circumstances I propose to order that the Registrar accept the claim made in the combined Maduwongga application for registration pursuant to s 190A(6) and include in the Register of Native Title Claims details of the claim. Having regard to the basis upon which I have reached my conclusion I will allow the parties seven days to file written submissions as to any order as to costs. I will also allow liberty to apply in relation to any ancillary directions particularly directions having regard to the time from which the inclusion of the claim in the Register should be taken to have effect. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. Associate: Dated: 4 November 1999 Counsel for the Applicants: Mr G.M.G. McIntyre Solicitor for the Applicants: Corser & Corser Counsel for the First Respondent: No appearance Counsel for the Second Respondent: Ms C.J. Thatcher Solicitor for the Second Respondent: Crown Solicitor for Western Australia Date of Hearing: 4 October 1999 Date of Judgment: 4 November 1999	14,513
federal_court_of_australia:fca/single/2009/2009fca1330	decision	commonwealth	federal_court_of_australia	text/html	2009-11-18 00:00:00	Safari Automotive Technology Pty Ltd v Ironman 4x4 Pty Ltd [2009] FCA 1330	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2009/2009fca1330	2024-09-13T22:49:23.565875+10:00	FEDERAL COURT OF AUSTRALIA Safari Automotive Technology Pty Ltd v Ironman 4x4 Pty Ltd [2009] FCA 1330 TRADE PRACTICES –interlocutory injunction - restraining from importing distributing supplying offering for sale or selling goods of a same design and appearance - passing off - breach of ss 52 and 53 of the Trade Practices Act 1974 (Cth). EVIDENCE – hearsay expert opinion – need to comply with ss 76 and 79 of the Evidence Act 1995 (Cth). Copyright Act 1968 (Cth) Evidence Act 1995 (Cth) Trade Practices Act 1974 (Cth) Apand Pty Ltd v Kettle Chip Pty Ltd (1994) 52 FCR 474 Bayer Bioscience NV v Deltapine Australia Pty Ltd (No.2) (2006) 71 IPR 40 Cooke v Commissioner of Taxation (2002) 51 ATR 223 Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd and Others (1999) 44 IPR 281 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 Philips Electronics NV and Another v Remington Consumer Products Australia Pty Ltd (1997) 40 IPR 279 Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90 Red Bull Australia Pty Ltd v Sydneywide Distributors Pty Limited (2001) 53 IPR 481 Sebel Furniture Ltd v Acoustic & Felts Pty Ltd (2009) 80 IPR 244 SAFARI AUTOMOTIVE TECHNOLOGY PTY LTD (ACN 071 262 756) and AUSTRALIAN PERFORMANCE DEVELOPMENT PTY LTD (ACN 096 857 082) v IRONMAN 4X4 PTY LTD (ACN 005 327 882) and ANGELLA PTY LTD (ACN 100 783 980) VID 748 of 2009 MIDDLETON J 18 NOVEMBER 2009 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 748 of 2009 BETWEEN: SAFARI AUTOMOTIVE TECHNOLOGY PTY LTD (ACN 071 262 756) First Applicant AUSTRALIAN PERFORMANCE DEVELOPMENT PTY LTD (ACN 096 857 082) Second Applicant AND: IRONMAN 4X4 PTY LTD (ACN 005 327 882) First Respondent ANGELLA PTY LTD (ACN 100 783 980) Second Respondent JUDGE: MIDDLETON J DATE: 18 NOVEMBER 2009 PLACE: MELBOURNE REASONS FOR JUDGMENT INTRODUCTION 1 This application for interlocutory injunctions came on before me as a matter of urgency. 2 On 27 October 2009, after considering the submissions of the parties, and upon certain undertakings being given, orders were made by the Court. 3 I now provide my reasons for dismissing the application for interlocutory relief. 4 The applicants' claims arise under the Copyright Act 1968 (Cth), the Trade Practices Act 1974 (Cth) ('Trade Practices Act'), and the tort of passing off. I do not need to deal with the Copyright Act aspects as they have been resolved by the giving of appropriate undertakings by the first and second respondents. 5 The parties are well familiar with the background to this litigation but a few salient points can be made. 6 Since 1989 Safari Automotive Technology Pty Ltd ('Safari') or its predecessors in business designed manufactured distributed and sold throughout Australia and the world snorkels for four wheel drive vehicles ('Safari Snorkels'). It is alleged by Safari that the Safari Snorkels are physically recognisable and can be distinguished from other snorkels in the Australian market place without the need to refer to the Safari trade mark. 7 Safari Snorkels account for approximately 66% of snorkel sales in Australia each year and there would be appear to be one major competitor in Australia. Undoubtedly, and I am prepared to accept, Safari and Safari Snorkels had become well known in the minds of traders and consumers of four wheel drive vehicles and vehicle accessories in Australia, and Safari has generated a substantial goodwill and reputation in Australia in relation to Safari Snorkels. 8 The first respondent, Ironman 4x4 Pty Ltd ('Ironman') imports distributes advertises offers for sale and sells snorkels which have a similar design and appearance to some models of the Safari Snorkels ('the Ironman Snorkels'). The second respondent sells both Safari Snorkels and Ironman Snorkels. APPLICANTS' CLAIMS 9 By their application the applicants seek interlocutory injunctions effectively restraining the respondents from importing distributing supplying offering for sale or selling in Australia snorkels of a same design and appearance as the Safari Snorkels, which conduct they allege constitutes passing off or a breach of ss 52 and 53 of the Trade Practices Act. 10 In essence, the applicants claims under the Trade Practices Act can be summarised as follows:- · Various statements in catalogues and on websites that Ironman Snorkels are made of 'high quality polyethylene and are UV resistant for long life' are false; · False representations are made because of the identical physical appearance to Safari Snorkels together with wholly copied copyright works included in Ironman Snorkel kits. Additionally, the Ironman representations of quality suggest falsely that Ironman Snorkels are of a commensurate quality or have the same design and manufacturing providence, or the same performance characteristics, uses or benefits, or are sponsored by Safari or Australian Performance Development Pty Ltd ('APD') or that Ironman is sponsored or approved by Safari or APD. 11 The claim in relation to passing off is that the identical physical appearance of Safari Snorkels together with a wholly copied copyright works included in Ironman Snorkel kits and the Ironman representations as to quality, suggest falsely that Ironman Snorkels are commensurate in quality and that Ironman's 4x4 Snorkel business is licensed or approved by Safari or APD. PRINCIPLES OF LAW 12 The relevant principles relating to the grant of interlocutory injunctions are well known and were conveniently set in a recent decision of Foster J in Sebel Furniture v Acoustic and Felts Pty Limited (2009) 80 IPR 224 paras 19 – 31. Relevantly in this case I stress the following aspects: (a) it is sufficient that an applicant show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial, and an applicant does not need to show that it is more probable than not that at trial the applicant will succeed; (b) if the Court looks at the evidence before it, and there is a probability that at the trial of the action the applicant will be entitled to relief then the applicant has established a prima face case; (c) whether an injunction should be granted will depend upon the inter-relationship between the probability that at the trial of the action the applicant will be held entitled to relief and questions of the adequacy of damages and the balance of convenience. 13 At this point it is also convenient to state some general principles in relation to the Trade Practices Act and the tort of passing off which I do not consider to be seriously in contention. 14 In the absence of copyright design or trade mark protection a person is free to copy a rival's product so long as the product is clearly identified as being of his own: see eg Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 200 per Gibbs CJ; Philips Electronics NV and Another v Remington Consumer Products Australia Pty Ltd (1997) 40 IPR 279 ('Philips (1997) 40 IPR 279') per Lehane J at 294; Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90 ('Remington (2000) 100 FCR 90') at [37] – [47]; Dr Martens Australia Pty Ltdv Figgins Holdings Pty Ltd and Others (1999) 44 IPR 281 at 358 per Goldberg J; Sebel (2009) 80 IPR 244 per Foster J at [176] – [181]. 15 In Puxu (1982) 149 CLR 191Gibbs CJ held (at 199-200): 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 some cases this is because the design of a particular article has traditionally, or over a considerable period of time, been accepted as the most suitable for the purpose which the article serves. In some cases indeed no other design would be practicable. In other cases, although the article in question is the product of the invention of a person who is currently trading, the suitability of the design or appearance of the is such that a market has become established which other manufacturers endeavour to satisfy, as they are entitled to do if no property exists in the design or appearance of the article. 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. See also Mason J at 210-11 and Brennan J at 224-6. 16 In both Remington (2000) 100 FCR 90and Sebel (2009) 80 IPR 244, the applicant for interlocutory relief failed to establish a prima facie case of passing off or breaches of ss 52 and 53 of the Trade Practices Actwhere the conduct complained of comprised merely the distribution and sale of goods of the same shape or appearance as the applicants' goods in circumstances where the goods were otherwise clearly labelled; Philips (1997) 40 IPR 279at 294, Remington (2000) 100 FCR 90 at [40]-[41] and Sebel at [181] and [184]. CONSIDERATION 17 It is convenient to make some observations as to some of the preliminary submissions before going through the major aspect of this case dealing with the Trade Practices Act and passing off allegations. 18 Evidence was sought to be introduced mainly through an affidavit sworn on 16 October 2009 by David Edward Inall (the Engineering and Marketing Manager of Safari) as to certain testing of the Ironman Snorkels by independent engineers. 19 Mr Inall deposed that he engaged Falcon Test Engineers ('Falcon') an independent accredited test laboratory to conduct an assessment of the quality of the Ironman Snorkels. A copy of the test report was exhibited; the effect of the evidence was to demonstrate the UV performance of the Ironman Snorkels to be 'very poor'. Falcon also concluded that the Ironman Snorkels were significantly weaker in impact strength than a Safari Snorkel. 20 The first conclusion was relevant to the substantive claim made against the respondents, and the second conclusion went to the question of balance of convenience because it was said that there were safety issues which would compel the Court's intervention at this early stage. 21 Issues arose as to the admissibility of the Falcon evidence. I will assume that the hearsay expert evidence is admissible by virtue of the operation of s 75 of the Evidence Act 1995 (Cth) ('the Evidence Act'). However, I take the view that whilst this is not evidence of an opinion given by a witness in court, the requirements in ss 76 and 79 of the Evidence Act apply. There is no reason why hearsay evidence of an opinion should not have to meet the requirements of admissibility of opinion evidence set out in the Evidence Act. 22 Upon reading the Falcon report it seems to be abundantly clear that it does not comply with s 79; it is not even clear who is the author of the opinion or who carried out the appropriate tests: see Cooke v Commissioner of Taxation (2002) 51 ATR 223. It is also not clear to me that the author of the report has sufficiently disposed the facts upon which the opinion is based. 23 I do accept that evidence given by an expert witness regarding observations of testing may not be opinion evidence for the purposes of the general exclusionary rule for opinion evidence. However, in this case without the benefit of the conclusions of the expert, I can reach no conclusions of the type pressed by the applicants based upon the test results which have been presented to the Court. 24 I therefore rule that the Falcon tests are inadmissible and any material relying upon such test is equally inadmissible as irrelevant. 25 If I am wrong in this ruling then having regard to the importance of the evidence, and the clear opportunity which the applicants have had to present the evidence directly, other than through Mr Inall, I put no weight on this evidence. 26 Therefore, I do not treat the Falcon tests as establishing (even at this early stage) the matters sought to be concluded by Mr Inall in his affidavit. 27 As a separate matter, I should indicate that I do not accept that by reason of the operation of O 58 r 31 of the Rules of Court that the evidence sought to be introduced by the applicants on this issue (including the Falcon tests) should be rejected. The Rule would not prevent this Court from considering the Flacon tests sought to be introduced by the applicants if they otherwise complied with the requirements of the Evidence Act: see generally Bayer Bioscience NV v Deltapine Australia Pty Ltd (No.2) (2006) 71 IPR 40 per Heerey J. 28 I now turn to the relevant claims. 29 As to the allegation that there was a false representation that the Ironman Snorkels were made with high quality polyethylene and were UV resistant for long life, in view of my rejection of the evidence in support of this claim (or alternatively my putting no weight on this evidence) that claim has not been established, even at this interlocutory stage. 30 As to the other allegations, the answer to these is that the Ironman Snorkels are distinctly branded and sold. Ironman has a significant and valuable reputation in Australia as a supplier of accessories for four wheel drive vehicles. Ironman is well known to consumers. The evidence shows that the Ironman snorkels are distinctly branded and packaged and sold as being Ironman Snorkels. 31 In my view, Ironman clearly brands its own products at the time at which the purchaser or consumer is making a decision to purchase those products. The evidence overwhelmingly indicates that the Ironman Snorkels are marketed and sold in circumstances where it would be clear to a consumer that they are Ironman products. That clear indication of brand would remain with the consumer well after the time of purchase. 32 I see no basis to distinguish the approach taken in Philips (1997) 40 IPR 279and Sebel 80 IPR 224. 33 Undoubtedly there are instances were the use of a trade mark might not prevent consumers being misled. Sometimes the powerful similarities of get-up overcome distinctive naming: see for example Apand Pty Ltd v Kettle Chip Pty Ltd (1994) 52 FCR 474 and Red Bull Australia Pty Ltd v Sydneywide Distributors Pty Limited (2001) 53 IPR 481. 34 I also accept that by looking just at the snorkels themselves there is a resemblance with the new product and the Safari snorkel, although both have their own name embossed on each product. I also accept that Ironman copied the Safari Snorkel and templates. 35 However, as was noted in Remington (2000) 100 FCR 90 at [43]: …Of course, some people might, probably unjustifiably, and probably transiently, associate the new product in some way with the only product of that sort previously available. However, if anyone were misled as a result, it would not be by the conduct of the intruder upon the monopoly, but by virtue of an inherent problem of the situation. Nor is such a difficulty to be attributed to passing off, provided the goods in question are appropriately and clearly branded. Here, the Remington brand is prominent and virtually ubiquitous. 36 The Full Court continued at [45]: …The public is thoroughly accustomed to competing brands of almost identical products, which may or may not have some link – or may not today, but may tomorrow, share an over-all owner, by virtue of a takeover or purchase. A similar suggestion, made in the Dr Martens case, was there described (at FCR 148) as 'fanciful' and 'bizarre'. 37 I do not think it has been demonstrated that a person familiar with Safari products would inevitably conclude an association between Safari and Ironman Snorkel in view of the branding that takes place by the Ironman products and the presence in the market place of both Safari and Ironman. 38 I therefore came to the view that the applicants have a very weak prima facie case, and that if the evidence remained as it was the applicants would not obtain the relief they seek. 39 Putting aside the issue of public interest in preventing grossly substandard products flooding the Australian market (an assertion I reject as there is no evidence substantiating such a claim) the question then arises as to whether damages are an inadequate remedy and the balance of convenience is in favour of the applicants. 40 As I have indicated these issues are not to be treated in isolation from the issue of the serious question to be tried. It may be that even if there is a weak prima face case, the balance of convenience may be so overwhelmingly in favour of an applicant, that the grant of an interlocutory injunction is appropriate. 41 Further, there are a number of contentions of the applicants I accept. Ironman has only just launched the particular product the subject of the injunctions sought, this product being only one of a very large range of Ironman products. There are also difficulties with calculating losses when diversion is made to a third party because of the sales, or the possibility of depressed prices from illegitimate competition. 42 However, having reached the conclusion that the claim of the applicants is very weak I consider that this substantially neutralises the submissions made as to the adequacy of damages as a remedy and the balance of convenience in favour of the applicants. 43 Further, I consider the applicants underestimate the impact an injunction will have on the respondents, particularly the first respondent. I do not consider that the measures suggested by the applicants could be implemented without disruption to the respondents business, and perhaps, more importantly, their reputation. Whilst Ironman has only just launched the Ironman Snorkel, it has nevertheless entered the market sufficiently for an injunction to intrude into its legitimate business activities. 44 I also take into consideration that fact that the first respondent has offered to give an undertaking to keep an account. Whilst I accept this does not overcome all of the difficulties suggested by the applicants in assessing damages, it is a matter to be considered in the balance. 45 For the above reasons, the interlocutory relief was refused. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. Associate: Dated: 18 November 2009 Counsel for the Applicants: Mr G McGowan SC with Ms S Ryan Solicitor for the Applicants: Rush & Failla Counsel for the First Respondent: Mr SR Horgan SC with Ms GL Schoff Solicitor for the First Respondent: Davies Collison Cave Counsel for the Second Respondent: Self Represented Date of Hearing: 27 October 2009 Date of Judgment: 18 November 2009	4,336
federal_court_of_australia:fca/single/2016/2016fca0269	decision	commonwealth	federal_court_of_australia	text/html	2016-03-24 00:00:00	Westpac Banking Corporation v State of Queensland [2016] FCA 269	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2016/2016fca0269	2024-09-13T22:49:27.991627+10:00	FEDERAL COURT OF AUSTRALIA Westpac Banking Corporation v State of Queensland [2016] FCA 269 File number: QUD 126 of 2016 Judge: EDELMAN J Date of judgment: 24 March 2016 Catchwords: REAL PROPERTY – default in payment by registered proprietor upon loan secured by mortgage over property – bankruptcy of registered proprietor – disclaimer of title to property by trustee in bankruptcy of registered proprietor – application by lender for orders vesting title to the property in it for the purposes of sale – claim by current occupant of the property to a subsisting equitable interest arising from a resulting or constructive trust BANKRUPTCY – effect of disclaimer of property by trustee in bankruptcy when conveyance of legal title had not been obtained – operation of discretion to vest title under s 133(9) of the Bankruptcy Act 1966 (Cth) – manner of exercise of that power in circumstances of competing claims by mortgagee and person with rights in equity MORTGAGES – effect upon mortgage of disclaimer of title by trustee in bankruptcy – effect on mortgage of escheat of fee simple to the Crown in right of the State Legislation: An Act for the better relief of the creditors against such as shall become bankrupts (1604) 1 Jac 1 c 15 Bankruptcy Act 1883 (46 & 47 Vict) c 52 Bankruptcy Act 1924 (Cth) Bankruptcy Act 1966 (Cth) ss 58(1)(a), 58(2), 116(2), 116(2)(a), 133, 133(9) Escheat (Procedure) Act 1887 (50 & 51 Vict c 53) Land Title Act 1994 (Qld) National Consumer Credit Protection Act 2009 (Cth) Sch 1; s 88 Property Law Act 1974 (Qld) s 84 Property Law Act 1974 (Qld) s 85(2) Residential Tenancies and Rooming Accommodation Act 2008 (Qld) s 317 Residential Tenancies and Rooming Accommodation Act 2008 (Qld) s 317 Cases cited: Anderson v McPherson (No 2) [2012] WASC 19 Boddington v Castelli (1853) 1 El & Bl 879; (1853) 118 ER 665 Commissioner of The Australian Federal Police v Courtenay Investments Ltd (No 4) [2015] WASC 101 Duckworth v Water Corporation [2012] WASC 30; (2012) 261 FLR 185 Emilco Pty Limited v Jaa Jaa [2001] NSWSC 1035 Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29 Lysaght v Edwards (1876) 2 Ch 499 National Australia Bank v New South Wales [2009] FCA 1066; (2009) 182 FCR 52 Rams Mortgage Corporation Ltd v Skipworth and Another (No 2) [2007] WASC 75; (2007) 210 FLR 11 Sandhurst Trustees Ltd v 72 Seventh Street Nominees Pty Ltd (in liq) (1998) 45 NSWLR 556 Scott v Surman (1742) Willes 400; (1742) 125 ER 1235 Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315 Winch v Keeley (1787) 1 Term Rep 619; (1787) 99 ER 1284 American Law Institute, Restatement of the Law of Trusts (American Law Institute Publishers, St Paul, 1935) Blackstone W, Commentaries on the Laws of England (University of Chicago Press, University Chicago, 1979 reprint) Vol 2 Maitland F, Equity - A Course of Lectures (2nd ed, Cambridge University Press, Cambridge, 1936) Swadling, W "The Fiction of the Constructive Trust" (2011) 64 Current Legal Problems 399 Watson A, The Digest of Justinian (University of Penn Press, Pennsylvania, 1998) Vol 4 Date of hearing: Determined on the papers Date of last submissions: 21 March 2016 (submitting notice filed by the First Respondent) Registry: Queensland Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 50 Counsel for the Applicant: Ms MJ Luchich Solicitor for the Applicant: Minter Ellison Solicitor for the First Respondent: Ms S Amos of Crown Law Counsel for the Second Respondent: The Second Respondent appeared in person ORDERS QUD 126 of 2016 BETWEEN: WESTPAC BANKING CORPORATION ABN 33 007 457 141 Applicant AND: STATE OF QUEENSLAND First Respondent BRENT JOHN O'NEILL Second Respondent JUDGE: EDELMAN J DATE OF ORDER: 24 MARCH 2016 THE COURT DECLARES THAT: 1. The Applicant is entitled to calculate the entirety of the debt secured and owing (the Debt) pursuant to registered mortgage numbers 711108694 and 711477087 (Mortgages) over the land described as Lot 29 on Registered Plan No. 107777 in the Local Government of the Gold Coast, being all of the land contained in title reference 13836129 and situated at 99 Monaco Street, Broadbeach Waters in the State of Queensland (Property) as and if there had there been no disclaimer of the Property by the Official Trustee in Bankruptcy (Trustee) as trustee of the bankrupt estate of Ms Denise Gay Pilley (also known as Denise Gay De Beer). THE COURT ORDERS THAT: 2. Upon payment of the sum of $570,000 in cleared funds by the Second Respondent, Brent John O'Neill to the Applicant on or before 6 April 2016, and in exchange for a registrable release of the Mortgages, the estate in fee simple in the land described as Lot 29 on Registered Plan No. 107777 in the Local Government of the Gold Coast, being all of the land contained in title reference 13836129 and situated at 99 Monaco Street, Broadbeach Waters in the State of Queensland (the Property) presently registered in the name of Denise Gay Pilley shall vest in the Second Respondent pursuant to s 133(9) of the Bankruptcy Act 1966 (Cth) and the Second Respondent will be liable for any statutory charges affecting the Property. 3. In the event the Second Respondent fails to make the payment in accordance with paragraph 2 of this order: (a) Pursuant to s 133(9) of the Bankruptcy Act 1966 (Cth) the estate in fee simple in the Property presently registered in the name of Denise Gay Pilley shall, from 7 April 2016, vest in the Applicant for the purpose of the Applicant exercising its powers as mortgagee under the Land Title Act 1994 (Qld), Property Law Act 1974 (Qld) and under the Mortgages and subject to the following conditions: (i) for the purposes of any dealings with the Property, the Applicant may, (but is not bound to) act as if it were exercising its powers as mortgagee under the Land Title Act 1994 (Qld), Property Law Act 1974 (Qld) and under the Mortgages except that the Applicant is not required to serve: A. a default notice under s 88 of the National Credit Code, being schedule 1 to the National Consumer Credit Protection Act 2009 (Cth); B. a notice of default under s 84 of the Property Law Act 1974 (Qld); and C. a notice to vacate under s 317 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) on the Second Respondent or any other occupant/s (if any) of the Property; (ii) the proceeds of sale from the Property shall be applied as follows: A. first, in payment of any statutory charges affecting the Property which the relevant statute provides are payable in priority to the mortgagee; B. secondly, in payment of all costs, charges and expenses properly incurred by the Applicant as incident to the sale, or any attempted sale, or otherwise; C. thirdly, in discharge of the Debt owed to the Applicant; D. fourthly, in payment of any subsequent mortgages (if any), and the residue (if any) of the proceeds so received shall be paid into Court in this proceeding; (iii) after any sale of the Property by the Applicant, the Applicant must deliver to the Official Trustee in Bankruptcy (Trustee) as trustee of the bankrupt estate of Ms Denise Gay Pilley and the First and Second Respondents a notice in a form substantially similar to that prescribed in s 85(2) of the Property Law Act 1974 (Qld). (b) The Second Respondent, Brent John O'Neill must deliver the Property to the Applicant by: (i) on or before 15 April 2016 delivering up vacant possession of the Property to the Applicant; and (ii) on or before 15 April 2016 delivering to the Applicant's solicitors a signed withdrawal in respect of any caveats lodged over the Property; and (iii) signing any other documents reasonably required by the Applicant to enable any transfer of the Property to a purchaser pursuant to a sale by the Applicant pursuant to the Mortgages and pursuant to any order made in this proceeding, and shall not interfere with the Bank's exercise of its rights under this order and the Land Title Act 1994 (Qld), Property Law Act 1974 (Qld) and under the Mortgages; (c) The Applicant's costs of and incidental to this proceeding are to be treated as reasonable enforcement expenses under its Mortgages over the Property and are to be payable from the proceeds of sale of the Property on the indemnity basis pursuant to clause B1 (b) of registered mortgage number 711477087 over the Property. 4. An affidavit by a solicitor for the Applicant filed in these proceedings, as to compliance or non-compliance by the Second Respondent with paragraph 2 of this order, shall be sufficient evidence of such compliance or non-compliance. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT Introduction [1] Westpac's mortgage and loan [5] Mr O'Neill's interest in relation to the Property [7] The interest in relation to the Property claimed by Ms Catelides [15] Ms Pilley's bankruptcy [18] Disclaimer by the Official Trustee [27] The discretion under s 133(9) of the Bankruptcy Act [37] The declaration sought by Westpac [45] Conclusion [47] EDELMAN J: Introduction 1 On 12 February 2016, the applicant, Westpac, brought this application seeking orders vesting title in it to a property at 99 Monaco Street, Broadbeach Waters, Queensland (the Property). Westpac holds a first and second registered mortgage over the Property. The registered proprietor of the Property, and mortgagor, had become bankrupt. She was in default in her loan repayments secured by Westpac's mortgage. The registered proprietor's trustee in bankruptcy, the Official Trustee, disclaimed any title to the Property. So the title was said to have escheated to the State of Queensland, the first respondent. Westpac sought orders under s 133(9) vesting the title to the Property in it for the purpose of sale to recoup the loan secured by its registered mortgage. 2 On 8 and 9 March 2016, I held directions hearings in this matter. There were immediate complications. One complication was that the de facto partner of the registered proprietor, Mr O'Neill, claimed an equitable interest in relation to the Property. A second complication, which was not raised at the directions hearings but which I address below and which does not appear to present any obstacle, is that a third party claims to have a call option in relation to the Property. I expressed the preliminary view to the parties that if the evidence which was filed was as it had been described, then it may be that the person in whom title should be ordered to vest would be Mr O'Neill, not Westpac. However, Mr O'Neill's title would remain subject to Westpac's registered mortgage. 3 After the directions hearing on 9 March 2016, the District Registrar mediated the dispute between the parties. A settlement agreement was reached. The parties proposed orders by consent. The primary orders sought are effectively to vest title to the Property in Mr O'Neill upon discharge of Westpac's mortgages. As I explained to the parties at the directions hearings, those orders cannot be made unless I am satisfied that the foreshadowed evidence, and the legal authority, supports my preliminary view. 4 The parties have now filed evidence and submissions. The State of Queensland filed a submitted appearance on 21 March 2016. Based on that evidence and those submissions I am satisfied on a preliminary basis that the orders sought should be made. The reservation is that although Westpac submitted that a potentially interested third party, Ms Catelides, was served with this application and that she did not respond, it is arguable that she was a necessary and proper party to be heard. In circumstances in which I have reached the conclusion sought by the parties, but by legal reasoning which is not identical to that submitted by Westpac, it is appropriate to defer making any orders for seven days to provide Ms Catelides any time within which to make any further submissions, or apply to be joined, before final orders are made. However, as I have explained, it is difficult to see any basis upon which she could resist these orders but she should be given an opportunity if she wishes, to address any of the matters in these reasons. Westpac's mortgage and loan 5 Westpac holds a first registered mortgage over the Property. The registered proprietor of the Property is Ms Pilley, who is also referred to in some of the material before the Court as Ms De Beer. Ms Pilley was given notice of this application. She did not file a notice of appearance. At the Court's direction for reasons related to overlapping proceedings in a different court, she attended at a directions hearing concerning this application. At that directions hearing she confirmed, for reasons which will become apparent later in these reasons, that she has no interest in this application. 6 On 14 January 2008, Westpac advanced monies to Ms Pilley under a Loan Agreement. The debt owing pursuant to the Loan Agreement are secured by a first and second registered mortgage over the Property. As at 8 February 2016, Westpac certified the debt to be $576,696.70, excluding recent accrued interest and costs. Mr O'Neill's interest in relation to the Property 7 The second respondent, Mr O'Neill, is the current occupant of the Property. He is the former de facto partner of Ms Pilley. Some of his evidence on this application concerned his interest in relation to the Property. Mr O'Neill's uncontradicted evidence is as follows. 8 The Property was purchased on 26 January 2006 for $512,000. Ms Pilley became the registered proprietor. She contributed $100,000 to the purchase price. Mr O'Neill contributed $15,000 to the purchase price. The remainder was funded by a bank loan to Ms Pilley. 9 Mr O'Neill says that he and Ms Pilley lived in the Property from the time of settlement on 17 March 2006. He paid approximately 80% of the mortgage repayments. He also made major improvements to the property including adding two bedrooms and two bathrooms, a lounge room, and ducted air conditioning. There is considerable work that remains to complete the renovations. 10 On 22 February 2013, Mr O'Neill lodged a caveat over the Property to protect his asserted interest as "an interest pursuant to constructive and/or resulting Trust by reason of the common intention of the Caveator and the Caveatee and by reason of the Caveator's contribution to the conservation, preservation and improvement of the property". 11 Ms Pilley's loan was refinanced and after Westpac became the financier, the loan was increased. Westpac has varied the terms of the loan on a number of occasions. 12 In August 2014, Mr O'Neill separated from Ms Pilley. They entered an agreement on 16 August 2014. The terms of the agreement are not clear but it appears to have the following effects: (1) Mr O'Neill have possession of the Property subject to his payment of the loan secured by Westpac's mortgage and payment of rates; (2) Mr O'Neill pay Ms Pilley $32,600 (although later referred to as $35,000); (3) Mr O'Neill complete the renovations to the Property by 30 November 2015; (4) The Property be sold by 30 November 2015; (5) Mr O'Neill repay any shortfall by which the loan exceeds the proceeds from the sale of the Property; and (6) Any surplus funds from sale are to be paid to Mr O'Neill. 13 It is unnecessary to descend into detail concerning the nature of Mr O'Neill's interest in relation to the Property in circumstances in which there was no dispute that he had a beneficial interest. It is also undesirable to descend into detail of the precise legal position in circumstances in which I received no submissions on this point. It suffices to say that I am satisfied that Mr O'Neill's payment of $15,000 of the purchase price gave him a beneficial interest in the proportion 15/512 under a resulting trust: see discussion of the nature of this interest in my decision in Anderson v McPherson (No 2) [2012] WASC 19 [88]-[103]. I am also satisfied that Mr O'Neill had an interest, which might attract the description of a constructive trust, by which Ms Pilley held her registered title subject to Mr O'Neill's right of possession, and power of sale including rights to surplus proceeds from sale. As I explain below, for reasons of historical continuity that underlie the Bankruptcy Act 1966 I describe Mr O'Neill's interest as an interest under a constructive trust. However, there is a strong argument that Mr O'Neill's interest is better understood as an equitable right to performance commensurate with the terms of the contract, and not a trust: Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315, 332-333 [53] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ); Swadling, W "The Fiction of the Constructive Trust" (2011) 64 Current Legal Problems 399. Contrast Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216; (2012) 45 WAR 29, 59 [129] (McLure P). 14 Mr O'Neill's rights under the agreement are subject to the antecedent rights of Westpac as registered mortgagee. There is also no evidence (or allegation) that Westpac had any notice of Mr O'Neill's interest under a resulting trust at the time that Westpac registered its (now indefeasible) interests as mortgagee. The interest in relation to the Property claimed by Ms Catelides 15 On 24 November 2015, Ms Catelides emailed Westpac to ask about the mortgage repayments that are owing. She asserted that the Property did not form part of Ms Pilley's bankruptcy and that she (Ms Catelides) held a call option over the Property. She enclosed a Call Option Deed dated 1 May 2015. It appears to be signed by herself and Ms Pilley as the registered proprietor of the Property. The Call Option Deed purported to give Ms Catelides the option to purchase the Property for a price which was equal to or more than $560,000. Westpac did not consent to Ms Pilley entering the Call Option Deed with Ms Catelides. It also appears that Mr O'Neill did not consent to Ms Pilley entering the Call Option Deed. Any rights of Ms Catelides would be subject to rights of Westpac as registered mortgagee and the pre-existing rights of Mr O'Neill as a beneficiary of a constructive and resulting trust. 16 Correspondence ensued between Ms Catelides and Westpac. Ms Catelides asked Westpac if she could make the mortgage repayments, perform renovations to the Property, and subsequently settle with the bank for $560,000. Alternatively, she sought to purchase the Property from the bank, without the renovations, for $480,000. The solicitors for Westpac responded and explained that Westpac was not the registered proprietor and also was not prepared to release its mortgage until the debt of $576,794 (as it was then) was paid. 17 Ms Catelides was served by Westpac with this application. She did not enter an appearance. Her potential interest in these proceedings was not mentioned at any of the directions hearings where I explored the issues in this matter. However, her correspondence with Westpac suggests that she may have been an interested party. As I explain in my conclusion, orders should not be entered for seven days to permit her any opportunity to be heard. Ms Pilley's bankruptcy 18 On 14 July 2015, Ms Pilley became bankrupt by her debtor's petition. She has not been discharged. Her trustee is the Official Trustee. The Official Trustee was served with this application but, for reasons concerning disclaimer (set out below), understandably did not seek to appear. 19 The effect of Ms Pilley's bankruptcy under s 58(1)(a) of the Bankruptcy Act is that her title to the Property vested in the Official Trustee. However, s 58(2) has the effect that the title only "vests in equity" in the Official Trustee until there is a formal conveyance of title on the Register to the Official Trustee. It does not appear that the Official Trustee ever took a conveyance of the title from Ms Pilley. 20 Since 1604, the rights to property held by a trustee in bankruptcy, such as the Official Trustee, have been subject to any rights of a third party under a trust: see Duckworth v Water Corporation [2012] WASC 30; (2012) 261 FLR 185, 197 [66]-[69] referring to Winch v Keeley (1787) 1 Term Rep 619, 623; (1787) 99 ER 1284, 1286 (Buller J); Scott v Surman (1742) Willes 400, 402; (1742) 125 ER 1235, 1236 (Willes CJ); Boddington v Castelli (1853) 1 El & Bl 879, 885; (1853) 118 ER 665, 667 (Parke B). 21 The same preservation of trust rights of another was consistently preserved in English legislation over four centuries from An Act for the better relief of the creditors against such as shall become bankrupts (1604) 1 Jac 1 c 15 and, in Australia, it was included when the Bankruptcy Act 1924 (Cth) was enacted based upon the report of the Clyne Committee and the model of the Bankruptcy Act 1883 (46 & 47 Vict) c 52. It can also be observed that the term "constructive trust" was in strong currency at that time to describe specifically enforceable equitable rights arising from a contract in relation to land: Lysaght v Edwards (1876) 2 Ch 499, 506 (Jessel MR). The preservation of trust rights was also maintained in the 1966 Bankruptcy Act as is evident in ss 5 and 116(2) of the Bankruptcy Act. Section 5 provides that the "property of the bankrupt" (other than in ss 58(3) and 58(4)) means the property divisible among the bankrupt's creditors and any rights and powers in relation to that property if he or she had not become a bankrupt. Section 116 provides as follows: 116 Property divisible among creditors (1) Subject to this Act: (a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge; and (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 (c) property that is vested in the trustee of the bankrupt's estate by or under an order under section 139D or 139DA; and (d) money that is paid to the trustee of the bankrupt's estate under an order under section 139E or 139EA; and (e) money that is paid to the trustee of the bankrupt's estate under an order under paragraph 128K(1)(b); and (f) money that is paid to the trustee of the bankrupt's estate under a section 139ZQ notice that relates to a transaction that is void against the trustee under section 128C; and (g) money that is paid to the trustee of the bankrupt's estate under an order under section 139ZU; is property divisible amongst the creditors of the bankrupt. (2) Subsection (1) does not extend to the following property: (a) property held by the bankrupt in trust for another person; ... 22 However, Westpac submitted that a beneficial interest of a third party under a trust is lost upon bankruptcy if the bankrupt also happens to hold a beneficial interest under the same trust. Westpac's submission is that if the word "another" is to have any work to do in s 116(2), it must confine the exclusion in s 116(2)(a) to cases where the bankrupt is not a beneficiary. That was said to be because: (1) a trustee cannot be the sole beneficiary of a trust; there must always be "another person" who is a beneficiary of a trust; and (2) if s 116(2) were read to apply the exclusion to every case where another person is a beneficiary, even if the bankrupt is one too, then the effect is that s 116(2) will apply to every trust a bankrupt holds. The word "another" would be redundant. 23 The error in this submission is its premiss. The word "another" is not redundant if s 116(2) applies to every case in which the bankrupt holds property on trust. If a bankrupt held property on trust for herself and another person then the effect of the word "another" is to exclude the bankrupt's beneficial interest from the operation of s 116(2)(a). It can be accepted that there may be difficulties of theory with the notion of a person owing duties to himself or herself as both trustee and one of a number of beneficiaries. On one view, the person has an unencumbered part interest and holds the remainder on trust for others. But there are many cases where a person has been described as both trustee and beneficiary where other beneficiaries exist. And many statutes have been drafted on the premiss that this is possible. 24 Westpac relied upon the decision of Barrett J in Emilco Pty Limited v Jaa Jaa [2001] NSWSC 1035. In that case, his Honour referred to s 116(2)(a) and then said: This reference to "another person" makes it necessary to consider whether, when the chose in action became vested in Mr Jaa Jaa upon completion under the agreement of 13 March 1992, that chose in action could properly be said to have been held in trust exclusively for persons who did not include Mr Jaa Jaa himself. 25 The reference by his Honour to "exclusively for [other] persons" was unlikely to have been intended to suggest that a person would lose equitable rights upon bankruptcy if the bankrupt also happened to have equitable rights under the same trust. The question being considered in that passage in Emilco was simply whether Mr Jaa Jaa's right of reimbursement or indemnity from trust property was excluded from the property divisible amongst his creditors. His Honour held that it was excluded. 26 The effect of Ms Pilley's bankruptcy was not to extinguish Mr O'Neill's rights as a beneficiary under a resulting trust. Nor did it extinguish his rights as a beneficiary of a "constructive trust" who, not being a volunteer, was entitled to orders compelling performance of the 16 August 2014 Agreement: see Sonenco (No 77) Pty Ltd v Silva (1989) 24 FCR 105, 121 (Ryan and Gummow JJ). Disclaimer by the Official Trustee 27 On 1 October 2015, the Official Trustee disclaimed the trustee's interest in relation to the Property pursuant to s 133 of the Bankruptcy Act. That section provides as follows: 133 Disclaimer of onerous property … (1) Subject to this section, the trustee may, notwithstanding that he or she has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation to it and notwithstanding, in the case of property the transfer of which is required by a law of the Commonwealth or of a State or Territory of the Commonwealth to be registered, that he or she has not become the registered owner of that property, by writing signed by him or her, at any time disclaim the property. (1A) Subject to this section, the trustee may at any time, by writing signed by him or her, disclaim any contract that forms part of the property of the bankrupt whether or not the trustee has endeavoured to assign the property or exercised any rights in relation to it. (2) A disclaimer under subsection (1) or (1A) operates to determine forthwith the rights, interests and liabilities of the bankrupt and his or her property in or in respect of the property disclaimed, and discharges the trustee from all personal liability in respect of the property disclaimed as from the date when the property vested in him or her, but does not, except so far as is necessary for the purpose of releasing the bankrupt and his or her property and the trustee from liability, affect the rights or liabilities of any other person. 28 Westpac submitted that the effect of the disclaimer by the Official Trustee is that the title to the Property reverted to the Crown in right of the State of Queensland by escheat. There is doubt about this conclusion. 29 The first difficulty is that the Official Trustee never obtained a formal conveyance of the title. The Register was not altered. As I have explained, this meant that the effect of the Bankruptcy Act was that the title to the Property only "vested in equity" in the Official Trustee. Section 58(2) of the Bankruptcy Act provides Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not so vest at law until the requirements of that law have been complied with. 30 On one view, the Official Trustee's disclaimer could only have been of the equitable interest in the Property created by the Bankruptcy Act. Equitable rights are not estates and cannot be equated with common law title: Maitland F, Equity - A Course of Lectures (2nd ed, Cambridge: Cambridge University Press, 1936) 17. As Scott recognised in s 2 of the first Restatement of the Law of Trusts, in a definition repeated by the American Law Institute ever since, the equitable right under a trust operates as an encumbrance on the legal title "subjecting the person by whom the property is held to equitable duties to deal with the property for the benefit of another person": American Law Institute, Restatement of the Law of Trusts (American Law Institute Publishers, St Paul, 1935). On this view, the disclaimer of the equitable interest might simply remove an encumbrance from the legal title. But this does not mean that the legal title would be unaffected: see Commissioner of The Australian Federal Police v Courtenay Investments Ltd (No 4) [2015] WASC 101 [346]. 31 However, the effect of s 133(1) of the Bankruptcy Act appears to permit the Official Trustee to "disclaim" a title which the Official Trustee never held. This seems to be the effect of the words permitting disclaimer "notwithstanding, in the case of property the transfer of which is required by a law of the Commonwealth or of a State or Territory of the Commonwealth to be registered, that he or she has not become the registered owner of that property, by writing signed by him or her". The "notwithstanding" clause would not be necessary if the Official Trustee were only disclaiming an equitable right. Further, if this were not the effect of s 133(1) then a possible alternative would be that the bankrupt would continue to hold title to property, either onerous or valuable, despite the bankruptcy and outside any of the limited exceptions in the Bankruptcy Act. That would be inconsistent with the scheme and purpose of the Bankruptcy Act and would give rise to further questions such as whether the registered proprietor held the title on an implied statutory trust for the Crown in right of the Commonwealth or, subject to the interaction with the Land Titles Act 1994 (Qld), the State. 32 On the assumption that the Official Trustee disclaimed the registered title, there are then very difficult questions concerning the effect of that disclaimer in the period prior to any court order under s 133(9) of the Bankruptcy Act. This issue was considered in National Australia Bank v New South Wales [2009] FCA 1066; (2009) 182 FCR 52 where, after a characteristically lucid discussion of the history of escheat of land, Rares J observed (60-61 [28]) that "the question of where the title goes after a disclaimer is as clear as mud". The position has been confused and debated for two millennia since it was one of the marks of contrast between the Sabinian and Proculian schools. The Sabinians considered that an abandoned thing became res nullius at once, and capable of occupatio (ownership by first possession). The Proculians took a different view. They were possibly motivated by the distribution of largesse at election time where coins thrown to the crowd were intended to be delivered to uncertain persons rather than abandoned (see Inst II.1.46). The Proculian view was that the owner did not lose ownership until another person took control. The Sabinian view prevailed: D 41.7.2.1; D 47.2.43.5 (Watson, A The Digest of Justinian (University of Penn Press, Pennsylvania, 1998) Vol 4). The consequences have caused various difficulties in various pockets of the law for nearly two millennia. 33 In National Australia Bank, Rares J referred to three difficulties in a context similar to this case with the view that disclaimer caused an escheat to the State. The first difficulty, as Rares J observed, is that historically escheat did not occur automatically without an act of the superior tenant or Sovereign, or later by inquiry: see Blackstone W, Commentaries on the Laws of England (University Chicago, University of Chicago Press, 1979 reprint) Vol 2, 244-245; Escheat (Procedure) Act 1887 (50 & 51 Vict c 53). 34 The second difficulty is the system of Torrens title. In Sandhurst Trustees Ltd v 72 Seventh Street Nominees Pty Ltd (in liq) (1998) 45 NSWLR 556, 565 Bryson J held that the doctrine of disclaimer and escheat operated outside the Torrens system so that "the person who, according to the register, is apparently the fee simple owner in truth is not". In National Australia Bank v New South Wales, Rares J suggested that the better view may be that after a disclaimer under the Bankruptcy Act the title to the fee simple does not escheat absolutely to the Crown in right of the State because the Court has power to make a vesting order (59 [23]). However, the difficult question still remains of the status of the title in the period prior to a vesting order. 35 The third difficulty is whether an escheat should be to the Crown in right of the State or to the Crown in right of the Commonwealth, particularly in circumstances in which disclaimers and vesting orders operate, as in this case, under a law of the Commonwealth, the Bankruptcy Act. There were no submissions made in this case concerning the relationship between the Land Title Act 1994 (Qld) and the Bankruptcy Act, particular s 133(9). 36 Ultimately, four matters mean that it is unnecessary to consider these fascinating issues. The first is my conclusion that the title to the fee simple had been disclaimed. The second is the lack of any event affecting the title between the date of disclaimer, 1 October 2015, and the date of this decision. The third is the lack of any opposition by the State of Queensland to the proposed orders. And the fourth matter is my conclusion that s 133(9) of the Bankruptcy Act empowers this Court to make the orders sought irrespective of where the title to the fee simple is currently vested, and my further conclusion that the orders sought are appropriate. The discretion under s 133(9) of the Bankruptcy Act 37 Sections 133(9) to 133(13) of the Bankruptcy Act relevantly provides: (9) The Court may, on application by a person either claiming an interest in, or being under a liability not discharged by this Act in respect of, disclaimed property, and after hearing such persons as it thinks fit, make an order, on such terms as the Court considers just and equitable, for the vesting of the property in, or delivery of the property to, a person entitled to it or a person in whom, or to whom, it seems to the Court to be just and equitable that it should be vested or delivered, or a trustee for that person. (10) Subject to subsection (11), where an order vesting property in a person is made under subsection (9), the property to which it relates vests forthwith in the person named in the order for that purpose without any conveyance, transfer or assignment. (11) Where: (a) the property to which such an order relates is property the transfer of which is required by a law of the Commonwealth or of a State or Territory of the Commonwealth to be registered; and (b) that law enables the registration of such an order; the property, notwithstanding that it vests in equity in the person named in the order, does not vest in that person at law until the requirements of that law have been complied with. (12) A person aggrieved by the operation of a disclaimer under this section shall be deemed to be a creditor of the bankrupt to the extent of any loss he or she has suffered by reason of the disclaimer and may prove the loss as a debt in the bankruptcy. (13) In this section: mortgage includes charge. mortgagee includes the person entitled to the benefit of a charge. 38 Section 133 empowers this Court to make an order if "it seems to the Court to be just and equitable" that the fee simple to the Property should be vested in a person. In this case, the two possible persons in whom it may be just and equitable for the fee simple to the Property to be vested are Westpac or Mr O'Neill. The disclaimer did not affect Westpac's rights as a registered mortgagee. Nor did it extinguish the equitable rights that Mr O'Neill had as the beneficiary of a constructive and a resulting trust: Rams Mortgage Corporation Ltd v Skipworth and Another (No 2) [2007] WASC 75; (2007) 210 FLR 11, 15 [11] (Heenan J). 39 At the time of disclaimer, Ms Pilley was in default under the loan agreement. The defaults included: (a) the Loan Account being arrears in the amount of $1,448.36; (b) failure to pay outgoings in respect of the Property (outstanding rates and water charges); and (c) various dealings with the Property without Westpac's consent. 40 Westpac submitted that the consequence of the disclaimer is that Westpac is unable to take action to realise its security. Hence, as I have explained, Westpac filed this application initially seeking orders vesting the Property in Westpac so that it could exercise its rights as a registered mortgagee. Westpac also sought orders requiring Mr O'Neill to deliver possession of the Property to Westpac. Westpac's application was served on Mr O'Neill, the State of Queensland, Ms Pilley, the Official Trustee, and Ms Candita Catelides. The State of Queensland has now filed a submitting appearance. 41 At a directions hearing on 18 February 2016, I expressed concern with the orders sought by Westpac given the effect that they may have on Mr O'Neill's equitable rights. Immediately following the directions hearing, Westpac and Mr O'Neill participated in a court ordered mediation. At that mediation they entered a settlement agreement to which the State of Queensland consented. The Settlement Deed provided, in clause 2, as follows: 2. Proceedings (a) By 4.30pm on 7 March 2016 Mr O'Neill will: (i) provide the solicitors for the Bank, Minter Ellison, care of Giuseppe Russo at email address [email protected] a copy of an unconditional written offer of finance for the amount of $570,000 which has been accepted and executed by Mr O'Neill; and (ii) pay any outstanding statutory charges concerning the Property. (b) In the event that Mr O'Neill does not comply with sub-paragraph (a) above then he agrees and hereby consents to an order being made in the Proceeding in the terms of paragraphs 1, 3(a), 3(b) and 3(c) of the order annexed to this Deed and marked 'A'. (c) In the event that Mr O'Neill does comply with sub-paragraph (a) above, he agrees and hereby consents to an order being made in the Proceeding in the entirety of the form annexed to this Deed and marked 'A'. 42 Westpac submits that Mr O'Neill failed to comply with paragraph 2(a) of the Settlement Deed because (i) he provided only a conditional offer of finance, and (ii) he failed to pay outstanding statutory charges concerning the Property. These matters can be put to one side because Westpac, in written submissions, waived its rights to rely on this non-compliance. 43 If the settlement goes ahead, the effect of the Settlement Deed would be either of two consequences. First, that the Property will vest in Mr O'Neill if he pays Westpac the sum of $570,000 by 6 April 2016 in exchange for the release of the mortgages held by Westpac. Alternatively, if Mr O'Neill does not pay $570,000 by 6 April 2016, the Property will vest in Westpac and Mr O'Neill will be required to deliver vacant possession to Westpac. 44 In reaching a conclusion as to the circumstances in which it is just and equitable to make a vesting order I place weight on the relative rights of Westpac as a mortgagee and Mr O'Neill as the person with current possession of the fee simple and rights under a constructive and a resulting trust. I also place weight on the agreement that they have reached for a proposed vesting order which will give effect to a fair mutual balancing of those rights. In Mr O'Neill's submissions he explained that his "offer of $570,000" was made as part of a negotiation with Westpac based on "a figure that is above what [Westpac] may achieve should the property be sold in its present state". If Mr O'Neill makes the required payment which will cause Westpac to discharge its mortgage, I am satisfied that it would be just and equitable for the title to the Property to vest in him. If he does not, then Westpac's rights as mortgagee could be seriously prejudiced. It would then be appropriate for Westpac to be put in the position of a registered owner for the purposes of sale of the Property in order to recover its secured debt. The declaration sought by Westpac 45 Westpac also sought a declaration as follows: The Applicant is entitled to calculate the entirety of the debt secured and owing (the Debt) pursuant to registered mortgage numbers 711108694 and 711477087 (Mortgages) over the land described as Lot 29 on Registered Plan No. 107777 in the Local Government of the Gold Coast, being all of the land contained in title reference 13836129 and situated at 99 Monaco Street, Broadbeach Waters in the State of Queensland (Property) as and if there had there been no disclaimer of the Property by the Official Trustee in Bankruptcy (Trustee) as trustee of the bankrupt estate of Ms Denise Gay Pilley (also known as Denise Gay De Beer). 46 That declaration is appropriate in circumstances in which a contingency of my orders may be that Mr O'Neill fails to discharge Westpac's mortgage and the Property needs to be sold by Westpac. In National Australia Bank v New South Wales (61 [29]) Rares J held that: Here, by force of s 133(2) the effect of the trustee's disclaimer on 29 October 2008 appears to have determined any ongoing charge on the land for subsequent liabilities that would otherwise have continued to accrue, such as future (unpaid) interest on the debt secured by the mortgage. I agree with Needham J's conclusion that a mortgagee of Torrens title land is entitled to be granted a vesting order: Re Tulloch Ltd 3 ACLR at 814. I am of opinion that the land should be vested under s 133(9) in the bank for the purpose for which it originally was mortgaged, namely to secure payment to the bank of all principal, interest and other moneys due to it notwithstanding the effect of the disclaimer. If, after a sale, there is a shortfall the bank will be able to prove for it as an unsecured creditor in the bankrupts' estate. (Italics added). Conclusion 47 Orders should be made in the terms of the proposed order, with one qualification emphasised. The qualification is that the effect of s 133(11) of the Bankruptcy Act is that the vesting order made by this Court under s 133(9) does not take effect at law until registration. In order for the legal title to vest in Mr O'Neill or Westpac, steps must be taken to procure registration of the title that this Court has ordered to vest. 48 The parties agreed that no order as to costs should be made in the event that a vesting order is made in terms of the proposed orders, subject to Mr O'Neill making the payment of $570,000 by 6 April 2016. However, if that payment is not made, and if the title to the Property vests in Westpac, then the parties agreed, and it is appropriate, that Westpac's costs of and incidental to this proceeding should be ordered to be treated as reasonable enforcement expenses under its Mortgages over the Property and are to be payable from the proceeds of sale of the Property on the indemnity basis pursuant to clause B1 (b) of registered mortgage number 711477087 over the Property. 49 The orders sought by Mr O'Neill and Westpac should be made. However, those orders should not be entered for 7 days. Although Westpac says that Ms Catelides was served with this application, and she did not respond, it is arguable that she was a necessary and proper party to be heard. 50 Finally, at the conclusion of Mr O'Neill's submissions he sought "a court ruling" that $5693.62 that he paid to Westpac, pursuant to a letter of demand on 20 November 2015, was not validly paid. He asked that this amount be deducted from the "settlement amount" of $570,000. That is not a matter raised by this application. If Mr O'Neill seeks restitution of that amount then he will need to bring separate proceedings. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edelman. Associate: Dated: 24 March 2016	10,553
federal_court_of_australia:fca/single/1997/1997fca0242	decision	commonwealth	federal_court_of_australia	text/html	1997-04-08 00:00:00	Re Theo, Sol Ex Parte Official Trustee in Bankruptcy [1997] FCA 242	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1997/1997fca0242	2024-09-13T22:49:28.504570+10:00	CATCHWORDS PRACTICE AND PROCEDURE - taxation of costs - bankruptcy - whether Deputy District Registrar of Federal Court lacks power to tax costs payable to litigant in bankruptcy proceedings - where respondents legal practitioners - whether entitled to recover same range of costs as if they had retained other legal representation. Bankruptcy Act 1966 (Cth) - ss 14, 167, 315 Bankruptcy Rules - r 4 Federal Court Rules - O 77 r 1, O 62 rr 8 and 39 Cases Considered Cameron v Cole (1944) 68 CLR 571 Cachia v Hanes (1994) 179 CLR 403 Cashman & Partners v Secretary, Department of Human Services and Health (1995) 61 FCR 301 RE SOL THEO; EX PARTE OFFICIAL TRUSTEE IN BANKRUPTCY QB 1422 OF 1990 DRUMMOND J BRISBANE 8 APRIL 1997 IN THE FEDERAL COURT OF AUSTRALIA No QB 1422 of 1990 GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND RE: SOL THEO Applicant EX PARTE: OFFICIAL TRUSTEE IN BANKRUPTCY Respondent MINUTES OF ORDERS CORAM: Drummond J DATE OF ORDER: 8 April 1997 WHERE MADE: Brisbane THE COURT ORDERS THAT: 1. The applicant's notice of motion is dismissed. NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. IN THE FEDERAL COURT OF AUSTRALIA No QB 1422 of 1990 GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND RE: SOL THEO Applicant EX PARTE: OFFICIAL TRUSTEE IN BANKRUPTCY Respondent CORAM: Drummond J DATE: 8 April 1997 PLACE: Brisbane REASONS FOR JUDGMENT Mr Theo applies for an order that "a taxation of bills of costs filed by the statutory trustees for sale pursuant to orders of the Court of 2 September 1996 and 3 October 1996 be reviewed". However, as Mr Theo made clear in argument, he seeks an order setting aside the certificates of taxation of those costs on the ground that, since the 1996 amendments to the Bankruptcy Act 1966 (Cth), which came into effect on 16 December 1996, the Deputy Registrar of this Court has no power to tax the costs in question. On 2 September 1996, Kiefel J dealt with an application by Mr Theo to stay orders made by Heerey J on 1 August 1996, at the behest of Mr Theo's trustee in bankruptcy, whereby Heerey J appointed Mr Philp and another as co-trustee on the statutory trust for sale of certain properties in which Mr Theo had an interest jointly with his wife. Mr Theo had transferred his interest in these properties to his wife shortly before his bankruptcy; Heerey J found these transfers were void as against the trustee in bankruptcy. Kiefel J dismissed Mr Theo's stay application and ordered that he pay the statutory trustee's costs of the application: they had been made respondents by Mr Theo to the stay application. By a further application by Mr Theo, dealt with by Kiefel J on 3 October 1996, he sought what he termed "clarification" of Heerey J's orders of 1 August 1996; he also sought an order that, upon his provision of a bank guarantee, the statutory trustees for sale be removed, together with an order staying execution of Heerey J's orders of 1 August 1996 with respect to Mr and Mrs Theo's residence. This application was disposed of by Kiefel J ordering that the statutory trustees not enter into any unconditional contract for sale of any of the properties the subject of Heerey J's orders until determination of Mr Theo's pending appeal. Kiefel J ordered that Mr Theo pay the costs of the statutory trustees of their appearance that day: once again, they had been made respondents by Mr Theo to his application. Mr Theo's appeal against Heerey J's judgment was allowed by the Full Court on 7 November 1996. It was only Heerey J's judgment, including his order appointing the statutory trustees for sale, that was set aside. The Full Court did not interfere with Kiefel J's orders of 2 September or 3 October 1996. Those orders, as orders of the Federal Court, a superior court of record, therefore stood as authority for the statutory trustees to recover from Mr Theo their costs of 2 September and 3 October, despite Mr Theo's successful appeal, subject only to those costs being quantified by taxation. Those orders will continue to have full effect unless and until they are set aside. See Cameron v Cole (1944) 68 CLR 571 at 590. The costs payable by Mr Theo to the statutory trustees under these two orders were taxed by a Deputy District Registrar of this Court, over Mr Theo's objection, on 7 March 1997 and certificates of taxation were issued on 10 March 1997. In so far as Mr Theo relies on s 167 of the Bankruptcy Act in support of his argument that the Deputy District Registrar had no authority to tax those costs, his reliance is misplaced. That section, both prior to and after the 1996 amendments, deals only with the taxation of costs recoverable by persons involved in various capacities in the administration of a bankrupt estate by way of remuneration for services provided by those persons in connection with the administration. The costs the subject of Kiefel J's orders were costs which the statutory trustees recovered, not for services performed in that capacity, but rather by way of the limited indemnity to which they were held entitled in their capacity as successful litigants against whom Mr Theo had brought the two applications in question. That the trustees were both solicitors in practice and that they acted for themselves in this litigation does not, on the law as it presently stands, deny them the entitlement to recover much the same range of costs as they could have recovered if, instead of acting for themselves, they had retained other legal representation: see Cachia v Hanes (1994) 179 CLR 403 at 411-413 and Cashman & Partners v Secretary, Department of Human Services and Health (1995) 61 FCR 301 at 312-313. I reject Mr Theo's submission to the contrary. Mr Theo's other point is that Mr Allen, who, at all relevant times, has held office as a Deputy District Registrar of the Federal Court appointed under s 18N of the Federal Court of Australia Act 1976 (Cth) and who, up to 16 December 1996, also held an appointment under s 14 of the Bankruptcy Act 1966 (Cth) as a Deputy Registrar in Bankruptcy, was not, however, at the time he taxed the two lots of costs in question a "taxing officer" within the meaning of that term in s 167(9), in the form in which it has stood since 16 December 1996. That can be accepted. But, in my opinion, it provides no ground for doubting that Mr Allen's taxation of the two costs orders in question is legally effective to quantify Mr Theo's liability under those two orders. The orders for costs here in question were made pursuant to s 32 of the Bankruptcy Act, a provision unaffected by the 1996 amendments. Prior to those amendments coming into effect on 16 December 1996, the taxation of costs ordered to be paid by a court exercising jurisdiction in bankruptcy was governed by Part XIII of the Bankruptcy Rules. Those Rules required such costs to be taxed by "a taxing officer": see, eg, r 163. Bankruptcy r 4(1) gave that expression "the same meaning as in s 167" of the Bankruptcy Act. Section 167(9) of the Bankruptcy Act in its pre-December 1996 form defined "taxing officer" to mean "a Registrar or Deputy Registrar or a person authorised in writing by a Registrar, with the approval of the Court or the Inspector-General, to exercise the powers and perform the functions of a taxing officer". The terms "Registrar" and "Deputy Registrar" in this provision as it then stood meant a Registrar in Bankruptcy and a Deputy Registrar in Bankruptcy appointed under s 14 of that Act: see s 5(1). Section 167(9) was amended by the 1996 amendment to define "taxing officer" as "a person appointed by the Inspector-General for the purposes of" s 167. Section 315 of the Bankruptcy Act, in so far as it previously authorised the making of Bankruptcy Rules under that Act, was repealed as from 16 December 1996. The Bankruptcy Rules in force under the Bankruptcy Act prior to that date thereafter ceased to have any effect as Rules under that Act. However, as from 16 December, by force of O 77 r 1 of the Federal Court Rules, those Rules, in the form they were in immediately before that date, continue to have legal force, but only as Rules of the Federal Court and only to the extent allowed by O 77 r(2). It follows that, when old Bankruptcy Rule 4(1), now in force as a Federal Court rule, gives the expression "taxing officer" in Part XIII of those old Bankruptcy Rules the same meaning that expression had in s 167 of the Bankruptcy Act, it picks up s 167 of the Bankruptcy Act in the form in which it stood immediately prior to the 1996 amendments coming into effect. But the offices of Registrar and Deputy Registrar in Bankruptcy ceased to exist on 16 December 1996: see item 57 of Schedule 1 to the amending Act No 44 of 1996. By items 6 and 11 of Schedule 1 to the amending Act, the definitions of "Deputy Registrar" and "Registrar" were repealed and a new definition of the expression "Registrar" substituted; that term in the Bankruptcy Act now means "the Registrar, a Deputy Registrar, a District Registrar or a Deputy District Registrar of the Federal Court". By item 441(1) of the Schedule, this new definition of the term "Registrar" was declared to apply to all provisions of the Bankruptcy Act applying to bankruptcies and other insolvency administrations that are current on or after 16 December 1996. But for the reasons given, the expression "taxing officer" in Part XIII of the Bankruptcy Rules cannot be read as a reference to the Registrar or a subordinate Registrar of the Federal Court. However, O 77 r 1(3) of the Federal Court Rules provides that the Federal Court Rules, to the extent that they are consistent with the Bankruptcy Rules as applied by O 77 r 1(2), also apply to the practice and procedure of the Federal Court in the exercise of its jurisdiction in bankruptcy. Order 62 rr 8 and 39 provide for the taxation of costs under orders made by the Federal Court to be taxed by "a Registrar", ie, by the Registrar or a District Registrar of the Court, including a Deputy Registrar or a Deputy District Registrar of the Court. Mr Allen, as I have said, held office as a Deputy District Registrar of the Court at the time he taxed the costs in question. Order 62 rr 8 and 39 of the Federal Court Rules are consistent with those Bankruptcy Rules which, by force of O 77 r 1(2), apply as Rules of the Federal Court from 16 December 1996. Order 62 r 8 provides for the taxation of costs ordered to be paid by the Federal Court and the rule, in terms, is not limited to orders made by the Court in the exercise of any particular jurisdiction. It is a rule of general application to the taxation of costs ordered by this Court in the exercise of any jurisdiction and is in terms well capable of applying to costs ordered to be paid by the Court in its bankruptcy jurisdiction. The provisions of Part XIII of the Bankruptcy Rules which provided for the taxation of costs ordered to be paid by courts exercising bankruptcy jurisdiction ceased to have any effect from 16 December 1996, when there was no longer any official authorised by those Rules to perform that function. Order 62 rr 8 and 39 do not therefore conflict with any provision of the Bankruptcy Rules to the extent that the Bankruptcy Rules continue, by force of O 77, to have legal effect. It follows that Deputy District Registrar Allen was authorised by O 62 rr 8 and 39 of the Federal Court Rules to tax the costs in question. Mr Theo's notice of motion must therefore be dismissed. I certify that this and the preceding six pages are a true copy of the reasons for judgment herein of the Honourable Justice Drummond. Associate: Date: 8 April 1997 Applicant appeared in person. Solicitor for the respondent: Bennett & Philp Date of hearing: 2 April 1997	2,791
federal_court_of_australia:fca/single/2011/2011fca1149	decision	commonwealth	federal_court_of_australia	text/html	2011-10-04 00:00:00	Barlaw Pty Ltd v Crouch (Trustee) [2011] FCA 1149	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2011/2011fca1149	2024-09-13T22:49:28.656715+10:00	FEDERAL COURT OF AUSTRALIA Barlaw Pty Ltd v Crouch (Trustee) [2011] FCA 1149 Citation: Barlaw Pty Ltd v Crouch (Trustee) [2011] FCA 1149 Appeal from: Barlaw Pty Ltd v Crouch [2011] FMCA 384 Parties: BARLAW PTY LTD TRADING AS BARRAK LAWYERS v NICHOLAS CROUCH AS TRUSTEE OF THE ESTATE OF MARK ANTHONY BARTOLO File number: NSD 1387 of 2011 Judge: FOSTER J Date of judgment: 4 October 2011 Catchwords: PRACTICE AND PROCEDURE – appeal – whether security for the respondent's costs of an appeal from a Federal Magistrate should be ordered Legislation: Bankruptcy Act 1966 (Cth), s 180 Corporations Act 2001 (Cth), s 1335 Federal Court of Australia Act 1976 (Cth), s 56 Date of hearing: 4 October 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 19 Solicitor for the Applicant: Mr B Barrak of Barrak Lawyers Counsel for the Respondent: Mr AP Spencer Solicitor for the Respondent: Matthews Folbigg Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1387 of 2011 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: BARLAW PTY LTD TRADING AS BARRAK LAWYERS (ACN 128 139 935) Appellant AND: NICHOLAS CROUCH AS TRUSTEE OF THE ESTATE OF MARK ANTHONY BARTOLO Respondent JUDGE: FOSTER J DATE OF ORDER: 4 OCTOBER 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appellant provide security for the respondent's costs of the appeal in the amount of $35,000, such security to be provided within 28 days of today's date by way of cash payment to the Registrar of the Court, such amount to stand as security for the respondent's costs of the appeal and not to be disbursed without a prior order of the Court. 2. In the event that the security is not provided within the timeframe ordered above, the proceeding be stayed. 3. The costs of the respondent's Interlocutory Application filed on 8 September 2011 be the respondent's costs in the appeal. 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 1387 of 2011 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: BARLAW PTY LTD TRADING AS BARRAK LAWYERS (ACN 128 139 935) Appellant AND: NICHOLAS CROUCH AS TRUSTEE OF THE ESTATE OF MARK ANTHONY BARTOLO Respondent JUDGE: FOSTER J DATE: 4 OCTOBER 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The respondent, Mr Crouch, has applied to the Court for an order that the appellant provide security for his costs of the appeal in the amount of $80,000 or in such other amount as the court deems fit. In addition, the respondent seeks an order that the amount of the security be paid into Court by cash or bank cheque within 14 days from the date of any order for security. Finally, the respondent seeks an order for the appeal to be stayed pending the payment of security. 2 In support of his application, the respondent read and relied upon the affidavit of Stephen Keith Mullette, sworn on 8 September 2011. He also relied upon certain other documents, being two ASIC documents and a Notice to Produce requiring certain financial documentation to be produced by the appellant, together with the documents produced in answer to that Notice to Produce (Exhibits A, B and C). 3 The appellant opposed the making of any order for security. Essentially, the appellant submitted that, it being an incorporated legal practice, there was every reason to expect that, should it be required to pay costs in due course, it would do so without demur. 4 The evidence before me shows that the appellant is a company with a paid up capital of $1,000 and assets of $1,000 or less. It has earned reasonably substantial income in the past, generating a relatively small annual profit. It has no real estate in New South Wales. 5 In answer to the Notice to Produce served by the respondent, the appellant produced certain documents but did not produce all of the documents required by the Notice to Produce. The documents which it did produce confirmed the essential facts concerning its financial position which I have noted at [4] above. The appellant did not produce, as it was required to do, financial statements for the years ended 30 June 2009, 30 June 2010 and 30 June 2011. I infer that those documents would not have improved the general position summarised at [4] above. 6 On the evidence, therefore, the position is that it is likely that, should an order for costs be made against the appellant at the conclusion of the current appeal, the appellant will not be able to meet that order from its own funds. This simple circumstance enlivens the Court's jurisdiction pursuant to s 1335 of the Corporations Act 2001 (Cth) and s 56 of the Federal Court of Australia Act 1976 (Cth). Once the jurisdiction is enlivened, I am required to consider, as a discretionary matter, whether security should be ordered and, if so, in what amount. 7 The appeal is an appeal from a decision of a Federal Magistrate in which the Federal Magistrate ordered, pursuant to s 180 of the Bankruptcy Act 1966 (Cth), that the resignation of the respondent as trustee of the estate of Mark Bartolo be accepted. The contest before the Federal Magistrate involved a claim by the appellant that the respondent should be removed as trustee of that estate, on the one hand, and a claim by the trustee that he should be allowed to resign on terms, on the other hand. It is not necessary to traverse the detail of the Federal Magistrate's decision. 8 Counsel for the respondent has conceded that the appeal is not hopeless and should not be regarded as without merit for the purposes of the present application. Mr Barrak, who is the principal of the appellant, urged upon me that the prospects of the appellant on the appeal are substantial and that I should weigh that in the balance in favour of the appellant and against an order for security. I do not think it is appropriate to enter into any assessment of the prospects of the appellant on appeal once I have come to the view that there is sufficient prospect to regard the appeal as having some merit. 9 In the circumstances of the present case, I note that the respondent accepts that the appeal has some merit and that I am entitled to take that circumstance into account in favour of the appellant insofar as the present application is concerned. I will approach my consideration of the present application on that basis. 10 It seems to me that I should exercise my discretion in favour of making an order for security. I do so, principally, because, in the circumstances of the present case, if the position of the respondent is not reasonably secured, the costs of the present appeal may ultimately be visited upon the creditors of the bankrupt estate of which the respondent was formerly trustee, or, indeed, on the trustee personally, in circumstances where he may have succeeded in the appeal. This is an unsatisfactory state of affairs and should be avoided if at all possible. In any event, it seems to me that the financial position of the appellant is such that an order for security is warranted. 11 The evidence adduced on behalf of the respondent concerning quantum is found in the affidavit of Mr Mullette at paragraphs 39 to 45. In that affidavit, Mr Mullette estimates that the costs of the appeal will ultimately be in the order of $94,792.50, inclusive of GST. The detail of the process which Mr Mullette undertook to arrive at that estimate is set out in those paragraphs of his affidavit. It is not necessary to traverse the detail of Mr Mullette's calculations for present purposes. 12 I have come to the view that the appeal should not take more than one day and that the interlocutory stages of the appeal can be adequately met by allowing an amount of $25,000 for those stages. I propose to allow $10,000 for the hearing itself, making a total of $35,000 by way of security. 13 I have carefully considered the extent of preparation which Mr Mullette believes will be required and have come to the view that it is unlikely, in all the circumstances, that as much time as he has allowed will be required and that the matter can be prepared more efficiently than he has perhaps thought. 14 I propose by way of brief explanation as to how I arrived at the amount of $25,000 to set out the following matters: 15 First, Mr Mullette has, in effect, allowed 77 hours for a junior solicitor (at a cost of $22,715) and 34 hours for a partner level lawyer (at a cost of $16,830) to prepare the matter as well as seven and a half days for junior Counsel (at a cost of $26,250). The total of these three components accounts for a significant part of his estimated costs (viz $65,795). It seems to me that junior Counsel ought not to be involved and will not be involved to the extent set out by Mr Mullette and that there should be a substantial discount in the number of days allowed, in the order of about 50%. In relation to the costs of the lawyers, both junior and senior, there is a real potential for duplication which should also result in a significant discount. Doing the best I can and approaching the matter rather broadly, it seems to me that, if I allow something of the order of two days for Counsel and two and a half days for the two solicitors by way of preparation, that would be sufficient and reasonable in the circumstances. The cost of preparation which I propose to allow is therefore $25,000. 16 As already mentioned, I would allow $10,000 for the hearing itself. 17 Accordingly, I propose to order that the appellant provide security for the respondent's costs in the amount of $35,000, such security to be provided within 28 days of today's date by way of cash payment to the Registrar of the Court and such amount to stand as security for the respondent's costs of the appeal and not to be paid out without an order of the Court. 18 Secondly, in the event that the security is not provided within the timeframe I have indicated, the proceeding will be stayed. I note that the orders which I have made will not affect the listing of the appeal for hearing in the February/March 2012 appellate sittings of the Court unless the stay which I have proposed comes into effect in due course for the reason that the security is not provided. 19 I order that the costs of this application be the respondent's costs in the appeal. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate: Dated: 6 October 2011	2,508
federal_court_of_australia:fca/single/2005/2005fca1214	decision	commonwealth	federal_court_of_australia	text/html	2005-08-30 00:00:00	SZEKM v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 1214	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2005/2005fca1214	2024-09-13T22:49:28.702081+10:00	FEDERAL COURT OF AUSTRALIA SZEKM v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 1214 SZEKM v MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS and REFUGEE REVIEW TRIBUNAL NSD 869 OF 2005 STONE J 30 AUGUST 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 869 OF 2005 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZEKM APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS FIRST RESPONDENT REFUGEE REVIEW TRIBUNAL SECOND RESPONDENT JUDGE: STONE J DATE OF ORDER: 30 AUGUST 2005 WHERE MADE: SYDNEY 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 NSD 869 OF 2005 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZEKM APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS FIRST RESPONDENT REFUGEE REVIEW TRIBUNAL SECOND RESPONDENT JUDGE: STONE J DATE: 30 AUGUST 2005 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal from the decision of a Federal Magistrate made on 16 May 2005 in which his Honour dismissed an application to review a decision of the second respondent ('the Tribunal') made on 5 August 2004 and handed down on 30 August 2004. The Tribunal affirmed the decision of a delegate of the first respondent refusing to grant the appellant a Protection (Class XA) visa. 2 At the hearing of this appeal, the appellant, who appeared for himself with the aid of an interpreter, stated that he knew the appeal was hopeless and that he had only filed the appeal in the hope of staying in Australia for longer and avoiding the removal proceedings that ordinarily follow refusal of a protection visa. However, given the appellant was unrepresented and I had serious doubts that he was aware of the consequences of this statement, I decided to address the grounds listed in his notice of appeal. 3 The appellant, a citizen of the People's Republic of China, arrived in Australia on 18 April 2004. On 23 April 2004, he lodged an application for a protection visa with the Department of Immigration and Multicultural and Indigenous Affairs. On the same day, the delegate of the first respondent refused the application. On 26 May 2004, the appellant sought review of the delegate's decision with the Tribunal. The appellant's claims 4 According to his protection visa application, the appellant was born in Shanghai and, after completing 10 years of schooling, commenced work with a 'bus services company' where he worked from 1981 until his departure to Australia in 2004. 5 The photocopy of the appellant's passport attached to his protection visa application shows that it was issued in December 2003. While the appellant indicated in his protection visa application that he left China legally, he also claimed he experienced difficulty in obtaining his passport and 'had to pay some money'. 6 In a statement attached to his protection visa application, the appellant claimed that he started to learn Falun Gong and became a 'member' in 1998 after being introduced by a cousin who was the 'head' of Falun Gong in Shanghai. He stated that he began to learn Falun Gong for health purposes. After a few months of practising, he found his health improving and said he 'could not live without practicing it'. The appellant claims that at this point he started to introduce other friends and colleagues to Falun Gong and that most of his spare time was spent devoted to Falun Gong. 7 In 1999 Falun Gong was declared illegal in China. The appellant claimed that as a result, 'we [presumably the appellant and other followers] started to live in horror and we were often called together for brain washing by the political section of our company'. The appellant claimed that in July 1999 he went to Beijing with other Falun Gong members to present a petition. According to the appellant, there were 'thousands and thousands of members' at the rally in Beijing on this day. In his statement, the appellant claimed that the government used the army to disperse the group, forcing him to return to Shanghai worrying about his safety. Due to his concerns about his safety, the appellant claimed to have taken leave without pay and gone into hiding. 8 The appellant stated that in October 2003 he 'realized that the government [had] started to investigate me about my involvement with' Falun Gong. Concerned about his safety, he sought help from 'some concerned people' and obtained a passport and a visa to come to Australia. 9 On this basis, the appellant claimed to fear persecution by the Chinese authorities on account of his membership of the Falun Gong movement. The Tribunal's decision 10 As noted above at [2], the appellant sought review of the delegate's decision by the Tribunal on 26 May 2004. The application for review essentially reproduced, in truncated form, the claims he made in his protection visa application. 11 By letter dated 3 June 2004, the Tribunal wrote to the appellant advising him that it was unable to make a decision in his favour on the material then before it and invited the appellant to attend a hearing at 10.00am on Wednesday 28 July 2004. A Response to Hearing Invitation form was attached to the letter which also stated: 'The Tribunal will only change this hearing date for good reasons. If you think you might be unable to attend the hearing, you must contact the Tribunal immediately. If you do not attend the hearing and the Tribunal does not postpone the hearing, it can make a decision on your case without further notice.' On 28 June 2004, the Tribunal received the appellant's completed Response to Hearing Invitation form in which he indicated that he wished to attend the hearing. 12 In its reasons, after recording this background the Tribunal stated: 'However, the Applicant did not attend the hearing or contact the Tribunal to explain his failure to attend. In these circumstances, and pursuant to s.426A of the [Migration Act 1958 (Cth)], the Tribunal has decided to make its decision on the review without taking any further action to enable the Applicant to appear before it.' 13 Turning to consider the appellant's claims, the Tribunal stated: 'The Tribunal has before it little more than a vague and incomplete account contained in the Applicant's protection visa application and his brief written statement to the Tribunal. It has not had the opportunity, through a hearing or other means, to obtain further information to determine the veracity of the Applicant's claims and their relevance to his application for refugee status.' 14 The Tribunal consequently was unable to be satisfied that the appellant adheres to Falun Gong; that he was or is the subject of any adverse attention of the Chinese authorities for that or any other reason; or that there are any past or current circumstances which give rise to a well-founded fear of persecution for a Convention reason in the foreseeable future. The Federal Magistrate's decision 15 Before the Federal Magistrate the appellant raised two grounds of review. First, that he was not given a proper opportunity to explain his case and was thereby denied procedural fairness; and secondly, that the Tribunal Member demonstrated apprehended bias in dismissing his application for review. 16 In relation to his claim of a denial of natural justice, the appellant stated before his Honour that he was ill for three or four days over the period of the hearing. The Federal Magistrate commented at [7] of his reasons: 'The Applicant told the Court today that because he was ill he asked his migration agent to obtain an adjournment for him. He believes that he did so at least the day before the hearing, if not earlier. He said the migration agent told him that his application had been refused some time after the hearing. The migration agent did not attend Court today and has not filed any affidavit in these proceedings. The Applicant told the Court that he was not able to attend a doctor for the three or four days during the time that he was ill. He had brought some medication with him from China and he took that.' 17 The Federal Magistrate stated that there was no evidence before him to demonstrate that an application for an adjournment was made and no medical certificate to certify the appellant's health at the relevant time. His Honour held that as the appellant had been invited to attend the hearing and there was no evidence before the Tribunal as to why the appellant had not appeared the Tribunal was within its rights under s 426A(1) of the Migration Act 1958 (Cth) ('the Act') to proceed to make a decision in the appellant's absence 18 In respect of the claim of apprehended bias, the Federal Magistrate stated at [12]-13]: 'The Applicant has told the Court that he believes the Tribunal was biased against him. He says he believes the Tribunal was biased because he did not attend the hearing and it was for that reason that the Tribunal did not find in his favour. It is a serious matter to make an allegation of bias; it involves an allegation of personal fault on the part of the decision maker. An allegation of bias should not be made lightly. … The simple answer is that there is no evidence of bias. A decision by the Tribunal that is not favourable to an applicant is not of itself evidence of bias. There has to be something more than that to show a degree of bias on the part of the decision maker. No evidence of bias appears on the Tribunal decision and the Applicant did not attend the Tribunal hearing. There is no reviewable error.' 19 Having rejected the appellant's claims, the Federal Magistrate dismissed the application. This appeal 20 The notice of appeal to this Court from his Honour's judgment lists the following grounds of appeal: '2. The Tribunal failed to consider my [claims] for my application for a protection visa. 3. The Tribunal did not properly observe the Migration Act 1958 to consider my application for a protection visa. 4. The Tribunal filed to exercise its jurisdiction as it failed to assess the chance that I would be persecuted on my return to China because of Falun Gong. 5. I attended the hearing at [the] Federal Magistrates Court but my arguing points were not accepted by the Judge.' 21 On 6 July 2005, I ordered that the appellant file and serve written submissions no later than 22 August 2005. The appellant has not complied with this order and the Court is therefore required to proceed on the basis of the entirely unparticularised grounds quoted above. 22 In relation to the appellant's claim of procedural unfairness made before the Federal Magistrate, the appellant does not deny that he was invited to attend the hearing in accordance s 425 of the Act. As such, the Tribunal was empowered under s 426A(1) of the Act to make a decision on the review without taking any further action to allow or enable the appellant to appear before it. There was no error in the Tribunal proceeding as it did and no error in the Federal Magistrate dismissing this claim. 23 In respect of the claim of apprehended bias, I respectfully agree with his Honour as to the seriousness of such an allegation. It is plain that the failure of the appellant to attend the hearing and the Tribunal's affirmation of the delegate's decision are linked. The Tribunal did not have the opportunity to question the appellant and obtain further information from him. It was consequently unable to be satisfied that the appellant was a person to whom Australia owed protection obligations under the Convention. There is nothing in the Tribunal's reasons to provide any support for an allegation of apprehended bias. 24 The appellant has also raised a number of further allegations on appeal. Leaving aside the issue of the limited role of an appellate court, none of these grounds are supported by any material before this Court and, in my opinion, are plainly devoid of merit. 25 In my view, the Tribunal's decision does not contain jurisdictional error, either as alleged by the appellant or otherwise, and the Federal Magistrate was correct to dismiss the application before him. The appeal must be dismissed with costs. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. Associate: Dated: 1 September 2005 The Appellant appeared in person Counsel for the Respondent: S Kaur-Bains Solicitor for the Respondent: Blake Dawson Waldron Date of Hearing: 30 August 2005 Date of Judgment: 30 August 2005	2,809
federal_court_of_australia:fca/single/2021/2021fca0133	decision	commonwealth	federal_court_of_australia	text/html	2021-02-24 00:00:00	Bailey v DPR Haulage Pty Ltd [2021] FCA 133	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca0133	2024-09-13T22:49:28.793302+10:00	Federal Court of Australia Bailey v DPR Haulage Pty Ltd [2021] FCA 133 File number: WAD 2 of 2021 Judgment of: BANKS-SMITH J Date of judgment: 24 February 2021 Catchwords: INDUSTRIAL LAW - whether to transfer proceeding to Federal Circuit Court of Australia under s 32AB of the Federal Court of Australia Act 1976 (Cth) - where factors weigh in favour of transfer Legislation: Fair Work Act 2009 (Cth) ss 340, 566 Federal Court of Australia Act 1976 (Cth) ss 32AB, 37M Federal Court Rules 2011 (Cth) rr 27.11, 27.12 Federal Court and Federal Circuit Court Regulation 2012 (Cth) Schedule 1 Cases cited: Sampson as the trustee of the Bankrupt Estate of Wei Chen v Huang [2020] FCA 545 Division: Fair Work Division Registry: Western Australia National Practice Area: Employment and Industrial Relations Number of paragraphs: 15 Date of hearing: 22 February 2021 Counsel for the Applicant: The applicant appeared in person Counsel for the Respondent: Mr CS Silver Solicitor for the Respondent: Chad Silver & Associates ORDERS WAD 2 of 2021 BETWEEN: PAUL BAILEY Applicant AND: DPR HAULAGE PTY LTD Respondent order made by: BANKS-SMITH J DATE OF ORDER: 24 FEBRUARY 2021 THE COURT ORDERS THAT: 1. This proceeding be transferred to the Federal Circuit Court of Australia pursuant to s 32AB(1) of the Federal Court of Australia Act 1976 (Cth) and r 27.11 and r 27.12 of the Federal Court Rules 2011 (Cth). 2. Costs reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BANKS-SMITH J: 1 These proceedings were commenced on 30 December 2020 in this Court. 2 The applicant alleges his employment as a delivery driver was wrongfully terminated by the respondent. The applicant's claim is brought under s 340(1)(a) of the Fair Work Act 2009 (Cth). He seeks payment of an amount equivalent to 12 months' salary ($85,134), together with damages to compensate him for the impact of the termination on his reputation ($25,000). The applicant is self-represented. 3 There is no question that the Federal Circuit Court of Australia has the jurisdiction to determine the applicant's claim (see s 566 of the Fair Work Act), and the question has arisen as to whether this proceeding should be transferred to that Court. Statutory context 4 Section 32AB of the Federal Court of Australia Act 1976 (Cth) provides that the Court may transfer a proceeding to the Federal Circuit Court. That section relevantly provides: 32AB Discretionary transfer of civil proceedings to the Federal Circuit Court (1) If a proceeding is pending in the Court, the Court may, by order, transfer the proceeding from the Court to the Federal Circuit Court. (2) The Court may transfer a proceeding under subsection (1): (a) on the application of a party to the proceeding; or (b) on its own initiative. … (6) In deciding whether to transfer a proceeding to the Federal Circuit Court under subsection (1), the Court must have regard to: (a) any Rules of Court made for the purposes of subsection (4); and (b) whether proceedings in respect of an associated matter are pending in the Federal Circuit Court; and (c) whether the resources of the Federal Circuit Court are sufficient to hear and determine the proceeding; and (d) the interests of the administration of justice. (7) If an order is made under subsection (1), the Court may make such orders as it considers necessary pending the disposal of the proceeding by the Federal Circuit Court. … 5 Rule 27.11 and r 27.12 of the Federal Court Rules 2011 (Cth) are relevant but it is only necessary to set out r 27.12, which states: 27.12 Factors to be taken into account (1) For an appeal under the AAT Act, the parties must address the matters mentioned in section 44AA(7) of that Act. (2) For a proceeding, the parties must address the matters mentioned in section 32AB(6) of the Act. (3) For an appeal under the AAT Act or a proceeding, the parties should address the following: (a) whether the appeal or proceeding is likely to involve questions of general importance; (b) whether it would be less expensive and more convenient to the parties if the appeal or proceeding were transferred; (c) whether an appeal or proceeding would be determined more quickly if transferred; (d) the wishes of the parties. 6 Accordingly, in determining whether or not the Court should transfer the proceeding to the Federal Circuit Court, the Court must have regard to the matters in s 32AB(6) of the Federal Court of Australia Act and r 27.12(3) of the Federal Court Rules. Consideration 7 The applicant has filed an affidavit in support of his application. It is apparent from the affidavit that the dispute about the termination of his employment is largely factual, or will involve the application of law to particular facts: whether he conducted himself in the manner alleged by the respondent; whether he smoked in his truck; whether he conducted proper vehicle maintenance and complied with occupational health and safety processes; and whether his conduct caused damage to the truck in question. 8 Although I recognise that the dispute is important to both parties, it does not appear that the questions raised are of such general importance that they ought to be dealt with in this Court. 9 Nor is this the kind of matter where extensive judicial intervention is likely to be required; in fact, the attitude of the parties suggests that the matter might sensibly be mediated by a Judicial Registrar in the short term. Having regard to s 37M(2) of the Federal Court of Australia Act, with its emphasis on the just and efficient use of judicial resources and on proportionate costs and expenses, it seems to me that the resolution of this matter might be dealt with justly and efficiently in the Federal Circuit Court. 10 Further, the fees that may be incurred are likely to be less, having regard to the respective fees prescribed by Schedule 1 of the Federal Court and Federal Circuit Court Regulation 2012 (Cth). 11 At the first case management hearing in this matter I raised with the parties whether it might be appropriate to transfer the proceedings to the Federal Circuit Court, and both parties were agreeable to that course. 12 The parties are to be commended for having commenced fruitful discussions about an efficient manner in which the litigation might proceed, and have apparently reached agreement as to programming directions that might be made as to filing short timelines of events, filing short case statements and attending a mediation. 13 Those are all matters that can be undertaken in the Federal Circuit Court, and so rather than make those orders, I indicated to the parties that if I decided to transfer the application, I would do so quickly and provide short reasons so that the parties are not unduly delayed by the transfer. 14 In saying that, I respectfully adopt Wigney J's comment in Sampson as the trustee of the Bankrupt Estate of Wei Chen v Huang [2020] FCA 545 that: [28] Transferring proceedings to the Circuit Court should not, however, convey the impression that the Circuit Court only deals with matters of lesser significance. To do so would be to misunderstand the nature of the Circuit Court. Rather, transfers of proceedings are simply a reflection of 'the concept of more efficient and better administration of justice which underlies the creation of that court and underlies the arrangements for transfer of cases between the two courts': Sheikholeslami v University of New South Wales [2006] FCA 712 at [8]-[9]. 15 Having taken into account and weighed the above matters, I consider it is appropriate that this matter be transferred to the Federal Circuit Court. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith. Associate: Dated: 24 February 2021	1,831
federal_court_of_australia:fca/single/2001/2001fca1772	decision	commonwealth	federal_court_of_australia	text/html	2001-12-10 00:00:00	Evans Deakin Pty Limited v Sebel Furniture Limited [2001] FCA 1772	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2001/2001fca1772	2024-09-13T22:49:28.814064+10:00	FEDERAL COURT OF AUSTRALIA Evans Deakin Pty Limited v Sebel Furniture Limited [2001] FCA 1772 practice and procedure – discovery – third party discovery under Order 15A rule 8 of the Federal Court Rules – circumstances in which third party discovery orders might be made – limits to construing rule otherwise than on the words of the rule – where third party is parent of party to proceedings – consideration of general principles Federal Court Rules O 15A r 8 Keviris Pty Limited v Capitol Building Society (unreported, Supreme Court of Victoria, 9 February 1988) referred to Richardson Pacific v Fielding (1990) 26 FCR 188 referred to McLernon Group Insurances v Biron Corporation [1995] FCA 500 referred to Re La Rosa [1992] FCA 797 referred to The Owners of the Ship 'Shin Kobe Maru' v The Empire Shipping Company Inc (1994) 181 CLR 404 referred to PMT Partners Pty Limited (in Liquidation) v Australian National Parks and Wildlife Services (1995) referred to 184 CLR 301 Knight v F.P. Special Assets (1992) 174 CLR 178 referred to Eastman v R [2000] HCA 29 referred to Australian Memory v Brien [2000] HCA 30 referred to Abebe v the Commonwealth (1999) 197 CLR 510 referred to Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 referred to EVANS DEAKIN PTY LIMITED v SEBEL FURNITURE LIMITED N 768 of 1999 ALLSOP J SYDNEY 10 DECEMBER 2001 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N768 of 1999 BETWEEN: EVANS DEAKIN PTY LIMITED APPLICANT AND: SEBEL FURNITURE LIMITED RESPONDENT JUDGE: ALLSOP J DATE OF ORDER: 10 DECEMBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Leave be granted to the respondent to serve upon Evans Deakin Industries Pty Ltd a subpoena in the form of the draft annexed and marked A. 2. The applicant, through its officers and solicitors, take such steps as are reasonably necessary to assist Evans Deakin Industries Pty Ltd to ascertain and produce the documents under the subpoena referred to in Order 1 above, the legal costs of any such assistance to be the applicant's costs in the cause. 3. The respondent's Notice of Motion filed 5 December 2001 be dismissed. 4. The costs of the applicant and the respondent of and relating to the respondent's notice of motion be costs in the cause. 5. Evans Deakin Industries Pty Ltd pay its own costs of the respondent's notice of motion. 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 N768 of 1999 BETWEEN: EVANS DEAKIN PTY LIMITED APPLICANT AND: SEBEL FURNITURE LIMITED RESPONDENT JUDGE: ALLSOP J DATE: 10 DECEMBER 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 There is a notice of motion before me which was filed on 5 December, seeking third party discovery under Order 15A rule 8 of the Federal Court Rules. 2 The discovery was sought by the respondent to the proceedings, Sebel Furniture Limited (Sebel) against the parent of the applicant. 3 The proceedings concern complaints by the applicant, Evans Deakin Pty Limited, about the failure of Sebel to live up to commercial intentions expressed in a tender document and in communications surrounding a tender document for the supply of seating in railway carriages. Evans Deakin Pty Limited, the applicant, tendered to the State of New South Wales, through the State Rail Authority, for the supply of rail carriages for what is known as the Fourth Generation Train Project. 4 The dispute on the pleadings is between the applicant and the respondent, Sebel. The applicant is a subsidiary of Evans Deakin Industries Pty Limited. I will refer, hereafter, to Evans Deakin Pty Limited as the applicant and Evans Deakin Industries Pty Limited as the parent. The matter has been pleaded in some detail by the applicant and the respondent. Issues will arise between the applicant and the respondent in the proceedings as to the decision-making process at various stages which governed how the applicant dealt with and proposed to deal with the tender of Sebel and the news of Sebel's withdrawal from the tender. 5 Evidence has been filed for the purposes of the motion which would indicate, at least at some points, that the parent had some involvement, or at least some power of involvement, in the commercial decision-making processes of the applicant. From what counsel have indicated to me this morning, the parent has, and at all relevant times has had, a commercial and legal power of control over the applicant. That is not to say, of course, that the applicant is not the proper party to the proceedings and that any relevant decision was not a decision of the applicant. 6 Orders for discovery have been made in these proceedings but in November 2001 the respondent apparently become concerned as to the existence of documents within the power, custody and control of the parent and which were not within the power, custody and control of the applicant. Since mid-November there has been correspondence between the parties about the production of these documents by the parent. That correspondence ranged over the question of the entitlement of the respondent to seek the documents, the appropriate scope of the request for the documents but not, it would appear, the relevance of the documents or any question of oppression in the sense that that expression is usually used in this context. 7 The respondent filed the notice of motion seeking documents set out in subparagraphs 2(a) and (b) of the notice of motion which was listed for hearing today. In that notice of motion, in order 3, the respondent sought an order that it, that is the respondent, pay the costs and expenses of the parent in complying with the third party discovery order requested in the notice of motion. It also, in order 4, accepted that the costs of the applicant and the respondent of the notice of motion would be costs in the cause. Written submissions were filed by the parties, which I have read. 8 When the matter was called on for hearing today, the respondent, through its counsel, indicated that one of the concerns which had been expressed by the solicitors for the applicant and for the parent, they being the same solicitors, was that a more appropriate procedural vehicle for the disposition of the problem was a subpoena, rather than an order for third party discovery, and that this had led to the agreement of the parties that such debate as there was between them should be resolved by reference to the terms of a draft subpoena which was handed up to me. I am content to deal with the matter on the basis of the subpoena. 9 Before me, represented by Mr Pike, are I take it both the applicant and the parent. The applicant has an entitlement to be present at this debate about the subpoena and the parent is present, having been served with the notice of motion, and it opposes the terms of the draft subpoena, though it does not oppose the terms of a subpoena as reflected in the four numbered paragraphs in a letter of Gilbert & Tobin to Clayton Utz, dated 7 December 2001. 10 I think it appropriate if I make some comments about the form of the procedure, given that there have been submissions by the parties on this. 11 Order 15A rule 8 has been said, in some cases, to be an order of an exceptional nature. It has also been said on occasions that the exercise of the power should be made only with caution. I refer in particular to, in the latter respect, a decision of Keviris Pty Limited v Capitol Building Society, (unreported, Supreme Court of Victoria, 9 February 1988). In the former respect, that is, the exceptional nature of the order, I refer to what Burchett J said in Richardson Pacific v Fielding (1990) 26 FCR 188, which decision has been followed in a number of decisions of this Court, eg McLernon Group Insurances v Biron Corporation [1995] FCA 500 and Re La Rosa [1992] FCA 797. I do not disagree with what Burchett J said to the extent that his Honour was saying that the imposition upon third parties of the rigour, discipline and obligation of discovery should be a matter not taken lightly and will not regularly occur. I think that the fact that it will not regularly occur is something to be understood and expected from an appreciation of the content of the obligation as provided by the rule. I do not understand anything his Honour said or anything said in any other judgment in this Court to engraft on to Order 15A rule 8, any qualification not present in the words of the rule. I appreciate that it is not a statute, rather it is a rule of court. However, it is a rule of Court made under statutory power. Provisions conferring judicial power upon courts should be construed liberally, eschewing limitations and implications not found in the words. There are too many High Court decisions of the last ten years to list exhaustively in support of that proposition. I only refer to, by way of example, The Owners of the Ship 'Shin Kobe Maru' v The Empire Shipping Company Inc (1994) 181 CLR 404, 421, PMT Partners Pty Limited (in Liquidation) v Australian National Parks and Wildlife Services (1995) 184 CLR 301, 313 and 316, Knight v F.P. Special Assets (1992) 174 CLR 178, 205, Eastman v R [2000] HCA 29, 81, Australian Memory v Brien [2000] HCA 30, 17, Abebe v the Commonwealth (1999) 197 CLR 510, 586-87, and Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 at 201. 12 That principle does not lead to the conclusion that orders under Order 15A rule 8 would be made as a matter of course, but it does indicate that when phrases seeking to elucidate such as 'exceptional' or 'with caution' are used, they are not to be taken as fettering an otherwise clearly expressed power under Order 15A rule 8, or engrafting on it a requirement not found in the words, when the circumstances for its exercise are called for. 13 In these proceedings the parent company, on the evidence, had the power, and on at least one occasion was prepared to exercise the power, of participation in the decision-making process the subject of the litigation. I would have expected, subject to questions of oppression and the like, commercial litigation to have been disposed of in these circumstances on the basis that if there was a real and not fanciful suggestion that the parent company was involved in the decision-making process and it had documents which the subsidiary did not, that the parent company would produce those documents without the need for formality. 14 That may be qualified by the details of ownership of the subsidiary and the degree of arm's length distance between the operations of the two. I do not have those matters in front of me. As a matter of general practice, the efficient and cost effective disposition of commercial litigation between parties who are members of a wider group will in the ordinary course require common sense and co-operation between the parties themselves such that documents that are in the custody possession, custody or control of a parent, should ordinarily be made available if they bear upon the suit which that parent causes its subsidiary to bring, if they are requested in a responsible fashion. 15 There may be a good reason for this not to occur in some cases but, in circumstances where cooperation is not forthcoming and in circumstances where there is a real conformity between the commercial interests and aims of a parent company and its subsidiary, I do not see any difficulty in the application of Order 15A rule 8 to such circumstances. 16 The parties do not wish this matter disposed of on the basis of Order 15A rule 8. However, my views about it affect the way I approach the subpoena. No oppression is claimed in the terms of a subpoena sought by the respondent. The documents are not said to be irrelevant. A more narrowly drafted suggestion is put forward by the applicant and its parent. In the absence of any compelling reason why the drafting put forward by the respondent is inappropriate by way of causing unnecessary and inappropriate expense or dislocation I see no reason to narrow the scope of the subpoena in accordance with the terms set out in paragraphs 1 to 4 in the letter of Gilbert and Tobin of 7 December. 17 Therefore I grant leave to the respondent to serve upon Evans Deakin Industries Proprietary Limited a subpoena in the form of the draft handed to me and before me on the argument today. I do not need to make an order about the costs and expenses of the recipient of the subpoena in the light of the rules. 18 I order the applicant through its officers or solicitors to take such steps as are reasonably necessary to assist Evans Deakin Industries Proprietary Limited, that is the parent, to ascertain and produce the documents called for by the subpoena. Any legal costs of the applicant in complying with that order are to be its costs in the cause. 19 As to the motion before me today, I dismiss the motion in the terms that it was sought. I have made the order about the subpoena and the costs of the applicant and the costs of the respondent of this notice of motion are to be costs in the cause. The parent should pay its own costs (if any) of the motion. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop . Associate: Dated: 12 December 2001 Counsel for the Applicant (Respondent on motion): Mr I R Pike Solicitor for the Applicant (Respondent on motion): Gilbert and Tobin, Sydney Counsel for the Respondent (Applicant on motion): Mr I M Jackman Solicitor for the Respondent (Applicant on motion): Clayton Utz, Brisbane Date of Hearing: 10 December 2001 Date of Judgment: 10 December 2001	3,133
federal_court_of_australia:fca/single/2010/2010fca1423	decision	commonwealth	federal_court_of_australia	text/html	2010-12-17 00:00:00	Wenkart v Pantzer (No 3) [2010] FCA 1423	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2010/2010fca1423	2024-09-13T22:49:30.561831+10:00	FEDERAL COURT OF AUSTRALIA Wenkart v Pantzer (No 3) [2010] FCA 1423 Citation: Wenkart v Pantzer (No 3) [2010] FCA 1423 Parties: THOMAS RICHARD WENKART v WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART AND HAPDAY HOLDINGS PTY LTD (ACN 001 185 253), MACQAURIE HEALTH CORPORATION LIMITED (ACN 003 531 860) AND THROVENA PTY LIMITED (ACN 001 738 763); WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART v THOMAS RICHARD WENKART AND HAPDAY HOLDINGS PTY LTD (ACN 001 185 253) File number: NSD 7051 of 2002 Judge: FLICK J Date of judgment: 17 December 2010 Catchwords: PRACTICE AND PROCEDURE – costs– fixing costs in a "gross sum" – desirability of making an order – absence of evidence as to the "gross sum" to be ordered Legislation: Federal Court Rules (Cth), Order 62 rr 4(2)(c), 46 Cases cited: Australian Competition and Consumer Commission v Boral Ltd [2007] FCA 14, cited Beach Petroleum NL v Johnson (1995) 57 FCR 119, considered Eat Media Pty Ltd v Mulready Media Pty Ltd [2010] FCA 392, 267 ALR 573, cited Playcorp Group of Companies Pty Ltd v Peter Bodum A/S (No 2) [2010] FCA 455, cited Seven Network Ltd v News Ltd [2007] FCA 2059, considered Sony Entertainment (Australia) Pty Ltd v Smith [2005] FCA 228, 215 ALR 788, cited Wenkart v Pantzer (No 8) [2004] FCA 280, cited In the matter of Thomas Richard Wenkart, Wenkart v Pantzer [2007] FCA 1589, cited Wenkart v Pantzer [2009] FCA 1086, cited Wenkart v Pantzer [2010] FCA 866, 269 ALR 641, cited Wenkart v Pantzer (No 2) [2010] FCA 1408, cited Date of hearing: 18 and 23 November 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 36 Counsel for the Applicant/ First Cross-Respondent: Mr M Green Solicitor for the Applicant/ First Cross-Respondent: Bruce Stewart Dimarco Counsel for the First Respondent/ Cross-Claimant: Ms E A Collins SC Solicitor for the First Respondent/ Cross-Claimant: Bartier Perry Solicitor for the Second Respondents/ Second Cross-Respondent: Mr Pembroke-Birss of S Moran & Co, Solicitors IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 7051 of 2002 BETWEEN: THOMAS RICHARD WENKART Applicant AND: WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART First Respondent HAPDAY HOLDINGS PTY LTD (ACN 001 185 253), MACQUARIE HEALTH CORPORATION LIMITED (ACN 003 531 860) AND THROVENA PTY LIMITED (ACN 001 738 763) Second Respondents BETWEEN: WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART Cross-Claimant AND: THOMAS RICHARD WENKART First Cross-Respondent HAPDAY HOLDINGS PTY LTD (ACN 001 185 253) Second Cross-Respondent JUDGE: FLICK J DATE OF ORDER: 17 DECEMBER 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Notice of Motion as filed by Mr Pantzer on 23 November 2010 is dismissed. 2. The Notice of Motion as filed by Dr Wenkart on 23 November 2010 is dismissed. 3. The proceeding is stood over to 24 December 2010 at 9.30 am with a view to then making orders to finalise this proceeding. 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 NSW DISTRICT REGISTRY GENERAL DIVISION NSD 7051 of 2002 BETWEEN: THOMAS RICHARD WENKART Applicant AND: WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART First Respondent HAPDAY HOLDINGS PTY LTD (ACN 001 185 253), MACQUARIE HEALTH CORPORATION LIMITED (ACN 003 531 860) AND THROVENA PTY LIMITED (ACN 001 738 763) Second Respondents BETWEEN: WARREN PANTZER AS FORMER TRUSTEE OF THE ESTATE OF THOMAS RICHARD WENKART Cross-Claimant AND: THOMAS RICHARD WENKART First Cross-Respondent HAPDAY HOLDINGS PTY LTD (ACN 001 185 253) Second Cross-Respondent JUDGE: FLICK J DATE: 17 DECEMBER 2010 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The background facts relevant to this long-running proceeding have been previously recounted: Wenkart v Pantzer (No 8) [2004] FCA 280 at [2] to [37] per Lindgren J; In the matter of Thomas Richard Wenkart, Wenkart v Pantzer [2007] FCA 1589 at [1] to [35] per Branson J; Wenkart v Pantzer [2009] FCA 1086 at [1] to [10]. They need not now be repeated. 2 Presently before the Court are two Notices of Motion both filed in Court on 23 November 2010 and heard instanter. 3 One Motion is that filed by Mr Pantzer seeking an order for costs in several proceedings (including that which is presently before the Court) to be paid in a gross sum of $472,077.38 pursuant to Order 62 r 4(2)(c) of the Federal Court Rules; the other is a Motion filed by Dr Wenkart seeking an order that Mr Pantzer pay his costs up to and including 29 May 2009 or, alternatively, an order that Mr Pantzer pay costs up to and including 10 January 2005. The precise amount claimed by Mr Pantzer was later revised. 4 These Motions now need to be resolved in order to resolve the one matter left unresolved by Wenkart v Pantzer (No 2) [2010] FCA 1408. 5 Of present concern is the conclusion previously reached that Dr Wenkart should be ordered to pay 90% of the costs of Mr Pantzer: Wenkart v Pantzer [2010] FCA 866 at [142] and [155], 269 ALR 641 at 671 and 672. That judgment: (i) left unstated (or so it was contended) whether such costs should be taxed on a solicitor/client basis or on a party/party basis; and (ii) left open for future resolution the appropriateness of making an order pursuant to Order 62 r 4(2)(c). 6 It is concluded that costs are to be taxed on the usual party/party basis and that it is not possible to make an order for costs in a "gross sum". It is also concluded that Dr Wenkart's Motion is to be dismissed. Costs — Party/Party or Solicitor/Client? 7 Rejected is a submission advanced on behalf of Mr Pantzer that he should recover 90% of his costs taxed on a solicitor/client basis. 8 That submission was apparently founded upon a statement previously made that the "sole function now being discharged is to attempt to bring together the various conclusions reached by others and to make orders to give effect to those conclusions": [2010] FCA 866 at [115]. That statement was made after setting forth observations made by Branson J in Wenkart v Pantzer [2007] FCA 1589 where Her Honour had also said: [47] In the taxation judgment at first instance I placed weight on the nature of certain costs orders against Dr Wenkart sought and obtained by Mr Pantzer in this Court. Order 62 r 4(1) of the Federal Court Rules provides that, subject to that Order, where under any order of the Court costs are to be paid to any person, that person is entitled to his costs to be taxed. Costs "to be taxed" in the context of O 62 r 4 means costs taxed in accordance with O 62 (O 62 r 1). Unless the order for costs provides otherwise that will ordinarily mean costs on a party/party basis. By contrast, costs recoverable under the Act are recoverable on a solicitor/client basis. In a bankruptcy proceeding the usual costs order is that the successful party's costs "be taxed and paid in accordance with the Act". Nonetheless, the Court has a wide discretion as to the appropriate costs orders to be made even in a bankruptcy proceeding (Labocus Precious Metals Pty Ltd v Thomas [2007] FCA 1154 at [87]). In a particular bankruptcy proceeding the Court might, for example, prove willing to allow a trustee his or her legal costs to be taxed under the Federal Court Rules on a party/party basis but not his or her costs paid in accordance with the Act. This observation, it may be noted, was not expressly extracted in the August 2010 judgment. 9 The foundation for the submission advanced on behalf of Mr Pantzer, with respect, is misplaced. A statement as to the function sought to be discharged says nothing as to the basis upon which a final order for costs should be made. 10 Moreover, it is not considered that the August 2010 judgment left the question as to the basis upon which costs were to be recoverable in any doubt. After assessing the percentage of costs that should be recovered at 90% it was there further concluded: [152] In assessing that percentage, consideration has been given to whether any separate order should be made for costs on an indemnity basis for any part or parts of the proceeding. Ultimately it is not considered that any such order should be made. The 90% assessment is a fair and proper accommodation of all of the competing considerations relevant to the exercise of the discretion. It may well have been preferable to have further expressly stated that Mr Pantzer should be entitled to an order for the payment of 90% of his costs and that such costs were to be assessed and taxed on a party/party basis. But the intent was clear. No other basis was then either stated or contemplated. Such costs as should be paid are to be paid on what is sometimes referred to as the usual basis, namely costs taxed on a party/party basis. Order 62 11 The principles relevant to the exercise of such powers as are conferred by Order 62 were not in issue – but those provisions and some of the relevant principles should be briefly noted. 12 Order 62 r 4 of the Federal Court Rules provides as follows: Taxed costs and other provisions (1) Subject to this Order, where by or under these Rules or any order of the Court costs are to be paid to any person, that person shall be entitled to his taxed costs. (2) Where the Court orders that costs be paid to any person, the Court may further order that as to the whole or any part of the costs specified in the order, instead of taxed costs, that person shall be entitled to: (a) a proportion specified in the order of the taxed costs; or (b) the taxed costs from or up to a stage of the proceedings specified in the order; or (c) a gross sum specified in the order; or (d) a sum in respect of costs to be ascertained in such manner as the Court may direct. (3) The Court may make an order under subrule (2) at any time, whether or not an order that costs be paid to a person has previously been made or entered. The power, it may be noted, may be exercised "at any time" and may be exercised "whether or not an order that costs be paid to a person has previously been made or entered": see Eat Media Pty Ltd v Mulready Media Pty Ltd [2010] FCA 392, 267 ALR 573. 13 The purpose of the rule is to "avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation": Beach Petroleum NL v Johnson (1995) 57 FCR 119. There, von Doussa J made the following observations in respect to this rule: Pursuant to O 62, r 3(1) the Court may exercise its powers and discretions as to costs at any stage of the proceedings, or after the conclusion of the proceedings. In my opinion the Court has power to make a gross sum order at this stage notwithstanding that costs orders were earlier made which envisaged taxation in the ordinary way. … The purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation. The power is appropriate to be used in complex cases. An order that costs be assessed as a gross sum does not envisage that any process similar to that involved in taxation should take place, but the power must be exercised judicially and after giving the parties an adequate opportunity to make submissions on the matter … (1995) 57 FCR 119 at 120. His Honour later observed: I agree, however … that before exercising the power to fix a gross fee, the Court should be confident that the approach taken to estimate costs is logical, fair and reasonable. On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary "fail safe" discount on the cost estimates submitted to the Court: Leary v Leary at 76; 265. (1995) 57 FCR 119 at 123. See also: Sony Entertainment (Australia) Pty Ltd v Smith [2005] FCA 228 at [189], 215 ALR 788 at 812 per Jacobson J; Playcorp Group of Companies Pty Ltd v Peter Bodum A/S (No 2) [2010] FCA 455 at [1] to [8] per Middleton J. 14 In Seven Network Ltd v News Ltd [2007] FCA 2059, Sackville J has further usefully summarised the applicable principles as follows: PRINCIPLES [25] The authorities establish a number of principles applicable to a claim for a gross sum costs order to be made pursuant to FCR, O 62 r 4(2)(c): (i) The purpose of the subrule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: …. (ii) An order that costs be assessed as a gross sum does not envisage that any process similar to that involved in taxation should take place. On the contrary, the Court applies a much broader brush than would be used on a taxation of costs pursuant to O 62: … (iii) The Court should be confident that the approach taken to the estimate of costs is logical, fair and reasonable. The Court should be astute to avoid both overestimating the recoverable costs and underestimating the appropriate amount, for example by applying an arbitrary discount to the amounts claimed: … (iv) Although the power to assess a gross sum for costs involves the exercise of a discretion, it is necessary to bear in mind fundamental principles applicable to an assessment of costs on a party and party basis. These include the principles contained in O 62 r 19 (embodying the 'necessary or proper' test) and those stated in Stanley v Phillips (1966) 115 CLR 470, at 478, per Barwick CJ (on a party and party taxation the emphasis is upon obtaining adequate representation to enable justice to be done, not upon the propriety of steps taken to ensure maximum success in the cause): … (v) Although the methodology permitted by O 62 r 4(2)(c) initially involves a broader approach than on a normal taxation, the provisions of O 62 and Sch 2 provide assistance in fixing an appropriate gross sum: … [26] The last point should be developed a little further. FCR, O 62 r 4(2)(c) authorises the Court to order that, instead of taxed costs, the successful party should be entitled to a gross sum costs order. The subrule contains no express direction that the Court is to apply the detailed criteria that are laid down in O 62 and Schedule 2. On the contrary, the subrule apparently leaves the question of quantification at large. [27] Rule 4(2)(c) is, however, located within an Order that makes detailed provision for the assessment of party and party costs. It would be extremely odd if the more expeditious procedure contemplated by r 4(2)(c) resulted in either a successful or an unsuccessful party being exposed to an assessment of costs which simply ignores or overrides the basic principles applicable to a taxation of costs. I accept Mr Sheahan's submission that it would be an error for a Court to use its power under r 4(2)(c) to assess a gross sum clearly higher than that which would be allowed on a taxation of costs. His Honour also went on to observe that "[c]are should be taken, however, to ensure that the process does not take on too many of the characteristics of a taxation of costs": [2007] FCA 2059 at [30]. 15 Reference should also be made to Order 62 r 46 which provides for the assessment procedures to be applied. The DESIRABILITY of an Order 16 Leaving aside questions as to whether it is possible to make such an order given the state of the evidence, factors which would otherwise warrant the making of an order for costs in a "gross sum" in the present proceeding include: the desirability of bringing all issues dividing the parties in this long-running proceeding to a final conclusion; the desirability of avoiding what may be potentially a complex and protracted taxation process; and the desirability of avoiding what may well prove to be yet a further source of disagreement between these litigants and the seemingly inevitable incurring of further legal costs. 17 Notwithstanding the considerable desirability of making an order pursuant to Order 62 r 4(2)(c) and the "wide discretion" of the Court in making costs orders, it is regrettably concluded that there is not a sufficiently certain evidential basis upon which such an order could be made if costs are to be assessed on a party/party basis. A Gross Sum? — The Evidence 18 Counsel on behalf of Dr Wenkart: opposed the making of an order for costs in a "gross sum"; and maintained that the state of the evidence relied upon by Mr Pantzer was such that even if an order were to be made it was not possible to properly assess the amount that should be ordered. 19 The order as initially sought by Mr Pantzer in his Motion that costs be fixed in a gross sum of $472,077.38 was supported by evidence of a Legal Costs Consultant, Mr Dickinson. Two affidavits of Mr Creais were also relied upon. The evidence relied upon by Dr Wenkart was two affidavits of Mr Gorczyca. 20 A number of objections were taken to the evidence of Mr Dickinson ranging from objections founded upon s 69(3) of the Evidence Act 1995 (Cth) through to objections founded upon the proposition that Mr Dickinson had expressed opinions without disclosing the basis upon which those conclusions had been reached. Those objections were noted and a decision as to the fate of those objections was reserved. There was little merit in resolving the objections in advance of any cross-examination as such cross-examination as thereafter took place was within a limited compass. The objections, it may be noted, were not without some merit. Objection was also taken to some parts of Mr Creais' affidavits and Mr Gorczyca's affidavits. But it is ultimately concluded that it is unnecessary to resolve any of the objections. 21 The quantum of the costs relevantly incurred by Mr Pantzer was varied from time to time but at one stage was said to be $600,399.24. The task entrusted to Mr Dickinson, and the task he discharged, was "to provide an opinion on the likely quantum of party party costs and disbursements recoverable by [Mr Pantzer] as against [Dr Wenkart], taxed on a solicitor client basis, for work performed from 22 October 2003 to the present". Adopting that approach, he maintained that the costs that would be recoverable would be $472,077.38. 22 Mr Dickinson expressed no opinion as to the quantum of costs that would be recoverable if costs were to be taxed on a party/party basis as opposed to costs recoverable if taxed on a solicitor/client basis. The difference between the two approaches was nevertheless briefly touched upon by Mr Dickinson in his first affidavit when he said: [23] The test to be applied on a solicitor client taxation is more generous than a taxation conducted on an ordinary party party basis, particularly as the costs are not constrained by the Federal Court scale of costs. … He continued on to refer expressly to the following observations of His Honour Justice Finkelstein in Australian Competition and Consumer Commission v Boral Ltd [2007] FCA 14: [12] More usually an order for costs to be taxed on a solicitor/client basis is understood to mean that the person should recover that which he ought properly pay to his solicitor: Goodwin v Storrar [1947] 1 KB 457 at 458. The purpose of the order is to allow "as many of the charges which [the party] would have been compelled to pay to his own solicitor for costs of the action as fair justice to the other party will permit": Smith v Smith [1906] VLR 78 at 80, citing from Daniels Chancery Practice. Oliver, Law of Costs (1960) p 1 states this is substantially "a party and party taxation on a more generous scale". In providing the opinion that he did, Mr Dickinson set forth the methodology he pursued, including the need to apply "a global percentage reduction to the profit costs and disbursements to reflect a party party taxation determined on a solicitor client basis". 23 But the absence of evidence as to the amount that would in all likelihood be recoverable if costs were taxed on a party/party basis makes it difficult to assess the amount of any order fixing costs in a "gross sum". 24 Based upon his experience, Mr Gorczyca, the solicitor for Dr Wenkart, maintained that "the percentage of legal costs allowed to a receiving party … when payable on a party/party basis is approximately 50% to 80% of those costs". If costs are payable upon an indemnity basis, he said that the percentage allowed to a receiving party was approximately 80%. A separate review undertaken by Mr Gorczyca of costs claimed from 5 March 2002 until 13 April 2003 disclosed that the costs claimed were $29,556.50. The amount assessed for these costs was about 80% of the amount claimed. 25 The amount of $472,077.38, it may be noted, is about 78% of the total costs of $600,399.24. 26 Leaving aside such adjustments as may emerge by reason of differences in recovery (for example) of profit costs as opposed to disbursements, it would be tempting to fix a "gross sum" of costs that may be recoverable by Mr Pantzer as a percentage (for example) of 70%. But whether that percentage would be any more reliable than 60% or 80% would be open to question. All that could be said is that a percentage so fixed would be a percentage within the range of costs envisaged by Mr Gorczyca and may be less "generous" than the figure assessed by Mr Dickinson. 27 Given the amount initially claimed of $600,399.24 (which was later revised to be $559,618.32), it is stating the obvious to acknowledge that any one percentage figure rather than another has significant cost implications. If 60% of the initial amount was the appropriate percentage, the sum would be about $360,240; if the percentage was 70%, the sum would be about $420,280. 28 Although the power conferred by Order 62 r 4(2)(c) may be particularly suited to complex litigation (cf Sony Entertainment (Australia) Ltd v Smith), in the present proceeding the difficulty of attempting any assessment, without the benefit of more focussed evidence, is peculiarly exacerbated by the course which the proceeding has taken over the best part of this last decade. For the Court to fix any percentage would have the potential to cause injustice to Mr Pantzer by fixing a "fail safe" discount and may also occasion prejudice to Dr Wenkart by over-estimating the costs that may be recoverable: Beach Petroleum NL v Johnson. 29 It is regrettably concluded that any inclination for the Court itself to fix the percentage of costs that may be recoverable if taxed on a party/party basis would be an uncertain process guided by only the most generally expressed opinions as to costs that may be recoverable. The fact that a number of requests were made for such evidence to be adduced on behalf of Mr Pantzer highlights why the Court should now proceed cautiously. Leave was given when Mr Dickinson was called to adduce supplementary oral evidence. But no such evidence was forthcoming. In the absence of Mr Dickinson venturing into a process of quantifying costs recoverable if taxed on a party/party basis, it would be unwise for the Court to attempt to do so. 30 Notwithstanding the breadth of the discretion conferred upon the Court when fixing costs in a "gross sum" pursuant to Order 62 r 4(2)(c) and the desirability of doing so in the present proceeding, it is concluded that there is an absence of a sufficiently certain evidential basis to assess those costs in any particular amount. Conclusions 31 The Notice of Motion as filed on behalf of Mr Pantzer seeking an order for costs in a fixed sum is to be dismissed. 32 There is no merit in the Notice of Motion as filed on behalf of Dr Wenkart. It had previously been decided that Mr Pantzer was to have 90% of his costs. The Motion sought to re-agitate that conclusion. But the filing of the Motion preserved the position of Dr Wenkart should there be an appeal. 33 The matter of substance before the Court was the order sought by Mr Pantzer that costs be fixed in a "gross sum." He has been unsuccessful. But there should be no order for costs either in favour of Mr Pantzer or Dr Wenkart with respect to the matters canvassed on 28 October, 18 November or 23 November 2010. Although Mr Pantzer was substantially successful in the matters dealt with in the judgment delivered yesterday (Wenkart v Pantzer (No 2) [2010] FCA 1408), he has been unsuccessful in now obtaining costs fixed in a "gross sum". There should be no order as to costs in respect to the issues canvassed on these dates. 34 Other than the order now made dismissing these two Motions, the order that should now be made to give effect to the issues as to costs resolved in Wenkart v Pantzer [2010] FCA 866 is that Mr Pantzer should have an order for costs in his favour in the present proceeding, those costs to be 90% of the costs incurred as taxed on a party/party basis. Had an order been made pursuant to Order 62 r 4(2)(c), it may have been appropriate to consider whether any such order should also embrace any orders as to costs previously made, including (if possible) costs orders in the other proceedings referred to in his Notice of Motion filed on 23 November 2010. But such an order is not to be made. Existing orders as to costs are not to be varied. It should be noted that that Motion includes an incorrect reference to NSD 2549/2005 which should be NSD 2459/2005. 35 It should also be noted in respect to costs orders that should now be made that Hapday Holdings Pty Ltd ("Hapday Holdings") filed an Outline of Submissions on 27 October 2010 surprisingly seeking an order that Mr Pantzer pay Hapday Holdings' costs "on an indemnity basis, as agreed or taxed". No such order should be made. Nor should any order be made that Hapday Holdings or Macquarie Health Corporation Limited or Throvena Pty Limited (jointly referred to from time to time as the Second Respondents) be entitled to recover their costs, or that any costs order should be made against these entities. These entities should bear their own costs. ORDERS 36 The Orders of the Court are: 1. The Notice of Motion as filed by Mr Pantzer on 23 November 2010 is dismissed. 2. The Notice of Motion as filed by Dr Wenkart on 23 November 2010 is dismissed. 3. The proceeding is stood over to 24 December 2010 at 9.30 am with a view to then making orders to finalise this proceeding. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 17 December 2010	6,555
federal_court_of_australia:fca/full/2023/2023fcafc0167	decision	commonwealth	federal_court_of_australia	text/html	2023-10-19 00:00:00	Tapiki v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCAFC 167	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2023/2023fcafc0167	2024-09-13T22:49:30.802232+10:00	Federal Court of Australia Tapiki v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCAFC 167 Application for judicial review from: Tapiki and Minister for Immigration, Citizenship and Multicultural Affairs [2021] AATA 1228 File number: WAD 65 of 2023 Judgment of: KATZMANN, SARAH C DERRINGTON AND KENNETT JJ Date of judgment: 19 October 2023 Catchwords: MIGRATION – Application for writ of habeas corpus and declaration that item 4 of Sch 1 to Migration Amendment (Aggregate Sentences) Act 2023 (Cth) (Amending Act) is invalid – where previous Full Court judgment held cancellation of applicant's visa invalid as applicant's aggregate sentence of 12 months' imprisonment not within scope of s 501(7)(c) of Migration Act 1958 (Cth) (Act) – where Act subsequently amended by Amending Act with retrospective effect to treat aggregate sentence as equivalent to sentence for single offence for purposes of s 501(7)(c) CONSTITUTIONAL LAW – Whether impugned provisions of Amending Act constitute usurpation of, or interference with, Commonwealth judicial power – whether Amending Act impermissibly purports to "reverse" Full Court judgment – whether Amending Act has effect of withdrawing or fettering entrenched jurisdiction of High Court under s 75(iii) and (v) of Constitution CONSTITUTIONAL LAW – Whether Amending Act extinguishes a cause of action for false imprisonment such that it effects an acquisition of property other than on just terms contrary to s 51(xxxi) of Constitution – where s 3B of Act creates right to receive compensation where "this Act" would otherwise not be valid as a result of an acquisition of property – whether acquisition of property resulting from Amending Act "results" from "this Act" Legislation: Constitution ss 51(xxxi), 75 Acts Interpretation Act 1901 (Cth) ss 11B, 15 Administrative Appeals Tribunal Act 1975 (Cth) Judiciary Act 1903 (Cth) ss 78B, 39B(1A)(c) Migration Act 1958 (Cth) ss 3B, 5, 189, 500, 501(3A), 501(7), 501CA Migration Amendment (Aggregate Sentences) Act 2023 (Cth) s 3, Sch 1, items 1-4 Migration Legislation Amendment Act (No 1) 2008 (Cth)) Cases cited: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 AIO21 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC 114; 294 FCR 80 Australian Building Construction Employees' and Builders Labourers' Federation v Commonwealth (1986) 161 CLR 88 Australian Education Union v General Manager of Fair Work Australia [2012] HCA 19; 246 CLR 117 Australian Education Union v Lawler [2008] FCAFC 135; 169 FCR 327 Bainbridge v Minister for Immigration and Citizenship [2010] FCAFC 2; 181 FCR 569 BC v Minister for Immigration and Multicultural Affairs [2001] FCA 1669; 67 ALD 60 Brisbane City Council v Amos [2019] HCA 27; 266 CLR 593 Croome v Tasmania (1997) 191 CLR 119 Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2013] NSWCA 250; 85 NSWLR 335 Duncan v Independent Commission Against Corruption [2015] HCA 32; 256 CLR 83 Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 Haskins v Commonwealth [2011] HCA 28; 244 CLR 22 Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1 JZQQ v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCAFC 168 Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 Miller v French (2000) 530 US 327 Pearson v Minister for Home Affairs [2023] FCAFC 203; 295 FCR 117 Plaut v Spendthrift Farm Inc (1995) 514 US 211 Re Ruddock; Ex parte LX [2003] FCA 561 Sales v Minister for Immigration and Citizenship [2008] FCAFC 132; 171 FCR 56 Somanader v Minister for Immigration and Multicultural Affairs [2000] FCA 1192; 178 ALR 677 Tapiki v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCAFC 10 Tapiki v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCA 391 Thompson v Judge Byrne [1999] HCA 16; 196 CLR 141 Tomlinson v Ramsay Food Processing Pty Ltd [2015] HCA 28; 256 CLR 507 Division: General Division Registry: Western Australia National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 65 Date of hearing: 24 August 2023 Counsel for the Applicant: MGS Crowley Solicitor for the Applicant: William Gerard Legal Pty Ltd Counsel for the Respondent: G Hill SC with T Wood Solicitor for the Respondent: Australian Government Solicitor ORDERS WAD 65 of 2023 BETWEEN: KINGSTON TAPIKI Applicant AND: MINISTER FOR IMMIGRATION, CITIZENSHIP AND MULTICULTURAL AFFAIRS Respondent order made by: KATZMANN, SARAH C DERRINGTON and KENNETT JJ DATE OF ORDER: 19 October 2023 THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the respondent's costs as agreed or assessed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: Introduction 1 The applicant, a citizen of New Zealand, arrived in Australia in April 1995 when he was 18 months old. He has not acquired Australian citizenship. He held various visas issued under the Migration Act 1958 (Cth) (the Act) until, on 29 October 2020, a decision was made to cancel the visa that he then held. 2 That decision (the cancellation decision) was made by a delegate of the respondent (the Minister) under s 501(3A) of the Act, which provides as follows: (3A) The Minister must cancel a visa that has been granted to a person if: (a) the Minister is satisfied that the person does not pass the character test because of the operation of: (i) paragraph (6)(a) (substantial criminal record), on the basis of paragraph (7)(a), (b) or (c); or (ii) paragraph (6)(e) (sexually based offences involving a child); and (b) the person is serving a sentence of imprisonment, on a full-time basis in a custodial institution, for an offence against a law of the Commonwealth, a State or a Territory. 3 The applicant was at that time serving a custodial sentence of the kind mentioned in s 501(3A)(b). The delegate was satisfied that the applicant did not pass the character test because he had a "substantial criminal record" for the reason set out in s 501(7)(c): the person has been sentenced to a term of imprisonment of 12 months or more. 4 This was for the reason that, on 30 September 2020, the applicant had been convicted and sentenced in the Local Court of New South Wales to an aggregate term of 12 months imprisonment for offences of affray and assault (and an appeal from that judgment to the District Court of New South Wales had been dismissed). 5 The applicant made representations seeking that the cancellation decision be revoked under s 501CA of the Act. Section 501CA applies where a decision has been made under s 501(3A) to cancel a visa: s 501CA(1). Subsection (3) requires the Minister to give notice of that decision to the visa holder and invite representations "about revocation of the original decision". Subsection (4) provides that the Minister may revoke the original decision if such representations are made and if: (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. 6 A delegate considered the applicant's representations and decided, on 15 February 2021, not to exercise the power in s 501CA (the non-revocation decision). The applicant applied under s 500(1)(ba) for review of that decision by the Administrative Appeals Tribunal (the Tribunal). On 11 May 2021 the Tribunal affirmed the non-revocation decision (the Tribunal decision). 7 The applicant applied for judicial review of the Tribunal decision. His application was dismissed by the Federal Court on 14 April 2022: [2022] FCA 391 (Bromwich J). He appealed to the Full Court. 8 The appeal from the judgment of Bromwich J (the appeal) came before the Full Court (Perry, Derrington and Thawley JJ) on 16 August 2022. The Full Court also heard a separate proceeding (commenced in the Federal Circuit and Family Court (Division 2) (the Circuit Court) and transferred to the Federal Court) (the transferred proceeding) which sought relief directed at the cancellation decision. In both proceedings, the applicant (who had now acquired legal representation) ran a new point: that an aggregate sentence of 12 months' imprisonment does not involve being "sentenced to a term of imprisonment of 12 months or more" within the meaning of s 501(7)(c) (the aggregate sentence point). 9 While the Full Court's judgment was reserved, a differently constituted Full Court in Pearson v Minister for Home Affairs [2022] FCAFC 203; 295 FCR 177 (Allsop CJ, Rangiah and Sarah C Derrington JJ) (Pearson) accepted the aggregate sentence point. Pearson was handed down on 22 December 2022. The applicant was released from immigration detention the following day. 10 The Full Court delivered judgment in both of the applicant's proceedings on 14 February 2023: [2023] FCAFC 10 (Tapiki). The Minister did not attempt to distinguish Pearson and submitted only formally that it was wrongly decided. Special leave to appeal from Pearson was refused by the High Court on 11 August 2023. The Full Court held that the delegate had no power to make the cancellation decision and that, because the applicant's visa had not been validly cancelled, the power of revocation in s 501CA(4) never arose. The first of these conclusions led, in the transferred proceeding, to declarations that the cancellation decision was invalid and that the applicant continued to hold the visa that was purportedly cancelled. The second conclusion led, in the appeal, to the appeal being allowed and an order being made for the issue of a writ of certiorari quashing the Tribunal decision. 11 The Tribunal did not have time to work out what, if anything, it should do in the light of these orders. This was because, on 17 February 2023, the Migration Amendment (Aggregate Sentences) Act 2023 (Cth) (the Amending Act) commenced. The Bill for the Amending Act had been introduced in the Senate on 7 February 2023 (while the Full Court was reserved in Tapiki) and the Act received assent on 16 February 2023. The Explanatory Memorandum to the Bill (the EM) makes it clear that it was introduced in response to the reasoning in Pearson. 12 The only operative provision of the Amending Act is s 3, which gives effect to Sch 1 to the Act. It provides: Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. 13 Schedule 1 to the Amending Act does two things. First, item 1 inserts into the Act s 5AB, which provides that a single sentence imposed by a court in respect of two or more offences is to be treated no differently to a sentence imposed in respect of a single offence. That amendment applies prospectively (item 3). Secondly (and relevantly here), it expressly validates things done before its commencement which would otherwise be invalid on the ground that an aggregate sentence had been regarded as equivalent to a sentence for a single offence. (There are also provisions dealing with the effect of validation on review, appeal and other rights which need not be discussed here.) 14 Item 4 of Sch 1 is as follows: 4 Validation of things done before commencement (1) This item applies if a thing done, or purportedly done, before commencement under a law, or provision of a law, covered by subitem (2) would, apart from this item, be wholly or partly invalid only because a sentence, taken into account in doing, or purporting to do, the thing, was imposed in respect of 2 or more offences. (2) The laws and provisions are as follows: (a) the Migration Act 1958; (b) any legislative instrument made under that Act; … Note: The things referred to in subitem (1) include (for example) the following: (a) deciding under section 501, 501A, 501B or 501BA of the Migration Act 1958 to refuse to grant a visa to a person, or to cancel a visa granted to a person; (b) accessing information under Division 2 of Part 4A of that Act, or disclosing information under Division 3 of that Part; (c) giving a notice under subsection 501L(1) of that Act; (d) divulging or communicating information as mentioned in subparagraph 503A(1)(a)(ii) or (b)(ii) of that Act. (3) The thing done, or purportedly done, is taken for all purposes to be valid and to have always been valid. (4) To avoid doubt, anything done or purported to have been done by a person that would have been invalid except for subitem (3) is taken for all purposes to be valid and to have always been valid, despite any effect that may have on the accrued rights of any person. (5) For the purposes of applying this item in relation to civil or criminal proceedings, this item applies in relation to: (a) civil and criminal proceedings instituted on or after commencement; and (b) civil and criminal proceedings instituted before commencement, being proceedings that are concluded: (i) before commencement; or (ii) on or after commencement. 15 The concepts of doing "a thing" and purporting to "do a thing" are defined in item 2, in a way that includes making a decision, exercising a power, performing a function and discharging a duty (or purporting to do any of these things). 16 Following the commencement of the Amending Act, on 8 March 2023 the applicant was taken back into immigration detention, where he remains. This proceeding 17 On 21 March 2023, the applicant commenced this proceeding by filing an originating application. The Chief Justice subsequently gave a direction under s 20(1A) of the Federal Court of Australia Act 1976 (Cth) for the original jurisdiction of the Court to be exercised by a Full Court. The applicant now relies on an amended originating application filed on 14 August 2023. By that application, he seeks: (a) a declaration that items 4(3), (4) and (5)(b)(i) of Sch 1 to the Amending Act are invalid; and (b) habeas corpus, and an order that he be released from detention forthwith. 18 The declaration of invalidity is sought on two grounds: (a) that the impugned provisions of item 4 involve a usurpation of or interference with the judicial power of the Commonwealth or purport to exclude the entrenched jurisdiction of the High Court; and (b) that those provisions effect an acquisition of the applicant's right to sue for false imprisonment otherwise than on just terms, contrary to s 51(xxxi) of the Constitution. 19 Notice of the constitutional issues has been served on the Attorneys-General of the Commonwealth and the States under s 78B of the Judiciary Act 1903 (Cth) (the Judiciary Act). 20 As to habeas corpus, the applicant contended in writing that an onus lay on the Minister to prove the lawfulness of his detention. The Minister read an affidavit affirmed on 20 July 2023 by an officer responsible for detaining the applicant, deposing to the officer's belief that the applicant was an "unlawful non-citizen" (as defined by s 5 of the Act) and the basis for that belief. Under s 189 of the Act, reasonable suspicion on the part of an officer that a person is an unlawful non-citizen results in a duty to detain the person. Once that evidence was received (over objection to certain aspects), counsel for the applicant accepted that the claim for habeas would succeed only if the impugned provisions of the Amending Act were held to be invalid. It is therefore not necessary to discuss the evidence in relation to the claim for habeas any further. 21 Meanwhile, no objection has been raised to the competency of the application and no submission made that the Minister is not a proper respondent. We are satisfied that the Court has jurisdiction under s 39B(1A)(c) of the Judiciary Act, and that the Minister is a person to whom the writ might properly be directed if it should issue. The issues that require consideration are therefore limited to the two grounds upon which the impugned provisions in the Amending Act are said to be invalid. 22 The applicant has also recently commenced proceedings seeking damages for false imprisonment. That proceeding is not before us, but its existence has some relevance as mentioned below. Chapter III of the constitution Usurpation of judicial power 23 It is well settled that, while the vesting of the judicial power exclusively in courts by Ch III of the Constitution entails that the Parliament cannot enact a law purporting to "direct the courts as to the manner and outcome of the exercise of their jurisdiction" (Australian Education Union v General Manager of Fair Work Australia [2012] HCA 19; 246 CLR 117 (AEU) at [48] (French CJ, Crennan and Kiefel JJ)), it does not prevent legislation altering the substantive law, including alterations with retrospective effect or affecting rights in issue in pending proceedings (Australian Building Construction Employees' and Builders Labourers' Federation v Commonwealth (1986) 161 CLR 88 at 96). 24 The applicant submits that the impugned provisions in item 4 of Sch 1 are on the wrong side of this line because, in their application to his case, they do more than merely alter substantive rights. Item 4 sets at naught the declarations made and the writ of certiorari granted by the Full Court in Tapiki. This is clear in two respects. (a) First, item 4 validates the cancellation decision. Also, to the extent that the non-revocation decision or the Tribunal decision lacked legal effect because the applicant's visa had not been cancelled, it confers legal effect on them. It thus requires that the rights of the parties arising out of those decisions are taken to be (and to have always been) to the contrary of the rights that were declared by the Full Court and effectuated by certiorari. (b) Secondly, item 4(5)(b)(i) expressly gives the validating provision in subitem (3) effect "in relation to" curial proceedings completed before its enactment. That makes clear the intention of the legislature that the orders made in Tapiki would not stand in the way of the cancellation decision and things done in reliance on it being treated for all purposes as valid. That which was quashed by the Full Court is no longer quashed; and the declarations of right made by the Court no longer bind the parties. 25 The applicant does not embrace the argument, advanced in JZQQ v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCAFC 168 (JZQQ) (which was heard immediately before this proceeding by the Court as presently constituted), that item 4 as a matter of construction has no application to decisions of the Tribunal because those decisions are made under the Administrative Appeals Tribunal Act 1975 (Cth) (which is not one of the Acts referred to in item 4(2)). The construction argument advanced in JZQQ cannot assist the present applicant to the extent that he seeks to retain the benefit of the declarations made in Tapiki that the cancellation decision was invalid and he still holds a visa, since that decision on any view was made under the Migration Act. It is therefore necessary to grapple with the constitutional issues. 26 In its application "in relation to" Tapiki (and upon the substantive rights declared in that case), item 4 is said to "reverse or dissolve" the orders of the Court in that case (to use language adopted in AEU at [48]–[49]). The Tribunal decision, the "legal effect" or "legal consequences" of which "quashed" by the issue of certiorari (Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 580 (Mason CJ, Dawson, Toohey and Gaudron JJ), quoted in AEU at [46]) is, by operation of item 4, legally effective. The rights of the parties, declared by the Court in connection with the cancellation decision, are, by operation of item 4, not as declared. 27 However, in these respects item 4 is no different from the provision that was upheld in AEU. There, particulars of an organisation had been entered on the register of organisations maintained pursuant to the Workplace Relations Act 1996 (Cth) (the WR Act), giving the organisation a particular legal status. A Full Court of this Court (hearing the case on remitter from the High Court) held that the organisation was not qualified to be registered and issued certiorari to quash the registration: Australian Education Union v Lawler [2008] FCAFC 135; 169 FCR 327 (Lawler). The physical register was annotated to that effect. Later legislation (which renamed the WR Act as the Fair Work (Registered Organisations) Act 2009 (Cth) (the FW(RO) Act)) effected a statutory "purging" of membership, which cured the source of the organisation's ineligibility. The impugned provision (s 26A of the FW(RO) Act) provided in effect that, if the purported registration of an organisation before the commencement of the purging provision would be invalid for the reasons given in Lawler, that registration "is taken, for all purposes, to be valid and to have always been valid". The register was then further annotated with a reference to s 26A. 28 The applicant in AEU, contending that s 26A was invalid, had been the successful applicant in Lawler. Its argument relied on s 26A having reversed the effect of the orders in Lawler on the very registration that had been quashed in that case. The argument was rejected in this Court and in the High Court. 29 French CJ, Crennan and Kiefel JJ relevantly held (at [53]): As the Solicitor-General submitted, it would be an impermissible interference with the judicial power of the Commonwealth if the Parliament were to purport to set aside the decision of a court exercising federal jurisdiction. There is no such interference, however, if Parliament enacts legislation which attaches new legal consequences to an act or event which the court had held, on the previous state of the law, not to attract such consequences. That was the substantive operation of s 26A. It changed the rule of law embodied in the statute as construed by the Full Federal Court in Lawler. We agree with Gummow, Hayne and Bell JJ [at [96]] that s 26A assumes that Lawler was correctly decided. To change that rule generally and for the particular case was within the legislative competence of the Commonwealth. (Emphasis added.) 30 The import of that holding is illustrated by two extracts from decisions of the Supreme Court of the United States, which their Honours set out at [51]. In Plaut v Spendthrift Farm Inc (1995) 514 US 211 at 227 (Plaut), Scalia J observed that: [A] judicial decision becomes the final word of the judicial department with regard to the particular case or controversy, and Congress may not declare by retroactive legislation that the law applicable to that very case was something other than what the courts said it was. (Original emphasis.) 31 Their Honours read this statement in the light of what Plaut was actually about (a law directing the reinstatement of proceedings that had been dismissed) and concluded that it did not enunciate a general rule. Their Honours then referred to Miller v French (2000) 530 US 327 at 347, where the Court said: [W]hen Congress changes the law underlying a judgment awarding prospective relief, that relief is no longer enforceable to the extent it is inconsistent with the new law. Although the remedial injunction here is a 'final judgment' for purposes of appeal, it is not the 'last word of the judicial department'. 32 Gummow, Hayne and Bell JJ similarly reasoned that s 26A did not as a matter of form or substance alter the Full Court's decision in Lawler: AEU at [90]. Lawler decided the validity of a particular decision on the basis of the law "as it stood at the time of the Full Court's judgment", which meant that s 26A did not alter, let alone dissolve or reverse, that judgment: at [89]. Rather than purporting "to declare what the law was at the time of the Full Court in the Lawler matter", s 26A "assume[d] that the Lawler matter was correctly decided" at [96]. 33 No distinction arises from the fact that, in AEU, further entries were made in the register after the Lawler judgment and again after the enactment of s 26A. These were not further exercises of statutory power dependent for their effect on the law having changed. They were merely notes seeking to assist a reader in understanding the legal effect of the registration that had been made. 34 None of the aspects of AEU referred to above is cast into any doubt by the later decision in Duncan v Independent Commission Against Corruption [2015] HCA 32; 256 CLR 83 (Duncan). Duncan concerned a NSW provision which retrospectively expanded the jurisdiction of the Independent Commission Against Corruption (ICAC), so as to reverse a holding concerning the scope of that jurisdiction in Independent Commission Against Corruption v Cunneen [2015] HCA 14; 256 CLR 1. Duncan involved a State law and therefore depended on application of the Kable doctrine (see Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51); but the Court held that the impugned law would not have been inconsistent with Ch III if it were a law of the Commonwealth, referring in this connection to AEU (at [18]–[26]) (French CJ, Kiefel, Bell and Keane JJ). 35 The clear authority of AEU stands in the way of acceptance of the applicant's argument that item 4 usurps, or interferes with, the exercise of judicial power and is thereby inconsistent with Ch III. Jurisdiction under s 75 36 The applicant also submitted that item 4 has the effect of withdrawing or fettering the entrenched jurisdiction of the High Court under s 75(iii) and (v) of the Constitution. The argument was that item 4 purports to validate decisions already made, rather than authorising any new decision, and rights and causes of action in relation to the existing decisions in this case are merged in the judgment in Tapiki. The consequence (the argument runs) is that further judicial review, and litigation concerning the detention of the applicant effected as a consequence of the cancellation decision, are foreclosed and the jurisdiction under s 75(iii) and (v) is thereby excluded. 37 The asserted vice (as we understand it) is that, having run his case to finality and succeeded, the applicant is stuck with the validation of the cancellation decision and the Tribunal decision even if there are other grounds upon which he might be able to argue that the latter (at least) is affected by jurisdictional error. In contrast, a person whose judicial review proceedings had not been finalised before the commencement of the Amending Act would lose the benefit of the aggregate sentence point (in that it must now fail as a matter of substantive law) but could still argue other grounds of review. 38 This submission proceeds on an incorrect understanding of the "causes of action" merging in the earlier judgment. In BC v Minister for Immigration and Multicultural Affairs [2001] FCA 1669; 67 ALD 60 at [29]–[30] (BC), Sackville J referred to the imprecision of the term "cause of action" and came to the view that the test that should be applied was one based on the substance of what had been advanced in the earlier proceeding. The theme was taken up in AIO21 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC 114; 294 FCR 80 (AIO21), where the Full Court (Kenny, O'Callaghan and Thawley JJ) said at [65]–[67]: So far as concerns "claim" estoppel, the question in judicial review proceedings of the present kind is whether: (a) the "cause of action" or "claim" should be viewed as the claim for relief for jurisdictional error in relation to the impugned decision, with the result that the doctrine would operate to prevent a second application even on a ground of judicial review which had not been advanced or determined; or (b) different grounds of jurisdictional error can be seen as separate causes of action or claims arising out of the one decision. We consider that the latter is the better view. If, in a subsequent judicial review application concerning a decision previously the subject of an unsuccessful judicial review application, an applicant asserts that the decision-maker exceeded the jurisdiction conferred by the statute on a ground which, as a matter of substance, has not previously been determined, then the subsequent application is not barred by "claim" estoppel. As Heerey J stated in [Re Ruddock; Ex parte LX [2003] FCA 561], referring to the decision of Merkel J in [Somanader v Minister for Immigration and Multicultural Affairs [2000] FCA 1192; 178 ALR 677], "the question whether there is identity between the earlier cause of action and the ones raised in the proceeding said to be the subject of the plea is to be determined by matters of substance rather than the form of the particular proceeding or the way in which it is pleaded". Of course, we accept that, as Sackville J observed in BC, the application of a "substance" test might prove difficult in particular cases. In the present case, however, the asserted ground of jurisdictional error was one which was clearly not considered or determined by Steward J in the first unsuccessful judicial review application concerning the Tribunal's decision. No "claim" estoppel can arise, and no res judicata could apply. Since the claim was not made, it could not merge in the earlier judgment. (Citations omitted.) 39 AIO21 involved a question whether "claim" estoppel arose from a proceeding pursued unsuccessfully. However, as the last two sentences of this extract illustrate, that principle is the mirror image of res judicata in the strict sense (which arises where claims are pursued successfully): see AIO21 at [56] and BC at [17]–[26]. 40 At first instance in Tapiki, the applicant was unrepresented and, apart from taking issue with some findings of fact by the Tribunal, advanced no submissions: see [2022] FCA 391 at [2]. On appeal and in the transferred proceeding, the only ground advanced was the aggregate sentence point. Further agitation of that ground in relation to the cancellation decision and the Tribunal decision is precluded on the basis that it is res judicata, and we see no reason why that should be thought to be inconsistent with the entrenched jurisdiction of the High Court. This ground would, of course, now fail as a matter of substantive law in the light of item 4. However, to the extent that the decisions in issue here might arguably be liable to be set aside on other grounds that are different as a matter of substance, those claims have not merged in the judgment in Tapiki. Leaving aside questions of Anshun estoppel and the need for an extension of time, it is open to the applicant to commence new judicial review proceedings arguing, for example, that the Tribunal failed to take into account a relevant consideration, so that item 4 does not apply to its decision in the light of the terms of subitem (1). It follows that item 4 does not have the asserted vice that forms the premise of the applicant's argument. 41 No submissions were made on the potential application of Anshun principles in the event that the applicant were to commence further proceedings seeking to set aside the cancellation decision or the Tribunal decision. It is sufficient to observe that any argument invoking those principles would arise for consideration by the reviewing court, having regard to all of the circumstances, as part of the exercise of its jurisdiction. "Anshun estoppel" is a "true estoppel" (Tomlinson v Ramsay Food Processing Pty Ltd [2015] HCA 28; 256 CLR 507 at [22] (French CJ, Bell, Gageler and Keane JJ)) in that it forms an aspect of the rights of the parties inter se, rather than a jurisdictional point arising from the final, binding and conclusive nature of a judicial determination: see Rogers v The Queen (1984) 181 CLR 251 at 275 (Deane and Gaudron JJ). It is difficult to see how the necessity for an applicant to overcome an Anshun argument could be said to amount to a withdrawal of or fetter upon the jurisdiction of the High Court under s 75. 42 For these reasons we do not consider that item 4 is invalid by reason of any inconsistency with Ch III. Acquisition of property 43 Section 51(xxxi) of the Constitution is framed as a grant of legislative power. However, it has long been recognised that it implicitly subtracts from other heads of Commonwealth power any ability to make laws with respect to the acquisition of property. Laws having that character can only be enacted under s 51(xxxi) and must therefore comply with its requirement of "just terms". In this way, s 51(xxxi) operates as a constitutional guarantee. 44 In Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 it was held that a right to bring an action for damages constituted "property" within the meaning of s 51(xxxi); and that a law which extinguished such a right, conferring a corresponding benefit on the person against whom the action might be brought, thereby effected an "acquisition" of such property (see also Haskins v Commonwealth [2011] HCA 28; 244 CLR 22 at [41]). The applicant here alleges that he has a right to bring an action for damages for false imprisonment against the Commonwealth, which item 3 of Sch 1 to the Amending Act purportedly extinguishes. He submits that no "just terms" are provided and that, therefore, the relevant provisions in item 4 are invalid. 45 It is not self-evident that the applicant has a cause of action against the Commonwealth, at least in the sense of a claim that would actually succeed. The potential claim relates only to the period between handing down of judgment in Pearson (on 22 December 2022) and the applicant's release, which apparently occurred late on 23 December 2022. The applicant's detention since March 2023 has been based on the understanding of relevant officers that the Amending Act was effective, which is not said to be unreasonable. 46 Presumably, at some stage on 22 or 23 December, a view was formed that Pearson must be regarded as stating the law correctly and that, therefore, it was no longer possible to "reasonably suspect" (for the purposes of s 189 of the Act) that the applicant was an unlawful non-citizen. There is no evidence as to when the officers responsible for detaining the applicant were made aware of Pearson and its consequences, or what had to be done thereafter to effect his release from detention. We would not necessarily assume that detention becomes unlawful at the precise moment it becomes apparent to the detaining officer that release is required; a short period for completing paperwork, organising transport and so on may possibly be permitted. However, for present purposes we proceed on the basis that the applicant has a cause of action for false imprisonment which has some monetary value. 47 The Minister advanced an argument in writing that the claim of invalidity under s 51(xxxi) was moot (or premature), because the applicant had not commenced proceedings seeking damages and there was thus no live dispute concerning liability. That argument appears to fall away in the light of the commencement of separate proceedings, noted above, but we would not have upheld it in any event. In oral argument, counsel suggested that the point was really one concerning the applicant's standing (which is much the same thing: see, eg, Croome v Tasmania (1997) 191 CLR 119 at 132–133 (Gaudron, McHugh and Gummow JJ)). However it was put, the argument was misdirected. 48 The applicant clearly has standing to seek a declaration that the relevant provisions of item 4 are invalid, because his status under the Act and his liberty depend directly on their effect. Obviously, he also has standing to seek habeas corpus. A justiciable controversy thus arises, and this is the matter presently before the Court. The applicant is then entitled to put whatever submissions can properly be put in support of his claim for relief; there is no further standing requirement attaching to particular arguments. The fact that item 4 extinguishes a cause of action sounding in damages (even, in principle, somebody else's cause of action) is enough to raise a question as to whether the extinguishment falls foul of s 51(xxxi); and it is open to the applicant to submit that item 4 is invalid for that reason. Any such cause of action must necessarily have accrued before the Amending Act commenced. However, it is not necessary for issue to have been joined on that cause of action in a proceeding between the relevant parties, either at the time of commencement or now. We therefore respectfully disagree with what was said on the issue of mootness in Bainbridge v Minister for Immigration and Citizenship [2010] FCAFC 2; 181 FCR 569 (Bainbridge) at [11] (Moore and Perram JJ), although for reasons outlined below we do not consider that the actual decision in Bainbridge was incorrect. 49 However, the extinguishment of a cause of action results in the Amending Act infringing s 51(xxxi) only if that is done without "just terms". The Minister submits that s 3B of the Act provides "just terms" and therefore avoids invalidity. 50 Section 3B provides (relevantly) as follows: 3B Compensation for acquisition of property (1) If: (a) this Act would result in an acquisition of property; and (b) any provision of this Act would not be valid, apart from this section, because a particular person has not been compensated; the Commonwealth must pay that person: (c) a reasonable amount of compensation agreed on between the person and the Commonwealth; or (d) failing agreement—a reasonable amount of compensation determined by a court of competent jurisdiction. … (3) In this section: acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution. 51 It will be seen that s 3B is drafted so as to come into play if the Act has any effect which, absent sufficient compensation, would infringe s 51(xxxi). If triggered, it creates a right to receive compensation as agreed or as determined by a court. That clearly amounts to "just terms" (and the applicant did not contend otherwise). An argument as to invalidity is thereby transformed into a claim for compensation. 52 The question that requires attention is whether any acquisition of property resulting from the operation of item 4 on past events or decisions is an acquisition that "results" from "this Act" within the meaning of s 3B(1). The applicant submits that it is not, and that s 3B therefore does not apply. 53 In Bainbridge the Full Court considered the same argument in relation to a similar provision contained in an amending Act and rejected it. 54 In the earlier decision of Sales v Minister for Immigration and Citizenship [2008] FCAFC 132; 171 FCR 56, the Full Court had held that the cancellation powers in s 501 and associated provisions of the Act did not extend to a visa that was held by operation of law rather than having been "granted" to a person. That had widespread consequences for the administration of the Act and the Parliament sought to reverse those consequences. Schedule 4 to the Migration Legislation Amendment Act (No 1) 2008 (Cth) (the 2008 Act): (a) inserted a new section into the Act, providing that visas of this kind were taken to have been "granted" for the purposes of ss 501 to 501H (comparable to item 1 of Sch 1 in this case); (b) gave that amendment prospective operation (comparable to item 3 in this case); and (c) provided that "any decision made or purported to be made" before commencement under identified provisions of the Act, to cancel a visa within identified classes, … is as valid, and is taken always to have been as valid, as it would have been if [the visa purportedly cancelled] were a visa that had been granted. 55 The last of these provisions (item 7 of Sch 4 to the 2008 Act) did the same work as item 4 of the Amending Act in this case. It was challenged in Bainbridge. 56 Moore and Perram JJ considered the argument based on s 51(xxxi) to be moot, for reasons with which we have expressed disagreement above. However, their Honours also dealt with the substance of the argument. They referred to s 15 of the Acts Interpretation Act 1901 (Cth) (the Acts Interpretation Act), which then provided: Every Act amending another Act shall, unless the contrary intention appears, be construed with such other Act and as part thereof. 57 Applying s 15, their Honours held that item 7 was "part of the Principal Act and s 3B therefore provides just terms which satisfy the requirements of s 51(xxxi)" (at [13]). They rejected an argument that item 7 exhibited a contrary intention so as to displace s 15. Buchanan J reasoned to identical effect (at [44]–[45]). 58 Since the decision in Bainbridge, s 15 of the Acts Interpretation Act has been repealed. The work done by the former s 15 is now done by s 11B, which is as follows: 11B Amending Act to be construed with amended Act (1) Every Act amending another Act must be construed with the other Act as part of the other Act. (2) If: (a) an Act (the amending Act) amends another Act (the principal Act); and (b) a provision (the non-amending provision) of the amending Act does not amend the principal Act, but relates to an amendment of the principal Act made by another provision of the amending Act; and (c) a term is used in the non-amending provision that has a particular meaning in the principal Act or in a provision of the principal Act amended or included by the amending Act; then the term has that meaning in the non-amending provision. Note: Subsection (2) covers, for example, application, transitional and saving items in a Schedule to an amending Act that relate to amendments of a principal Act made by other items in the Schedule. (3) Subsection (2) does not limit subsection (1). 59 It will be noted that the current s 11B(1) reproduces the former s 15 save that it omits reference to a contrary intention. But all of the rules of interpretation in the Acts Interpretation Act are now subject to a contrary intention by force of s 2(2). 60 Contrary to the submissions of the applicant, we do not think that Bainbridge can be distinguished because of differences between the 2008 Act and the Amending Act. It is true that a decision on the construction of an instrument generally does not provide binding authority on the construction of another instrument. However, the issue here concerns the construction of s 3B (in the light of relevant provisions of the Acts Interpretation Act) and its interaction with an amending Act of a particular character. Section 11B(1) is in relevantly the same terms as the former s 15. Schedule 1 to the Amending Act has the same structure as Sch 7 to the 2008 Act, and the provisions of present relevance (item 4 of the relevant Schedule in each case) do the same work. Each purports to render valid (ie effective in law to do what they purport to do) an identified class of pre-existing decisions that are otherwise invalid (ie ineffective). The reasoning in Bainbidge is applicable. 61 It was not argued that Bainbridge was wrongly decided. While we have expressed disagreement with one of the two independent bases for decision as expressed by the plurality (as to mootness), we think that their Honours' reasoning on the interaction of s 3B and s 15 of the Acts Interpretation Act (and the reasoning of Buchanan J to the same effect) should be treated as authoritative. If it matters, this line of reasoning is independent of that with which we disagree and therefore, regardless of the correctness of the other basis for the decision, is properly regarded as the ratio decidendi of the case: Day v The Ocean Beach Hotel Shellharbour Pty Ltd [2013] NSWCA 250; 85 NSWLR 335 at [32] (Leeming JA, Meagher JA agreeing). 62 Adherence to the reasoning in Bainbridge is supported by the repeal of s 15 and the enactment of s 11B after the former had been applied in that case. Parliament re-enacted s 15 in a modified form, as s 11B(1), but left the important words as they were apart from updating them to a slightly more modern drafting style (as to which see s 15AC of the Acts Interpretation Act). That suggests that the legislature was content with the operation given to the former provision in Bainbridge: see, eg, Thompson v Judge Byrne [1999] HCA 16; 196 CLR 141 at [40] (Gleeson CJ, Gummow, Kirby and Callinan JJ); Brisbane City Council v Amos [2019] HCA 27; 266 CLR 593 at [24] (Kiefel CJ and Edelman J); [45] (Gageler J); at [48]–[49] (Keane J); and at [55]–[56] (Nettle J). 63 Some weight is added to that consideration by the addition of s 11B(2). That subsection recognises that an Act which "amends another Act" can include particular provisions that do not themselves amend that Act (but relate to the amendments), and expressly extends definitions in the principal Act to those "non-amending provisions". Section 11B(3) provides that this extension does not limit s 11B(1). This tends to confirm that the whole of the Amending Act in the present case is to be characterised as "an Act amending" the Act, for the purposes of s 11B(1), and not divided into provisions that amend the Act and provisions that do not. 64 For these reasons, if item 4 of the Amending Act acquires property of the applicant by extinguishing a cause of action, just terms are provided for that acquisition and it does not fall foul of s 51(xxxi). Disposition 65 The applicant's attack on the validity of item 4 fails. The application must be dismissed. Neither party argued that costs should not follow the event. There will be orders accordingly. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Katzmann, Sarah C Derrington and Kennett. Associate: Dated: 19 October 2023	10,637
federal_court_of_australia:fca/single/2019/2019fca0006	decision	commonwealth	federal_court_of_australia	text/html	2019-01-11 00:00:00	Huddleston v Northern Territory of Australia [2019] FCA 6	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca0006	2024-09-13T22:49:33.547699+10:00	FEDERAL COURT OF AUSTRALIA Huddleston v Northern Territory of Australia [2019] FCA 6 File number: NTD 6023 of 2001 Judge: GRIFFITHS J Date of judgment: 11 January 2019 Catchwords: NATIVE TITLE – application to replace a named deceased applicant with another person under s 66B of the Native Title Act 1993 (Cth) – application granted Legislation: Native Title Act 1993 (Cth) Date of hearing: Determined on the papers Registry: Northern Territory Division: General Division National Practice Area: Native Title Category: Catchwords Number of paragraphs: 6 Solicitor for the Applicant: Northern Land Council Solicitor for the First Respondent: Solicitor for the Northern Territory Solicitor for the Fourth Respondent: King & Wood Mallesons Solicitor for the Fifth and Sixth Respondents: Ward Keller Lawyers ORDERS NTD 6023 of 2001 BETWEEN: ARTHUR QUE NOY, DAPHNE HUDDLESTON, GABRIEL HAZELBANE AND MARGARET FOSTER Applicant AND: NORTHERN TERRITORY OF AUSTRALIA First Respondent CAMELOT NORTHERN TERRITORY LIMITED Second Respondent NORTHERN GOLD NL (and others named in the Schedule) Third Respondent JUDGE: GRIFFITHS J DATE OF ORDER: 11 JANUARY 2019 THE COURT ORDERS THAT: 1. The name of the applicant in proceedings NTD 6023 of 2001 be amended by replacing the name Arthur Que Noy with the name Michael Foster. 2. The heading of the application be amended by removing the words "Arthur Que Noy & Ors" from the title of the action and by inserting the words "Daphne Huddleston & Ors" in their place. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GRIFFITHS J 1 By an interlocutory application filed on 9 January 2019, the applicant seeks orders to replace a named deceased applicant with another person under s 66B of the Native Title Act 1993 (Cth) (NT Act). 2 The persons who are currently named as the applicant are Arthur Que Noy (now deceased), Margaret Foster, Gabriel Hazelbane and Daphne Huddleston. It is proposed that Michael Foster replace Arthur Que Noy, and that the other named persons remain as the applicant. 3 The applicant relies on an affidavit of Michael Foster dated 6 December 2018 and an affidavit of Tess Cole-Adams dated 8 January 2018. Mr Foster is a member of the Kamu clan group of which Mr Noy was also a member. I accept Mr Foster's evidence that the members of the Kamu clan group met in Darwin on 20 November 2018 and that the meeting authorised Mr Foster to apply to the Court to be named as an applicant in the proceeding and replace the deceased. I also accept Mr Foster's evidence that the authorisation was given in accordance with traditional decision-making processes and that Mr Foster consents to becoming an applicant. 4 In her affidavit, Ms Cole-Adams annexed correspondence between the applicant and certain respondents regarding the proposal in the interlocutory application. The first and fourth respondents gave their consent. The second and third respondents are deregistered. The legal representative for the fifth and sixth respondents (Branir Pty Ltd and Tovehead Pty Ltd respectively) responded by saying that the sixth respondent no longer had any interest in the proceeding and the fifth respondent neither consented to nor opposed the interlocutory application on the basis that it did not wish to be perceived as taking sides in what it understood to be a dispute between the Kamu and Malak Malak peoples. 5 Section 66B of the NT Act provides: 66B Replacing the applicant Application to replace applicant in claimant application (1) One or more members of the native title claim group (the claim group) in relation to a claimant application, or of the compensation claim group (also the claim group) in relation to a compensation application, may apply to the Federal Court for an order that the member, or the members jointly, replace the current applicant for the application on the grounds that: (a) one or more of the following applies to a person who is, either alone or jointly with one or more other persons, the current applicant: … (ii) the person has died or become incapacitated; … (b) the member or members are authorised by the claim group to make the application and to deal with matters arising in relation to it. Note: Section 251B states what it means for a person or persons to be authorised by all the persons in the claim group to deal with matters in relation to a claimant application or a compensation application. Court order (2) The Court may make the order if it is satisfied that the grounds are established. Federal Court Chief Executive Officer to notify Native Title Registrar (3) If the Court makes the order, the Federal Court Chief Executive Officer must, as soon as practicable, notify the Native Title Registrar of the name and address for service of the person who is, or persons who are, the new applicant. Register to be updated (4) If the claim contained in the application is on the Register of Native Title Claims, the Registrar must amend the Register to reflect the order. 6 I am satisfied that it is appropriate to make the orders sought in the interlocutory application. It will be necessary for appropriate steps to be taken in accordance with s 66B(3) and (4). I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths. Associate: Dated: 11 January 2019 SCHEDULE OF PARTIES NTD 6023 of 2001 Respondents Fourth Respondent: TELSTRA CORPORATION LIMITED Fifth Respondent: BRANIR PTY LTD Sixth Respondent: TOVEHEAD PTY LTD	1,366
federal_court_of_australia:fca/full/2006/2006fcafc0180	decision	commonwealth	federal_court_of_australia	text/html	2006-12-15 00:00:00	Evans v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCAFC 180	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2006/2006fcafc0180	2024-09-13T22:49:33.649622+10:00	FEDERAL COURT OF AUSTRALIA Evans v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCAFC 180 MIGRATION – appeal from a decision of the Administrative Appeals Tribunal – appellant held absorbed person visa – appellant convicted of attempted murder – appellant's visa cancelled on character grounds pursuant to Migration Act 1958 (Cth) s 501 – whether Tribunal decision unreasonable due to failure to consider appellant's mental state at time of offence - whether s 501 applicable where visa holder has been in Australia for more than 10 years - Migration Act 1958 (Cth) s 201 HELD: Appeal dismissed Migration Act 1958 (Cth) Migration Legislation Amendment Act 1994 (Cth) Migration Amendment Act 1983 (Cth) Migration (Offences and Undesirable Persons) Amendment Act 1992 Luu v Minister for Immigration & Multicultural Affairs (1998) 96 FCR 304 cited Bridges v Minister for Immigration & Multicultural Affairs (2001) 114 FCR 456 cited Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476 cited Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 referred to Re Minister for Immigration and Multicultural Affairs; Ex Parte Applicant S20/2002 (2003) 198 ALR 59 cited Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 referred to Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50 followed Minister for Immigration & Multicultural Affairs v Gunner (1998) 84 FCR 400 referred to Minister for Immigration & Multicultural Affairs v Jia (2001) 205 CLR 507 referred to MICHAEL JOHN EVANS v MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS AND ADMINISTRATIVE APPEALS TRIBUNAL TAD 8 OF 2006 NORTH, MANSFIELD & EMMETT JJ 15 DECEMBER 2006 ADELAIDE (HEARD IN HOBART) IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY TAD 8 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: MICHAEL JOHN EVANS Appellant AND: MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGES: NORTH, MANSFIELD & EMMETT JJ DATE OF ORDER: 15 DECEMBER 2006 WHERE MADE: ADELAIDE (HEARD IN HOBART) THE COURT ORDERS THAT: 1. The appeal is dismissed. 2. The appellant pay to the first respondent her 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 TASMANIA DISTRICT REGISTRY TAD 8 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: MICHAEL JOHN EVANS Appellant AND: MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGES: NORTH, MANSFIELD & EMMETT JJ DATE: 15 DECEMBER 2006 PLACE: ADELAIDE (HEARD IN HOBART) REASONS FOR JUDGMENT NORTH & MANSFIELD jj INTRODUCTION 1 Mr Evans was born in 1942. He is a British national. He came to Australia in 1977 and has lived here ever since. Following the amendments to the Migration Act 1958 (Cth) (the Act) effected by the Migration Legislation Amendment Act 1994 (Cth) he was deemed to have been granted an absorbed person visa on 1 September 1994. That permitted him to remain indefinitely in Australia. 2 However, his conduct has impaired that entitlement. On 3 December 2003, Mr Evans was convicted of attempting to murder his wife. He was sentenced to four and a half years imprisonment. That conviction led to a delegate of the Minister deciding to cancel his visa pursuant to s 501(2) of the Act. 3 Section 501(2) provides: '(2) The Minister may cancel a visa that has been granted to a person if: (a) the Minister reasonably suspects that the person does not pass the character test; and (b) the person does not satisfy the Minister that the person passes the character test.' 4 Section 501(6) relevantly provides that a person does not pass the character test if the person has a substantial criminal record. Section 501(7) provides that, for the purposes of the character test, a person has a substantial criminal record if the person has been sentenced to a term of imprisonment of 12 months or more. Consequently, it was accepted that the conviction meant that Mr Evans did not pass the character test, so that the discretion provided in s 501(2) to cancel the visa was enlivened. 5 This appeal is the culmination of Mr Evans' challenges to the cancellation of his visa. EARLIER PROCEEDINGS 6 The delegate's decision was reviewed by the Administrative Appeals Tribunal under s 500(1)(b) of the Act. On 21 October 2005, the Tribunal affirmed the decision to cancel Mr Evans' visa. 7 The Tribunal referred to the evidence which had been given at the trial when Mr Evans was convicted of attempted murder. His wife's evidence was that on the evening of 9 May 2003 she had returned to the matrimonial home at about 7.55 pm and found her husband waiting inside. He appeared to have been drinking heavily. She went to the bedroom and lay on the bed reading a magazine. Shortly afterwards, Mr Evans entered, picked up a loaded gun which was kept in the bedroom, and said words to the following effect to her: 'I've been waiting all day for your – you bitch. You're going to die you bitch.' He apparently pointed the gun at her and kept repeating 'you're going to die'. He discharged the gun, shooting her in the stomach. She attempted to wrest the gun from him. He said he intended to 'blow her brains out' and then to 'blow his own brains out'. She managed to get hold of the gun. He followed her from the bedroom and then returned saying 'I'll get the other gun and finish what I started'. She escaped from the house. She underwent surgery and eventually recovered. 8 Mr Evans' case at the trial did not accord with that version. He said that he followed his wife to the bedroom for the purpose of killing himself in her presence. He said he had no intention to harm her. He denied threatening her in the manner she alleged. He said that his wife tried to take the gun from him, and was shot accidentally in the ensuing struggle. 9 As the Tribunal observed, clearly, the jury did not believe him and was satisfied beyond reasonable doubt that he had tried to kill her. It was accepted that it was not open to Mr Evans on the review by the Tribunal of his visa cancellation to challenge his conviction or the essential facts giving rise to it: Luu v Minister for Immigration & Multicultural Affairs (1998) 96 FCR 304; Bridges v Minister for Immigration & Multicultural Affairs (2001) 114 FCR 456. 10 Despite that, the Tribunal also heard evidence directly from Mr Evans and from his wife. It confirmed the version of events each of them had given at the trial. The Tribunal found that, even if it were competent to find facts inconsistent with the jury verdict, it would not do so. It found the wife to be a 'frank and impressive witness'. By way of contrast, it found Mr Evans: '… to be either lying about the relevant incident or, possibly, as suggested by Dr Sale in his report … to have deluded himself as to what actually happened.' Dr Sale is a specialist psychiatrist. His report is dated 31 October 2003. It is further discussed below when considering the first ground of appeal. 11 The Tribunal then turned to the Act and to the direction given under s 499 (Direction No 21, 23 August 2001), to which the delegate and the Tribunal were obliged to have regard when exercising the discretion conferred by s 501. The direction posed three primary considerations for a decision-maker in exercising the discretion as to whether or not to cancel a visa under s 501(2) of the Act. Only two of them are directly relevant to the present proceeding, namely: (a) the protection of the Australian community and members of the Australian community, and (b) the expectations of the Australian community. 12 The Tribunal acknowledged that those considerations directed attention to the serious nature of the conduct, the likelihood of the conduct being repeated, and the likelihood of cancellation of the visa providing discouragement to other like-minded offenders. It described as 'a key issue' the level of risk which may accrue to the community as a whole or individual members of the community if the visa was not cancelled. 13 The Tribunal then addressed those three topics. It thought that the criminal offence was 'very serious indeed' and that Mr Evans' conduct was at a 'very high level of culpability'. It noted that no provocation had been offered by his wife. It also noted that Mr Evans had not deviated from his claim that the shooting was accidental, and so there was no meaningful remorse for his criminal conduct. 14 As to the risk of Mr Evans re-offending, the Tribunal noted the comment of the trial judge, when sentencing, that the likelihood of re-offending was 'slight'. The Tribunal could see no evidentiary support for that observation in the report of Dr Sale. The Tribunal inferred that Mr Evans received a 'comparatively light' sentence because of his lack of prior convictions and his very poor health. The Tribunal noted that Mr Evans' stated intention was not to contact his wife upon his release from prison, but on the other hand that his wife was 'obviously genuinely fearful' that, unless Mr Evans is forced to leave Australia, he may well seek her out and try once more to kill her or to do her serious harm. It noted his wife's evidence that Mr Evans was usually particularly aggressive after consuming whisky, that he is a person who holds grudges, and despite his claim that he would not resume drinking hard spirits when released, he had been a drinker of heavy spirits on a regular basis in the past. The Tribunal had little confidence that Mr Evans would moderate his drinking patterns when he is released. The Tribunal also regarded it as significant that there was no obvious motive for Mr Evans deciding to kill his wife. It felt the evidence indicated that he had waited at home for her, formulating the plan to kill her before she arrived home. It suggested that Mr Evans had become self-absorbed, emotive and vengeful. 15 The Tribunal concluded: 'On the evidence which I have before me, I am quite unable to conclude that the risk of his attempting to inflict further harm upon Mrs Flowers when discharged from prison is slight or non-existent. On the contrary, I think that such a risk is real and substantial.' 16 The Tribunal also had regard to the fact that Mr Evans had been unable to show any realistic support mechanism which would be available to him within the Australian community when discharged. There was nothing to suggest any family members or friends who would be likely to provide him with accommodation or support. There was nothing concrete in his future plans. It thought those factors tended to accentuate the possibility of him resuming his over-indulgence in alcohol and brooding upon his hatred or resentment of his wife. 17 The Tribunal then addressed the expectations of the Australian community. Apart from the matters referred to, it had regard to Mr Evans' poor health. He has many chronic and disabling ailments affecting his strength, mobility, and probably his longevity. He will require ongoing medication in consultation with a supervising general practitioner and on occasions specialists. The Tribunal did not think that there was any reason to believe that Mr Evans, if he returns to Britain, will not have access to all appropriate services and facilities. Nor did it think that he will have any particular difficulty in re-establishing himself in Britain, having lived the first half of his life there. 18 It concluded that a fair-minded reasonable member of the Australian community would expect that Mr Evans' visa should be cancelled. There are a number of other matters it had regard to, including those referred to above. I do not need to refer to them. 19 The Tribunal concluded: 'The applicant has committed a very serious crime. Upon his release from prison he will have to make a fresh start. His long term residency in Australia is a factor in his favour, but he has no support network among relatives or friends and having regard to his evidence it is unlikely that such a network will be developed. He may have relatives in the UK who would provide some assistance, but there is no guarantee of this. The determinative factor in my determining not to exercise my discretion to save his visa from cancellation is my perception of his substantial risk of re-offending if he remains in Australia and decides to pursue his wife. Removal to Britain will effectively prevent any temptation to do so as she intends to continue residing in Australia.' 20 Mr Evans then sought to quash the Tribunal's decision by order of this Court. As the decision of the AAT was a privative clause decision as defined in s 474(2) of the Act, the Court was confined to determining whether there was jurisdictional error on the part of the Tribunal: Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476. 21 At first instance, two jurisdictional errors were identified by Heerey J as being asserted on behalf of Mr Evans. The first was that the Tribunal's decision was so unreasonable that no reasonable decision-maker could have made it, so as to indicate (as we understood it) that the Tribunal had not correctly considered the matters which it was required to consider. That general issue was not pressed on this appeal and need not be further considered. The second was that the Tribunal had committed jurisdictional error by failing to take into account that the underlying cause of Mr Evans' mental condition at the time of the offence, described as a fear of lymphoma, no longer existed, and that the fact that the underlying cause had dissipated was relevant when considering whether the risk of Mr Evans re-offending was substantial. In submissions on this appeal, senior counsel for Mr Evans submitted that the learned primary judge had misapprehended the nature of the second contention, which was said to have been that the Tribunal had failed to consider at all the mental state of Mr Evans at the time of the commission of the offence, and so must have failed to consider properly the question of the risk of him re-offending. 22 However those matters were expressed, Heerey J was not satisfied that there was jurisdictional error on the part of the Tribunal. His Honour dismissed the application. THE APPEAL 23 There were two grounds of appeal argued. The first was that the Tribunal had committed jurisdictional error by not considering Mr Evans' mental state at the time he committed the offence, and that the failure to do so rendered the Tribunal's decision unreasonable. It was said that a decision made without such a finding on that issue could not be one supported by logical and rational grounds. Reliance was placed upon Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 and Re Minister for Immigration and Multicultural Affairs; Ex Parte Applicant S20/2002 (2003) 198 ALR 59 respectively. Consequently, it was argued, the learned primary judge must himself have fallen into error by not discerning that jurisdictional error. 24 The second ground of appeal was one permitted by leave, without opposition from the Minister. It was not argued at first instance. It was that the Tribunal had failed to hold that the Minister's power to cancel Mr Evans' visa on character grounds under s 501 of the Act was unavailable in the case of the criminal conduct in Australia by Mr Evans, because his period of residence in Australia precludes the application to him of Div 9 of Pt 2 of the Act, which provides for the deportation of non-citizens in certain circumstances. THE FIRST GROUND OF APPEAL 25 The first ground of appeal was described as "the mental state issue". On the evidence before the Tribunal, Mr Evans at the time of the offence suffered depression re-active to a provisional diagnosis of a serious and potentially lethal malignancy involving lymph node tissue; and after his arrest that provisional diagnosis was found to be erroneous and Mr Evans' diagnosis became sarcoidosis, a non-lethal connective tissue disease. The Tribunal was said to have committed jurisdictional error by failing to take into account Mr Evans' mental state at the time of the offence when considering whether there was a real and substantial risk of Mr Evans re-offending upon his release. It was argued that Mr Evans' mental state as described would not persist as he no longer believed he suffered terminal lymphoma, so the risk of him re-offending was clearly only slight. The jurisdictional error was described as the Tribunal's decision, in that respect, being unreasonable and not supported by logical and rational grounds. 26 The learned primary judge referred to the claim that the Tribunal had failed to take into account that the underlying cause of Mr Evans' mental condition no longer existed. His Honour gave two answers. First, he said that the Tribunal was not bound to take that consideration into effect, having regard to the text of the Act or by implication from its subject matter, scope or purpose: Peko-Wallsend Ltd at 39-41. Secondly, his Honour said that the Tribunal had regard to Dr Sale's report and so must have had regard to Mr Evans' mental state at the time of the offence. As his Honour pointed out, it was an over-simplification, if not a distortion, to impute to Dr Sale the view that (i) all Mr Evans' criminal behaviour was due to his fear of lymphoma, (ii) it is now established he does not have lymphoma, (iii) ergo there is now no risk of further criminal behaviour, and in particular, towards his wife. 27 As to the first ground of challenge, we respectfully agree with the learned primary judge. The report of Dr Sale, to which the Tribunal referred on two separate occasions in its reasons, indicates that the Tribunal was aware of that document. It cannot be said in the circumstances that the Tribunal did not have regard to the contents of that report, including its contents concerning the mental state of Mr Evans at the time of the offence. 28 In addition, as Heerey J said, whilst the provisional diagnosis of lymphoma may have contributed to Mr Evans' mental state at the time of the offence (a mental state which Dr Sale described as being "at a crisis", Dr Sale's report does not indicate that the removal of the threat of death from lymphoma meant that Mr Evans would be unlikely to re-offend. 29 Dr Sale's report described Mr Evans' mental state at the time of the offence as being the consequence of his increasing health problems rendering him effectively an invalid, of his drinking heavily, of him having become impotent, of him resenting his wife's better health and ability to participate in work, of his low self-esteem, of him harbouring fears about his wife's fidelity, and in response to those circumstances, of Mr Evans suffering depression. It also referred to Mr Evans shortly before the offence having been given information that caused him to fear that he had developed a lethal illness, lymphoma. That report also suggested that Mr Evans' continued assertion that the incident was an accident caused by his wife's seizing of the barrel of the rifle may be one he genuinely believes, by reason of his mental illness, or mental condition, and that he has maintained that belief despite the fact he is now more composed and no longer faces death by lymphoma because it is "one which he will be better able to live with". Consequently, even assuming in Mr Evans' favour (and contrary to our conclusion) that the Tribunal did not consider his mental state at the time of the offence, Mr Sale's report does not provide any sound foundation for a conclusion that Mr Evans is unlikely to engage in further similar conduct. Indeed, the Tribunal identified a number of circumstances by reason of which it concluded to the contrary. The Tribunal was entitled to place such weight upon Dr Sale's report, and the matters to which it referred, as it considered appropriate. 30 In our judgment, the finding of the Tribunal about the risk of Mr Evans re-offending upon his release was neither irrational, nor so unreasonable that no reasonable person could have arrived at that conclusion. The contention, in our view, simply reflects a strong disagreement with the process of reasoning of the Tribunal on an issue of fact: see Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 626. 31 Accordingly, we have reached the conclusion that the first ground of appeal must therefore fail. the second ground of appeal 32 The second ground of appeal can be shortly dealt with. Senior counsel for Mr Evans accepted that it would stand or fall with the decision of the High Court in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50 (Nystrom), if that decision were delivered before the appeal was finalised. At the time of the hearing, that decision had not been delivered. The decision was given on 8 November 2006. 33 The argument was that the delegate of the Minister, and then the Tribunal, was not empowered to cancel Mr Evans' absorbed person visa under s 501 in the case of criminal conduct in Australia, because his period of residence in Australia, by reason of which he became entitled to his absorbed person visa, precluded the application to him of Div 9 of Pt 2 of the Act. Division 9 of Pt 2 concerns deportation. 34 Relevantly, ss 200 and 201 provide: '200 Deportation of certain non-citizens The Minister may order the deportation of a non-citizen to whom this Division applies. 201 Deportation of non-citizens in Australia for less than 10 years who are convicted of crimes 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) … (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.' 35 Those provisions were introduced into the Act by the Migration Amendment Act 1983 (Cth). Section 201 has not since been materially amended (except by its renumbering by the Migration Legislation Amendment Act 1994 (Cth). It was argued that ss 200 and 201 reflect a legislative policy that certain persons (including, in the circumstances, Mr Evans) are protected from exclusion or cancellation of visa by reason of criminal conduct after they have been in Australia for a specified and lengthy period of time. Mr Evans falls within those excluded from the operation of s 200 because he was a permanent resident as defined in s 204(2) and has been in Australia for more than 10 years at the time of the offence. Hence, it was argued, the cancellation of his visa provided for in s 501, first introduced by the Migration (Offences and Undesirable Persons) Amendment Act 1992 (Cth), should be read so as not to have been intended to disturb the status of persons such as Mr Evans who were covered by the shield of time provided in s 201. 36 That contention was clearly rejected by the High Court in Nystrom. It concluded that s 501(2) was not subservient to ss 200 and 201 in circumstances such as those of Mr Evans, and that s 501(2) was available as an independent source of power to cancel a visa, including an absorbed person visa such as that held by a person in Mr Evans' circumstances. CONCLUSION 37 For those reasons, the appeal must be dismissed. We consider that the appellant should pay to the first respondent costs of the appeal. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices North and Mansfield. Associate: Dated: 11 December 2006 IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY TAD8 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: MICHAEL JOHN EVANS Appellant AND: MINISTER FOR IMMIGRATION & MULTICULTURAL AFFAIRS First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGES: NORTH, MANSFIELD & EMMETT JJ DATE: 15 DECEMBER 2006 PLACE: HOBART REASONS FOR JUDGMENT EMMETT J 38 The appellant, Michael John Evans, is a non-citizen within the meaning of the Migration Act 1958 (Cth) ('the Act'). Until 11 August 2005, Mr Evans was the holder of an absorbed person visa under the Act. On that day, the first respondent, the Minister for Immigration and Multicultural Affairs ('the Minister'), cancelled Mr Evan's visa. Mr Evans sought review of the Minister's decision by the second respondent, the Administrative Appeals Tribunal ('the Tribunal'). On 21 October 2005, the Tribunal affirmed the Minister's decision. Mr Evans then appealed to the Federal Court of Australia pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). On 28 March 2006, a judge of the Court dismissed the appeal with costs. Mr Evans has now appealed to the Full Court from the orders of the primary judge. STATUTORY FRAMEWORK 39 Section 29(1) of the Act provides that the Minister may grant a non-citizen permission to do either or both of: a) travel to and enter Australia; and b) remain in Australia. Such permission is to be known as a visa. 40 Under s 13 of the Act, a non-citizen in Australia who holds a visa that is in effect is a lawful non-citizen. Under s 14, a non-citizen in Australia who is not a lawful non-citizen is an unlawful non-citizen. Under s 15, if a visa is cancelled, its former holder, if in Australia, becomes, on the cancellation, an unlawful non-citizen unless, immediately after the cancellation, the former holder holds another visa that is in effect. 41 Section 34(1) of the Act provides that there is a class of permanent visas to remain in, but not re-enter, Australia, to be known as absorbed person visas. Under s 34(2), a non-citizen in Australia is taken to have been granted an absorbed person visa on 1 September 1994, if the person: a) was in Australia on 2 April 1984; b) had ceased to be an immigrant before that date; c) has not left Australia on or after that date; and d) immediately before 1 September 1994 was not a person to whom s 20 of the Act, as then in force, applied. The Minister accepts that those four prerequisites were satisfied in respect of Mr Evans. 42 Under s 501(2) of the Act, the Minister may cancel a visa that has been granted to a person if: a) the Minister reasonably suspects that the person does not pass the character test; and b) the person does not satisfy the Minister that the person passes the character test. Under s 501(6)(a), a person does not pass the character test if the person has a substantial criminal record, as defined by s 501(7). Under s 501(7), a person has a substantial criminal record, relevantly, if the person has been sentenced to a term of imprisonment of twelve months or more. 43 Under s 200 of the Act, the Minister may order the deportation of a non-citizen to whom Division 9 of the Act applies. By the operation of s 201, s 200 applies to a person who is a non-citizen where, relevantly: a) the person has been convicted in Australia of an offence; b) when the offence was committed, the person had been in Australia as a permanent resident for a period of less than ten years; 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 204(2) provides that, for the purposes of s 201, permanent resident means, relevantly, a person whose continued presence in Australia is not subject to any limitations as to time imposed by law. The Minister accepts that Mr Evans is a permanent resident for the purposes of s 201. 44 Under s 206(1), where the Minister has made an order for the deportation of a person, that person shall, unless the Minister revokes the order, be deported accordingly. Under s 82(4), a visa held by such a person ceases to be effective upon the person's departure from Australia following a deportation order. Until the deportation order is executed, however, such a person continues to be a lawful non-citizen. 45 Section 189 of the Act provides that, if an officer knows or reasonably suspects that a person in Australia is an unlawful non-citizen, the officer must the person. Under s 198, subject to exceptions not presently relevant, an officer must remove an unlawful non-citizen as soon as reasonably practicable. Section 253(1) provides that, where an order for the deportation of a person is in force, an officer may, without warrant, detain a person whom the officer reasonably supposes to be that person. A person so detained may be kept in immigration detention or in detention as a deportee in accordance with s 253(8). Under s 253(8) a deportee may be kept in immigration detention or such detention as the Minister or the Secretary directs: a) pending deportation, until he or she is placed on board a vessel for deportation; b) at any port or place in Australia at which the vessel calls after he or she has been placed on board; or c) on board the vessel until its departure from its last port or place of call in Australia. THE TRIBUNAL'S DECISION 46 Mr Evans was born in the United Kingdom in 1942 and came to Australia in August 1977. On 30 November 1985, Mr Evans married Anne Elizabeth Flowers ('Mrs Flowers'). On 9 May 2003, he attempted to murder her by shooting her in the stomach. He was remanded in custody. On 3 December 2003, he was convicted by a jury of attempted murder and sentenced to four and a half years imprisonment with a non-parole period of two and a quarter years. 47 Thus, Mr Evans has a substantial criminal record within the meaning of s 501(7) of the Act. Accordingly, it was open for the Tribunal to suspect that Mr Evans does not pass the character test and it was open on the material before the Tribunal to conclude that Mr Evans did not satisfy the Tribunal that he passes the character test. The power to cancel Mr Evans's absorbed person visa under s 501(2) was therefore activated. 48 Nevertheless, the power is a discretionary one. Pursuant to s 499 of the Act, the Minister has given a Direction to provide guidance for decision makers in making decisions to cancel a visa under s 501 of the Act. Under the Direction, a decision maker is required to adopt a balancing exercise that takes into account all relevant considerations. One of the primary considerations to be taken into account is the protection of the Australian community and its members. One of the factors relevant to an assessment of the level of risk to the community, from the continued stay of a non-citizen who does not satisfy the character test, is the likelihood that criminal conduct may be repeated. 49 The material before the Tribunal included a report dated 31 October 2003, made to the Legal Aid Commission of Tasmania by Dr Ian Sale, a psychiatrist. Dr Sale interviewed Mr Evans when Mr Evans was on remand. He was given background information consisting of a statutory declaration made by Mrs Flowers and a record of interview with Mr Evans when he was first arrested. Dr Sale's report was put before the sentencing judge following the conviction of Mr Evans for the attempted murder of his wife. 50 In its reasons, the Tribunal referred to evidence given by Mr Evans at a hearing before the Tribunal. The Tribunal considered that that evidence demonstrated that Mr Evans still fails to acknowledge or accept the criminality of his conduct. The Tribunal found that Mr Evans was either lying about the relevant incident or, possibly, as suggested by Dr Sale in his report, to have deluded himself as to what actually happened. The Tribunal was much more inclined to the first alternative. Clearly, however, the Tribunal had regard to Dr Sale's report in reaching that conclusion. 51 The Tribunal concluded that the criminal offence committed by Mr Evans was very serious indeed, in so far as he intentionally shot his wife and avoided her vital organs only by chance. The Tribunal considered that Mr Evans's acknowledgment in evidence, that the incident should never have happened and that it was his responsibility, did not amount to an acknowledgment of an intent to kill or a meaningful expression of remorse for his criminal conduct. At no time in his evidence did Mr Evans deviate from his claim that the shooting of his wife was accidental. 52 The Tribunal observed that the judge who sentenced Mr Evans described his offence as very serious. However, the Tribunal expressed surprise that the sentencing judge preceded that comment with an observation that the likelihood of Mr Evans's re-offending was 'slight'. The Tribunal said that it could see no evidentiary support for such an observation in the evidence of Dr Sale. Again, it is clear that the Tribunal had express regard to the report of Dr Sale in considering whether or not there was a likelihood that Mr Evans would re-offend. 53 The Tribunal then dealt with the evidence given by Mr Evans that, upon release from prison, he had no intention of making contact with his wife. The Tribunal had regard to evidence that it considered tended to establish a determined and violent disposition on the part of Mr Evans. The Tribunal found that it was plain that Mr Evans had consumed large amounts of liquor on a regular basis for many years before his offence, and the Tribunal had little confidence that he would moderate his drinking patterns when he was released from prison. 54 The Tribunal observed that there was no obvious motive for Mr Evans's deciding to kill his wife and that it was likely that he had become self absorbed, emotive and vengeful. On the evidence before the Tribunal, the Tribunal was unable to conclude that the risk of Mr Evans attempting to inflict further harm on his wife, when discharged from prison, was slight or non-existent. On the contrary, the Tribunal considered that such a risk was real and substantial. The Tribunal referred to a pre-parole report, which suggested that Mr Evans is in the high range in relation to the risk of re-offending. The Tribunal also referred to the fact that Mr Evans had been unable to show any realistic support mechanism that would be available to him within the Australian community when he is discharged. THE ISSUES 55 Mr Evans raises two grounds in his appeal. The second ground was raised pursuant to leave granted by the Full Court, since it was not raised before the primary judge. 56 The first ground is that the Tribunal committed jurisdictional error in not considering Mr Evans's mental state at the time he committed the relevant criminal offence. 57 The second ground is that, having regard to the provisions of s 201, as explained by s 204, s 501 should be construed such that it does not extend to the cancellation of a visa held by a non-citizen who had been in Australia as a permanent resident for ten years or more. Failure to consider mental state 58 In essence, Mr Evans contends that Dr Sale's report raised, as a possible basis for concluding that the visa should not be cancelled, the proposition that his mental state, at the time of committing the offence, was affected by depression, reactive to a provisional diagnosis of a serious and potentially lethal malignancy, a diagnosis that was rejected after the offence had been committed. The argument is that, once Mr Evans overcame the depression created by the possibility of a fatal disease, which in some way contributed to his committing the offence, he would be unlikely to re-offend. Mr Evans says that the Tribunal failed to have regard to that possibility and that, while the Tribunal was not asked to consider that possibility, that failure constituted jurisdictional error. 59 The observations, findings and conclusions of the Tribunal that are summarised above indicate that the Tribunal clearly had regard to the question of whether there was a likelihood that Mr Evans would re-offend. The Tribunal expressly had regard to the report of Dr Sale in reaching that conclusion. It cannot be said that the Tribunal failed to have regard to a relevant integer thrown up by the material before it. 60 In any event, it is difficult to see how Dr Sale's report suggests that any change in Mr Evans's mental health that occurred when he was diagnosed, after his arrest, as not having a potentially fatal disease, was relevant to the risk of his re-offending. The most that can be said of Dr Sale's report is that it contains the following material: 'Mr Evans was aware of this sinister possibility, and he knew if this diagnosis was confirmed he might be referred for radiotherapy. He was apprehensive about confirming this diagnosis, and this is a significant aspect of his mindset at the time of the incident for which he is charged. Since being in custody he has undergone further investigations, including a biopsy and a diagnosis [of a disease] …not malignant and generally not lethal … Turning to his mental state at the time of the incident… he was depressed, … and had harboured thoughts of self-harm. Matters reached a crisis when, in a further health development, he was given information that caused him to fear he had developed a lethal illness. … Your client will likely instruct that this was an accident caused by his wife seizing the barrel of the rifle. This is a version he may now genuinely believe. As outlined earlier, his memory for what happened is likely to be flawed and patchy. His current version of the events, now that he is more composed and no longer facing death…, is one which he will be better able to live with.' 61 I do not see in those observations by Dr Sale any suggestion that Mr Evans's fear that he may have a lethal disease contributed to his criminal action to such an extent that, upon finding that he did not have a lethal disease, his mental attitude would be sufficiently different that he would not have committed the offence. There was no jurisdictional error on the part of the Tribunal in failing to give further consideration to such a possibility. Power under section 501 62 In essence, Mr Evans contended that there is no distinction, in substance, between removal, following the cancellation of a visa under s 501, and execution of a deportation order made under s 200. Exclusion from Australia by reason of conviction for general criminal offences resulting in a substantial term of imprisonment is the subject matter of ss 200 and 201, and removal pursuant to cancellation of a visa under s 501 is not permitted by reason only of conviction for general criminal offences resulting in a substantial term of imprisonment. 63 Parliament should not be presumed to have intended to overthrow fundamental principles, infringe rights or depart from the general system of law without expressing its intention with irresistible clearness. Mr Evans contends that s 201 contains specific statutory protection from deportation, for a person who has been a permanent resident for 10 years or more. He says that that protection was conferred by amendments made to the Act in 1984 and cannot be impliedly repealed by the subsequent conferral of an additional and general method of exclusion, as found in ss 501 and 198. 64 Sections 200 and 201 relate to deportation only on the ground that a non-citizen has been convicted of 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. On the other hand, s 501 is concerned with the general question of whether a person passes the character test. One aspect of the character test is whether the person has a substantial criminal record, a term defined in language similar to that referred to in s 201. However, s 501 covers many more aspects that do not depend upon a substantial criminal record. 65 Exclusion from Australia, by reason of failure of the character test, through cancellation of a visa and then the operation of s 198, is the subject matter of s 501. Mr Evans says that, having regard to the restriction in s 201, which he says Parliament clearly intended to constitute a substantive protection, the amendments to the Act in 1992 and 1998, to confer the power contained in s 501, should not be construed as effecting an implied repeal of that protection. He says that those amendments use only general words and the Parliament neither debated nor expressly repealed the protection that it first afforded by amendments made in 1984. 66 The power conferred by s 501 is certainly wider than the power conferred by ss 200 and 201. Nevertheless, the powers are different. The fact that the two powers overlap in some factual situations does not mean that a limitation on the availability of one applies as a limitation upon the other. The circumstance that powers arising under separate sources might be exercised in respect of the same set of facts does not affect the construction of either of the statutory provisions – Minister for Immigration & Multicultural Affairs v Gunner (1998) 84 FCR 400 at 408, Minister for Immigration & Multicultural Affairs v Jia (2001) 205 CLR 507 at [85] and [130]. 67 In any event, the arguments advanced on behalf of Mr Evans concerning the interrelationship between ss 200 and 201, on the one hand, and s 501, on the other, are based on a misconception that the effect of the amendments in 1984 was to confer a right upon Mr Evans. The effect of ss 200 and 201 was to confer on the Minister the power to make a deportation order. The Act deals with the consequences of making such an order. There were restrictions imposed on the exercise of that power to the extent that the class of persons in respect of whom a deportation order could be made was limited to those who had not been permanent residents for ten years or more. Mr Evans could not have been the subject of a deportation order under s 200 after he had been a permanent resident for ten years. However, the Minister has not purported to make a deportation order. Rather, the Minister has exercised a different power, albeit one conferred at a time later than the time when the limited power under s 200 was conferred. 68 The power to cancel Mr Evans's absorbed person visa, and thereby render him liable to removal under s 198, was created prior to the commission of the relevant offence. As a matter of logic, s 200 and s 201 conferred no right on Mr Evans. The most that can be said is that, in their terms, the power conferred on the Minister was restricted such that it could not be exercised in relation to Mr Evans. 69 There is no basis in the language of the Act for reading into s 501 a restriction in terms of s 201 that simply does not appear in s 501 (see Minister for Immigration and Multicultural Affairs v Nystrom [2006] HCA 50). It is clear that, when s 501 was enacted in its present terms, it was intended to create powers to cancel visas in the circumstances specified, subject to the safeguards that are there provided. There is no basis for saying that s 501 does not mean what it says in explicit terms. The second ground should be rejected. CONCLUSION 70 I do not consider that either of the grounds has been established. The appeal should be dismissed with costs. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 15 December 2006 Counsel for the Appellant: S Estcourt QC and R Browne Solicitor for the Appellant: FitzGerald and Browne Lawyers Counsel for the Respondent: P Gray Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 18 August 2006 Date of Judgment: 15 December 2006	9,712
federal_court_of_australia:fca/single/2021/2021fca0948	decision	commonwealth	federal_court_of_australia	text/html	2021-08-04 00:00:00	Mainstream Group Holdings Limited, in the matter of Mainstream Group Holdings Limited (First Scheme Hearing) [2021] FCA 948	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca0948	2024-09-13T22:49:34.829680+10:00	Federal Court of Australia Mainstream Group Holdings Limited, in the matter of Mainstream Group Holdings Limited (First Scheme Hearing) [2021] FCA 948 File number: NSD 271 of 2021 Judgment of: PERRAM J Date of judgment: 4 August 2021 Date of publication of reasons: 11 August 2021 Catchwords: CORPORATIONS – members' scheme of arrangement – first court hearing – application under Corporations Act 2001 (Cth) ss 411 and 1319 to convene members' meeting – where director making recommendation has interest in employee share plan – where target company liable for break fee – where virtual members' meeting proposed Legislation: Corporations Act 2001 (Cth) Pt 5.1, ss 411, 1319 Cases cited: Dragontail Systems Limited, in the matter of Dragontail Systems Limited [2021] FCA 834 In the matter of Villa World Limited [2019] NSWSC 1207; 139 ACSR 550 In the matter of Vocus Group Limited [2021] NSWSC 630 QMS Media Limited, in the matter of QMS Media Limited [2019] FCA 2172 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 13 Date of hearing: 4 August 2021 Counsel for the Plaintiff: Dr R P Austin with Mr B J May Solicitor for the Plaintiff: Maddocks Lawyers Counsel for Interested Parties: Mr J Williams SC ORDERS NSD 271 of 2021 IN THE MATTER OF MAINSTREAM GROUP HOLDINGS LIMITED MAINSTREAM GROUP HOLDINGS LIMITED Plaintiff order made by: PERRAM J DATE OF ORDER: 4 AUGUST 2021 THE COURT ORDERS THAT: 1. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act), the Plaintiff convene and hold a meeting (Scheme Meeting) of the holders of ordinary shares in the Plaintiff (Scheme Shareholders): (a) to consider, and, if thought fit, to approve (with or without modification) the scheme of arrangement (Scheme) proposed to be made between the Plaintiff and its shareholders, the terms of which are as set out in Appendix A to these orders; (b) to be held as a wholly virtual meeting by means of audio-visual technology, with no physical assembly; and (c) to be held on 6 October 2021 commencing at 10:30 am (AEST). 2. The scheme booklet, substantially in the form of Exhibit RS-2 to the affidavit of Ron Smooker sworn 3 August 2021 (Smooker Affidavit), and which comprises the explanatory statement as required by s 412(1)(a) of the Act, be and is hereby approved (subject to any amendments required by the Court). 3. The Scheme Meeting be convened by sending on or before 18 August 2021: (a) in the case of Scheme Shareholders who have elected to receive shareholder communications electronically by way of email (Email Shareholders), an email substantially in the form contained at page 103 of Exhibit RS-1 to the Smooker Affidavit, which contains links to: (i) a document substantially in the form of the scheme booklet (which contains, among other things, the Notice of Scheme Meeting as Attachment 4 to the scheme booklet); and (ii) a personalised proxy form for the Scheme Meeting substantially in the form of Attachment 5 to the scheme booklet (Proxy Form); (b) in the case of Scheme Shareholders who have elected to receive shareholder communications by post (Postal Shareholders), the following documents to the registered address recorded in the Plaintiff's register (by pre-paid post to those addresses if in Australia or by airmail or international courier service to those addresses if outside Australia): (i) the scheme booklet (which contains, among other things, the Notice of Scheme Meeting as Attachment 4 to the scheme booklet); (ii) a personalised Proxy Form; and (iii) a reply-paid envelope for the return of the Proxy Form; and (c) in the case of Scheme Shareholders who are not Email Shareholders or Postal Shareholders and whose registered address recorded in the Plaintiff's register is in Australia, the following documents by pre-paid post addressed to those addresses: (i) a document substantially in the form contained at page 105 of Exhibit RS-1 to the Smooker Affidavit containing a URL link to the scheme booklet (which contains, among other things, the Notice of Scheme Meeting as Attachment 4 to the scheme booklet); (ii) a personalised Proxy Form; and (iii) a reply-paid envelope for the return of the Proxy Form; and (d) in the case of Scheme Shareholders, other than Email Shareholders or Postal Shareholders, whose registered address recorded in the Plaintiff's register is outside Australia, the following documents by airmail or international courier service addressed to those addresses: (i) a document substantially in the form contained at page 105 of Exhibit RS-1 to the Smooker Affidavit containing a URL link to the scheme booklet (which contains, among other things, the Notice of Scheme Meeting as Attachment 4 to the scheme booklet); (ii) a personalised Proxy Form; and (iii) a return envelope for the return of the Proxy Form. 4. Subject to these Orders, the Scheme Meeting be convened, held, and conducted in accordance with the provisions of Pt 2G.2 of the Act (save for any applicable replaceable rule) that apply to a meeting of the Plaintiff's members. 5. Voting on the resolution to approve the Scheme is to be conducted by way of a poll. 6. A Proxy Form in respect of the Scheme Meeting will be valid and effective if, and only if, it is completed and delivered electronically or by post in accordance with its terms by 10.30 am (AEST) on 4 October 2021 7. Mr Byram Johnston, or failing him, Ms JoAnna Fisher, be Chair of the Scheme Meeting. 8. The Chair of the Scheme Meeting shall have the power to adjourn the meeting to such time, date, and place as he or she considers appropriate. 9. Compliance with r 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) (Rules) is dispensed with. 10. Compliance with r 3.4 and Form 6 of the Rules is dispensed with. 11. The Plaintiff publish in The Australian newspaper once on or before 16 September 2021 an advertisement substantially in the form of Appendix B to these orders. 12. The further hearing of the originating process is adjourned to a hearing before Perram J on 15 October 2021 at 10:15 am (AEST). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT PERRAM J: Introduction 1 This is an application pursuant to s 411 and s 1319 of the Corporations Act 2001 (Cth) ('the Act') to convene a meeting of the members of Mainstream Group Holdings Limited ('Mainstream') to consider and vote upon a scheme of arrangement ('Scheme') between Mainstream and its ordinary shareholders. Mainstream is listed on the Australian Stock Exchange ('ASX'). The proposed Scheme is a scheme of arrangement under Pt 5.1 of the Act under which an Australian entity, Apex Fund Holdings Australia Pty Limited ('Apex Holdings'), will acquire 100% of the ordinary shares in Mainstream with each Mainstream shareholder to receive $2.80 per share, that is to say, it is a conventional cash acquisition scheme. If the Scheme is implemented Mainstream will cease to be listed on the ASX. Apex Holdings is a wholly owned indirect subsidiary of a Bermudan company, Apex Group Limited ('Apex Group') (together, 'Apex'). 2 The price of $2.80 was arrived at as a result of an escalating series of offers made to acquire Mainstream. There were three parties involved and the price escalations were as follows: Proposed acquirer Date Price Vistra Holdings (Australia) Pty Ltd 9 March 2021 $1.20 SS&C Technologies, Inc. and SS&C Solutions Pty Limited (together, 'SS&C') 12 April 2021 $2.00 SS&C 27 April 2021 $2.25 Apex Group 29 April 2021 $2.35 Apex Group 30 April 2021 $2.55 SS&C 6 May 2021 $2.56 Apex Group 6 May 2021 $2.60 SS&C 14 May 2021 $2.61 Apex Group 18 May 2021 $2.65 SS&C 25 May 2021 $2.66 Apex Group 26 May 2021 $2.75 SS&C 1 June 2021 $2.76 Apex Group 10 June 2021 $2.80 3 An independent report prepared by Deloitte has valued each ordinary share at between $2.17 and $2.64. The proposed price appears therefore to be the result of a competitive bidding process and to exceed the value Deloitte has placed on Mainstream. Applicable Principles 4 The power of the Court to order a meeting of members and to approve the relevant explanatory statement to be provided to them is conferred by s 411(1) of the Act. As Halley J has recently explained in Dragontail Systems Limited, in the matter of Dragontail Systems Limited [2021] FCA 834 ('Dragontail') at [8], the authorities concerning the convening of such meetings require, as a precondition to the exercise of that power, satisfaction of seven matters which in this case are that: (a) Mainstream is a Part 5.1 body; (b) the Scheme participants are members of Mainstream; (c) the scheme meeting will be convened between members of the same class; (d) the Scheme is bona fide and properly proposed; (e) ASIC has had a reasonable opportunity to examine the terms of the Scheme and the scheme booklet and make any submissions to the Court; (f) the scheme booklet provides adequate disclosure; and (g) the Scheme can properly be described as an arrangement of compromise. 5 I am satisfied of each of these matters so the power is enlivened. Halley J in Dragontail also usefully distilled the relevant principles and authorities governing how the discretion should be exercised: [10]-[14]. If I may gratefully adopt his Honour's review these principles may be summarised as follows. 6 First, the purpose of the first hearing is to permit the Court to exercise its supervisory jurisdiction to review the scheme and scheme booklet and to raise any queries that it might have with the plaintiff. In practice, the first hearing is where the Court will typically intervene even if it is only at the second hearing that the Court gives its formal imprimatur to the scheme. In adopting that approach, whilst not ruling out the possibility that approval might not be forthcoming at the second hearing, the Court is cognisant of the fact that the market often views the Court's approval for the convening of a scheme meeting as providing some assurance that the scheme, at least in form and substance, has received the Court's preliminary clearance and that trading in the company's securities will thereafter proceed on that basis. 7 Secondly, so far as the question of whether the Court should convene the meeting, the Court will do so where the scheme is not inappropriate and where it is one that sensible business people might consider is of benefit to the members involved. If the scheme has those qualities it is not to the point that a better scheme might be imagined – that is a matter for the members voting at the meeting. Perhaps obviously, the Court will not convene a meeting unless it is likely that it would approve the scheme at the second hearing if the application were unopposed. The Court should, however, satisfy itself at the first hearing that the scheme has no obvious flaws and that an adequate explanation of it has been provided to the company's members. Proposed Scheme 8 I am satisfied that the meeting should be convened so that the members may consider whether to adopt the proposed Scheme. At the hearing of the application to convene the meeting Mainstream was represented by Dr Austin and Mr May of counsel. Apex was represented by Mr Williams SC. Dr Austin very properly drew to my attention a number of features of the Scheme which might warrant attention. None of these cause me concern but I will briefly mention four. 9 First, Mainstream has an employee share plan under which some employees have unvested rights to the issue of ordinary shares. If the Scheme proceeds the employee share plan is to be brought to an end and the employees issued with ordinary shares prior to the Scheme coming into effect. In practice this means that if the Scheme is approved the relevant employees will participate in its fruits. I see no difficulty with this. One of the employees with rights under the share plan is the Chief Executive Officer, Mr Martin Smith, who also holds or controls a number of ordinary shares. In his capacity as CEO Mr Smith has made a recommendation (along with the whole board) to the members that the proposed Scheme be adopted. Mr Smith's rights under the employee share plan give him an interest in the outcome different from other members. There is a debate as to whether a director with such an interest may make a recommendation which has been outlined by O'Callaghan J in QMS Media Limited, in the matter of QMS Media Limited [2019] FCA 2172 at [85]-[87]. This debate appears to be arid so long as the matter is 'fully and prominently disclosed as a matter for shareholders to take into account': at [86], quoting In the matter of Villa World Limited [2019] NSWSC 1207; 139 ACSR 550 at [31] per Black J. In this case, the letter to members from the Chairman contained in the scheme booklet prominently discloses the fact of Mr Smith's interest in the employee share plan and that it will result in the issue to him of ordinary shares. The value of those shares under the Scheme is also disclosed in the letter. The same matter is disclosed in the body of the scheme booklet in Section 9 entitled 'Additional Information'. In my view, the information provided in the scheme booklet is sufficient to enable members to take this matter into account. Disclosure is therefore adequate. 10 Secondly, if the Scheme does not proceed Mainstream will be liable to pay a break fee to Apex Group unless the Scheme has been voted down by members. I do not see a difficulty with this since the proposed fee appears to represent a genuine pre-estimate of Apex Group's costs: In the matter of Vocus Group Limited [2021] NSWSC 630 at [18] per Black J. 11 Thirdly, Apex has executed a deed poll binding itself to the members of Mainstream in terms that will ensure that Apex observes the Scheme as if it were a party to the Scheme itself. This is necessary since Apex is not a party to the proposed Scheme. There is evidence before the Court that this deed poll is enforceable in Bermuda where Apex Group is domiciled. 12 Fourthly, the meeting is most likely to be held during the continuing government-imposed lockdown in response to the spread of the Delta variant of the SARS-CoV-2 virus. The draft orders provide for a virtual meeting which is acceptable. The scheme booklet will be provided electronically to those who have signalled their consent to that course and by means of link in a hardcopy letter sent to those who have not indicated any preference in that regard. In the small number of cases where members have indicated a preference to receive paper communications, they will be sent the full scheme booklet. I see no difficulty with this. Conclusion 13 It was for those reasons that I made the orders sought on 4 August 2021. For completeness, I should note the evidence that Mainstream relied upon on the application. The bulk of the material before the Court at the first hearing was collated in the form of a court book. The evidence comprised: (a) seven affidavits read by Mainstream, being the affidavits of Andrew McNee affirmed 29 March 2021, Byram Johnston sworn 30 July 2021 and 2 August 2021 ('Second Johnston Affidavit'), JoAnna Fisher affirmed 30 July 2021, Oliver Bampfield affirmed 30 July 2021, Michele Picciota affirmed 30 July 2021 and Ron Smooker sworn 3 August 2021; (b) two further affidavits read by Mainstream but sworn or affirmed by witnesses in Apex's camp, being the affidavits of Maxwell Johnston affirmed 2 August 2021 and Jonathan Betts sworn 2 August 2021; (c) annexures AM-1, AM-2 and AM-3 to Mr McNee's affidavit; MP-1 and MP-2 to Ms Picciota's affidavit; JDGB-1, JDGB-2 and JDGB-3 to Mr Betts' affidavit; MRWJ-1, MRWJ-2, MRWJ-3, MRWJ-4, MRWJ-5 and MRWJ-6 and MRWJ-7 to Mr Maxwell Johnston's affidavit; BTJ-3 and BTJ-4 to the Second Johnston Affidavit; and (d) exhibits BTJ-1, BTJ-2, RS-1, RS-2, JF-1 and OB-1 tendered on the Plaintiff's case. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram. Associate: Dated: 11 August 2021	3,864
federal_court_of_australia:fca/single/2010/2010fca0097	decision	commonwealth	federal_court_of_australia	text/html	2010-02-19 00:00:00	Eric Preston Pty Ltd v Euroz Securities Limited [2010] FCA 97	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2010/2010fca0097	2024-09-13T22:49:40.607890+10:00	FEDERAL COURT OF AUSTRALIA Eric Preston Pty Ltd v Euroz Securities Limited [2010] FCA 97 Citation: Eric Preston Pty Ltd v Euroz Securities Limited [2010] FCA 97 Parties: ERIC PRESTON PTY LTD (ACN 008 753 348) v EUROZ SECURITIES LIMITED (ACN 089 314 983); EUROZ SECURITIES LIMITED (ACN 089 314 983) v ERIC PRESTON PTY LTD (ACN 008 753 348) File number: VID 356 of 2008 Judge: SIOPIS J Date of judgment: 19 February 2010 Catchwords: CONTRACT - whether a term was incorporated into the retainer by reason of a prior course of dealings - whether a term could be inferred by reference to post-contractual conduct - whether loss caused by the breach of the retainer. MISLEADING OR DECEPTIVE CONDUCT - whether representation was passed on by respondent - whether representation was adopted - whether loss was caused by impugned conduct. Legislation: Corporations Act 2001 (Cth) ss 942B, 942B(2), 1041H, 1041H(1), 1041I(1), 1041I(1B) Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAA, 12BAB, 12BAB(5), 12BB, 12BB(1), 12DA, 12GF(1B)(b) Civil Liability Act 2002 (WA) s 5AI(1)(a) Federal Court Rules O11 r 8 Jones v Dunkel (1959) 101 CLR 298 Cases cited: DJ Hill & Co Pty Ltd v Walter H Wright Pty Ltd [1971] VR 749 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32 Browne v Dunn (1893) 6 R 67 Suvaal v Cessnock City Council (2003) 200 ALR 1 Clambake Pty Ltd v Tipperary Projects Pty Ltd (No 3) [2009] WASC 52 Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592 Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2009) 252 ALR 659 Orix Australia Corporation Ltd v Moody Kiddle and Partners Pty Ltd [2006] NSWCA 257 Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371 Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41 Breen v Williams (1996) 186 CLR 71 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] 160 FCR 35 Aequitas v Sparad No 100 Ltd (formerly Australian European Finance Corp Ltd) (2001) 19 ACLC 1,006 Date of hearing: 16-20, 23-27, 31 March, 25 September 2009 Date of last order: 11 November 2009 Date of last submissions: 16 November 2009 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 500 Counsel for the Applicant: Mr P Bick QC with Mr D Farrands Solicitor for the Applicant: Slater & Gordon Counsel for the Respondent: Mr G Donaldson SC with Ms W Buckley Solicitor for the Respondent: Fairweather & Lemonis Counsel for the Cross‑Claimant: Mr G Donaldson SC with Ms W Buckley Solicitor for the Cross‑Claimant: Fairweather & Lemonis Counsel for the Cross‑Respondent: Mr P Bick QC with Mr D Farrands Solicitor for the Cross‑Respondent: Slater & Gordon IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 356 of 2008 BETWEEN: ERIC PRESTON PTY LTD (ACN 008 753 348) Applicant EUROZ SECURITIES LIMITED (ACN 089 314 983) Cross-Claimant AND: EUROZ SECURITIES LIMITED (ACN 089 314 983) Respondent ERIC PRESTON PTY LTD (ACN 008 753 348) Cross-Respondent JUDGE: SIOPIS J DATE OF ORDER: 19 FEBRUARY 2010 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The applicant's application filed on 20 May 2008 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 VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 356 of 2008 BETWEEN: ERIC PRESTON PTY LTD (ACN 008 753 348) Applicant EUROZ SECURITIES LIMITED (ACN 089 314 983) Cross-Claimant AND: EUROZ SECURITIES LIMITED (ACN 089 314 983) Respondent ERIC PRESTON PTY LTD (ACN 008 753 348) Cross-Respondent JUDGE: SIOPIS J DATE: 19 FEBRUARY 2010 PLACE: PERTH TABLE OF CONTENTS BACKGROUND............................................................................................................ [9] ERIC PRESTON'S CLAIM AGAINST EUROZ SECURITIES................................ [119] THE WITNESSES.......................................................................................................... [122] Eric Preston's witnesses............................................................................................. [122] Mr Bruce Scott Drummond.................................................................................... [123] Mrs Judith Maree Drummond................................................................................ [133] Mr Graham Douglas Anderson.............................................................................. [134] Mr Gregory Errol Blashki...................................................................................... [141] Mr Russell Allan McKimm..................................................................................... [142] Euroz Securities' witnesses........................................................................................ [157] Mr Richard Armstrong Caldow............................................................................. [158] Mr Anthony Mark Brittain..................................................................................... [167] Mr Kenneth David Pendergast............................................................................... [170] THE CLAIM BASED ON THE BREACH OF CONTRACT..................................... [172] Eric Preston's pleaded claim in contract................................................................... [173] Euroz Securities' defence........................................................................................... [186] Did Euroz Securities agree to act as financial advisor to Eric Preston as part of its retainer?................................................................................................................. [194] The advice in relation to Eric Preston entering into the Leveraged Equities facility.......................................................................................................................... [226] Did Mr Caldow advise in May 2007 that the Opes Prime facility was the same as the Leveraged Equities facility?................................................................................ [254] Can Eric Preston rely on a case founded on the allegation that Euroz Securities failed to advise as to the characteristics of the Opes Prime facility?...................... [291] Would Eric Preston have entered into the Opes Prime facility even if it had been advised as to its characteristics and attendant risks?.............................................. [300] The pleaded breaches relating to events of February 2008..................................... [314] The 1 February 2008 advice came too late............................................................ [320] Failure to advise Eric Preston to terminate the Opes Prime facility.................. [327] Failure to advise that Euroz Securities could not comment on the financial position of Opes Prime........................................................................................... [330] Advice that the share portfolio was safe................................................................ [333] THE CLAIM IN TORT................................................................................................. [336] THE CLAIM THAT EUROZ SECURITIES ENGAGED IN MISLEADING OR DECEPTIVE CONDUCT.............................................................................................. [347] The first representation.............................................................................................. [355] The second representation......................................................................................... [367] Did Euroz Securities engage in misleading or deceptive conduct in relation to the second representation?..................................................................................... [405] BREACH OF FIDUCIARY DUTY............................................................................... [420] The trading commission and the trailing commission............................................... [433] CAUSATION.................................................................................................................. [444] THE CLAIM THAT ERIC PRESTON CONTRIBUTED TO ITS LOSS.................. [464] THE CLAIM THAT MR ANDERSON IS PROPORTIONATELY LIABLE FOR ERIC PRESTON'S LOSS............................................................................................. [467] Advice in relation to Eric Preston entering into the Opes Prime facility................. [469] Substantial Shareholder Advice................................................................................. [480] Advice in relation to 1 February 2008 email............................................................. [485] THE CLAIM THAT OPES PRIME IS PROPORTIONATELY LIABLE FOR ERIC PRESTON'S LOSS............................................................................................. [486] DAMAGES..................................................................................................................... [493] REASONS FOR JUDGMENT 1 Eric Preston Pty Ltd, the applicant, is a private company. Mr Bruce Drummond and his wife, Mrs Judith Drummond, are its directors. The respondent, Euroz Securities Limited, is a subsidiary of Euroz Limited, a publicly listed company. Euroz Securities provides stockbroking services. Mr Richard Caldow is a stockbroker and is one of the directors of Euroz Securities. Mr Drummond first dealt with Mr Caldow as a stockbroker in about 1995, when Mr Caldow was employed by Paterson Ord Minnett Ltd, and Mr Drummond was, in his personal capacity, a stockbroking client of that company. Over the ensuing years they established a close business relationship. When Mr Caldow moved from Paterson Ord Minnett to Euroz Securities in 2000, Mr Drummond opened a share trading account with Euroz Securities. 2 In 2003, Mr Drummond received advice that there would be taxation advantages if a corporate entity under his control, carried on the share trading activity which until then, Mr Drummond had carried on on his own account. Mr Drummond acted on that advice and decided that Eric Preston should be the company to conduct that share trading activity. Since 2004, Eric Preston has been engaged in the business of share trading. Mr Drummond has been solely responsible for carrying on this business and for making the investment decisions on behalf of Eric Preston. He has carried on this business on a full-time basis since April 2007. During the period January 2004 to May 2007, Eric Preston was a party to a margin loan facility with Leveraged Equities Limited and used that facility in relation to its share trading activities. Eric Preston traded in shares at the riskier end of the market and Leveraged Equities did not offer a margin on many of the shares in Eric Preston's portfolio. At all material times, Eric Preston, through Mr Drummond, used Euroz Securities as its stockbroker. 3 In May 2007, Eric Preston terminated its margin loan facility with Leveraged Equities and entered into a securities lending and borrowing agreement with Opes Prime Stockbroking Ltd as a means of obtaining funds to use in purchasing shares for its portfolio. The Opes Prime facility offered margins on shares which Leveraged Equities did not. 4 In very general terms, under this agreement, Opes Prime agreed to advance funds to Eric Preston for share trading purposes and Eric Preston agreed to "lend" its shareholding to Opes Prime by transferring its legal and beneficial ownership in its shareholding to Opes Prime. Eric Preston had a contractual right to call on Opes Prime to deliver shares it had "lent" to Opes Prime, by repaying Opes Prime, and was a creditor of Opes Prime for the difference between the value of the shares in its portfolio and the amount of the advance. 5 On entering into the Opes Prime facility, Eric Preston transferred the legal and beneficial ownership in its share portfolio to Opes Prime or its nominee. After May 2007, Eric Preston used the Opes Prime facility extensively to finance the purchase of shares for its portfolio. On 1 February 2008, Euroz Securities sent Mr Drummond an email pointing out that the securities lending facility with Opes Prime was different to, and risker than, a conventional margin loan. The email stated, in effect, that one of the risks associated with the Opes Prime facility was that if Opes Prime was to become insolvent, Eric Preston would rank as an unsecured creditor for the difference between the value of its share portfolio and the amount outstanding to Opes Prime under the facility. Eric Preston did not terminate the Opes Prime facility and continued to trade shares and use the Opes Prime facility. 6 On 27 March 2008, administrators were appointed to Opes Prime. At that time Eric Preston's portfolio of shares was worth $7,822,957.15 and it owed Opes Prime $3,075,142.91 under the facility. On 15 October 2008, liquidators were appointed to Opes Prime. Eric Preston has filed a proof of debt in the liquidation of Opes Prime in the sum of $5,389,251.09. 7 On 4 August 2009, Opes Prime entered into a scheme of arrangement with its creditors. 8 In this proceeding, Eric Preston alleges that Euroz Securities acted in breach of its contractual, tortious and fiduciary duties that it owed to Eric Preston in relation to the Opes Prime facility. It also claims that Euroz Securities breached statutory duties. Eric Preston claims that but for the breaches of duty it would not have entered into the Opes Prime facility but would have stayed with Leveraged Equities and, therefore, would not have lost the value of the shares it held in its portfolio at the date of the appointment of the administrators. It claims damages from Euroz Securities. BACKGROUND 9 Until 2007, Mr Drummond was, through various private companies, actively involved in the management and operation of major motor vehicle dealerships in the Perth metropolitan area. 10 In 1979, at the age of 28 years, Mr Drummond acquired a 30% interest in a motor vehicle dealership, Midland Nissan, operated by Midland Datsun Pty Ltd. Eric Preston owned the site on which the Midland Nissan dealership was located. In 1982, Mr Drummond acquired all the shares in Eric Preston, and bought out his partner's interest in Midland Datsun. Mr Drummond borrowed the sum of $500,000 to do so from Australian Guarantee Corporation. 11 In 1998, Mr Drummond was the controlling shareholder and director of Goldeast Corporation Pty Ltd (Goldeast). In that year, Goldeast purchased the business of Metro Motors, a major Holden and Subaru dealership in Perth. 12 In 1998, at the time when Goldeast purchased the Metro Motors business, Midland Nissan employed approximately 50 persons and Metro Motors employed over 100 persons. Mr Drummond, through Midland Datsun, continued to own the Midland Nissan dealership until 2001. 13 Metro Motors was the third largest dealership in Western Australia and in the top 20 dealerships in Australia for Holden motor vehicles. At one point, its annual turnover was in excess of $70 million. 14 Eric Preston owned the site of the Midland Nissan dealership and in the period up to 1998 purchased two adjoining properties. It also acquired the Metro Motors property holding. Eric Preston borrowed $5 million in order to complete the purchase. 15 As well as his interest in carrying on the business of his motor dealerships, Mr Drummond had an interest in share trading. 16 In around 1995, Mr Drummond first made contact with Mr Richard Caldow, who was then employed as a stockbroker by Paterson Ord Minnett. Mr Caldow had commenced employment with Paterson Ord Minnett as an assistant sharebroker in July 1992. Mr Caldow first had dealings with Mr Drummond when Mr Drummond telephoned Paterson Ord Minnett looking to speak to another broker who had, unbeknown to Mr Drummond, left that firm. Mr Drummond was put through to Mr Caldow. Mr Drummond placed an order to buy one million Golden Valley shares at 2.5 cents. Thereafter, Mr Drummond continued to deal with Mr Caldow as his stockbroker at Paterson Ord Minnett. 17 In about June 1997, Mr Caldow moved to Busselton to establish an office of Paterson Ord Minnett with Mr Simon Yeo, who was then also employed by Paterson Ord Minnett. During the period that Mr Caldow worked in the Paterson Ord Minnett office in Busselton, Mr Drummond continued to use him as his stockbroker. By then Mr Drummond had become one of Mr Caldow's major clients. 18 In July 2000, Mr Drummond entered into a margin loan agreement with Leveraged Equities Limited – a company associated with Adelaide Bank Limited. This occurred after he had been sent an application form to apply for a Leveraged Equities margin loan by Mr Caldow. Thereafter, Mr Drummond used the Leveraged Equities margin loan in his share trading activities. 19 In November 2000, Mr Jay Hughes, Mr Peter Diamond and Mr Andrew McKenzie, all directors of Paterson Ord Minnett, resigned and established Euroz Limited and Euroz Securities Limited, as a wholly owned subsidiary company, to conduct a stockbroking business. Mr Diamond offered Mr Caldow a position as Executive Director of Euroz Securities and a shareholding in Euroz Limited. Mr Yeo was also offered a position at Euroz Securities. Each of them accepted the offer and resigned from Paterson Ord Minnett. 20 Euroz Securities has an Australian Financial Services Licence which entitles it to carry on a stockbroking business and to use the description of stockbroker or sharebroker whilst it complies with the conditions of the licence. Euroz Securities is not licensed to provide general financial advice. In accordance with its licence, it was entitled to make recommendations in relation to the buying and selling of shares. Euroz Securities had a research department which specialised in researching low capitalisation emerging mining and exploration stocks. Euroz Securities regularly published materials that made buy and sell recommendations in respect of these stocks. Further, Euroz Securities is, and was at the material times, a party to a wholesale securities lending agreement with ACS Broker Services Limited. It made use of the facilities under this agreement in the conduct of its business. 21 As well as being an executive director of Euroz Securities, Mr Caldow is and, was at the material times, a member of the private client team which is headed by Mr Yeo. Mr Caldow's desk at work at Euroz Securities was, at all material times, located in close proximity to that of Mr Yeo. Mr Anthony Brittain was, at the material times the chief operating officer and financial officer of Euroz Securities. Mr Anthony Hewett was, at the material times, the head of Risk and Compliance. 22 Shortly after Mr Caldow moved to Euroz Securities in 2000, Mr Drummond became a client of Euroz Securities. At that time, the total value of Mr Drummond's share portfolio was around $100,000. Mr Drummond "followed" Mr Caldow to Euroz Securities. 23 In 2003, Mr Graham Anderson and Ms Lena Hilton advised Mr Drummond that the share trading activities he was then carrying on should be carried on by a corporation so as to attract lower corporate tax rates on profits. Mr Anderson is an accountant who advised Mr Drummond and his associated companies on his business affairs. Ms Hilton provided tax advice to Mr Drummond and his business entities. 24 Mr Anderson completed "sophisticated investor" certificates in respect of Eric Preston for the financial years 2003, 2004, 2005 and 2006. These certificates certified that Eric Preston had net assets of at least $2.5 million and a gross income for each of the preceding two years of at least $250,000. 25 Mr Anderson was also an officer of a number of publicly listed companies. These companies were mainly, but not exclusively, mining exploration companies. These companies included: Gallery Gold Limited, Falcon Minerals Limited, Echo Resources Limited and Apex Minerals NL. Mr Drummond bought shares in these companies from time to time. 26 Mr Drummond and Mr Anderson had a close working relationship. They communicated by email on almost a daily basis and on many occasions they exchanged several emails during the course of the day. The emails were directed mainly to the various business interests of Mr Drummond and his associated companies, but also included comment on sporting events, and evidenced a personal, as well as business, relationship. 27 Mr Anderson gave evidence in this case and I will say more about him, and the claims made affecting him, later in these reasons. 28 In late 2003, Mr Drummond told Mr Caldow that Mr Anderson had advised him that Eric Preston would be the new vehicle for future share trading activities. 29 On 6 January 2004, Eric Preston opened a share trading account with Euroz Securities. On that date, Mr Drummond and Mrs Drummond, as directors of Eric Preston, signed a form supplied to them by Euroz Securities for the purposes of opening the account for Eric Preston. The form included the following question: F Corporations Law Requirement Euroz Securities Limited has an obligation to ask you for particulars of your investment objectives, financial situation and specific needs in order to make recommendations appropriate to you. Please be advised that if you do not want to provide this information it may inhibit your advisors ability to recommend appropriate investments in relation to your financial situation. Do you wish to disclose this information to Euroz Securities Limited? YES NO 30 The word "NO" was circled and signatures of Mr and Mrs Drummond were affixed. 31 After Eric Preston opened the share trading account with Euroz Securities, Mr Drummond inquired of Mr Caldow whether a private company could have a margin loan. Mr Caldow told Mr Drummond that a private company could have a margin loan and sent Mr Drummond Leveraged Equities' application form for Eric Preston to complete. 32 There is controversy in the evidence as to the circumstances surrounding the entry by Eric Preston into the Leveraged Equities margin loan agreement. I will deal with that controversy later in these reasons. However, Mr and Mrs Drummond signed and submitted the completed application form to Leveraged Equities and a Leveraged Equities margin loan account was opened by Eric Preston. 33 Mr Drummond transferred the shares that were then held in his name into Eric Preston's Leveraged Equities account. At that time the total value of the shares was "several hundred thousand dollars". 34 Until January 2004, when Eric Preston commenced its share trading activities, Mr Drummond carried on his share trading activities from his office at the Metro Motors premises. From January 2004 until April 2007, Mr Drummond continued to carry on the share trading activities on behalf of Eric Preston, from the same premises. 35 Mr Drummond took the share trading activities that he conducted on behalf of Eric Preston seriously. Mr Drummond subscribed to the online sharebroker, CommSec, and by that means was able daily to follow the movements in the stock market on his computer through CommSec's website. Mr Drummond used his CommSec account to maintain a watch list of shares. He also used his computer to follow on a daily basis the share price movements and announcements made to the Australian Stock Exchange (ASX). The watch list included shares which were in companies not researched by Euroz Securities. Further, Mr Drummond systematically maintained research files which he compiled from information obtained from the financial press and also research materials sent to him by Euroz Securities. Mr Drummond also read the Australian Financial Review every day and from about mid‑2007 he subscribed to Personal Investor magazine and Business Spectator magazine. The research material that was sent to Mr Drummond included Euroz Securities' weekly newsletter which was often up to 40 pages in length. 36 On Friday, 21 January 2005, Mr Drummond instructed Mr Caldow to purchase a large number of shares in Falcon Minerals. Mr Drummond purchased 640,000 shares for $531,327. On the following Monday, the next trading day, an announcement was made to the ASX in relation to the acquisition by Jubilee Mines NL of a strategic interest in Falcon Minerals and the share price of Falcon Minerals went up. On that Monday morning, Mr Drummond telephoned Mr Caldow and directed him to sell the 640,000 shares in Falcon Minerals which were sold for $589,198, for a profit of $57,871. 37 This was the largest trade that Eric Preston had done up to that time. This trade was done without the recommendation of Mr Caldow. 38 In April 2005, Euroz Securities was the broker to the initial public offering on the ASX of shares in a company, Sundance Energy Australia Limited. The ASX code for this company's shares is SEA. Eric Preston took up a parcel of shares on the initial public offering. Eric Preston also entered into sub-underwriting arrangements with Euroz Securities in relation to a placement of Sundance Energy shares. Eric Preston over time acquired a very large holding in Sundance Energy shares. Each of Mr Caldow and Mr Drummond held and continued to hold, a positive view about Sundance Energy shares. 39 On 10 November 2005, Mr Drummond telephoned Mr Caldow and asked Mr Caldow to purchase two million shares in Gallery Gold Limited for Eric Preston. Approximately four weeks later, a takeover bid was made for Gallery Gold. Eric Preston sold its shares after the bid at a price of 43 cents per share and made a profit of $247,955. 40 In late 2005, Eric Preston participated as a sub-underwriter of a placement of shares in Babcock & Brown Environmental Investments Limited, which was underwritten by Euroz Securities. There was a disagreement between Mr Drummond and Mr Caldow as to the timing of the payment of the fee due to Eric Preston in respect of that sub-underwriting undertaken by Eric Preston. Mr Drummond telephoned Mr Caldow and complained to him that Eric Preston had not been paid the fee due to Eric Preston. I will say more about this telephone conversation later in these reasons. 41 In 2006, there was a considerable increase in Eric Preston's trading activities. From 2006, Mr Drummond spoke to Mr Caldow by telephone four or five times a day. Euroz Securities continued to send Mr Drummond research material and "buy" and "sell" recommendations. Euroz Securities offered Eric Preston positions in more than a dozen initial public offering placements. 42 Before December 2006, Mr Anderson had given Mr Drummond advice as to the operation of the escrow provisions of the ASX Listing Rules in respect of an investment in an unlisted company, National Fuel Ltd. On 9 December 2006, before the proposed public listing of Natural Fuel, Mr Drummond received an agreement from a firm of solicitors to sign on behalf of Eric Preston in relation to the operation of the escrow provisions on those shares. On 11 December 2006, Mr Drummond then forwarded the draft agreement to Mr Anderson by email. The email read as follows: Graham welcome home Please have a close look at this and ring me a s a p as I have to have this back today. Why don't I get at least a 50% reprieve seeing I did pay $5.00 a share and the multiple equals $9.00 a share. 43 Mr Anderson replied as follows: Yes, the full 1,200,000 will be escrowed. We have discussed this previously. Eric Preston is classed as a type 10 investor in the attached appendix 9B to the extent of the shares purchased from Distinctive. Given the amount of shares he holds, he is probably deemed a vendor holding greater than 20% of the issued capital. 44 Mr Drummond examined for himself the ASX Listing Rules after receiving this email response from Mr Anderson. Mr Drummond responded later that day to Mr Anderson by an email which expressed, in particularly colourful and abusive language, his dissatisfaction with previous advice he had received from Mr Anderson. 45 In March 2007, Goldeast sold its motor dealership business to Melville Motors (2006) Pty Ltd. At the same time, Eric Preston sold the property on which the dealership operated and the adjoining property. 46 On 27 March 2007, the contract for the sale of that motor vehicle business was settled. 47 In April 2007, Mr Drummond commenced to conduct the share trading business on behalf of Eric Preston, on a full-time basis. To that end Mr Drummond took an office in the same building as Mr Anderson. The office was one floor up from that of Mr Anderson. This meant that Mr Drummond was less than a minute or two away from Mr Anderson. 48 In late April or early May 2007, Mr Mark Rice of Opes Prime Stockbroking Ltd (Opes Prime) made a presentation to representatives of Euroz Securities, including Mr Yeo, regarding the Opes Prime securities lending and borrowing facility. Mr Mark Rice was, at the time, Head of Sales and Marketing at Opes Prime. 49 Shortly after the presentation on 10 May 2007, Mr Yeo of Euroz Securities sent an email to Mr Rice which stated: Compliance having a look at how we go about recommending a different margin lender. Some of the boys have asked about the security of OPES and what the balance sheet is like in terms of the lending you do against smaller cap stocks – what level of security do we have in the event of a major downturn?? 50 On 10 May 2007, Mr Rice responded to Mr Yeo's email. He stated: In answer to your second question about Opes and what happens in a market downturn. The first part of the answer is that we mark to market securities on a daily basis and where the client's security value declines and they go into a margin call, they have to come up with more cash or securities to cover their loan or they can be potentially sold down to cover the position. So you have exactly the same risk as with any other margin lender. However, we do operate under a securities lending and borrowing arrangement such that to get the funds to lend to the end client we "on lend" the securities to our funders, primarily ANZ. We maintain ample buffers with our funders so that we don't get into a position such that both we and the end clients are in margin call at the same time. In the extreme market meltdown situation when this could happen, we also have alternative means of raising cash to meet our obligations with our funders while our clients are meeting their margin calls. In the absolute highly unlikely worst case scenario, if Opes was to become insolvent, clients would end up as creditors to our funders, which is primarily ANZ, and they would have to repay their loan in exchange for the securities. There are a number of mitigating factors to ensure this doesn't happen, which are: · We have a significantly diversified portfolio of shares with our funders · We can be naturally hedged with the securities lending side · We maintain ample buffers with our funders · We employ a strict margin call process with clients · Alternative funding facilities are in place for the extreme situation · Our LVRs for the small cap stocks are low, so the stock has to "overnight" fall very significantly for the client to be in an uncovered position · General ASX risk management in extreme market downturns These procedures have been tried and tested, for example in March this year, and proven that our risk management procedures are robust. Hopefully this gives you some comfort but I am more than happy to provide you with further information about the business. 51 As at May 2007, Eric Preston's Leveraged Equities account contained shares in Beach Petroleum Limited to which a margin was attached, and about $1.6 million worth of shares in other companies, to which no margin was attached. One share with no margin attached was Sundance Energy. At that time Eric Preston held about four and a half million Sundance Energy shares. Further, the Leveraged Equities statements for Eric Preston's margin loan account, for each of the preceding months of January 2007 to April 2007, show that Eric Preston was at the commencement of each of those months in a shortfall position, that is, it had exceeded its credit limit. 52 On 14 May 2007, Mr Drummond had a telephone conversation with Mr Caldow. The contents of this telephone conversation are a crucial issue in this case. This is because Eric Preston has pleaded that Mr Drummond relied upon what Mr Caldow told him in the course of that conversation to terminate the Leveraged Equities facility, and to enter into the Opes Prime facility. Euroz Securities strongly contests the version of the conversation contended for by Eric Preston. I deal with that factual dispute at some length below. However, it is common cause that during the course of that conversation Mr Yeo, whose desk was located close to that of Mr Caldow in the Euroz Securities office, said words to the effect that Mr Caldow should tell Mr Drummond about Opes Prime. After the conversation, Mr Caldow sent Mr Drummond an email attaching the Opes Prime Financial Services Guide. 53 On 15 May 2007, Mr Drummond sent an email to Ms Danielle Jones at Leveraged Equities. The email stated: As you can see I have a large holding in Sundance Energy without any leveraged attached. It is my intention to buy more of this stock and I am enquiring as to whether you are able to help me by allowing a percentage of say 35%. Please confirm whether you are able to assist. 54 Ms Jones replied by email to Mr Drummond later that day, advising that Leveraged Equities would not provide a margin against the Sundance Energy shares. 55 On 17 May 2007, Mr Drummond telephoned Mr Rice of Opes Prime and discussed with him entry into an Opes Prime facility. Mr Drummond also discussed with Mr Rice the prospect of Eric Preston being able to use shares Mr Drummond held in his own name in Natural Fuel as collateral. 56 On 17 May 2007, Mr Caldow communicated by email with Mr Rice following a query from Mr Drummond. Later that day, Mr Caldow forwarded those emails to Mr Drummond. The emails between Mr Caldow and Mr Rice related mainly to loan to value ratios offered by Opes Prime, interest rates and trailing commissions proposed to be paid by Opes Prime to Euroz Securities. 57 Mr Drummond printed the computer file sent by Mr Caldow, containing the Financial Services Guide and application form on his printer. 58 The front page of the Opes Prime Financial Services Guide has located beneath the Opes Prime logo the following statement: Securities Lending and Borrowing Financial Services Guide Monday, 15 May 2006. 59 The financial services guide contained the following statement: First, and most importantly, you should note that we do not provide you with "personal advice" as defined by the Act and ASIC. Accordingly, we will not take into account your "objectives, financial situation and needs" ("Objectives") (as defined by the Act and ASIC) and therefore this FSG has been prepared without taking into account those Objectives. You will not be provided with a Statement of Advice. Accordingly you should carefully consider the appropriateness of our services with regard to your particular circumstances. 60 Under the heading on the next page "About Opes" the following statements appear: Opes provides these highly specialised services to sophisticated market players. This includes wealthy individuals, boutique fund managers and corporations. Because of the nature of our client base, Opes is not in the business of providing general or personal investment advice. Instead, working very closely with our clients and their advisors, we focus attention to the clients' requirements in our specialised field. This can include our equity participation, joint ventures and sharing risk, and with all of our clients, a long term mutual commitment and relationship. 61 The Opes Prime Financial Services Guide also contained a blank application form and the terms of the securities lending and borrowing agreement offered by Opes Prime. 62 On 22 May 2007, Mr and Mrs Drummond, as directors of Eric Preston, signed the completed application form for a securities lending and borrowing agreement with Opes Prime. The application form contained the following wording: I/We hereby declare that: 1 I/We acknowledge and accept that for corporate applicants it is a condition precedent for all the directors to have executed the Deed of Guarantee and Indemnity accompanying this Application Form prior to initiating any trading instructions to Opes Prime; 2 I/We acknowledge and accept that the confirmations despatched electronically are subject to the correction of errors and omissions; 3 I/We agree that Opes Prime will not be giving any general or personal advice to me/us in relation to the Facility or any dealing under it and so Opes Prime does not need to give me/us a Statement of Advice; 4 I/We have read and understood the FSG and accept the risks of securities lending under this Facility; 5 A person who signs an Application Form from an electronic copy of this FSG acknowledges that the person either downloaded and read the entire contents of the FSG or received personally and read the paper copy of the FSG; and 6 By signing this Application Form, a Facility with an account for me/us will be established on the terms set out in this FSG. 63 Mr and Mrs Drummond, as directors of Eric Preston, also executed a document entitled "Collateral lodgement from sponsored holding (HIN)" which authorised the transfer of Eric Preston's share portfolio to "ANZ Nominees PID 2005". 64 The application form for the securities lending and borrowing agreement with Opes Prime also provided that the directors of Eric Preston provide a guarantee and indemnity of Eric Preston's liability under the agreement. Mr Graham Anderson witnessed the signatures of Mr and Mrs Drummond attesting to their agreement to the guarantee and indemnity provisions. 65 On 22 May 2007, Mr Drummond faxed a completed application form to Mr Rice at Opes Prime and asked what further information needed to be supplied. Mr Drummond then telephoned Mr Rice and discussed the application. Also, later that day, Mr Rice sent a fax to Mr Drummond advising Mr Drummond that he would have to complete a further application form in his own name and that he and Mrs Drummond would both need to sign the further forms, one such form was the "Refinancing Instruction Form". Mr Rice forwarded the forms to Mr Drummond. 66 Mr and Mrs Drummond, on behalf of Eric Preston, executed the "Refinancing Instruction Form" to authorise the pay out of the loan owed by Eric Preston to Leveraged Equities and the transfer of the shares held by Leveraged Equities pursuant to its margin loan. Mr Drummond completed and signed the other forms. 67 On 23 May 2007, Mr Drummond faxed the completed application forms to Mr Rice. 68 On 24 May 2007, Mr Caldow, after having spoken to Mr Drummond, spoke to Mr Rice about getting a better interest rate from Opes Prime for Eric Preston. 69 On 24 May 2007, Mr Drummond sent Mr Anderson two emails attaching the Opes Prime Financial Services Guide and a string of emails between Mr Rice and Mr Caldow relating to the loan to value ratio, interest rates and trailing commissions in respect of the Opes Prime facility. There was an issue as to the extent to which Mr Anderson gave Mr Drummond advice about the entry of Eric Preston into the Opes Prime facility agreement. I will deal with this issue later in these reasons. 70 The Securities Lending and Borrowing Agreement (SLBA) between Eric Preston and Opes Prime contained among other clauses, the following clauses. Clause 1.1 of the SLBA provided as follows: 1.1 The Lender will lend Securities to the Borrower, and the Borrower will borrow Securities from the Lender, in accordance with the terms of this Agreement, regardless of which party is the Lender. In all cases Opes Prime must have received from the Client and accepted (by whatever means) a Borrowing Request, regardless of which party is the Lender. Unless otherwise stated in a Confirmation or other correspondence, if Opes Prime is the Borrower of Securities, the Fee initially will be interest on the Cash Collateral at the rata and with such other components as otherwise advised to the Client. 71 Clause 2 of the SLBA provided as follows: 2.1 The Lender will procure the delivery of Securities to the Borrower or deliver such Securities in accordance with the relevant Borrowing Request together with appropriate instructions for or instruments of transfer (if necessary) duly stamped (if necessary) and such other instruments (if any) as required to vest title absolutely in the Borrower. 2.2 Such Securities will be deemed to have been delivered by the Lender to the Borrower on delivery to the Borrower or as it directs of the relevant instruments of transfer and certificates or other documents of title (if any), or in the case of Securities title to which is registered in a computer based system which provides for the recording and transfer of title to the same by way of electronic entries (such as CHESS), on the transfer of title in accordance with the rules and procedures of such system as in force from time to time, or by such other means as may be agreed. 72 Clause 3.1 of the SLBA provided as follows: 3.1 The Parties must execute and deliver all necessary documents and give all necessary instructions to procure that all right, title and interest in: 1.1.1.1 any Securities borrowed pursuant to clause 1; 1.1.1.2 any Equivalent Securities redelivered pursuant to clause 6; 1.1.1.3 any Collateral delivered pursuant to clause 5; 1.1.1.4 any Equivalent Collateral redelivered pursuant to clauses 5 or 6; will pass absolutely from one Party to the other, free from all liens, charges, equities and encumbrances, on delivery or redelivery of the same in accordance with this Agreement. In the case of Securities, Collateral, Equivalent Securities or Equivalent Collateral title to which is registered in a computer based system which provides for the recording and transfer of title to the same by way of electronic entries, delivery and transfer of title will take place in accordance with the rules and procedures of such system as in force from time to time. 73 Clause 6.1 and cl 6.2 of the SLBA provided as follows: 6.1 The Borrower undertakes to redeliver Equivalent Securities in accordance with this Agreement and the terms of the relevant Borrowing Request. 6.2 Subject to clause 7 and the terms of the relevant Borrowing Request, the Lender may call for the redelivery of all or any Equivalent Securities at any time by giving notice on any Business Day of not less than the Standard Settlement Time for such Equivalent Securities or the equivalent time on the exchange or in the clearing organisation through which the relevant borrowed Securities were originally delivered. The Borrower must redeliver such Equivalent Securities not later than the expiry of such notice in accordance with the Lender's Instructions. 74 Clause 7.1 of the SLBA provided as follows: 7.1 On the date and time that Equivalent Securities are required to be redelivered by the Borrower in accordance with the provisions of this Agreement, the Collateral Taker will simultaneously redeliver the Equivalent Collateral and pay any Cash Collateral (in respect of the Equivalent Securities to be redelivered) to the Collateral Provider. Neither Party is obliged to make delivery (or to make a payment as the case may be) to the other unless it is satisfied that the other Party will make such delivery (or make an appropriate payment as the case may be) to it simultaneously. If it is not so satisfied (whether because an Event of Default has occurred in respect of the other Party or otherwise), it will notify the other Party and, unless that other Party has made arrangements which are sufficient to assure full delivery (or the appropriate payment as the case may be) to the notifying Party, the notifying Party will (provided it is itself in a position, and willing, to perform its own obligations) may withhold delivery (or payment, as the case may be) to the other Party. 75 At 1 June 2007, Eric Preston had a share portfolio of a market value of $5,552,375.60. It had a balance outstanding on the margin loan with Leveraged Equities of $1,812,076.27. However, because Leveraged Equities would only lend against some of the stocks in Eric Preston's share portfolio, the portfolio had a margin value of $1,593,582.61. There was a shortfall in respect of the margin loan in an amount of $218,493.66. 76 On 1 June 2007, Opes Prime paid the balance outstanding on Eric Preston's Leveraged Equities account to Leveraged Equities. 77 During the period 1 June 2007 to 4 June 2007, the securities held on behalf of Eric Preston by Leveraged Equities were transferred. The Portfolio Statement issued by Opes Prime to Eric Preston for the period 1 June 2007 to 29 June 2007 records that the following shares were transferred by Leveraged Equities: 1,000,000 BPT 100,000 IPM 3,000,000 ITC 250,000 MDL 200,000 OXR 17,950 PBD 2,000,000 SDL 5,236,763 SEA 571,429 SEAO 500,000 TFE 6500 VMG 78 On 30 May 2007, Mr Caldow, on the instructions of Mr Drummond, on behalf of Eric Preston, completed a Euroz Securities' document opening an account for Eric Preston to trade using the Opes Prime facility, which contained the following question from Euroz Securities as to risk profile: Euroz Securities Limited has an obligation to ask you for particulars of your investment objectives, financial situation and specific needs in order to make recommendations appropriate to you. Please be advised that if you do not want to provide this information it may inhibit your advisor's ability to recommend appropriate investments in relation to your financial position. 79 Mr Drummond instructed Mr Caldow to answer that question by stating that he did not wish to disclose the details of Eric Preston's investment objectives, financial situation and specific needs. 80 Eric Preston commenced trading using the Opes Prime facility on 31 May 2007 with the purchase of a further 239,000 shares in Sundance Energy. Thereafter, until 27 March 2008, Mr Drummond used the Opes Prime facility extensively as a means of financing of the share trading activities of Eric Preston. During that period Eric Preston transacted more than 340 trades. 81 In June 2007, Mr Rice of Opes Prime prepared a brochure in consultation with Mr Yeo of Euroz Securities, setting out the loan to value ratios which Opes Prime would offer in relation to stocks which were on the Euroz Securities research list. The Opes Prime brochure is headed "Equity Financing" and described "equity financing" as "the lodging of securities with Opes Prime to borrow money to invest in other securities". 82 On 14 August 2007, Mr Caldow attended a meeting of the board of directors of Euroz Securities. Also present was, among others, Mr Yeo. The minutes of that meeting record the following: Mr Yeo tabled and read to his report on the retail desk…He highlighted: … · Clients switching to Opes from LE based on new interest charges for loans under 50k. 83 From August 2007, Mr Drummond started meeting regularly with Mr Caldow and, from September 2007, with Mr Peter Diamond of Euroz Securities for a beer and a chat at the Captain Stirling Hotel in Nedlands at the end of the trading day. These meetings continued until March 2008. 84 As previously mentioned, Mr Drummond was very favourably disposed to Sundance Energy shares. In early 2007, Mr Caldow said words to the following effect to Mr Drummond in relation to Eric Preston's holding in Sundance Energy shares: I don't think you should go to 5% and you realise that if you do you need to put in a substantial shareholder notice. 85 Whilst Mr Caldow was away on holiday during the period 15 September 2007 to 15 October 2007, Mr Drummond purchased another one million shares in Sundance Energy which increased Eric Preston's holding in Sundance Energy to in excess of five per cent. After Mr Caldow returned from his holiday, Mr Caldow during a telephone conversation advised Mr Drummond that Eric Preston would need to file a "substantial shareholder notice" because it had exceeded a five per cent holding. Mr Drummond said that he had better speak to Mr Anderson about it. 86 Mr Drummond then spoke to Mr Anderson. Thereafter, Mr Drummond telephoned Mr Caldow and reported that he had spoken to Mr Anderson who had said that it was not necessary to lodge a substantial shareholder notice as the shares were held by ANZ and that ANZ held 27 million of these shares. 87 By an email dated 4 October 2007, from Mr Rice to Mr Yeo, Mr Rice advised Mr Yeo that Opes Prime sponsored a V8 Supercar and invited Mr Yeo to nominate some Euroz Securities' employees to attend the Indy Car Race at the Gold Coast on 19 October 2007, as the guests of Opes Prime. Mr Yeo duly nominated four advisors to attend the Indy Car Race in response to Opes Prime's invitation. 88 On 19 December 2007, Mr Rice sent Mr Yeo an email inviting four of the Euroz Securities advisors to join Opes Prime at the semi-final of the Australian Open tennis tournament. The invitation was to have dinner and drinks followed by the tennis. Mr Yeo responded by an email saying that there was plenty of interest in the invitation and asking Mr Rice to send him a list of Euroz Securities advisors and "their total loan balances". Opes Prime then sent Mr Yeo the list he requested. This list named each of the Euroz Securities advisors (who was described as a "referrer"), the clients of Euroz Securities whom each had referred to Opes Prime, and the balance outstanding to Opes Prime on each client's loan. The list showed that the total number of persons referred by Euroz Securities "referrers" was 53. This included Eric Preston. The balance outstanding on Eric Preston's loan was $2,990,045.98. The list of persons with Opes Prime facilities also included a number of employees of Euroz Securities, and relatives of employees of Euroz Securities. Among those persons was Mr Caldow's brother-in-law and sister-in-law. 89 In late January 2008, Ms Nicola Thiel of Leveraged Equities attended a meeting of Euroz Securities brokers at their premises. As mentioned, by that time there were over 50 stockbroking clients of Euroz Securities who had entered into securities lending and borrowing agreements with Opes Prime as a means of financing their respective share trading activities. 90 After that meeting Ms Thiel and Mr Caldow had a conversation. In the course of that conversation, Ms Thiel told Mr Caldow that a client who has an Opes Prime facility transfers ownership in the shares to Opes Prime and Opes Prime on‑transfers ownership in the shares to obtain its funding from banks. This meant that the stocks were not held in the client's name, but were held by ANZ. 91 After that conversation with Ms Thiel, Mr Caldow raised this issue with Mr Yeo who said that he would check with Opes Prime. 92 On 31 January 2008, Mr Brittain of Euroz Securities read an article in The Australian newspaper which was written by Ms Adele Ferguson entitled "Banks put squeeze on Tricom". The article included the following statements: ANZ has given Tricom managing director Lance Rosenberg only days to reduce the broker's margin loan book. Tricom yesterday belatedly settled its trades with the Australian Securities Exchange following a crisis that began just over a week ago when the share market lost 5 per cent in one day, triggering margin calls. Tricom's main creditors, ANZ, Merrill Lynch and Credit Suisse, then effectively froze Tricom's accounts. Tricom, which holds about 29,000 accounts, was forced to sell shares it financed on behalf of clients… … The Tricom model is such that clients who take out a securities lending agreement (similar to a margin loan) sign away their beneficial ownership of the shares to Tricom. This can leave clients as unsecured creditors behind the banks. The calibre of Tricom's clients is unknown because they are not required to provide financial details to get a securities lending agreement. They just have to tick a box and agree to collateral of cash or shares. "When you provide shares as collateral, you transfer them to us absolutely," the Tricom securities lending agreement booklet says. So, when a client takes out a securities lending agreement, the shares the client buys are transferred to Tricom, which takes on the beneficial ownership of the shares. This means the client takes on Tricom's credit risk. The most likely reason a client goes to Tricom is because Tricom does not require the documentation of other margin lenders, such as ability to prove financial worth or ability to pay. "Some people who take out loans with Tricom don't have all the financials required to get a traditional loan," one broker said. Tricom's bankers, ANZ, Merrill Lynch and Credit Suisse, have contracts with Tricom, not with Tricom's clients. That is how they have the power to freeze Tricom's accounts and force Tricom to sell shares when there is a margin call. The common perception among many of Tricom's clients is that the shares belong to them, but when they take out a securities lending agreement with Tricom they sign the beneficial ownership of those shares to Tricom. It is this that makes Tricom different to most other margin lenders. They don't own shares on trust for the client. In most cases margin lenders hold shares in a separate account in the client's name. In Tricom's case, the shares get mixed in with Tricom's and everyone else's shares, providing securities to the banks that provide margin loans to Tricom. The exact wording in Tricom's securities lending explanatory booklet is: "The margin lending facility operates through a securities lending agreement for your competitive advantage. This differs from many of the traditional margin lending facilities. Although we refer to 'lending' and 'borrowing' securities, the securities are actually transferred absolutely to the other party." It continues: "When you lodged securities as margin cover or against the loan we make to you, you are transferring those shares absolutely to Tricom. You do not retain any beneficial ownership in the shares you lend to Tricom. Ordinarily Tricom will on-lend the securities it receives on a loan from you, participating in the extensive securities lending market in Australia. That securities lending market is not specifically regulated and you have no rights relating to the securities loan under any exchange market rules." 93 Mr Brittain also discussed the article with Mr Yeo and Mr Hewett. Mr Yeo and Mr Hewett spoke to Mr Rice at Opes Prime about the nature of the Opes Prime facility. Mr Rice sent an email in response to the matters raised by Mr Yeo and Mr Hewett. The email stated: Further to our discussions, please find following an explanation of our structure and current position. Opes Prime operates under a securities lending and borrowing structure, such that the legal ownership of stocks passes to Opes Prime and the client retains full economic and beneficial ownership of the shares. The stock will most commonly be registered in the name of ANZ Nominees who are our nominee/custodian. We source the funding for the book through securities lending and borrowing arrangements with a number of counterparties, including ANZ, Merrill Lynch and Dresdner. The risk associated with this structure is if Opes Prime was to become insolvent then the clients would become unsecured creditors of Opes Prime for the difference between the market value of their securities and the amount they have borrowed from us. Please note the following about the structure of Opes Prime Stockbroking: · We are a full market participant of the ASX and are subject to the ASX Operational and ACH Clearing Rules; · We have an AFSL and are subject to ASIC rules and regulations; · These regulations require Opes Prime to maintain various Risk Management and Compliance processes and procedures; · As an ASX participant we must calculate and report our capital adequacy requirements on a daily basis; · We are regularly audited by ASX as all participants are; · We are audited by Ernst & Young; · A reasonable portion of our total assets under management are held in short positions, which provides a degree of protection in market downturns; · We receive value from our funders on all stocks which we provide a LVR against and to lower the risk, provide a lower LVR to our client than that we receive from our funders. We are not using excess collateral on large stocks to provide a LVR against lower market cap stocks; · Our long book is geared conservatively and we have significant buffers available. During the recent market volatility, we have conducted stress testing on our book and are comfortable where we are placed. Our analysis indicated that the market would have to fall by a further 20% or more and none of our clients meet any of their margin calls for us to have an issue. Needless to say, the risk of every single client failing to meet their margin calls is so unlikely as to be negligible; · In the event of a significant rapid market correction, we have the capacity to raise cash through sources, other than our securities lending and borrowing arrangements with our funders, to meet margin calls with our funders while our clients are meeting their margin calls; and · Our funders completed significant due diligence before and on an ongoing basis on our operations. For example, both ANZ and Merrill Lynch have been in contact with us in the past few days to expressly state their continued support and their desire that we should continue our business with them. Both expressed that they felt this way based on our past performance, our experience, procedures and prudence, and our evident IT capabilities. The risk management procedures that we have in place include the following: · Processes for setting up clients that include credit checking and other verification processes to give us surety around client's capacity to meet margin calls; · Use of standard legal agreements; · We have an Operational Risk team to monitor client positions; · We monitor and margin client positions on a daily basis; and · A clear methodology for determining our lending criteria for securities that is based on a number of factors including market capitalisation, liquidity, concentration and diversification of portfolio. In respect of clients not meeting margin calls in agreed timelines, then we will sell down their portfolio to bring the portfolio back into position, in line with margin lending industry practice. With these policies and procedures in place, we are confident that the firm is in a strong position and more than capable of managing market volatility. Our overall value proposition of product, credit, service and price are extremely competitive if not market leading and we will continue to work with all our partners to provide innovative financial solutions to help everyone grow their businesses. I am more than happy to provide you further information and speak to anyone about concerns they may have. 94 On 31 January 2008, Mr Brittain arranged for an email to be sent from Mr Hewett to all brokers attaching a statement regarding Opes Prime and also Tricom. Mr Yeo then instructed all the retail brokers including Mr Caldow to send out the email to their clients. Mr Caldow did so. 95 On 1 February 2008, Mr Drummond received an email from Mr Caldow. The email stated: General Margin Lending Comments from Euroz Securities We refer to recent media articles about the ASX settlement difficulties being experienced by Tricom Equities Limited and the potential exposures of their clients. The problems being experienced by Tricom are largely as a result of the margin lending business that they operate which has been exposed to the significant decline in value of some of their substantial stock positions. Euroz Securities would like to highlight that we do not operate any margin lending business and have no direct exposure to Tricom or any of their operations. However, some of our clients have entered into securities lending arrangement and it is worth highlighting the fundamental differences in the borrowing arrangements between a securities lender (eg Tricom, Opes Prime) versus traditional margin lenders (like St George, Leveraged Equities, BT, etc). Typically securities lenders provide more attractive interest rates than margin lenders, lend on a greater number of stocks than margin lenders and provide a higher loan to value ratio (LVR) for the stocks on which the lend. Importantly the client is not required to provide detailed financial information to get a securities lending agreement. One significant point is that the securities lending model requires legal ownership to pass from the client to the securities lender and often the stock is held in a pooled account rather than segregated by individual client HIN. This means that all the shares for all the clients get mixed in together with the securities lenders and this pool is used as security by the banks that provide the loans to securities lender. The risk associated with this structure is that if the securities lender was to become insolvent then the clients would become unsecured creditors of the lender for the difference between the market value of their securities and the amount they have borrowed. Please note that the securities lending market is not specifically regulated and there are no rights relating to the securities loan under any stock exchange market rules. There are obviously some benefits in the securities lending arrangements, however, equally you need to consider the additional risks. In the light of the recent issues, these risks may warrant reassessment. 96 In early February 2008, Mr Brittain prepared a document described as the "Operations Monthly Report for January 2008". It was distributed by email to Mr Diamond for review on 8 February 2008, and was then included in the board papers for the meeting of directors of Euroz Securities on 19 February 2008. The report contained the following entry under the heading "Risk Management and Compliance": · Issue at ASX on 29 January 2008 resulting in delay to the cash settlement process and caused by Tricom being unable to meet their settlement obligation. This has resulted in a review of our securities lending operations with Opes given the higher risk associated with these products. · Evaluating a further issue the above highlighted with respect to our authority to advise clients regarding their securities lending arrangements and whether this requires a change to our AFSL. 97 Mr Rice of Opes Prime came to Perth and met with representatives of Euroz Securities on 5 February or 6 February 2008. During the course of the meeting, Mr Rice made a number of statements. These statements were to the following effect: Opes was a participant in the ASX and therefore calculated and reported its capital and equity requirements to the ASX on a daily basis; Opes was regularly audited by the ASX and ASIC; Opes had the full support of the ANZ and their other banks; Opes was audited by Ernst & Young; For Opes to have an issue the Australian Stock Market would need to fall by 20% in a day; and none of its client's paid their margin calls. 98 At the meeting, in response to a query from Mr Brittain, Mr Rice confirmed that if Opes Prime went down, the client would be an unsecured creditor of Opes Prime. 99 After the meeting Mr Caldow telephoned Mr Drummond and reported on what Mr Rice had said at the meeting. The content of this telephone conversation is an important issue in this case. I discuss this issue in detail below. However, it is accepted that during that telephone conversation Mr Caldow said that he was passing on information which he had heard from Mr Rice, and that if Mr Drummond wished to discuss the information further that Mr Drummond should telephone Mr Rice. 100 Subsequently, Mr Drummond did telephone Mr Rice and discuss the financial position of Opes Prime with Mr Rice. 101 On 6 February 2008, after he had spoken to Mr Rice, Mr Drummond consulted with Mr Anderson. Mr Anderson advised Mr Drummond that he had worked too hard and too long to take any risk in relation to the Opes Prime facility. Mr Drummond then told Mr Caldow of the conversation that he had had with Mr Anderson. Mr Caldow said to Mr Drummond that he could not agree more with Mr Anderson's advice. A few days later, Mr Caldow and Mr Drummond had a telephone conversation. Mr Drummond asked how he could get out of Opes Prime. Mr Caldow said he could sell down some stock and pay out the loan, or he could refinance. 102 Shortly thereafter, Mr Caldow emailed Leveraged Equities inquiring as to whether it would refinance the Opes Prime facility by providing a margin loan to Eric Preston. He sent details of Eric Preston's existing share portfolio. 103 Mr Drummond, on behalf of Eric Preston, continued to use the Opes Prime facility to trade in shares, after receiving the email of 1 February 2008 and the advice from Mr Anderson and Mr Caldow. 104 On 11 February 2008, Mr Caldow received an email from Leveraged Equities saying that it would not refinance the Opes Prime facility of Eric Preston because of the nature of the stocks in Eric Preston's portfolio. Mr Caldow forwarded this email to Mr Drummond. 105 On 11 February 2008, Mr Drummond also emailed CommSec stating that he was looking at opening a margin loan account and inquiring as to the loan to value ratios CommSec would allow in respect of Cooper Energy, OM Holdings, Sundance Energy and Territory Resources. CommSec replied later that day, in effect, stating that it would not provide a margin loan on the basis of the security comprising shares in those companies. 106 On Monday, 11 February 2008, an article appeared in the Australian Financial Review headed "Opes Prime 'doing fine' in volatile market". The paragraphs of the article read: Broker Opes Prime last week distanced itself from troubled rival Tricom Equities, which has been forced to reduce the size of its loan book after failing to settle trades on time two weeks ago. Melbourne-based Opes Prime said there had not been a significant increase in margin calls to its clients in January and early February when the benchmark S&P/ASX 200 Index plunged nearly 11 per cent. Banks such as Commonwealth Bank of Australia, Macquarie Bank and Westpac Banking Corporation experienced a big rise in margin calls and removed some companies from the margin lists. Opes Prime executive director Julian Smith attributed the strength of recent trading to the diverse nature of clients' portfolios. It tends to lend against a portfolio of shares so if the price of one share falls sharply, Opes Prime can often increase the loan against other shares to compensate. Mr Smith said Opes Prime had margin calls on less than 2 per cent of its book and that figure was decreasing rapidly. Even at the height of volatility in the market, our total client margin calls did not go beyond 7 per cent…At that sort of amount, we do not have any cause for concern. Mr Smith said the firm had held extra discussions with its bankers, which include Australia & New Zealand Banking Group and Merrill Lynch, during the past few weeks, and the lenders had expressed their full confidence in the company. "They all said to us they were very happy and that we should continue to do what we are doing," he said, and January had been a "very good month" as business inflows picked up. Plans to float on the ASX via a backdoor listing through quoted shell company Reco were on track, Mr Smith said, but he declined further comment. The broker has a loan book of $1 billion against $2 billion of assets. The firm's large investment in information technology systems was another reason behind its ability to cope with the recent volatile equity markets, and its business model as a stock lender rather than a margin lender gave it more flexibility… 107 On Tuesday, 12 February 2008, there was a board meeting of Euroz Securities. Among those present at the board meeting were Mr Caldow and Mr Yeo. The minutes of that board meeting record the following: Mr McKenzie tabled and read to Mr Diamonds report on financials…He highlighted: … · OPES positions – reduction in positions held with OPES · A discussion on EZL held in OPES was held · It was RESOLVED that no staff were to hold their EZL on an OPES account · A discussion about the market conditions (current and expected) was held. 108 Later in February 2008, Mr Drummond, on behalf of Eric Preston, also applied to the National Australia Bank Limited (NAB) for a margin loan secured against the Eric Preston share portfolio in order to refinance the Opes Prime facility. The NAB advised that it would not refinance the Opes Prime facility on the basis only of the Eric Preston's portfolio. It would, however, provide a loan secured against Mr and Mrs Drummond's house. Mr Drummond would not agree to that. 109 On 18 March 2008, there was a meeting of the board of directors of Euroz Securities. Among those present were Mr Yeo and Mr Caldow. The minutes of the meeting record as follows: Mr McKenzie tabled and read to Mr Diamonds Report on financials…He highlighted: · OPES positions – reduction in EZL positions held with OPES Comment: S Yeo commented that he had discussed EZL positions with NAB and OPES and that they had a positive view on how those positions would be managed. · Brokerage about 4-5 best month this year. However March could see reductions in brokerage due to market conditions. 110 During the period 1 February 2008 to 27 March 2008, Mr Drummond made 68 trades using the Opes Prime facility. There was no diminution in the amount of trading engaged in by Eric Preston during that period compared to the level of trading engaged in by Eric Preston during the period after the Opes Prime facility was entered into and 1 February 2008. 111 On 27 March 2008, administrators were appointed to Opes Prime. 112 On 28 March 2008, Mr Yeo rang Mr Caldow at approximately 7 am and said words to the effect that Opes Prime had gone into administration. 113 As at 27 March 2008, Eric Preston held a portfolio worth $7,822,957.15. The portfolio was comprised of the following shares: 6,000 APP 30,000 BHP 850,000 COE 743,685 OMH 11,400,000 SEA 114 On 27 March 2008, the amount outstanding on Eric Preston's Opes Prime facility was $3,075,143. 115 On 28 March 2008, Mr Russell Kane, a director of Euroz Securities, sent Mr Jay Hughes, the executive director of Euroz Limited, and also a director of Euroz Securities, an email in the following terms: How the f#$#$K can we have a client with $5-6m exposure to OPES prime. I am sorry but that is dumb. 116 On 15 October 2008, liquidators were appointed to Opes Prime. Eric Preston has filed a proof of debt in the sum of $5,389,251.09. 117 On 4 August 2009, a scheme of arrangement was entered into between Opes Prime and its creditors. The parties have proceeded on the basis that the indications are that Eric Preston will recover around 37 cents in the dollar from the scheme of arrangement. 118 I make findings in terms of the description of the events and circumstances described in [9]-[117] above. ERIC PRESTON'S CLAIM AGAINST EUROZ SECURITIES 119 On 20 May 2008, Eric Preston commenced this proceeding. The pleadings were amended during the course of the trial. Eric Preston amended its statement of claim and Euroz Securities amended its defence and counterclaim. 120 Further, on 25 September 2009, each of Eric Preston and Euroz Securities was given leave to reopen their respective cases, to permit Eric Preston to introduce further evidence comprising the Operations Monthly Report for January 2008 prepared by Mr Brittain and to permit the parties to make further submissions in relation to issues arising from that report. Also, by orders made on 11 November 2009, leave was given to Eric Preston to reopen its case to permit it to tender documents relating to the filing of Eric Preston's proof of debt and the scheme of arrangement, entered into on 4 August 2009. I also sought submissions from the parties as to how I was to treat the fact that there was a prospect that Eric Preston would receive a dividend from the scheme of arrangement in the disposition of this proceeding. I received fulsome submissions on this issue. However, in light of the conclusions to which I have come, it is unnecessary to address those submissions. 121 Eric Preston relies upon the following causes of action: (a) breach of contract, (b) breach of a duty of care allegedly owed by Euroz Securities to Eric Preston, (c) damages arising from misleading or deceptive conduct in contravention of the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth), and (d) breach of fiduciary duty. THE WITNESSES Eric Preston's witnesses 122 The following persons gave evidence as part of Eric Preston's case: Mr Drummond, Mrs Drummond, Mr Anderson, Mr Blashki and Mr McKimm. Mr Bruce Scott Drummond 123 Mr Drummond swore five affidavits. The first affidavit was sworn on 9 September 2008. This is Mr Drummond's primary affidavit. The second affidavit was sworn on 19 November 2008. Mr Drummond annexed to his second affidavit a copy of statements issued by Euroz Securities setting out Eric Preston's share trading activity between January 2004 and April 2008. There are also statements from each of Leveraged Equities and Opes Prime, relating to Eric Preston's share trading using the respective facilities. 124 Mr Drummond's third affidavit was sworn on 25 February 2009. This affidavit was sworn after Mr Drummond had seen the affidavit of Mr Caldow sworn on 30 December 2008 and the affidavit of Mr Brittain sworn on 5 January 2009. This affidavit responds to statements made in the affidavits of Mr Caldow and Mr Brittain. 125 Mr Drummond's fourth affidavit was sworn on 15 March 2009, the day before the commencement of the trial. In this affidavit, Mr Drummond refers to, and seeks to supplement or explain statements made in his previous affidavits. Mr Drummond's fifth affidavit was sworn during the trial on 24 March 2009, and related to the giving of further discovery. 126 Mr Drummond's evidence was unsatisfactory and must be approached with caution. This is particularly so in relation to the evidence which is contained in his affidavits and which relates to his dealings with Mr Caldow. In my view, significant aspects of Mr Drummond's evidence, particularly his affidavit evidence, was tailored so as to accommodate the case which he and his lawyers sought to advance. 127 In his first affidavit, in particular, Mr Drummond omitted to refer to a number of matters which would have formed part of an accurate account of the events which occurred, but which had the propensity to undermine the case which he sought to make. As I mention in my reasons below, a significant example of Mr Drummond creating a misleading impression through omission, occurred in relation to his evidence about his existing relationship with Leveraged Equities at the time that he entered into the Opus Prime facility. In his first affidavit, Mr Drummond sought to create the impression that he enjoyed a good relationship with Leveraged Equities and that it was only through the intervention of Mr Caldow that that good relationship was severed. It was only after he learned that Mr Caldow had deposed in his affidavit to the complaints that Mr Drummond had made to him about Leveraged Equities, that Mr Drummond acknowledged in his third affidavit that he had not been content with the facilities which were available to him under the Leveraged Equities facility. 128 A further example of Mr Drummond failing to be frank as to circumstances and events in his first affidavit which had a propensity to undermine the case he sought to advance, was the failure to mention the extent to which he dealt with Mr Rice of Opes Prime, directly, before entering into the Opes Prime facility. Mr Drummond makes no mention of the fact that he telephoned Mr Rice on 17 May 2007, about the Opes Prime facility, nor the fact that he had sought Mr Rice's assistance with the completion of the application forms. 129 Yet a further example of the tailoring of Mr Drummond's evidence in his first affidavit, relates to his evidence about the conversation in February 2008 with Mr Caldow when Mr Caldow reported on Mr Rice's meeting with Euroz Securities advisors. Mr Drummond fails to refer to the fact that Mr Caldow had said that he should telephone Mr Rice directly, if he wanted to find out more about Opes Prime's financial position, and that he had subsequently done so. I deal with this matter in more detail below. 130 I also refer in my reasons below, to another significant attempt by Mr Drummond to tailor his affidavit evidence for the purposes of advancing the case sought to be made. This relates to para 3 of the fourth affidavit made by Mr Drummond, which sought to tailor evidence to diminish the significance of the fact that Mr Drummond had deposed that he had sought advice from Mr Anderson (and not Mr Caldow) as to whether it was prudent for Eric Preston to enter into the Leveraged Equities facility. It was also an attempt to reconcile Mr Drummond's evidence with the contrary evidence of Mr Anderson. 131 Further, during cross-examination, Mr Drummond departed from the evidence which he had given in his affidavits in respect to matters of significance to the disposition of this case. I have set out in my reasons below a number of instances when this occurred. Another instance, which has some significance, relates to the nature of the language used by Mr Drummond when expressing dissatisfaction with services or institutions. In his affidavit, Mr Caldow deposed that Mr Drummond had in late 2005 or early 2006, whilst using particularly colourful language, threatened to sue him in relation to what Mr Drummond saw as Euroz Securities' failure to pay Eric Preston a sub-underwriting fee. Mr Caldow also referred in his affidavit to other conversations in which Mr Drummond had sworn and used colourful language in relation to his criticism of Leveraged Equities and his description of banks. In his third affidavit, Mr Drummond denied that he had threatened Mr Caldow, or swore at him during the discussion about the sub-underwriting fee. He also denied using the colourful language Mr Caldow described when recounting Mr Drummond's criticisms of the service provided by Leveraged Equities and banks. In his cross-examination, Mr Drummond initially denied that he had ever used abusive language or swore at Mr Caldow, he finally conceded, however, that there had been occasions when he became frustrated and swore at Mr Caldow. Further, it is apparent from the tenor of the emails between Mr Drummond and Mr Anderson, particularly the email of 11 December 2006, and the concessions finally made by Mr Drummond, that Mr Drummond is not averse to using colourful language in his communications with those persons with whom he has a close relationship. In my view, this also bears upon the weight to be accorded to the evidence of the conversations between Mr Caldow and Mr Drummond, as deposed to by Mr Drummond and Mr Caldow in their respective affidavits. Mr Caldow's version of the conversations is couched in colloquial language, including colourful language, which has the ring of truth, bearing in mind what I have just said as to the propensity of Mr Drummond to use language of that nature on some occasions. On the other hand, the conversations deposed to by Mr Drummond are couched in the stilted and artificial language used by lawyers seeking to advance a case on behalf of their client. 132 I prefer the evidence of Mr Caldow to that of Mr Drummond where their evidence conflicts. Mrs Judith Maree Drummond 133 Mrs Judith Maree Drummond, who is the wife of Mr Drummond and a director of Eric Preston, swore two affidavits. The first affidavit was sworn on 9 September 2008. The second affidavit was sworn on 15 March 2009. There was no challenge to the credibility of Mrs Drummond. Mr Graham Douglas Anderson 134 Mr Graham Douglas Anderson swore two affidavits dated 9 September 2008 and 25 February 2009 respectively. Mr Anderson swore his second affidavit after he had seen the affidavits of Mr Caldow and Mr Brittain sworn on 30 December 2008 and 5 January 2009 respectively. 135 Mr Anderson is the managing director of a corporate advisory firm, GDA Corporate, which is the trading name for Graham Anderson Pty Ltd. Mr Anderson has operated that business since 1 July 1999. Mr Anderson also operates a financial planning business, Portico Financial Management Pty Ltd. That business has operated since January 2006. Further, during the period 1999 to 2006, Mr Anderson was the principal of Graham D Anderson & Co, chartered accountants and management consultants. 136 Mr Anderson's evidence must also be approached with caution, particularly insofar as he gave evidence as to the scope of his retainer with Mr Drummond and his associated entities and the extent to which he gave Mr Drummond advice. I say that for the following reasons. 137 Mr Anderson was acutely conscious of the fact that Euroz Securities claimed that he ought to have advised Eric Preston as to the risks associated with entry into the Opes Prime facility. Mr Anderson sought to minimise the extent of his retainer and the scope of professional services which he provided to Mr Drummond and his associated companies, including Eric Preston. In his affidavits, Mr Anderson deposed that there were three discrete areas in respect of which he provided financial services to Mr Drummond and his associated companies. These were advice in relation to the conduct of the car dealership, auditing services of the car dealership companies, and taxation advice as a secondary advisor to Ms Lena Hilton. He repeated this in his answers early in his cross-examination. 138 During the course of cross-examination, Mr Anderson was taken to and asked about a number of emails evidencing his dealings with Mr Drummond in relation to the investment in shares in Natural Fuel. At first, Mr Anderson, unconvincingly, said that the dealings were directed only to keeping him informed of the number of shares and the cost base of those shares for the purpose of preparing accounts. Mr Anderson later conceded that the scope of the dealings extended beyond that limited purpose, and that he had given advice to Mr Drummond in relation to the escrow provisions relating to the Natural Fuel shares. Mr Anderson was taken in cross-examination to a wide range of tasks which he carried out on the instructions of Mr Drummond, which went beyond the scope of the three discrete areas postulated by Mr Anderson. These tasks included, but were certainly not confined to, completing off-market transfer forms, dealing with solicitors in relation to a dispute involving a firm, London Partners, negotiating an off-market sale of shares in Echo Resources, assisting in the application for finance for the purchase of a property in Dunsborough, Western Australia and advice as to whether Eric Preston was required to file a substantial shareholder notice in respect of the number of shares in Sundance Energy which Mr Drummond had acquired on behalf of Eric Preston. 139 Mr Anderson ultimately accepted that he provided business advice to Mr Drummond and his associated companies in respect of all of their commercial activities, other than legal advice and superannuation advice and Eric Preston's share trading activities. 140 Secondly, Mr Anderson's evidence as to the limited extent of his retainer was also inconsistent with Mr Drummond's description of Mr Anderson as his "confidante". The closeness of the relationship between Mr Drummond and Mr Anderson is demonstrated by the large volume of emails that passed between them and the wide range of matters dealt with in the emails. It is also evident by the fact that in response to a subpoena, Mr Anderson claimed privilege in relation to letters containing legal advice in relation to this proceeding which Mr Drummond had forwarded to him. Mr Gregory Errol Blashki 141 Mr Gregory Errol Blashki swore an affidavit dated 15 December 2008, which attached an expert report on the assessment of damages. Mr Blashki also prepared a second report. Mr Blashki obtained a Bachelor of Commerce degree from the University of Melbourne in 1974 and is a partner of the accountancy firm, Pitcher Partners. He has been a partner of Pitcher Partners, KPMG and its predecessor firms since 1982. Mr Blashki's evidence does not raise credibility issues. However, there are aspects of his expert reports with which Mr Pendergast disagreed. Mr Russell Allan McKimm 142 Mr McKimm is a stockbroker. At the date of the trial, Mr McKimm was a client advisor at Tolhurst Ltd. 143 During the period 2005 to 2007, Mr McKimm was a director of Shaw Stockbroking Ltd. During the period 2001 to 2005, he was a director of Tolhurst Ltd and during the period 1999 to 2001, a director of D & D Tolhurst Ltd. Before that, Mr McKimm was a manager of D & D Tolhurst Ltd, NSW, in the years 1995 to 1999. During the period 1991 to 1995, Mr McKimm was business development manager and head of financial planning at Dicksons Ltd. During the period 1988 to 1991, Mr McKimm was the managing director of Ord Minnett Ltd. Prior to that, during the period 1985 to 1998, Mr McKimm was a director of BZW Australia. Between 1977 and 1985, Mr McKimm was an advisor and then partner of Randall & Company. 144 For the purposes of this proceeding, Mr McKimm prepared a report dated 16 December 2008. Mr McKimm then prepared a supplementary report dated 27 February 2009 and during the course of the trial, he prepared a further supplementary report, dated 24 March 2009. 145 In those reports Mr McKimm answered a number of questions which had been put to him by Eric Preston's instructing solicitors. In the first report, those questions included questions relating to the advice which a "reasonable and prudent securities advisor" would give a client contemplating entry into a conventional margin loan or a "securities lending margin loan". He was also asked about the advice which a reasonable and prudent securities advisor would give a client with a securities lending margin loan should the advisor first become aware during the course of the loan of the difference between a conventional margin loan and a securities lending margin loan in circumstances where the securities advisor believes the client may not be aware of the difference between such products. 146 In the supplementary report of 27 February 2009, Mr McKimm opined upon the question of whether Mr Caldow had acted in accordance with the standards of a reasonable and prudent advisor in advising Mr Drummond in relation to the entry into Leveraged Equities margin loans in around 2000 and again in 2003. He relied upon the accuracy of the evidence in Mr Drummond's affidavits. 147 Mr McKimm also opined on the advice given to Mr Drummond on securities lending and said that Mr Caldow or someone else in Euroz Securities, should have explained to Mr Drummond in clear and plain terms how the Opes Prime facility would operate. Mr McKimm also expressed opinions on the question of the trailing commission and said that it should have been disclosed. Mr McKimm was also asked what Euroz Securities should have done on becoming aware that the Opes Prime facility was a securities lending facility. He opined that not all available options were explored with Mr Drummond so as to avoid the risk. He did not identify those options. Further, he opined that a reasonable and prudent stockbroking firm would have had a process for understanding a sophisticated product like the Opes Prime facility before recommending it to clients. 148 In his further supplementary report, Mr McKimm was asked what a reasonable and prudent stockbroker in Euroz Securities' position would do, when promoting the Opes Prime product. He also opined that the difference between that product and a conventional margin loan should have been pointed out to the client. He was also asked what a reasonable and prudent stockbroker in the position of Euroz Securities would do when, knowing that a number of its clients and staff were parties to an Opes Prime facility, it discovered that the Opes Prime facilities were share lending facilities. Mr McKimm opined that a reasonable and prudent stockbroker should have investigated with diligence the credit worthiness of Opes Prime. If the investigation did not provide an assurance, clients should be advised that the broker could not make an assessment of the position and clients should be advised to make their own assessment or immediately exit the facility, if they were unable to make the assessment. He also opined that a reasonable and prudent advisor would take legal advice and carry out an analysis of the stocks which clients had lodged with Opes Prime and determine the clients' exposure. 149 Mr McKimm was also asked if Opes Prime had told Euroz Securities that for it to be in trouble financially the share market would have to fall 20% in one day and no client meet a margin call on Opes Prime facilities, what a reasonable and prudent stockbroker would have done in response to this. He said that the response was superficial and that a prudent stockbroker in the position of Euroz Securities should have tried to reliably ascertain what Opes Prime's exposure to the market was referrable to the stocks it lent on. He said that it was not a question of whether all clients would fail to meet margin calls but rather the relative exposure of major clients of Opes Prime to margin calls. If this could not be assessed then it would cause the reasonable and prudent broker to regard the issue as urgent and to advise the client that the risks were significant. He was also asked questions as to the role of a compliance manager and responsible executive for compliance of a stockbroking firm. 150 In his first report Mr McKimm stated: Assumptions: 2 I have been instructed to assume the facts and circumstances set out in the statement of claim dated 20 May 2008, the reply and defence [sic] dated 21 July 2008 and the witness statements of Bruce Scott Drummond, Judith Maree Drummond and Graham Douglas Anderson. 3 I have also been instructed to assume that the chronology of events, as provided by Slater & Gordon is [sic] Appendix A, is materially correct. 4 I have based my opinions on these facts as assumed. 151 The statement of claim on which Mr McKimm relied to express his opinions contains the allegation that the retainer between Eric Preston and Euroz Securities was to act as a stockbroker and financial advisor. This is expressly pleaded in para 3 of the statement of claim. Further, para 2(c) of the statement of claim pleaded that Euroz Securities was at all material times, a "stockbroker and financial products and services advisor". Also, the particulars to the plea in para 3, that Euroz Securities agreed to act as Eric Preston's financial advisor, state that Mr Caldow had said to Mr Drummond in 2000, that Euroz Securities would be happy to act as "stockbroker and financial advisor to Eric Preston". 152 It follows, that in giving his opinions, Mr McKimm assumed that the retainer between Eric Preston extended to giving financial advice in relation to third party financial products. I have found in the reasons which follow, that Eric Preston has failed to establish that the scope of the retainer extended to an undertaking by Euroz Securities to act as a financial advisor to Eric Preston. It follows that Eric Preston has failed to establish a fundamental assumption on which it asked Mr McKimm to assume in relation to the provision of his opinion. 153 It follows that the opinions expressed by Mr McKimm as to the standard to be adopted by a reasonable and prudent stockbroker, or (as Mr McKimm uses the terms interchangeably in his opinions), a reasonable and prudent securities advisor, have no application to the resolution of the core issues in this case. They, accordingly, are irrelevant and, alternatively, are to be accorded no weight. 154 I note that in Mr McKimm's supplementary report, he refers to the fact that he had been provided with a copy of the defence. However, in cross-examination Mr McKimm showed little consciousness of the content, or import, of the defence. During the cross‑examination of Mr McKimm in relation to the statement in his supplementary report, that since his first report, he had seen the defence, the following exchange occurred (transcript at 576): And you were given, for the first time, the defence?---I might have to check on that but – is that - - - Well, don't you remember?---No, the report was done some time ago. Well, you familiarised yourself with it for the purpose of giving evidence, no doubt?‑‑‑Yes. Your Honour, I haven't got the papers in front of me. I can't honestly say. 155 The report to which Mr McKimm referred had in fact been prepared less than a month before Mr McKimm was cross-examined. 156 In my view, Mr McKimm was not conscious of the content, or import of, the defence and the attendant controversy as to the limited scope of the retainer. I find that he did not take this into account in preparing his reports and that he acted on the basis of the assumptions referred to in his first report. Euroz Securities' witnesses 157 Mr Caldow, Mr Brittain and Mr Kenneth Pendergast gave evidence as part of Euroz Securities' case. Mr Richard Armstrong Caldow 158 Mr Caldow obtained a Bachelor of Commerce degree from the University of Western Australia in 1998. In 1989, he was employed by the then firm Arthur Anderson in its Taxation Division. Mr Caldow spent approximately one and a half years at Arthur Anderson. He then moved to the firm of Ernst & Young. At Ernst & Young Mr Caldow completed his professional year and then advanced to the position of a senior taxation consultant with that firm. 159 In July 1992, Mr Caldow commenced employment with Paterson Ord Minnett as an assistant sharebroker. 160 Mr Caldow's affidavit was sworn on 30 December 2008. 161 Mr Caldow gave evidence and was cross-examined at length. During the cross‑examination, there were times when Mr Caldow exhibited some frustration. He was also cautious and was not prepared to speculate in respect of questions affecting the conduct of other persons. On numerous occasions he replied that senior counsel for Eric Preston would have to address that question to the person who had the relevant involvement in the activities referred to in the question. 162 However, in respect of the questions which related to matters upon which he could depose, in my view, Mr Caldow answered the questions as best he could. Further, the evidence which he gave in his affidavit was couched in language which had the ring of truth. Further, his evidence in cross-examination had the same quality. I cite as one example of the convincing evidence which Mr Caldow gave of his response to the threats which Mr Drummond made to sue Euroz Securities in respect of the sub-underwriting fee. 163 Eric Preston sought to attack the credibility of Mr Caldow's evidence by referring to the fact that Euroz Securities had given inadequate discovery during the interlocutory process, and also to the fact that Euroz Securities had not called to give evidence, Mr Yeo, Mr McKenzie, Mr Kane, Mr Hewett and Mr Rice. 164 In my view, neither of these attacks is appropriately directed to the question of the credibility of Mr Caldow's evidence. Mr Caldow was not responsible for the giving of discovery, nor was there any evidence that Mr Caldow had any involvement in the decision not to call the persons referred to. 165 In any event, I observe in passing, that as the case has unfolded, only the evidence of Mr Rice would have added significantly to the resolution of the issues before the Court. However, no inference under the principle in Jones v Dunkel (1959) 101 CLR 298, arising from the failure to call Mr Rice, would arise, because it cannot be said that Mr Rice is in the "camp" of Euroz Securities. 166 As mentioned, I prefer the evidence of Mr Caldow to that of Mr Drummond in relation to the aspects of the case where their evidence conflicts. Mr Anthony Mark Brittain 167 Mr Anthony Mark Brittain completed a Bachelor of Commerce degree from the University of Western Australia in 1987. He qualified as a Chartered Accountant in 1991. Thereafter he spent time working for KPMG, Newton Investment Management Limited and Hartley Poynton Limited, before joining Euroz Securities. Mr Brittain was appointed to the position of chief operating officer and financial officer in December 2007. 168 Mr Brittain was an impressive witness. He was prepared to make concessions and gave his evidence to the best of his ability. I accept his evidence. However, as the resolution of the issues in this case have emerged, Mr Brittain's evidence was not of major significance in the resolution of those issues. 169 I also reject the attack made by Eric Preston on Mr Brittain's credibility arising from the late discovery of the Euroz Securities Operations Monthly Report for January 2008. I accept that Mr Brittain was not responsible for the omission to discover that document. Further, Euroz Securities offered to make Mr Brittain available for cross-examination in relation to that document, but Eric Preston did not accept the offer. Mr Kenneth David Pendergast 170 Mr Pendergast is a partner of Ernst & Young in the transaction advisory services division. Mr Pendergast prepared two reports on the question of loss and damage. As mentioned, there were some issues on which the experts disagreed but, as in the case of Mr Blashki, no credibility issues arose from the evidence of Mr Pendergast. 171 I have set out above the four causes of action on which Eric Preston relies. THE CLAIM BASED ON THE BREACH OF CONTRACT 172 I now turn to deal with Eric Preston's claim that Euroz Securities breached the retainer. Eric Preston's pleaded claim in contract 173 Eric Preston has pleaded that in 2000, it retained Euroz Securities to be "its stockbroker and financial advisor". 174 Further, Eric Preston pleaded that the following were the implied terms of the retainer: (a) Euroz Securities would exercise all reasonable care, skill and diligence in acting for and advising Eric Preston pursuant to the retainer, (b) Euroz Securities would at all times act in the best interests of Eric Preston, (c) Euroz Securities would advise Eric Preston of the true nature of the financial products Eric Preston would acquire or use on the advice of, or through, Euroz Securities, (d) Euroz Securities would advise Eric Preston of the risks associated with the financial products Eric Preston would acquire and/or use on the advice of, or through, Euroz Securities, (e) Euroz Securities would advise Eric Preston how to minimise risks associated with the acquisition of, or use of, financial products acquired on the advice of, or through, Euroz Securities, (f) Euroz Securities would not recommend, or facilitate the use of, a financial product by Eric Preston which would operate to transfer the beneficial interest in Eric Preston's share portfolio to any third party, including any financial product provider, without advising Eric Preston that such a transfer would occur and advising Eric Preston of the risks associated with such a transfer. 175 Eric Preston pleaded that each of these terms was to be implied to give commercial efficacy to "the intentions of the parties". Further, it was contended that terms (a), (b) and (f) were implied by operation of the law. 176 Eric Preston then pleaded (para 6 of the statement of claim) that in December 2003, Euroz Securities advised Eric Preston to use a margin lending facility with Leveraged Equities to partly fund its share trading activities. It is alleged that that advice was oral and given by Mr Caldow. It is also pleaded (para 7 of the statement of claim) that Mr Caldow said during that conversation, in relation to the Leveraged Equities facility, that the share portfolio of Eric Preston would be owned and held in the name of Eric Preston and would constitute security for the Leveraged Equities facility; that Eric Preston could buy and sell shares provided as security for the Leveraged Equities facility as it saw fit; and that provided Eric Preston paid all margin calls in respect of the Leveraged Equities facility it could not lose the shares in its portfolio. 177 Eric Preston went on to plead (para 8 of the statement of claim) that it acted on Mr Caldow's advice and entered into the Leveraged Equities facility on or about 19 December 2003. 178 Importantly, Eric Preston then pleaded (para 9 of the statement of claim) the following. In or about May 2007, Euroz Securities, by Mr Caldow, advised Eric Preston to terminate the Leveraged Equities margin lending facility and to open a margin lending account with Opes Prime in its place, because the Opes Prime facility allowed Eric Preston to acquire a greater range of shares than was available under the Leveraged Equities facility; the Opes Prime facility offered a higher loan to value ratio than the Leveraged Equities facility; the Opes Prime facility had a lower rate of interest than the Leveraged Equities facility, namely, eight per cent per annum; and the Opes Prime facility was otherwise in nature, substance and in risk the same as the Leveraged Equities facility. The advice allegedly given by Mr Caldow is referred to in the pleading as the "OP advice". 179 It is stated in the particulars, that this advice was oral and given by Mr Caldow to Mr Drummond of Eric Preston in or about May 2007. 180 Eric Preston then pleaded that in reliance on that advice, Eric Preston terminated the Leveraged Equities facility, entered into the Opes Prime facility and made available its share portfolio, which then had a value of $5,615,648.68, for the Opes Prime facility. 181 It was then pleaded that Euroz Securities breached each of the implied terms referred to in [174] above. There are 26 particulars which were given in support of the plea of the breach of the implied terms of the retainer. I will refer to the substance of those particulars below. 182 Eric Preston then went on to plead (para 12 of the statement of claim) that "by reason of the matters aforesaid", it had suffered, and would suffer, loss and damage. In the particulars to this plea, Eric Preston stated that but for the breaches of the implied terms of the retainer it would have continued with the Leveraged Equities facility, and that Eric Preston's share portfolio has been lost in its entirety. 183 It was also said that had Eric Preston not entered the Opes Prime facility it would have retained the shares in its portfolio as a medium to long term investment and all of the shares had risen in value so that as at the commencement of the date of this proceeding, Eric Preston had lost or would lose not less than a further $2 million. Eric Preston also stated in its particulars that Euroz Securities conduct had prevented Eric Preston from having a reasonable opportunity to avoid the loss of its share portfolio. 184 The particulars of the breaches of the implied terms of the retainer relied on by Eric Preston are stated in a confusing manner. There was no attempt made in the statement of claim to identify which of the particulars were relied upon to support each breach of each of the six implied terms relied upon by Eric Preston. In other words, no attempt was made to link any of the particulars to any of the breaches. This is not helpful. 185 However, I discern Eric Preston's case on the breach of the implied terms of the retainer as particularised, to be as follows: (a) Euroz Securities, by Mr Yeo, knew before May 2007 that the borrowing facility offered by Opes Prime was not a conventional margin loan facility but was a share lending facility. This is because Mr Rice told Mr Yeo that this was the case. Also, Mr Rice made a presentation to Euroz Securities advisors about the Opes Prime facility. Further, Mr Rice and Mr Yeo cooperated in compiling a brochure and promoting the Opes Prime facility among clients of Euroz Securities. Opes Prime promoted the relationship with Euroz Securities by providing incentives to Euroz Securities advisors, such as trips to the Australian Open tennis tournament and Indy Car races. Further, it was to be inferred that Euroz Securities knew about the risk inherent in share lending and was familiar with the concept because Euroz Securities used share lending facilities on a wholesale basis as part of its usual stockbroking business when it settled trades. It also referred to margin lending in its annual reports. Further, a number of clients, staff members of Euroz Securities and their relatives, had entered into Opes Prime facilities. (b) The advice which Eric Preston alleges Mr Caldow gave Mr Drummond (referred to in [178] above) was wrong and unsound. This was because the Opes Prime facility was not the same as the Leveraged Equities facility. It was in fact very different and far riskier than the Leveraged Equities facility. Under the Opes Prime facility Eric Preston would, and did, transfer all of its shares in its portfolio (whether funded by margin lending or owned outright) to Opes Prime so that Opes Prime could deal with the shares as it saw fit. Eric Preston would, and did, become an unsecured creditor of Opes Prime. Further, the shares which were transferred were used as security for Opes Prime's debts and were at risk of being lost by reason of other margin lending clients of Opes Prime failing to pay their margin calls. Euroz Securities failed to make an assessment of the risks and failed to make known or warn of these risks to Mr Drummond. (c) In any event, even if Euroz Securities did not know about the risks associated with the Opes Prime facility, it ought to have known about the risks and taken steps to advise Mr Drummond about the risks arising from the fact that Eric Preston would lose legal and beneficial ownership of its share portfolio and not acquire a beneficial interest in respect of the shares it purchased using the Opes Prime facility. (d) Euroz Securities did not inform Eric Preston of the risks inherent in the Opes Prime facility until 1 February 2008. (e) The advice given in February 2008 was inadequate because: (i) it was too late for Eric Preston to have a reasonable opportunity to avoid the loss because by then Opes Prime was in danger of becoming insolvent and in breach of its own lending arrangements; (ii) Euroz Securities did not tell Mr Drummond positively to terminate the Opes Prime facility; alternatively, did not say that it could not advise about Opes Prime, and thereby deprived Eric Preston of the opportunity to save the value of its share portfolio less the value of the loan it owed to Opes Prime; (iii) Mr Caldow made statements, for which he had no reasonable basis, that falsely assured Mr Drummond that Eric Preston's share portfolio was safe, after February 2008, when it was not. (f) Further, in its dealings with Eric Preston, Euroz Securities preferred its own interest in receiving a trailing commission from Opes Prime and facilitating trading in the shares which Euroz Securities was promoting, to the interest of Eric Preston in having a margin loan which was secure provided that Eric Preston paid any margin calls made under the facility. Euroz Securities' defence 186 Euroz Securities admitted that it entered a retainer as a stockbroker, and denied that the retainer included retaining Euroz Securities to act as financial advisor to Eric Preston. 187 Euroz Securities denied that the retainer contained the implied terms as pleaded by Eric Preston. It contended that there was an implied term to exercise reasonable care, skill and diligence in performing the duty undertaken pursuant to the retainer agreement. The scope of that duty, contended Euroz Securities, was confined to carrying out its function as a stockbroker, and did not extend to acting as Eric Preston's financial advisor. It followed that Euroz Securities denied that there were implied into the retainer agreement the implied terms pleaded by Eric Preston. 188 Further, Euroz Securities denied that Mr Caldow gave Mr Drummond the advice in May 2007, alleged by Eric Preston, as to the characteristics of the Opes Prime facility, which Mr Drummond said he relied upon to terminate the Leveraged Equities margin loan and enter into the Opes Prime facility. 189 It followed, said Euroz Securities, that Mr Drummond could not have relied upon, and did not rely upon, that advice in deciding to enter into the Opes Prime facility. 190 Further, said Euroz Securities, in light of the plea that Mr Drummond relied upon Mr Caldow's positive advice that the Opes Prime facility was the same as the Leveraged Equities facility, it was not open to Eric Preston to advance a case that Mr Drummond's belief as to the characteristics of the Opes Prime facility had been induced by some other factual scenario. Thus, for example, said Euroz Securities, it was not open to Eric Preston to advance a case that Euroz Securities did not give the positive advice alleged, and that Mr Drummond acted on an assumption (rather than a positive belief) that the Opes Prime facility was the same as the Leveraged Equities facility, by reason of a failure by Euroz Securities to give warnings as to the differences between the two facilities. Such an inconsistent case could not be honestly advanced, said Euroz Securities. 191 Euroz Securities also alleged that, in any event, the advice that Mr Caldow gave Mr Drummond by the email of 1 February 2008, as to the character of the Opes Prime facility and attendant risk, broke any causal link between any previous breach of contract (which was denied) and any loss or damage Eric Preston may have suffered. Euroz Securities also denied that Mr Caldow's advice of 1 February 2008, or the circumstances surrounding the giving of that advice, breached any contractual duties owed by Euroz Securities to Eric Preston. 192 Euroz Securities then pleaded that even if it breached the contract and the causal chain was not broken by the advice of 1 February 2008, Eric Preston had by its own negligence contributed to its loss. Further, Euroz Securities pleaded that each of Mr Anderson, Opes Prime, ANZ, Merrill Lynch and Dresdner Kleinwort were concurrent wrongdoers in respect of any loss suffered by Eric Preston. At trial Euroz Securities did not press this claim against the banks. 193 I now deal with the first issue arising on the claim for breach of contract, namely, the scope of the retainer. Did Euroz Securities agree to act as financial advisor to Eric Preston as part of its retainer? 194 It is an essential part of Eric Preston's case that Euroz Securities agreed to act as its financial advisor, as well as its stockbroker. This is because it relied on breaches of the pleaded implied terms of the retainer. The content of the implied terms are premised on Euroz Securities having agreed to act as its financial advisor as well as its stockbroker. In its final written submissions, Eric Preston, correctly, recognised that the question of the scope of the retainer was a "critical issue". 195 The making of the crucial retainer agreement is pleaded in para 3 of the statement of claim. There it is pleaded that in or about 2000, Eric Preston retained Euroz Securities to be its stockbroker and financial advisor. Eric Preston has not in its pleading sought to limit the scope of the financial matters in respect of which it is alleged Euroz Securities agreed to advise Eric Preston. Accordingly, I will treat the plea as a plea that Euroz Securities agreed to give general financial advice to Eric Preston, which would include giving advice in relation to financial credit products offered by third parties which may be used to provide financial assistance in respect to the purchase of shares. 196 In the particulars to its plea as to the making of the retainer agreement, Eric Preston stated: The retainer was partly oral and partly to be implied. Insofar as it was oral it was comprised in conversations between Richard Caldow of Euroz and Bruce Drummond of EP taking place in or about 2000 pursuant to which Caldow advised Drummond that he had transferred his employment as a stockbroker and financial advisor from Paterson Ord Minnett to Euroz. Caldow had acted as stockbroker and financial advisor to EP at Paterson Ord Minnett since in or about 1995. Caldow advised Drummond that he and four other senior staff of Paterson Ord Minnett had set up Euroz and that Euroz would be happy to act as stockbroker and financial advisor to EP. Drummond informed Caldow that he would transfer EP's business from Paterson Ord Minnett to EP. Insofar as the same was to be implied, it was to be implied to give commercial efficacy to the retainer and by operation of law. 197 Euroz Securities contended that the retainer is limited to the provision of stockbroking services and advice in respect of stocks and shares, and did not include within its scope the provision of general financial advice, and in particular, did not extend the giving advice in respect of third party financial products. 198 Euroz Securities contended that Eric Preston's plea that it agreed to act as Eric Preston's financial advisor has not been made out. 199 In my view, Eric Preston has failed to prove its pleaded case that Euroz Securities agreed to act as Eric Preston's financial advisor as well as its stockbroker. 200 There was no evidence from Mr Drummond of a conversation between himself and Mr Caldow in the terms alleged by Eric Preston in the particulars, namely, that there was an oral statement made by Mr Caldow that he would be "happy to act as stockbroker and financial advisor to Eric Preston", which Mr Drummond accepted by telling Mr Caldow that he would transfer Eric Preston's business from Paterson Ord Minnett to Euroz Securities. As Eric Preston only commenced share trading in 2003, Mr Caldow could not have offered in 2000, to act as stockbroker and financial advisor to Eric Preston. However, I have treated the reference to "Eric Preston" in the particulars, as a reference to "Mr Drummond". 201 In any event, the evidence of Mr Drummond in his third affidavit was that he regarded Mr Caldow, during the time that he worked at Paterson Ord Minnett, as his "share adviser". At para 9 to para 10 of that affidavit he said: I refer to paragraph 11 and 12 of Mr Caldow's affidavit. At around the time Mr Caldow rang me in late 2000, as referred to at paragraph 36 of my first affidavit, I held approximately $100,000 in shares. I agreed to follow Mr Caldow to Euroz and it was therefore necessary to put those shares under the administrative control of Euroz as my broker. The $100,000 share portfolio comprised essentially mining stocks. By the end of 2000, Mr Caldow had been my share adviser for some time, having initially only executed trades at my request. I did not have any other broker at that time and have not had any other since. 202 Further, I do not accept that there was an implied agreement founded on commercial efficacy between the parties that Euroz Securities would act as a financial advisor as well as a stockbroker to Eric Preston – which is another ground relied upon in the particulars. It is quite possible for an agreement which is confined to acting as a stockbroker to be a commercially efficacious agreement. 203 I also do not accept that by operation of law, an agreement to act as a stockbroker also gave rise to an agreement to act as a financial advisor, particularly in the circumstances where the right to act as a financial advisor is regulated by statute, and it is common cause that Euroz Securities did not have a licence to give financial advice generally, or in relation to financial products such as securities lending and borrowing agreements, in particular. 204 Accordingly, I find that Eric Preston has not proved its claim, as pleaded and particularised, that the retainer between Eric Preston and Euroz Securities included an undertaking by Euroz Securities to act as a stockbroker and financial advisor to Eric Preston. 205 It follows that the retainer did not contain the implied terms of the scope, and in the terms, relied upon by Eric Preston. 206 In its closing oral submissions, Eric Preston also sought to rely upon, alternatively, to characterise the pleading as incorporating a plea of, a prior course of dealing, as a basis to establish that it was a term of the retainer agreement between Euroz Securities and Eric Preston, that Euroz Securities agreed to act as Eric Preston's financial advisor. 207 In support of this contention, Eric Preston relied upon Mr Drummond's evidence that, during the the period when he was trading shares in his own name, there had been occasions when Mr Caldow had sent him Leveraged Equities brochures which contained an application form for a margin loan and had informed him as to the characteristics of a margin loan. Mr Drummond said that these conversations had occurred whilst Mr Caldow was employed by Paterson Ord Minnett. 208 Mr Drummond also deposed that Mr Caldow had given advice in relation to Eric Preston entering into a margin loan with Leveraged Equities. 209 I deal with the evidence on these issues below. However, in my view, for the reasons expressed below, these conversations, would not, even if proved, support a finding that a term that Euroz Securities would act as Eric Preston's financial advisor, was to be incorporated into the retainer, on the basis of a prior course of dealings. 210 For Eric Preston to establish that it had, by reason of a prior course of dealings, entered into a contract with Euroz Securities, whereby Euroz Securities undertook to act as its financial advisor, Eric Preston would have to show that there were previous occasions on which it had contracted with Euroz Securities upon those terms. In the case of DJ Hill & Co Pty Ltd v Walter H Wright Pty Ltd [1971] VR 749, the Full Court of the Supreme Court of Victoria considered whether certain terms had been incorporated into a contract of carriage by way of a prior course of dealings between the parties. At 754, Winneke CJ (with whom Starke and Anderson JJ concurred) observed: In our view, [counsel's] argument, based upon a course of prior dealing between the parties, fails, for the simple reason that there was no evidence of a prior series of contracts between the parties containing terms or conditions of the kind he now seeks to import into the subject contract. 211 These observations are apposite to the evidence of Mr Drummond referred to in [207]‑[208] above. 212 In this case, Eric Preston must be taken to have entered into its retainer agreement with Euroz Securities when in 2003, Mr Drummond on behalf of Eric Preston, opened a trading account with Euroz Securities for Eric Preston. There was no evidence of any previous occasion on which Eric Preston had contracted with Euroz Securities. In those circumstances, there was no prior course of dealings pursuant to which the term contended for, could be incorporated into a contract between Eric Preston and Euroz Securities. 213 In any event, even if it was possible to have regard to the retainers previously made between Mr Drummond, in his personal capacity, on the one hand, and Euroz Securities and Paterson Ord Minnett, on the other, for the purpose of establishing the terms of a retainer between Eric Preston and Euroz Secuirities, there was, as previously stated, no evidence that when Mr Drummond, in 2000, entered into the retainer with Euroz Securities it was on the terms that Euroz Securities would agree to act as Mr Drummond's financial advisor as well as his stockbroker. Indeed, the evidence referred to above, shows that Mr Drummond regarded Mr Caldow as his "share advisor". 214 Nor was there any evidence that when Mr Drummond engaged Paterson Ord Minnett (which occurred even before Mr Drummond first had dealings with Mr Caldow), Paterson Ord Minnett had agreed to act as Mr Drummond's financial advisor as well as his stockbroker. 215 Even if Mr Caldow had, prior to Eric Preston operating its trading account with Euroz Securities, sent Leveraged Equities' application brochures to Mr Drummond, and given him information about a margin loan, this evidence is not capable of establishing the incorporation of a term into a contract by way of a prior course of dealings. That evidence is evidence of post-contractual conduct which occurred during the course of a stockbroker relationship established by the respective retainers with Paterson Ord Minnett and Euroz Securities which had previously been entered into. As mentioned, there was no evidence that any of the retainers contained a term to the effect that either Paterson Ord Minnett or Euroz Securities would act as a financial advisor to Mr Drummond. 216 I also understood Eric Preston during closing submissions, to rely upon facts that occurred after the entry into the retainer with Euroz Securities as evidence of the fact that the terms of the retainer between Eric Preston and Euroz Securities included a term that Euroz Securities had agreed to act as a financial advisor to Eric Preston. Eric Preston referred to the fact that Mr Caldow had given Eric Preston advice in relation to Eric Preston's entry into a margin loan with Leveraged Equities, and that Mr Caldow advised Mr Drummond in relation to Eric Preston's entry into the Opes Prime facility. 217 The basis on which Eric Preston sought to rely upon these facts is not entirely clear, because, as previously stated, the pleaded particulars as to the making of the retainer did not refer to these matters in support of the plea in para 3 of the statement of claim that Euroz Securities agreed to act as the financial advisor to Eric Preston. It is the case, however, that post‑contractual conduct may be relied upon in certain circumstances to infer the existence and terms of an agreement. (See Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 (Integrated Computer Services); Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32.) 218 However, in any event, even if Eric Preston is permitted to rely upon this unpleaded case, Mr Caldow's conduct, would not establish the existence of a term in the retainer that Euroz Securities agreed to act as Eric Preston's financial advisor. For that conduct to give rise to an inference that Euroz Securities agreed to act as Eric Preston's financial advisor, the conduct must, in the words of McHugh JA (as he then was) in Integrated Computer Services at 11,118, be explicable only on the basis of such an agreement in such terms, having been made. 219 As will become apparent, I have found that Mr Caldow did not make the statements pleaded in para 7 of the statement of claim to Mr Drummond, acting on behalf of Eric Preston, as to the characteristics of the Leveraged Equities margin loan, before Eric Preston entered into the Leveraged Equities margin loan. I have also found that Mr Caldow did not give the so-called "OP advice" prior to Eric Preston entering into the Opes Prime facility. I have found that Mr Caldow did forward to Mr Drummond a brochure and application form for a Leveraged Equities margin loan, and also sent Mr Drummond the Financial Services Guide for the Opes Prime facility and sent emails to Mr Rice seeking information about the Opes Prime facility. 220 In my view, Mr Caldow's conduct is not conduct which is only explicable on the basis of the existence of an obligation to act as Eric Preston's financial advisor. The conduct of Mr Caldow in referring Eric Preston to the Leveraged Equities and Opes Prime financial product is equally consistent with it being non-contractual conduct engaged in by Euroz Securities outside the terms of its retainer with Eric Preston. In other words, as conduct engaged in by Euroz Securities for the purpose of earning a reward from the third party financial product provider. That is not to say that such conduct could not, in certain circumstances, be capable of giving rise to obligations to the client otherwise than in contract. 221 As I have previously said, each of Eric Preston's claims for breach of contract depends upon it proving that it was a term of the retainer between Euroz Securities and Eric Preston that Euroz Securities agreed to act as its financial advisor. As I have also said, in my view, Eric Preston has failed to prove that Euroz Securities agreed as part of its retainer with Eric Preston to act as Eric Preston's financial advisor, as well as its stockbroker. 222 It follows that Eric Preston's claims founded on breach of contract are dismissed. 223 I observe, in passing, that a great deal of time was taken up in the trial by an examination of the facts and circumstances concerning the relationship between Opes Prime and Euroz Securities. These facts and circumstances included the following: (a) Mr Rice had made a presentation to Euroz Securities' private client advisors; (b) Mr Yeo had a prior work relationship with Mr Rice of Opes Prime, and Mr Yeo cooperated with Mr Rice in relation to the preparation of a brochure for distribution to Euroz Securities' clients that set out the loan to value ratio that Opes Prime would be prepared to offer on the stocks which were researched by Euroz Securities; (c) there was an arrangement between Opes Prime and Euroz Securities whereby Opes Prime would pay a trailing commission to Euroz Securities consequent upon a client of Euroz Securities entering into an Opes Prime facility agreement; and effect was given to this arrangement; (d) the board of directors of Euroz Securities were informed of the fact that clients of Euroz Securities were switching from the Leveraged Equities facility to the Opes Prime facility; (e) Opes Prime offered incentive rewards, such as a trip to the Australian Open tennis tournament and the Indy Car races, to Euroz Securities' client advisors; (f) a significant number of Euroz Securities' employees and clients, including relatives of Euroz Securities' client advisors, had entered into Opes Prime facility agreements during the period May 2007 to February 2008; (g) Euroz Securities took steps to warn its clients who had entered into facilities with Opes Prime in February 2008 as to the true nature of the Opes Prime facility; and (h) there was discussion of the Opes Prime position at meetings of the board of directors of Euroz Securities in February 2008 and March 2008 and Mr Kane expressed alarm at the exposure of Eric Preston to Opes Prime. 224 In my view, these facts and circumstances also do not establish that the retainer entered into between Eric Preston and Euroz Securities was a retainer which included an agreement to act as a financial advisor. It is possible to infer from the aforementioned facts and circumstances, that Euroz Securities was concerned about the exposure of their clients to Opes Prime. It is also possible to infer, as I do, the existence of a contract between Euroz Securities and Opes Prime, whereby Opes Prime agreed to pay a commission to Euroz Securities in respect of each client of Euroz Securities that Euroz Securities introduced to Opes Prime and who subsequently entered into a facility with Opes Prime, and that there was cooperation between Opes Prime and Euroz Securities in performing this agreement. 225 However, it does not follow from the existence of such an agreement between Opes Prime and Euroz Securities, that Euroz Securities agreed to act as a financial advisor to Eric Preston. The advice in relation to Eric Preston entering into the Leveraged Equities facility 226 As mentioned previously, it was a constituent element of Eric Preston's pleaded case that Mr Caldow advised Mr Drummond, on behalf of Eric Preston, in December 2003, to use a margin lending facility with Leveraged Equities, to partly fund its share trading activities. In para 6 and para 7 of the further amended statement of claim, Eric Preston pleaded: In or about December 2003 Euroz advised EP to use a margin lending facility with Leveraged Equities Ltd ("LE"), a subsidiary of Adelaide Bank ("the LE facility") to partly fund its share trading activities. PARTICULARS The advice was oral given by Caldow of Euroz to Drummond of EP in or about December 2003, the material substance of which was to the effect alleged. Euroz advised EP in relation to the LE facility that: (a) The share portfolio of EP would be owned and held in the name of EP and would constitute security for the LE facility. (b) EP could buy and sell shares provided as security for the LE facility as it saw fit. (c) Provided EP paid all margin calls in respect of the LE facility, it could not lose the shares in its portfolio. PARTICULARS Such advice was oral given by Caldow of Euroz to Drummond of EP, the material substance of which was to the effect alleged. 227 Eric Preston then pleaded that in reliance on the advice in para 6 and para 7 of the statement of claim, Eric Preston entered into the Leveraged Equities facility on or about 19 December 2003. 228 There was during the trial a factual dispute as to the circumstances of Eric Preston entering into the Leveraged Equities facility in December 2003. 229 I deal first with the evidence of events that occurred whilst Mr Caldow was at Paterson Ord Minnett. Mr Drummond deposed in his first affidavit (para 63) that in 1996 whilst he was at Paterson Ord Minnett, Mr Caldow said that he should open a margin lending account with Leveraged Equities on two occasions. On the first occasion, Mr Caldow sent Mr Drummond an application form. Mr Drummond said that he put it in the bin. On the second occasion, Mr Caldow again sent an application form to Mr Drummond but he did not make any application. He said that on each of those occasions that Mr Caldow sent him an application form, Mr Caldow told him that Leveraged Equities would lend money against the value of his share portfolio or other security that he could put up and that he could use that money to purchase more shares. Mr Drummond went on to say that Mr Caldow said that if the value of the shares fell below the margin set by Leveraged Equities he would receive a margin call which he was required to meet. Mr Caldow said that if he, Mr Drummond, failed to meet the margin call, Leveraged Equities could sell the shares in the portfolio. Mr Drummond said that Mr Caldow had said that this was a standard margin lending arrangement, and he, Mr Drummond, could pay a margin call by selling the shares down or putting money into "Eric Preston's [sic] Leveraged Equities account". Mr Drummond said that he did not proceed to open a margin lending account. 230 Mr Drummond then deposed at para 65 of his first affidavit that in 2000, Mr Caldow, whilst he was still at Paterson Ord Minnett, again suggested that Mr Drummond should open a Leveraged Equities account. Mr Drummond then deposed: He explained to me again, in terms similar to that set out above, how a LE margin lending account would work. He said that I would retain full ownership of the shares, and they would remain in my name at all times. He said that they would only be sold if I failed to meet a margin call. He said that if I received a margin call, because the shares had fallen in value below the limit set by LE, I could sell the shares down and/or put money into the LE account to meet the margin call. He said that as long as I met all margin calls, I could never lose the shares in my portfolio. I signed the application form on 17 July 2000 nominating Caldow as my Broker/Adviser and commenced to use the LE facility. I continued to use it when I transferred my business to Euroz. 231 Mr Drummond also referred to this conversation with Mr Caldow, at para 44 and para 45 of his third affidavit, but in those paragraphs he does not say that Mr Caldow said anything about retaining full ownership of the shares held in a margin loan account, nor about never losing the shares, provided he met the margin calls. 232 Mr Caldow said in his affidavit, that he did not recall having conversations with Mr Drummond in the terms alleged by Mr Drummond whilst he was at Paterson Ord Minnett. 233 During cross-examination, Mr Drummond was asked about the content of the conversation Mr Caldow had with with him in 2000 (which is deposed to in para 65 of Mr Drummond's first affidavit). The following exchange occurred: Yes, and the issue of a margin lending facility didn't arise again until around 2000?‑‑‑It was around the time when Euroz Securities was starting up, I believe. Yes. You had another discussion, did you?---We had another discussion. How did that discussion come about?---He – Mr Caldow sent me out the application form again. Did you ask him for it?---We – I just say, I can't remember whether I asked him for it but we had a discussion about margin lending. He was telling me, you know, what margin lending was about and I asked him to send me out a book. All right and do you remember the terms of the discussion that you had with Mr Caldow then about margin lending?---Much the same as the first one, that just to refresh my memory on exactly what in fact a Leveraged Equity loan meant. I wasn't inquiring about anything else at that stage. All right. So do you have a recollection now of what it was that Mr Caldow conveyed to you in that conversation in 2000?---I believe I asked the similar questions: what the Leveraged Equity – leveraged meant and once again I was taken to the position that you could put a block of security of shares to Leveraged Equities and if they were a quality stock which they were able to lend against, they would give you a proportion of that money back to buy more shares. Yes, and that's your best recollection of that conversation?---That's my best recollection. Yes. Of course it's what, nine years ago or so, now?---Yes. 234 I now deal with the evidence of the events leading to the entry of Eric Preston into the Leveraged Equities facility - which occurred after Mr Caldow joined Euroz Securities. This evidence includes evidence in relation to the question of whether Mr Anderson advised Mr Drummond in relation to Eric Preston's entry into the Leveraged Equities margin loan. The sequence of this evidence is somewhat revealing. 235 Mr Drummond said in his first affidavit, that when he transferred his share trading activities to Eric Preston in 2003, Mr Drummond asked Mr Caldow about Eric Preston opening a Leveraged Equities margin lending account. Mr Drummond said that Mr Caldow arranged for the forms to be sent to him and he filled out the application form and took the documents to Mr Anderson and asked him if it was "in order" for Eric Preston to enter into the Leveraged Equities account and Mr Anderson said that he thought it would be in order. Mr Drummond said at para 68 of his first affidavit as follows: I personally did not read the LE booklet. I read the application form. I was content to rely on what Caldow had told me as to how a LE margin lending facility would work, its risks and the circumstances in which EP could lose the shares in its portfolio; that is, by not meeting a margin call. It was important to me that EP retained ownership of the shares in its portfolio, so that EP could buy and sell shares as and when it wished to. 236 In para 98 of his first affidavit, Mr Drummond repeated that he asked Mr Anderson for advice as to whether Eric Preston should enter into the margin loan facility with Leveraged Equities. 237 Mr Anderson at para 35 of his first affidavit of 9 September 2008, said that he did not provide any advice to Mr Drummond or Eric Preston on margin lending either through Leveraged Equities or any other institutions. 238 In his affidavit of 30 December 2008, Mr Caldow deposed that Mr Drummond asked him whether a company could enter into a margin loan and that Mr Drummond asked him to send him a Leveraged Equities' margin loan application form. Mr Caldow said that he sent the form to Mr Drummond. Mr Caldow said that that was all he did and that he did not give any advice to Mr Drummond about the Leveraged Equities margin loan facility. 239 At para 44 of Mr Drummond's third affidavit, Mr Drummond does not disagree with Mr Caldow's evidence. However, Mr Drummond goes on to say that when Mr Caldow was at Paterson Ord Minnett, Mr Caldow had advised him as to the nature of a Leveraged Equities' margin loan agreement in 2000 and on a previous occasion. I note that the evidence that Mr Drummond gives in para 44 of his third affidavit as to the content of the conversation which he had with Mr Caldow in 2000, is different to the evidence which he gave in his first affidavit. 240 Further, Mr Drummond said at para 46 of his third affidavit that Mr Caldow did give him advice about Eric Preston entering into a Leveraged Equities margin loan facility. However, Mr Drummond did not depose to the words said to have been spoken by Mr Caldow as comprising the advice to which he referred. It appears that Mr Drummond is there referring to the advice, he said, Mr Caldow gave him in his personal capacity in 1996 and 2000, whilst Mr Caldow was at Paterson Ord Minnett. 241 Neither in his first nor third affidavit, does Mr Drummond depose to Mr Caldow speaking any words of advice in relation to Eric Preston entering into the Leveraged Equities facility in 2003. 242 As previously mentioned, Mr Drummond made a fourth affidavit on 15 March 2009, the day before the commencement of the trial. In para 4 of the fourth affidavit, Mr Drummond deposed: In paragraph 27 of my first affidavit I stated that I was told by Mr Anderson in 2003 that Mr Anderson did not have a problem with EP entering into the LE facility, and at paragraph 66 I stated that Mr Anderson told me that it was in order for EP to enter into the margin lending facility with LE. That advice was given by Mr Anderson in the context of advice from him and Ms Lena Hilton in 2003 that share trading should be done through EP, and that if margin lending was to be used to fund share trading, the margin lending facility should be with EP. 243 During cross-examination, however, Mr Drummond admitted that the meeting with Ms Hilton and Mr Anderson, where there had been a discussion as to the use of Eric Preston as the vehicle to conduct share trading, was quite separate from the meeting which he had had with Mr Anderson at which he had asked Mr Anderson whether it was in order for Eric Preston to enter into the Leveraged Equities margin loan. 244 The following exchanges occurred during Mr Drummond's cross-examination on his fourth affidavit: Now, just pause there, Mr Drummond. This is the affidavit that you prepared on Sunday, the day before this trial commenced and what had happened, I put it to you, is you had been reading through your evidence and realised that there was material in the evidence that had been filed in this case that was unhelpful to your case. Isn't that what happened?---Which paragraph are we talking about? Just general. Why did you come to be preparing an affidavit on the day before trial commenced?---There was changes that had to be made. Why?---I had discussion with my legal team and they had prepared another affidavit for me to sign. Why?---I had discussion with my legal team and they'd prepared another affidavit for me to sign. So it wasn't as a result of late discovery or anything like that; there were changes you had to make to your earlier evidence, was it?---Yes. All right. So, what, there are matters that are false or are wrong in your earlier affidavits, is that right?---I don't believe so. Well, then, why did you have to come up with a new affidavit to deal with it?---I don't know what you're actually referring to about what I've actually changed. Okay. Have a look at paragraph 4. What you set out in paragraph 4 is a lie. That's not true at all. When Mr Anderson said to you that it was in order for Eric Preston to enter into the Leverage facility, this is, it was a good idea for Eric Preston to enter into the Leverage facility. It had nothing to do with or in the context of the margin lending should occur through a corporate vehicle as opposed to you personally, was it?---We had a discussion at Ms Hilton's office with Mr Anderson and it was established that it had to be done through Eric Preston. Yes. Then later, you had a conversation with Mr Anderson when you've had the forms – so after you'd made the decision to trade through Eric Preston, you rang Mr Caldow; he sent you the forms – yes?---Yes. So you had a meeting with Ms Hilton and with Mr Anderson and you, [sic] good idea to trade through Eric Preston?---Yes. You then got the forms. You then had another meeting, just you and Mr Anderson, is that right?---Yes. In that meeting, that's what you were referring to in paragraph 27 and 66 of your first affidavit that I took you to. I've just taken you to those. Yes?---Yes. 245 In my view, there were two separate meetings and two separate sets of advice. I find that there was no advice given by Mr Anderson at the first meeting with Ms Hilton that Eric Preston should use a margin loan from Leveraged Equities. Paragraph 4 of Mr Drummond's fourth affidavit was, in my view, an attempt to overcome the apparent incongruity in Mr Drummond's evidence. In his earlier affidavits, Mr Drummond had said that he had sought the advice of Mr Anderson as to whether it was in order for Eric Preston to enter into the Leveraged Equities facility. This was incongruous with Mr Drummond's contention that it was Mr Caldow and not Mr Anderson on whom he, on behalf of Eric Preston, had relied on for financial advice generally, and, in particular, in relation to Eric Preston's entry into the Leveraged Equities facility and then the Opes Prime facility. 246 The evidence in para 4 of Mr Drummond's fourth affidavit, in seeking to associate Mr Anderson's advice with the meeting with Ms Hilton and Mr Anderson, is at odds with the evidence that Mr Drummond gave in cross-examination, that there were two separate meetings. I reject the evidence in the fourth affidavit. 247 This episode contributes to undermining the credibility of Mr Drummond's evidence. As I have said earlier, Mr Drummond's evidence, particularly, insofar as it is set out in his affidavits, must be approached with caution. 248 In cross-examination, Mr Anderson, denied that he had given any advice in relation to the entry by Eric Preston into the Leveraged Equities facility. Mr Anderson said that he did not have any recollection of having a discussion with Mr Drummond prior to Eric Preston entering into the margin lending facility with Leveraged Equities. Mr Anderson said that he was not qualified to advise him in relation to such a facility and, therefore, he did not believe that he would have had that discussion. 249 As I have said above, Mr Anderson's evidence, particularly on the extent to which he provided advice to Mr Drummond and his associated companies, is unsatisfactory and must be approached with caution. 250 I find that Mr Drummond sought advice from Mr Anderson as to whether Eric Preston should enter into the facility. I also find that Mr Drummond provided to Mr Anderson the Leveraged Equities' brochure, which Mr Caldow had sent Mr Drummond. It contained the terms and conditions. I find that Mr Drummond provided the Leveraged Equities' brochure to Mr Anderson specifically for the purpose of seeking advice from Mr Anderson as to whether Eric Preston should enter into the agreement. Mr Anderson advised that he could see no problem in Eric Preston doing so. 251 I also find that prior to the entry into the Leveraged Equities facility in late 2003, Mr Caldow did not give Mr Drummond advice as to the Leveraged Equities margin loan as alleged by Eric Preston in para 6 and para 7 of its statement of claim. I accept Mr Caldow's evidence on this issue. Further, the effect of Mr Drummond's evidence is also that Mr Caldow did not provide any advice about the Leveraged Equities facility in 2003 and did no more than forward the Leveraged Equities' brochure. It follows that I find that Mr Drummond did not rely on any advice from Euroz Securities before Eric Preston entered into the Leveraged Equities facility, as alleged in paras 6, 7 and 8 of the statement of claim. 252 I also reject the evidence of Mr Drummond that in 2000, when Mr Caldow sent Mr Drummond the brochure and application form for a Leveraged Equities margin loan, he told Mr Drummond that he would retain ownership in his share portfolio and would not lose his ownership of the shares in his portfolio provided he paid the margin calls. When he was cross-examined on the relevant conversation, Mr Drummond made no reference to this aspect of the conversation. 253 In any event, insofar as Eric Preston sought to advance a case against Euroz Securities, that Mr Drummond relied on advice given to him in his private capacity, by Mr Caldow whilst acting as agent for a different principal, namely, Paterson Ord Minnett, that case was misconceived. Did Mr Caldow advise in May 2007 that the Opes Prime facility was the same as the Leveraged Equities facility? 254 Even though, in light of my finding as to limited scope of the retainer, it is unnecessary in relation to Eric Preston's claim for breach of contract, to resolve this question, this allegation is central to Eric Preston's case. It underlies each of the four causes of action. It is also fundamental to Eric Preston's claim for damages which is based on the allegation that it would not have terminated the Leveraged Equities facility, had Mr Drummond not been induced by Mr Caldow's advice to believe that the Opes Prime facility was no different in character and risk to the Leveraged Equities facility. 255 I now deal with the evidence. 256 In his first affidavit, which was sworn on 9 September 2008, Mr Drummond deposed (para 75 and para 76) as follows: I had not heard of OP until May 2007. I had had a good relationship with LE in relation to my own account and that of EP. By May 2007 the EP LE account had both stocks with a margin loan against them, and about $2.5m worth of stocks with no margin loan against them. In May 2007 Caldow told me that Mark Rice of OP had made a presentation to Euroz in respect of OP's margin lending product. A short time later in May 2007, during the course of a telephone conversation I was having with Caldow, I heard Simon Yeo saying to Caldow "Why don't you talk to BD about talking to Opes Prime, get him to call Mark Rice". I asked Caldow what that was about. Caldow told me it was a margin lending business which operated in exactly the same way as LE but had some advantages over LE. He said OP offered the same product as LE, but with a lower rate of interest, a better loan to value ratio and the ability to borrow against a wider range of stocks. He said Mark Rice was an ex-Adelaide Bank mate of Simon Yeo's and that he was the OP National Sales Manager. He said he would get some information about the OP product sent to me. I asked him if the product was exactly the same as the LE product other than the three advantages he mentioned. I said to him that I had a good history with LE and did not want to change to the OP product unless there was a good reason to do so. He said it was the same. 257 In his affidavit of 30 December 2008, Mr Caldow deposed (at para 45) that from late 2006, Mr Drummond began expressing his frustrations to Mr Caldow about Leveraged Equities. One of the matters which Mr Drummond complained about was that Leveraged Equities delayed updating his account. He also complained to Mr Caldow about the turnover of accounts managers at Leveraged Equities. Mr Caldow also said that Mr Drummond had said to him in relation to this issue: "If I ran my fucking business this way I would be broke". Mr Caldow also deposed that Mr Drummond complained that Leveraged Equities did not give margins on the stocks that Mr Drummond was interested in. This, he said to Mr Caldow, limited his ability to trade. 258 Mr Caldow went on to depose that Mr Drummond would regularly call him just after 4 pm, which was when Leveraged Equities updated its computer system on a daily basis, because the Leveraged Equities' system had not been updated with his recent trades. Mr Caldow said that Eric Preston was often at or around maximum possible gearing at any point in time and was, therefore, restricted from trading using the Leveraged Equities facility. 259 Mr Caldow said that he inferred from these conversations that Mr Drummond, from the time that he entered into the Leveraged Equities facility, monitored his margin lending position on a daily basis. 260 Mr Caldow then deposed (at para 48 of his affidavit) that he had a conversation with Mr Drummond in May 2007 in the following terms: In or about May 2007 Mr Drummond and I had a conversation regarding Leveraged Equities in words to the following effect: Mr Drummond - "Leveraged Equities doesn't give a margin against stocks that I want to buy. Is there anywhere else I can go to get a margin on these stocks." Me - "Why don't you try NAB, which is where I have my margin lending." Mr Drummond - "I fucking hate banks, they want too much information. They always screw you." Me - "I don't know of anyone else who will lend against your stocks." Mr Yeo sits immediately across from me at Euroz. At times, Mr Yeo can overhear my conversations. At this point in the conversation, Mr Yeo said to me words to the effect "Tell BD about Opes." Mr Drummond - "What did Yeoy say?" Me - "Yeoy has heard about this new product Opes." Mr Drummond - "What is it?" Me - "A contact of his has gone from Leveraged Equities to Opes and evidently they can give you a better margin on stock but I haven't looked at it." Mr Drummond - "You had better send me some info on it." Me to Mr Yeo - "Do we have the brochure on it?" Mr Yeo - "No, it's all on their website." 261 After that conversation, Mr Caldow sent on 14 May 2007 to Mr Drummond an email which annexed, without comment from Mr Caldow, a PDF file containing the Opes Prime Financial Services Guide. 262 Mr Caldow went on to depose that on the following day, 15 May 2007, Mr Drummond rang Mr Caldow and said words to the following effect: I've asked Leveraged Equities whether they will lend against Sundance Energy, they said no. That's the end of that then. 263 Mr Caldow said that he did not tell Mr Drummond to terminate the facility with Leveraged Equities, nor did he tell him to open a facility with Opes Prime. 264 Mr Caldow deposed that on 17 May 2007, Mr Drummond had a telephone conversation with him in the course of which Mr Drummond said to him words to the following effect: I have spoken to Opes and I can cross‑margin Eric Preston's shares and the Natural Fuels shares that are in my name. 265 Mr Caldow also said that in another telephone conversation, on or about 17 May 2007, Mr Drummond said words to the following effect: I have spoken to Rice and I don't need to provide any financial information to Opes. 266 Mr Caldow deposed that it was evident to him from this statement and from Mr Drummond's tone during this conversation that Mr Drummond was pleased with that fact. 267 Mr Caldow said that also on 17 May 2007, Mr Drummond rang him and said words to the following effect: Mr Drummond – "What stocks do Opes lend against and what do I need to do to open an account?" Me – "I don't know, I will find out for you." 268 Mr Caldow said that he then telephoned or emailed Mr Rice and inquired as to the stocks against which Opes Prime would lend. Mr Rice responded and also sent Mr Caldow an email setting out the interest rates charged by Opes Prime. The email also contained the following information: Adviser Loan Book Trail Commission (excluding GST) $0-$2,000,000 0.50% $2,000,000-$5,000,000 0.60% $5,000,000 plus 0.75% I am happy to go outside of the structure above if normally he has a larger loan than the $580,000 currently. If you can tell me what rate and commission you are looking for, we can go from there. 269 Mr Caldow responded to Mr Rice's email by sending an email asking what his client had to do to set up an account. Mr Rice responded in an email in the following terms: The client needs to complete the attached application form and send this along with photo ID back to us. To refinance from LE they will also need to complete the attached Refinancing Instruction Form which we will then forward to LE. If he is going to put the NFL in, the best way to do this is to set up an account in his own name and then we can cross margin the two accounts by all parties signing the attached cross margin letter. I have also reattached the spreadsheet given the pricing error we had. 270 By an email dated Thursday, 17 May 2007 and recorded as having been sent at 12 pm, Mr Caldow forwarded the emails between himself and Mr Rice to Mr Drummond along with the attachments which included the Opes Prime Financial Services Guide, an Excel spreadsheet outlining loan to value ratios, the Refinancing Instruction Form and the cross‑margin letter. 271 Mr Caldow then deposed that about a week after that email exchange he had a telephone conversation with Mr Drummond in the following terms: Me - "What interest rate did you end up getting with Opes?" Mr Drummond - "8.2 percent." Me - "I will see if I can do better for you, let me give them a call and I'll try to get it lower." Mr Drummond - "Why would you be able to get it any lower." Me - "Well it's worth a try. They're not going to put it up." 272 Mr Caldow then called Mr Rice of Opes Prime and had a conversation with him to the following effect: Me - "Any chance of getting a better rate for Bruce Drummond?" Mr Rice - "You get a trail commission on his loan. If you forego trail commission we can do 8%." Me - "I didn't even realise there was a trail commission; I am not interested in one." Mr Rice - "OK, we will make it 8%." Me - "Great." 273 Mr Caldow said that after he had had that telephone conversation with Mr Rice, he telephoned Mr Drummond and said that he had been able to get an interest rate of eight per cent for him. Mr Caldow went on to say that he did not, at that time, make any mention to Mr Drummond about not taking a trail commission because he did not think that that was important. 274 Mr Caldow said that his only involvement in the establishment of the account by Eric Preston with Opes Prime was as deposed to above. 275 In his third affidavit sworn on 25 February 2009 (at para 49) (which was sworn in response to the affidavit of Mr Caldow), Mr Drummond deposed that he did not complain to Mr Caldow about Leveraged Equities; nor had he used the language Mr Caldow attributed to him in criticising the service provided by Leveraged Equities (see [257] above). Mr Drummond went on to say, however, that he had discussed with Mr Caldow "that there were limits on the facility provided by Leveraged Equities in relation to the stocks recommended by Euroz and that this was constraining [his] ability to further purchase stocks recommended by Euroz". 276 However, during his cross-examination, Mr Drummond finally conceded that he had, in fact, complained to Mr Caldow about Leveraged Equities: Right. So what's in – so in relation to this, we're now to understand that your evidence – you now actually agree with Mr Caldow that you did complain to him about Leverage Equity, yes?---Yes. 277 In respect of the conversation with Mr Caldow referred to at [260] above, Mr Drummond said that he had asked Mr Caldow during that conversation whether he knew of other available margin lenders Eric Preston could use. Mr Caldow had said that the National Australia Bank provided margin lending facilities. Mr Drummond denied that he had used the crude language about banks attributed to him by Mr Caldow. 278 During the cross-examination of Mr Drummond as to the content of the crucial conversation with Mr Caldow on 14 May 2007, the following exchange occurred: Now, can you tell me now, as best you can recollect it now, how it was that you first became aware of Opes?---I was having a telephone conversation with Ritchie and I overhead Simon Yeo who has a – sits right next door to Mr Caldow, after some discussion, saying – he said to Ritchie, "Have you told BD about Opes Prime?" Can I pause there; sorry, I didn't want to cut you off, but you were having a conversation with Mr Caldow?---Yes. During which – again, you were having – if not complaining, you were commenting to him that "On my Leveraged account I just can't get margin on shares that I want to trade in"?---No, I don't believe that was case. We were having a conversation…buying stock. And then what do you remember, Mr Yeo saying something?---Mr Yeo, who sits right next door to Mr Caldow, saying, "Have you told BD about Opes Prime?" To which I answered, because Mr Yeo has quite a loud voice. I said to Ritchie, "What's all that about?" and Ritchie said to me, "Look, Mark Rice, who is a mate of Yeoy's works for a company called Opes Prime as a sales manager for market – for Opes Prime and why don't you get him to talk to him about Opes Prime." All right. So that's what Yeoy is saying in the background?---Yes. And Mr Caldow then said to you that he hadn't had a look at it, but he'd send you some info on it?---I spoke to Mark Rice and--- No, just in this first conversation?---Oh sorry. No, he said he didn't know anything about it, yes. Yes, he didn't know anything about it, "I'll send you some info"?---Yes. And then he said the information is on their website?---That's what he said, yes. Is that the start and finish of that conversation? Yeo is in the background saying "Tell BD about Opes"?---Mm. Mr Caldow says, "Oh well, there's this crowd Opes," I think he told you that you could get a better margin at Opes, but he hadn't looked at it. It's obvious he didn't know anything about it from the conversation?---He said that, yes. And he said, "I'll send some information to you"?---Yes. End of conversation?---Yes. And then he sent you the information?---He emailed me some information, yes. 279 Mr Caldow was also cross-examined. Mr Caldow consistently denied that he had given any advice to Mr Drummond during the course of the crucial conversation. 280 I reject the evidence of Mr Drummond as to the content of the conversation deposed to by Mr Drummond in his first affidavit. I prefer the evidence of Mr Caldow as to the content of that conversation and find that the terms of the conversation were as deposed to by Mr Caldow. I make this finding for the following reasons. 281 First, in his cross-examination, Mr Drummond accepted the version of the conversation to which Mr Caldow had deposed. Of particular significance, is that Mr Drummond deposed that Mr Caldow had said that he did not know anything about the Opes Prime facility. This is inconsistent with Mr Drummond's affidavit evidence that Mr Caldow had said that the facility was the same as the Leveraged Equities margin loan. 282 Secondly, the evidence which Mr Drummond gave in his first affidavit was misleading as to his attitude to the Leveraged Equities facility in May 2007, at the time of his conversation with Mr Caldow. In his first affidavit, Mr Drummond did not reveal that at the time of the crucial conversation he was dissatisfied with Leveraged Equities and that he had expressed this dissatisfaction to Mr Caldow. To the contrary, Mr Drummond sought to create the impression in his first affidavit that he was content with his relationship with Leveraged Equities and that Mr Caldow induced him to terminate this good relationship to enter into a relationship with Opes Prime. This is also reflected in Eric Preston's pleading in its statement of claim. It was only in his third affidavit, and after he had seen Mr Caldow's affidavit, that Mr Drummond acknowledged that he had previously spoken to Mr Caldow about the limitations of the Leveraged Equities facility, although, even then, Mr Drummond sought to colour his evidence, by seeking to characterise these complaints as "discussions". It was only in his cross-examination that he ultimately accepted that he had, as Mr Caldow had deposed, complained to him about Leveraged Equities. 283 Thirdly, in his third affidavit, Mr Drummond also denied the description of the language which he used in relation to the deficiencies in the service provided by Leveraged Equities and his attitude to banks. Evidence emerged during the trial which showed that Mr Drummond can on occasions use very frank and blunt language. An example of Mr Drummond's propensity to use coarse and blunt language at times is to be seen in the email, critical of Mr Anderson's advice, which he sent to Mr Anderson of 11 December 2006. Mr Drummond's attempt to couch the language that he used in anodyne terms in his affidavit evidence is unconvincing. 284 Fourthly, another factor which undermines the reliability of the evidence of the crucial conversation given by Mr Drummond in his first affidavit, is that Mr Drummond did not refer to having dealt directly with, and made inquiries of, Mr Rice prior to making an application for the Opes Prime facility in his first affidavit. The failure to refer to his dealing with Mr Rice prior to entering into the Opes Prime facility in his first affidavit, is a further instance of Mr Drummond seeking to create the false impression that it was solely at Mr Caldow's initiative that Eric Preston moved from a good working relationship with Leveraged Equities to Opes Prime for Mr Caldow's selfish reasons. 285 I reject the criticisms made by Eric Preston during closing submissions, that I should not place weight on the cross-examination because of the alleged "rolled-up" nature of the questions put to Mr Drummond. First, it was open to senior counsel for Eric Preston to have taken that objection during the course of the cross-examination as he did in relation to a number of questions. Secondly, in my view, Mr Drummond understood the questions and was not prejudiced by their form. 286 Senior counsel for Eric Preston contended that senior counsel for Euroz Securities did not comply with the rule in Browne v Dunn (1893) 6 R 67, because he did not challenge Mr Drummond directly by asking him whether he stood by his version of the conversation deposed to in his first affidavit. In my view, it was unnecessary to put to Mr Drummond his own version. It was sufficient compliance with the rule in Browne v Dunn that senior counsel for Euroz Securities gave the witness an opportunity to comment upon Mr Caldow's version of the crucial conversation. In my view, senior counsel for Euroz Securities gave Mr Drummond a fair opportunity to deal with the opposing evidence. In any event, Eric Preston was plainly on notice through the pleadings that it was a fundamental contention of Euroz Securities that no advice of the nature alleged by Eric Preston had been given by Mr Caldow to Mr Drummond. 287 Senior counsel for Eric Preston also drew my attention to the fact that later on during his cross-examination, Mr Drummond had sought to commence answering a question by stating that the crucial conversation had been in accordance with his evidence in his first affidavit, and that this answer had been cut off by an intervention by senior counsel for Euroz Securities. 288 Further, during re-examination, Mr Drummond sought to reassert his affidavit evidence as to the content of the crucial conversation. I place no weight on Mr Drummond's attempt to reassert his position in the first affidavit after the evidence he had given in cross-examination referred to above. The cross-examination answers Mr Drummond gave set out at [278] above, were spontaneous and had the ring of truth. The subsequent attempts by Mr Drummond to reassert the version of the conversation described in his first affidavit were artificial and, in my view, given after Mr Drummond had realised the adverse import of his spontaneous answers given during his earlier cross-examination for Eric Preston's case. 289 It follows that I find that Mr Caldow did not state that the Opes Prime facility was the same as the Leveraged Equities facility other than it had a lower rate of interest and a better loan to value ratio, and that he did not advise Mr Drummond on behalf of Eric Preston, to terminate the Leveraged Equities facility. 290 I find that Mr Caldow made no representation as to the characteristics of the Opes Prime facility. I find that Mr Caldow told Mr Drummond that he did know about the Opes Prime facility. I find that following the conversation with Mr Caldow, Mr Drummond then approached and dealt directly with Mr Rice of Opes Prime about entry into the Opes Prime facility, save for the respects deposed to by Mr Caldow. Can Eric Preston rely on a case founded on the allegation that Euroz Securities failed to advise as to the characteristics of the Opes Prime facility? 291 Eric Preston's case is based on the central contention that Mr Caldow made a positive statement as to the characteristics of the Opes Prime facility, and that Mr Drummond relied upon it to terminate the Leveraged Equities facility and to enter into the Opes Prime facility. 292 Mr Drummond said specifically in his first affidavit (para 93) that he did not read the content of the Opes Prime Financial Services Guide because he relied on the positive advice of Mr Caldow that the Opes Prime facility was no different in character than the Leveraged Equities facility. 293 I have found that Mr Caldow did not make the positive statement alleged by Eric Preston. Euroz Securities contended that if I found that Eric Preston failed to make out its claim that Mr Caldow made the statement which Mr Drummond said he relied upon to enter into the Opes Prime facility, it was not open to Eric Preston to advance an alternative case based on a failure by Euroz Securites to reveal the differences in the two facilities. It was not possible, said Euroz Securities, for Eric Preston honestly to run a case which is founded on an alternative scenario that Mr Caldow did not give positive advice. This is because it is not possible to plead a factually inconsistent case. 294 In my view, the contention of Euroz Securities should be upheld. 295 As mentioned, Mr Drummond specifically deposed that it was the positive advice of Mr Caldow which caused him not to read the Opes Prime Financial Services Guide and induced in him, the belief that the Opes Prime facility was of the same character as the Leveraged Equities facility such that Eric Preston would retain beneficial ownership in the shares in its portfolio. 296 Order 11 r 8 of the Federal Court Rules provides that a party may not plead inconsistent statements of fact. In this case, Eric Preston's claim was based squarely on an allegation that Mr Drummond relied on a positive statement made by Mr Caldow, and as a consequence, did not read the terms of the Opes Prime Financial Services Guide, before entering into the Opes Prime facility. 297 It would not have been open to Eric Preston to plead that Mr Drummond's belief was induced by any other factual circumstance. 298 In Suvaal v Cessnock City Council (2003) 200 ALR 1, Callinan J observed at 35-36, at [139] and [144]: The Court of Appeal (Powell JA, Giles JA and Rolfe AJA) was of the opinion that the appeal could be disposed of in the respondent's favour on the ground that the master had no proper basis for a finding in favour of the appellant following her rejection of his pleaded, and repeated, assertion that it was contact with him by, or the proximity of an unidentified motor vehicle to him that caused the marked and sudden deviation of his bicycle into the potholes beside the road, the facture in the steering mechanism and the fall. … In my opinion the Court of Appeal had no option but to allow the appeal. The approach of the master was an incorrect one. She seemed to think that, rather than decide whether the appellant had proved the case that he sought repeatedly to make at the trial and which she concluded she was bound to reject, she was obliged to find some other explanation for the accident. This was to misunderstand the nature of the task she had to perform. 299 These observations are apposite to this case. Accordingly, Eric Preston having failed to prove occurrence of the event which it was said actually induced the crucial belief that the Opes Prime facility was the same as the Leveraged Equities facility, it is not open to Eric Preston to contend, nor for the Court to find, that that the crucial belief was induced by a different factual scenario. Would Eric Preston have entered into the Opes Prime facility even if it had been advised as to its characteristics and attendant risks? 300 It was a central element of Eric Preston's case that if Mr Drummond had been advised that Eric Preston would be no more than an unsecured creditor of Opes Prime, and would be at risk of losing its portfolio in the event of Opes Prime's insolvency, Eric Preston would have stayed with Leveraged Equities. In his second affidavit, Mr Drummond said at para 13: In the event that I had been made aware around the end of May 2007 when EP switched from an LE Facility to an OP Facility that the OP Facility was a share lending arrangement pursuant to which EP's portfolio would be transferred absolutely to OP, leaving EP as an unsecured creditor of OP, EP would have remained with LE. 301 Euroz Securities contended that, even if Mr Drummond had been advised prior to Eric Preston's entry into the Opes Prime facility, that Eric Preston would lose the beneficial ownership in its share portfolio and would stand as an unsecured creditor in the event of the insolvency of Opes Prime, Mr Drummond would still have terminated the Leveraged Equities facility and entered into the Opes Prime facility. 302 A court needs to be cautious when scrutinising evidence that, had a person been warned of a particular risk, he or she would have acted differently, when that evidence is given after some major loss or damage has occurred (Clambake Pty Ltd v Tipperary Projects Pty Ltd (No 3) [2009] WASC 52). 303 The risk of loss to Eric Preston which has eventuated in this case, is that Opes Prime has become insolvent and Eric Preston is now in the position of an unsecured creditor for the difference between the value of its portfolio and the amount owing to Opes Prime under the facility. 304 I reject Mr Drummond's evidence set out at [300] above. I am of the view, that even if Mr Drummond had been advised of the risk which subsequently led to Eric Preston's loss, Mr Drummond, on behalf of Eric Preston, would still have terminated the Leveraged Equities facility and entered into the Opes Prime facility. 305 I base that view on the following facts. 306 First, before entering into the Opes Prime facility in May 2007, Mr Drummond was discontented with Leveraged Equities. In the months leading up to May 2007, Eric Preston was operating at the limit of the credit available to it under the Leveraged Equities facility, and Mr Drummond was frustrated by the failure of Leveraged Equities to offer any further margin, in respect of Sundance Energy shares, and any margin in respect of shares in other companies in which Eric Preston held shares. 307 Mr Drummond was, at all material times, particularly attracted to Sundance Energy shares and was desirous of building up a large portfolio of shares in that company. Before terminating the Leveraged Equities facility, Mr Drummond sent an email to Ms Jones asking whether Leveraged Equities would offer a margin against Sundance Energy shares. Within a week of Leveraged Equities' reply saying that it would not, Mr Drummond made the application for the Opes Prime facility, which did offer a margin on Sundance Energy shares. Further, Mr Drummond, for Eric Preston, immediately purchased more shares in Sundance Energy once the Opes Prime facility became operative. Thereafter, Mr Drummond, used the Opes Prime facility to increase, substantially, Eric Preston's stake in Sundance Energy shares. 308 Further, the Opes Prime facility offered margins on a number of other stocks in that part of the market which attracted Mr Drummond, on which Leveraged Equities did not. 309 Secondly, eight weeks before administrators were appointed to Opes Prime, Mr Drummond was informed by Euroz Securities by the 1 February 2008 email that in the event of the insolvency of Opes Prime, Eric Preston would rank as an unsecured creditor. Further, at around the same time, Mr Drummond also received advice from Mr Anderson, endorsed by Mr Caldow, that he should not risk the loss of the share portfolio, and that he should terminate the Opes Prime facility. 310 However, notwithstanding the receipt of the email of 1 February 2008, and the advice from Mr Anderson, Mr Drummond continued to use the Opes Prime facility to engage in share trading. Thus, fully aware that, in the event that Opes Prime became insolvent, Eric Preston would stand only as an unsecured creditor for the difference between the value of its share portfolio and the balance of the loan, Mr Drummond, nevertheless, continued to use the Opes Prime facility to purchase shares which were not eligible for a margin under the Leveraged Equities facility. In particular, Mr Drummond continued to increase Eric Preston's holding of Sundance Energy shares. During the period 1 February to 28 March 2008, Eric Preston bought a total of 1,165,000 Sundance Energy shares in a series of 22 separate trades on 18 separate days during that period. 311 In February 2008, the question as to the stability of Opes Prime's financial position had been raised by the publicity about Tricom. I infer from the fact that Mr Drummond was prepared to take the risk of Opes Prime becoming insolvent in the post 1 February 2008 circumsances, that, in order to gain the trading advantages of the Opes Prime facility, he would, therefore, in May 2007, have been prepared to take the risk of Opes Prime becoming insolvent, when he was not conscious of any publicity giving rise to the issue of the stability of Opes Prime's financial position. 312 Thirdly, in February 2008, Mr Drummond, aware of the risk associated with the Opes Prime facility, had the opportunity to adopt the course of action he said he would have adopted in May 2007, had he then been made aware of that risk. That is, Mr Drummond, fully aware of the attendant risk of staying with Opes Prime, had the opportunity to refinance with Leveraged Equities but did not take the steps necessary to do so. In early February 2007, Mr Caldow inquired whether Leveraged Equities would refinance Eric Preston's Opes Prime facility. Leveraged Equities was not prepared to refinance on the basis of the shares then comprising Eric Preston's share portfolio. However, Mr Drummond did not pursue the option of making adjustments to Eric Preston's share portfolio so as to satisfy Leveraged Equities' requirements. Instead, as mentioned above, Mr Drummond continued to purchase during the period 1 February 2008 to 27 March 2008, shares in companies which were unacceptable to Leveraged Equities. 313 In my view, these facts fatally undermine Mr Drummond's evidence set out at [300] above, that he would have stayed with Leveraged Equities had he been advised of the matters therein described. The pleaded breaches relating to events of February 2008 314 Eric Preston contended that there were other breaches of the implied terms of the retainer which related to the events which occurred in or about February 2008. As previously mentioned, it is unnecessary to deal with those allegations in light of my finding that Eric Preston has failed to establish that the retainer contained the implied terms said to have been breached. However, I will make some observations in relation to those allegations. 315 It was said that, for the following reasons, the forwarding of the email to Mr Drummond on 1 February 2008, was not sufficient to comply with the implied terms of the retainer. 316 First, it was said that the advice in the email was given at a time when Opes Prime was in danger of becoming insolvent and Eric Preston did not have a reasonable opportunity of avoiding the loss of its share portfolio. 317 Secondly, the email did not recommend to Eric Preston that it immediately terminate the Opes Prime facility. 318 Further, Eric Preston pleaded that Euroz Securities was in breach of its duty by not immediately, after 31 January 2008, advising Eric Preston that it could not advise Eric Preston about Opes Prime, thereby depriving Eric Preston of the opportunity to save the value of its share portfolio, less the value of the loan it owed to Opes Prime. 319 Eric Preston also alleged that Euroz Securities breached the implied terms of the retainer by advising Eric Preston after 1 February 2008, that its portfolio was safe, when there were no reasonable grounds for giving that advice. The 1 February 2008 advice came too late 320 I deal first, with the contention that the advice as to the difference in characteristics between the Opes Prime facility and the Leveraged Equities facility came too late to give Eric Preston a reasonable opportunity to avoid the loss of its share portfolio. 321 Eric Preston's claim that the advice as to the difference between the two facilities came too late for it to have a reasonable opportunity to save its portfolio, is rejected. This is because, in my view, Mr Drummond, on behalf of Eric Preston did have a reasonable opportunity after he received the advice to avoid the loss but did not take that opportunity. 322 At para 21 of his second affidavit, Mr Drummond said: As at 31 January 2008 EP owed OP approximately $2.4m. Had I been advised EP should terminate its OP Facility as a matter of urgency, I would have sold sufficient shares to realise sufficient funds to pay out the OP loan and I would have requested the remaining shares, being shares in SEA, to be transferred back to EP together with a cheque for the balance owed. EP would have sold the following shares and achieved the following returns: Action Stock Code Amount Unit Price Sale Proceeds Sell APP 500,000 $0.450 $225,000 Sell ALE 1,000,000 $0.170 $17,000 Sell COE 600,000 $0.655 $393,000 Sell EAR 400,000 $0.175 $70,000 Sell OMH 743,685 $2.390 $1,350,000 Sell TTY 400,000 $1.105 $442,000 $2,497,000 323 Mr Caldow deposed that the following conversation occurred in early February 2008, after Mr Drummond had received the email of 1 February 2008, and the advice of Mr Anderson and Mr Caldow, that he should terminate that Opes Prime facility: Mr Drummond - "How do I get out of Opes?" Me - "Your options are, you can sell stock and/or you can pay out the loan". Mr Drummond - "I don't want to pay it out. It is the money for the new house and Judith wouldn't want me to touch it". 324 I accept this evidence. 325 In my view, it was open to Mr Drummond to sell down some of the shares in Eric Preston's share portfolio but he chose not to do so. That was a personal choice that Mr Drummond made. Mr Drummond was aware that there were risks involved in the course that he adopted, but he chose to accept the risk. It cannot, therefore, be said that Mr Drummond did not have a "reasonable opportunity" to avoid the loss of Eric Preston's share portfolio. Mr Drummond said that he did not believe that it was urgent to take steps to get out of the Opes Prime facility, but it does not follow, therefrom, that he did not have a reasonable opportunity to avoid the loss by selling down sufficient shares in Eric Preston's portfolio to pay out the facility. The reason he did not sell down the shares is because he did not want to. 326 Further, Eric Preston pleaded in relation to this allegation that by 1 February 2008, Opes Prime was "in danger of becoming insolvent and in breach of its own lending agreements". However, I was not taken to any evidence, nor asked to make any findings, as to, the financial position of Opes Prime on 1 February 2008, or indeed at any time. The financial position of Opes Prime leading up to the appointment of the administrators was not explored in this case. I, accordingly, make no finding as to the financial position of Opes Prime at 1 February 2008. Failure to advise Eric Preston to terminate the Opes Prime facility 327 It was also contended that Euroz Securities breached its retainer because it did not in terms advise Eric Preston in the 1 February 2008 email to terminate the Opes Prime facility. Underlying this contention, is a further contention that the financial position of Opes Prime was so parlous at that time that it would have justified the advice for which Eric Preston contends. 328 This contention would have failed for the following reasons. First, as mentioned, Eric Preston did not seek to establish the financial position of Opes Prime as at 1 February 2008. Secondly, Eric Preston did not adduce any evidence to show that if Euroz Securities had made inquiries from Opes Prime as to its financial position, that it would have been informed as to the true financial position, so as to be in a position to give the advice which it said should have been given. 329 Further, in any event, Mr Drummond did receive advice to terminate the Opes Prime facility from Mr Anderson, endorsed by Mr Caldow, but declined to do so, notwithstanding that he had a reasonable opportunity to do so. Failure to advise that Euroz Securities could not comment on the financial position of Opes Prime 330 It was also contended that Euroz Securities breached the implied terms of the retainer by failing to advise Mr Drummond on behalf of Eric Preston, that it could not comment on the solvency or financial stability of Opes Prime. 331 This contention would also have failed because there was no evidence from Mr Drummond that had he been advised by Euroz Securities that it could not advise as to the financial position of Opes Prime, that he would have taken steps which would have meant that Eric Preston would have avoided the loss to its share portfolio. 332 Further, Mr Caldow, in effect, did advise Mr Drummond that he could not advise on the financial position of Opes Prime during their conversation in early February 2008, when he passed on the information he had learned from Mr Rice. Advice that the share portfolio was safe 333 Eric Preston also contended that there was a breach of duty by Euroz Securities in that Mr Caldow made statements to Mr Drummond which amounted to a representation that Eric Preston's portfolio was safe, when there were no reasonable grounds for that statement. 334 Mr Drummond said that he relied on this statement not to take steps to protect his position. Mr Drummond said that as a consequence he regarded the need to take steps to liquidate his position in Opes Prime was not urgent. 335 There was a factual dispute between the parties as to whether Mr Caldow gave such advice. For the reasons which I set out in [405]‑[417] below, I find that Mr Caldow did not give such advice. THE CLAIM IN TORT 336 Eric Preston pleaded that, in May 2007, when Mr Caldow gave Mr Drummond the advice to terminate the Leveraged Equities facility and to enter into the Opes Prime facility (as previously mentioned, this advice is referred to in the pleading as the "OP advice"): (a) Euroz Securities knew that Eric Preston relied on Euroz Securities for advice as to the buying and selling of shares and the acquisition and use of other financial products by Eric Preston; (b) Eruoz Securities knew that it was very likely that Eric Preston would enter into the Opes Prime facility; (c) Euroz Securities knew that if Eric Preston relied on the advice given by Mr Caldow and entered into the Opes Prime facility and such advice was wrong or unsound, Eric Preston would risk incurring significant economic loss; (d) Euroz Securities knew, or ought to have known, that Eric Preston was vulnerable to the loss of all or part of its share portfolio, or the value thereof, should the advice be wrong. 337 It is then alleged that those facts gave rise to the following duties owed by Euroz Securities to Eric Preston: (a) a duty to exercise reasonable care, skill and diligence in acting as stockbroker and financial advisor to Eric Preston; (b) a duty to take reasonable care to avoid foreseeable economic loss, and risk of economic loss, to Eric Preston; (c) a duty to take reasonable care to ensure that Eric Preston was aware of the true nature and substance of the Opes Prime facility and the risk associated therewith. 338 It is then pleaded that, in breach of the duty of care, Euroz Securities recommended and facilitated the use of the Opes Prime facility without advising Eric Preston that the beneficial interest in its share portfolio had been transferred to a third party, and the risk associated with such a transfer. 339 It is also alleged that Euroz Securities breached its duty by failing to advise Eric Preston of the true nature, substance and risk of the Opes Prime facility and by failing to take reasonable steps to avoid foreseeable harm to Eric Preston. 340 There is appended to the pleading of those allegations of breach of duty, particulars substantially to the same effect as the particulars which were relied upon for the claim for breach of contact. As was the case in relation to the plea for breach of the implied terms of the retainer, no attempt was made by Eric Preston to link any one or more of the specific paragraphs containing the particulars to any one or more of the pleaded breaches of duty. 341 Eric Preston then pleaded that by reason of the said breaches of duty, it has suffered and will suffer loss and damage. In the particulars, Eric Preston repeats the particulars relied on in support of the claim for breach of contract, namely, that but for the breaches of duty, Eric Preston would have continued with the Leveraged Equities facility and would not have lost its share portfolio. 342 Whilst it is possible to construe the statement of claim as pleading a "reliance based" claim for negligent misrepresentation in relation to the giving of the alleged so-called "OP advice" by Mr Caldow in May 2007, the parties did not conduct the trial on that basis. 343 The parties treated the claim in tort as being founded on a duty of care which was coextensive with the duty of care owed under the retainer (see Eric Preston's written opening statement, and Eric Preston's senior counsel's closing submissions (transcript at 969)). Further, in its written closing submissions Eric Preston did not treat the allegations of breach of duty in contract and tort, as being other than coextensive. 344 I have already found that Eric Preston has failed to prove that the retainer entered into with Euroz Securities extended to an undertaking by Euroz Securities to act as Eric Preston's financial advisor, and that the implied duty to act with reasonable care and skill did not extend to acting both as a stockbroker and financial advisor. On the basis on which the parties conducted the trial, Eric Preston's duty of care in tort would be coextensive and similarly circumscribed. The alleged breaches of the duty of care did not relate to any acts or omissions by Euroz Securities in carrying out its function purely as a stockbroker. The allegations were premised on Euroz Securities having duties of care arising from its agreement in the retainer, to act as a financial advisor to Eric Preston. 345 Accordingly, Eric Preston's claim in tort also fails. 346 I am not to be taken as saying that, had Eric Preston pursued a reliance based claim on the basis of the pleadings, that the result would have been different. The fact that I have found that in the crucial conversation in May 2007, Mr Caldow told Mr Drummond that he did not know anything about the Opes Prime facility, would have constituted a considerable obstacle to the success of any such claim. Further, there was no plea of any circumstances occurring in February 2008, upon which to found a reliance based duty of care in relation to advice as to the financial position of Opes Prime at that time. THE CLAIM THAT EUROZ SECURITIES ENGAGED IN MISLEADING OR DECEPTIVE CONDUCT 347 Eric Preston claimed that Euroz Securities engaged in misleading or deceptive conduct in contravention of s 1041H of the Corporations Act 2001 (Cth) and s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) by making two representations which were misleading or deceptive. 348 Section 1041H(1) of the Corporations Act provides that: A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or financial service, that is misleading or deceptive or is likely to mislead or deceive. 349 Section 1041I(1) of the Corporations Act provides that: A person who suffers loss or damage by conduct of another person that was engaged in in contravention of section…1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention. 350 Section 12DA of the ASIC Act provides: A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive. 351 Eric Preston alleged that the Opes Prime credit facility was a "financial product" within the meaning of s 12BAA of the ASIC Act. 352 It is further pleaded that the advice given and representations allegedly made by Euroz Securities in relation to the Opes Prime facility constituted "financial product advice" within the meaning of the Corporations Act and s 12BAB(5) of the ASIC Act. 353 Eric Preston pleaded that in making representations and giving advice in relation to the Opes Prime credit facility, Euroz Securities provided a "financial service" within the meaning of the Corporations Act and s 12BAB of the ASIC Act. 354 I note that Euroz Securities disputed these contentions, but in light of my conclusions, it is not necessary to rule on Euroz Securities' arguments. The first representation 355 I deal with the first of the representations alleged by Eric Preston. 356 As mentioned, Eric Preston has pleaded that Euroz Securities engaged in contravening conduct by making two representations which caused Eric Preston to suffer loss and damage. 357 Eric Preston pleaded that prior to the entry into the Opes Prime facility, Euroz Securities represented that save for the differences previously referred to, the Opes Prime facility was as to its nature and substance, and in risk, the same as the Leveraged Equities facility, so that, provided Eric Preston paid all margin calls in respect of the Opes Prime facility, it could not lose its share portfolio. 358 In its particulars of this plea, Eric Preston relied upon the conversation between Mr Caldow to Mr Drummond referred to at [178] above and Euroz Securities' silence in failing to advise Eric Preston of the following matters: (a) It had failed to make any or any adequate assessment of the nature, substance and risks of the Opes Prime facility. (b) The Opes Prime facility was a "very different facility" to the Leveraged Equities facility in that under the Opes Prime facility Eric Preston would transfer all of the shares in its portfolio, whether funded by margin lending or owned outright, to Opes Prime under a share lending arrangement, so that Opes Prime could deal with the shares in such manner as it saw fit, including transferring the shares to third parties as collateral for the loans to Eric Preston. (c) The shares in Eric Preston's portfolio, whether the subject of margin lending or not, constituted the security for Opes Prime's debts and were at risk "for failure by other margin lending clients of Opes Prime to pay their margin calls". (d) The Opes Prime facility involved a high level of risk to Eric Preston not present in the Leveraged Equities facility. (e) Eric Preston would under the Opes Prime facility transfer its shareholding to Opes Prime so that Eric Preston lost ownership and control of the shares in its share portfolio and would become an unsecured creditor of Opes Prime. 359 Eric Preston pleaded that the first representation was false, misleading or deceptive, or likely to mislead or deceive (para 25 of statement of claim). Somewhat unhelpfully the particulars of this allegation refer back to a number of particulars relied upon in support of the claim for breach of the retainer. However, I have treated the particulars as an allegation that the advice given by Mr Caldow was wrong because the Opes Prime facility did not have the characteristics described by Mr Caldow, but rather had the characteristics and risks referred to in subparas (b), (c), (d) and (e) above. Eric Preston also pleaded (para 26 of the statement of claim) that insofar as the first representation pertained to future matters, Eric Preston relied upon s 12BB(1) of the ASIC Act. 360 Eric Preston pleaded that in reliance on the first representation, Eric Preston terminated the Leveraged Equities facility and entered into the Opes Prime facility and began using the Opes Prime facility. It also pleaded that had the first representation not been made Eric Preston would have continued with the Leveraged Equities facility and not entered into the Opes Prime facility and not lost its share portfolio. Eric Preston, accordingly, claimed loss and damage. 361 The evidence of Mr Drummond as to his reliance on the statement made by Mr Caldow is at para 76 and para 93 of his first affidavit. Mr Drummond's evidence is that it was the statement that induced in him the belief that the Opes Prime facility was the same as the Leveraged Equities facility, and it was this statement which caused him not to read the terms and conditions of the Opes Prime Financial Services Guide before entering into the Opes Prime facility. 362 By reason of my findings made at [289]-[290] above, I have found that Mr Caldow did not make the statements as to the characteristics of the Opes Prime facility during the conversation relied upon by Eric Preston in its particulars, Eric Preston has failed to establish that the first representation was made. 363 Eric Preston's claim is not enhanced by seeking to include Mr Caldow's silence as part of the impugned representation. In this case, it was alleged that Mr Caldow gave positive advice which was wrong. It was not a case where it is necessary to view the conduct as a whole to discern the misleading impression, which it is said, was relied upon by Mr Drummond. In this case, the alleged words themselves created the misleading impression because they conveyed wrong information. Silence adds nothing. 364 It follows that once Eric Preston failed to prove that the impugned statement was made, then Eric Preston's contention, that it suffered loss by reason of Mr Caldow's making of the statement, also fails. 365 In any event, by reason of my findings at [304] above, Eric Preston has also failed to establish its allegation at para 27 of its statement of claim that, but for the making of the first representation, Eric Preston would not have entered into the Opes Prime facility, and would not have suffered the loss it claimed. 366 I, accordingly, dismiss Eric Preston's claim for damages founded on the allegation that Euroz Securities engaged in misleading or deceptive conduct by making the first representation. The second representation 367 Eric Preston pleaded that around or shortly prior to 1 February 2008, Euroz Securities represented to Eric Preston that: (a) Opes Prime was not like Tricom; (b) it would be necessary for the stock market to fall 20% in one day and for no client of Opes Prime to pay their margin calls for Opes Prime to be in trouble; and (c) the Eric Preston share portfolio was and would be safe under the Opes Prime facility. 368 In the particulars to this plea, Eric Preston stated that each of the statements pleaded at subparas (a) and (b) was made orally by Mr Caldow to Mr Drummond. Eric Preston then stated that the third part of the representation, namely, that in subpara (c) above, was to be implied from the statements made in subparas (a) and (b) and the fact that Mr Caldow made those statements with the intention of leading Eric Preston to believe that its share portfolio was safe under the Opes Prime facility and the fact that Mr Caldow did not advise Eric Preston to terminate the Opes Prime facility. 369 Eric Preston then pleaded that in reliance on the second representation, it formed the view that its share portfolio was not at risk, and that Eric Preston did not terminate the Opes Prime facility and require payment or transfer to it in cash or shares of the net value of its share portfolio after repayment of the Opes Prime loan. 370 It is then pleaded that in contravention of the statutory provisions referred to at [348] and [350] above, the second representation was false, misleading or deceptive, or likely to mislead or deceive. In the particulars provided in support of that allegation, Eric Preston stated that the second representation was false in fact and that Mr Caldow had no reasonable basis for making it. It was also said that the second representation was made for the sole purpose of assuring Eric Preston that its share portfolio was safe when, in fact, it had been transferred to a third party and was at serious risk of being lost. 371 Eric Preston also pleaded that the statements in subparas (b) and (c) of the second representation were "as to future matters" and it relied on s 12BB of the ASIC Act. 372 It is also pleaded that had the second representation not been made, Eric Preston would have formed the view that its share portfolio was at risk under the Opes Prime facility, would have terminated the Opes Prime facility and required payment or transfer to it in cash and/or shares of the net value of the share portfolio. 373 Euroz Securities denied that it engaged in conduct which contravened the statutory provisions relied upon by Eric Preston. Euroz Securities contended that it did not take any responsibility for advising in relation to the solvency or otherwise of Opes Prime. It is contended specifically that Mr Caldow did no more than pass on information as to the position of Opes Prime which Mr Rice had told him. Further it is contended that Mr Drummond appreciated that Mr Caldow was passing on information from Mr Rice. Further, Euroz Securities denied that Mr Caldow had ever advised Mr Drummond that the Eric Preston share portfolio was safe. 374 Further, Euroz Securities pleaded that, insofar as the second representation amounted to a representation as to a future matter, if, which it was denied, the second representation was made, Euroz Securities had reasonable grounds for making it. 375 I now deal with the allegation that Euroz Securities engaged in contravening conduct by Mr Caldow by making the second representation. As I have mentioned above, Euroz Securities contended specifically that Mr Caldow did no more than pass on information as to the position of Opes Prime which Mr Rice had told him, and did not, therefore, engage in contravening conduct. 376 The legal principles relating to engaging in misleading or deceptive conduct in circumstances where there is a contention that the alleged misleading information has been passed on, have been reviewed recently by the High Court and the New South Wales Court of Appeal. 377 In the case of Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592 (Butcher), the appellants were the purchasers of a waterfront property on which there was located a swimming pool. They were property investors. Prior to purchasing the property, they received from the respondent, a suburban real estate agent, a brochure which contained a survey diagram which showed the location of the pool being entirely within the freehold land. The pool was not, in fact, entirely within the freehold land. The real estate agent's brochure contained disclaimers, which stated that it was not a surveyor and it did not engage a surveyor to do the survey, and that the diagram recorded what a particular surveyor had found. One of the disclaimers stated: We believe the vendor and the surveyor are reliable, but we cannot guarantee the accuracy of the information they have provided. Whatever you rely on, you must rely on your own inquiries. 378 In Butcher at 604-605, at [37], Gleeson CJ, Hayne and Heydon JJ identified the approach to be taken in assessing whether there was liability in cases where monetary relief was claimed by a plaintiff who alleged that a particular representation was made to identified persons of whom the plaintiff was one. Gleeson CJ, Hayne and Heydon JJ observed: The plaintiff must establish a causal link between the impugned conduct and the loss that is claimed. That depends on analysing the conduct of the defendant in relation to that plaintiff alone. So here, it is necessary to consider the character of the particular conduct of the particular agent in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known. Indeed, counsel for the purchasers conceded that the mere fact that a person had engaged in the conduct of supplying a document containing misleading information did not mean that that person had engaged in misleading conduct: it was crucial to examine the role of the person in question. 379 The majority, at 605, at [38], also adopted the following observations from Yorke v Lucas (1985) 158 CLR 661 at 666: That does not, however, mean that a corporation which purports to do no more than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false. If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in the truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive. 380 Gleeson CJ, Hayne and Heydon JJ then went on to observe at 605, at [39]: In applying those principles, it is important that the agent's conduct be viewed as a whole. It is not right to characterise the problem as one of analysing the effect of its "conduct" divorced from "disclaimers" about that "conduct" and divorced from other circumstances which might qualify its character. 381 At 605, at [40], Gleeson CJ, Hayne and Heydon JJ observed: For the following reasons, the agent did not engage in conduct towards the purchasers which was misleading. Whatever representation the vendor made to the purchasers by authorising the agent to issue the brochure, it was not made by the agent to the purchasers. The agent did no more than communicate what the vendor was representing, without adopting it or endorsing it. That conclusion flows from the nature of the parties, the character of the transaction contemplated, and the contents of the brochure itself. (Emphasis added.) 382 The majority then engaged in a detailed analysis of each of the three matters referred to in the italicised sentence in the observations set out above. At 609, at [51], the majority observed: Hence it would have been plain to a reasonable purchaser that the agent was not the source of the information which was said to be misleading. The agent did not purport to do anything more than pass on information supplied by another or others. It both expressly and implicitly disclaimed any belief in the truth or falsity of that information. It did no more than state a belief in the reliability of the sources. 383 In the case of Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2009) 252 ALR 659 (Ingot), the Court of Appeal of New South Wales relevantly considered whether the respondent, Macquarie, had engaged in misleading or deceptive conduct in the course of distributing a draft prospectus which contained information from a third party. Ipp JA observed (at 707, at [275]) that the majority in Butcher pointed out that: [I]n analysing whether conduct was misleading, a particular approach was to be adopted where the objects of the conduct are "identified individuals to whom a particular misrepresentation has been made or from whom a relevant fact, circumstance or proposal was withheld". 384 Ipp JA went on to say that that approach had been followed in the case of Orix Australia Corporation Ltd v Moody Kiddle and Partners Pty Ltd [2006] NSWCA 257 (Orix). Ipp JA then observed at 707, at [276]: In that case the appellant claimed that it had suffered loss as a result of the misleading conduct of the respondent. Only one witness testified on behalf of the appellant, namely, its senior key accounts executive. The knowledge and understanding of this witness were the knowledge and understanding of the appellant. At [59], with the concurrence of Spigelman CJ and Basten JA, I said: In a case where the alleged victim of misleading conduct is a single entity, and the knowledge and understanding of the entity is that of a particular individual, the actual knowledge and understanding of the individual is of fundamental importance. If the individual recipient of information believes a disclaimer to mean that the agent is not the source of the information said to be misleading, and that the agent is merely passing on information supplied by others, that must be decisive. It is not then necessary to construe the disclaimer. 385 In Ingot, Ipp JA went on to say at 707, at [287]‑[288]: In my view, the fact that Macquarie may have contributed significantly to the drafting of substantial parts of the prospectus (contrary to the statements to different effect made in the draft prospectus) is not material. There is considerable evidence to the effect that the information in the prospectus, which Mr Saville regarded as influencing his decision to cause the appellants to invest in the sub‑underwriting contracts…was not information that Macquarie provided. Importantly, Mr Saville understood that Macquarie was not the source of the representations, or the information that formed the basis for them; Mr Saville believed, rather, that Macquarie was merely passing on the information (derived from others) conveyed by the representations. 386 The essence of Eric Preston's allegation that Euroz Securities engaged in misleading or deceptive conduct by, "around or shortly prior to 1 February 2008", making the second representation, is that Mr Caldow represented to Mr Drummond that Eric Preston's share portfolio was safe and would be safe under the Opes Prime facility, without having reasonable grounds for that representation. 387 I now deal with the evidence in relation to this claim. 388 Mr Drummond deposed at para 109 of his first affidavit that at 1:13 pm on 1 February 2008, he received the email from Mr Caldow. Mr Drummond deposed that in the following week he had a telephone conversation with Mr Caldow. Mr Drummond's evidence is, at para 110 of his first affidavit: The following week I had a telephone conversation with Caldow. I asked him to explain what the email meant in relation to EP. He said a meeting had taken place between Euroz and Mark Rice of OP. He said Mark Rice had briefed him, Simon Yeo and other Euroz dealers about OP's position. He said Mark Rice told them OP was not like Tricom, which I was aware from press reports at the time and believed had recently suffered financial difficulties. He said Mark Rice had told them the market would have to fall by 20% in one day and no OP client meet a margin call for OP to be in any difficulty. He said they were told by Mark Rice that "fundamentally ANZ owned most of the shares". He said everything I had with OP was with ANZ. 389 At para 112 of his first affidavit, Mr Drummond deposed: I considered that it was unlikely the market would fall by 20% in one day, and I considered it even less likely that all of the OP's clients would fail to meet their margin calls. The market had dropped since I received the email on 1 February 2008. In the course of my conversation with Caldow I told him I was concerned by that drop in the market. He told me EP's portfolio was safe. 390 Mr Caldow deposed at para 78 and para 79 of his affidavit that after the meeting that Mr Rice had with representatives of Euroz Securities on 5 or 6 February 2008, he telephoned Mr Drummond. He told Mr Drummond that at the meeting Mr Rice made statements to the effect set out at [397] above, about Opes Prime. Mr Caldow then deposed that during the conversation, he and Mr Drummond discussed what Mr Rice said "many times". Mr Caldow then deposed: Finally, I said to Mr Drummond words to the effect "I'm just passing on information that Rice has told me. Why don't you call Rice direct", to which Mr Drummond said words to the effect "ok". On or about the following day Mr Drummond telephoned me and said to me words to the effect "I have spoken to Rice. He said pretty much what you passed on." 391 Mr Caldow went on to depose at para 81 of his affidavit, that later Mr Rice had telephoned him and advised him that he would be in Perth in the following week and asked whether he should see Mr Drummond whilst he was in Perth. Mr Caldow said that he then telephoned Mr Drummond and had a conversation in the following terms: Me - "Mark Rice has rung me. He is going to be in Perth in the next 14 days. He wants to know whether you want to meet with him." Mr Drummond - "What is he going to tell me?" Me - "I suppose to reiterate what he told you on the phone." Mr Drummond - "There is no point in me seeing him then." 392 In his third affidavit, Mr Drummond did not take issue with the matters deposed to at para 78 and para 79 of Mr Caldow's affidavit. In para 62 of that affidavit, Mr Drummond does not dispute what Mr Caldow said at para 81 of his affidavit. However, he said that Mr Caldow had said on an earlier occasion that he thought Opes Prime "would not fall over". 393 In para 3 of his fourth affidavit, Mr Drummond referred to paras 110-112 of his first affidavit which referred to the conversation he had with Mr Caldow after Mr Rice's visit. Mr Drummond repeated that during that conversation, he was told that Opes Prime was not like Tricom, that it would be necessary for the stock market to fall 20% and for no clients to pay their margin calls for Opes Prime to be in trouble and that "Euroz" had said Eric Preston's portfolio was safe. Mr Drummond went on to depose in that paragraph that had he not been told this, he would have been of the view that Eric Preston's share portfolio was at risk and he would have terminated the facility and required payment or transfer to Eric Preston in cash and/or shares of a net value of the share portfolio. 394 Mr Drummond also said that he relied on the statement not to take steps to protect his position. Mr Drummond said that as a consequence he regarded the need to take steps to liquidate his position in Opes Prime was not urgent. 395 Mr Drummond was cross-examined about the content of the material telephone conversation with Mr Caldow. The following exchange occurred: MR DONALDSON: All right. Can I put it to you that Mr Caldow said in that conversation that he was just passing on to you information that he'd received from Mr Rice?---I believe that to be the fact, yes. Yes. He said that to you ?---Yes. And he also said to you that why don't you call Mr Rice directly?---Yes. Then you spoke to Mr Rice?---Yes, I rang Mr Rice. So you didn't rely on what you were told in the 1 February email, or even what Mr Caldow had said to you. You went and spoke to Mr Rice yourself?---Mr Caldow asked me to call Mr Rice. He asked you?---Yes. He said to me to call Mr Rice. "Why don't you call Mark Rice?" So they're the words, "Why don't you call Mark Rice"?---I believe that's to be the case, yes. And you decided to call Mr Rice?---Yes. To hear whatever you were going to hear directly from him?---I did, and I spoke to Mr Rice. In that conversation with Mr Rice, what did he say to you?---Well, I asked him what it was all about. He had the meeting with Euroz. We had a discussion about what Opes Prime was about, and we had a discussion about what was discussed about the meeting. Fundamentally, I heard exactly the same from Mr Rice that I heard from Mr Caldow. He was really confirming the conversation that went on at the offices of Euroz to Mr Caldow who passed it onto me. I rang Mr Rice to confirm that confirmation, and that was what happened. So you were quite content with the explanation that Mr Rice gave you?---Yes. 396 The following exchange also occurred during Mr Drummond's cross-examination: So just pause there. So, from what I understand your evidence to be now, that information was conveyed to you, by Mr Caldow, straight from Mr Rice and you understood that?---Yes. That Mr Caldow was simply passing on to you what Mr Rice had said, and that you then spoke to Mr Rice yourself and were told the same thing?---Yes. 397 During cross-examination, Mr Drummond was also taken to para 3 of his fourth affidavit in which he said that Mr Caldow had stated during the crucial conversation in early February 2008, that his share portfolio was safe: MR DONALDSON: …Mr Caldow never said to you, at any time, that Eric Preston's portfolio was safe, did he?---No, I believe he did tell me it was safe. When?---During conversations I had with him and we had numerous conversations. When? At what time period are you talking about here?---We're still talking about the time period of February, I was still trading with Euroz, having conversations, still having three, four, five phone calls a day to Mr Caldow. I can't remember what day, but a discussion – for me to say that, that would have happened. So after the 1 February email, the sequence we've just gone through, Mr Caldow passes onto you what Opes has said to him, you then speak to Mr Rice, you then get advice from Mr Anderson, you've worked too hard to lose everything, you can't tolerate any risk, Mr Caldow says, "I couldn't agree more." You then resolve you're going to refinance?---Yes. Then your evidence is that at some – what, later time, Mr Caldow said to you that your portfolio was safe?---Yes. Do you recall when that conversation was?---Well, it would have been on the basis – or I believe it to be on the basis that there was discussion around the stock market having to fall 20 per cent, and Opes clients not making any margin calls, that was a – at that time, it was pretty safe, I haven't – didn't know the market was going to fall 20 per cent, Mr Caldow had reassured me that he hadn't been around when the market had fallen 20 per cent in a day, so that was advice. So have you then concluded that your portfolio was safe from Mr Caldow saying to you, "Look, the two matters that have been raised, the market falling 20 per cent and no Opes clients making a margin call, they're unlikely to happen." That's what Mr Caldow told you, in that right?---Yes, words to that effect. Words to that effect?---Yes. You inferred from that, therefore my portfolio is safe?---My portfolio was safe, yes. But Mr Caldow never said to you that your portfolio was safe, did he?---Well, I said that he did tell me that after discussions with him on many occasions. Many occasions, he said to you- - - ?---No, we had lots of telephone conversations, a lot of things were discussed on those telephone conversations. I was trading, still trading with Euroz Securities in exactly the same fashion I had been leading up to that, and so during conversation, I believe that's what was said. 398 I do not, for the following reasons, accept Mr Drummond's evidence that Mr Caldow expressly stated that Eric Preston's portfolio was safe. 399 First, that evidence is contrary to the claim pleaded in the statement of claim. The statement of claim does not allege that Mr Caldow expressly stated that Eric Preston's portfolio was safe. Mr Caldow's representation is referred to in two places in its statement of claim. First, it is referred to in particular (xii) of para 15(d) of the statement of claim, and then it is referred to in para 22 of the statement of claim. Eric Preston does not in either of those references, allege that Mr Caldow made an express statement that Eric Preston's portfolio was safe. Specifically, the particulars to para 22 of the statement of claim distinguish between the express statements allegedly made by Mr Caldow (namely, that Opes Prime was not like Tricom and that it would be necessary for the market to fall 20% and for no client of Opes Prime to pay their margin calls for Opes Prime to be in trouble) and the statement that the portfolio was safe. The former statements are said to be oral, whereas the latter statement is said to be implied from the former statements. 400 Secondly, Mr Drummond's evidence on the question was unsatisfactory. In cross‑examination his evidence ranged from the answer that he inferred that the portfolio was safe from other statements that Mr Caldow had made, to answers that Mr Caldow had said on "many occasions" that Eric Preston's portfolio was safe. He did not identify any specific occasion, and, in particular, did not state in unequivocal terms that Mr Caldow made the statement during the course of the conversation in early February 2008, which is relied upon in Eric Preston's statement of claim, and in his first affidavit. I observe, in passing that, Eric Preston's pleaded case makes no mention of any express representations made by Mr Caldow on "many occasions" that Eric Preston's portfolio was safe under the Opes Prime facility. 401 In my view, the evidence that Mr Drummond gave was motivated by the fact that he knew that his affidavit evidence contained a statement that Mr Caldow had said that his portfolio was safe but that Mr Drummond had no recollection in the witness box of any such statement having been made by Mr Caldow and that Mr Drummond sought to defend the fact that his affidavit had been drafted in a manner which stated that Mr Caldow had said that the portfolio was safe. 402 Thirdly, that Mr Caldow would make a statement that Eric Preston's portfolio was safe is entirely inconsistent with the undisputed evidence that after Mr Drummond had spoken to Mr Rice on 5 February or 6 February 2008, Mr Caldow told Mr Drummond that he could not agree more with Mr Anderson's advice that Mr Drummond should not tolerate any risk in relation to Eric Preston's portfolio. 403 It follows that I find that Eric Preston did not establish that Mr Caldow said that Eric Preston's portfolio was safe or would be safe, under the Opes Prime facility. 404 There does not appear to be a pleaded claim founded on the statement in Mr Drummond's third affidavit that Mr Caldow had said that he thought Opes Prime would not fall over. However, particularly, for the reasons set out in [402] above, I also reject Mr Drummond's evidence that this statement was made by Mr Caldow. Did Euroz Securities engage in misleading or deceptive conduct in relation to the second representation? 405 Mr Caldow deposed that he told Mr Drummond during the course of their telephone conversation on 5 or 6 February 2008, that Mr Rice had said that for Opes Prime to have an issue the stock market would have to fall by 20% in a day and none of its clients paid their margin calls, and that he was simply passing on information which Mr Rice had provided during the course of the meeting earlier that day. This evidence is accepted. I also find that during that conversation, Mr Caldow advised Mr Drummond to telephone Mr Rice directly if he wanted further clarification from Mr Rice in respect of the information about Opes Prime which he was passing on. 406 During cross-examination, Mr Drummond did not cavil with Mr Caldow's evidence to this effect. 407 Mr Drummond also accepted that after having spoken to Mr Caldow, he did telephone Mr Rice as Mr Caldow had suggested, and that Mr Rice had confirmed the statements which Mr Caldow had passed on to Mr Drummond as to the financial position of Opes Prime. Mr Drummond also accepted that he understood that Mr Caldow was passing on the information which he had received from Mr Rice. 408 Further, it was Mr Anderson's evidence that when Mr Drummond telephoned Mr Anderson to discuss what steps he, Mr Drummond, should take in relation to the Opes Prime facility, Mr Drummond advised Mr Anderson as to what Mr Rice had told him as to the financial position of Opes Prime. 409 I find that Mr Drummond understood at the end of the conversation with Mr Caldow that Mr Caldow was not the source of the information as to the financial position of Opes Prime. Mr Drummond knew and understood that Mr Caldow was passing on information from Mr Rice, and that Mr Rice was the source of that information. I also find that Mr Caldow did not adopt the information either expressly or impliedly because in advising Mr Drummond to speak to Mr Rice, he disavowed any ability or capacity to express an opinion on the accuracy of the information. 410 On the application of the test referred to by Ipp JA in Orix, and confirmed in Ingot (see [384] above), the finding in the preceding paragraph is "decisive" of the issue. 411 It is unnecessary, therefore, to apply the objective test of the "reasonable person" in the position of the representee referred to in Butcher. However, on the application of that test I would have come to the same view. 412 In the context of this case, the test in Butcher requires the Court to have regard to the character of Mr Caldow's conduct in relation to Mr Drummond, bearing in mind what each knew about the other as a result of the nature of their dealings and conversations, or what each may be taken to have known. 413 In this case, Mr Drummond was the person, on behalf of Eric Preston, to whom Mr Caldow made the impugned statement. Mr Drummond was a very experienced businessman who had achieved success in the competitive motor vehicle dealership industry. Further, Mr Drummond was carrying on business on behalf of Eric Preston as a professional share trader. I also find, notwithstanding Mr Anderson's views to the contrary, that Mr Drummond was a sophisticated investor with a very good understanding of the operation of share trading – having made investments in unlisted as well as listed companies, and having participated in initial public offerings and in the sub-underwriting of share issues, and having a familiarity with the ASX Listing Rules. 414 Further, Mr Drummond was a confident person who had on previous occasions, dealt directly with Mr Rice in relation to Opes Prime. He would not have felt constrained in contacting Mr Rice directly. 415 Mr Caldow had a close business relationship with Mr Drummond as Eric Preston's stockbroker. The impugned statement related to the financial position of Opes Prime. Mr Caldow did not, in his conversation with Mr Drummond purport to have any personal or professional knowledge of the financial position of Opes Prime in February 2008. Mr Drummond knew that Mr Caldow had no personal knowledge as to the financial position of Opes Prime at that time. Mr Caldow made that state of affairs known to Mr Drummond and, further, made it clear that if Mr Drummond wished to obtain further information as to Opes Prime's financial position, he would have to speak to Mr Rice, the person who was the source of the information. 416 I find that a reasonable person in Mr Drummond's position would have understood that Mr Caldow was not the source of the information and was merely passing on the information he had received from Mr Rice. That reasonable person would also have understood Mr Caldow was not in a position to verify or adopt Mr Rice's statements about Opes Prime's financial position. It would have been evident to a reasonable person that in suggesting that Mr Drummond telephone Mr Rice to learn more about Opes Prime's financial position, Mr Caldow was disavowing any ability or capacity to express an opinion on the accuracy or otherwise of the information provided by Mr Rice. 417 It follows that, Eric Preston has not established that Euroz Securities made the second representation alleged by Eric Preston. 418 It, also, follows that Eric Preston's claim based on the alleged contraventions of the Corporations Act and the ASIC Act is dismissed. 419 As previously mentioned, there was also evidence that after the initial conversation in early February 2008, relied upon by Eric Preston as comprising the second representation, there were other conversations between Mr Drummond and Mr Caldow when the question of the likelihood of the stock market falling 20% in one day was discussed by Mr Caldow and Mr Drummond. During cross-examination, Mr Caldow said that Mr Drummond often discussed with him the prospect of the share market falling 20% in one day, and that Mr Caldow said that it was unlikely based on past history. Mr Caldow said Mr Drummond expessed similar views. These conversations were not pleaded as comprising the second, or any other, representation. Accordingly, they cannot be relied upon to found any claim. However, in any event, throughout this period, each of Mr Caldow and Mr Drummond was aware that this standard as a measure of Opes Prime's financial stability, had been passed on by Mr Rice. In my view, the opinions expressed by Mr Caldow as to the likelihood of the stock market falling 20% in one day, did not amount to an endorsement by Mr Caldow of that standard as being an accurate or appropriate measure of Opes Prime's financial stability. Mr Caldow stated in cross-examination, that during those conversations, he made this position clear to Mr Drummond (see transcript at 815). I accept that evidence. BREACH OF FIDUCIARY DUTY 420 The next claim is one based on an allegation that Euroz Securities breached its fiduciary duty owed to Eric Preston. 421 Eric Preston pleaded that the relationship between Euroz Securities and Eric Preston as "stockbroker and financial advisor" on the one hand, and Eric Preston, as a client, on the other, was a relationship of trust and confidence and a fiduciary relationship. In its statement of claim, Eric Preston alleged that, in breach of its fiduciary duty, Euroz Securities failed to act in the best interests of Eric Preston, Euroz Securities allowed its interests to conflict with the interests of Eric Preston, and Euroz Securities improperly used its position to gain an advantage for itself and/or to cause prejudice or detriment to Eric Preston. 422 It is claimed that by reason of the breaches of fiduciary duty, Eric Preston suffered loss and damage. The relief claimed by Eric Preston in respect of the alleged breaches of fiduciary duty is the same as the relief claimed in relation to the claim for breach of contract. 423 The particulars which are provided in support of the bald allegations of breaches of fiduciary duty are effectively the same particulars which were appended to the claim for breach of contract, tort and misleading or deceptive conduct. There was no attempt made to associate any one or more of the particulars with any one or more of the pleaded breaches. However, in its written closing submissions (para 158), Eric Preston contended that the fiduciary relationship imported a duty to act diligently in the client's interests, to fully disclose all relevant matters and to exercise a reasonable degree of care, skill and diligence. It is then contended (para 159), that Euroz Securities breached its fiduciary duty to Eric Preston by: · Failing to act diligently in determining the nature and risks of the OP facility, and to advise EP accordingly. · Having done so, in failing to advise EP not to move from its LE facility. · Failing to diligently investigate and assess the risks of the OP facility on or after 1 February 2008 and to advise EP to exit the facility. · Passing on untested and untestable assurances by Rice of OP. · Failing to advise EP to exit the OP facility, or alternatively that Euroz could not assess the risks associated with the OP facility and therefore EP should exit it. 424 In support of its claim that Euroz Securities breached its fiduciary duty to Eric Preston, Eric Preston relied upon the following observations by Brennan J (as he then was) in Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371 at 385 (Daly): Whenever a stockbroker or other person who holds himself out as having expertise in advising on investments is approached for advice on investments and undertakes to give it, in giving that advice the advisor stands in a fiduciary relationship to the person whom he advises. … The duty of an investment advisor who is approached by a client for advice and undertakes to give it, and who proposes to offer the client an investment in which the advisor has a financial interest, is a heavy one. His duty is to furnish the client with all the relevant knowledge which the advisor possesses, concealing nothing that might reasonably be regarded as relevant to the making of the investment decision including the identity of the buyer or seller of the investment when that identity is relevant, to give the best advice which the advisor could give if he did not have but a third party did have financial interest in the investment to be offered, to reveal fully the advisor's financial interest, and to obtain for the client the best terms which the client would obtain from a third party if the advisor were to exercise due diligence on behalf of his client in such a transaction. 425 In Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41 at 97 (Hospital Products), Mason J (as he then was) observed: That contractual and fiduciary relationships may co-exist between the same parties has never been doubted. Indeed, the existence of a basic contractual relationship has in many situations provided a foundation for the erection of a fiduciary relationship. In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction. 426 The observations of Mason J have, in my view, application to the claim which is made by Eric Preston. Eric Preston's claim is that the fiduciary obligations arise by reason of the relationship arising from the undertaking in the retainer that Euroz Securities act as stockbroker and financial advisor to Eric Preston. The breaches of the duty referred to in [423] above, all relate to matters going to advising in relation to the Opes Prime facility and the financial position of Opes Prime. The breaches of fiduciary duty are premised on the existence of a contractual obligation to act as a financial advisor in respect to third party financial products. I have already found that Eric Preston has failed to prove that the retainer between Eric Preston and Euroz Securities contained a term whereby Euroz Securities undertook to act as a financial advisor to Eric Preston. As Mason J observed above, the fiduciary relationship must accommodate itself to the terms of the contract between the parties, and cannot be superimposed upon the contract in such a way as to alter the operation of the contract. 427 Accordingly, I find that there were no fiduciary obligations upon Euroz Securities which could give rise to the breaches relied upon by Eric Preston. The observations of Brennan J in Daly can be reconciled with those of Mason J in Hospital Products on the basis that the "fiduciary duties" referred to by Brennan J were consistent with the scope of the contract under consideration in that case. 428 In any event, even if it had been the case that Eric Preston had proved that there was a retainer whereby Euroz Securities undertook to act as Eric Preston's financial advisor, and fiduciary obligations had arisen pursuant to the obligation to act in that capacity, the fiduciary obligations would not have given rise to the positive duties of investigation and advice as to the nature of the Opes Prime facility, the risks associated with using that facility and the financial state of Opes Prime. This is because the state of the authorities in Australia appears to be that the scope of the fiduciary obligation founded on the obligation to act in another's interest, is proscriptive and not prescriptive. 429 In Breen v Williams (1996) 186 CLR 71 (Breen), Gaudron and McHugh JJ observed at 113: In this country, fiduciary obligations arise because a person has come under an obligation to act in another's interests. As a result, equity imposes on the fiduciary proscriptive obligations - not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict. If these obligations are breached, the fiduciary must account for any profits and make good any losses arising from the breach. But the law of this country does not otherwise impose positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed. (Footnote omitted.) 430 These observations were cited with approval by McHugh, Gummow, Hayne and Callinan JJ in Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 at 197-198, at [74]. (See also, Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) (2007) 160 FCR 35 at 78, at [290] per Jacobson J.) 431 The question which then arises is how does one reconcile the observations of Brennan J in Daly (see [424] above), with these observations. 432 This task was undertaken by Austin J in the case of Aequitas v Sparad No 100 Ltd (formerly Australian European Finance Corp Ltd) (2001) 19 ACLC 1,006. Austin J referred to the "discordant" nature of the observations of Brennan J in Daly (see [424] above), and the observations of Gummow and McHugh JJ in Breen. At 1,059, at [286]-[287], Austin J observed: The reasoning in Breen v Williams is quite a distance away from Brennan J's dictum in Daly v The Sydney Stock Exchange, and yet Daly v The Sydney Stock Exchange was cited by Gummow J (at 134) without any hint of disapproval. It would be possible to reconcile the cases by orienting each case to its facts, on the basis that the doctor-patient relationship is less comprehensively fiduciary than the financial advisor-client relationship. But that distinction would not give effect to the conceptual analysis which found favour with five of the six judges who decided Breen v Williams. The logic of their analysis is that most of the observations of Brennan J do not relate to the fiduciary character of the advisor's position. In my opinion, in light of the reasoning in Breen v Williams, Brennan J's dictum should be taken to refer, for the most part, to the contractual aspects of the advisor‑client relationship. The duty to provide "best advice" and to disclose knowledge and information arise out of the advisor's "undertaking", and are therefore implied terms of the contractual retainer. And disclosure may also relieve the advisor from the fundamental fiduciary duty not to "assume a position where his self-interest might conflict with the honest and impartial giving of advice". The trading commission and the trailing commission 433 Eric Preston also included as one of the particulars of its pleaded allegation that Euroz Securities breached its fiduciary duties, that Eric Preston's entry into the Opes Prime facility permitted Euroz Securities to obtain for itself payment of a trailing commission offered by Opes Prime at a rate of 0.6% of the loan made by Opes Prime to Eric Preston. 434 Further, it was pleaded that Euroz Securities benefited financially by Eric Preston's entry into the Opes Prime facility because that facility permitted Eric Preston to engage in a greater level of share trading activity than did the Leveraged Equities facility, particularly in relation to stocks researched by Euroz Securities. This, said Eric Preston, meant that Euroz Securities was able to benefit by earning a greater level of commission on Eric Preston's share trading activities. 435 It is perhaps arguable that a fiduciary obligation not to obtain any unauthorised benefit from the stockbroker-client relationship will have arisen from the appreciation by Mr Caldow in May 2007, that Mr Drummond was contemplating entering into the Opes Prime facility. These circumstances could arguably have given rise to the need by Euroz Securities to disclose to Eric Preston that it would receive a financial benefit in the form of a trailing commission payable by Opes Prime to Euroz Securities, as part of receiving the informed consent of Eric Preston to Euroz Securities obtaining this financial benefit. 436 The evidence showed that Opes Prime paid Euroz Securities a trailing commission in relation to Eric Preston's Opes Prime facility on a monthly basis. 437 Senior counsel for Eric Preston referred in his opening to the fact that Euroz Securities obtained a trailing commission in respect of the entry by Eric Preston into the Opes Prime facility. Further, Mr Caldow was cross-examined in relation to that matter. Mr Caldow admitted that he had not expressly told Mr Drummond before or after Eric Preston entered into the Opes Prime facility that he or Euroz Securities would earn a trailing commission. However, Eric Preston did not in its statement of claim seek to identify any specific loss which was said to have been caused to it by reason of the failure to disclose the trailing commission; nor was any specific relief claimed in the statement of claim founded upon an allegation that there had been a failure to disclose the trailing commission. Nor was there any allegation that the failure to disclose the trailing commission led to the loss of Eric Preston's share portfolio – which was the loss which Eric Preston pleaded as having been caused by the breach of Euroz Securities' fiduciary duty. 438 Also, in its written closing submissions, Eric Preston did not contend for any relief founded on a breach of Euroz Securities' fiduciary duty arising from its alleged failure to disclose the trailing commission. 439 Further, had Eric Preston properly formulated and pursued a claim that Euroz Securities obtained an unauthorised financial benefit in the form of the trailing commission, the question would have arisen as to whether there was an informed consent by Eric Preston to the financial interest of Euroz Securities in the entry into the Opes Prime facility by Eric Preston. In this regard, it is to be observed that among the string of emails between Mr Caldow and Mr Rice which Mr Caldow forwarded to Mr Drummond prior to Eric Preston's entry into the Opes Prime facility, was an email that stated Opes Prime would be paying Euroz Securities a trail commission. Mr Drummond, in cross-examination, accepted that he had been made aware that Euroz Securities would be earning a trailing commission (transcript at 306) prior to entry into the Opes Prime facility. 440 As to the trading commissions, earned by Euroz Securities, no claim was made for any specific relief in relation to the commissions earned by Euroz Securities in respect of the increased number of trades made by Eric Preston using the Opes Prime facility. Nor was it said that the failure by Mr Caldow to state that the use of the Opes Prime facility by Eric Preston would give rise to a higher level of share trading and the attendant payment of a greater amount of money by way of trading commissions, caused the loss of the share portfolio. 441 Had any claim been mde by Eric Preston that there was the receipt of an unauthorised financial benefit by Euroz Securities by way of the increased trading commission, it is likely, that it would have been met by the defence that Eric Preston knew of this financial interest of Euroz Securities and consented to Euroz Securities being paid the increased trading commissions consequent upon the increased trading opportunity offered by the Opes Prime facility. During cross-examination (transcript at 274), Mr Drummond accepted that he understood that Euroz Securities would earn increased commissions on the increased trading which would result from the use of the Opes Prime facility, and he was happy for that to happen. 442 I note that the plea in relation to the undisclosed receipt of the trading and trailing commissions is also referred to in the particulars of breach of the retainer. My comments in the preceding paragraphs on this question of the trading and trailing commissions apply mutatis mutandis to those particulars. 443 Accordingly, to the extent that Eric Preston may have sought to do so (which, in my view, it did not), Eric Preston has not succeeded in establishing any right to relief founded on allegations relating to the receipt by Euroz Securities of trading and trailing commissions. CAUSATION 444 It was a major contention of Euroz Securities that even if it had breached any of the duties alleged by Eric Preston, any loss which Eric Preston claimed that it had suffered, was not caused by any such breach of duty. This was, said Euroz Securities, because the chain of causation between any breach of duty and Eric Preston's claimed loss was broken by the disclosure that was made in Euroz Securities' 1 February 2008 email and subsequent conversations with Mr Caldow about the email. The relevant disclosure being that the Opes Prime facility was a securities lending and borrowing agreement and not a margin loan and that Eric Preston would in the event of the insolvency of Opes Prime, rank as an unsecured creditor for the difference between the value of its portfolio and the amount outstanding to Opes Prime under the facility, and that ANZ owned the shares in Eric Preston's portfolio. 445 In its reply, Eric Preston contended that the email sent by Euroz Securities on 1 February 2008, was confusing, misleading and inadequate. It was pleaded that a "reader" of the email may believe that the email referred only to the legal ownership passing from the client to the security lender so that a reader of such email who believed that the beneficial ownership of the shares remained with the client, would or might, be misled into a false sense of security. 446 Further, Eric Preston pleaded in its reply, that the email did not disclose that the shares were transferred by the security lender to banks in consideration of loans made to the securities lender. It was also said that the email did not fully disclose all of the risks including risks associated with on-lending of shares by the banks for short-selling or other purposes, insolvency of the banks, and consequences of a significant downturn in the share market and the failure of other clients of the security lender to meet their obligations. Also, pleaded Eric Preston, the email did not disclose that even if the security lender did not become insolvent, the clients were no more than unsecured creditors of the security lender - having no more than a contractual right to call for the replacement of their shares on the repayment of their loans. 447 Further, it was said that Euroz Securities' email did not advise that the clients had neither legal nor beneficial ownership in their shares and the share portfolio was being held on their behalf by Opes Prime or ANZ. It was also said that the email did not advise that having regard to the fate of Tricom, the only way clients of Euroz Securities who had an Opes Prime facility could ensure they preserve the equity in their share portfolio was to forthwith terminate their Opes Prime facility. 448 I find that pleaded criticisms made in the reply as to the content of the 1 February 2008 email are misconceived. They comprise an instance of the distance between the case the lawyers for Eric Preston sought to make, and Mr Drummond's evidence. Many of the criticisms in the reply are expressed in objective terms as to how a "reader" might construe the email, as opposed to how Mr Drummond actually did construe the email. Much time was taken up at the trial, including by evidence from Mr McKimm, in addressing these criticisms of the wording of the email. However, in my view, the essential issue was whether the email and the consequential conversations were effective in dispelling the wrong impression that Mr Drummond had as to the material characteristics and attendant risks of the Opes Prime facility, so that he appreciated that Eric Preston would lose its share portfolio if Opes Prime became insolvent. 449 I find that by 6 February 2008, at the latest, Mr Drummond knew and understood that the Opes Prime facility was not the same as a margin lending facility and that Eric Preston did not own the shares in its portfolio which had become "pooled" with other shares and were owned by ANZ. Further, Mr Drummond knew and understood that under the Opes Prime facility, Eric Preston would, in the event of the insolvency of Opes Prime, rank as an unsecured creditor for the difference between the value of its portfolio and the amount outstanding to Opes Prime. I find that, by 6 February 2008, Mr Drummond was fully apprised of the risk under the Opes Prime facility, that in the worse case scenario, Eric Preston would lose all of its portfolio. 450 I base that finding on the following considerations. 451 By the email of 1 February 2008, Euroz Securities informed Mr Drummond that the the Opes Prime facility was different from a margin lending facility, that under a securities lending and borrowing facility there was a pooling of the shares of all clients and that those "pooled" shares were used as security by the banks which advanced funds to the securities lender. The email stated that a client was, in the event of Opes Prime becoming insolvent, at risk of ranking as an unsecured creditor of Opes Prime for the difference between the market value of the portfolio and the amount outstanding to Opes Prime. 452 In para 107 of his first affidavit, Mr Drummond acknowledged that the 1 February 2008 email advised that the Opes Prime facility was a share lending arrangement, which was fundamentally different to the traditional margin lending arrangement. 453 Further, during the cross-examination of Mr Drummond on para 3 of his fourth affidavit, Mr Drummond accepted that he appreciated from the information contained in the email, that Eric Preston's portfolio was at risk of being lost and that he should terminate the Opes Prime facility. The following exchange occurred: "Had I not been told this" – so, had you not been told that the share market had to fall 20 per cent, no client to make a margin call, and that your portfolio was safe, is that what you're trying to say, if you hadn't been told all those three things, it would have been your view that Eric Preston's share portfolio was at risk under the OP facility and you would have terminated it straight away, is that what you're trying to say?---Yes. So if – you've just told us that the information about the 20 per cent and the information about the – no Opes client making a margin call, that was conveyed straight on from Mr Rice, by Mr Caldow and you spoke to Mr Rice yourself about that?---Yes. So if you hadn't been told that by Mr Rice, you would have got out straight away, is that your evidence?---I would have looked very closely at getting out straight away, yes. The reason you would have looked very closely at getting out straight away before you were told that is because of the email you received on 1 February, isn't it?---Yes. 454 Further, Mr Drummond acknowledged in cross-examination (transcript at 325) that Mr Caldow told him in relation to the February 2008 email, that in the worse case scenario Eric Preston would lose all of its stock. 455 It is also apparent from the evidence of Mr Anderson that by 6 February 2008, Mr Drummond understood that the shares in Eric Preston's portfolio were not owned by Eric Preston but had been pooled together and were owned by ANZ. It follows that I reject Mr Drummond's evidence in para 5 of his fourth affidavit, insofar as he is deposing therein, that he did not by February 2008, appreciate that the shares in the portfolio were not beneficially owned by Eric Preston. If he did not appreciate that fact, it could only have been because he did not understand the concept of "beneficial ownership" as applied to shares. 456 In its defence, Euroz Securities contended that Eric Preston could have avoided the loss because at all material times after 1 February 2008, Eric Preston had the financial capacity to terminate the Opes Prime facility by selling sufficient shares to pay the balance outstanding on the facility. 457 I have already found that it was from early February 2008, that Mr Drummond had a reasonable opportunity to avoid the loss of the value of the Eric Preston share portfolio by selling sufficient shares in Eric Preston's portfolio to discharge the debt due to Opes Prime under the facility. 458 Further, during cross-examination, Mr Drummond admitted (transcript at 335) that it would have been open to him, on behalf of Eric Preston, to have terminated the Opes Prime facility by selling a sufficient number of shares to pay the Opes Prime debt. Also, at [323] above, I referred to the conversation between Mr Caldow and Mr Drummond in the course of which Mr Drummond told Mr Caldow that he did not want to sell down the shares, because he intended to use the proceeds of the shares to build a new house. I have accepted the evidence of Mr Caldow as to the content of this conversation. 459 That Mr Drummond did not want to pursue the option of selling down sufficient stock to pay out the Opes Prime facility, is further evidenced by the evidence of Mr Caldow that on 5 February 2008, shares in the company OM Holdings Ltd, a company in which Eric Preston held shares, increased in price. Mr Caldow said to Mr Drummond that he should take a profit on some of the OM Holdings shares to reduce his loan balance but Mr Drummond said that he did not want to do this. 460 Mr Drummond did investigate refinancing with another financial institution on the basis of Eric Preston's existing share portfolio, as an alternative to selling down some stock. However, even after Mr Drummond had been advised on 10 March 2008, that NAB would not refinance Eric Preston's Opes Prime loan on the basis only of its existing portfolio, Mr Drummond still did not implement a strategy to sell down sufficient shares in the portfolio, so as to pay out the loan. As mentioned above, after 10 March 2008, Mr Drummond continued to purchase more Sundance Energy shares. 461 Mr Drummond may have made the assessment that it was not urgent for him to terminate the Opes Prime facility, but that does not mean that selling down a sufficient number of shares to pay out the facility was not a course of action which was open to him as a means of terminating the Opes Prime facility and avoiding the loss. I find that Mr Drummond was aware from early February 2008, that there were risks arising from the characteristics of the Opes Prime facility including that Eric Preston's whole portfolio could be lost, but he was prepared to take those risks. As I have mentioned above, the reason Mr Drummond did not sell down sufficient shares to pay out the Opes Prime facility is because he did not want to do so. 462 I also observe that there was no evidence of Mr Drummond making any complaint blaming Euroz Securities for the loss of Eric Preston's portfolio, at the time that he was advised of the appointment of the administrator to Opes Prime on 28 March 2008, or shortly thereafter. This is of some significance, in light of the fact that the evidence disclosed that Mr Drummond had certainly not hesitated to express his dissatisfaction with the professional performance of, Mr Anderson, in a situation of substantially less consequence to Mr Drummond in December 2006. The email which Mr Drummond sent to Mr Anderson dated 11 December 2006, was an immediate and vehement expression of Mr Drummond's dissatisfaction. 463 It follows that, in my view, the chain of causation between any breach of duty complained of, and loss claimed by Eric Preston was broken by the advice that Euroz Securities gave Eric Preston by the email of 1 February 2008, and the subsequent conversation between Mr Drummond and Mr Caldow referred to above. THE CLAIM THAT ERIC PRESTON CONTRIBUTED TO ITS LOSS 464 Euroz Securities pleaded, as an alternative, that if it was liable for the loss claimed by Eric Preston for misleading or deceptive conduct, that pursuant to s 1041I(1B) of the Corporations Act and s 12GF(1B)(b) of the ASIC Act, Eric Preston was responsible in whole or in part, for its loss and damage. This was because of Eric Preston's failure to take reasonable care. Euroz Securities alleged that Eric Preston failed to read the terms of the Opes Prime Financial Services Guide, did not take legal advice in relation to the Opes Prime facility, and did not make inquiries as to why, in contrast to the position with the Leveraged Equities facility, it was not necessary to provide security to Opes Prime in respect of the facility. It was also alleged that after 1 February 2008, Eric Preston did not take immediate steps to terminate the Opes Prime facility. 465 In response to the claims in contract and tort, Euroz Securities also alleged that Eric Preston had by its own negligence contributed to any loss it suffered. 466 In light of my previous findings, it is unnecessary for me to make any further findings in relation to this plea. THE CLAIM THAT MR ANDERSON IS PROPORTIONATELY LIABLE FOR ERIC PRESTON'S LOSS 467 Euroz Securities pleaded that if it was liable for loss suffered by Eric Preston, Mr Anderson was also liable for such loss as a concurrent wrongdoer in respect of the loss allegedly suffered by Eric Preston within the meaning of s 5AI(1)(a) of the Civil Liability Act 2002 (WA). In light of my finding that Euroz Securities is not liable for the loss claimed by Eric Preston, it is unnecessary to deal with this claim by Euroz Securities. However, I set out below in brief, the factual findings that I would have made on this claim. 468 It was alleged that Mr Anderson acted in breach of his duty of care in relation to the advice that he gave to Eric Preston on three occasions. These occasions were: first, in May 2007, in relation to Eric Preston's entry into the Opes Prime facility, secondly, in relation to the advice sought by Mr Drummond in October 2007, as to the need for Eric Preston to file a substantial shareholder notice in respect of Eric Preston's holding of Sundance Energy shares, and thirdly, in relation to the advice sought by Mr Drummond in February 2008, in relation to the 1 February 2008 email that Mr Drummond received from Euroz Securities. Advice in relation to Eric Preston entering into the Opes Prime facility 469 I deal with the first alleged breach of duty. 470 Euroz Securities pleaded that Mr Anderson since 1995, provided to Mr Drummond and his related entities general financial advice and was the "primary source of such advice". 471 Euroz Securities then pleaded that Mr Anderson had previously provided advice to Mr Drummond that he should conduct his share trading activities through Eric Preston and had provided advice to Eric Preston, in relation to its entry into a margin lending facility with Leveraged Equities, which facility was entered into on the terms that Eric Preston provided a registered charge over its assets in favour of Leveraged Equities. 472 Euroz Securities went on to plead that on 24 May 2007, that Mr Drummond had sent Mr Anderson by email the Opes Prime Financial Services Guide and other documents required to establish an account with Opes Prime. Those documents, it was pleaded, did not include any document which comprised the giving of security by Eric Preston to Opes Prime in respect of any amounts outstanding under the Opes Prime facility. 473 Euroz Securities pleaded that by reason of those facts, Eric Preston reasonably expected Mr Anderson to advise it of any material risks associated with the termination of its facility with Leveraged Equities and the establishment of a new facility with Opes Prime, and that Mr Anderson owed to Eric Preston a duty to provide such advice. 474 It is alleged that in breach of that duty of care, Mr Anderson did not provide advice as to the risks associated with the termination of the facility with Leveraged Equities and the establishment of the new facility with Opes Prime. 475 In his evidence, Mr Anderson deposed that on 24 May 2007, Mr Drummond sent him two emails which contained information relating to the Opes Prime facility. The documents attached to the email comprised the Opes Prime Financial Services Guide, a document containing loan to value ratios and a copy of the refinancing instruction form together with a cross‑margin letter. There were also among the documents transmitted a document containing details of interest rates to be charged by Opes Prime and trailing commissions to be paid by Opes Prime. Mr Anderson gave evidence that, although Mr Drummond sent him the documents, Mr Drummond did not specifically ask him to advise on the documents. Accordingly, said Mr Anderson, he did not give Mr Drummond any advice as to Eric Preston's entry into the Opes Prime facility. 476 Further, said Mr Anderson, he was not asked to advise on the nature and characteristics of the Opes Prime facility at the time that he witnessed the signatures of Mr and Mrs Drummond on the application form for the Opes Prime facility on 22 May 2007. 477 In cross-examination, Mr Drummond deposed that the reason he sent Mr Anderson the email containing the Opes Prime Financial Services Guide and the other documents relating to the entry into the Opes Prime facility, was so that Mr Anderson would be informed as to the details of the transaction and that he expected Mr Anderson to advise him in relation to the transaction. 478 However, the email sent to Mr Anderson does not call upon Mr Anderson to advise Mr Drummond in relation to the Opes Prime facility. Further, there was no other evidence that Mr Drummond expressly asked Mr Anderson for this advice. Mr Drummond's expectation that Mr Anderson would advise him, was an unexpressed expectation. 479 I find that Mr Anderson was the primary source of general financial advice to Mr Drummond and his associated entities. However, I find that Mr Anderson was never expressly asked by Mr Drummond to provide advice as to the entry of Eric Preston into the Opes Prime facility, and that Mr Anderson did not give any advice on this matter. Substantial Shareholder Advice 480 I now deal with the second alleged breach of duty of care. 481 In this regard, Euroz Securities alleged that in October 2007, Eric Preston sought advice from Mr Anderson as to whether Eric Preston was required to lodge a substantial shareholder notice in respect of its shareholding in Sundance Energy. 482 Euroz Securities went on to allege that the advice which Mr Anderson gave in October 2007, that ANZ had lodged a substantial shareholder notice for all the shares in Sundance Energy, was advice given in breach of Mr Anderson's duty of care to Eric Preston, because he should have advised that by lodging the substantial shareholder notice ANZ was contending that it held the legal and beneficial ownership in Sundance Energy. 483 I find that Mr Drummond did not ask for any advice from Mr Anderson, other than to advise whether it was necessary for Eric Preston to file a substantial shareholder notice. However, I recognise that this factual finding may not be determinative of the question of the scope of Mr Anderson's duty to advise in that circumstance. However, as I have said by reason of the findings I have made, it is unnecessary to determine that question. 484 Further, Euroz Securities did not refer to any evidence as to what Mr Drummond would have done had the advice which Euroz Securities said should have been given, been given. Advice in relation to 1 February 2008 email 485 This claim does not call for the making of any factual findings. THE CLAIM THAT OPES PRIME IS PROPORTIONATELY LIABLE FOR ERIC PRESTON'S LOSS 486 Euroz Securities also pleaded that if, which it denied, it was liable for the loss and damage suffered by Eric Preston, Opes Prime was a concurrent wrongdoer in respect of such loss within the meaning of s 5AI(1)(a) of the Civil Liability Act 2002 (WA). In support of that claim, Euroz Securities alleged that: (a) Opes Prime had contravened s 942B of the Corporations Act in that it had not provided the information to Eric Preston required by s 942B(2) of the Corporations Act; and (b) Opes Prime had breached its duty of care which it owed to Eric Preston. 487 Euroz Securities contended that Opes Prime breached its obligations under s 942B of the Corporations Act because the Opes Prime Financial Services Guide did not contain information of the kinds of financial services that Opes Prime was authorised to provide and the kinds of financial products to which those services related. 488 More specifically, Euroz Securities pleaded that Opes Prime knew that Eric Preston was seeking to refinance with it, from a margin lender. In those circumstances, the Opes Prime Financial Services Guide was required to state that the product being offered was not a margin lending facility. Further, it was said that the Financial Services Guide was required to state that ANZ did not hold the share portfolio to be transferred, pursuant to the Opes Prime facility, as custodian. 489 Euroz Securities then pleaded that, if the Opes Prime Financial Services Guide complied with s 942B of the Corporations Act in the manner pleaded, Eric Preston would not have suffered the loss claimed. 490 In support of the claim that Opes Prime breached its duty of care to Eric Preston, Euroz Securities repeated its claim that by reason of the fact that Opes Prime knew that Eric Preston was contemplating refinancing from a margin lending facility with Leveraged Equities, Opes Prime had a duty to exercise reasonable care to advise Eric Preston as to the nature of the Opes Prime facility and as to its differentiation from a margin lending facility. 491 It is contended that in breach of that duty, Opes Prime did not state that the financial product being offered in the Opes Prime Financial Services Guide was not a margin lending facility. Further, it did not state that ANZ would not hold the shares transferred by Eric Preston pursuant to the Opes Prime facility on behalf of Eric Preston, and did not say that the shares transferred would not be beneficially held for Eric Preston. 492 In view of the fact that it is not necessary, in light of my earlier findngs, to deal with these claims, and because it is conceivable that these issues may become the subject of litigation in other cases, I am of the view that no utility would be served in making further comment in respect of these claims. DAMAGES 493 In light of my previous findings, the question of damages does not arise. 494 However, Eric Preston's claim for damages gave rise to a disputed question of fact and it is necessary to resolve that question of fact. Eric Preston's claim for damages is for the difference between the position Eric Preston would have been in had it remained with Leveraged Equities and the position that it was in on 27 March 2008, immediately before the appointment of the Opes Prime administrators. Eric Preston relied upon two alternative measures of damages – one which Eric Preston characterised as the tortious measure and the other which it characterised as the contractual measure of damage. The factual dispute arose in the context of assessing damages by reference to Eric Preston's contractual measure. 495 Eric Preston's contention was that it is appropriate to assess loss and damage for breach of contract by reference to the value of the Eric Preston share portfolio as at the end of May 2007, plus the expected gain which Eric Preston would have realised over the period that it would have been expected to retain the portfolio whilst utilising the Leveraged Equities facility, less the actual value of the portfolio on 27 March 2008 - which was treated as nil. In determining the period during which Eric Preston would have been expected to have retained its portfolio for the purposes of assessing the notional gain that the portfolio would have made, Mr Blashki made the assumption that Mr Drummond would have caused Eric Preston to "utilise nearly all of the equity in the portfolio in the short term" in order to pay for a house which Mr and Mrs Drummond intended to build on Wattle Avenue, Dalkeith. In short, Mr Blashki assumed that Mr Drummond would have caused Eric Preston to have liquidated its share portfolio before 27 March 2008. Euroz Securities contended that there was no basis in the evidence to support that assumption. It went on to contend that had Eric Preston been with Leveraged Equities on 27 March 2008, Mr Drummond would on behalf of Eric Preston, continued to trade in shares into the future. The consequence would have been that Eric Preston's portfolio would have been affected by the very substantial decline in the value of the shares that occurred between March 2008 and the date of the trial. 496 In his second affidavit, Mr Drummond deposed that in the latter half of 2007, he decided to engage architects to design a new house to replace their existing home in Wattle Avenue, Dalkeith. Mr Drummond then deposed that: The total cost of the house was to be approximately $4m. After Hoffman & Brown produced a satisfactory design, I resolved to fund construction of the new house wholly or substantially out of the equity in EP's share portfolio, while still trying to retain a significant interest in SEA for medium to long term investment. 497 During his cross-examination, Mr Drummond deposed that, before March 2008, he had received an estimate for the cost of the proposed house of $4 million. The following exchange then occurred: But you were working on a basis of having some $4 million available?---I was working around the architect's estimates of about $4 million. And you had that at 4 March?---I had it 4 March, yes. And you didn't, having had it, pull it out and put it over in a cheque account or somewhere else, did you?---No, I didn't. And it was your intention, whether you were in Opes or Leveraged Equity, to keep trading on that account for as long as you could?---I was happy to continue to trade. 498 I find that Mr Drummond would not by 27 March 2008, have caused Eric Preston to sell shares in order to generate the sum of $4 million which would have been withdrawn and set aside for the payment of the house which Mr Drummond planned to build in Wattle Avenue. I find that, even if Mr Drummond had continued with Leveraged Equities, Mr Drummond would have caused Eric Preston to have continued to trade beyond 27 March 2008, until such time as the actual costs of the building of the house were ascertained. There is no evidence as to when that was likely to have occurred. It follows, that Eric Preston has failed to establish a crucial assumption which Mr Blashki relied upon in preparing his report in support of Eric Preston's claim for damages founded upon breach of contract. 499 There was also a cross-claim by Euroz Securities. The disposition of the cross-claim did not receive close attention during the trial. I will hear the parties on the means of dealing with the cross-claim. 500 I dismiss the application by Eric Preston. I certify that the preceding five hundred (500) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. Associate: Dated: 19 February 2010	58,744
federal_court_of_australia:fca/single/1997/1997fca0932	decision	commonwealth	federal_court_of_australia	text/html	1997-09-09 00:00:00	Babb, Jeffrey Robert v Commonwealth of Australia (Department of Administrative Services) [1997] FCA 932	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1997/1997fca0932	2024-09-13T22:49:40.943073+10:00	FEDERAL COURT OF AUSTRALIA INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - whether the applicant was an employee serving a period of PROBATION determined in advance Workplace Relations Act 1996 (Cth) Workplace Relations Regulations reg. 30B(1)(c) Members of Parliament (Staff) Act 1984 (Cth) Reed v Blue Line Cruises Limited (unreported, Industrial Relations Court of Australia, Moore J, 26 November 1996) CFMEU & Hornett v Borg Manufacturing Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 6 February 1997) JEFFRY ROBERT BABB v COMMONWEALTH OF AUSTRALIA (DEPARTMENT OF ADMINISTRATIVE SERVICES) VI 1183 of 1997 Before: Judicial Registrar Millane Place: Melbourne Date: 11 September 1997 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 1183 of 1997 BETWEEN: JEFFRY ROBERT BABB Applicant AND: COMMONWEALTH OF AUSTRALIA (DEPARTMENT OF ADMINISTRATIVE SERVICES) Respondent JUDICIAL REGISTRAR: MILLANE DATE OF ORDER: 9 SEPTEMBER 1997 WHERE MADE: MELBOURNE MINUTES OF ORDERs THE COURT ORDERS THAT: 1. The applicant's application in proceeding number VI 1183 of 1997 is dismissed. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 1183 of 1997 BETWEEN: JEFFRY ROBERT BABB Applicant AND: COMMONWEALTH OF AUSTRALIA (DEPARTMENT OF ADMINISTRATIVE SERVICES) Respondent JUDICIAL REGISTRAR: MILLANE DATE: 11 SEPTEMBER 1997 PLACE: MELBOURNE REASONS FOR JUDGMENT By an application filed on 18 December 1996 the applicant sought reinstatement and compensation alleging that on 9 December 1996 his employment by the respondent as an Electorate Officer Grade B was terminated in contravention of the provisions of the Workplace Relations Act 1996 (Cth) (the Act). It was agreed by the parties that the Court would deal with the jurisdictional question first. This was whether, at the relevant time, the applicant was an employee serving a period of probation determined in advance. This course was adopted because a finding that the applicant was in fact serving a period of probation determined in advance excludes the applicant from the class of employees to whom remedies are available under the Act. Relevantly, regulation 30B(1)(c) of the Workplace Relations Regulations provides: "30B(1) Subject to subregulation (2), for the purposes of section 170CC of the Act, the following employees are excluded from the operation of Subdivision B, C, D and E of Division 3 of Part VIA of the Act: (a) ... (aa) ... (b) ... (c) an employee serving a period of probation or a qualifying period of employment, if the duration of the period or the maximum duration of the period, as the case requires: (i) is determined in advance; and (ii) is reasonable, having regard to the nature and circumstances of the employment; (d) ..." The dispute between the parties was confined to the two points I have referred to above and did not include any assertion or evidence establishing that the duration of the alleged probationary period of employment was unreasonable having regard to the nature and circumstances of the employment. Accordingly, I was only required to decide the narrower issue of whether at the outset the employment was probationary because there was then an express or implied agreement to that effect (see generally the decisions of His Honour Justice Moore in Reed v Blue Line Cruises Limited (unreported, Industrial Relations Court of Australia, Moore J, 26 November 1996) and CFMEU & Hornett v Borg Manufacturing Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 6 February 1997)). On 9 September 1997, having had the opportunity to hear the evidence and read the documents tendered to the Court, I dismissed the applicant's application, indicating then that my written reasons for judgment would follow. THE WITNESSES The applicant gave evidence and called one other witness, John Raymond Pasquarelli (Pasquarelli), who is presently unemployed but was the senior adviser to the Federal Member for Oxley at the relevant time. The respondent called one witness, the Honourable Pauline Lee Hanson MP, (Hanson), the Federal Member of Parliament for the Division of Oxley in the House of Representatives. THE EVIDENCE In response to orders made by the Court both parties filed contentions, which documents purported to detail the facts and law each asserted were relevant to a determination of the jurisdictional question. After hearing all the evidence called by each party it was apparent to me that the contentions filed were poorly crafted documents and did not articulate clearly the allegations of facts and the law relied on. The contentions only assumed significance at hearing when Hanson was cross-examined about parts of the document filed by the respondent and the difference between those parts and her evidence. For instance, Hanson's oral evidence of what she said to the applicant when she allegedly informed him that the position was a probationary one, was far more detailed than the quotation contained in the contentions. It not uncommon for witnesses to be taken to task over the contents of pleadings and contentions filed with the Court. Nevertheless, unless it can be shown that the witness has read, or is directly responsible for the contents of the document usually drafted by the party's solicitors, or has adopted the contents of the document, it is not appropriate to give weight to any differences between the statements in the document and the oral evidence. Clearly her evidence of what she said went much further than the quotation in the respondent's contentions. However, I am satisfied that she did not read the contentions filed before the document was shown to her in Court, nor did she adopt the contents of same. In determining the weight, if any, I should apportion to this matter, I have also considered the contentions filed by the applicant. This document bears little resemblance to the primary facts alleged by the applicant and Pasquarelli in their oral evidence. The applicant's contentions are drafted in the form of a pleading; that is to say, a defence rather than a particularisation of the facts the applicant intended to rely on at hearing to meet his burden of proof on the jurisdictional question. Having regard to all these matters, in making my findings I have concentrated entirely on the evidence of the witnesses and the documentary evidence tendered to the Court. It was common ground that from 18 November 1996 the applicant was engaged by Hanson as an Electorate Officer Grade B. This employment was entered into pursuant to Part IV of the provisions of the Members of Parliament (Staff) Act 1984 (Cth). The effect of this legislation and the subordinate instrument created pursuant to its provisions (see the Arrangements and Conditions for the Employment of Staff of Senators and Members dated 23 October 1983) is that, as happened in this case, the electorate officer engaged by the Member of Parliament as part of her personal staff became and was, at the date of termination, an employee of the Commonwealth. The three witnesses all agreed that on 30 October 1996 an interview for the position of Electorate Officer Grade B took place between Hanson and the applicant at a house in Yarraville during an evening barbecue. Hanson and the applicant were the only participants and, therefore, the only people able to give evidence on whether the oral offer of employment made and accepted in the fifteen to twenty minutes they spent together was for employment subject to a three month period of probation. On the one hand Hanson asserted that she informed the applicant that there would be a three month period of probation and he expressly agreed to that condition. On the other hand, the applicant denied any reference at all to probationary employment. He claims that on 25 November 1996, one week after the commencement date of his employment on 18 November 1996, he was pressured by Pasquarelli to sign a document (Exhibit A1) purporting to acknowledge an earlier agreement with Hanson to the effect that his employment was probationary employment. Essentially the determination of the primary issue rests on an assessment of the credibility of the evidence of Hanson and the applicant and, because of the surrounding circumstances, an assessment of the likelihood that they acted in the way they say they did. Having heard the evidence, the applicant, who carries the onus of proof on the jurisdictional question, failed to satisfy me that it was more probable than not that the contract of employment entered into was an unconditional one. A number of factors helped me reach this conclusion. The first was that, as the respondent's senior counsel, Mr Tracey QC, observed, the applicant presented as a very poor historian particularly when required to detail the range of matters he said were discussed at his first meeting with Hanson. He was prompted both in evidence-in-chief and cross-examination before he was able to give evidence on a number of matters. The second factor was that Pasquarelli as a witness called by the applicant to corroborate, amongst other matters, the applicant's allegation that on 25 November 1996 under protest he was forced by Pasquarelli to sign Exhibit A1 acknowledging an agreement for probationary employment, failed to give evidence to sustain this allegation. The third factor was the evidence of both Hanson and Pasquarelli that, because of the public position Hanson holds, there is an emphasis on there being mutual confidence and trust between her and her personal staff. Neither Pasquarelli nor Hanson were personally acquainted with the applicant prior to 30 October 1996; although Pasquarelli's enquiries led him to recommend the applicant as a worthy candidate for the position. In this climate it is likely that Hanson did adopt a more cautious approach to hiring this new staff member, leaving herself the option of terminating the relationship in the short-term if the applicant was an unsuitable employee. The last factor, which is related to the preceding one, is that in early 1996 Pasquarelli introduced a policy whereby all personal staff hired, including Pasquarelli, were required to agree to probationary periods of employment. It seems that that policy was not implemented until after Pasquarelli, Barbara Hazelton and Heidi Lewis, both of whom were Electorate Officers, were already employed. Nevertheless, all agreed to this condition attaching to their contracts of employment. Had Hanson purported to terminate their employment within the three month probationary period, arguably there was no proper basis under the Act for establishing that any period of probationary employment was determined in advance. However, it was said that Brett Heffernan, who was the Electorate Officer Grade B from April 1996 until he resigned on 20 September 1996, was employed subject to the probationary employment policy. It is likely that, by reason of the existence and implementation of this policy and, as it turns out, the difficulties encountered with Barbara Hazelton who strongly objected to but subsequently agreed to having the probationary condition attach to her contract of employment, Hanson acted in a way which was consistent with the policy applying to each member of her small group of personal staff. BACKGROUND By way of background it was common ground that following her election to Parliament in 1996 Pasquarelli was appointed by Hanson as her senior adviser. At the beginning of September 1996 her staff consisted of Pasquarelli and the three electorate officers named above. As I have already noted, Brett Heffernan resigned on 20 September 1996 leaving a vacancy to be filled by a person with research skills and experience. As Hanson's senior adviser, Pasquarelli pursued the staff replacement and, as a result of his inquiries, recommended the applicant as a suitable candidate to be interviewed by Hanson. At hearing the applicant described himself as a freelance writer with extensive experience as a researcher having worked for Senator Peter Sims in Western Australia between 1975 and 1980. On 30 October 1996 Hanson and Pasquarelli flew to Melbourne from Canberra with a view to Hanson attending the Footscray Market the next morning. However, after arriving in Melbourne late in the afternoon, they attended a barbecue at the home of friends of Pasquarelli. It was agreed by Pasquarelli and Hanson that there was then an arrangement in place for the applicant to meet with Hanson at the barbecue and be interviewed for the vacant position. They also agreed that when the applicant arrived he was introduced to Hanson by Pasquarelli and shown by the host and Pasquarelli to the front of the house where they conducted the interview in private. After the interview was concluded they returned to the party and Hanson alleges that she informed Pasquarelli that the applicant had accepted her offer of probationary employment. This allegation was not put to Pasquarelli. Pasquarelli was at pains to tell the Court that when all these events took place, he and the other staff were working under considerable pressure and there was an urgent need to replace Heffernan to deal with the research backlog. Because of the pressure of work it was his evidence that, although he was the person responsible for ensuring that the agreement to a ninety day period of probation was signed, he neglected to pursue this course until Monday, 25 November 1996 when he attended the Ipswich electorate office with the applicant for the first time. Contrary to the evidence subsequently given by Hanson, Pasquarelli told the Court that shortly before attending the barbecue he did not mention probationary employment, nor did he remind Hanson that if she offered the position to the applicant it must be offered as a probationary position. In considering the weight to be given to Pasquarelli's evidence I have borne in mind the fact that in this proceeding he is not what is commonly referred to as an independent witness. Both the applicant and Pasquarelli sued the Commonwealth at the same time alleging that on 9 December 1996 their employment was terminated by Hanson in contravention of the provisions of the Act. Both proceedings were fixed for hearing at the same time with Babb's application and the jurisdictional issue being dealt with first. It was apparent from the evidence of particularly Pasquarelli that there had been a dispute between he and Barbara Hazelton some months prior to the applicant's employment when Pasquarelli insisted that Barbara Hazelton sign an agreement saying that her employment was subject to a period of probation. That dispute was not resolved until Hanson intervened and Barbara Hazelton capitulated and signed the agreement. When Pasquarelli gave his evidence he clearly felt strongly about both his argument with Barbara Hazelton over the probationary employment issue and the fact that he had initiated probationary employment agreements in order to protect Hanson from what he described as "... frivolous unfair dismissal claims". As her adviser and the person responsible for ensuring the implementation of the probationary employment policy, it is more likely than not that before Hanson attended the meeting Pasquarelli had orchestrated, she was reminded by Pasquarelli to place the applicant on probation if she offered him employment. Hanson's evidence to this effect is consistent with Pasquarelli's subsequent conduct on either 18 or 25 November 1996 when Pasquarelli and the applicant allege that he took a pro forma letter from the computer, altered the identity of the employee referred to in the letter and required the applicant to sign that letter. Relevantly, the signed letter (Exhibit A1) provides as follows: "FURTHER TO YOUR APPOINTMENT TO MY STAFF JEFFRY BABB ELECTORATE OFFICE OXLEY Dear Jeff As per our discussions prior to your appointment, I wish to reiterate that such appointment is probationary for a period of three months (90 days) from the date of appointment. Subject to your satisfactory performance during the probationary period, consideration will be given to your permanent appointment. Yours sincerely The conditions and terms of employment are accepted PAULINE HANSON INDEPENDENT MEMBER FOR OXLEY JEFFRY BABB" It was said by Pasquarelli and the applicant that the substance of the pro forma letter, which the applicant read before he signed, was not altered even though it was, according to the applicant, untrue. Pasquarelli's evidence concerning the making of probationary employment agreements with the incumbent staff indicated to me that he drew no distinction between an agreement for a probationary contract of employment signed after the employment commenced and an agreement entered into beforehand. Given his understanding of this matter, there was no obvious reason for Pasquarelli to perpetuate any false statement alleging that Hanson had discussed the probationary employment with the applicant prior to the appointment being made. I have already noted that Hanson asserted that after the initial interview concluded she informed Pasquarelli that she had appointed the applicant on probation. The lastmentioned evidence assists in explaining why, after 13 November 1996 when the written agreement the Commonwealth required was executed and, after the applicant had worked for one week, Pasquarelli suddenly remembered that he had not organised the signing of the probationary agreement and informed the applicant that "... all bets were off" if he did not sign that document. This comment, his subsequent conduct and Exhibit A1 are generally consistent with an understanding on Pasquarelli's part that Hanson had discussed a probationary employment agreement with the applicant at the interview and had subsequently confirmed this discussion with Pasquarelli. The applicant's difficulty in recalling numerous matters to do with the making of the contract of employment and the execution of the agreement with the Commonwealth on 13 November 1996, was compounded by Pasquarelli's subsequent failure to corroborate the thrust and substance of the applicant's allegation concerning the making of Exhibit A1. The applicant told the Court that when he and Pasquarelli arrived at the Ipswich electorate office on Monday, 25 November 1996, the following conversation took place: "BABB: ... he said, "Well, we'll have to sign this probationary agreement." I said, "What probationary agreement?" He said -- ... He said, "Everybody who works here has to sign a probationary agreement." I said, "Well, that's the first I've heard of it." He said, "No, no, no, everybody has to sign it." I said, "Well, where is it?" He said, "Well, it's on the computer", so he called up the computer, got a pro forma letter off the computer and said, "Well, this is the probationary agreement." I said, "Well, I'm not very happy about doing this," because as far as I was concerned there was no probationary period. He says, "Well, everybody has to do it and if you don't do it, I'll be in trouble because everybody has to sign it." I said, "Well, I'm doing this under duress." He said, "Well, as far as I'm concerned, if you don't sign it, all bets are off." So I said, "Well, I have no alternative but to sign it", which I did, and I said - he gave me the agreement and he said, "Well, sign now." I said, "Look, John, it hasn't even got a date on it. What sort of a document is it without a date on it? It could be dated at any time." He said, "Well, you were supposed to sign it on the day you started work." So I said, "Well, I'd better date it on the 18th then," so he said, "Well, go ahead and date it then." So that was what happened on that day." Pasquarelli's evidence was that the applicant "baulked" when he produced the document for signing, however, he "didn't baulk all that seriously". Pasquarelli could not recall what the applicant said to him but did indicate that whatever was said was not "... that significant to make (him) think that (he) was going to have a problem". The applicant told the Court that he signed the document containing the untruthful statements and backdated it to 18 November 1996 after telling Pasquarelli that there had been no discussion of or mention of probationary employment. He took this course, he said, because he believed he had no other option and he wanted to protect Pasquarelli who had indicated that he, Pasquarelli, would be in trouble with Hanson if the document was not signed. Pasquarelli strongly rejected any suggestion that he indicated that he would be in trouble with Hanson if the document was not signed. He also rejected any suggestion that when he told the applicant that "... all bets were off" if he did not sign the document, he meant by this that the applicant's employment would be terminated. Indeed, he made the rather curious comment that when he said these words he "... might have been, for the sake of (his) position, bluffing". I am satisfied that it is likely that Exhibit A1 was created and signed by the applicant in Ipswich on 25 November 1996, although he inserted the date of commencement of his employment, "18.11.96", when he signed it. Pasquarelli said he had no recollection of what happened to the document after he gave it to the applicant, who told the Court that he signed it but was not present when Hanson signed it. It is probable that the document was retained by Pasquarelli and subsequently given to Hanson to sign. Looked at objectively, the evidence given by Pasquarelli in relation to Exhibit A1 is not inconsistent with Hanson's primary allegation that she told the applicant his employment would be probationary employment. More importantly, his evidence does not substantiate the claims made by the applicant about the circumstances leading to him signing the document. Returning to the applicant's evidence concerning the first interview on 30 October 1996, he claims that he was left waiting for a telephone call from Pasquarelli to confirm that he had an interview with Hanson that afternoon. When he did not receive that confirmation he took it upon himself after 6.00pm to attend the barbecue anyway. When he arrived he alleges that Pasquarelli looked "quite stunned". This was presumably because the appointment had not been confirmed. In contrast to this evidence, both Pasquarelli and Hanson said they attended the barbecue with the understanding that an appointment had already been made for the date and location of the interview. Because of this it is not remarkable that Pasquarelli contradicted the applicant's evidence by denying that he was surprised when he saw the applicant arrive. The applicant told the Court he was tense before the interview because he wanted the job. When it was put to him that in the course of his conversation with Hanson she said words to the effect of "... if you decide to accept the job, you should realise you will be on probation for three months. After that we'll see whether or not things are working out between us and whether you're happy working with me and me with you. It's a policy I have with all my electorate staff; is that all right with you?". The applicant denied that probation was mentioned and also denied that he had responded to the statement made by Hanson with the statement "yes, that's fine". When his attention was drawn to his failure to recall many other matters and it was suggested to him that it was possible that he may also have failed to recall the statement that the employment was to be probationary employment, the applicant responded by saying "I am certain about most things. Given that it was a year ago, I'm not a computer, I can't remember everything. I know my wife asked me when I got home "Is this a permanent job?", and I said, "Yes, it's a permanent job"." It is not the case that when witnesses give evidence after many months have elapsed that, in order to succeed, they must or are expected to recall conversations verbatim. Nevertheless, actual recollection of the substance of the conversation is preferable to reconstruction based on what was said to the applicant's wife some time later. Generally speaking, Hanson's evidence sets out her recollection of a sequence of conversations before, during and after the interview. This recollection did not rely on any apparent reconstruction and was consistent with the probationary employment policy applying to all her staff and the document, Exhibit A1, signed by her and the applicant. Because of these matters, her evidence was more plausible. Apart from my observations concerning his failure to recall many matters without prompting, as a witness the applicant demonstrated a marked reluctance to accept the simple and, some might say, self-evident proposition that his position on Hanson's personal staff where his research would form the basis of the public speeches made by her, was a position requiring a greater than usual degree of mutual trust and confidence. The impression I gained from the applicant's refusal to acknowledge the difference between his position as a researcher for a member of parliament and what he referred to as the normal employer and employee relationship was that he consciously sought to avoid the conclusion that the special characteristics of the job he was being offered made it more likely than not that Hanson would act in the manner she says she did. His attitude had an adverse impact on his credibility as a witness because I was left with the concern that he was unwilling to give evidence unless it advanced his cause. Taking all the abovementioned matters into consideration, I was not satisfied on the balance of probabilities that the agreement to employ the applicant was an unconditional agreement and I made an order dismissing his application. I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of Judicial Registrar Millane. Associate: Dated: 9 September 1997 Appearing for the Applicant: Ms T. Cirkovic Solicitor for the Applicant: Tanya Cirkovic & Associates Counsel for the Respondent: Mr R.R.S. Tracey QC with Mr N.J.D. Green Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 8 September 1997 Date of Judgment: 9 September 1997	5,454
federal_court_of_australia:fca/single/2019/2019fca1940	decision	commonwealth	federal_court_of_australia	text/html	2019-11-21 00:00:00	Rivas v Republic of Chile [2019] FCA 1940	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca1940	2024-09-13T22:49:41.284920+10:00	FEDERAL COURT OF AUSTRALIA Rivas v Republic of Chile [2019] FCA 1940 Review of: Gonzalez v Republic of Chile (Local Court of New South Wales, No. 2019/00055222, 27 June 2019) File number: NSD 1240 of 2019 Judge: ABRAHAM J Date of judgment: 21 November 2019 Catchwords: EXTRADITION – application under s 39B of the Judiciary Act 1903 (Cth) for judicial review of a decision of the Local Court of New South Wales refusing an application for bail under s 15 of the Extradition Act 1988 (Cth) – where applicant sought the grant of bail by the Federal Court – consideration of 'special circumstances' – consideration of 'real risk of flight' Held: applicant did not assert or establish any error by the magistrate – application dismissed Legislation: Extradition Act 1988 (Cth) ss 15, 15(2), 15(3), 15(6), 19, 19(10), 21, 21(1), 21(2A)(b), 21(6)(e), 21(6)(f), 22 Judiciary Act 1903 (Cth) s 39B Cases cited: Barney v United Kingdom [2012] FCA 51 Collector of Customs v Pozzolanic [1993] FCA 456; (1993) 43 FCR 280 Craig v State of South Australia [1995] HCA 58; (1995) 184 CLR 163 Haddad v Lyon [2003] FCA 1623 Hossain v Minister for Immigration and Border Protection [2018] HCA 34; (2018) 264 CLR 123 Liem v Republic of Indonesia [2018] FCAFC 135; (2018) 265 FCR 251 Matson v United States of America [2018] FCAFC 57; (2018) 260 FCR 187 Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 Moloney v New Zealand [2005] FCA 245 MZXHY v Minister for Immigration and Citizenship [2007] FCA 622 O'Donoghue v Ireland [2009] FCA 394 SZJMG v Minister for Immigration and Citizenship [2008] FCA 1145 Taylor v United States of America [2012] FCA 366 Timar v Republic of Hungary [1999] FCA 1518 Tsvetnenko v United States of America [2019] FCAFC 74; (2019) 367 ALR 465 Yacoub v United States of America [2019] FCA 1682 United Mexican States v Cabal [2001] HCA 60; (2001) 209 CLR 165 Vasiljkovic v Commonwealth of Australia & Ors [2006] HCA 40; (2006) 227 CLR 614 Date of hearing: 24 October 2019 Registry: New South Wales Division: General Division National Practice Area: Federal Crime and Related Proceedings Category: Catchwords Number of paragraphs: 68 Counsel for the Applicant: Mr F Santisi Solicitor for the Applicant: Tsintilas & Associates Counsel for the Respondent: Mr T Glover Solicitor for the Respondent: Commonwealth Attorney-General's Department ORDERS NSD 1240 of 2019 BETWEEN: ADRIANA RIVAS Applicant AND: REPUBLIC OF CHILE First Respondent HER HONOUR MAGISTRATE MARGARET QUINN Second Respondent JUDGE: ABRAHAM J DATE OF ORDER: 21 NOVEMBER 2019 THE COURT ORDERS THAT: 1. The applicant's application to review the bail decision delivered on 27 June 2019 is dismissed. 2. The applicant is to pay the costs of the first respondent to be agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT ABRAHAM J: 1 The first respondent, the Republic of Chile, has sought, pursuant to an extradition request presented to Australia, the extradition of the applicant to face prosecution in Chile for 7 counts of aggravated kidnapping, contrary to Article 141 No. 3 of the Criminal Code (Chile). 2 The following decisions have been made in the extradition process to date: first, the decision of the Commonwealth Attorney-General, made on 26 October 2018, to issue a notice of receipt of the Extradition Request, pursuant to s 16 of the Extradition Act 1988 (Cth) (Extradition Act) (s 16 decision); and second, the decision of the second respondent, a magistrate of the Australian Capital Territory, made on 5 December 2018, to issue an extradition arrest warrant for the applicant pursuant to s 12(1) of the Extradition Act (s 12 decision). 3 Following the applicant's arrest and remand in custody on 19 February 2019, the applicant made an application for bail pursuant to s 15 of the Extradition Act, before a magistrate of the State of New South Wales, submitting that there were "special circumstances" justifying remand on bail. On 27 June 2019, the magistrate refused to remand the applicant on bail pursuant to s 15(2) of the Extradition Act. The decision is an administrative one: Tsvetnenko v United States of America [2019] FCAFC 74; (2019) 367 ALR 465 (Tsvetnenko) at [25]. As such, the decision is amenable to judicial review in this Court under s 39B of the Judiciary Act 1903 (Cth) (Judiciary Act): Yacoub v United States of America [2019] FCA 1682 (Yacoub) at [4]. 4 The next stage in the extradition process is before a magistrate of the State of New South Wales to determine the applicant's eligibility for surrender to Chile pursuant to s 19 of the Extradition Act (s 19 proceedings). 5 This proceeding is an application, pursuant to s 39B of the Judiciary Act, for review of the bail decision of the magistrate. While the originating application also sought that bail be granted, this Court does not have jurisdiction to grant bail at this stage of proceedings, as it is apparent from the terms of s 15(2) of the Extradition Act, jurisdiction to grant bail is confined to magistrates or eligible Federal Circuit Court judges, and an application for judicial review under s 39B does not, and cannot, bestow any jurisdiction upon this Court to grant bail under s 15 of the Extradition Act: Yacoub at [9]. Relevant principles 6 The principles for the grant of bail to a person who is the subject of extradition proceedings are well established, and differ significantly from those that apply to a person charged with a criminal offence under State, Territory or Federal law: Yacoub at [1]. 7 Section 15(2) of the Extradition Act provides that a person arrested under an extradition arrest warrant shall be remanded in custody or, subject to section (6), on bail if "special circumstances" exist: Tsvetnenko at [7]. Relevantly, s 15 is in the following terms: 15 Remand (1) A person who is arrested under an extradition arrest warrant shall be brought as soon as practicable before a magistrate or eligible Federal Circuit Court Judge in the State or Territory in which the person is arrested. (2) The person shall be remanded by a magistrate or eligible Federal Circuit Court Judge in custody, or, subject to subsection (6), on bail, for such period or periods as may be necessary for proceedings under one or more of sections 15A, 18 and 19 to be conducted. … (6) A magistrate or eligible Federal Circuit Court Judge shall not remand a person on bail under this section unless there are special circumstances justifying such remand. 8 In United Mexican States v Cabal [2001] HCA 60; (2001) 209 CLR 165 (Cabal) at [61]-[62] the High Court (Gleeson CJ, McHugh and Gummow JJ) concluded: Given this background and the rationale for the "special circumstances" condition, bail in extradition cases should be granted only when two conditions are fulfilled. First, the circumstances of the individual case are special in the sense that they are different from the circumstances that persons facing extradition would ordinarily endure when regard is had to the nature and extent of the extradition charges. This means that the circumstances relied on must be different in kind from the disadvantages that all extradition defendants have to endure. To constitute "special circumstances", the matters relied on "need to be extraordinary and not factors applicable to all defendants facing extradition". Second, there must be no real risk of flight. Absence of a real risk of flight is ordinarily a necessary but not a sufficient condition of bail. When there is a real risk of flight, ordinarily bail should be refused. Further, the risk of flight should be considered independently of the effect of the proposed bail conditions. In this area of law, the history and character of the defendant and the potential punishment facing the defendant are likely to be surer guides to the risk of flight than bail conditions – even rigorous conditions. A person, fearing punishment and inclined to flee, is unlikely to be diverted from that course by the prospect that his or her sureties may forfeit their securities or by stringent reporting conditions. Even if the defendant has to report twice daily to the police, he or she will have a period of twelve to fourteen hours in which to leave Australia. Even when special circumstances are proved and there is no real risk of flight, it does not follow that bail must be granted… 9 The Court had observed at [57]: …In Australia, the existence of special circumstances is an essential condition of the grant of bail. It seems proper, therefore, to determine whether special circumstances exist before considering the question of flight, a matter that is highly relevant in the exercise of the general discretion. It may be going too far to say that, if there is any risk of flight, the Act requires that bail be refused, even if there are special circumstances. In a particular situation, the special circumstances may be so cogent that bail should be granted although there is a slight risk of flight. Nevertheless, to grant bail where there is a real risk of flight could only be justified in the most extraordinary circumstances. In the vast majority of cases, the proper exercise of discretion requires the refusal of bail if there is such a risk. To grant bail where a risk of flight exists is to jeopardise Australia's relationship with the country seeking extradition and to jeopardise our standing in the international community. 10 Recently, the Full Court (Besanko, Banks-Smith and Colvin JJ) in Tsvetnenko at [14], explained the staged nature of the test for bail in international extradition matters as follows: So, there must be special circumstances. If so, then the risk of flight is to be considered together with all matters relevant to the exercise of a general discretion whether to grant bail. In the exercise of that general discretion, if there is a real risk of flight then the statutory discretion should be exercised by refusing bail (save for the extraordinary case). It is in that sense that the requirement that there be no real risk of flight becomes a second condition that should be fulfilled before bail is granted to a person arrested under an extradition arrest warrant. 11 To obtain relief under s 39B there must be identified either jurisdictional error or non-jurisdictional error on the face of the record: Craig v State of South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179 and Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 at [82]. Accordingly, close attention must be paid to the terms of the particular statute conferring the decision-making power, in this case s 15(2) of the Extradition Act, to discern the extent of any purported non-compliance. 12 As the High Court (Kiefel CJ, Gageler and Keane JJ) in Hossain v Minister for Immigration and Border Protection [2018] HCA 34; (2018) 264 CLR 123 at [24] stated (footnotes omitted): Jurisdictional error, in the most generic sense in which it has come to be used to describe an error in a statutory decision-making process, correspondingly refers to a failure to comply with one or more statutory preconditions or conditions to an extent which results in a decision which has been made in fact lacking characteristics necessary for it to be given force and effect by the statute pursuant to which the decision-maker purported to make it. To describe a decision as "involving jurisdictional error" is to describe that decision as having been made outside jurisdiction. A decision made outside jurisdiction is not necessarily to be regarded as a "nullity", in that it remains a decision in fact which may yet have some status in law. But a decision made outside jurisdiction is a decision in fact which is properly to be regarded for the purposes of the law pursuant to which it was purported to be made as "no decision at all". To that extent, in traditional parlance, the decision is "invalid" or "void". 13 The statutory authority reposed in the magistrate under s 15(2) of the Extradition Act was described and commented upon by the Full Court in Tsvetnenko as follows at [24] and [30] : The statutory authority that is relevant in the present case is contained in s 15(2) of the Extradition Act. It confers a discretionary power upon a magistrate or eligible Federal Circuit Court judge to remand on bail a person arrested under an extradition arrest warrant. … Importantly, the discretionary power conferred by s 15(2) is not expressly conditioned upon the magistrate or eligible judge being satisfied as to any particular matter. In particular, it is not expressly conditioned upon the magistrate being satisfied that there are special circumstances. The discretion to be exercised by the magistrate or eligible judge arises upon arrest of a person under an extradition warrant. When arrested the person must be brought before a magistrate or eligible judge: s 15(1). The person must then be remanded. It falls to the magistrate or eligible judge to exercise a discretion whether to remand in custody or on bail. The requirement that there be special circumstances is separately stated as a matter that must exist before there is any discretion to release on bail. 14 It follows, that this Court must identify an error "of a kind that it misdirected the magistrate in a manner and to an extent that there was a failure to undertake the statutory task or the task was discharged in a manner that meant it was outside the authority conferred": Tsvetnenko at [43]; Yacoub at [14]. The Court's task is limited to review of jurisdictional error, and is limited to the material before the magistrate: SZJMG v Minister for Immigration and Citizenship [2008] FCA 1145 at [27] per McKerracher J citing MZXHY v Minister for Immigration and Citizenship [2007] FCA 622 at [8] per Nicholson J. 15 Given the nature of some of the applicant's grounds it is appropriate also to refer to the observations in Tsvetnenko at [70], where the Full Court considered the concept of unreasonableness in the context of s 15 of the Extradition Act and stated: As to review for unreasonableness, as noted above, statutory discretionary powers of administrative decision-makers are subject to a presumption that the power is to be exercised reasonably in accordance with the conceptions of the general law: Minister for Immigration and Border Protection v SZVFW [2018] HCA 30 at [4], [53], [59], [80], [88], [131]. However, the Court must not stray into evaluating for itself how a discretion entrusted to a statutory decision-maker should be exercised. Therefore, the test as to whether a decision is unreasonable and therefore beyond power is 'necessarily stringent' (SZVFW at [11], Kiefel CJ), 'extremely confined' (at [52], Gageler J adopting the language of Brennan J in Attorney-General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1 at 36), 'in the realm of the extraordinary' (at [70], Gageler J) and is expressed in 'strong terms' (at [135], Edelman J). Bail decision 16 The magistrate heard the bail application on 24 and 27 May 2019, and was provided with detailed written and oral submissions. 17 In her written reasons, the magistrate, briefly summarised the submissions of the parties and the background to the application. Her Honour identified a number of issues, amongst other things, which were matters raised for consideration on the bail application. They were: the need to muster legal funds for legal actions in Australia and Chile; preparation and exploration of legal action in Chile; preparation for challenge to the extradition documents and processes in the Federal Court; health issues and medical treatment; strong family ties in Australia; no steps to abscond or change her name knowing that extradition may be sought; surrender of her passport; delay of hearing the matter for up to 2-3 years; and surety of $50,000 offered in support of the bail application. 18 The magistrate referred to the authorities relevant to bail in extradition proceedings, including Cabal and Tsvetnenko, and correctly stated the relevant principles. 19 In relation to the applicant's health issues, her Honour, after considering the evidence before her, found that the applicant had not demonstrated that her medical conditions were such that she could be satisfied there would be a serious deterioration to her health by incarceration giving rise to special circumstances. She concluded, on the evidence, that the range of care available in custody was sufficient to meet her health concerns. In relation to delay, the magistrate concluded, after referring to the relevant authorities, that the applicant had not demonstrated that the circumstances are different to the kinds of disadvantages that all extradition defendants have to endure and therefore on the facts were not special circumstances. In relation to the need to prepare for legal proceedings, the magistrate observed that the applicant accepted that the review and validity of the s 12 and s 16 decisions are outside the ambit of considerations for extradition bail. Again, after referring to the relevant authorities, while accepting that the preparation of legal challenges is not without difficulty, her Honour concluded that the applicant was in no different position to others incarcerated under the Extradition Act. 20 The magistrate acknowledged that a combination of circumstances can amount to special circumstances, however, also concluded that no special circumstances arose whether the considerations in this case were considered separately or together, and that the applicant was in no different position to anyone else facing extradition. 21 Further, the magistrate noted that denial of the allegations cannot be special circumstances, as there is no determination of guilt or innocence in the extradition process, noting that detention in this context is administrative, not punitive. 22 Even though the magistrate did not find special circumstances existed, and noted that on that basis, it appeared unnecessary to examine the applicant's risk of flight, she concluded nonetheless that she would not have granted bail because in her view, the applicant was a real risk of flight. While acknowledging that the applicant may not be a "significant" flight risk, the magistrate accepted that the circumstances by which she came to leave Chile, and the heavy penalties for the serious charges she faces in Chile meant that an inference could be drawn that the applicant fled Chile to avoid justice. Consideration 23 The originating application contains 18 grounds, one of which has 15 subparagraphs. Many of the grounds overlap. 24 The applicant's written and oral submission in support of the grounds frequently addressed matters not relevant to an application for judicial review of a bail decision under the Extradition Act. Some would also not be relevant to an application for bail. The applicant's submission in the Magistrates Court bore those same hallmarks. 25 In her written submission, the applicant noted that, in part, the complaint is that the magistrate's decision was unreasonable in the Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 (Li) sense, in that it lacked an evident or intelligible justification. Relying on Li at [85], the applicant submitted that while it "may not be possible to say which of a number of possible errors were made…the result itself bespeaks error". 26 However, in substance, much of the applicant's submissions are bare assertions that challenge conclusions on the basis of no more than a disagreement with the conclusion. Dressing arguments under the guise of being "unreasonable", or asserting that facts were "ignored" because the magistrate did not accept the argument or recite all the details of it, does not alter the nature of the challenge. So much is apparent from the fact that the applicant's submissions were often prefaced by "it was open to the magistrate" or "it does not necessarily follow". 27 In reality, the applicant's submission is that she disagrees with the magistrate's conclusion. This application is not a merits review. This Court does not have jurisdiction to conduct a review of the magistrate's decision on this basis, and caution is required by the Court in assessing a complaint of unreasonableness to ensure that it does not impermissibly engage in a merits review of the decision: Li at [66]. 28 In that context, the respondent categorised the applicant's written submission and grounds into groups as follows: (1) the applicant was resident in Australia and there is "no record as to wrong doing in Australia"; (2) between 2006 and 2011, the applicant was in Chile, indicted for the offences the subject of the extradition request, but was not prosecuted to finality, amounting to delay in prosecuting and an absence of explanation for the delay; (3) that Chile had made previous extradition requests which was impermissible, in violation of the treaty and contrary to law; (4) the matter is complex; (5) the matter would take time to "unravel"; (6) the extradition has poor prospects of success; (7) the time that has passed since the events the subject of the charges; (8) the applicant denies the allegations made against her; (9) it was not open to the magistrate to find that "the health reasons" did not constitute special circumstances; and (10) the applicant was not a real risk of flight. 29 During the course of the hearing the applicant accepted that summary as accurate, although added that she submitted that while the magistrate was not to make a finding about the s 19 proceedings, she was obliged to form some assessment of the prospects. 30 During the hearing the applicant submitted that she put the application before the magistrate and in this Court, on the basis that special circumstances existed on two bases: first, the applicant's health and second, matters about the extradition itself (complexity, delay and prospects of success). The applicant also addressed the issue of flight. I propose to address the submissions on those three topics. I note from the groupings of grounds identified above, health is subparagraph 9, matters relating to the extradition process are encompassed in subparagraphs 2-8, and flight is subparagraph 10. The remaining matter in subparagraph 1, was not advanced during the hearing. Suffice to say that ties to Australia, such as residency, are not a special circumstance justifying release on bail: Haddad v Lyon [2003] FCA 1623 at [19]; O'Donoghue v Ireland [2009] FCA 394 at [7]-[8]; Barney v United Kingdom [2012] FCA 51 at [35]; Taylor v United States of America [2012] FCA 366 at [29]. 31 I note that in making submissions on the three topics identified above, the applicant did not directly address any of the arguments raised in the respondent's written submission opposing her application. 32 Before addressing the argument I note that it is well settled that the reasons of an administrative decision maker are not to be "construed minutely and finely with an eye keenly attuned to the perception of error": Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ citing the Full Court (Neaves, French and Cooper JJ) in Collector of Customs v Pozzolanic [1993] FCA 456; (1993) 43 FCR 280 at 287. And in respect to extradition applications, it was observed by Weinberg J in Timar v Republic of Hungary [1999] FCA 1518 at [63]-[64]: It must also be recognised, however, that documents emanating from countries with which Australia has extradition arrangements will often be drafted in language and style which is very different from our own, and perhaps less than perfect from our perspective. Whether or not those documents can be said to meet the requirements of the Act is, as Gummow J observed in Wiest [Wiest v Director of Public Prosecutions [1988] FCA 450; (1988) 23 FCR 472], a matter for practical judgment. Such documents must, in my opinion, be read fairly, and not perversely. It is not the case that every conceivable doubt or possible ambiguity of fact or law, no matter how inconsequential, must be resolved against the country seeking extradition… 33 That approach was endorsed by the Full Court (Mortimer, Wigney and Lee JJ) in Liem v Republic of Indonesia [2018] FCAFC 135; (2018) 265 FCR 251 at [127]. 34 For the reasons below, none of the grounds are established. Health 35 While the applicant identified this as a significant basis of her argument, only one paragraph of her written submission is directed to this which simply alleges that it was not open to the magistrate to conclude that health reasons were not special circumstances. In oral submissions the applicant contended that her health issues were not properly addressed. 36 Her Honour addressed the issue of health in paragraphs [22]-[41] of her reasons. Relying on Cabal, her Honour acknowledged that in some circumstances "health issues which cause a serious deterioration of health may constitute special circumstances". Her Honour went on to consider the various submissions made by the applicant on this topic, including the details of medications taken, health history and information about ongoing pain suffered by the applicant, concluding that "there was nothing in the submissions or documents which supported a finding that the applicant has or would suffer from a serious deterioration of health caused by her incarceration in her circumstances". It is apparent that her Honour considered the material relied on by the applicant and gave detailed reasons for rejecting the applicant's submission that health conditions amounted to special circumstances justifying her being remanded on bail. The applicant did not point to or identify any error in the magistrate's reasons in this respect. 37 No error is disclosed. Matters relating to this extradition 38 Most of the applicant's submission addressed matters which related to this particular extradition application (and the documentation in support) including the challenges or arguments which she contends she will make about the process during her application for judicial review in this Court of the ss 12 and 16 decisions, and the upcoming s 19 proceedings. 39 This submission was said to go to the issue of complexity, the delay it would take for the issues to be resolved and that there were poor prospects of success. 40 The applicant's submission was in some respects inconsistent, accepting on the one hand that the magistrate was not deciding the issues under ss 19 or 22 of the Extradition Act, nor the challenges in this Court to the ss 12 and 16 stages of the extradition process, but submitting on the other hand that the magistrate, in assessing special circumstances in this case, could have made an assessment on arguments the applicant proposes to raise in each of those stages of the proceedings. 41 First, as noted above, the fact that the applicant denies the offence is not relevant. Her Honour concluded that denial of the allegations was not a special circumstance "as there can be no determination of guilt or innocence under Australia's international extradition arrangements": see Vasiljkovic v Commonwealth of Australia & Ors [2006] HCA 40; (2006) 227 CLR 614 at [33] and [34] per Gleeson CJ. 42 While the applicant accepted that it was not a relevant consideration, she nonetheless repeatedly relied on it. So much is clear from the applicant's oral submission in which she noted that when "one looks at the material, it was open to the magistrate to assess the prospect of all of the next stages to come", and that on the evidence before the magistrate, she could not have "appl[ied] this legislation to these facts and come to a conclusion that there's a real possibility that ultimately she might be convicted in Chile". This contention cannot be accepted. As the magistrate correctly identified, the guilt or innocence of the applicant in the extradition offences bears no weight on the consideration of an application for bail under s 15 of the Extradition Act. 43 Second, and related, as the respondent correctly submitted, many of the matters relied on by the applicant are matters for the domestic criminal process in Chile, not for the extradition process. 44 Third, the applicant's repeated submission in support of this argument, that the magistrate had an obligation to make inquiries about certain factual matters and come to particular conclusions on that basis, is without foundation. In the context of extradition proceedings, the onus is on the applicant in the bail application: Cabal at [70]. I note also that the assertion is inconsistent with the function being performed by other repositories of powers at the various other stages of the Extradition Act (including ss 12 and 16): Matson v United States of America [2018] FCAFC 57; (2018) 260 FCR 187 at [92]-[93]. 45 Similarly, the applicant's submission made orally, that the magistrate had not read the material, is also without any foundation. In any event, the magistrate's reasons for decision clearly reflects otherwise. For example, the magistrate summarised Chile's allegations against the respondent in paragraph [9]. That summary is clearly open from the material on the extradition. The applicant did not challenge the correctness of that summary until she was asked about its accuracy. That the applicant points to parts of the material which, she submitted, is inconsistent with that summary, or could not by itself, establish that, does not alter that proposition. As another example, the applicant submitted before the magistrate and in this Court, that the material showed that one of the charges had been dismissed in Chile. This was rejected by the magistrate, with this conclusion being reached on a clear consideration of the material relied on and finding that it did not support that submission. 46 Fourth, as to the question of delay, contrary to the applicant's contention, the magistrate did not ignore this consideration or the facts, rather she accepted the extradition proceedings and resulting challenges would take "considerable time". Her Honour referred to the relevant authorities, including Cabal at [66], and concluded that there had not been "unusual delay" such to constitute special circumstances. Her Honour applied the principles to the facts. No error is disclosed in her Honour's findings in this respect. 47 Fifth, as to the question of complexity, the applicant repeatedly submitted here and in the Court below, that the extradition process concerning her is not "run of the mill" and is somehow out of the ordinary. The respondent challenged that assertion and submitted that the extradition process concerning the applicant is being conducted according to the requirements of the Extradition Act and extensive and well-settled Australian jurisprudence concerning extradition. The respondent's submission must be accepted. This particular case is no different to the process any person facing extradition "would ordinarily endure". The magistrate recognised that the applicant pointed to the complexity of such matters but concluded that while the preparation of legal and constitutional challenges is not without difficulty, the applicant is in no different position to others. There is no error in her reasoning process. 48 Sixth, as to the applicant's prospects of success on the challenges she proposes to make to the extradition process, her submission was inconsistent as to relevance of, and approach to, this issue. 49 The respondent submitted that to the extent the applicant raised this ground before the magistrate it was made as an assertion and not developed as a discrete ground constituting a special circumstance, but only as a matter demonstrative of her intention to challenge the extradition process. The applicant relied on her intention to: (i) commence proceedings in the Federal Court seeking review of the s 16 decision; and (ii) to contest her extradition, both of which her Honour dealt with in her reasons. 50 The applicant did appear to rely on this aspect of this argument to demonstrate the complexity of the proceedings and the length of time that it will take to resolve, with the applicant taking avenues to contest her extradition as she is entitled to do. As noted above, the magistrate rejected those submissions as forming a basis for special circumstances in this case. Her Honour was not required to recite in her reasons each of the issues raised by the applicant as to potential arguments in the proceedings challenging the ss 12 and 16 decisions, or in the s 19 proceedings. 51 The applicant submitted, "that the very material that is being put forward by the requesting State shows substantial issues that might see it ultimately fail" and that the magistrate "could have formed some assessment…as to those issues being live issues that might see the extradition process come to an end" (emphasis added). 52 The respondent submitted that the applicant's submission is no higher than saying there will be some uncertainty about the ultimate outcome. The language used by the applicant to describe her submission varied, and at times was inconsistent. However, properly considered, that accurately described the applicant's submission, as illustrated by the passages recited in the paragraph above. 53 As the respondent correctly submitted, the s 19 proceedings have not yet occurred and therefore there have been no facts found, or decision made, to demonstrate that she has prospects of successfully resisting extradition. The applicant is, in effect, inviting this Court to consider surrender eligibility prior to a hearing (at which full submissions addressing that issue will be made). The respondent submitted at this stage in the extradition process, all that can be ascertained is that there is likely to be a dispute between the applicant and the respondent about her being found to be eligible for surrender pursuant to s 19. On the respondent's submission, the ability to dispute or contest the satisfaction of the requirements for eligibility for surrender is not exceptional; it is open to all persons whose extradition is sought. The respondent contended that the strength of either party's case with respect to eligibility for surrender cannot realistically be tested in the course of a bail application (which was not, in any event, before the magistrate). The respondent submitted it is nearly impossible to form a view with respect to the matters advanced by the applicant said to give rise to her having good prospects of resisting extradition, given the applicant's submissions deal with these matters by way of bald assertions of non-satisfaction, disputing facts contained in the extradition request and identifying matters that may require consideration at subsequent stages of the extradition process. 54 As the magistrate correctly observed, and as was accepted by the applicant, the review of the various extradition decisions which the applicant is challenging is not part of her function. It was also accepted by the applicant that determining the s 19 issue was not part of her function. As the magistrate concluded, based on the applicant's submission, they were outside the ambit of bail considerations for extradition bail. The applicant has not challenged the correctness of that conclusion. Nor has the applicant challenged the correctness of the magistrate's summary of the considerations the applicant relied on in support of her bail application. That summary reflects that the applicant's reliance on these issues as to prospects, was relevant to complexity, delay and the difficulty with preparation of her challenges. 55 That the applicant has sought judicial review in this Court of the ss 12 and 16 decisions does not advance her submission. Calling into question the extradition, and making applications challenging the s 12 and s 16 stage does not of itself reflect anything about the merit. Nor does the submission that the applicant is challenging the s 19 proceeding. 56 Given that the applicant's submission is that it was "open" to the magistrate to assess the arguments, (even leaving to one side how that could be done at this stage of proceedings, particularly given the broad assertions on which it was based), that does not establish jurisdictional error. 57 It is recognised that a high probability of success in resisting extradition can be a relevant factor: Tsvetnenko at [15]. However, that does not assist the applicant, given the nature of this application, and the applicant's argument as articulated in this Court and before the magistrate. 58 The applicant relied particularly on the decision of Moloney v New Zealand [2005] FCA 245 where Madgwick J granted bail to two persons pending the review of their extradition proceedings. Before the magistrate and in this Court, the applicant submitted, based on that decision that a prospect of an appeal succeeding could be special circumstances. However, the very brief judgment relied on by the applicant provides little assistance to her. Rather Madgwick J's conclusion was no more than a consideration whether in that case bail ought to be granted. With respect, it addresses no point of principle. 59 The decision does not refer to or consider any authorities. Nonetheless, the case does not stand for the proposition that the prospect of the appeal succeeding (which in that case was from the s 19 determination), without more, amounts to special circumstances. In that case, the review being referred to, was a review of the magistrate's decision to permit extradition to New Zealand. Madgwick J was to hear that review. While he formed the view that there were above average prospects of success in the appeal, he reached that conclusion "without in any way getting into the merits": see at [2]. In that case, the magistrate had described the case as finely balanced. That was not the only factor; there was little actual prospect of flight, and for practical purposes no prospect for one applicant. Age was a factor, as was poor health. Madgwick J described the applicants as "people of quite outstanding character," and that they were brothers in a religious order. Significantly, the applicants had been on bail before and had complied with the conditions. He described a decision to put them in jail at this stage, even if there was a presumption in favour of that, would be out of proportion with what was called for. It is plain that the case is factually distinguishable from this case. 60 This basis of the application for review (which encompasses a number of grounds) has not been established. Flight 61 Notably, despite the significance of this consideration, and the reasons given by the magistrate, the applicant in her written submission paid scant attention to it. The lengthy written submission stated no more than the applicant is not a flight risk and the finding is unreasonable. In support of this contention, the applicant briefly drew attention to several factors, including that she had limited means such that flight was impossible due to her age and need for medical attention, had substantial ties to the community and her son had risked his home as security. 62 As is made clear in Cabal, where there is a real risk of flight ordinarily bail should be refused. The Court observed at [57]: …Nevertheless, to grant bail where there is a real risk of flight could only be justified in the most extraordinary circumstances. In the vast majority of cases, the proper exercise of discretion requires the refusal of bail if there is such a risk. To grant bail where a risk of flight exists is to jeopardise Australia's relationship with the country seeking extradition and to jeopardise our standing in the international community. 63 Apart from the general assertion that the finding was unreasonable, the applicant does not point to any error in the reasoning process or explain why the finding is unreasonable in the Li sense, in that the magistrate's decision lacked an evident and intelligible justification. 64 The applicant's oral submission was more an argument as to why she was not a flight risk rather than an attempt to establish any jurisdictional error with the magistrate's reasoning. The applicant submitted that while "on her own admission, she left Chile whilst on bail, that does not necessarily mean that she was a flight risk". The applicant took issue with the contention that she fled Chile, but rather described it as that she "simply came home" to Australia. Ultimately, the applicant submitted there was no evidence that she was a flight risk given her explanation for why she left Chile, and that the magistrate failed to consider/reject this explanation. 65 The respondent submitted that the applicant's arguments in relation to flight, were again only "directed to the merits or the ultimate outcome of the decision, rather than pointing to unreasonableness". The respondent drew attention to the fact that the magistrate had identified that it was "unnecessary" to examine the risk of flight, but felt it prudent to do so, and had considered the claims at paragraphs [66] and [67] of her reasons. Further, the respondent submitted that the applicant had identified no error in the conclusions her Honour reached on this point at paragraph [75] of her reasons. 66 As correctly identified by the respondent, the magistrate's reasoning was comprehensive and unobjectionable. On any scenario, as the magistrate found the applicant was on bail in Chile and subject to bail conditions when she left Chile in breach of those condition, and came to Australia via Argentina. The magistrate accepted the respondent's submission, unsurprisingly, as it is consistent with the applicant's own description in a documentary of how she left Chile. As the magistrate found at paragraph [71], the medical notes taken shortly after the applicant arrived in Australia demonstrate that she knew she was subject to bail conditions, that she was under house arrest and that she escaped. As noted above, in the circumstances that the applicant fled Chile the magistrate concluded that an inference can be drawn that she fled to avoid justice. 67 The applicant points to no error. The applicant has not established any error in this finding. Conclusion 68 In reality the applicant's submission is a complaint about the result of the bail decision, with little, if any attempt to identify jurisdictional error. The grounds have not been established. Accordingly the application is dismissed. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Abraham. Associate: Dated: 21 November 2019	9,137
federal_court_of_australia:fca/single/1998/1998fca0838	decision	commonwealth	federal_court_of_australia	text/html	1998-05-29 00:00:00	In the Matter of Moustafa El Moustafa Cobbs Hill (Tas) Meat Supplies Pty Ltd & Ors v Moustafa El Moustafa & Ors [1998] FCA 838	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1998/1998fca0838	2024-09-13T22:49:41.830115+10:00	FEDERAL COURT OF AUSTRALIA BANKRUPTCY - Composition - Application for composition to be declared void or set aside - Duty of solicitor acting as controlling trustee - Scope of protection conferred by s 306B of the Bankruptcy Act 1966 (Cth) ("the Act") upon controlling trustee - Whether s 306B protects controlling trustee from costs orders - Whether s 306B protects controlling trustee from costs order in respect of omissions in report prepared under s 189A of the Act. CORPORATIONS LAW - Insolvent trading - Liability of director - Director ceased taking active role in management of company - Whether director resigned. Bankruptcy Act 1966 (Cth),ss 64ZA, 188, 189A, 190,222, 196, 306B Corporations Law, s 588M Re Mills; Ex parte Lloyd's (1997) 73 FCR 551 IN THE MATTER OF mOUSTAFA EL MOUSTAFA A Debtor COBBS HILL (TASMANIA) MEAT SUPPLIES PTY LTD (in liquidation) (ACN 071 384 686) and roberts limited (acn 009 475 647) and The inspector general of Bankruptcy v MOUSTAFA EL MOUSTAFA and DAVID HENRY SCOTT (AS TRUSTEE OF THE COMPOSITION) and p finkelstein MARSHALL J MELBOURNE 29 mAY 1998 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 7537 of 1998 IN THE MATTER OF : mOUSTAFA EL mOUSTAFA A DEBTOR BETWEEN: COBBS HILL (TASMANIA) MEAT SUPPLIES PTY LTD (in liquidation) (ACN 071 384 686), roberts limited (acn 009 475 647) first Applicants The inspector general in Bankruptcy second applicant AND: MOUSTAFA EL MOUSTAFA , DAVID HENRY SCOTT (AS TRUSTEE OF THE COMPOSITION) first Respondents p finkelstein second respondent JUDGE: MARSHALL J DATE OF ORDER: 14 may 1998 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. It is declared that the composition of Moustafa El Moustafa ("the Debtor") accepted at a meeting of creditors on 4 August 1997 be declared void pursuant to s 222(2) of the Bankruptcy Act 1966 (Cth). 2. The estate of the debtor be sequestrated. 3. The debtor pay the costs of and incidental to the application and such costs be taxed and paid out of the debtor's estate. 4. The question of costs payable, if any, by the controlling trustee, be reserved and the following timetable apply in relation to that issue: (a) Any affidavit in opposition to an order for costs against the controlling trustee and any further submission in opposition to such an order be filed and served on or before 4.00 pm on Tuesday 19 May 1998. (b) Any affidavit or further submission in support of an order for costs against the controlling trustee be filed and served on or before 4.00 pm Friday 22 May 1998. (c) The application in so far as it deals with the question of costs if any to be paid by the controlling trustee be adjourned to 2.15 pm Friday 29 May 1998. 5. The application other than dealt with too finality by the foregoing orders be adjourned to 2.15 pm Friday 29 May 1998. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY vg 7537 of 1998 IN THE MATTER OF : mOUSTAFA EL mOUSTAFA A DEBTOR BETWEEN: COBBS HILL (TASMANIA) MEAT SUPPLIES PTY LTD (in liquidation) (ACN 071 384 686), roberts limited (acn 009 475 647) first Applicants The inspector general in Bankruptcy second applicant AND: MOUSTAFA EL MOUSTAFA , DAVID HENRY SCOTT (AS TRUSTEE OF THE COMPOSITION) first Respondents p finkelstein second respondent JUDGE: MARSHALL J DATE: 29 MAY 1998 PLACE: MELBOURNE REASONS FOR JUDGMENT On 14 May 1998 the Court made the following orders on an unopposed basis at the conclusion of submissions on that day. The orders were as follows: 1. It is declared that the composition of Moustafa El Moustafa ("the Debtor") accepted at a meeting of creditors on 4 August 1997 be declared void pursuant to s 222(2) of the Bankruptcy Act 1966 (Cth). 2. The estate of the debtor be sequestrated. 3. The debtor pay the costs of and incidental to the application and such costs be taxed and paid out of the debtor's estate. 4. The question of costs payable, if any, by the controlling trustee, be reserved and the following timetable apply in relation to that issue: (a) Any affidavit in opposition to an order for costs against the controlling trustee and any further submission in opposition to such an order be filed and served on or before 4.00 pm on Tuesday 19 May 1998. (b) Any affidavit or further submission in support of an order for costs against the controlling trustee be filed and served on or before 4.00 pm Friday 22 May 1998. (c) The application in so far as it deals with the question of costs if any to be paid by the controlling trustee be adjourned to 2.15 pm Friday 29 May 1998. 5. The application other than dealt with too finality by the foregoing orders be adjourned to 2.15 pm Friday 29 May 1998. The matter before the Court was an application pursuant to s 222 of the Bankruptcy Act 1966 (Cth) ("the Act") to declare void a composition. In the alternative the application relied upon ss 239 and 242 of the Act. The first applicant, Cobbs Hill (Tasmania) Meat Supplies Pty Ltd (in liquidation) ("Cobbs Hill") and the second applicant, Roberts Limited made application to the Court on 22 August 1997 for orders setting aside the composition and for sequestration of the estate of the first respondent, Moustafa El Moustafa ("the debtor"). On 2 February 1998 the Court ordered that the controlling trustee of the composition, Mr P Finkelstein, ("the controlling trustee") be joined as a respondent and that the Inspector-General in Bankruptcy ("the Inspector-General") be joined as an applicant in the proceeding. The trial commenced on 8 May 1998 and resumed on 12, 13 and 14 May 1998. Mr G Bigmore QC with Mr P Fary appeared for Cobbs Hill and Roberts Limited. Mr D Hyde of counsel appeared for the Inspector-General. Mr P Finkelstein, solicitor, appeared for the debtor and the controlling trustee (himself). There was no appearance on behalf of Mr Scott, the second respondent. Mr Bigmore advised the Court that Mr Scott had taken the position that he would abide by any order of the Court. In his submission in reply on 14 May 1998, Mr Finkelstein conceded that the circumstances surrounding the debtor's composition which was accepted at a meeting of creditors on 4 August 1997, were such that, in the words of Merkel J in Re Mills; Ex parte Lloyd's (1997) 73 FCR 551, 557, "serious issues and suspicions (had) been raised" concerning several issues relevant to the acceptance of the composition and that "[t]hese matters are clearly appropriate for further investigation which will not occur under the composition". Given the concession made by Mr Finkelstein in his reply it is unnecessary for the Court to traverse every complaint made by the applicants concerning the circumstances of the acceptance of the composition. However, having regard to the obvious public interest in ensuring that the provisions of the Act are rigorously and scrupulously applied, it is important to traverse in at least summary form, the problems raised by the circumstances in which the debtor's composition was accepted. It is to these matters which I now turn. BACKGROUND FACTS On 15 July 1997 the debtor executed an authority pursuant to s 188 of the Act in which he proposed that his affairs be dealt with under Part X of the Act. The authority authorised Mr Finkelstein to call a meeting of creditors and to take control of the debtor's property. A meeting of creditors was called for 4 August 1997. At that meeting a special resolution was passed which endorsed a proposal for the composition. Prior to the meeting solicitors acting for Cobbs Hill had advised Mr Finkelstein of a claim which Cobbs Hill had against the debtor pursuant to s 588M of the Corporations Law for $625,424.00. Section 588M of the Corporations Law entitles a liquidator to recover from a director of a company any loss or damage suffered by a creditor arising from insolvent trading of the company. Mr Finkelstein replied to that correspondence and informed Cobbs Hill's solicitors that no such valid claim existed because the debtor had resigned as a director of Cobbs Hill when the company was solvent. Mr Palmer, a solicitor representing Cobbs Hill, was denied the right to vote on behalf of Cobbs Hill at the creditors meeting after a ruling made by the "chairman" of the meeting a Mr Kerridge that Cobbs Hill was not entitled to a vote. Mr Kerridge permitted voting rights to be given to Vasel and Marisa Ivanopoulos ("the Ivanopoulos'") in respect of an alleged sum of $1.2m owing to them by the debtor relating to a third party guarantee. Prior to the creditors meeting it was incumbent upon the controlling trustee to prepare a report "summarising and commenting on the information about the debtor's affairs that is available to the controlling trustee". See s 189A(1)(a) of the Act. The debtor's statement of affairs referred to trust income received by him. The report made no mention of the amount of that income. It also failed to make any mention of what appeared to be at the very least curious circumstances concerning an encumbrance upon real property held by the debtor at Greenvale. That is a topic to which I shall later return. The report also failed to give any estimation of the likely dividend available to creditors upon the acceptance of the composition for a sum of a mere $8,000.00. The creditor's meeting was improperly conducted. It was the role of the controlling trustee to determine who should vote at the meeting. The "chairman", more properly described as "president" had no such role. See s 64ZA(8) and (9) of the Act. Apart from problems associated with the lack of compliance with ss 189A(1)(a) and 64ZA(8) of the Act there were in my view three issues of serious concern in the process that led to the acceptance of the composition. They were: · the failure to allow Cobbs Hill to vote when there was no evidence before the controlling trustee to justify a conclusion that the debtor had resigned as a director · the admission of the Ivanopoulos' to vote in circumstances where there was insufficient evidence to support a conclusion that the debtor in fact owed any money to the Ivanopoulos' · the failure to properly investigate the shady circumstances concerning the mortgage over the Greenvale property. It is to these issues that I now turn. THE COBBS HILL CLAIM The debtor had no role in the active management of Cobbs Hill from 15 May 1996. At that time there was no conclusive evidence that Cobbs Hill was insolvent. The debtor intended to resign his directorship in the company. Appropriate documentation was prepared by his solicitor to give effect to that intention. Those documents were never executed by the debtor. Failing to take a role in the management of the company is not tantamount to resigning as a director. A formal written notice of resignation was required by the company's articles and memorandum of association. No such resignation was given. I conclude that the Cobbs Hill claim was not properly or adequately investigated by the controlling trustee and that there was sufficient information before the creditors meeting for him to form the view that, at the very least, this matter required further investigation. At the conclusion of the evidence in the trial, it was clear to the Court that the Cobbs Hill ought to have been admitted to vote at the creditors meeting. However, with a more open mind on the issue, the controlling trustee would have had sufficient information about the matter at the time of the meeting to seriously challenge the contrary view which he had adopted in correspondence to Mr Palmer. THE IVANOPOULOS' DEBT The circumstances surrounding this issue defy belief. Given that a sequestration order has been made and that the trustee in bankruptcy will doubtless investigate this matter thoroughly it is sufficient for me to summarise my concerns. The first concern I have is in regard to the written guarantee produced to the Court as evidence of the Ivanopoulos claim. The written guarantee was purported to have been executed in July 1989. Curiously, the body of the guarantee refers to a "Deed of Company Arrangement" under the Corporations Law, references which were not introduced until June 1993. Mr Kerridge, who gave evidence on behalf of the debtor, claimed that he had prepared and witnessed the guarantee in 1989. He said that he had not retained a copy of the guarantee. Mr Kerridge claimed that in March 1997 and in connection with the debtor's purported debt to the Ivanopoulos', he sought to obtain a copy of the written guarantee from Mr Ivanopoulos. He claimed that Mr Ivanopoulos had only forwarded the execution pages containing the signatures and the schedule page. Mr Kerridge claimed that, as he had prepared the guarantee in 1989 from a standard form deed of guarantee, upon receipt of the execution and schedule pages from Mr Ivanopoulos in 1997, he (Mr Kerridge) simply added to the execution and schedule pages the missing pages from his standard form guarantee. Mr Kerridge deposed that the only difference between the written guarantee as produced in 1989 and the version he compiled in 1997 was the omission of the words "Scheme of Arrangement" to read instead "Deed of Arrangement". I do not find Mr Kerridge's account of the Ivanopoulos guarantee convincing. Mr Kerridge did not impress me as a witness of truth. At the end of his evidence I was left with the impression that he had manufactured the claim on the debtor by the Ivanopoulos', in order to ensure that the proposal for the composition put and favoured by the controlling trustee was accepted. His role may require further investigation by appropriate authorities. My impression that the Ivanopoulos guarantee was manufactured is substantiated by two further concerns: · is highly improbable that any rational person would seek to commit themselves to the guarantee, the terms of the guarantee being the debtor committing himself to a $1.2m debt on the basis of 10% of the profits to be earned by a company (Shepparton Wall Street Pty Ltd ) which was then in substantial debt · Stamp duty was not paid on guarantee in 1989, a matter which Mr Kerridge rather unconvincingly attributed to "oversight at the time". THE AWAD MORTGAGE The circumstances surrounding this issue also defy belief. In his report the controlling trustee said under the heading "Home Ownership" as follows: "The home in which the debtor resides at 1 Airdrie Mews, Greenvale (as contained in Certificate of Title Volume 9427 Folio 639) is owned in his name as sole proprietor, but is heavily mortgaged.. Against a current market value of $340,000.00 still the amount owed to Mr. and Mrs. Awad is currently $353,000.00, thereby leaving a shortfall by way of deficiency in the sum of $13,000.00. On that basis, the property at Greenvale will be insufficient in value to meet the debt owned (sic) to Mr. and Mrs. Awad as secured Creditors, to the extent that they would be entitled to prove for the amount of such deficiency as if unsecured Creditors." Given that the trustee in bankruptcy may need to further investigate this matter it is appropriate that I express in short form only my concerns about it. I am concerned about the timing of the transaction. The mortgage was not registered until 5 June 1997. The relevant authority was given to Mr Finkelstein on 15 July 1997 but an earlier authority was attempted to be given on 9 June 1997. The very timing of the mortgage is a matter which should have been reflected in the controlling trustee's report, the mortgage having been given after the collapse of Cobbs Hill and after the debtor was put on notice of his potential liability for insolvent trading. I am also concerned about the circumstances in which the mortgage was effected and as to whether the dealing between the trustee and the debtor was truly at arm's length. The controlling trustee, having been in a position to enquire of these significant matters, should have made some comment on them in his report. THE ROLE OF A SOLICITOR AS CONTROLLING TRUSTEE Section 188 of the Act entitles solicitors to act as a controlling trustee for the purposes of Part X bankruptcy. The inclusion of solicitors as a class of persons entitled to act as controlling trustee is a recent addition, one of the many amendments to the Act introduced in 1996. Prior to the amendment, only a registered trustee or the Official Trustee, could be a controlling trustee. It is important that solicitors who act as controlling trustee are cognisant of the role conferred upon them by the Act. Part X of the Act confers upon the controlling trustee a number of powers and responsibilities in respect of a debtor and his or her property. I will not comment on all these powers save those whose exercise in the present matter have been impugned. The controlling trustee is required to prepare a report for creditors commenting both on the debtor's affairs and on any proposal by the debtor for dealing with his or her affairs (see s 189A(1). This report must state whether a debtor's proposal is in the interests of the creditors (see s 189A(1)(b) ). In aid of this function, the controlling trustee is empowered to ascertain all that is material to the debtor's affairs (see s 190(2)(b)). The purpose of the report is to fully appraise the creditors as to the debtor's affairs so that creditors can make an informed decision on whether their interests would be best served by accepting the debtor's proposal or by the bankruptcy of the debtor. Consequently, it is essential for the controlling trustee to ensure that all facts material to the debtor's affairs are brought to the attention of creditors in the report and that the statement of belief of the controlling trustee is properly based. The controlling trustee is charged with the function of ruling on any entitlement of any person to vote at a meeting of creditors (see s 196 and s 64 ZA(8)). A controlling trustee must discharge this function with proprietary having regard to the merits of a creditor's claim and without regard to extraneous considerations. Both these roles point to a fundamental duty of a controlling trustee, a duty to act in an impartial and independent manner. Anything else would undermine public confidence in the administration of Part X of the Act. A solicitor who acts as a controlling trustee should be aware that this role is very different to the role which arises from the solicitor/client relationship - a relationship whereby a solicitor acting inaccordance with ethical and professional obligations, adopts a partisan role and on the instructions of the client, endeavours, frequently in an adversarial context, to secure the best outcome for the client. The partisan characteristics of a solicitor/client relationship must not inform the conduct of a solicitor acting as controlling trustee in that person's dealings or relationship with the debtor. If a controlling trustee is to properly perform his/her role or functions, he or she must be impartial to the wishes of the debtor. In this respect the role or function of a controlling trustee is the same regardless of whether the controlling trustee is a solicitor or registered trustee. COSTS The Court appreciated Mr Finkelstein's frankness in effectively conceding that the application before it must succeed, albeit in his reply. Having regard to Mr Finkelstein's changed view of the nature of the case especially after Mr Kerridge's evidence, the Court viewed it to be appropriate to permit Mr Finkelstein to place further material before it on the question of costs. The Court will now hear submissions on that issue. Prior to so doing, I should indicate that on 14 May 1998 I ruled that Mr Finkelstein's submission that he was immune from having to pay costs in this matter should be rejected. His alleged immunity arose from s 306B of the Act. That section provides that: "An action, suit or proceeding does not lie against the Inspector-General, an Official Receiver, the trustee of the estate of a bankrupt or any other person in respect of a statement made in good faith in a report prepared or given to a person under subsection 12 (1A) or (1B), 155A(6), 155F(2), 155I(4) or section 189A." Mr Finkelstein submitted that he was immune from a costs order against him because he made a statement in good faith in his report under s 189A of the Act. I assume, for the purposes of the argument, that the report under s 189A was made in good faith. However s 306B, in my view, only operates to provide a "qualified privilege" to persons under its umbrella in respect of claims against them for defamation. The relevant predecessor provision was inserted into the Act in 1981. The explanatory memorandum accompanying the relevant Bill provided as follows: "Clause 146 and 147 - Protection in respect of reports Official Receivers have been given qualified privilege in any report filed with the Registrar under s 19 to ensure that in the performance of his duties he is not inhibited by concern about civil liability for defamation. The same measure of qualified privilege is given to registered trustees who are required to report on the conduct and affairs of bankrupts. This clause gives the trustee the same protection that was previously given to the Official Receiver in relation to any reports prepared under s 19. It is made clear that the protection extends to supplementary reports (clause 146). The special protection for a report by a registered trustee is repealed (clause 147). Transitional provisions are included." The above quotation from the explanatory memorandum confirms my view of the effect of s 306B of the Act. However, if I am in error on this point, s 306B cannot assist Mr Finkelstein in respect of any omissions he has made in his report on issues such as: · lack of thorough summary of and comment on the status of the debtor as a continuing director of Cobbs Hill · lack of thorough summary of and comment on the Ivanopoulos and Awad issues. CONCLUSION It was for the reasons expressed above that I was prepared to make the orders which I did make on 14 May 1998, being orders the making of which were not opposed by Mr Finkelstein. I will now hear evidence and submissions on the question of what costs if any should the controlling trustee be liable to pay. I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall Associate: Dated: 29 May 1998 Counsel for the First Applicants: Mr G Bigmore QC with Mr P Fary Solicitor for the First Applicants: J M Smith & Emmerton Counsel for the Second Applicant: Mr D Hyde Solicitor for Second Applicant: J M Smith & Emmerton Counsel for the Debtor and Second Respondent: Mr P Finkelstein Solicitor for the Debtor and Second Respondent: FLA Partners Date of Hearing: 8, 13, 14 and 29 May 1998 Date of Judgment: 29 May 1998 (ex-tempore)	5,238
federal_court_of_australia:fca/single/2022/2022fca1317	decision	commonwealth	federal_court_of_australia	text/html	2022-11-04 00:00:00	Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd [2022] FCA 1317	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2022/2022fca1317	2024-09-13T22:49:41.916126+10:00	Federal Court of Australia Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd [2022] FCA 1317 File number: NSD 1297 of 2020 Judgment of: BROMWICH J Date of judgment: 4 November 2022 Catchwords: INDUSTRIAL LAW – application for declaratory relief and pecuniary penalties for contraventions of numerous provisions of the Fair Work Act 2009 (Cth) (FWA) – where the employer made admissions to contraventions of underpaying award entitlements in relation to minimum wages, weekend and public holiday penalty rates, overtime and annual leave, superannuation, and a related failure to keep employment records and provide payslips – where there is a proposed a range of pecuniary penalties proposed by the applicant and not opposed by the respondent, so as to be effectively an agreed range – whether the quantum of penalties within that range is sufficient and appropriate to meet the objective of deterrence – Held: respondent to pay the Commonwealth a pecuniary penalty of $475,200 being at the top of the range effectively agreed upon Legislation: Fair Work Act 2009 (Cth) ss 44(1), 45, 90(2), 125(1), 535(1), 535(2), 536(1), 546, 546(1), 546(2), 577, 577(1), 715 Fair Work Regulations 2009 (Cth) regs 3.31(1)(a), 3.32(a), 3.32(b), 3.32(c), 3.32(d), 3.33(1)(b), 3.33(3)(b), 3.34(a), 3.36(1) Food, Beverage and Tobacco Manufacturing Award 2010 (Cth) cll 20.1, 29.2, 30.2(f), 33.1(a), 33.6, 33.7 General Retail Industry Award 2010 (Cth) cll 17, 18.2, 22.2, 29.2(a), 29.2(c), 29.4(b), 29.4(c), 29.4(d) Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 314 IR 301 Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 Barbaro v The Queen [2014] HCA 2; 253 CLR 58 Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai) [2017] FCA 1301; 275 IR 148 Fair Work Ombudsman v IE Enterprises Pty Ltd [2021] FCA 60 Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; 168 FCR 383 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285 Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177; 299 IR 404 Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170; 171 FCR 357 Division: Fair Work Division Registry: New South Wales National Practice Area: Employment and Industrial Relations Number of paragraphs: 54 Date of last submissions: 3 June 2022 Date of hearing: 27 April 2022 Counsel for the Applicant: Mr D Fuller Solicitor for the Applicant: Fair Work Ombudsman Counsel for the Respondent: Mr M Heath Solicitor for the Respondent: Accuro Maxwell ORDERS NSD 1297 of 2020 BETWEEN: FAIR WORK OMBUDSMAN Applicant AND: 85 DEGREES COFFEE AUSTRALIA PTY LTD Respondent order made by: BROMWICH J DATE OF ORDER: 4 November 2022 THE COURT DECLARES THAT: 1. The respondent, 85 Degrees Australia Pty Ltd (85 Degrees), contravened the following civil remedy provisions in the period between 1 July 2016 to 26 June 2017: (a) section 535(1) of the Fair Work Act 2009 (Cth), by failing to make and keep for seven years, the following employee records of the kind prescribed by the Fair Work Regulations 2009 (Cth) in relation to each of Ms Hsin-Hui Yang, Ms Yi-Hsuan Cheng, Ms Pin-Jung Chen, Ms Wen-Ru Luo, Ms Yu-Xin Ma, Ms Siang-Cyun Su, Ms Hsiao-Ying Tung and Ms Yu Zheng (collectively, Employees): (i) a record that specified whether each of the Employees' employment was full-time or part-time, as prescribed by reg 3.32(c) of the Fair Work Regulations; (ii) a record that specified whether each of the Employees' employment was permanent, temporary or casual, as prescribed by reg 3.32(d) of the Fair Work Regulations; and (iii) a record of the number of overtime hours worked by each of the Employees, as prescribed by reg 3.34(a) of the Fair Work Regulations; (b) section 535(2) of the Fair Work Act, by failing to make and keep for seven years, in the English language (as required by reg 3.31(1)(a) of the Fair Work Regulations), employee records of the following kind in relation to each employee: (i) a record that specified the employee's name, the name of their employer and the date on which their employment began, as prescribed by reg 3.32(a), (b) and (e) of the Fair Work Regulations; (ii) a record that specified the gross and net amounts paid to the employee, including any bonuses paid, as prescribed by reg 3.33(1)(b) and (3)(b) of the Fair Work Regulations; and (iii) a record that specified any leave that the employee took and the balance of their entitlement to any leave from time to time, as prescribed by reg 3.36(1) of the Fair Work Regulations; (c) section 536(1) of the Fair Work Act, by failing to give each of the Employees a pay slip within one working day of paying an amount to each of the Employees in relation to the performance of work; (d) section 44(1) of the Fair Work Act, by failing to: (i) give each of the Employees a Fair Work Information Statement before, or as soon as practicable after, the employee started employment, pursuant to s 125(1) of the Fair Work Act; (ii) pay each of the Employees for their untaken paid annual leave when their employment ended, pursuant to s 90(2) of the Fair Work Act; (e) section 45 of the Fair Work Act, by: (i) failing to pay each of Ms Yang (from 1 July 2016 to 27 February 2017 only) and Ms Cheng (collectively, Retail Employees), the minimum junior rates of pay to which they were entitled pursuant to cl 18.2 of the General Retail Industry Award 2010 (Retail Award); (ii) failing to pay each of the Retail Employees the minimum rates of pay to which they were entitled pursuant to cl 17 of the Retail Award; (iii) failing to pay each of the Retail Employees penalty rates for work on a Saturday to which they were entitled pursuant to cl 29.4(b) of the Retail Award; (iv) failing to pay each of the Retail Employees penalty rates for work on a Sunday to which they were entitled pursuant to cl 29.4(c) of the Retail Award; (v) failing to pay each of the Retail Employees rates for work on a public holiday to which they were entitled pursuant to cl 29.4(d) of the Retail Award; (vi) failing to pay each of the Retail Employees rates for overtime to which they were entitled for overtime hours worked on Monday to Saturday, pursuant to cl 29.2(a) of the Retail Award; (vii) failing to pay each of the Retail Employees rates for overtime to which they were entitled for overtime hours worked on Sunday, pursuant to cl 29.2(c) of the Retail Award; and (viii) failing to make superannuation contributions in relation to each of the Retail Employees pursuant to cl 22.2 of the Retail Award; (f) section 45 of the Fair Work Act, by: (i) failing to pay each of Ms Yang (from 28 February 2017 to 26 June 2017 only), Ms Chen, Ms Luo, Ms Ma, Ms Su, Ms Tung and Ms Zheng (collectively, Factory Employees) the minimum rates of pay to which they were entitled pursuant to cl 20.1 of the Food, Beverage and Tobacco Manufacturing Award 2010 (Food Award); (ii) failing to pay each of the Factory Employees rates for work on a public holiday to which they were entitled pursuant to cl 30.2(f) of the Food Award; (iii) failing to pay each of the Factory Employees overtime rates to which they were entitled for overtime hours worked on Monday to Friday, pursuant to cl 33.1(a) of the Food Award; (iv) failing to pay each of the Factory Employees overtime rates to which they were entitled for overtime hours worked on Saturday, pursuant to cl 33.6 of the Food Award; (v) failing to pay each of the Factory Employees (except Ms Yang) overtime rates to which they were entitled for overtime hours worked on Sunday, pursuant to cl 33.7 of the Food Award; and (vi) failing to make superannuation contributions in relation to each of the Factory Employees pursuant to cl 29.2 of the Food Award. THE COURT ORDERS THAT: 1. Pursuant to s 546(1) of the Fair Work Act 2009 (Cth), the respondent pay to the Commonwealth a pecuniary penalty of $475,200 within 28 days. 2. The parties have leave to make any application to vary the above declarations and order within 14 days, or such longer time as may be allowed, with notification of such application to be provided by email to the associate to Justice Bromwich. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BROMWICH J Introduction 1 This penalty determination is for serious contraventions of numerous civil penalty provisions of the Fair Work Act 2009 (Cth) involving underpayment of award entitlements in relation to minimum wages, weekend and public holiday penalty rates, overtime and annual leave, non-payment of superannuation, and a related failure to keep employment records and provide payslips. The applicant is the Fair Work Ombudsman (FWO). The respondent is 85 Degrees Coffee Australia Pty Ltd. 2 The Taipei City University of Science Technology in Taiwan had an internship program for its students. Participating students could gain paid work experience and at the same time earn academic credits. The University asked Comestibles Master Co Ltd, the Taiwanese parent company of 85 Degrees, to provide internship opportunities. An internship arrangement was subsequently entered into between Comestibles and the University, with the internship placements presently in issue being with 85 Degrees in Australia. 3 In the relevant period between about 1 July 2016 and about 26 June 2017, 85 Degrees employed students from the University as 12 month internees. During that period, 85 Degrees operated a number of retail stores in New South Wales, including 85 Degrees Coffee and 85°C Daily Café. Those stores sold baked goods, including cakes and drinks to customers. The baked products were manufactured in factories operated by 85 Degrees. Eight student interns worked in 85 Degrees' factories or the retail stores, but were only paid about $1,650 to $1750 per month, being about 30% of their lawful entitlements. 85 Degrees still operates one factory, but no longer operates any retail stores. Instead, it is a franchisor for 14 retail outlets where the produced factory goods are sold under exclusive supply arrangements. 4 The aggregate of the underpayments and non-payments for the eight student interns was just over $470,000 ($40,792.37 for superannuation and $429,393.18 for all the other underpayments). The breaches in relation to record keeping and payslips had the practical effect of concealing the underpayments. The individual underpayments were between just over $50,000 and just over $58,000 in the single year constituting the relevant period. 5 The initial calculation of underpayments was $452,148.33, but was revised down on 8 October 2020. Following this revision, each of the eight employees were contacted in Taiwan by 85 Degrees about being paid their outstanding entitlements in December 2021. All eight were directly paid their outstanding entitlements (apart from superannuation) on 13 January 2021, totalling $429,393.18 for amounts ranging from $50,213.14 up to $58,248.82, an average of just under $54,000. This was a prompt and important response by 85 Degrees, which has weighed substantially in its favour as a tangible acceptance of wrong-doing and rectification of its effect. The outstanding superannuation entitlements, plus interest, were paid to the Australian Taxation Office much later on 15 March 2022, six weeks after an amended assessment was received by 85 Degrees. 85 Degrees accepts that this payment could and should have been made at the same time as the other rectification payments. Those voluntary payments have also obviated the need for any compensation order to be made and enforced, as sought by the FWO. 6 85 Degrees also refers to additional voluntary payments of $4,297 that it made over the year of employment to seven of the eight employees, and of $1,917 made to the eighth employee, being a food allowance and an end of year bonus, which were not paid due to any legal obligation. It submits that these voluntary payments should be taken into account in considering the appropriate penalty to be imposed. The FWO submits that those payments should not be brought to account at all because, having been designated as such, they had nothing to do with the contravening conduct. I have not fully acceded to either stance. Instead, I have taken those payments into account only insofar as they had some limited bearing on the actual effect of the contravening conduct on the individual employees, but otherwise not given them much weight at all. It does not change the fact of, or quantum of, the payments that were not made as required. 7 The contravening conduct took place in breach of enforceable undertakings given by 85 Degrees to the Commonwealth of Australia (represented by the FWO) under s 715 of the Fair Work Act, proffered by 85 Degrees' managing director, Mr Shu-Ming (Tim) Shu, on 30 April 2015 and by another director, Mr Shu-Ching Chen on 14 May 2015, and accepted by the FWO on 5 June 2015. This was only a little over a year before the present contraventions commenced in July 2016, in relation to similar behaviour and in part involving breaches of the same two industrial awards. That undertaking included express formal admissions that 85 Degrees had failed to: (a) pay employees the correct minimum wage; (b) pay some employees some hours worked; (c) pay employees the applicable casual loading; (d) pay some employees the applicable overtime rates for additional hours worked; (e) pay some employees the applicable penalty rates for working on Saturday, Sunday and Public Holidays; (f) keep employee records required by law; (g) issue payslips to employees in the form required by law. 8 It follows that there can be no argument as to a lack of awareness on the part of 85 Degrees via its senior management as to the nature and existence of the legal obligations that were not complied with. The conduct was therefore intentional rather than inadvertent, and to that extent, necessarily more serious than, e.g., an innocent contravention: see Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [131]-[132]. 9 There is no direct evidence of contrition or remorse on the part of 85 Degrees, but there have been early admissions and substantial cooperation, albeit in the face of an essentially unanswerable case, as well as reimbursement of the underpayments in full, and in part going beyond the contravention allegations. Such cooperation is always important and needs to be recognised, with the weight to be given forming part of the matrix of considerations to be taken into account in arriving at an appropriate penalty, including in determining whether a proposed or agreed range is appropriate and if so, where in that range it should fall. 10 The FWO seeks declarations of contravention, compensation for translation expenses, and pecuniary penalties in the range from $416,880 to $475,200 (out of an aggregate statutory maximum of $729,000). 85 Degrees does not take issue with the declarations or compensation sought, nor with the range of penalties proposed, making that effectively an agreed range. However, 85 Degrees submits that the bottom of the FWO penalty range is sufficient and appropriate in all the circumstances. As will be seen, I do not accept that the bottom of the range proposed by the FWO is either sufficient or appropriate. Indeed, I have had to consider carefully whether the top of that range is enough. 11 For the reasons that follow, I will make the declarations in substance as sought and agreed to, and will impose a penalty at the top of the range sought by the FWO of $475,200 and accepted to be within an appropriate range by 85 Degrees, rather than the lesser amount at the bottom of that agreed range of $416,880 sought by 85 Degrees. That conclusion follows a number of observations and submissions from the FWO to justify an aggregate penalty of only 65% of the aggregate statutory maximum, with reference to a decision of the High Court in April 2022, Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 314 IR 301 (Pattinson HCA), which held that there is no principle guiding penalty imposition that requires there to be any proportionality between the seriousness of the conduct and the penalty imposed having regard to the maximum penalty, nor that the maximum penalty be reserved for the most serious category of contravention. I return to Pattinson HCA later in these reasons. The key events proven by agreed facts and affidavit evidence, the contraventions and the penalties sought 12 The penalty hearing took place by reference to the pleadings, including the amended defence admitting to the alleged contraventions, lengthy and detailed agreed facts, limited additional affidavit evidence, written submissions by both sides, and supplementary submissions by the FWO addressing aspects of Pattinson HCA. Some of those facts have already been set out in the introduction to these reasons. The key aspects of those facts, and further facts beyond them, are summarised in the FWO's submissions in chief, which are overtly stated not to be in dispute in the submissions for 85 Degrees. There is some degree of dispute as to what should be made of those facts. 13 While 85 Degrees places some stock in the underlying legitimacy of the internship arrangement, I prefer and accept the FWO's argument that this circumstance has little material bearing on the question of penalty. It is more in the nature of an absence of a feature indicating a greater need for deterrence, than a feature supporting any argument for any lesser need for deterrence. The common experience of the Court is that contraventions of the present kind often occur within otherwise lawful employment arrangements. The need for deterrence arises from otherwise lawful businesses conducting this aspect of their affairs unlawfully. A business that is itself unlawful, and those involved in running it, may be better candidates for criminal investigation, prosecution and punishment for the overall illegal enterprise, perhaps including imprisonment. 14 As noted above, the eight intern Employees worked in 85 Degrees' factories and retail outlets. They were paid monthly by a lump sum, split between electronic deposits into bank accounts in Taiwan, which fluctuated according to the prevailing exchange rate, typically in the range from about $871 to $927, and $400 in cash paid in Australia, being only about 30% of what they were entitled to by reason of the underpayments. Only the cash was readily available in Australia, although it seems only one employee experienced insurmountable difficulty in accessing money paid into a Taiwanese bank account, and therefore had to use her savings and borrow money from friends to meet living expenses. 15 The content of the contraventions of civil penalty provisions of the Fair Work Act, as reflected in the declarations to be made by consent, is able to be succinctly stated as follows: (a) s 535(1): failing to make and keep for seven years, employee records prescribed by the Fair Work Regulations 2009 (Cth) (Regulations), specifying their status as full-time or part-time, and permanent, temporary or casual and recording overtime hours worked for all eight interns; (b) s 535(2): failing to make and keep for seven years, in the English language as required by reg 3.31(1)(a) of the Regulations, employee records in relation to each employee specifying: (i) their name, the employer name, the date of commencement: reg 3.32(a); (ii) the gross and net amounts paid, including any bonus: reg 3.33(1)(b) and (3)(b); (iii) any leave taken and the leave entitlements balance: reg 3.36(1); (c) s 536(1): failing to give each employee a pay slip within one working day of paying an amount to each employee in relation to the performance of work; (d) s 44(1): (i) failing to give each employee a Fair Work Information Statement before, or as soon as practicable after, the start of employment, pursuant to s 125(1); (ii) failing to pay each employee their untaken paid annual leave when their employment ended, pursuant to s 90(2); (e) s 45, in relation to retail employees Ms Yang (from 1 July 2016 to 27 February 2017) and Ms Cheng and their entitlements under clauses of the General Retail Industry Award 2010 (Retail Award), failing to: (i) pay minimum junior rates of pay: cl 18.2; (ii) pay minimum rates of pay: cl 17; (iii) pay penalty rates for work on a Saturday: cl 29.4(b); (iv) pay penalty rates for work on a Sunday: cl 29.4(c); (v) pay rates for work on a public holiday: cl 29.4(d); (vi) pay rates for overtime for overtime hours worked on Monday to Saturday: cl 29.2(a); (vii) pay rates for overtime for overtime hours worked on Sunday: cl 29.2(c); and (viii) make superannuation contributions: cl 22.2; (f) s 45, in relation to factory employees Ms Yang (from 28 February 2017 to 26 June 2017), Ms Chen, Ms Luo, Ms Ma, Ms Su, Ms Tung and Ms Zheng and their entitlements under clauses of the Food, Beverage and Tobacco Manufacturing Award 2010 (Food Award), failing to: (i) pay minimum rates of pay: cl 20.1; (ii) pay for work on a public holiday: cl 30.2(f); (iii) pay each overtime rates for overtime hours worked on Monday to Friday; cl 33.1(a); (iv) pay overtime rates for overtime hours worked on Saturday: cl 33.6; (v) pay (except Ms Yang) overtime rates for overtime hours worked on Sunday: cl 33.7; and (vi) make superannuation contributions: cl 29.2. 16 The proposed declarations also made reference to cl 11(h) of the written undertaking given by 85 Degrees to the FWO on 5 June 2015 being breached, but that was not developed in oral or written submissions, and I am therefore not satisfied that it is necessary or appropriate to make an imprecise declaration to that effect. 17 The penalties sought by the FWO were furnished in the following table (with some adjustments): Contravention Employees Affected Maximum Penalty Maximum Penalty with 20% discount Proposed Penalty Range Percentage Proposed Penalty Range Contraventions of the Fair Work Act Section 535(1) by: All Employees $27,000 $21,600 70% – 80% $15,120 – $17,280 • failing to make and keep records relating to status, as required by reg 3.32(c) and (d); and • failing to make and keep records of overtime hours worked as required by reg 3.34(a). Section 535(2) by failing to make and keep the following records in the English language: All Employees $27,000 $21,600 70% – 80% $15,120 – $17,280 • records of an employee's name, employer and start date, required by reg 3.32(a), (b) and (e); • records of amounts paid to an employee, required by reg 3.33(1)(b) and (3); and • records relating to leave accrued and taken, required by reg 3.36(1). Section 536(1) by failing to provide pay slips to the Employees. All Employees $27,000 $21,600 70% – 80% $15,120 – $17,280 Section 44 by failing to provide a Fair Work Information Statement to each of the Employees pursuant to s 125 All Employees $54,000 $43,200 40% – 50% $17,280 – $21,600 Section 44 by failing to pay accrued annual leave entitlements on termination pursuant to s 90(2) All Employees $54,000 $43,200 80% – 90% $34,560 – $38,880 Contraventions of Section 45 of the Fair Work Act resulting from contraventions of the Retail Award Cl 17 and 18.2 of the Retail Award by failing to pay adult and junior base rates. Ms Yang and Ms Cheng (Retail $54,000 $43,200 70% – 80% $30,240 – $34,560 Employees) Cl 29.4(b) of the Retail Award by failing to pay Saturday rates. Retail Employees $54,000 $43,200 70% – 80% $30,240 – $34,560 Cl 29.4(c) of the Retail Award by failing to pay Sunday rates. Retail Employees $54,000 $43,200 70% – 80% $30,240 - $34,560 Cl 29.4(d) of the Retail Award by failing to pay public holiday rates. Retail Employees $54,000 $43,200 70% – 80% $30,240 – $34,560 Cl 29.2(a) of the Retail Award by failing to pay overtime rates. Retail Employees $54,000 $43,200 70% – 80% $30,240 – $34,560 Cl 22.2 of the Retail Award by failing to make superannuation contributions. Retail Employees $54,000 $43,200 70% – 80% $30,240 – $34,560 Contraventions of Section 45 of the Fair Work Act resulting from contraventions of the Food Award Cl 20.1 of the Food Award by failing to pay base rates. Ms Ma, Ms Su, Ms Zheng, Ms Tung, Ms Yang, Ms Chen and Ms Luo (Factory $54,000 $43,200 80% – 90% $34,560 – $38,880 Employees) Cl 30.2(f) of the Food Award by failing to pay public holiday rates. Factory Employees $54,000 $43,200 80% – 90% $34,560 – $38,880 Cl 33.1(a) of the Food Award by failing to pay overtime rates Factory Employees $54,000 $43,200 80% – 90% $34,560 – $38,880 Cl 29.2 of the Food Award by failing to make superannuation contributions. Factory Employees $54,000 $43,200 80% – 90% $34,560 – $38,880 Total $729,000 $583,200 $416,880 – $475,200 18 In arriving at the above grouping of contraventions and associated dollar figures and ranges, the FWO has had regard to: (a) the statutory course of conduct provision in s 557(1) of the Fair Work Act, which provides that two or more contraventions of a term of the same civil penalty provision are to be treated as a single contravention when committed by the same person and arising out of the same course of conduct. This does not allow for grouping of contraventions of different civil penalty provisions, and that provisions that address breaches of national employment standards or awards operate at the level of the individual clauses of those standards or awards, resulting in the aggregations in the table above; (b) common law course of conduct principles, to avoid double punishment for the same contravening conduct, which do not have any practical effect in this case; (c) relevant considerations of the kind identified by the Full Court in Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170; 171 FCR 357 per Branson and Lander JJ at [57], being both general and specific deterrence, the nature and extent of the conduct and loss suffered, the size and resources of the contravener, the involvement of senior management and contrition and cooperation, noting that following Pattinson HCA each of the features other than deterrence must now be regarded as means of assessing the penalty needed to meet that sole consideration; (d) totality, to the extent that this principle meaningfully has any work to do as it has always functioned in practice as a final check on proportionality in the sense dispensed with by Pattinson HCA, although it does also potentially go to the question of oppression, which is a measure of proportionality allowed by the High Court. Pattinson HCA and related observations 19 Until Pattinson HCA was decided, I would have had little reason to doubt that a penalty in the range proposed by the FWO would have been proportionate and just in all the circumstances, and therefore "appropriate" as required by s 546(1) of the Fair Work Act, having regard to the role of the maximum penalty provided for in s 546(2), while giving primacy to the objective of deterrence. This would have entailed following the reasoning in the decision of the Full Court, of which I was a non-plurality concurring member, in Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177; 299 IR 404 (Pattinson Full Court) that was overturned by Pattinson HCA. However, following Pattinson HCA, the need for proportionality between the contravening conduct and the penalty imposed described in Pattinson Full Court has been dispensed with and the penalty imposed is therefore no longer required to be in proportion to the contravening conduct. Moreover, the maximum penalty is no longer to be treated as one of the yardsticks for penalty imposition. That principle of proportionality, and the role of the maximum penalty, both drawn from the criminal law, have no role to play in relation to the imposition of civil penalties. This Court is therefore obliged to proceed upon that basis in all Fair Work Act civil penalty proceedings. The same regime must presumably apply in all other civil penalty proceedings unless the legislation in question supports a different conclusion than the High Court reached in relation to s 546 of the Fair Work Act. 20 Pattinson HCA may have the practical effect of respondents needing to make a selection between the potentially stark choices of: (a) defending civil penalty proceedings, irrespective of whether they are truly contestable, in the hope of successfully defending them at least in part on liability, because, in any given case, the maximum penalty or close to it will be imposed no matter what, because that is what deterrence demands; (b) advancing evidence and arguments at a penalty hearing as to why severe penalties, or even penalties at or approaching the aggregate maximum, should not apply in a given case as they go beyond what is necessary in all the circumstances to advance the sole objective of deterrence (specific and/or general); or (c) negotiating an agreed penalty or range of penalties. 21 It seems likely that the last of these options of agreed penalties (as to a single figure or even a range) will assume even greater importance than it did before April 2022, when Pattinson HCA was handed down. As a result, Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (Agreed Penalties Case) may then likely prevail, in a practical sense, over Pattinson HCA, because of the strong support given to accepting and applying an agreed penalty. 22 In the Agreed Penalties Case, per French CJ, Kiefel, Bell, Nettle, and Gordon JJ at [57], it was observed that, in contrast to criminal sentence proceedings following Barbaro v The Queen [2014] HCA 2; 253 CLR 58, which held that the prosecution cannot furnish or support a penalty range in civil proceedings, and therefore there is generally very considerable scope for agreement as to the appropriate remedy and for the Court to be persuaded as to it being appropriate, and as part of [58] (emphasis is original, footnote omitted): 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. 23 Thus, the touchstone for acceptance of the proposed penalty is a conclusion that it is appropriate. Pattinson HCA specifically endorsed the Agreed Penalties Case, including at [42], citing [59], dealing with it being unexceptional for a court to accept agreed submissions as to the nature and quantum of relief in a range of civil cases involving the public interest. 24 An unfortunate by-product of greater resort to agreed penalties than might otherwise have been the case is that there will be fewer decided cases in which judicial reasoning in support of particular levels of penalty imposition emerge to provide a body of penalty imposition yardsticks to develop the jurisprudence in this area. But it may be that there is no longer as much need for such jurisprudence to be developed any more in contested penalty cases, given that so much of it was focused on reasoning derived by analogy from the retributive aspect of criminal sentencing, applied for a non-retributive purpose in civil penalty proceedings in an effort to arrive at a just result directed to deterrence. This always used to go beyond proportionality and extend to principles also originally sourced in retribution, including in particular, the course of conduct principle at common law (cf s 577 of the Fair Work Act), totality, and parity, all of which, as understood in ordinary day-to-day practice, functioned in much the same way, shining substantially the same conceptual analytical light from different perspectives. 25 In light of the foregoing, I have engaged in a searching justification for not imposing penalties in excess of the top of the range proposed by the FWO and not opposed by 85 Degrees, and perhaps closer to the aggregate statutory maximum, noting my prior observations on the reasons for ordinarily not exceeding a regulator's suggested penalty range in Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai) [2017] FCA 1301; 275 IR 148 at [44]-[45]. It is of some importance that the range proffered by the FWO is agreed to by 85 Degrees, thereby engaging the Agreed Penalties Case so as to be given effect to ordinarily unless outside the range that this Court is willing to accept, and as a contrast to the effect of Pattinson HCA in the absence of such an agreement being reached. 26 While the FWO suggests in post-hearing supplementary submissions addressing Pattinson HCA that I am free to depart from the range advanced and agreed upon, in the sense of going above that range, I would not do so without notice and giving 85 Degrees a chance to be heard. That is because a respondent contravener ought to be entitled to proceed upon the basis that the regulator will adhere to the range communicated in the course of negotiations, and proffered to a court. A court needs to have a good reason to depart from that range, and may have to give such a respondent an opportunity to withdraw concessions made upon that basis. 27 A further observation is that had this proceeding gone to trial and the FWO's case succeeded in full, I doubt I would have had any real alternative to imposing the maximum available aggregate penalty of $729,000, or something close to it, as being necessary in all the circumstances to meet the single objective of deterrence mandated more clearly than ever by Pattinson HCA, no matter how unfair and even counterproductive that might have been, especially for future cases by deterring admissions of contravention, or even admissions to individual facts and circumstances, rather than insisting upon proof by admissible evidence. That is because the maximum aggregate penalty was no longer limited to the worst category of contravening conduct, and that penalty, while disproportionate in relation to the seriousness of the conduct, would not, on the evidence, have been oppressive in the sense identified in Pattinson HCA. 28 The difference in the outcome of the maximum available aggregate penalty of $729,000 and the upper end of the range sought by the FWO of $475,200 turns on the assessment of what is necessary to achieve the objective of deterrence, unfettered by any concept of proportionality between conduct and sanction or limit as to the imposition of the maximum penalty. The measure or degree of a largely unfettered sanction considered necessary to achieve deterrence is a difficult fact to ascertain for the purpose of the proper exercise of the judicial function. There is limited judicial reasoning involved in imposing penalties without regard for proportionality or the maximum penalty, because, at least in some cases, it is simply an exercise of crude utilitarianism directed to reducing the incidence of contravening conduct through a form of economic terror, long abandoned in the criminal law as a function of the proper administration of justice and the proper application of the rule of law: see Pattinson Full Court, per Allsop CJ, White and Wigney JJ at [41]-[93], especially at [42]. 29 As noted above, the FWO furnished supplementary submissions, addressing Pattinson HCA. The burden of those submissions is that the reasoning of the plurality in the High Court did not preclude giving significant weight to cooperation, including as a means of ameliorating the need for a higher penalty to advance deterrence. I have taken those submissions into account, but only to the extent permitted by Pattinson HCA. 30 The features that I now rely upon in imposing the lower penalty at the top of the range agreed upon, rather than closer to the maximum available penalty for repeated contravening conduct, would have been either substantially absent or overwhelmed by the adverse implications unavoidably drawn in the event of continued denial of the contraventions, calling for enhanced deterrence. Of course, had the proceeding gone to trial, there is every possibility that at least some of the admitted contraventions would not have been proved because of a potential shortfall in the quality of evidence needed to prove them, even to the civil standard given their seriousness, especially given that none of the eight former intern Employees reside in Australia. However, even such a shortfall may not have been enough to produce a lower penalty than the top of the range proffered by the FWO. The competing submissions 31 Following Pattinson HCA, which in turn reinforced the Agreed Penalties Case, the focus on penalty imposition is exclusively on deterrence in its widest sense, with all other factors directed to assessing what is needed to achieve that objective, while also avoiding the imposition of an oppressive penalty. 32 Below is a concise precis of the case on penalty advanced by the FWO, which I largely accept, subject to limited further considerations advanced by 85 Degrees below. One aspect I do not consider in detail was the personal circumstances of one of the Employees, in particular the difficulties she had in accessing the money paid into her Taiwanese account, referred to above. Rather than descending into that individual detail, the payment of money into bank accounts in Taiwan was a feature of the approach taken by 85 Degrees which had a tendency to contribute to additional difficulties for the Employees on top of the fact of significant underpayments. 33 The FWO places emphasis on three features of the contraventions giving rise to a particular need for general deterrence, as follows. First, the underpayments were for a significant amount, with there being an incentive for employers to underpay to increase profits, avoid tax obligations, and obtain a competitive advantage over other employers, which are particularly prominent in areas where the largest costs are labour. This submission finds ample support in Reckitt Benckiser at [152], quoted with approval by the plurality in Pattinson HCA at [41]: If it costs more to obey the law than to breach it, a failure to sanction contraventions adequately de facto punishes all who do the right thing. It is therefore important that those who do comply see that those who do not are dealt with appropriately. This is, in a sense, the other side of deterrence, being a dimension of the general deterrence equation. This is not to give licence to impose a disproportionate or oppressive penalty, which cannot be done, but rather to recognise that proportionality of penalty is measured in the wider context of the demands of effective deterrence and encouraging the corresponding virtue of voluntary compliance. 34 Secondly, there is a particular need for general deterrence in the retail and food manufacturing industries, with the retail industry in particular being recognised in prior decisions as having a "heightened need for general deterrence" by reason of generally employing unskilled workers who are more likely to be young or from overseas: Fair Work Ombudsman v IE Enterprises Pty Ltd [2021] FCA 60 per Anderson J at [69]. This submission is supported by industry profiles compiled by the FWO that are in evidence which indicate that the retail and food manufacturing industries generally experience moderate to high rates of disputes, emphasising the importance of encouraging a self-regulating culture of compliance. Reliance on submissions of this kind, which may be grounded in such evidence, is supported by the Agreed Penalties Case per French CJ, Kiefel, Bell, Nettle and Gordon JJ at [60] (citing NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285 at 290-295): … it is the function of the relevant regulator to regulate the industry in order to achieve compliance and, accordingly, it is to be expected that the regulator will be in a position to offer informed submissions as to the effects of contravention on the industry and the level of penalty necessary to achieve compliance. 35 Thirdly, there is a particular need for general deterrence to ensure that employers are discouraged from exploiting overseas workers, with the evidence before the court being to the effect that despite such workers comprising only 4% of the workforce, they were involved in 19% of the disputes dealt with by the FWO in the period from January 2018 to June 2021 (being after the relevant period), and with employees from Taiwan being particularly overrepresented. This again reflects the value of the input and assistance of a regulator, recognised in the quote from the Agreed Penalties Case at [60], reproduced above. 36 85 Degrees seeks to qualify the first three features of general deterrence advanced by the FWO by suggesting: (a) that its conduct was better explained as a disconnect between the requirements of Taiwanese law and Australian law than an attempt at profit maximisation and tax minimisation, while accepting that was a practical effect of what took place; (b) that the Employees were genuine interns, and there was no evidence that it had set about to exploit them; and (c) that there was no premediated exploitation, a point addressed above. I am unable to accept that any of these considerations have any material bearing on general deterrence, and little even to assist on specific deterrence. Deterrence is directed to conduct, and in a case in which nature of the legal requirements were brought to 85 Degrees' attention by the enforceable undertaking. Moreover, if an innocent state of mind is relied upon to reduce the penalty to be imposed, it needs to be proven, not merely asserted: Reckitt Benckiser at [131]. 37 As to specific deterrence, the FWO points to a further five factors as follows. First, there were prior contraventions of a like kind, as reflected in the enforceable undertakings that were breached. 85 Degrees accepts that is so, but submits that this also points to steps taken to comply with those undertakings. This does not assist 85 Degrees because the contraventions then took place anyway. 38 Secondly, contraventions detected in each of the five audits conducted by the National Retail Association between 2016 and 2017, including some of the same contraventions that are now before the Court, had resulted in advice being given to 85 Degrees as to employee entitlements. 85 Degrees points to self-audits and progress made. Again, this does not help 85 Degrees given the instant contraventions that then followed. 39 Thirdly, the involvement of senior management of 85 Degrees, being the managing director, Mr Shu-Ming (Tim) Shu, and another director, Mr Shu-Ching Chen, both of whom had signed the enforceable undertaking, and had undertaken training, knew the facts establishing the contraventions, and were still directors. 85 Degrees submits that as those directors are its public face, the sanction imposed will have its own specific deterrence effect. I am unable to see how this offsets their involvement or reduces the need for deterrence. 40 Fourth, the current and ongoing business activities give rise to a need for operative deterrence. While 85 Degrees no longer operates retail shops, it is a franchisor to entities who do, and it continues to be involved in food manufacturing. There remains a need for deterrence even in those circumstances, and in relation to its continuing factory operations. 41 Fifth, 85 Degrees has not adduced any evidence to give any basis for confidence that there will be voluntary compliance in the future. 85 Degrees points to the involvement of the two directors in cooperation, admission of contravention and a measure of acceptance of wrongdoing in the rectification payments made. The conclusion I reach is that the risk of further contraventions is hard to assess, which suggests a strong and important role for specific deterrence in penalty assessment and imposition. Of course, should 85 Degrees contravene again, it would seem that an accessorial case against the directors in person would be more likely. It may also be that criminal offences of wage theft will be in place in the not-too-distant future. 42 In relation to specific deterrence more generally, 85 Degrees submits that there was not a determined refusal to comply with the law, or to disobey it, an argument that seems to rise no higher than a suggestion of ignorance of the law which is hard to accept given the audits which identified the looming problem, and the enforceable undertaking that reflected that the problem had manifested. To continue this sort of conduct at least reflected a stubborn determination not to take positive steps to ensure compliance. There is plainly a significant need for specific deterrence. 43 On the topic of the nature and extent of the conduct and the loss suffered, the FWO submits that the circumstance of the employees travelling to Australia and doing the internship as a part of their university program, along with their youth, difficulties with English and lack of familiarity with local laws and practices, made them particularly susceptible to exploitation. 85 Degrees points to each intern having the option of doing the internship in Taiwan or overseas, so that reliance on an employer to do the right thing was present wherever it took place. I am unable to see how that assists 85 Degrees. The simple fact is that it was able to take advantage of the circumstances that arose from the internships taking place here. It is not to the point, as 85 Degrees advances, that there were no overt threats made and the intern Employees signed up to working flexibly, because that was not paid for properly at the time. I am unable to accept that the intern Employees were anything other than highly susceptible to exploitation in the sense of being in no realistic position to resist being overworked and underpaid. 44 It does not help to submit, as 85 Degrees does, that visa information pointed each intern employee to the obligation on them to comply with labour laws here. Rather, those circumstances made it easier for 85 Degrees to deny the Employees their entitlements, which was also concealed by the record-keeping breaches. The long hours that were not paid for by overtime or penalty rates, longer than other employees, exacerbated the poor living conditions and general amenity brought about by not being able to pay for suitable accommodation. The exploitation that in fact took place had these additional dimensions directly flowing from the illegality. 45 Additionally, the principal objectives of the Fair Work Act and the two awards as to minimum standards were undermined, and needed to be reinforced. 46 The underpayments were objectively large, with the smallest underpayment being more than a full-time employee would ordinarily earn in a single year on the highest classification under either award, and with a large component flowing from the failure to pay penalty rates for weekends and public holidays and overtime, yet the Employees did not have the benefit of not working at those times either and only had immediately available the cash amount of $400 per month. 47 The money that was not paid as required was able to be kept by 85 Degrees and used for its benefit until it was paid in full after this proceeding was commenced. The Employees were left with the burden of pursuing the superannuation paid by 85 Degrees to the Australian Taxation Office, rather than to a fund identified by each employee as required. 48 85 Degrees was a sophisticated employer, operating multiple factories and retail stores, and now being a franchisor in relation to 14 retail stores. It is part of a larger corporate group with companies in the group operating in Australia, Taiwan, Malaysia and the Cayman Islands, and as a result was able to source employees and managers from overseas. While 85 Degrees had a significant net loss in the financial year ending 30 June 2021, it has a high turnover, relatively low cost of sales, and correspondingly less in the way of operating expenses. Most of the loss incurred in that year was due to rectification payments made to the Employees. 85 Degrees has substantial cash on hand, increasing by $600,000 since the June 2021. It is well able to meet the penalties to be imposed and there does not seem to be any reason for allowing additional time to pay in all the circumstances. I have no reason to have any concern that the penalties to be imposed will be oppressive in the sense identified in Pattinson HCA, noting that the gap between the top of the range sought by the FWO, and the bottom of the range sought by 85 Degrees is not very substantial. 49 While 85 Degrees largely does not cavil with the FWO's characterisation of its conduct, nor dispute the range of penalties proposed while seeking a penalty at the lower end of that range, it advances a number of slightly contrary submissions. 85 Degrees submits that the arrangement with the intern Employees was not intentionally and deliberately exploitative and that the Employees agreed to their terms of employment. That outsourcing decision can only be correct in the sense that it may have been done consistently with Taiwanese law as it applied in Taiwan, and therefore perhaps not thought to be exploitative by that standard. That submission does not take 85 Degrees very far. It is clear that the conduct was deliberate as opposed to inadvertent, and carried out in contravention of enforceable undertakings. Its most senior management must have been aware, or at least plainly should have been aware, that Australian law applied to the employment here. The end result was undoubtedly exploitative, and the contravening conduct itself was plainly deliberate. 50 The FWO submits, and I accept, that while there was cooperation, including ultimately full admissions, which should be recognised and given substantial weight, especially in the aftermath of Pattinson HCA, 85 Degrees initially denied being the employer and alleged it was rather the responsibility of its parent company, Comestibles, which prolonged both the investigation and this proceeding. The FWO therefore submits that a 20% discount off the maximum available penalty was appropriate, as reflected in the fourth column in the table above. 85 Degrees suggests that the discount should be greater, being instead 25%. I am unable to accept that is appropriate in all the circumstances. Indeed, my preference would be for such a discount to be applied to the penalty to be imposed, not to the maximum penalty, especially given the limited role of the maximum penalty following Pattinson HCA, but as this approach was agreed except as to the size of the discount, I am content to proceed upon that basis as not being inappropriate, but not to go any higher than 20%. 51 In the FWO's post-Pattinson HCA submission, it is submitted that it is compatible with that case and with previous civil penalty cases, citing in particular Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; 168 FCR 383 per Stone and Buchanan JJ at [73]-[76], for cooperation to be taken into account on the basis of it being relevant to deterrence in at least three ways, each of which has application in this case: (a) specific deterrence as demonstrating contrition, remorse and acceptance of responsibility; (b) general deterrence by reinforcing the strength and integrity of the regulator and the regulatory process; and (c) the utilitarian value of the regulatory process and the justice system in the sense of facilitating the course of justice, which I would further note frees up the regulator's resources to investigate and bring other proceedings, itself contributing to general deterrence. 52 The FWO also submits that Pattinson HCA does not preclude taking into account the utilitarian value of cooperation independently of deterrence. While each of those submissions have some force, properly examined they are relevant because, whether directly or indirectly, they can be linked to, or be supportive of, deterrence objectives, especially when regard is had to cooperation which frees regulator resources to take deterrence action elsewhere, so as to remain squarely within Pattinson HCA. Deterrence is, after all, directed to compliance. The particular features that the FWO identifies, and which I accept, are: (a) the utilitarian benefit already adverted to, which contributes both directly and indirectly to compliance activities; and (b) the analogy of a discount for cooperation with criminal law analogues, including guilty plea discounts, which may be seen to be a further feature of the utilitarian benefit, and such things as agreements as to facts and penalties, citing the approval of the Agreed Penalties Case in Pattinson HCA at [14]. 53 Having regard to all of the foregoing, I accept the FWO's submission that no further and final adjustment for totality is called for. There is nothing to suggest that even the top of the range proposed by the FWO will be oppressive in the relevant sense. To the contrary, as I have already indicated, I accept that the top of the range proposed by the FWO, and not said by 85 Degrees to be wrong although it seeks less, is within the appropriate range in all the circumstances, albeit only just within that range. In all the circumstances, no more is required to meet the objective of deterrence. Conclusion 54 For the forgoing reasons, and as set out in more detail in the orders part of this judgment, I am satisfied that it is appropriate in all the circumstances to: (a) make the declarations of contravention sought by the FWO and agreed to by 85 Degrees, noting that no separate argument was directed to the compensation sought for interpreter expenses, which I would additionally order if sought; (b) order that 85 Degrees pay to the Commonwealth within 28 days an aggregate pecuniary penalty of $475,200, being the top of the range proposed by the FWO and agreed to, rejecting the submission by 85 Degrees that a penalty at the bottom of that range of $416,880 was appropriate or sufficient, and noting that at a contested hearing it would have been difficult for it to resist a much greater penalty. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromwich. Associate: Dated: 4 November 2022	12,403
federal_court_of_australia:fca/single/2002/2002fca0652	decision	commonwealth	federal_court_of_australia	text/html	2002-04-24 00:00:00	Gurung v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 652	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2002/2002fca0652	2024-09-13T22:49:41.938893+10:00	FEDERAL COURT OF AUSTRALIA Gurung v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 652 DHAN GURUNG v MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS W120 of 2002 CARR J 24 APRIL 2002 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W120 OF 2002 BETWEEN: DHAN GURUNG APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGE: CARR J DATE OF ORDER: 24 APRIL 2002 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The application for leave to appeal is refused. 2. The applicant pay the respondent'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 WESTERN AUSTRALIA DISTRICT REGISTRY W120 OF 2002 BETWEEN: DHAN GURUNG APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGE: CARR J DATE: 24 APRIL 2002 PLACE: PERTH REASONS FOR JUDGMENT 1 On 19 April 2002 French J heard an application for an interlocutory injunction restraining the respondent from removing the applicant from Australia. The factual background of the matter at that stage was set out in French J's reasons given on that date for refusing the interlocutory injunction sought. It was as follows: "In July 1999, the applicant came to Australia on a student visa. He married a Ms Hannah King. They separated in September 2001, but remain married. They have a two year old child. It was asserted that the marriage may not have irretrievably broken down although there was a conflict between the spouses. The applicant's wife took the child and moved to Melbourne last year and the applicant became very depressed. About two and a half months ago he was notified that his visa was cancelled on the basis that his marriage was not ongoing. He became more depressed. He missed the child and became fearful of losing the child forever if he was deported. Due to his depression he withdrew from life and did not attend to the cancellation of his visa or the removal of the child. He was arrested and detained about one and a half months ago and remains in detention." 2 The facts placed before French J differ from the facts which appear in the documents annexed to an affidavit sworn today and filed on behalf of the respondent. The facts as deposed to in the respondent's affidavit are that the applicant arrived in Australia on 6 July 1995 on a student visa valid for a stay until 17 August 1997. The applicant applied for a further visa on 14 August 1997 which was refused on 24 November 1997. 3 He commenced an application for review on 22 December 1997. The Immigration Review Tribunal considered the matter and considered that the application was invalid and so determined on 13 May 1998. The associated bridging visa, according to the information placed before the court by the respondent, ceased on 2 April 1998. The applicant took no further action and lodged no further applications and thus became an unlawful non-citizen on 3 April 1998. His status has not changed. 4 The applicant now seeks leave to appeal from French J's orders. He also seeks an interlocutory order restraining the respondent from removing him from Australia. 5 The tests for the grant of leave to appeal from an interlocutory order are reasonably well settled. In essence, the interlocutory order must be seen to be attended with sufficient doubt to warrant reconsideration by a Full Court and, if wrong, to work substantial injustice if leave were refused. I consider that in the circumstances of this case the second limb, ie substantial injustice, is satisfied. That is, if the decision under challenge were wrong, then there is very likely to be a substantial injustice to the applicant in that in all probability, on the evidence before the Court, he will be removed from Australia before his substantive application is heard. 6 However, I do not think that there is any doubt attending French J's decision. His Honour held, in accordance with well established authority, that the administrative decision under challenge was made considerably more than 28 days before the application was filed in this court and that s 477(2) of the Migration Act 1958 (Cth) prohibits this Court from extending the time limited by s 477(1), i.e. 28 days from notification of the decision. 7 The applicant's evidence is that he was notified of the visa cancellation about two and a half months ago. This application was filed last Friday, on 19 April 2002. 8 Mr V. De Alwis made submissions to French J to the effect that s 477 was ultra vires the Constitution. He made other submissions as to the invalidity of the portions of the legislation which prevent this court from extending time. In my view, his Honour's reasons for rejecting those submissions are not attended with any doubt. Mr De Alwis this afternoon repeated those submissions. In my view, they are without substance and some of them verged on being nonsensical. Accordingly I refuse leave to appeal. I propose to make the following orders: 1. Application for leave to appeal refused. 2. The applicant pay the respondent's costs of the application for leave to appeal. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of Justice Carr. Associate: Dated: 23 May 2002 Counsel for the Applicant: Mr V De Alwis Solicitors for the Applicant: MIGRANT Lawyers Counsel for the Respondent: Mr P J Corbould Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 24 April 2002 Date of Judgment: 24 April 2002	1,350
federal_court_of_australia:irc/1996/1996irca0478	decision	commonwealth	federal_court_of_australia	text/html	1996-10-03 00:00:00	Whitmore v Graf-x Pty Ltd [1996] IRCA 478	https://www.judgments.fedcourt.gov.au/judgments/Judgments/irc/1996/1996irca0478	2024-09-13T22:49:41.962219+10:00	DECISION NO:478/96 C A T C H W O R D S INDUSTRIAL LAW - Industrial Law - Termination of Employment-whether unilateral alteration of an employee's contract of employment constituted termination of employment where employee refuses to accept such alteration - compensation. . INDUSTRIAL RELATIONS ACT 1988, ss.170DE, 170DC, 170EE Strachan v Liquorland (Australia)Pty Ltd, 6 February 1996, Moore J, unreported. Marriott v. Oxford [1970] 1Q.B. 187, W. E. Cox Toner v. Crook [1981]I.C.R. 823, Bashir v. Brillo [1979] I.R.L.R. 295 WHITMORE -V- GRAF-X PTY LTD No. SA96/1064 JUDICIAL REGISTRAR: L FARRELL PLACE: ADELAIDE DATE: 3 OCTOBER 1996 IN THE INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) SOUTH AUSTRALIA DISTRICT REGISTRY ) No. SA96/1064 B E T W E E N: GRAEME WHITMORE Applicant AND GRAF-X PTY LTD Respondent MINUTES OF ORDER BEFORE: JUDICIAL REGISTRAR L FARRELL PLACE: ADELAIDE DATE: 3 OCTOBER 1996 THE COURT ORDERS THAT: 1. The Respondent pay to the Applicant the sum of $10200 pursuant to Section 170EE(2) within 21 days. 2. The Respondent pay to the Applicant the sum of $1700 pursuant to Section 170EE(5) within 21 days. 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 ) SOUTH AUSTRALIA DISTRICT REGISTRY ) No. SA96/1064 B E T W E E N: GRAEME WHITEMORE Applicant AND GRAF-X PTY LTD Respondent BEFORE: JUDICIAL REGISTRAR L FARRELL PLACE: ADELAIDE DATE: 3 OCTOBER 1996 REASONS FOR JUDGMENT This is an application for relief in respect of termination of employment. The application comes before the Court pursuant to the provisions of Section 170ED of the Industrial Relations Act. The Respondent is a small printing company set up in 1993 following the demise of the Stock Journal and it's subsidiary company, Lasercolour. The Respondent company was formed by Ms Cagney, who continues to be a director of the company and Mr S Mutton, who died in May 1994. Mr Mutton's wife, Vanda, replaced Mr Mutton as director, however she has little to do with the day to day running of the business. Initially the company had 2 employees, I understand it now has 10 employees. The Applicant, Mr Mutton and Ms Cagney had been employed at the Stock Journal and its subsidiary company. Following the death of Mr Mutton and the departure from the Respondent of its scanner operator in August 1994, the Applicant commenced employment with the Respondent. One of the main issues of contention was whether the Applicant was a production manager for the Respondent. From the evidence before me I am satisfied that the Applicant was employed by the Respondent with a view to him becoming a partner, that his duties can be described as scanner operator with some managerial responsibilities, but with no responsibilities relating to the management of staff. My impression of both the Applicant and Ms Cagney was that their respective memories were selective in recalling the circumstances of the Applicant's employment. It appears that the Applicant's desire for a partnership stake in the business and his perception of his role in managing the business were an ongoing source of aggravation for him. In June 1995 the Applicant and Ms Cagney agreed to a change in the Applicant's terms and conditions of employment. From then the Applicant was paid $850 per week and he was no longer paid overtime. During December 1995 and January 1996 the Applicant took three weeks leave. During that time a casual operator replaced the Applicant. Ms Cagney gave evidence that she realised during this time that the Applicant was much slower at his work than the casual operator. In late February 1996 at the instigation of Ms Cagney, she and the Applicant had a discussion concerning the staffing level of the Respondent, the Applicant's relationships with other staff, his relationship with clients and a trial period of 1 month as production manager that was supposed to have taken place in late 1995. On 1 March 1996 a meeting of all staff was held. The Applicant did not speak at the meeting. Ms Cagney allocated duties at that meeting. On 12 March 1996 the Applicant requested a meeting with Ms Cagney. At the end of the meeting he left and was off work as a result of stress until 25 March 1996. Ms Cagney gave evidence that she advised the Applicant at that meeting that she was changing his hours, his duties and his rate of pay. I do not accept that evidence. Having heard both the Applicant and Ms Cagney's accounts of what occurred, clearly what took place was a heated argument where both were critical of the other. It seems improbable to me that Ms Cagney took such a decision and told the Applicant of it then and there. Particularly in view of the fact that the discussion was instigated by the Applicant and and in light of her admission that she was relatively inexperienced in management it seems to me to be unlikely that her account of what occurred could be accurate. I accept the Applicant's version of what occurred at the meeting. On 25 March 1996 the Applicant returned to work, working 4 hours per day and provided the Respondent with a claim for workers' compensation stating "Depression and anxiety neurosis caused by workplace issues". On 26 March 1996 Ms Cagney gave the Applicant a memo that he scanned and handed back to her saying that he refused to accept it. On 29 March 1996 the Applicant received the same memo by post. The text of the memo is as follows: "The purpose of this memo is to confirm in writing the discussions we had on 21 February and 12 March regarding your future position with the firm. 1. As discussed at our most recent meeting on 12 March, you have been unable to handle successfully the combined workload of being a scanner operator and production manager. Scanning has suffered as a result. This was made particularly apparent during your three weeks' annual leave over the Christmas period when a temporary scanner operator had to be brought in at short notice to cover your absence. The quality of his work and the amount of time he took to do scans was significantly better than on what you had been producing. 2. You have considerable difficulty interacting with some of the clients to the extent that there are clients who have asked specifically not to deal with you. Despite having been advised not to speak with a specific client (at his request), you continued to do so. This almost resulted in the firm losing this client. 3. You have difficulty in relating to your fellow employees, causing unrest within the firm. 4. When you commenced employment with the firm you informed me that you were interested in becoming a partner. I advised you then that Vanda and I would discuss this at a later stage. As a result of the problems above, it is obvious that this is not a course we can pursue. You advised me some months ago that you were on medication for stress. I feel that changing your responsibilities will assist you in this area. This position of production manager is not a full-time job and the duties relating to it have been distributed amongst other staff members as appropriate thus making this position redundant. As discussed at our most recent meeting, we have therefore changed your duties to scanning only, thus transferring your present salary to the equivalent hourly wage paid to other members of the firm, ie $16.00 an hour for a 37.5 hours per week. This is effective as of 27 March 1996, giving you the required period of two week's notice. I have discussed these decisions with Vanda, who supports them. I was informed by Sandra Ward that you had called on Wednesday 13 March and advised that you would not be coming back to work until later this week. As you know, I am always contactable by telephone at home, work or on my mobile. I did not at any stage give my consent to you being away from work for this period of time. We emphasise that we would like to see you successfully address the problems at hand. If, however, you are unable to do so to our satisfaction within the next six weeks, then we have no alternative but to terminate your employment. Yours sincerely (signed) C. M. Cagney". The Applicant has not worked for the Respondent since 29 March 1996. He received sick leave payments up until 2 May 1996. On 4 April 1996 a meeting was held to discuss the possibility of the Applicant returning to work. By letter dated 10 April 1996 the Applicant's Union advised Ms Cagney that the reduction in his wages was not accepted and indicated that proceedings for unlawful termination would be commenced if the matter was not resolved. By letter dated 2 May 1996 the Applicant requested payment of his outstanding annual leave. In my view the memo of 25 March 1996 expressed Ms Cagney's final view( in evidence Ms Cagney stated that she regarded the contents of the memo as being open to discussion but nothing on the face of the memo gives any indication of that), and was an incorrect reflection of the past events, (which was conceded by Ms Cagney in evidence). The change of duties, hours and rate of pay as set out in the memo was a significant unilateral alteration of the Applicant's contract of employment, which the Applicant refused to accept, both on 26 March 1996 and by his subsequent conduct and involvement of the Union. In my view the action of the employer in delivering the memo to the Applicant by post can be regarded as the event which initiated the termination of the Applicant's employment. This matter can be distinguished from the factual situation in Strachan v Liquorland (Australia)Pty Ltd, 6 February 1996 (unreported) where Moore J found no termination of employment in the demotion of the Applicant. In that matter the applicant had accepted the unilateral alteration of the contract of employment. I am satisfied in light of the English Authorities referred to by the Applicant's representative (Marriott v. Oxford [1970] 1Q.B. 187, W. E. Cox Toner v. Crook [1981]I.C.R. 823, Bashir v. Brillo [1979] I.R.L.R. 295) that the Applicant's conduct in subsequently accepting sick leave payments for a period of about 5 weeks and requesting his outstanding leave entitlements in the way that he did, ought not in any way alter the view that the Applicant refused to accept the variation in his contract of employment. In my view the Respondent had no valid reason for the termination of the applicant's employment. The Applicant did not seek reinstatement. The Applicant's Workers Compensation claim was settled on 27 August 1996 on the basis that the Applicant was paid weekly payments of compensation up to 2 July 1996. In my view it is improbable that the employment relationship between the Applicant and the Respondent would have lasted beyond a further six months having regard to the rate at which the relationship between Ms Cagney and the Applicant had deteriorated since the Applicant's return from annual leave and the fact that it was by that time highly unlikely that the Applicant would have been allowed to join the partnership. I therefore award compensation to the Applicant in the sum of $10,200. The Applicant is also entitled to payment in lieu of notice pursuant to the provisions of Section 170DB. On my calculation the Applicant is entitled to $1700. I certify that this and the preceding 4 pages are a true copy of the reasons for my judgment. DATES OF HEARING : 22, 23 & 27 AUGUST 1996 FOR THE APPLICANT : MR S BLEWETT FOR THE RESPONDENT : MR A CHISMEYSA	2,639
federal_court_of_australia:fca/single/2011/2011fca0769	decision	commonwealth	federal_court_of_australia	text/html	2011-07-06 00:00:00	SA E.Med Pty Ltd v Calvary Health Care Adelaide Ltd [2011] FCA 769	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2011/2011fca0769	2024-09-13T22:49:43.076652+10:00	FEDERAL COURT OF AUSTRALIA SA E.Med Pty Ltd v Calvary Health Care Adelaide Ltd [2011] FCA 769 Citation: SA E.Med Pty Ltd v Calvary Health Care Adelaide Ltd [2011] FCA 769 Parties: SA E.MED PTY LTD (ACN 099 711 476) v CALVARY HEALTH CARE ADELAIDE LTD (ACN 106 314 229) File number: SAD 94 of 2011 Judge: BESANKO J Date of judgment: 6 July 2011 Catchwords: PRACTICE AND PROCEDURE — application for order under O 29 r 2 of the Federal Court Rules for the separate decision of questions in a proceeding — where applicant seeks to separate issues as to quantification of its loss and damage from issues as to liability and other relief claimed — where an interim injunction had been granted and an expedited trial ordered — where applicant said it was unlikely question of quantification of damages would ever need to be decided — where there was no clear division between liability and damages — where it was not possible to determine the extent of overlap of evidence — where there was no evidence applicant could not be ready for trial on all issues by the expedited trial date — whether it was just and convenient to separate the issues HELD: The application for separate trials of issues was refused. Legislation: Trade Practices Act 1974 (Cth) ss 51AA, 51AC, 52 Federal Court Rules O 29 r 2 Cases cited: Tepko Pty Ltd v Water Board (2001) 206 CLR 1, cited Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495, cited Bathox Australia Pty Ltd v PJ SAS Trading Pty Ltd [2004] FCA 1082, cited BlackRock Asset Management Australia Services Ltd v Waked [2011] FCA 272, cited Dates of hearing: 4, 6 July 2011 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 21 Counsel for the Applicant: Mr T Duggan Solicitor for the Applicant: Donaldson Walsh Counsel for the Respondent: Mr B Doyle Solicitor for the Respondent: Thomsons Lawyers IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 94 of 2011 BETWEEN: SA E.MED PTY LTD ACN (099 711 476) Applicant AND: CALVARY HEALTH CARE ADELAIDE LTD (ACN 106 314 229) Respondent JUDGE: BESANKO J DATE OF ORDER: 6 JULY 2011 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The applicant's notice of motion dated 1 July 2011 be dismissed. 2. The applicant pay the respondent's costs of and incidental to the said notice of motion. 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 GENERAL DIVISION SAD 94 of 2011 BETWEEN: SA E.MED PTY LTD (ACN 099 711 476) Applicant AND: CALVARY HEALTH CARE ADELAIDE LTD (ACN 106 314 229) Respondent JUDGE: BESANKO J DATE: 6 JULY 2011 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 This is a notice of motion by the applicant in this proceeding seeking an order under O 29 r 2 of the Federal Court Rules for the decision of questions separately from other questions in the proceeding. The respondent opposes the application and submits that all issues of law and fact should proceed to trial at the same time. 2 The applicant brings a proceeding against the respondent which relates to operation of an emergency medical clinic located at Calvary Wakefield Hospital at 300 Wakefield Street, Adelaide, in the State of South Australia. The applicant carries on the business of operating the said emergency medical clinic under the name 'Wakefield Emergency Centre'. The respondent is the lessee of the premises of the Calvary Wakefield Hospital and it carries on the business of operating a hospital on the land. 3 In 2006 the applicant and the respondent entered into a written agreement whereby the respondent granted the applicant the right to operate the Wakefield Emergency Centre. Various payments were to be made between the parties but it is not necessary to set out the details because the dispute between the parties concerns the period or term of the agreement. The written agreement appears to provide for terms of five years, subject to termination by either party by six (6) months' notice in writing to the other party prior to the expiration of the then current period of the engagement. The respondent purported to terminate the agreement by letter dated 6 December 2010 as from midnight on 30 June 2011. The applicant does not accept that the respondent had or has the right to terminate the agreement. It contends that shortly prior to the execution of the written contract in 2006 the respondent agreed that it would not give notice to terminate the term of the engagement of the applicant in accordance with the contract 'unless the respondent intended to close, and not to operate, or permit the operation of, the Emergency Centre, or another Emergency Centre, in the Hospital'. That statement was said by the applicant to be a term of the written agreement (or alternatively the written agreement should be rectified so as to include it) or a collateral contract or a representation. 4 In early March 2008 the parties discussed the carrying out by the applicant of improvements to the Emergency Centre. The applicant's case is that the respondent's servants and agents made statements to it which were to the effect that the Emergency Centre would remain open and that the written agreement would not be cancelled. On that basis the applicant carried out improvements costing it the sum of $621,672.62. The applicant's case is that the statements by the respondent constituted representations or a collateral contract. 5 The applicant's case in relation to the respondent's termination notice is that it is a breach of contract or collateral contract, a 'breach' of the representations and that an estoppel arises in relation to the termination notice. In addition, the applicant claims that the representations were misleading or deceptive conduct contrary to s 52 of the Trade Practices Act 1974 (Cth) ('Trade Practices Act') or that the respondent's conduct in giving the termination notice and in seeking to terminate the written agreement was unconscionable at law and in equity contrary to s 51AA and s 51AC of the Trade Practices Act (as it then was) and/or section 20 and section 22 of the Australian Consumer Law. 6 The loss and damage pleaded in the event that the agreement 'is terminated by the Termination Notice, or otherwise' is as follows: Particulars of Loss and Damage 48.1 The Applicant would not have incurred, and will loose [sic] the present benefit of, 48.1.1 the costs of the Emergency Centre Improvements referred to in paragraph 32, being $621,672.62; 48.1.2 the finance costs and interest to April 2011 referred to in paragraph 33, being $262,451.65, and further financial costs and interest; 48.1.3 the licence fees paid by the Applicant to the Respondent referred to in paragraph 34.1, being $696,674.00 in total to February 2011, and any further licence fees; 48.1.4 reduced management fees received by the Applicant from the Respondent, referred to in paragraph 34.2, being $22,479.00 per annum, and being in total for five years $112,395.00. 48.2 The Applicant will suffer loss of profits from the conduct of the business of the Applicant pursuant to the 2006 Contract for the period from 1 July 2011 to 30 June 2016 and/or the loss or the value of the business of the Applicant. 7 In its Application issued on 6 May 2011 the applicant claims twenty-two forms of specific relief being seventeen declarations, an order for rectification of the written agreement, two prohibitory injunctions and one mandatory injunction, and damages. The claim for damages is in the following terms: 22. Damages for: 22.1 breach of the 2006 Contract; and/or 22.2 breach of the 2006 Contract as amended on or about 20 March 2008; and/or 22.3 breach of the First Collateral Contract; and/or 22.4 breach of the Second Collateral Contract; and/or 22.5 unconscionable conduct of the Respondent; 22.6 conduct of the Respondent contrary to the Trade Practices Act 1974 (Cth) (as it then was) and/or the Competition and Consumer Act 2010 (Cth) ordered pursuant to Section 82 and Section 87 of the said Act. 8 On 14 June 2011 the applicant issued a notice of motion seeking an interlocutory injunction against the respondent. On 23 June 2011 I made the following order: 4. Subject to the applicant's undertaking to pay any damages to the respondent should the respondent suffer any by reason of the making of this order and subject to the payment of $400,000 into Court by 4 pm on Monday 27 June 2011 as security for the said undertaking, and subject to the applicant taking all reasonable steps to expedite a trial of the within proceedings, THE COURT ORDERS THAT until further order the respondent its directors, officers, servants, agents and contractors be restrained from taking any steps, whether directly or indirectly, to: a. give effect to, or enforce, its termination notice dated 6 December 2010 addressed to the applicant and purporting to terminate the contract between the parties made on or about 22 September 2006 ('2006 contract') and evidenced by a document entitled 'Agreement for the Operation of the Wakefield Emergency Centre'; b. exclude, prevent, restrict, hinder or impede the Applicant from: i. occupying the Wakefield Emergency Centre located at premises situated at 300 Wakefield Street, Adelaide, South Australia; ii. carrying on the business of providing emergency services pursuant to the 2006 contract. 9 I also made an order that the proceeding be listed for trial for five days from 29 August 2011. 10 The applicant's notice of motion formulates the order it seeks in the following terms: 2. The questions relevant to the relief sought in paragraphs 1–21 of the Application dated 6 May 2011 be tried and determined separately from, and prior to, the trial and determination of the questions relevant to the relief sought in paragraph 22 of the Application. 11 At the hearing of the motion, counsel for the applicant formulated the order the applicant seeks in the following terms: The question of the quantification of the loss or damage, if any, suffered by the applicant be determined separately and after the determination of other issues in the proceedings. 12 In broad terms, the applicant submitted that it was unlikely that the quantification of damages will ever arise; that the quantification of damages is complex; that there is little overlap in terms of the evidence to be led at the hearing between the issues raised by the claims for relief in paragraphs 1–21 inclusive of the Application and the applicant's damages claim, and that the applicant is working to a very tight timetable in preparing its case for trial. 13 In broad terms, the respondent submitted that even if the applicant succeeded in its claims the most likely remedy was damages or compensation; that on any view at least some evidence of loss or damage will have to be led at the 'first' trial; that there would be an overlap in terms of the evidence to be led at the hearing or at the very least it was not possible at this stage to say that there would be no overlap and that the applicant had not adduced any evidence that it could not be ready for trial on all issues by 29 August 2011. 14 There was no dispute between the parties about the relevant principles. The starting point is that ordinarily a proceeding proceeds to trial on all issues of fact and law. In Tepko Pty Ltd v Water Board (2001) 206 CLR 1, Kirby and Callinan JJ (at 55 [168]) warned of the dangers of a trial of the issues rather than cases in their totality. It seems well-established that whether an order should be made under O 29 r 2 depends on whether it is just and convenient to do so in the circumstances: Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 ("Reading") at 499 at [9] per Branson J; Bathox Australia Pty Limited v PJ SAS Trading Pty Limited [2004] FCA 1082; BlackRock Asset Management Australia Services Ltd v Waked [2011] FCA 272 at [7] per Perram J. 15 With respect, in Reading, Branson J gives a helpful summary of the relevant principles and in particular the factors which will often go to support or to tell against an order for the separate decision of a question under O 29 r 2 (at 497-499 [6]-[9]). 16 I have decided that an order under O 29 r 2 should not be made. In reaching that decision I am influenced primarily by the following four matters. 17 First, I do not think it can be said that it is unlikely that the issue proposed to be hived off will need to come to trial. The applicant's submission was that if it was successful in its claims it was likely to obtain an injunction and if it was unsuccessful then that would be the end of the matter. At this stage, I will not express a view on likely remedies if the applicant is successful. It is sufficient for me to say that I do not think it can be said it is unlikely damages will need to come to trial and that therefore this supports the applicant's case for an order under O 29 r 2. 18 Secondly, there is no clear division in this case between liability and damages. Some aspects of damages such as the cost of the improvements and the profits being made at the time of the representations in 2008 seem to be inextricably linked with the applicant's liability case, including the making of the representations, reliance, detriment and the estoppel case. It seemed to me that the gravamen of the applicant's application was to postpone the issues raised in paragraph 48.2 of the statement of claim. Furthermore, there is force in the respondent's submission that the extent of the applicant's loss or damage will or may be relevant to whether relief in the form of injunctions is granted. 19 Thirdly, it is not possible at this stage to determine the extent of any overlap between the issues and, importantly, the possibility of witnesses whose credibility may be challenged, having to give evidence twice. That may become clearer as the matter progresses towards trial, but at this stage it has to be said that there is a distinct risk of that occurring. 20 Finally, although I am prepared to infer that both parties will have to work hard to be ready for trial by 29 August 2011, the respondent is correct in its submission that there is no evidence that the applicant cannot be ready by 29 August 2011. 21 For these reasons, I dismiss the applicant's notice of motion dated 1 July 2011. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. Associate: Dated: 8 July 2011	3,422
federal_court_of_australia:fca/single/2021/2021fca0437	decision	commonwealth	federal_court_of_australia	text/html	2021-04-23 00:00:00	Phillips (Liquidator), in the matter of Scope Plastics Pty Ltd (in liq) [2021] FCA 437	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca0437	2024-09-13T22:49:43.468929+10:00	Federal Court of Australia Phillips (Liquidator), in the matter of Scope Plastics Pty Ltd (in liq) [2021] FCA 437 File number: SAD 61 of 2021 Judgment of: WHITE J Date of judgment: 23 April 2021 Date of publication of reasons: 29 April 2021 Catchwords: TRUST AND TRUSTEES – application brought by the liquidator of a corporate trustee to be appointed as receiver of the property of the Trust under s 57 of the Federal Court of Australia Act 1976 (Cth) – application granted. Legislation: Corporations Act 2001 (Cth) s 556 Federal Court of Australia Act 1976 (Cth) s 57 Insolvency Practice Schedule (Corporations) s 90-15 Cases cited: Hosking, in the matter of Business Aptitude Pty Ltd (in liquidation) [2016] FCA 1438 Martyniuk v King [2000] VSC 319 Michell (Liquidator) v Delltta Holdings Pty Ltd (in liq) atf The Brookhill Trust [2019] FCA 2133 Re Pako Supermarkets [2020] VSC 487 Sapphire (SA) Pty Ltd v Ewens Glen Pty Ltd [2011] FCA 600 University of Western Australia v Gray (No 6) [2006] FCA 1825 Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 25 Date of hearing: 23 April 2021 Counsel for the Plaintiffs: Mr S Evans Solicitor for the Plaintiffs: Oakbridge Lawyers Pty Ltd ORDERS SAD 61 of 2021 IN THE MATTER OF SCOPE PLASTICS PTY LTD ACN 128 631 274 (IN LIQUIDATION) ANTHONY JOHN ARTHUR PHILLIPS AS LIQUIDATOR OF SCOPE PLASTICS PTY LTD ACN 128 631 274 (IN LIQUIDATION) First Plaintiff SCOPE PLASTICS PTY LTD ACN 128 631 274 (IN LIQUIDATION) Second Plaintiff order made by: WHITE J DATE OF ORDER: 23 APRIL 2021 THE COURT NOTES THAT the First Plaintiff asserts that the Second Plaintiff has a right of exoneration from, and an equitable lien over, the property of the Col Van Staveren Family Trust (Trust) for debts incurred by the Second Plaintiff as the trustee of that trust which are provable in the Second Plaintiff's liquidation (Trust Creditors). THE COURT ORDERS THAT: 1. Pursuant to s 57 of the Federal Court of Australia Act 1976 (Cth), the First Plaintiff is appointed as receiver, without security, over all present and after acquired property, rights and undertaking of the Trust including the proceeds of any such property. 2. The First Plaintiff has the following powers in respect of the property of the Trust, namely: (a) the powers enunciated in s 420 of the Corporations Act 2001 (Cth), as if the references in that provision to 'property of the corporation' was a reference to 'property of the Trust'; and (b) the powers that a liquidator has in respect of property of a company by s 477(2) of the Corporations Act. 3. The need for the First Plaintiff, as receiver, to file a guarantee under rr 14.21 and 14.22 of the Federal Court Rules 2011 (Cth), is dispensed with. 4. The First Plaintiff, in his capacity as receiver of the property of the Trust and in his capacity as liquidator of the Second Plaintiff, may have recourse to: (a) the property of the Trust for his costs, expenses and remuneration in respect of work undertaken to render that property available to meet the claims of creditors whose debts were incurred by the Second Plaintiff as trustee of the Trust; and (b) the property of the Trust for his other costs, expenses and remuneration properly incurred in the winding up generally 5. The First Plaintiff has a lien over the property of the Trust in respect of the amounts to be paid to him under Order 4 above. 6. The costs of and incidental to this application be costs in the winding-up of the Second Plaintiff. AND THE COURT DIRECTS THAT: 1. Pursuant to s 90-15 of Sch 2 to the Corporations Act, the First Plaintiff as liquidator of the Second Plaintiff is justified in treating all proceeds of property of the Trust received in the winding up of the Second Plaintiff pursuant to the claimed right of exoneration noted above as being available for distribution to Trust Creditors in accordance with the order of priorities provided for in Div 6 of Pt 5.6 of the Corporations Act. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT WHITE J: 1 On 23 April 2021, I made ex parte orders appointing the liquidator of Scope Plastics Pty Ltd as receiver of the property of the Col Van Staveren Family Trust (the Trust), of which Scope Plastics was until recently the trustee. I also made orders empowering the liquidator to sell that property and ancillary orders. 2 I said that I would publish reasons for the orders later. The following are those reasons. 3 Scope Plastics was engaged in the business of fabricating plastic products. It did so as trustee of the Trust. 4 Mr Colin Van Staveren is the sole director, secretary and shareholder of Scope Plastics. 5 The Trust is a discretionary trust and Mr Van Staveren its primary beneficiary. 6 On 13 April 2021, the Supreme Court of Queensland made an order for the winding up of Scope Plastics in insolvency and the first plaintiff, Mr Phillips, was appointed its liquidator. Scope Plastics ceased trading on the following day. One of the effects of the order of the Supreme Court was that, by the operation of cl 21.3(b)(iii) of the Trust Deed, Scope Plastics was deemed "automatically removed" as trustee of the Trust. 7 Mr Phillips' investigations to date indicate that Scope Plastics has a substantial indebtedness, exceeding $580,000, excluding employee entitlements. Two entities, ANZ Banking Group Ltd (ANZ) and My Stirling Ideas Pty Ltd (Stirling) are recorded on the Personal Property Securities Register as holding security interests over the property of Scope Plastic. 8 Mr Van Staveren has informed Mr Phillips that Scope Plastics did not operate in any capacity other than as the trustee of the Trust. That information has been confirmed by the investigations of Mr Phillips and by Scope Plastics' accountants. Scope Plastics does not hold any assets beneficially in its own name. 9 Mr Van Staveren, who is the appointor of the Trust, has not appointed any replacement trustee. Mr Phillips has deposed that he is not aware of any proposal to appoint a new trustee. 10 Scope Plastics has the usual right of a trustee to indemnity and exoneration from the Trust assets in respect of the liabilities it incurred as trustee. This is in any event confirmed by cll 18.3 and 18.5 of the Trust Deed. 11 Mr Phillips makes the application to be appointed as receiver and for the ancillary orders pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) in Sch 2 to the Corporations Act 2001 (Cth) and pursuant to s 57 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act). Section 90-15(1) provides that the Court may make such orders as it thinks fit in relation to the external administration of a company. 12 It is uncontroversial that the power conferred by s 90-15 is broad: see, for example, Re Pako Supermarkets [2020] VSC 487 at [39]. 13 Section 57 of the FCA Act provides: 57 Receivers (1) The Court may, at any stage of a proceeding on such terms and conditions as the Court thinks fit, appoint a receiver by interlocutory order in any case in which it appears to the Court to be just or convenient so to do. (2) A receiver of any property appointed by the Court may, without the previous leave of the Court, be sued in respect of an act or transaction done or entered into by him or her in carrying on the business connected with the property. (3) When in any cause pending in the Court a receiver appointed by the Court is in possession of property, the receiver shall manage and deal with the property according to the requirements of the laws of the State or Territory in which the property is situated, in the same manner as that in which the owner or possessor of the property would be bound to do if in possession of the property. 14 As is apparent, s 57(1) empowers the Court to appoint a receiver by interlocutory order in any case in which it appears to the Court to be "just or convenient so to do". The circumstances in which the Court may be satisfied that it is "just or convenient" are various but the general ground upon which a court appoints a receiver is to protect or preserve property for the benefit of the persons who have an interest in it: Martyniuk v King [2000] VSC 319 at [14]; University of Western Australia v Gray (No 6) [2006] FCA 1825 at [71]-[72]; and Sapphire (SA) Pty Ltd v Ewens Glen Pty Ltd [2011] FCA 600 at [15]. 15 It is now well established that a receiver may be appointed over trust property to secure the trustee's right of indemnity out of the assets of the trust: Hosking, in the matter of Business Aptitude Pty Ltd (in liquidation) [2016] FCA 1438 at [21]-[22], and see the authorities cited therein. 16 The underlying principles were summarised by Davies J in Michell (Liquidator) v Delltta Holdings Pty Ltd (in liq) atf The Brookhill Trust [2019] FCA 2133: [8] The relevant principles in considering the application are not in doubt and are well-established. In short, where a trustee is removed, it retains a right of indemnity from the trust assets secured by an equitable charge over them for the liabilities it incurred by reason of acting as a trustee. The trustee does not have the right to retain as against the defendant possession of the trust assets in order to secure its right of indemnity but it is well-established that a receiver and manager can be appointed over trust property to secure the trustee's right of indemnity out of the assets of the trust … [9] [I]t is now settled that the liquidator cannot sell the trust property without an order of the court, or by the appointment of a receiver over the trust assets … The reason, as explained by Moshinsky J in Cremin, is that trust assets are not the "property of the company" but are instead trust property in which the corporate trustee has a proprietary interest by way of lien or charge to secure its right of exoneration and thus to the extent that the subject of a sale is the whole of a trust asset, rather than merely the company's lien or charge in respect of that asset, it is not authorised by the power of sale in s 477(2)(c) of the Corporations Act 2001 (Cth) … [10] It has also recently become settled law that the proceeds from the exercise of a corporate trustee's right of exoneration may only be applied in satisfaction of the trust liabilities to which that right relates … In the present case, as Diamond Ace did not conduct any other activity other than as trustee of the Brookhill Trust, there is no issue about the application of the proceeds of the sale of trust assets otherwise than to satisfy the debts owed to trust creditors. (Citations omitted) 17 Mr Phillips has deposed, and I accept, that the application is brought in aid of the enforcement of Scope Plastics' right of indemnity and its equitable lien as former trustee of the Trust over the Trust assets. His appointment as receiver will permit those assets to be sold and to be applied to meeting the costs and expenses of the liquidation and meeting, at least in part, the debts of Scope Plastics in accordance with the priorities set out in s 556 of the Corporations Act. 18 I was satisfied that each of Mr Van Staveren, the Australian Securities and Investments Commission, ANZ and Stirling have been served with the proceedings and had been notified of the hearing on 23 April 2021. None of them appeared to oppose the making of the orders sought by Mr Phillips. I note in this respect that Mr Phillips has deposed that Mr Van Staveren has told him that he supports the application and does not wish to be heard on it. 19 Mr Phillips has brought the application relatively soon after his appointment as liquidator and he sought an urgent hearing. He did so for a number of reasons, including that Mr Van Staveren has told him that he does not have the capacity to recommence the operation of the business by the appointment of another trustee of the Trust, the disadvantage to the creditors if the plant and equipment cannot be realised in a timely manner and because, by reason of his receipt of various expressions of interest from parties seeking to purchase the plant and equipment, he expects to receive suitable offers in the very near future. 20 There are alternative means by which the assets of the Trust could be realised so as to meet Scope Plastics right of indemnity: the appointment of a replacement trustee or the appointment of some other person as receiver. There is no proposal before the Court for either alternative, and there is no reason to suppose that either would be less expensive or more efficacious than the appointment of Mr Phillips as receiver. 21 There do not seem to be any disqualifying factors in existence, such as a potential conflict of interest between Mr Phillips' position as liquidator, on the one hand, and receiver, on the other. 22 For these reasons, I was satisfied that it was appropriate to make the principal order sought by Mr Phillips. The ancillary orders he seeks are also appropriate and are in a form commonly made by the Court in like circumstances. 23 However, I declined to make a declaration sought by Mr Phillips in the following terms: The Second Plaintiff has a right of exoneration from, and an equitable lien over, the property of the Col Van Staveren Family Trust (Trust) for debts incurred by the Second Plaintiff and the trustee of that Trust which are provable in the Second Plaintiff's liquidation (Trust Creditors). 24 I did so because, ordinarily, the Court does not grant a declaration unless satisfied that doing so will serve a real purpose and that there is a proper contradictor to the issue to be resolved by the making of the declaration. In this case, it was not apparent that the proposed declaration would serve any real purpose being, in effect, no more than a statement of the underlying legal position. It is not as though there is a dispute about whether Scope Plastics may have recourse to particular assets in the exercise of its right of indemnity or exoneration. 25 These are my reasons for the orders made on 23 April 2021. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice White. Associate: Dated: 29 April 2021	3,336
federal_court_of_australia:fca/single/2003/2003fca0897	decision	commonwealth	federal_court_of_australia	text/html	2003-08-27 00:00:00	Australian Competition and Consumer Commission v Chen 2003] FCA 897	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2003/2003fca0897	2024-09-13T22:49:43.611450+10:00	FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Chen [2003] FCA 897 TRADE PRACTICES – Application for a declaration that the respondent engaged in conduct in contravention of the Trade Practices Act 1952 (Cth) – respondent outside Australia - respondent operated and maintained unauthorised "imitation" Sydney Opera House website and associated sites – declaration appropriate to mark the Court's disapproval of conduct. TRADE PRACTICES – Application under s 80 of the Trade Practices Act 1952 (Cth) for injunctive relief – respondent outside Australia – evidence of international co-operation to curb fraudulent or misleading cross-border conduct – appropriate to take into account not only formal enforcement mechanisms, but likely response of administrative agencies in foreign country – grant of injunction not futile Trade Practices Act 1952 (Cth), ss 6, 51A, 52, 53, 55A, 80, 87 Federal Court of Australia Act 1976 (Cth), s 21 Federal Court Rules, O 7 r 9, O 8 r 2 Foreign Judgments Act 1991 (Cth) Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK) Australian Competition and Consumer Commission v The Shell Company of Australia (1997) 72 FCR 386 cited Dow Jones & Company Inc v Gutnick (2002) 194 ALR 433 cited Australian Competition and Consumer Commission v Hughes [2002] ATPR 41-863 cited Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 cited Australian Competition and Consumer Commission v The IMB Group Pty Ltd (In Liq) [1999] ATPR 41-688 cited ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 cited National Australia Bank v Dessau [1988] VR 521 cited Helicopter Utilities Pty Ltd v Australian National Airlines Commission (1961) 80 WN(NSW) 48 cited Australian Competition and Consumer Commission v Purple Harmony Plates Pty Ltd (No 3) (2002) 196 ALR 576 cited Re Liddell's Settlement Trusts [1936] Ch 365 cited Castanho v Brown & Root (UK) Ltd [1981] AC 557 cited Hope v Hope (1854) 4 De G M & G 328; 43 ER 534 cited Locabail International Finance Ltd v Agroexport [1986] 1 WLR 657 cited ICF Spry, The Principles of Equitable Remedies (6th ed, 2001) P E Nygh and M Davies, Conflict of Laws in Australia (7th ed, 2002) D Harland "The Consumer in the Globalised Information Society – The Impact of International Organisations" (1999) 7 Comp & Cons LJ 1 D Ali, "Cross Border B2C Disputes" [2002] NZLJ 31 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v CHEN N 1039 OF 2002 SACKVILLE J SYDNEY 27 AUGUST 2003 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1039 OF 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: RICHARD CHEN RESPONDENT JUDGE: SACKVILLE J. DATE OF ORDER: 27 AUGUST 2003 WHERE MADE: SYDNEY THE COURT: DIRECTS the Applicant to bring in short minutes of order consistent with these reasons for judgment within 7 days. 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 1039 OF 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: RICHARD CHEN RESPONDENT JUDGE: SACKVILLE J. DATE: 27 AUGUST 2003 PLACE: SYDNEY REASONS FOR JUDGMENT The Proceedings 1 The applicant, ("ACCC") seeks declaratory and injunctive relief against the respondent in respect of conduct that is said to be misleading and deceptive, in contravention of s 52 and other provisions of the Trade Practices Act 1974 (Cth) ("TP Act"). The proceedings, which were commenced on 3 October 2002, have been undefended. 2 The ACCC complains that the respondent, who is a resident of the United States, has engaged in misleading and deceptive conduct over the Internet, to the detriment of Australian consumers. One question in the proceedings is whether the Court should grant an injunction to restrain the respondent's conduct, having regard to the conceded fact that there is no mechanism available for the registration or enforcement of any such injunction in the courts of the United States, federal or state. 3 The conduct of which the ACCC complains, in substance, is the operation from early 2002 until at least October 2002 of three Internet web sites. According to the ACCC's amended statement of claim, the three Internet web sites (to which I refer collectively as "the Sites") are as follows: * a web site entitled "sydneyopera.org" (the "Imitation Site"), which at the relevant times could be accessed by the domain name "www.sydneyopera.org"; * a web site entitled "Witestar" (the "Witesar Site") which could be accessed by the domain name "www.witestar.com"; * a web site entitled "The World's Box Office" (the "WBO Site"), which could be accessed by the domain names "www.worldsboxoffice.com" and "www.scholarscircle.com". (A domain name is essentially an easy to remember name for a host web server, corresponding to an Internet protocol ("IP") number.) 4 According to the ACCC, the respondent falsely represented that the Sites were affiliated with the Sydney Opera House Trust ("the Trust"), a body constituted under the Sydney Opera House Trust Act 1961 (NSW), and that the sale of tickets to events at the Opera House through the Sites was approved or permitted by the Trust. The Trust is the registrant of five official domain names, namely * www.sydneyoperahouse.com; * www.sydneyoperahouse.net; * www.sydneyoperahouse.com.au; * www.soh.nsw.gov.au; and * www.sydneyoperahouse.nsw.gov.au. Each of these domain names provides access to the Sydney Opera House's official web site. 5 The ACCC, despite extensive investigations, has never succeeded in serving the respondent personally with any documents or, indeed, definitively ascertaining his whereabouts at any particular time. However, the evidence indicates that he is a resident of the United States and that at some time in 2002 he probably resided in an apartment located at 400 West 119th Street, New York City, while more recently he has probably resided in Westmont, Illinois. 6 It also appears from recent inquiries undertaken by the ACCC that, although the Sites continue to exist and to be accessible from Australia, they no longer contain any information or make any representations relating to the Trust or to events at the Sydney Opera House. This seems to have been the case since no later than 25 February 2003. The likelihood is that the change came about, partly at least, because the ACCC vigorously pursued the matter with United States service providers that host the Sites and also with its regulatory counterpart in that country, the Federal Trade Commission ("FTC"). Even so, the respondent appears to retain a link to the WBO Site, since his name is recorded as the "administrative contact" for the internet domain name "worldsboxoffice.com". Although it is not entirely clear, the respondent probably also retains a link to the Witestar Site, as the administrative and technical contact for the domain name "witestar.com". The registration of the domain name "sydneyopera.org", appears to have expired on 17 January 2003. A new registration record was created on 25 February 2003, with a new registrar and registrant. The evidence suggests that the new registrant is not connected to the respondent, although the possibility of a connection cannot be ruled out. 7 The ACCC seeks declarations that the respondent, in connection with the Imitation Site, the Witestar Site and the WBO Site * engaged in conduct that was misleading or deceptive or was likely to mislead or deceive, in contravention of s 52 of the TP Act; * made false or misleading representations in contravention of s 53(c) and (d) of the TP Act; and * engaged in conduct that was liable to mislead the public in relation to services in contravention of s 55A of the TP Act. 8 The ACCC also seeks injunctions pursuant to s 80 of the TP Act * requiring the respondent to take all steps to remove and prevent access to the Sites by persons or computers within Australia (whether or not that requires the entire removal of the Sites); * restraining the respondent from publishing, operating or maintaining the Sites or any similar Internet web site in circumstances where the sites are accessible by persons or computers within Australia; and * restraining the respondent from publishing, operating or maintaining the Sites or any similar Internet web site so as to engage in misleading or deceptive conduct in contravention of the TP Act. 9 The application further seeks an order pursuant to s 80 of the TP Act requiring the respondent to provide details of all persons within Australia who have purchased tickets through the WBO Site since January 2002 and to refund all payments made to the purchasers. However, Mr McClintock addressed no argument specifically to this proposed order and I did not understand him to press for this form of relief. 10 On 8 October 2002, Conti J made an order pursuant to Federal Court Rules ("FCR") O 8 r 2 that the ACCC be granted leave to serve the originating process outside the Commonwealth on terms and conditions that the ACCC employ private agents in the United States to effect personal service. (FCR, O 8 r 2(2) provides that the Court may grant leave to serve process outside the jurisdiction if certain conditions are satisfied.) His Honour made orders requiring the respondent to take all steps to remove the Sites from the World Wide Web so that they cease to be and until further order remain inaccessible to persons or computers within Australia. His Honour also restrained the respondent, until further order, from publishing, operating or maintaining the Sites in circumstances where they are accessible to persons or computers within Australia. 11 The ACCC was unable to serve the originating process on the respondent personally. 12 On 8 November 2002, on the application of the ACCC, I made an order pursuant to FCR, O 7 r 9(1), for substituted service of the initiating process on the respondent. I did so on the basis that the ACCC had shown that it was "impracticable to serve [the process] in the manner set out in the Rules". The orders required a variety of steps to be taken, both in relation to hard copies and electronic versions of the originating process, in order to bring the proceedings to the respondent's attention. The ACCC duly complied with those orders. 13 As I have noted, the respondent has played no part in the proceedings. Nonetheless, I am prepared to infer from the evidence relating to the respondent's involvement in the Sites and the many steps taken, particularly by electronic means, to bring the proceedings to his attention that he has been made aware of these proceedings and of the relief sought against him in this Court. The Legislation 14 Section 52(1) of the TP Act provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 53 of the TP Act provides that a corporation shall not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods and services: "(c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have; (d) represent that the corporation has a sponsorship, approval or affiliation it does not have". Section 55A of the TP Act prohibits a corporation, in trade or commerce, engaging in conduct "that is liable to mislead the public as to the nature, the characteristics, the suitability for their purpose or the quantity of any services". 15 Section 51A(1) of the TP Act applies where a corporation makes a representation with respect to a future matter. If it does not have reasonable grounds for making the representation, the representation is taken to be misleading. In relation to a representation as to a future matter, the corporation, unless it adduces evidence to the contrary, shall be deemed not to have reasonable grounds for making the representation: TP Act, s 51A(2). 16 Section 6 of the TP Act, among other things, gives Part V of the TP Act (which includes ss 51A, 52, 53 and 55A) an extended operation. By s 6(2), Part V has the effect it would have if any references to trade or commerce were confined to trade or commerce "between Australia and places outside Australia" and a reference to a corporation included a reference to a person not being a corporation: see s 6(2)(a)(i), (h). By s 6(3), provisions of Part V also have the effect they would have if "(a) those provisions…were…confined in their operation to engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services…; and (b) a reference in those provisions to a corporation included a reference to a person not being a corporation". 17 Section 80(1) of the TP Act empowers the Court, on the application of the ACCC (or any other person, if satisfied that a person has engaged, or is proposing to engage in conduct that constitutes or would constitute a contravention of a provision of Part V, to grant an injunction on such terms as the Court determines to be appropriate. Section 80(4) provides as follows: "The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised: (a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; (b) whether or not the person has previously engaged in conduct of that kind; and (c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind." Section 80(5) contains similar provisions concerning the Court's power to grant mandatory injunctions. 18 Section 80(6) of the TP Act dispenses with the usual requirement of an undertaking as to damages as a condition of granting an interlocutory injunction, where the applicant is the ACCC or the Minister. 19 Section 87(1A)(b) of the TP Act states that, without limiting the generality of s 80, the Court may, on the application of the ACCC, on behalf of persons who have suffered loss or damage by the conduct of another person in contravention of Part V, make orders designed to compensate the persons for the loss or damage. An application by the ACCC under s 87(1A)(b) can be made, however, only if the persons who have suffered loss or damage consent in advance to the application: s 87(1B). The ACCC has not sought relief in these proceedings under s 87(1A)(b), although it might be able to do so in the future: cf Australian Competition and Consumer Commission v The Shell Company of Australia Ltd (1997) 72 FCR 386, at 391, per Drummond J. Findings 20 Senior counsel for the ACCC, Mr McClintock SC, who appeared with Mr Tonking, read no fewer than fifteen affidavits in support of the ACCC's case. Despite this volume of material, none of the affidavits was specifically devoted to the workings of the Internet and the World Wide Web. However, there is sufficient in the evidence, especially that of Mr Sefton, a solicitor who has expertise in computer science, to draw inferences as to how the Internet operates. 21 In this respect, it is convenient to adopt the helpful summary in the joint judgment of Gleeson CJ, McHugh, Gummow and Hayne JJ, in Dow Jones & Company Inc v Gutnick (2002) 194 ALR 433, at 437-438, [14]-[16], which is consistent with Mr Sefton's evidence: "One witness … described the Internet as 'a telecommunications network that links other telecommunication networks'. In his opinion, it is unlike any technology that has preceded it. The key differences identified … included that the Internet 'enables inter-communication using multiple data-formats … among an unprecedented number of people using an unprecedented number of devices [and] among people and devices without geographic limitation'. The World Wide Web is but one particular service available over the Internet. It enables a document to be stored in such a way on one computer connected to the Internet that a person using another computer connected to the Internet can request and receive a copy of the document. … The terms conventionally used to refer to the materials that are transmitted in this way are a 'document' or a 'web page' and a collection of web pages is usually referred to as a 'web site'. A computer that makes documents available runs software that is referred to as a 'web server'; a computer that requests and receives documents runs software that is referred to as a 'web browser'. The originator of a document wishing to make it available on the World Wide Web arranges for it to be placed in a storage area managed by a web server. This process is conventionally referred to as 'uploading'. A person wishing to have access to that document must issue a request to the relevant server nominating the location of the web page identified by its 'uniform resource locator (URL)'. When the server delivers the document in response to the request the process is conventionally referred to as 'downloading'." 22 It is not necessary to examine the voluminous and sometimes repetitive evidence in detail. It is sufficient for present purposes to record the significant findings justified by the evidence. 23 From at least January 2002 until October 2002, a person in Australia (or elsewhere) who typed into his or her computer the address "www.sydneyopera.org" would reach the Imitation Site. Search engines would also direct persons seeking information on the Sydney Opera House to the Imitation Site. When downloaded onto the person's screen, the front page in this Site appeared to be identical to the front page of the official Sydney Opera House site. The remaining web pages on the Imitation Site were, however, completely different from those on the official site. 24 The Imitation Site contained a separate "pop-up window" displaying the contents of the Witestar Site. This, in turn, contained a link to the WBO Site. The WBO Site advised a person gaining access to it that he or she could purchase tickets, by use of a credit card, for performances at any of a number of opera houses, including the Sydney Opera House. A person accessing the Imitation Site could also reach the WBO Site by clicking on the "Box Office" link of the Imitation Site. The WBO Site displayed the contents of a different web site, located at domain name "site.netopia.com/scholarscircle" by a process known as "framing". (Framing allows a web page to display the contents of another web page, usually without this fact being apparent to the Internet user.) 25 Each of the four domain names which provided access to the Sites during the relevant period can be linked in various ways to the respondent. I am prepared to infer that the respondent caused all four domain names to be registered with a United States Internet domain name registrar, NameSecure Inc. I am also prepared to infer that the respondent was responsible for operating and maintaining each of the Sites during the relevant period in 2002, although it is quite possible that other persons were also involved. 26 As Mr McClintock accepted, the evidence suggests that the web servers on which the Sites were stored were located in the United States, probably in New York and Illinois. A person in Australia who wished to gain access to one of the Sites (or who was directed to one of the Sites by a search engine) would issue a request to the host server by nominating the location of the relevant Site or web page. The server would then deliver the document in response to the request (the process known as downloading). 27 The Trust has never authorised the operators of the Sites to reproduce any part of its official web site. Nor has it approved or endorsed those Sites or the material contained on them. In short, there was no connection between the Sites and the Trust or the official Sydney Opera House site during the relevant period. 28 There is evidence that during 2002 a number of persons used their credit cards to purchase tickets for Sydney Opera House events by transactions effected through the Imitation and WBO Sites. Typically, the consumer was initially directed to the Imitation Site through a search engine. The consumer believed that he or she was dealing with the official Sydney Opera House site. The prices charged for tickets to performances were about double the prices charged through the official site. In most cases referred to in the evidence, the consumer subsequently found that no bookings had been made for the performance. It would seem that most, if not all, of those consumers whose complaints were subsequently investigated by the ACCC ultimately received refunds from their credit card providers. Of course, this does not necessarily mean that all consumers who were misled into purchasing tickets have received refunds. 29 The consumers who made complaints to the Sydney Opera House or the ACCC mostly seem to have booked and paid for tickets by accessing the WBO Site from outside Australia (that is, they made the bookings in anticipation of visiting Australia). In at least one case, however, a complainant booked tickets in Australia by processing the transaction through the WBO Site. Moreover, the evidence shows that ACCC investigators made "bookings" for Sydney Opera House events by accessing the Imitation and WBO Sites in Australia. I am prepared to infer that some Australian consumers have been misled in much the same way as consumers from other countries. If consumers actually received tickets to Sydney Opera House events after making reservations through the WBO Site, they would have paid considerably more for the tickets than if they had acquired them through the official web site for the Sydney Opera House. 30 I am satisfied, on the balance of probabilities, that the respondent, by operating and maintaining the Sites, made the representations alleged by the ACCC. That is, the respondent represented that (a) the Imitation Site was the Sydney Opera House official site; (b) the Imitation Site or its operators were affiliated or associated with the Sydney Opera House or the Trust; (c) the Imitation Site or its operators were sponsored or approved by the Trust; (d) the WBO Site was part of or connected with the Sydney Opera House official site; (e) the WBO Site or its operator were affiliated or associated with the Sydney Opera House official site or the Trust; (f) the WBO Site or its operator were sponsored or approved by the Trust; (g) the sale of tickets to Sydney Opera House events through the WBO Site was approved by or permitted by the Trust; (h) the operator of the WBO Site would supply tickets to Sydney Opera House events purchased through the WBO Site; (i) persons would receive tickets to Sydney Opera House events purchased through the WBO Site; (j) the Witestar Site was part of or connected to the Sydney Opera House official site; (k) the Witestar Site or its operator was affiliated or associated with the Sydney Opera House or the Trust; and (l) the Witestar Site or its operator were sponsored or approved by the Trust. 31 I accept the ACCC's submission that representations (h) and (i) were representations as to future matters within s 51A of the TP Act and that the respondent had no reasonable grounds for making those representations. I also accept the ACCC's submission that, having regard to the evidence to which I have referred, the other representations were misleading and deceptive, insofar as they were made to members of the public in Australia. 32 The ACCC identified the "services" for the purposes of the application of ss 53(c) and 55A of the TP Act as the offer made by the respondent on the WBO Site to provide booking facilities for events at the Sydney Opera House. Although the respondent is not a corporation, the TP Act applies to his activities, at least insofar as they affect consumers in Australia. This is so because he has engaged in conduct over the Internet which has involved the use of telephonic services (s 6(3)) or, alternatively, which has taken place in trade or commerce between Australia and the United States (s 6(2)): see Australian Competition and Consumer Commission v Hughes [2002] ATPR 41-863, at 44,792 per Allsop J. Accordingly, in my view, the ACCC has established that the respondent contravened ss 52, 53(c) and 55A of the TP Act by reason of his activities in relation to the Sites between January and October 2002. Mr McClintock did not explain how the respondent's activities constituted a contravention of s 53(d) of the TP Act and I am not inclined to think that they did. That conclusion, however, makes no substantial difference to the outcome of the proceedings. relief the accc's submissions 33 Mr McClintock acknowledged that the respondent is resident in the United States and that he has no known connection with Australia, other than through the Sites. Mr McClintock also acknowledged that there is no mechanism for the registration or enforcement in the United States of an injunction granted against a United States resident by an Australian court under the TP Act. He accepted that the strong likelihood is that no injunction could be enforced against the respondent through the United States courts if he chose simply to ignore the orders. Mr McClintock also accepted that this Court should take into account, in determining what relief is appropriate, the fact that the Sites have ceased to refer to the Sydney Opera House and no longer purport to offer a facility for purchasing tickets to events at the Opera House. 34 Nonetheless, Mr McClintock submitted that in the circumstances of the case it is appropriate to grant both declaratory and injunctive relief. He pointed to evidence showing the prevalence of cross-border consumer fraud or deception and the need to protect the public from exploitation. He contended that there is a utility in making declarations or orders which mark the Court's disapproval of the conduct and vindicate the public interest in taking all available measures to curtail misleading or deceptive conduct. He also relied on evidence suggesting that regulatory authorities in the United States, particularly the FTC, are more likely to co-operate in protecting Australian consumers from cross-border fraud if an Australian court has made formal orders restraining the offending conduct or requiring remedial action. the principles Declaratory Relief 35 Section 21(1) of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act") confers power on the Court in any matter in which it has original jurisdiction to make binding declarations of right, whether or not consequential relief is claimed. In Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89, the Full Court held that the Court has power under s 21 of the Federal Court Act to make a declaration of right in proceedings for injunctive relief bought under s 80 of the TP Act, regardless of whether injunctive relief is granted. The declaration, if made, is a declaration of right because the right declared is a public right, namely the right of the public not to be misled or deceived by misrepresentations: at 98, per Sheppard J; at 110, per Hill J. Sheppard J specifically recognised (at 100) that the policy of the TP Act, concerned as it is with the public interest, warrants the Court, in an appropriate case, exercising its power to grant declaratory relief to mark its disapproval of particular conduct contravening the TP Act. 36 Hill J in the same case rejected an argument that a declaration should not be made to the effect that the publication of an advertisement relating to passive smoking contravened s 52 of the TP Act because to do so would be futile. His Honour considered (at 107) that it was in the public interest that the Court indicate the result of the case by making an order binding on the parties: see, too, at 106, per Foster J; Australian Competition and Consumer Commission v The IMB Group Pty Ltd (In Liq) [1999] ATPR 41-688, at 42,803-42,804, per Drummond J. On this reasoning, it is open in the present case to grant an appropriately framed declaration to mark disapproval of the respondent's conduct whether or not injunctive relief is granted to restrain repetition of that conduct. Injunctive Relief 37 The ACCC relies on s 80 of the TP Act as the source of power to grant injunctive relief in the present case. The section has been described as "essentially a public interest provision", a proposition said to be exemplified by the sort of conduct in relation to which the Court may exercise its powers and the fact that s 80(1) grants the ACCC or "any other person" right to apply for an injunction: ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 ("ICI v TPC"), at 255 per Lockhart J (with whom French J agreed). 38 As Gummow J pointed out in ICI v TPC, at 266-267, there are distinctions between the remedy provided for in s 80 of the TP Act and the traditional injunction granted by courts of equity in aid of legal or statutory rights. The differences include the broadening of locus standi by s 80(1); the categories of conduct which may be enjoined by an injunction granted under s 80; the authority granted to the Court by s 80(3) to rescind or vary not only an interim injunction, but a final injunction; the removal by s 80(6) of the usual requirement for an undertaking as to damages where the ACCC or the Minister is an applicant for an interlocutory injunction; and the terms of s 80(4) and (5), which permit the Court to grant prohibitory and mandatory injunctions, whether or not there is any threat of a further infraction of the law or any imminent danger of substantial damage by the respondent's act or omission. 39 As to the last of these, Lockhart J in ICI v TPC observed (at 256) that s 80(4) and (5) are designed to ensure that once the condition precedent to the exercise of the discretion to grant injunctive relief has been satisfied, the Court should be "given the widest possible injunctive powers, devoid of traditional constraints, though the power must be exercised judicially and sensibly". Nonetheless, his Honour considered that the likelihood of future contraventions by the respondent is a factor relevant to the exercise of the statutory discretion. Gummow J also thought that the matters referred to in s 80(4) and (5) are relevant to the exercise of the Court's discretion. However, his Honour perhaps went a little further, expressing agreement (at 266) with the view of J D Heydon, Trade Practices Law, par 18.740, that "whilst in concept the statutory remedy provided for in s 80 of the Act is different from the equitable remedy of injunction as administered in the inherent jurisdiction of courts of equity, nevertheless 'in many practical respects, it is not…fundamentally distinct from the equitable remedy'". 40 Mr McClintock submitted that the Court has power under s 80 of the TP Act to grant an injunction requiring a person to do or refrain from doing something outside Australia. He supported that contention by reference to the well established proposition that, apart from a few exceptional cases such as those relating to title to foreign land: "a court of equity will not consider itself to be debarred from interceding, if it is otherwise appropriate to do so, merely because it appears that the property to which the claims of the plaintiff relate is situate abroad or that the acts he seeks to have performed or enjoined, as the case may be, will, if they take place at all, take place outside the jurisdiction": I C F Spry, The Principles of Equitable Remedies (6th ed, 2001), at 36. As was said by Brooking J in National Australia Bank Ltd v Dessau [1988] VR 521, at 522, the "jurisdiction is grounded not on any pretension to the exercise of judicial power abroad but on the circumstance that the defendant, being amenable to the Court's jurisdiction, can be personally directed to act or not to act". See, too, Helicopter Utilities Pty Ltd v Australian National Airlines Commission (1961) 80 WN (NSW) 48, at 51, per Jacobs J. 41 The issue, however, is not the scope of the jurisdiction of a court of equity acting in personam, but the extent of the power conferred on the Court by s 80 of the TP Act. The language of s 80(1) is broad: once the Court is satisfied that one of the preconditions has been met, it "may grant an injunction in such terms as the Court determines to be appropriate". There is nothing in this language that imposes an implied territorial limitation on the power of the Court. On the contrary, not only is the language of s 80(1) broad enough to permit the Court to prohibit or mandate acts abroad, but there is good reason to interpret it in this way. 42 Section 6(2) of the TP Act extends the application of Part V (and other provisions) to conduct in trade or commerce between Australia and places outside Australia. In enacting this provision, Parliament has relied on the trade and commerce power conferred by s 51(i) of the Constitution. The extended application of the TP Act has the effect that a person outside Australia (but subject to the jurisdiction of the Court under provisions such as FCR, O 8 r 2) might well contravene provisions of the Act and thereby enliven the power conferred on the Court by s 80(1). In these circumstances, in my opinion, s 80 should be read as contemplating that an injunction may be granted prohibiting or requiring the performance of acts outside Australia. I should add that the Court may have a similar power pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth), but it is not necessary to pursue that possibility in the present case: cf Australian Competition and Consumer Commission v Purple Harmony Plates Pty Ltd (No 3) (2002) 196 ALR 576, at 589 [42]-[44], per Goldberg J. 43 Of course, the fact that the respondent is outside Australia and, for that reason, any order might be difficult or impossible to enforce, may be a relevant consideration in determining whether a Court should grant injunctive relief. In this respect, courts of equity have expressed divergent views: see NAB v Dessau, at 523, per Brooking J; Spry, supra, at 41-42. Some courts have taken the robust approach that "[i]t is not the habit of this Court in considering whether or not it will make an order to contemplate the possibility that it will not be obeyed." In re Liddell's Settlement Trusts [1936] Ch 365, at 374, per Romer LJ, cited with approval by Lord Scarman (with whom Lords Wilberforce, Diplock, Keith and Bridge agreed) in Castanho v Brown & Root (UK) Ltd [1981] AC 557, at 574. Other authorities suggest that a court should not put itself in the position of making an order that it cannot enforce: Hope v Hope (1854) 4 De G M & G 328, at 347-348; 43 ER 534, at 542, per Cranworth LC; Locabail International Finance Ltd v Agroexport [1986] 1 WLR 657, at 665, per Mustill LJ (a case in which a mandatory interlocutory injunction was sought). 44 I think that Dr Spry is correct to suggest (at 42) that the preferable position, as a matter of principle, is that "the precise probability that the particular order in question will be obeyed has more or less weight according to the other circumstances and is taken by the court into account in exercising its discretion, together with such other matters as the degree of injury or inconvenience that will be suffered by the plaintiff if he does not obtain relief." 45 It seems to me that this approach is also appropriate in determining whether or not to grant an injunction pursuant to s 80 of the TP Act. The fact that an order is likely to prove difficult or even impossible to enforce is not necessarily a bar to the grant of relief, although it is a material consideration to be weighed against other circumstances relevant to the exercise of the Court's discretion. should a declaration be granted? 46 The declaration sought by the ACCC is in the following terms: "that the respondent, in connection with the Imitation Site, the Witestar Site and the WBO Site (as those terms are defined in the accompanying Statement of Claim): (a) engaged in conduct that was misleading or deceptive or was likely to mislead or deceive in contravention of section 52 of the Trade Practices Act 1974 (Cth); (b) made false or misleading representations in contravention of sections 53(c) and 53(d) of the Trade Practices Act 1974 (Cth); (c) engaged in conduct that was liable to mislead the public in relation to services in contravention of section 55A of the Trade Practices Act 1974 (Cth)." In my opinion, it is appropriate to make a declaration in these terms, subject to the qualification that, as I have previously indicated, the reference to s 53(d) of the TP Act should be omitted. 47 I have taken into account the fact that the Sites no longer contain information relating to the Sydney Opera House and no longer purport to provide a facility for booking tickets at the venue. I have also taken into account that the current registrant of the domain name "sydneyopera.org" appears to have no connection with the respondent. However, I do not infer from these facts that there is no threat that the respondent will not resume his pattern of blatantly misleading and deceptive conduct in relation to the Sydney Opera House. The respondent has not appeared in the Court to explain what has happened in relation to the Sites and, of course, no undertakings have been given to refrain from misleading conduct in the future, either to this Court or to the United States authorities. The respondent appears still to be associated with at least two of the Sites and, given the pattern of misleading and deceptive conduct revealed in the evidence, there can be no assurance that the respondent will not use the Sites or create other web sites to convey misleading information to Australian consumers (and consumers elsewhere) about the availability and sale of tickets to Sydney Opera House events. 48 As the Full Court recognised in Tobacco Institute v AFCO, the public interest in protecting Australian consumers from misleading conduct often warrants the making of a declaration. A declaration also marks the Court's disapproval of the respondent's conduct and, if appropriate, can be used to inform consumers of the dangers posed by the respondent's operation of the Sites. I think that these considerations justify making a declaration in the present case in the terms to which I have referred. should an injunction be granted? 49 The question of injunctive relief is more difficult. I have explained the obstacles in the path of enforcing in the United States any injunction granted by the Court. In general, a court will be loath to make orders affecting conduct outside Australia in circumstances where direct enforcement of those orders is difficult or impossible. It is also true that the offending conduct has ceased and that the respondent no longer appears to be associated with the domain name "sydneyopera.org". These are powerful considerations militating against the grant of an injunction. 50 I have, however, formed the view that, in the special circumstances of the present case, it is appropriate to grant an injunction, although I think any injunction should be framed more narrowly than the ACCC proposes. There are three factors which suggest to me that an injunction should be granted notwithstanding cogent considerations pointing to a different conclusion. 51 First, for the reasons I have given, this is not a case where it can be definitively concluded that the respondent does not intend to resume misleading and deceptive conduct aimed (among others) at Australian consumers. There is a risk that the respondent may resume the misleading and deceptive conduct that has characterised his operations in the past, although I cannot say that it is probable that he will. 52 Secondly, the ACCC adduced evidence showing that cross-border fraud and misleading conduct, particularly through the Internet, is a growing problem for the international community. The problem has prompted consumer protection and law enforcement agencies from many countries, as well as international agencies, to establish mechanisms for international co-operation to protect consumers. For example: * On 11 June 2003, the Council of the Organisation for Economic Cooperation and Development ("OECD") adopted Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices Across Borders that had been developed by the OECD's Committee on Consumer Policy. * The ACCC, the FTC and agencies from thirty other countries are parties to the Memorandum on the Establishment and Operation of the International Consumer Protection and Enforcement Network ("ICPEN Memorandum"). The main "common objective" of ICPEN is "to encourage practical action to prevent cross-border marketing malpractice" and its long term goals include taking action to combat cross-border breaches of consumer protection laws and to facilitate effective cross-border remedies. * In July 2000, the ACCC and the FTC entered into an Agreement on the Mutual Enforcement Assistance in Consumer Protection ("Co-operation Agreement"). The Co-operation Agreement recognises "the challenge posed by cross-border Internet fraud and deception" and records that "the Parties intend to assist one another and to cooperate on a reciprocal basis in providing or obtaining Evidence that could assist in determining whether a person has violated or is about to violate their respective Consumer Protection Laws, or in facilitating the administration or enforcement of such Consumer Protection Laws." The assistance contemplated by the Co-operative Agreement includes, in appropriate cases, "co-ordinating enforcement against transborder violations of the Parties' respective Consumer Protection Laws". 53 This evidence suggests that the Court should take into account, in determining what relief should be granted in respect of cross-border misleading conduct, the growing scale of the problem, particularly over the Internet, and the desirability of fashioning remedies that can reasonably be expected to discourage, if not entirely prevent such activities. 54 Thirdly, evidence was given by Mr Sitesh Bhojani, a member of the ACCC and Chair of its Enforcement Committee, that the ACCC would bring any orders made in these proceedings to the attention of the FTC and request its assistance in relation thereto pursuant to the Co-operation Agreement and in accordance with the ICPEN Memorandum. As I pointed out in argument, Mr Bhojani's affidavit might have been more specific in detailing the assistance that would be sought from the FTC and the terms on which it is likely to be provided. Nonetheless, I am prepared to infer that the FTC is more likely to institute action against the respondent to curtail misleading or deceptive conduct in the United States which affects Australian consumers (should such conduct be repeated) if an Australian court grants injunctive relief than if it does not. 55 The extra-territorial enforcement of federal orders is ordinarily a matter for the domestic law of the country in which the orders are sought to be enforced. At common law, four conditions must be satisfied if a foreign judgment is to be recognised by an Australian court (P E Nygh and M Davies, Conflict of Laws in Australia (7th ed, 2002), at 169): "(a) the foreign court must have exercised a jurisdiction which Australian courts will recognise; (b) the foreign judgment must be final and conclusive; (c) there must be an identity of parties; and (d) if based on a judgment in personam, the judgment must be for a fixed debt." (As to defences to enforcement, see P E Nygh and M Davies, at 188ff.) 56 The Foreign Judgments Act 1991 (Cth) now provides a mechanism for the registration and enforcement of overseas judgments, on the basis of "substantial reciprocity of treatment" (s 5(1)). The legislation follows the patterns of the Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK) and similar State and Territory legislation. To date the legislative scheme applies only to an "enforceable money judgment", although there is provision for the scheme to be extended by regulation to non-money judgments of a reciprocating country: s 5(6). 57 If the Australian rules governing the enforcement of foreign judgments are similar to those in force in other countries, there will rarely be a direct mechanism available for the extra-territorial enforcement of an injunction granted by an Australian court. This might suggest that an order requiring or prohibiting conduct in a foreign country can be seen as an act of futility. But the emergence of international co-operation to curb fraudulent or misleading trans-national conduct gives rise to alternative possibilities. In assessing whether the grant of injunction is futile, it seems to me to be appropriate to take into account not only formal enforcement mechanisms, but the likely response of administrative agencies in the foreign country. If, for example, an agency such as the FTC in the United States is likely to initiate measures designed to curb misleading and deceptive conduct affecting Australian consumers because that conduct is the subject of a prohibitory injunction issued by an Australian court, I would not characterise the grant of such relief as an act of futility, notwithstanding that the injunction itself cannot be directly enforced through the courts of the United States. 58 In the present case, an injunction granted by this Court restraining the respondent from resuming his misleading and deceptive conduct is likely to improve materially the chances of the ACCC obtaining the support of the FTC to take measures under the law of the United States to curb that conduct (should it recur). As I have said, I do not think it likely that the respondent will resume his activities to the detriment of Australian consumers, but there is a risk that he may do so. If he does, Australian consumers are likely to be adversely affected. In these circumstances, in my opinion, the making of an appropriately framed injunction against the respondent cannot be characterised as futile. 59 For the reasons I have given, an injunction should be granted against the respondent, but in more limited terms than the relief sought by the ACCC. The application seeks orders, in effect, requiring the respondent to prevent access to the Sites by persons or computers within Australia, even if that requires removal of the Sites. But there is no evidence that the material on the Sites, other than that material relating to the Sydney Opera House, was or is misleading or deceptive. Nor does the evidence allow me to infer that the FTC would be prepared to take action to close down the Sites, as distinct from responding favourably to a request to take measures under United States law to prevent the respondent publishing misleading or deceptive material relating to the Sydney Opera House. 60 Accordingly, I think that any injunction should be limited to restraining the respondent (by himself, his servants or agents) from publishing on the Sites, or any similar Internet Site accessible in Australia, information or material relating to the Sydney Opera House, or events at the Sydney Opera House, that is misleading or deceptive or is likely to mislead or deceive consumers in Australia. I shall direct the ACCC to bring in short minutes of order to that effect. 61 I add this comment. While domestic courts can, to a limited extent, adapt their procedures and remedies to meet the challenges posed by cross-border transactions in the Internet age, an effective response requires international co-operation of a high order. As the evidence in this case shows, some steps have been taken to secure that co-operation: see, too, D Harland "The Consumer in the Globalised Information Society – The Impact of International Organisations" (1999) 7 Comp & Cons LJ 1; D Ali, "Cross Border B2C Disputes" [2002] NZLJ 31 ("B2C" refers to "transnational business to consumer"). Clearly enough, much more needs to be done if Australian consumers are to be adequately protected against fraud or misleading conduct perpetrated over the Internet. CONCLUSION 62 The ACCC has made out its claim to declaratory and injunctive relief by reason of the respondent's contraventions of the TP Act, although the form of the injunction I propose to grant is narrower than that sought by the ACCC. I shall direct the ACCC to bring in short minutes of order consistent with these reasons. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. Associate: Dated: 27 August 2003 Counsel for the Applicant: Mr I McClintock SC with Mr A Tonking Solicitor for the Applicant: Corrs Chambers Westgarth Date of Hearing: 18 August 2003 Date of Judgment: 27 August 2003	10,733
federal_court_of_australia:fca/full/2024/2024fcafc0080	decision	commonwealth	federal_court_of_australia	text/html	2024-06-14 00:00:00	Commissioner of Taxation v Michael John Hayes Trading Pty Ltd as trustee of the MJH Trading Trust [2024] FCAFC 80	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2024/2024fcafc0080	2024-09-13T22:49:44.798626+10:00	Federal Court of Australia Commissioner of Taxation v Michael John Hayes Trading Pty Ltd as trustee of the MJH Trading Trust [2024] FCAFC 80 Review of: Michael Johns Hayes Trading Pty Ltd as trustee of the MJH Trading Trust and Commissioner of Taxation [2023] AATA 3005 File number: QUD 449 of 2023 Judgment of: BROMWICH, THAWLEY AND HESPE JJ Date of judgment: 14 June 2024 Catchwords: TAXATION – whether Administrative Appeals Tribunal erred in its construction of s 207-155 of the Income Tax Assessment Act 1997 (Cth) – alleged dividend stripping operation – Tribunal erred in its construction of s 207-155 – matter remitted to the Tribunal for redetermination according to law Legislation: Administrative Appeals Tribunal Act 1975 (Cth) s 44 Income Tax Assessment Act 1936 (Cth) Divs 6C, 7A, s 177E Income Tax Assessment Act 1997 (Cth) Div 207-F, ss 207-20, 207-145, 207-155 Cases cited: Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; 186 CLR 389 Commissioner of Taxation v Consolidated Press Holdings Ltd (No 1) [1999] FCA 1199; 91 FCR 524 Commissioner of Taxation v Consolidated Press Holdings Ltd [2001] HCA 32; 207 CLR 235 Commissioner of Taxation v Ellers Motor Sales Pty Ltd [1972] HCA 17; 128 CLR 602 Commissioner of Taxation v Patcorp Investments Limited [1976] HCA 67; 140 CLR 247 CPH Property Pty Ltd v Commissioner of Taxation [1998] FCA 1276; 88 FCR 21 Michael John Hayes Trading Pty Ltd as trustee of the MJH Trading Trust and Commissioner of Taxation (Taxation) [2023] AATA 3005 Division: General Division Registry: Queensland National Practice Area: Taxation Number of paragraphs: 61 Date of hearing: 22 May 2024 Counsel for the Applicant: Ms A Wheatley KC and Mr B McEniery Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondents: Mr M T Flynn KC and Mr P G Bickford Solicitor for the Respondents: Wilson Lawyers ORDERS QUD 449 of 2023 BETWEEN: COMMISSIONER OF TAXATION Applicant AND: MICHAEL JOHN HAYES TRADING PTY LTD as trustee of the MJH TRADING TRUST First Respondent JOHN HAYES TRADING PTY LTD as trustee of the JPH TRADING TRUST Second Respondent BRYAN HAYES TRADING PTY LTD as trustee of the BGH TRADING TRUST Third Respondent PAUL HAYES TRADING PTY LTD as trustee of the PAH TRADING TRUST Fourth Respondent order made by: BROMWICH, THAWLEY AND HESPE JJ DATE OF ORDER: 14 June 2024 THE COURT ORDERS THAT: 1. The application be allowed. 2. The respondents' notice of contention dated 9 November 2023 be dismissed. 3. The decision of the Administrative Appeals Tribunal be set aside. 4. The proceeding be remitted to the Tribunal for redetermination according to law. 5. Unless either party applies within 7 days, 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 THE COURT: 1 This is an "appeal" brought in this Court's original jurisdiction by the Commissioner of Taxation under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), from a decision of the Administrative Appeals Tribunal made on 20 September 2023: Michael John Hayes Trading Pty Ltd as trustee of the MJH Trading Trust and Commissioner of Taxation (Taxation) [2023] AATA 3005. The Tribunal decided to set aside the Commissioner's objection decisions by which the Commissioner had disallowed objections made by the respondents to amended assessments which had been issued to them. STATUTORY CONTEXT – DIVIDEND STRIPPING 2 The question of law is whether the Tribunal erred in its construction of s 207-155 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997). Section 207-155 provides: 207-155 When is a distribution made as part of a dividend stripping operation? A distribution made to a * member of a * corporate tax entity is taken to be made as part of a dividend stripping operation if, and only if, the making of the distribution arose out of, or was made in the course of, a * scheme that: (a) was by way of, or in the nature of, dividend stripping; or (b) had substantially the effect of a scheme by way of, or in the nature of, dividend stripping. 3 The composite phrase "dividend stripping" is not defined. It is used in a particular statutory context relating to the denial of imputation benefits where a distribution has been made as part of a "dividend stripping operation". The consequence of a distribution being made as part of a dividend stripping operation includes that the amount of the franking credit on the distribution is not included in the assessable income of the dividend recipient and the dividend recipient is not entitled to tax offsets: s 207-145(1)(d), (e) and (f) of the ITAA 1997. The correct construction of s 207-155(a), including the meaning of the phrase "dividend stripping", raises a question of law: Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; 186 CLR 389 at 397. 4 The concept of dividend stripping was discussed by the Full Court in Commissioner of Taxation v Consolidated Press Holdings Ltd (No 1) [1999] FCA 1199; 91 FCR 524 (French, Sackville and Sundberg JJ) (CPH FFC) in the context of s 177E of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936). 5 These reasons also refer to the primary judgment by Hill J and the High Court judgment in the Consolidated Press Holdings taxation litigation (CPH): CPH Property Pty Ltd v Commissioner of Taxation [1998] FCA 1276; 88 FCR 21 (CPH PJ) and Commissioner of Taxation v Consolidated Press Holdings Ltd [2001] HCA 32; 207 CLR 235 (CPH HC). 6 In CPH FFC, the Full Court observed that a scheme may be "by way of or in the nature of dividend stripping" even though not all the elements of a "standard" dividend stripping scheme are present or the scheme varies from the paradigm dividend strip, provided that the scheme retained the central characteristics of a dividend stripping scheme (at [156]). The Full Court had earlier identified those central characteristics by reference to the four dividend stripping cases referred to by Gibbs J in Commissioner of Taxation v Patcorp Investments Limited [1976] HCA 67; 140 CLR 247. Their Honours identified those cases as having the following five characteristics in common (at [136]): • a target company, which had substantial undistributed profits creating a potential tax liability either for the company or its shareholders; • the sale or allotment of shares in the target company to another party…; • the payment of a dividend to the purchaser or allottee of the shares out of the target company's profits; • the purchaser escaping Australian income tax on the dividend so declared…; and • the vendor shareholders receiving a capital sum for their shares in an amount the same as or very close to the dividends paid to the purchasers (there being no capital gains tax at the relevant times). 7 At [137], the Full Court identified a sixth characteristic, stating of each of the schemes that: …they were carefully planned, with all the parties acting in concert, for the predominant if not the sole purpose of the vendor shareholders, in particular, avoiding tax on a distribution of dividends by the target company. 8 As to the last characteristic – the predominant purpose of avoiding tax on a distribution of dividends by the target company – the Full Court stated at [174]: In our view, the first limb of s 177E(1) embraces only a scheme which can be said objectively to have the dominant (although not necessarily the exclusive) purpose of avoiding tax. The requirement of a tax avoidance purpose flows from the use by Parliament of the undefined expression "a scheme by way of or in the nature of dividend stripping". What is important is the nature of the scheme, not the subjective motives or intentions of any of the participants or the beneficiaries. The purpose of the scheme is to be assessed from the perspective of the reasonable observer, having regard to the characteristics of the scheme and the objective circumstances in which the scheme was designed and operated. THE TRIBUNAL'S DECISION 9 The Tribunal's decision concerned four schemes which the Commissioner considered to be dividend stripping operations within the meaning of Div 207-F of the ITAA 1997. The applicants (the respondents on this appeal) were four corporate trustees of public trading trusts (the Trading Trusts), each controlled by one of four brothers, and each settled on 24 February 2010: Michael John Hayes Trading Pty Ltd as trustee of the MJH Trading Trust; John Hayes Trading Pty Ltd as trustee of the JPH Trading Trust; Paul Hayes Trading Pty Ltd as trustee of the PAH Trading Trust; and Bryan Hayes Trading Pty Ltd as trustee of the BGH Trading Trust. 10 The four trustee companies were acquired in February 2010 by members of the Hayes family. Shortly thereafter, they became trustees of trusts that were formed with particular features so as to attract the "trading trust" rules in Div 6C of the ITAA 1936. The Trading Trusts were formed to participate as trading trusts in a reorganisation of the Hayes Group in the 2010 income year. Trading trusts are treated as companies for some tax purposes. Trading trusts are public trading trusts and not subject to Div 7A of the ITAA 1936. 11 The Hayes Group included four "Operating Companies": Malacorp Pty Ltd, Fuentes Pty Ltd, MJB&P Pty Ltd and MBJP Hayes Investments Pty Ltd. Each of these Operating Companies had profits available for distribution to shareholders. 12 On 7 May 2010, after the existing shareholders had declined an offer to acquire Z class shares: two of the respondents (the MJH Trading Trust and the PAH Trading Trust) each acquired 10 Z class shares for $1 per share in three of the four Operating Companies; two of the respondents (the BGH Trading Trust and the JPH Trading Trust) each acquired 10 Z class shares for $1 per share in each of the four Operating Companies. 13 On the day the respondents acquired the Z class shares, the four Operating Companies declared and paid fully franked dividends totalling $8,008,459.72 to the respondents, as holders of the Z class shares. The dividends represented almost all of the retained earnings of the Operating Companies, being $8,393,036.59. 14 The proceeds of the dividends were lent by the Trading Trusts either to the Operating Companies or to the original (existing) shareholders (set out in Tables 12 and 13 of the Tribunal's reasons). 15 The Tribunal observed that the "transactions entered into to pay the … dividends … and to use the funds representing those dividends after the dividends were paid were of a kind that would naturally attract curiosity": at [9]. The transactions had been "designed" or "formulated" by solicitors (Cleary Hoare) "having particular regard to various [ITAA 1936] rules that are not of common application" in order "to pass corporate wealth to an unexpected new owner in an unusual way", being "effected by executing documents, entering accounting journals, and executing and passing BPNs [bearer promissory notes]". The transactions were "executed in a short space of time, and in a choreographed manner and order". 16 In each of its 2010 income tax returns, each respondent included the franked dividends and the associated franking credits in its assessable income and claimed tax offsets under s 207-20 of the ITAA 1997. The Commissioner considered that the respondents were not entitled to the tax offsets on the basis that the dividends were distributions made as part of a dividend stripping operation because those dividends were paid pursuant to a scheme that was by way of, or in the nature of, dividend stripping or had substantially the effect of a scheme by way of, or in the nature of, dividend stripping: s 207-145(1)(d); s 207-155. 17 According to the Commissioner, the result was that: the dividends were included in the respondents' assessable incomes; the franking credits were not included in assessable income: s 207-145(1)(e); and the respondents were not entitled to tax offsets for those amounts: s 207-145(1)(f). 18 At the core of the dispute before the Tribunal was the question of whether the relevant purpose in carrying out the reorganisation was tax avoidance: at [7]. The respondents contended that it was not, and "that the purpose was to secure better asset protection features of the asset ownership arrangements within a group of family entities, and to streamline those arrangements": at [7]. The Commissioner contended that the purpose was to avoid tax. 19 The Tribunal described the matters which were not in dispute in the following way at [11]: The parties do not dispute the transactions that were entered into or carried out. Further, they agree that those transactions and the circumstances in which they were entered into or carried out mean that at least some elements of what is necessary to constitute a dividend stripping operation are satisfied. The parties agree: (a) the four … Operating Companies had retained profits …; (b) had those profits been distributed without changes to shareholding structures, tax liabilities would have arisen; (c) new shares in the … Operating Companies were acquired by new shareholders (the [Trading Trusts, being the applicants before the Tribunal]); (d) dividends were paid to the new shareholders shortly after the [Trading Trusts] acquired the new shares; (e) the dividends were paid following external advice, careful planning of the steps taken with all relevant parties acting in concert; and (f) if the requisite tax avoidance purpose is not present then neither of the s 207-155(a) (first limb) or (b) (second limb) tests apply. 20 The Tribunal described matters in dispute in the following way at [12]: The parties dispute the proper answers to three questions. (a) Whether the [Trading Trusts] received the dividends free of tax (in the relevant sense)? (b) Whether the pre-existing shareholders received non-taxable or capital amounts in full or sufficiently partial substitution for the dividends paid to the new shareholders? (c) Whether the required sole or dominant purpose was to avoid tax? 21 As to the first matter, the Tribunal concluded that the dividends received by the Trading Trusts did not bear tax in the relevant sense, satisfying the fourth characteristic of the paradigm example of a dividend stripping scheme: at [90] – [93]. 22 As to the second matter, the Tribunal observed that 30.46% of the dividends made their way to the original shareholders in the form of loans and concluded that, even if loan funds could be regarded as a substitute for capital, it was well short of the substitute required to be a dividend stripping operation and therefore the fifth characteristic was not satisfied. The Tribunal reasoned at [94] – [95]: The proportion of the dividends that made their way to the Hayes brothers in the form of loans was 30.46% as noted above. Even if loan funds could be regarded as a substituted receipt of capital, 30.46% is well short of the extent of the substitute required to be a dividend stripping operation. In the present matters: (a) the majority of what was paid in the form of a dividend to the [Trading Trusts] was returned to the original source of the dividend (the Operating Companies) by way of inter-entity loan. The dividends formed part of the system of continuing finance provided to trusts and companies in the Hayes Group. The majority of the money did not make its way back to the original shareholders who maintained substantially the same economic interests in the Hayes Group both before and after the 2010 reorganisation; and (b) a minority of the dividend money passed to the Hayes brothers (either individually or jointly) and was then used to retire or repay existing debt. That minority of the dividend money could be seen to be a refinancing of pre-existing debt. The Hayes brothers either individually or jointly assumed new liabilities in substitution for earlier liabilities owed to Hayes Group entities. They did not in any relevant sense receive any capital. They assumed dollar-for-dollar debt obligations in substitution of pre-existing debt obligations. 23 As to the third matter, the Tribunal concluded that the schemes lacked the requisite tax avoidance purpose because tax was not avoided: at [96] – [104]. At [96(d)], the Tribunal stated that the transactions "did not release profits from the target companies in a manner that eliminated future taxation burdens arising in respect of those profits". At [96(f)], the Tribunal stated that the transactions "preserved within the same family group … the same partly taxed profits … and the same latent future tax liability in respect of the accrued pre transaction profits, such that when those profits are released to the Hayes Group owners of the [Trading Trusts] beyond a corporate tax setting, the same or substantially equivalent tax liability will be attracted as would have been attracted had those profits been distributed to those Hayes Group owners directly". At [98], the Tribunal stated that "the relevant profits were not transformed to become non-taxable amounts, or moved beyond the Hayes family". At [103], the Tribunal stated: In the present circumstances, most of the amounts of the dividends paid by the Operating Companies to the [Trading Trusts] was returned by way of loan by the [Trading Trusts] to the Operating Companies or trusts connected with them and were not made available to the pre-scheme shareholders in the Operating Companies or their associates. Further the profits underlying the dividends paid to the [Trading Trusts], being corporate entities, remain profits of a company owned within the same family group available and liable to tax upon distribution to the ultimate owners thereof namely the same Hayes families with the same tax effect. The profits were not removed from the Australian income tax system at all. 24 The Tribunal's conclusion was that the dividends paid to the respondents "were not part of either a dividend stripping operation or a scheme of that nature or effect": at [105]. The Tribunal stated at [105]: When regard is had to: (a) the Consolidated Press predication test; (b) the focus on the vendor, or original, shareholders; (c) the absence of: (i) transformation of taxable profits; (ii) relocation of those taxable profits beyond the Hayes family; and (iii) any compensating non-taxable receipt, usually found in dividend stripping operations; and (d) the setting in which the transactions occurred including the 2007 transactions, the conclusion that follows is that the sole or dominant purpose of the transactions was not to avoid tax on the dividends paid, and that the dividends paid to the [Trading Trusts] by the Hayes Group Operating Companies were not part of either a dividend stripping operation or a scheme of that nature or effect. 25 The Tribunal reached no definitive conclusions concerning what it described (at [99]) as "motivators" (which was presumably a reference to what the Hayes family contended were its subjective motivations), namely asset protection and "better and simpler organisation of asset and loan arrangements within a family group". As to "asset protection", Cleary Hoare's fee of over $200,000 for its advice apparently came as a surprise to the Hayes family and their accountant, Mr Miller, but was said to be 70% tax deductible as tax advice: at [45] – [46]. The Tribunal's reasons do not contain findings of fact or conclusions from which it would be easy to conclude that the transactions had a dominant asset protection purpose. 26 As to "simpler organisation of asset and loan arrangements", the Tribunal stated at [88]: Mr Miller's evidence was that the 2010 steps laid a foundation for further rationalisation of the Hayes Group structure in later years, and it was beneficial from an organisational sense. Whether organisational arrangements are complex or not calls for a degree of subjective opinion. Those working with and managing structures may have a perception that differs from others looking in from the outside. And it is possible that additional entities may well make organisation and understanding easier for those with that need just as organisation of an office or warehouse may be improved by having additional containers to house things that need a home. Given the subjective nature of opinion on topics like the present, no material weight is to be afforded to the contention that the February and May 2010 steps simplified the structure. It was open to Mr Miller to have the view that it did, and there is no reason to conclude that his view was not honestly held. The Tribunal does not reject the contention, as the Commissioner has sought, but Mr Miller's view is not of material weight in the analysis required. CONSIDERATION 27 The Tribunal's ultimate conclusion, summarised at [105] of its reasons, was determinatively influenced by two principal factual matters: (a) the "profits were not removed from the Australian income tax system at all": at [103]; see also: [96(e)], [96(f)] and [105(c)(i)]; and (b) a majority of the dividends were ultimately loaned back to the Operating Companies (such that it could not be said that the original shareholders received a capital sum that substantially represented the profits distributed; there was no compensating non-taxable receipt" (implicitly by the original shareholders) as "usually found in dividend stripping operations"): at [95(a)], [105(c)(iii)]. 28 These two factual matters assumed particular significance in two parts of the Tribunal's reasoning: (a) first, in the Tribunal's consideration of the central or common characteristics of the particular dividend stripping schemes to which Gibbs J had referred in Patcorp, as identified by the Full Court in CPH FFC; (b) second, in its analysis of whether there was a dominant tax avoidance purpose which was undertaken by reference to what the Tribunal described as the "Consolidated Press predication test": at [105(a)]. 29 Before turning to the two factual matters referred to at [27] above, it is convenient to say something first about these two parts of the Tribunal's reasoning. Common characteristics of dividend stripping schemes 30 The description by the Full Court in CPH FFC of the common characteristics of a dividend stripping scheme is not a legislative prescription of the requirements of a dividend stripping scheme. It is wrong to approach the terms in which the Full Court described those central characteristics as though it were a statutory formula. This is demonstrated by the Full Court's analysis in CPH FFC – see, for example, at [159]. 31 No doubt it is convenient to assess the statutory question by reference to what the Full Court stated, but one must not lose sight of the statutory language. Section 207-155 of the ITAA 1997, like s 177E(1) of the ITAA 1936, applies to a scheme "by way of, or in the nature of, dividend stripping" or a scheme with substantially the effect of such a scheme. The phrase "by way of, or in the nature of" are words of enlargement. Section 207-155 was plainly intended to capture, for example, schemes which contain variations of the central characteristics identified in CCH FFC. The so-called "Consolidated Press predication test" 32 The Tribunal attached considerable weight to possible future tax being potentially payable in respect of the amounts loaned by the Trading Trusts to the Operating Companies as a result of its interpretation of what it termed the "Consolidated Press predication test". 33 It is not clear what the Tribunal meant when it referred to the "Consolidated Press predication test" at [105(a)]. At [25], the Tribunal said (footnote omitted): In the Consolidated Press primary decision, Hill J noted that any tax advantages to the stripper (eg rebates, the contemporary equivalent being tax offsets for franking credits) are not an essential ingredient in a dividend stripping scheme, a connection between the stripper and the shareholder is not critical either, and what is required is an enquiry as to whether a reasonable observer looking at the transaction would conclude that the essential character of the transaction was dividend stripping. And what differentiates a dividend stripping scheme from a scheme which is not, eg a mere reorganisation, is whether 'it could be predicated that it would only have taken place to avoid the shareholders in the target company becoming liable to pay tax on dividends out of the accumulated profits of the target company'. 34 At [26], the Tribunal stated (footnotes omitted): The Consolidated Press [Full] Court decision did not comment on the methodology adopted to determine the purposes of the transactions, but the High Court did: (a) endorse the result that both Hill J and the Full Court reached concerning absence of tax avoidance; (b) describe the tax avoidance purpose as the hallmark of a dividend stripping scheme; and (c) note that if there was a difference in approach between Hill J and the Full Court in formulating the tax avoidance predication test, the Full Court's formulation: that s l77E was intended to apply only to schemes which can be said to have the dominant purpose of tax avoidance; the required tax avoidance purpose ordinarily being that of enabling the vendor shareholders to receive profits of the target company in a substantially tax-free form, thereby avoiding tax that would or might be payable if the target company's profits were distributed to shareholders by way of dividends is preferrable. 35 The passage referred to by the Tribunal at [26(c)] is from CPH HC at [129], where the High Court stated: In one respect, immaterial on the facts of the present case, there may have been a difference between Hill J and the Full Court as to the operation of s 177E(1)(a)(i). Hill J considered that a scheme would only be a scheme by way of or in the nature of dividend stripping if it would be predicated of it that it would only have taken place to avoid the shareholders in the target company becoming liable to pay tax on dividends out of the accumulated profits of the target company. The Full Court considered that s 177E was intended to apply only to schemes which can be said to have the dominant purpose of tax avoidance; the required tax avoidance purpose ordinarily being that of enabling the vendor shareholders to receive profits of the target company in a substantially tax-free form, thereby avoiding tax that would or might be payable if the target company's profits were distributed to shareholders by way of dividends. Hill J may not have intended anything different from what was said by the Full Court. If there is a difference, the formulation of the Full Court is to be preferred, being consistent with the scheme of Pt IVA, and s 177A(5) in particular. 36 The word "predicated" was used by Hill J in describing the kinds of schemes to which his Honour considered s 177E(1)(a)(i) applied – see: CPH PJ at 47 – 48. It was also used by the High Court at [129] in describing what Hill J had said. The High Court did not say that there was a "predication" test. Indeed, the High Court at [129], reproduced above, endorsed the Full Court's formulation of the circumstances to which s 177E(1)(a)(i) was intended to apply, acknowledging that Hill J may not have intended anything different, but also expressly stating that if his Honour did mean anything different, the Full Court formulation was to be preferred. 37 The High Court at [129] also accepted the consideration by the Full Court to the effect that "s 177E was intended to apply only to schemes which can be said to have the dominant purpose of tax avoidance; the required tax avoidance purpose ordinarily being that of enabling the vendor shareholders to receive profits of the target company in a substantially tax-free form, thereby avoiding tax that would or might be payable if the target company's profits were distributed to shareholders by way of dividends". 38 The word "predicated" was not being used by Hill J to suggest that one needed to predict what future events might occur as a result of the relevant scheme having been undertaken, if that is what the Tribunal intended by referring to the "the Consolidated Press predication test". What Hill J stated (CPH PJ at 47 – 48) was: Obviously not all sales of shares, even if cum dividend, are in the nature of dividend stripping. Nor is the sale of 100 per cent of shares in a company necessarily dividend stripping, even if the company has accumulated profits. What is missing in the first case and may be missing in the second is the conclusion that an objective observer would reach as to why the scheme has taken place. For a scheme will only be a dividend stripping scheme if it would be predicated of it that it would only have taken place to avoid the shareholders in the target company becoming liable to pay tax on dividends out of the accumulated profits of the target company. It is that matter which distinguishes a dividend stripping scheme from a mere reorganisation. 39 In place of the word "predicated", his Honour could equally have used the word "said". The word "predicated", in the context in which it was used, should be taken to be referring to the basis or purpose of the scheme. 40 In any event, there is no "Consolidated Press predication test" as such. If the Tribunal considered that the inquiry about the purpose of a scheme centred upon a prediction of future events, that was erroneous. The inquiry about purpose centres on whether there was a purpose of avoiding tax that would or might be payable if the target company's profits were distributed to the original shareholders by way of dividends. That is a more immediate purpose than what might occur in the future. Profits not being removed from the Australian income tax system 41 As noted earlier, the Tribunal concluded at [103] that the "profits were not removed from the Australian income tax system at all" – see also at [96(e)], [96(f)], [105(c)(i)]. This observation suggests that the wrong question was asked and/or that the wrong test was applied. The fact that it is possible that the amounts distributed to the Trading Trusts, the majority of which were loaned back to the Operating Companies, might attract tax at some future point says very little about the relevant (more immediate) purpose of the scheme or, more precisely, says little about whether the purpose of the scheme was to avoid tax that would or might be payable if the target company's profits were distributed to the original shareholders by way of dividends. 42 A tax avoidance purpose on the part of the original shareholders is not disproved by the fact that the majority of the dividends were loaned back to the Operating Companies or because the "profits were not removed from the Australian income tax system". 43 First, as a matter of fact, a portion of the amounts paid as dividends to the Trading Trusts was accessed by the original shareholders in a form which did not attract tax in the hands of the original shareholders. That fact is probative both as to purpose and as to likely future events. 44 Secondly, the fact that the whole of the amount representing the dividends did not immediately find its way back to the original shareholders says nothing about whether those amounts will not do so in the future. There is nothing in the findings of the Tribunal to suggest that it would not be open to the original shareholders to access the balance of the amounts paid as dividends (namely, the amounts loaned to the Operating Companies) as loans in the future. 45 Thirdly, it is not particularly to the point that one could hypothesise future transactions which would result in tax being payable. One can equally hypothesise, consistently with practical commercial and tax planning reality, transactions in which tax would not be payable. 46 It may be accepted that, if tax on dividends is avoided as a result of a scheme, but tax is payable by a different entity in an equivalent amount in the same income year, that may be probative of whether there was a dominant purpose of tax avoidance on the dividends. However, in this case, tax on the dividends which would have been payable by the original shareholders has been avoided. The dividends were paid to associates of the shareholders and the majority of the proceeds lent back to the Operating Companies where they might be accessed in the future by the original shareholders in a tax-free way. The fact that the profits did not leave the Australian tax net (in the tax year in which the scheme was undertaken) is not determinative of whether the purpose of the scheme was for the original shareholders to avoid a tax liability on a distribution of profits had the distribution been made to those original shareholders. Dividends being loaned back to Operating Companies 47 The fact that the target Operating Companies' profits were paid to associates of the original shareholders and a majority then paid back to those target companies does not preclude the scheme from being one by way of, or in the nature of, dividend stripping. Having regard to the history and context, and what has been said earlier about the common characteristics of a dividend stripping scheme, a scheme may be "by way of, or in the nature of, dividend stripping" even if: (a) the profits are distributed to persons related to, associated with or controlled by the original shareholders; and (b) a compensating non-taxable receipt is not received by the original shareholder but is received by a person related to, associated with or controlled by the original shareholders. 48 The fact that the "stripper" Trading Trusts are members of the same group is not inconsistent with a dividend stripping operation. A dividend stripping operation does not require an "outsider" to be a party to the scheme. In CPH the fact that the "stripper" was a member of the same corporate group was not inconsistent with a dividend stripping operation: CPH FFC at [159], referring to Commissioner of Taxation v Ellers Motor Sales Pty Ltd [1972] HCA 17; 128 CLR 602 at 623. 49 The fact that there was an absence of "a compensating non-taxable receipt usually found in dividend stripping operations" ([105(c)(iii)] of the Tribunal's reasons) does not necessitate a conclusion that the scheme was not "by way of, or in the nature of, dividend stripping". The fact that a scheme may have an attribute different from a paradigm example of dividend strip is not determinative. 50 Nor is a scheme necessarily denied the character of a scheme "by way of, or in the nature of, dividend stripping" by reason of the fact that a non-taxable receipt is not received by the original shareholder directly. The Full Court in CPH FFC (at [136]) referred to the "vendor shareholders receiving a capital sum for their shares" as one of the common characteristics. The Full Court also noted that a common form of dividend strip might involve the allotment of shares rather than a sale of shares. There is no good reason why a dividend stripping scheme could not involve the target company receiving a capital sum, rather than the original shareholders receiving a capital sum. Once it is appreciated that a dividend stripping operation may involve an allotment of new shares rather than a sale of existing shares, there is no logical basis for denying a scheme the character of a scheme "by way of, or in the nature of, dividend stripping" merely because all or part of the capital sum is received by the target company rather than the original shareholders themselves. In the present case, the amount received by the target company would seem to have been received at the direction of, or pursuant to arrangements set by, the original shareholders. 51 In this regard, we note that the Tribunal made no findings about the rights attached to the Z class shares issued to the Trading Trusts beyond the entitlement to the special dividend which resulted in the stripping of the retained profits of the Operating Companies. Whether the Operating Companies remained subject to the control of the original shareholders is not known. Conclusion 52 The Tribunal erred in its construction of s 207-155 of the ITAA 1997 by failing to give proper effect to the words "by way of, or in the nature of" as words of expansion. Whilst it was relevant to observe that the original shareholders did not directly receive all of the dividends by way of capital (they only received part of the dividends by way of capital, as loans), it was erroneous not to consider whether the receipt by the Operating Companies of the balance of the dividends was sufficient in the circumstances for a conclusion that the scheme was "by way of, or in the nature of dividend stripping". 53 The Tribunal also erred in its analysis of dominant purpose by hypothesising that tax might be paid at some future time on the amounts loaned by the Trading Trusts to the Operating Companies, rather than addressing whether there was a dominant purpose of avoiding tax on a distribution of profits to the original shareholders. The payment of the dividends to the Trading Trusts in fact avoided tax on the part of the original shareholders, but this receives little attention. The Tribunal's reasons, including the terms of its conclusion at the end of [105], indicate that it was addressing a broad undefined tax avoidance purpose assessed by reference to the possibility of future events engaging a future tax liability in respect of amounts represented by the dividends which had been paid to associates of the original shareholders, rather than on the question of whether there was a purpose of avoiding tax on a distribution of profits to the original shareholders. FURTHER ARGUMENTS RAISED ON APPEAL 54 The Commissioner sought leave to raise on appeal a submission that it is sufficient if tax avoidance was an "incidental purpose" of a scheme and that a scheme did not need to have a dominant tax avoidance purpose in order for it to be found to be a scheme by way, of or in the nature of, dividend stripping. The Commissioner explained that what he meant by "incidental purpose" was a purpose less than a dominant purpose, but more than a trivial or de minimis purpose. 55 This submission must be rejected and leave refused. A dividend stripping scheme is a scheme to avoid tax. The term "dividend stripping" is rooted in the history of tax avoidance, specifically the tax which would be payable by the shareholder if that shareholder were to receive dividends. Although the statutory language is expansive, a scheme cannot be "by way of, or in the nature of, dividend stripping" if it lacks that essential characteristic as the sole or dominant characteristic. 56 Further, this case was not run before the Tribunal. Had that case been run, it is likely that the respondents would have run their cases in a different way, both forensically and in relation to the evidence or other material which would have been put before the Tribunal. The case was not fought at the level of the lower bar which the Commissioner now seeks to set. 57 The Commissioner also sought to raise on appeal a contention that s 207-145 of the ITAA 1997 might operate in circumstances where a part of a distribution might be said to have been made as part of a dividend stripping operation. Section 207-145(1)(d) refers to "the distribution". It contains no words of apportionment. Section 207-145(2), by contrast, applies to a "specified part of the distribution". The language of s 207-145(1)(d) does not support the Commissioner's contention. 58 During the hearing, the respondents abandoned reliance on a notice of contention. Without accepting that a notice of contention is the appropriate method to raise an issue by way of what is in substance a cross-appeal or cross-application in a s 44 "appeal", the notice of contention should be dismissed. CONCLUSION AND DISPOSITION 59 Whilst the Court is satisfied that the Tribunal erred in its construction of s 207-155, the Court is not satisfied that the facts have been fully found. It cannot be satisfied that only one conclusion would be reasonably open on the facts fully found. 60 Accordingly, the application is allowed and the matter is remitted to the Tribunal for redetermination according to law. The way in which the Tribunal should proceed with the rehearing, including how the Tribunal is constituted, is a matter for the Tribunal to decide. 61 We understood the parties to be in agreement that there would be no order as to costs of the appeal or the notice of contention. However, we reserve liberty to the parties to apply within 7 days in respect of costs to cater for the possibility that this understanding is incorrect. I certify that the preceding sixty one (61) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Bromwich, Thawley and Hespe. Associate: Dated: 14 June 2024	8,730
federal_court_of_australia:fca/single/2006/2006fca0816	decision	commonwealth	federal_court_of_australia	text/html	2006-06-30 00:00:00	Queensland Rail v Commissioner of Taxation [2006] FCA 816	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2006/2006fca0816	2024-09-13T22:49:45.748512+10:00	FEDERAL COURT OF AUSTRALIA Queensland Rail v Commissioner of Taxation [2006] FCA 816 CUSTOMS AND EXCISE - diesel fuel, rebate – meaning of "in rail transport" – whether fuel used in rail transport Customs Act 1901 (Cth) ss 164(1), 164(1AA), 164(7), Excise Act 1901 (Cth) s 78A A New Tax System (Australian Business Number) Act 1999 (Cth) ss 37, 41 Diesel and Alternative Fuel Grants Scheme Act 1999 (Cth) Transport Infrastructure Act 1994 (Qld) Port of Brisbane Corporation v Federal Commissioner of Taxation [2004] FCA 1232 considered Australian Taxation Office Excise Bulletin - Diesel Fuel Rebate Scheme EB 2000/3, 30 June 2001 QUEENSLAND RAIL v COMMISSIONER OF TAXATION QUD 213 OF 2004 DOWSETT J 30 JUNE 2006 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QUD 213 OF 2004 BETWEEN: QUEENSLAND RAIL APPLICANT AND: COMMISSIONER OF TAXATION RESPONDENT JUDGE: DOWSETT J DATE: 30 JUNE 2006 PLACE: BRISBANE REASONS FOR JUDGMENT 1 This case is concerned with amendments to the Customs Act 1901 (Cth) (the "Customs Act") and the Excise Act 1901 (Cth) (the "Excise Act"), extending the diesel fuel rebate scheme. In introducing the relevant legislation into Parliament (Hansard, House of Representatives, Tuesday 22 June 1999 at 7049-50) the Minister for Transport and Regional Services said: 'Under this bill and the customs bill, and the environment expenditure package agreed between the government and the Australian Democrats, there will be large and enduring benefits to regional Australia, to the environment and to transport operators in the road, rail and marine sectors. Businesses across Australia will pay less for fuel than they do now because they will get back the GST paid on inputs, including fuel. It is expected that business should save around 6 c to 7 c per litre by this measure alone, although the actual amount will not be until next year after the final pre-GST half-yearly CPI adjustment to excise rates.' 2 Diesel fuel is manufactured locally, but some is imported. Locally manufactured fuel is subject to the Excise Act whilst imported fuel is subject to the Customs Act. When an end user purchases such fuel, it is not identifiable as locally produced or imported. The relevant legislation provides benefits to a person who buys fuel for a particular use. It is therefore necessary that the rebate provisions in the Excise Act and the Customs Act be in similar terms. Relevantly, s 164(1AA) of the Customs Act provides: 'This section makes provision for a rebate to be payable in respect of diesel fuel purchased for certain usages. In particular (but without limiting the effect of the provisions), it sets out: (a) the particular usages of diesel fuel that would entitle a person to apply for rebate (subsection (1)); and … ' 3 Subsection 164(1) provides: 'A rebate is, subject to subsections (2) and (4A) and to such conditions and restrictions as are prescribed (being conditions and restrictions that relate to goods generally, to goods included in a class of goods that include diesel fuel or to diesel fuel only), payable to a person who purchases diesel fuel for use by the person: (a) in mining operations (otherwise than for the purpose of propelling any vehicle on a public road); (aa) in primary production (otherwise than for the purpose of propelling a road vehicle on a public road); (ab) in rail transport (otherwise than for the purpose of propelling a road vehicle on a public road) in the course of carrying on an enterprise; (ac) in marine transport (otherwise than for the purpose of propelling a road vehicle on a public road) in the course of carrying on an enterprise; (ad) at particular premises to generate electricity for use in the course of carrying on, at those premises, an enterprise that: (i) has, as its principal purpose, the retail sale of goods or services or the provision of hospitality; and (ii) does not have, at those premises, ready access to a commercial supply of electricity; (b) at residential premises to generate electricity for use in: (i) providing food and drink for; (ii) providing lighting, heating, air conditioning, hot water or similar amenities for; or (iii) meeting other domestic requirements of; residents of the premises; (c) at a hospital or nursing home or at any other institution providing medical or nursing care; or (d) at a home for aged persons.' 4 For present purposes, the relevant paragraph is par 164(1)(ab). Some of the terms used in that paragraph are defined in subs 164(7). In particular, the following terms are of interest: 'carrying on an enterprise has the same meaning as in the Diesel and Alternative Fuels Grants Scheme Act 1999. rail transportincludes light rail transport and transport by tram, but does not include any rail transport relating to forestry. road vehiclemeans a vehicle of a kind ordinarily used on roads for the transport of persons or goods.' 5 Reference to the Diesel and Alternative Fuels Grants Scheme Act 1999 discloses that the expression 'carrying on an enterprise', 'includes doing anything in the course of the commencement or termination of the enterprise.' That Act provides that the word 'enterprise', 'has the meaning given to it by section 38 of the "A New Tax System (Australian Business Number) Act 1999"'. In s 38 of that Act, the word 'enterprise' is defined as follows (see s 38): 'An enterprise is an activity or series of activities done, (a) in the form of a business; or (b) in the form of an adventure or concern in the nature of trade; or (c) on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property ;or … ' 6 Section 41 of the same Act provides that: 'business includes any profession, trade, employment, vocation or calling, but does not include occupation as an employee.' 7 The relevant provision of the Excise Act is s 78A. It is in similar terms to s 164 of the Customs Act. Pursuant to subs 78A(7) and subs 78A(8), various terms have the same meanings as in the Customs Act. 8 This case concerns the entitlement of Queensland Rail to receive a rebate in connection with the purchase of diesel fuel for use in its operations. Although there is no substantial dispute as to the extent of those operations, it will be of assistance in understanding the ambit of the matter if I briefly outline the evidence concerning them. Queensland Rail has five "business groups" described as follows: (a) the Passenger Services Group; (b) the Coal and Freight Services Group, now known as "QR National"; (c) the Network Access Group; (d) the Infrastructure Services Group; and (e) the Workshops Group, now known as the "Rollingstock and Component Services Group". 9 The Passenger Services Group operates commuter trains within the Brisbane region, long distance passenger trains and tourist trains. There are 140 stations in that region and 72 stations elsewhere in Queensland. In the Brisbane region, there are 300 kilometres of track which, in 2003-2004, carried 48.1 million passengers, with an average of 150 000 passenger journeys per day. The Coal and Freight Services Group (now known as "QR National"), provides freight, transport and logistic solutions to a variety of customers throughout Australia. It includes three divisions, Coal, Containerized Freight and Bulk Freight. 10 The Network Access Group has responsibility for managing Queensland Rail's infrastructure, including the rail network of more than 9 500 kilometres and all associated facilities and equipment 'necessary for carrying on the rail transport enterprise, including track, bridges, tunnels, level crossing, signalling, safety critical operation systems, the electric overhead traction system, train control centres, marshalling yards, communication systems, machinery and equipment.' 11 The Infrastructure Services Group is responsible for maintenance of Queensland Rail's rail transport infrastructure, including: (a) track construction, including sleeper laying and track laying; (b) project management and co-ordination; (c) track materials logistics management; (d) ballast cleaning and formation; (e) track grinding and lubrication; (f) track re-surfacing; (g) track re-sleepering; (h) on-track inspection services; (i) rail maintenance; and (j) trackside system and overhead maintenance. 12 The Workshops Group (now called the Rolling Stock and Component Services Group) provides maintenance, modification, overhaul, component exchange and manufacturing support for rolling stock. Queensland Rail is a statutory corporation, operating pursuant to the requirements of the Transport Infrastructure Act 1994 (Qld) (the "TI Act"). The TI Act requires Queensland Rail to have a safety management system. Queensland Rail claims that the provision of an adequate maintenance system is a necessary aspect of that system and also minimizes the cost associated with its operations. I accept those claims. 13 There is no dispute concerning Queensland Rail's entitlement to rebate in connection with its use of diesel fuel in running trains. The dispute is as to entitlement to such rebate in connection with the use of diesel fuel in other aspects of its operations. There is a substantial body of evidence concerning various types of equipment used by Queensland Rail, particularly in maintenance activities and in the loading and unloading of freight. Some equipment is mounted "on-rail", either because relevant functions require that arrangement or for mobility. Other equipment is either stationary or moves "off-rail". Some equipment is capable of use on and off-rail. It is described as "hi-rail". 14 In Excise Bulletin EB 2000/3, issued on 30 June 2000, the Australian Taxation Office offered a view as to the meaning of the expression "rail transport" as used in the Excise Act. It said: 'The expression "rail transport" includes light rail transport and transport by tram, but does not include any rail transport relating to forestry. The following uses of diesel fuel are eligible for rebate: (a) in trains, trams or other vehicles operating on rail for the transport of goods or passengers, whether or not on scheduled services; (b) in trains, trams or other vehicles operating on rail carrying out activities connected with rail transport (including the forward journey of a train with a view to undertaking transport activities or the return journey after the transport activities have been carried out); (c) in trains, trams or other vehicles operating on rail to carry out: (i) repair and maintenance of tracks; (ii) observation of track conditions; (iii) reduction of fire hazards on or adjacent to tracks; (iv) rescue or recovery of derailed rolling stock; (v) re-positioning of rail vehicles; or (d) in trains, trams or other vehicles operating on rail for their day-to-day operations (including air conditioning, heating or lighting). The following uses of diesel fuel are not eligible for rebate: (a) the production or manufacture of goods (including rail vehicles); (b) the movement, handling, storage, loading or unloading of goods before or after rail transportation; (c) the transport of passengers before or after rail travel; (d) planning, development or construction of railways, tramways, light rail networks, freight terminals, storage depots or similar facilities or infrastructure; (e) the supply of goods or services (including fuels) to rail transport vehicles by means other than rail; or (f) activities not conducted on railways, tramways or light rail systems.' 15 On 26 June 2003, PricewaterhouseCoopers, on behalf of Queensland Rail, wrote to the Deputy Commissioner of Taxation, seeking to amend a previous diesel rebate claim to include claims relating to use of diesel fuel in connection with: '1. Plant used in carrying on the enterprise (see Attachment A); 2. Road vehicles capable of travelling on rail (see Attachment B); … ' 16 There was also a claim for diesel fuel stock on hand, but that claim is no longer relevant. Attachment A, relating to 'plant used in carrying on the enterprise', was as follows: '(a) Infrastructure Services Group (maintenance of the rail network); · Forklifts; · Bobcats; · Compressors; · steam cleaners; · pressure cleaners; · generators; · tractors; · welders; · wacker packers; · earthmoving equipment; · new rail construction. (b) Coal and Freight Services Group (provision of haulage service) · Forklifts; · wheeled overhead gantries; · generators; · tractors; · steam cleaners. (c) Workshops (maintenance and construction of rolling stock) · Forklifts; · Bobcats; · Compressors; · steam cleaners; · pressure cleaners; · generators; · tractors; · welders.' 17 Attachment B (concerning road vehicles capable of travelling on-rail) was a table as follows: Light Vehicles (‹ 4.5t) Total fuel $499,626.42 On Rail On Road Average Percentage 41.65% 58.35% Fuel Allocation $208,094.40 Diesel Trucks (› 4.5t) Total Fuel – $491,819.01 On Rail On Road Average Percentage 32.34% 67.66% Fuel Allocation $159,054.27 $332,764.74 Total Eligible 367 149 litres 332 765 litres 18 Subsequent correspondence between the Commissioner and Queensland Rail, including a letter dated 4 September 2003 from the Deputy Commissioner to PricewaterhouseCoopers, indicates that by that date, the matters in dispute had changed slightly. They were as follows: '1. Is a claimant eligible for a rebate … for diesel fuel purchased and used in: (a) Plant for planning, development and construction of railways; (b) Graders and slashers to level the ground; (c) Equipment to clean, repair and maintain locomotives and rolling stock; (d) Equipment for loading and unloading items onto/from trains; (e) Generators to provide power for work gangs. 2. Is a claimant eligible for a rebate under (the Acts) for diesel fuel purchased for use in road vehicles fitted with "hi-rail" equipment when travelling on the railway undertaking eligible activities?' 19 The Deputy Commissioner advised that a rebate was available for diesel fuel purchased for use in road vehicles fitted with "hi-rail" equipment when 'travelling on the railway undertaking eligible activities', but not otherwise. 20 The Deputy Commissioner identified the relevant question as whether or not the activities in question (as performed by the identified equipment) were: '… within the generally understood definition of "transport", that is, that they are transport activities within the ordinary meaning of the expression "rail transport". This may be on the basis that those activities are so integral to transport so as to be regarded as being within the ordinary meaning of the word "transport". If they do, then diesel fuel purchased for use in those activities can be regarded as being for use "in transport", and if the transport is by rail, then "in rail transport".' 21 After referring to various other documents, the Deputy Commissioner observed: 'Having regard to the above, it can be said that the definition of "rail transport" is the act or action of carrying or conveying (passengers or goods) from one place to another by a train or tram or other vehicle that travels on either a rail (such as a monorail) or on a pair of rails (trams or trains). It is therefore necessary to determine whether the ancillary activities can be regarded as an act or action of carrying or conveying from one place to another.' 22 After consideration of various authorities, the Deputy Commissioner concluded that: 'To be considered "in rail transport", the activity must satisfy the criteria of: (a) carried out on the actual rail; and (b) by a rail vehicle. Therefore any activities carried out not on the rail, but rather beside it or in a workshop nearby are not considered to be "in rail transport". Any activities carried out on the rail, but not with use of a rail vehicle are also not "in rail transport". Although an activity may seem integral to the actual rail transport operations, it is not necessarily "in rail transport". Therefore, the activities of: (a) planning, developing and constructing railways; (b) levelling the ground; (c) cleaning, repairing and maintaining locomotives and rolling stock; (d) loading and unloading items onto/from trains; (e) generating power for work gangs; are not activities "in rail transport". No rebate is payable under the off road scheme in respect of diesel fuel purchased for use in those activities.' 23 As to hi-rail equipment, the Deputy Commissioner said: 'Vehicles fitted with "hi-rail" equipment would qualify as vehicles used in rail transport under the scheme, when the equipment is engaged in an activity which qualifies for the diesel fuel rebate scheme. However, a claimant will only be eligible for diesel fuel used in such vehicles where they are operated on the railway and used "in rail transport". For example, where the vehicles undertake track maintenance, they are guided by the rails as they travel along the railway repairing and maintaining it and transport repair crews and equipment. Any activity by the vehicle not on the railway (such as travel to and from the railway, beside the railway, positioning of the vehicle etc) or used in activities ancillary to rail transport is not eligible under the diesel fuel rebate scheme. Furthermore, if a vehicle is not designed for actual rail travel but simply drives on or over the rail line/tracks in the course of their activities, then any diesel fuel purchased for use is not eligible for rebate. Since the light commercial vehicles and diesel trucks are fitted with "hi-rail" equipment, they will considered to be engaged "in rail transport" for the purposes of the diesel fuel rebate scheme where they are operating on rails undertaking eligible activities.' 24 The Deputy Commissioner's letter of 4 September 2003 was in response to particular questions posed by Queensland Rail. For that reason it may not have fully reflected the Deputy Commissioner's position. As I understand it, it is accepted the rebate will apply to use of diesel fuel in all "on-rail" vehicles for "eligible activities", not only in hi-rail vehicles (which are capable of on-rail and off-rail use). 25 After further correspondence, Queensland Rail made a formal claim for rebate for all of its diesel use. On 30 April 2004, the claim was disallowed. Queensland Rail objected to the decision. The objection was disallowed. Queensland Rail appeals from that decision. 26 Queensland Rail does not assert, in this case, that the rebate is payable in connection with the building of a new railway line. However it does not admit that the rebate is not payable in those circumstances. Although there are some contrary suggestions in the material, it also seems that no claim is made in connection with the construction of new rolling stock. The claim is in connection with loading and unloading goods and maintenance activities. 27 It is for the appellant to demonstrate that the assessment to duty is excessive. In this case, Queensland Rail must demonstrate that the Deputy Commissioner's construction of the relevant legislation is erroneous. The Commissioner submits that in the present context, 'in rail transport' means 'in the act of transporting passengers or goods by rail.' 28 Some preliminary points should be made concerning the effect of s 164. Firstly, in order to qualify for the rebate, a person must purchase diesel fuel for a specified use. Paragraph (a) specifies mining operations. That expression is extensively defined in subs 164(7). Paragraph (aa) specifies primary production which is also defined in some detail. I have previously referred to the definition of rail transport. Paragraph (ab), concerning rail transport, is in similar form to par (ac), concerning marine transport. Paragraphs (ad), (b), (c) and (d) all deal with use at particular types of premises. 29 For the purposes of par (ab), the relevant fuel must be purchased for use: · in rail transport; · otherwise than for the purpose of propelling a road vehicle on a public road; and · in the course of carrying on an enterprise. 30 Because of the long history of state government rail operations in Australia, one tends to infer that any reference to rail transport must be to transport on one or other of those systems. However the rebate is more widely available. It extends to use in rail transport 'in the course of carrying on an enterprise'. Thus it would be available to a mining company which constructed its own railway line for the purpose of transporting its product, or to a sugar mill which operated a network of cane trains. In such cases, the relevant enterprise will involve more than the operation of a railway. In the case of Queensland Rail, the relevant enterprise will be simply that. If the wording of par (ab) were adapted to describe its application to Queensland Rail, it would read 'in rail transport … in the course of carrying on the enterprise of a railway (or supplying rail transport).' 31 I mention this matter because it may lead to one of two errors in approaching the proper construction of par (ab). One might be tempted to conflate the two questions so that the question became whether or not the fuel was purchased for use in connection with Queensland Rail's business or enterprise. Such an approach might be too favourable to Queensland Rail. Alternatively, the dual focus upon rail transport might lead to an assumption that the expression "rail transport" must describe something less than Queensland Rail's entire enterprise; in other words, that the relevant rail transport must be something less than carrying on the enterprise of a railway or supplying rail transport. Such an approach may be unduly favourable to the Commissioner. 32 The proper approach is to ask whether or not Queensland Rail has purchased diesel fuel for use in rail transport and if so, whether or not such use is in the course of carrying on an enterprise. In the present case, however, the focus is on the first question. 33 Counsel have referred me to a number of cases concerning other paragraphs of subs 164(1). However they appear to be of little assistance for present purposes. Paragraphs (ab) and (ac) are different in structure from the other paragraphs. I observe, however, that the expressions "mining operation" and "primary production" suggest that the rebate is to be available in connection with any kind of use in those industries, subject only to the exceptions concerning road use. 34 There is one case concerning par (ac). It is Port of Brisbane Corporation v Federal Commissioner of Taxation [2004] FCA 1232. That was an appeal from a decision of the Administrative Appeals Tribunal and was therefore limited to questions of law. The decision appears to have been based upon a finding that the Administrative Appeals Tribunal had considered irrelevant material in construing the relevant legislative provisions. In those circumstances, the decision can be of little assistance for present purposes. 35 This case depends upon the meaning of the expression "in rail transport". A considerable amount of time was spent in discussing the meaning of the word "in", in my opinion, not a particularly fruitful area of debate. To my mind, the more significant aspect is the word "transport", with any particular connotations that the word "rail" may contribute. The Shorter Oxford Dictionary defines the word "transport", used as a noun, to mean: 'transfer or conveyance of property … the carrying or conveyance of a person or thing from one place to another … a system or means of transportation or conveyance of people, goods etc …' 36 The question depends substantially upon whether, in the present context, the word "transport" means the carriage or conveyance of persons or things or the system of transportation or conveyance. The Commissioner advanced the former view. Queensland Rail advanced the latter. The Commissioner submitted that the word "in" connoted such a close association between the use of the diesel fuel and the rail that it could only be satisfied if the usage occurred on the rail. Thus the movement of persons or goods (including Queensland Rail's own equipment) on rail would be included, but loading or unloading a train with loading equipment, which was not on-rail, would not. Similarly, the use of diesel fuel in rail-mounted track maintenance equipment would be included, but such use in non-rail mounted equipment would not. 37 This approach may give too much significance to the word "rail" which is used adjectivally to qualify the word "transport". The preposition "in" governs the noun "transport". In other words the phrase "in rail transport" means "in transport which uses rail". 38 If Parliament had intended that only use of diesel fuel in activities on-rail was to attract the rebate, it would have been easy to say so. Language analogous to the very specific language used for the purpose of excluding the rebate in the case of vehicles used on public roads and use relating to forestry might have been appropriate. Paragraphs (ad), (b), (c) and (d) are "place-specific" and might also have been appropriate models for a requirement that the relevant activity occur "on-rail". 39 If the purpose of the legislation is to subsidize transport costs, particularly for regional, rural and remote areas, and to benefit the environment, then there is no apparent reason for such a narrow construction. The cost of providing rail transport (inevitably passed on to customers) will include the cost of fuel used in maintaining infrastructure and equipment and in loading and unloading, as well as the cost of fuel used in trains. The environment will presumably benefit as a result of diesel fuel use, whether it is used on or off track. 40 Queensland Rail, in advancing its broader view of the meaning of par (ab), seeks support from the words in parenthesis, namely 'otherwise than for the purpose of propelling a road vehicle on a public road'. It submits that if the words "in rail transport" had the narrow meaning urged by the Commissioner, then it would not have been necessary expressly to exclude use of fuel for the purpose of propelling a road vehicle on a public road. The Commissioner points out that there are similar exceptions in other paragraphs. He submits that it is possible that the words were included in par (ab) (and, presumably, par (ac)) out of an abundance of caution or by oversight. However the careful distinction between a "vehicle" in par (a) and "a road vehicle" in pars (aa), (ab) and (ac) suggests that considerable care was exercised in deciding how the exceptions should be drafted. A road vehicle is 'a vehicle of a kind ordinarily used on roads for the transport of persons or goods.' See s 164(7). The use of fuel in any vehicle on a public road is excluded for the purposes of par (a), but only use in a road vehicle on a public road is excluded in the each of the other three paragraphs. The distinction contemplates either mining operations involving the use of vehicles (other than road vehicles) on roads, which use is not to attract the rebate, or primary production, rail transport and marine transport involving the use of vehicles (other than road vehicles) on roads, which use is to attract the rebate. It is not possible to take the matter any further. I do not accept the Commissioner's assertion that the exclusion in par (ab) was inserted by inadvertence or out of an abundance of caution. 41 As I have said the breadth of the availability of the rebate identified in pars (a) and (aa) is difficult to reconcile with the Commissioner's argument. Subject to the one exception in each case, the intention is that the rebate be available in connection with all use of diesel fuel in mining operations and primary production. It is difficult to see why it would be thought appropriate to limit the availability in connection with the activities identified in pars (ab) and (ac). 42 A person is entitled to the rebate if he or she 'purchases diesel fuel for use by the person' in one of the prescribed uses. A person who purchases diesel fuel for use in rail transport is likely to be purchasing in relatively large amounts, even if the rail system in question is very small. It is unlikely that such a purchaser would identify purchases as being for either on-rail or off-rail use. Appropriation to that use would probably occur at a later stage. It would be difficult for a user to satisfy the test as at the time of purchase if only some of the fuel used in a relevant enterprise attracted the rebate. 43 The requirement that the use be 'in the course of carrying on an enterprise' also adds colour to the meaning of the words "in rail transport". It suggests that the rail transport in question is ongoing rather than occasional and of a commercial nature. It seems unlikely, in that context, that Parliament intended to draw an artificial distinction between activities on-rail and off-rail, all of which were necessary to the transport of people or goods by rail. 44 In my view, the words "in rail transport" mean 'in a system or means of transportation or conveyance of people or goods by rail'. Such a system must inevitably involve loading and unloading activities and maintenance activities. The use of diesel fuel in the course of such activities is necessarily "in" that system, regardless of whether such use occurs on- or off-rail. 45 I allow the appeal and set aside the Commissioner's decision. I will adjourn the matter to enable the parties to formulate appropriate orders. I will hear submissions as to costs. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 30 June 2006 Counsel for the Applicant: Mr J W de Wijn QC Mr S H P Stewart Solicitor for the Applicant: PricewaterhouseCoopers Legal Counsel for the Respondent: Mr J A Logan SC Mr C D Coulsen Solicitor for the Respondent: Australian Government Solicitor Dates of Hearing: 25 & 26 July 2005 Date of Judgment: 30 June 2006	6,559
federal_court_of_australia:fca/single/2007/2007fca2087	decision	commonwealth	federal_court_of_australia	text/html	2007-12-21 00:00:00	Perdikaris v Deputy Commissioner of Taxation (No 2) [2007] FCA 2087	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2007/2007fca2087	2024-09-13T22:49:48.162959+10:00	FEDERAL COURT OF AUSTRALIA Perdikaris v Deputy Commissioner of Taxation (No 2) [2007] FCA 2087 INCOME TAX – Commissioner not satisfied that the taxpayer's employer had made deductions under the PAYE system or withheld payments under the PAYG system – whether determinations that the Commissioner was not obliged to credit the sums of the claimed PAYE deductions in payment or part payment of the tax payable by a taxpayer or that the taxpayer was not entitled to credits for the sum of the PAYE deductions or the total of the amounts said to have been withheld under the PAYG system were reviewable under the Administrative Decisions (Judicial Review) Act 1977 (Cth) or the Judiciary Act 1903 (Cth) – whether jurisdictional error Held: application for review dismissed Constitution of the Commonwealth of Australia ss 75(v) and 77(1) Income Tax Act 1986 (Cth) ss 5(1) and 7 Income Tax Rates Act 1986 (Cth) s 12(1), Schedule 7 Income Tax Assessment Act 1936 (Cth) ss 166, 174, 177(1), 221C(1A), 221F and 221H, Division 1AAA of Part VI Taxation Administration Act 1953 (Cth) Part IVC, ss 12-35, 15-10, 16-20, 18-15 and 298(30) of Schedule 1 Income Tax Assessment Act 1997 (Cth) ss 995-1 and 960-100 Federal Court Rules Order 54 Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5(1), 6(1) and 7 Judiciary Act 1903 (Cth) s 39B(1) McAndrew v Federal Commissioner of Taxation (1956) 98 CLR 263 F. J. Bloemen Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 360 Webb v Commissioner of Taxation (No 2) (1993) 47 FCR 394 Deputy Commissioner of Taxation of the Commonwealth of Australia v Richard Walter Pty Limited (1995) 183 CLR 168 Deputy Federal Commissioner of Taxation v Sargon (1985) 85 ATC 4206 R v Heyde (1990) 20 NSWLR 234 Edmunds v Edmunds and Ayscough (1935) VLR 177 Griffith University v Tang (2005) 221 CLR 99 Laurent v The Law Society of New South Wales [2000] NSWSC 1103 Kioa v West (1985) 159 CLR 550 Mobil Oil Australia Proprietary Limited v The Commissioner of Taxation (1963) 113 CLR 475 Finch v Goldstein (1981) 36 ALR 287 Salemi v MacKellar [No. 2] (1977) 137 CLR 396 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 Williams v Minister for Justice and Customs of the Commonwealth of Australia [2007] FCAFC 33 CHRISTOPHER PERDIKARIS v DEPUTY COMMISSIONER OF TAXATION NSD 499 OF 2007 GRAHAM J 21 DECEMBER 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 499 OF 2007 BETWEEN: CHRISTOPHER PERDIKARIS Applicant AND: DEPUTY COMMISSIONER OF TAXATION Respondent JUDGE: GRAHAM J DATE OF ORDER: 21 DECEMBER 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the 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 499 OF 2007 BETWEEN: CHRISTOPHER PERDIKARIS Applicant AND: DEPUTY COMMISSIONER OF TAXATION Respondent JUDGE: GRAHAM J DATE: 21 DECEMBER 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 By s 5(1) of the Income Tax Act 1986 (Cth) income tax was imposed in accordance with the Income Tax Act 1986 and at the relevant rates declared by the Income Tax Rates Act 1986 (Cth). 2 Section 7 of the Income Tax Act 1986 (Cth) levied the income tax imposed by s 5(1) as follows: '7. The tax imposed by subsection 5(1) is levied, and shall be paid, for the financial year commencing on 1 July 1986 and for all subsequent financial years until the Parliament otherwise provides.' 3 Under s 12(1) of the Income Tax Rates Act 1986 (Cth) the relevant rates of tax were as set out in schedule 7 to that Act. That schedule has been amended to record the prevailing rates from time to time. 4 At all material times s 166 of the Income Tax Assessment Act 1936 (Cth) ('the Assessment Act') has made provision for the Commissioner to make assessments of the amount of the taxable income of a taxpayer and of the tax payable thereon and s 174 has made provision for the Commissioner to serve notices of assessment in writing upon persons liable to pay the tax the subject of the assessments. 5 Section 177(1) of the Assessment Act provided for notices of assessment to have a conclusive evidentiary character both in respect of the due making of the assessment and that the amount and all the particulars of the assessment were correct. Section 177(1) provided: '177(1) 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.' 6 The present proceedings are not proceedings under Part IVC of the Taxation Administration Act 1953 (Cth) ('the Administration Act'). 7 In McAndrew v Federal Commissioner of Taxation (1956) 98 CLR 263 ('McAndrew') at 280-282 Taylor J said of s 177(1): '… The purpose of that sub-section [s 177(1)], is, subject to an important qualification, to make the production of a notice of assessment in judicial proceedings conclusive evidence of the due making of the assessment and that the amount and all the particulars of the assessment are correct. The qualification is that upon proceedings on appeal against the assessment, the production of the assessment does not constitute conclusive evidence that the amount and all the particulars of the assessment are correct. It will be seen that the sub-section contains two limbs and that the second limb applies only in proceedings which are not appeals of the character specified. In all other proceedings both limbs apply. But although doubts may exist as to what is comprised in each limb, the existence of these doubts in no way requires a modification of the view previously expressed. … There seems no doubt that s.177(1) was intended to make it impossible for a taxpayer, in proceedings other than appeal against it, to challenge an assessment on any ground and, accordingly, there is every reason for thinking that the second limb in s.177(1) covers all grounds upon which an assessment may be challenged other than those covered by the first limb. … In my view s.170(1) (sic) should be understood as precluding a taxpayer in proceedings other than an appeal (or a reference [now a review]) under the Act from challenging an assessment on any ground. …' 8 In F. J. Bloemen Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 360 at 375 Mason and Wilson JJ cited with approval the observations of Taylor J in McAndrew. 9 In Webb v Commissioner of Taxation (No 2) (1993) 47 FCR 394 at 400 Hill J said: '… the giving to the taxpayer of a notice which stipulates the taxable income and the tax payable referable to that taxable income in the year (a positive figure) will be a notice of assessment attracting the provisions of the objection and appeals procedure and s 177.' His Honour then continued at 400-401 by saying: 'My view is consistent with the decision of Hunt J in Deputy Commissioner of Taxation (Cth) v Clyne (1982) 60 FLR 45 and that of Enderby J in Commonwealth v Opiel (1986) 86 ATC 5,013. The former case is not greatly different from the present. In that case Mr Clyne, who had received a notice of assessment showing a credit for provisional tax, sought to argue that the giving of that credit constituted an admission by the Commissioner that payment had been made for that amount or that a claim was no longer made in respect of that amount, or alternatively that the provisions of s 177 rendered there conclusive evidence that the amount was no longer claimed by the Commissioner. This somewhat audacious argument was rejected by Hunt J who regarded the particulars of assessment referred to in s 177 of the Act as constituting merely the two ingredients taxable income and the tax assessed with respect to that taxable income. The other material on the notice, including the credit, were, his Honour thought, particulars of the notice but not particulars of the assessment. The decision of Hunt J was followed by Enderby J in Opiel in holding that details of a refund stated in the assessment to be due to a taxpayer did not attract the conclusive evidentiary protection of s 177.' See also Deputy Commissioner of Taxation of the Commonwealth of Australia v Richard Walter Pty Limited (1995) 183 CLR 168 ('Richard Walter'). 10 To facilitate the recovery of income tax a system prevailed until 30 June 2000 under which employees were required to pay tax on their salary or wages income progressively as they earned it. The tax was paid through a tax instalment deduction system which employers were obliged to implement (the Pay-As-You-Earn or PAYE system) under the Assessment Act. 11 Traditionally, a Group Certificate was issued to an employee at the end of a given financial year and lodged with the Commissioner of Taxation ('the Commissioner') with the employee's income tax return so as to enable a credit to be claimed for the amount deducted by way of income tax under the PAYE system and remitted by the employer to the Commissioner. Such Group Certificates were signed by an authorised person on behalf of the 'Employer' and recorded, amongst other things, the 'Tax Instalments Deducted' in respect of the relevant 'Employee'. 12 As from 1 July 2000 a New Tax System (the Pay-As-You-Go or PAYG system) was put in place under which a payer was required to withhold amounts from salaries and wages paid to a payee which were then to be remitted by the payer to the Commissioner (see s 3AA of the Administration Act and Schedule 1 thereto) and the payee became entitled to a credit against his tax debts for the amounts collected under the new system. Under the new system a 'PAYG payment summary – individual non-business' was issued by the payer to the relevant payee at the end of the financial year, in lieu of a Group Certificate. Such PAYG payment summaries were signed by an authorised person on behalf of the 'Payer' and recorded, amongst other things, the 'Total tax withheld' in respect of the relevant 'Payee'. They were then affixed by a taxpayer to his relevant income tax return to enable a credit to be claimed for the amount withheld by way of income tax under the PAYG system and remitted by the employer to the Commissioner. 13 Generally speaking all resident individuals were required to lodge annual income tax returns. Such returns were normally required to be lodged within four months after the end of the relevant financial year with the opportunity in some instances for returns to be lodged during the ensuing six months or so. 14 This case is concerned with a taxpayer who claimed credits for amounts of tax said to have been deducted under the PAYE system or withheld under the PAYG system by a company of which he was a director where Group Certificates or PAYG Payment Summaries were said to have been issued to him by that company, but where no tax was ever remitted by the company in question or any other companies to the Commissioner. 15 The taxpayer, who is the applicant in these proceedings, did not lodge income tax returns for any of the eight years ended 30 June 1996, 30 June 1997, 30 June 1998, 30 June 1999, 30 June 2000, 30 June 2001, 30 June 2002 and 30 June 2003 until well after the times prescribed for doing so had expired. It would appear that returns for each of the eight years in question were forwarded to the Australian Taxation Office under cover of a letter dated 19 September 2005 from the applicant's tax agent, Gertos Savell Katos, on about 30 September 2005. It is necessary to record certain information in relation to the 8 returns seriatim as follows: 16 Year ended 30 June 1996 · Income tax return signed by the taxpayer against the date 15 September 2005, declaring the information provided to be 'true and correct'. · On page 2 of 2 of the return a taxable income of $76,804 was disclosed. Under the heading 'INCOME' the following appeared: 'INCOME 3 Group certificates and tax stamps Main salary and wage occupation ADMINISTRATIVE OFFICER Occupation code X 5999 C P Agents Pty Limited 31252.00 C 76804 = = = = = = = = 8 Total of tax instalments deducted $ 31252.00 = = = = = = = =' · The income tax return when lodged was accompanied by a 1996 Group Certificate said to have been issued by C P Agents Pty Limited ACN 062 002 019 on 18 July 1996. The Group Certificate suggested that in the period 1 July 1995 to 30 June 1996 the applicant had been paid $76,804 by way of salary, wages, etc and that tax instalments deducted from that income had totalled $31,252.00. · As at 18 July 1996 there was no company in existence by the name 'C P Agents Pty Limited'. On 8 October 1993 Clean Fast Pty Limited was registered with the ACN 062 002 019. That company changed its name to C P Agents Pty Limited on 29 April 1997. · On 13 August 1997 the company was wound up under a Creditors' Voluntary Winding Up, Christopher Damien Darin becoming the liquidator of the company on that day. · The company was deregistered on 23 March 2005. · Until 4 April 1996 the directors and secretaries of the company had been 'Chris Perdis' (the applicant) and 'Stella Perdis', who had also been the sole shareholders of the company with one share each. As from 4 April 1996, the applicant was the sole director and secretary. · On 28 December 2006 a Notice of Assessment was issued to the applicant assessing his taxable income at $76,804.00, as returned. On that income, tax of $26,699.88 was assessed together with $1,152.06 by way of Medicare levy and $41,121.29 by way of additional tax for the late lodgement of the return, a total of $68,973.23 being due for payment on the assessment. · An 'Explanation of Changes' endorsed on the foot of the Notice of Assessment recorded that there had been an adjustment to the credits of $'-31252.00' against which the relevant entry was 'Tax Instalment Deductions – Adjusted as a result of audit or investigation'. · The Notice of Assessment issued on 28 December 2006 followed the transmission of a letter from the Deputy Commissioner of Taxation to the applicant dated 30 November 2006 headed: 'DECISION ON INCOME TAX AUDIT PAYE Tax Instalment Deductions For Income Years 1996 and 1998 – 2000' The Deputy Commissioner's letter was accompanied by an 'Adjustment Sheet'and 'Reasons for Decision'. The Adjustment Sheet in respect of the year ended 30 June 1996 relevantly provided: 'Adjustments to PAYE Instalment Deductions PAYE Instalment Deductions claimed $31,252 Less Overstated PAYE Instalment Credits - $31,252 Amended PAYE Instalment Credits $ 0.00' The attached 'REASONS FOR DECISION' included: 'Issues raised by this Audit: Are you entitled to a PAYE credit of $31,252 for the year ended 30 June 1996? Are you entitled to a PAYE credit of $32,448 for the year ended 30 June 1998? Are you entitled to a PAYE credit of $33,592 for the year ended 30 June 1999? Are you entitled to a PAYE credit of $34,476 for the year ended 30 June 2000? Is there a tax shortfall amount for the years ended 30 June 1996 and 1998 – 2000? We considered these to be the relevant facts: You were a director and employee of CP Agents Pty Ltd (CP) and Cleanfast Property Maintenance Agents Pty Ltd (CF) during the years ending 30 June 1996 and 1998 – 2000. On 30 September 2005, you lodged your income tax returns for the years ended 30 June 1996 and 1998 – 2000. Your returns were prepared and lodged by a registered tax agent. In your income tax returns for the years ended 30 June 1996 and 1998 – 2000 you disclosed salary and wage gross income and claimed tax withholding (sic) credits as follows: Year ending Gross Income Tax withholding credit Payer 30 June $ $ 1996 76,804 31,252 CP 1998 79,404 32,448 CF 1999 81,640 33,592 CF 2000 83,720 34,476 CF On 28 September 2006, we issued to you an income tax audit letter asking you to provide information in relation to the PAYE TIDs claimed, with the relevant supporting documentation – full details of the name of the entity including Group Employer Number with documents lodged and details of payments made for the years ended 30 June 1996, 1998, 1999 and 2000. On 1 November 2006 your tax agent requested an extension of time until 10 November 2006, to collate and provide the relevant records. On 10 November 2006 your tax agent responded to our audit letter providing the following information and documentation: · 1996 – 2000 Group Certificates and 2001 – 2003 PAYG Payment Summaries · A number of anomalies were discovered in the group certificates and payment summaries. · The 1998, 1999 and 2000 Group Certificates issued showed the employer as Clean Fast Pty Ltd, where in fact it was Cleanfast Property Maintenance Agents Pty Ltd. · This was an error presumably made by a staff member of the Cleanfast Property Maintenance Agents Pty Ltd. · The payer's name on the 2001, 2002 and 2003 PAYG Payment Summaries is incorrect and there is no ABN. The correct name of the payer is Cleanfast Property Maintenance Agents Pty Ltd. · On 27 April 2004 it was decided to wind up Cleanfast Property Maintenance Agents Pty Ltd and a resolution was passed to wind up the company on 11 May 2004. · A declaration (dated 9 November 2006) made by you, outlining your period of employment with each entity and your employment duties and responsibilities. No supporting documentation was received regarding the Group Employer Number of each entity with the documents lodged and details of any payments made. According to our records neither entity was registered for PAYE. Our Decision: Are you entitled to a PAYE credit of $31,252 for the year ended 30 June 1996? No. Are you entitled to a PAYE credit of $32,448 for the year ended 30 June 1998? No. Are you entitled to a PAYE credit of $33,592 for the year ended 30 June 1999? No. Are you entitled to a PAYE credit of $34,476 for the year ended 30 June 2000? No. Why have we made this decision: The Pay As You Earn (PAYE) provisions are contained in Division 2 of Part VI of Income Tax Assessment Act 1936 (ITAA 1936). Section 221H(2) of ITAA 1936 states: Entitlement to credit – deductions by employer If: (a) an employer has made any deductions in respect of an employee under this Division during a year of income, and (b) an assessment has been made of the tax payable, or the Commissioner is satisfied that no tax is payable, by the employee in relation to the year of income; the employee is entitled to a credit equal to the sum of the deductions. "Deduction" means a deduction under section 221C or section 221D from the salary or wages of an employee. Under section 221H(2) an employee is entitled to a credit equal to the amount of deduction made from payments of salary and wages. If it can be established that an entity did not actually "deduct" an amount under section 221C or 221D, the employee would not be entitled to a credit for any amount under section 221H(2) of ITAA 1936. Application of the law to your circumstances You lodged your income tax returns for the years ending 30 June 1996, 1998, 1999 and 2000 on 30 September 2005 and claimed PAYE credits of $31,252, $32,448, $33,592 and $34,476 respectively. During this time, you were a director of CP Agents Pty Ltd (CP) and Cleanfast Property Maintenance Agents Pty Ltd (CF). Therefore, you were not in an arms length relationship to your employer. We requested from you the employer copies of your group certificates for the years ending 30 June 1996, 1998, 1999 and 2000. Other than the employee copies of your group certificate for 1996 – 2000, you have not provided any evidence to support your contention that PAYE was deducted from payments of salary and wages made to you. In any case, the issue of a group certificate is not conclusive evidence that PAYE deductions have been made from payments of salary and wages. Information available within the Tax Office supports the conclusion that the company has not fulfilled its obligation to deduct and remit the amounts of PAYE deductions during the years ending 30 June 1996 – 2000. Therefore, we will exclude the PAYE credits returned in your income tax returns for the years ending 30 June 1996 and 1998 – 2000. Penalty In relation to the 2000 and earlier Income years penalties are imposed on tax shortfall amounts …. Only certain credits are taken into account in determining a tax shortfall amount. Tax Instalment deductions are not credits that are included in the calculation of a tax shortfall. Accordingly no penalty can be imposed on the over-claiming of tax instalment deductions in the years ending 30 June 1996 and 1998-2000.' 17 Year ended 30 June 1997 · Income tax return signed by the taxpayer against the date 15 September 2005, declaring the information provided to be 'true and correct'. · On page 2 of 3 of the return a taxable income of $79,508 was disclosed. Under the heading 'INCOME' the following appeared: 'INCOME 3 Group certificates and tax stamp sheets Main salary and wage occupation ADMINISTRATIVE OFFICER Occupation code X 5999 C P Agents Pty Limited 33436.00 C 79508 … = = = = = = = = 8 Total of tax instalments deducted $ 33436.00 = = = = = = = =' · The income tax return when lodged was accompanied by a 1997 Group Certificate said to have been issued by C P Agents Pty Limited ACN 062 002 019 on 9 August 1997 (a Saturday). The Group Certificate suggested that in the period 1 July 1996 to 30 June 1997 the applicant had been paid $79,508 by way of salaries, wages, etc and that tax instalments deducted from that income had totalled $33,436.00. · On 28 December 2006 a Notice of Assessment was issued to the applicant assessing his taxable income at $79,508, as returned. On that income, tax of $27,970.76 was assessed together with $1,351.63 by way of Medicare levy and $37,890.46 by way of additional tax for the late lodgement of the return, a total of $67,212.85 being due for payment on the assessment. · An 'Explanation of Changes' endorsed on the foot of the Notice of Assessment recorded that there had been an adjustment to the credits of $'-33436.00' against which the relevant entry was 'Tax Instalment Deductions – Adjusted as a result of audit or investigation'. · The Notice of Assessment issued on 28 December 2006 followed the transmission of a letter from the Deputy Commissioner of Taxation to the applicant dated 28 September 2006 headed: 'DECISION ON INCOME TAX AUDIT PAYE Tax Instalment Deductions – Year ended 30 June 1997' The Deputy Commissioner's letter was accompanied by an 'Adjustment Sheet'and 'Reasons for Decision'. The Adjustment Sheet in respect of the year ended 30 June 1997 relevantly provided: 'Adjustments to PAYE Instalment Deductions PAYE Instalment Deductions claimed $33,436 Less Overstated PAYE Instalment Credits - $33,436 Amended PAYE Instalment Credits $ 0.00' The attached 'REASONS FOR DECISION' included: 'Issues raised by this Audit: Are you entitled to a PAYE credit of $33,436 for the year ended 30 June 1997? 1. Are you entitled to a PAYG Withholding of $44,668 for the year ended 30 June 2001? 2. Are you entitled to a credit for PAYG Withholding of $49,140 for the year ended 30 June 2002? 3. Are you entitled to a credit for PAYG Withholding of $49,179 for the year ended 30 June 2003? … We considered these to be the relevant facts: You were a director and employee of "CP" Ltd (sic) and "CF" Pty Ltd during the years ending 30 June 1997 till 30 June 2003. On 30 September 2005, you lodged your income tax returns for the years ended 30 June 1997 to 30 June 2003. Your returns were prepared and lodged by a registered tax agent. In your income tax returns for the year ended 30 June 1997 and 2001 to 2003 you disclosed salary and wage gross income as and claimed tax withholding credits on PAYE certificate or PAYG summaries as follows: Year ending Gross income Tax withholding credit Payer 30 June $ $ 1997 79,508 33,436 CP 2001 92,092 44,668 CF 2002 101,296 49,140 CF 2003 101,400 49,179 CF On 24 November 2005, we contacted your tax agent by phone and requested the original payer copies of your 1997 Group Certificate and 2001 to 2003 PAYG Payment Summaries. He responded on the 30 November 2005; however, he enclosed the payee copies of the above accompanied with a letter dated 24 November 2005. On 25 November 2005, we contacted your tax agent by phone and advised we received his letter and supporting documentation we requested. Upon reviewing the information sent, we found the payee and not the payer copies (as requested) were received. Your tax agent advised that this is all the information they have on file for you and the companies, as all the other information is with the liquidator, as the company was under external administration and had a controller appointed. He advised he would contact me and provide the liquidator's details. On 6 December 2005, your tax agent contacted our office and provided us with the liquidator's contact details. The same day, we contacted the liquidator's office by phone and left a message with his assistant – with our contact details and to return my call requesting: i. 1997 Group Certificate (Payer copy) ii. 2001 to 2003 Payment Summaries (Payer copies) of your payments iii. 1997 Annual PAYE Reconciliation, 2001 to 2003 PAYG Payment Summary Statements and Business Activity Statements (BAS), for the companies involved. For the latter, we asked for details of the Australian Business Number (ABN) under which the documents had been lodged. iv. Details and supporting documentation of payments that have been paid. On five further occasions we contacted the liquidator to verify progress in providing us with the supporting documentation requested above. According to our records, none of the above have been sent and lodged with our office. On 27 February 2006 we contacted the liquidator by phone. He advised he has searched through all the archived records for you and the entities for the above years and was not able to find any of the above information requested. Thus, he assumes that none of the above have been lodged, sent and paid. Following this call, we contacted your tax agent on two further occasions regarding the requests made above with the liquidator. On 6 March 2006, your tax agent returned my call and advised he will contact the liquidator regarding the file/information he has on yourself and your entities. Depending on the response he receives, he will contact you regarding any information, details and supporting documentation you may have. He was given seven (7) days to respond. On 17 March 2006, we issued you an income tax audit letter, asking you to provide information (within 28 days), in relation to the salary and wages income declared and PAYE/PAYG withholding credit claimed in your income tax returns with the relevant supporting documentation for the years 30 June 1997, 2001 to 2003. Your tax agent responded to our audit letter in writing on 3 April 2006 advising:- - you hold no records in relation to the company, and - all files were supplied directly to the company administrators once appointed (upon their request). Our Decision: Are you entitled to a PAYE credit of $33,436 for the year ended 30 June 1997? No. 1. Are you entitled to a credit for PAYG Withholding of $44,668 for the year ended 30 June 2001? No. 2. Are you entitled to a credit for PAYG Withholding of $49,140 for the year ended 30 June 2002? No. 3. Are you entitled to a credit for PAYG Withholding of $49,179 for the year ended 30 June 2003? No. … Why have we made this decision: [The material under this heading is the same as that appearing in the corresponding document referred to at [11] above, albeit later in point of time.] Application of the law to your circumstances You lodged your income tax return for the year ended 30 June 1997 on 30 September 2005 and declared gross salary and wages $79,508 and claimed PAYE credit of $33,436. During this time, you were a director of "CP" Pty Ltd. Therefore, you were not in an arms length relationship to your employer. In November 2005, we contacted your tax agent and requested copy of your Group Certificate for the year ended 30 June 1997. On 30 November 2005, we received a response from your tax agent who provided a payee copy of the 1997 Group Certificate and Payment Summaries for the years ended 30 June 2001 to 2003. We contacted your tax agent by phone on 1 December 2005 requesting payer copies of the above. He was unable to assist us, as all the information was with the liquidator, so on 6 December 2005 we contacted the liquidator's office by phone requesting the above and asking for evidence that PAYE was withheld (sic) from payments of salary and wages paid to you for the year ended 30 June 1997. The liquidator advised at a later date that after searching through the archived files, none of the requested information could be found. Other than the payee copies of your group certificate for 1997 and payment summaries for 2001 – 2003 years, you have not provided any other evidence to support your contention that PAYE was deducted from payments of salary and wages made to you. The issue of a group certificate is not conclusive evidence that PAYE deductions have been deducted from payments of salary and wages. Information available within the Tax Office supports the conclusion that the company has not fulfilled its obligation to deduct and remit the amounts of PAYE deductions during the year ended 30 June 1997. Thus, we are unable to verify that the amounts claimed have actually been deducted (sic) from payments of salary and wages made to you. Therefore, we will exclude the PAYE credit returned in your income tax return for the years ended 30 June 1997. The Pay As You Go (PAYG) withholding provisions are contained in Part 2-5 of Schedule 1 to the Taxation Administration Act 1953 ("TAA"). Section 18-15 of Schedule 1 to the TAA provides: 18-15 Tax credit for recipient of withholding payments (1) A person is entitled to a credit equal to the total of the amounts withheld from withholding payments made to a person during an income year if: (a) an assessment has been made of the income tax payable by the person for the income year, or (b) the Commissioner is satisfied that no income tax is payable by the person for the income year. Amount withheld is defined in section 995-1 of the Income Tax Assessment Act 1997 ("ITAA 1997"). An amount withheld by an entity from a withholding payment means: (a) an amount that the entity withheld from a payment under Division 12 in Schedule 1 to the Taxation Administration Act 1953. An amount withheld by an entity from a withholding payment includes amounts withheld under a withholding variation upwards. These variations are effected under the withholding declaration process set out in section 15-50 of the PAYG provisions. The effect of this provision is that the amounts withheld under a variation upwards become amounts "required to be withheld" under Division 12. Withholding payment is also defined in section 995-1 of the ITAA 1997 to mean: (a) a payment from which an amount must be withheld under Division 12 in Schedule 1 to the Taxation Administration Act 1953 (even if the amount is not withheld); or (b) an alienated personal services payment in respect of which Division 13 in that Schedule requires an amount to be paid to the Commissioner; or (c) a non-cash benefit in respect of which Division 14 in that Schedule requires an amount to be paid to the Commissioner. An amount withheld from a payment to an employee or a company director is an amount withheld under section 12-35 and section 12-40 of Schedule 1 to the TAA. Under section 18-15 of Schedule 1 to the TAA, a payee is entitled to a credit equal to the amount withheld. If it can be established that an entity did not actually "withhold" an amount from a payment of remuneration to an employee or company director under section 12-35 or section 12-40 of Schedule 1 to the TAA, the payee would not be entitled to a credit for any amount under section 18-15 of Schedule 1 to the TAA. Application of the law to your circumstances You lodged your income tax returns for the years ended 30 June 2001, 2002 and 2003 on September 2005 and declared gross salary and wages of $92,092, $101,296 and $101,400, and claimed pay as you go withholding credits of $44,668, $49,140 and $49,179 respectively. During this time you were a director of "CF" Pty Ltd. You were not in an arms length relationship to your employer. In November 2005, we contacted your tax agent and requested copies of your Payment Summaries for the years ended 30 June 2001, 2002 and 2003. On 30 November 2005, we received a response from your tax agent who provided payee copies of the Payment Summaries for the years requested. We contacted your tax agent by phone on 1 December 2005 requesting payer copies of the above. As he was unable to assist us, as all the information was with the liquidator, on 6 December 2005 we contacted the liquidator's office by phone requesting the above and asking for evidence that PAYGW was withheld from payments of salary and wages paid to you during the years ended 30 June 2001 to 30 June 2003 inclusive. You have not provided any other evidence to support your contention that PAYGW was deducted from payments of salary and wages made to you. The issue of a Payment Summary solely is not conclusive evidence that PAYGW has been deducted (sic) from payments of salary and wages. Information available within the Tax Office supports the conclusion that the company has not fulfilled its obligation to report and remit the amounts of PAYGW during the years ended 30 June 2001 to 30 June 2003. Hence, we are unable to verify that the amounts claimed have actually been deducted (sic) from payments of salary and wages made to you. Therefore, we will exclude the PAYGW returned in your income tax returns for the years ended 30 June 2001, 30 June 2002 and 30 June 2003. Penalty Year ended 30 June 1997 In relation to the 2000 and earlier income years, penalties are imposed on tax shortfall amounts under Part VII of the Income Tax Assessment Act 1936 (ITM 1936). A tax shortfall is defined in section 222A of the ITAA 1936 and broadly means the difference between the tax properly payable by the taxpayer and the tax that would have been payable if it were assessed on the basis of the taxpayer's return for the year of income. Only certain credits are taken into account in determining a tax shortfall amount. Tax instalment deductions are not credits that are included in the calculation of a tax shortfall. Accordingly, no penalty can be imposed on the over-claiming of tax instalment deductions in the year ended 30 June 1997. Tax Shortfall Penalty – Years ended 30 June 2001 to 2003 Under section 28475 (sic) of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953), an administrative penalty can be imposed where: · you or your agent make a false or misleading statement, and · the statement results in a shortfall amount. A false or misleading statement can result, for example, if you omit assessable income from your tax return, or if you over-claim a tax deduction, tax offset, credit or payment. This false or misleading statement must result in a shortfall amount. Under Item 2 of sub-section 284-80(1) of the TM 1953, you can have a shortfall amount if: · the Commissioner must pay or credit an amount to you under a taxation law; · this amount is worked out on the basis of a statement made by you or your agent; and · this amount is more than it would be if you or your agent had not made a false or misleading statement. Under section 18-15 of Schedule 1to (sic) the TM 1953, you are entitled to a credit equal to the amount withheld from your withholding payments for an income year after 1 July 2000. Withholding payments include payments of salary to an employee. Therefore, where you or your agent makes a false or misleading statement in regard to this credit, you can have a tax shortfall amount. Where a false or misleading statement has been made, the shortfall amount is the difference between: · the amount the Commissioner must pay or credit to you worked out on the basis of the statement; and · what the credit or payment would have been if the false or misleading statement had not been made. In your 2001 taxation return, you over claimed your credit for PAYG withheld by $44,668. Therefore, you have a shortfall amount for the 2001 year. In your 2002 taxation return, you over claimed your credit for PAYG withheld by $49,140. Therefore, you have a shortfall amount for the 2002 year. In your 2003 taxation return, you over claimed your credit for PAYG withheld by $49,179. Therefore, you have a shortfall amount for the 2003 year. Reasonable care Where this shortfall amount results from a failure by you or your agent to take reasonable care to comply with a taxation law, a penalty can be applied at the rate of 25% of the shortfall amount. The reasonable care standard is discussed in the Taxation Ruling TR 94/4. As noted at paragraph 8 of the Ruling, the reasonable care test requires you to take the care that a reasonable, ordinary person would take in your circumstances to fulfill your tax obligations. Where you have tried your best to lodge a correct return – having regard to your experience, education, skill and other relevant circumstances – you will not be liable to pay a penalty. You do not meet the reasonable care standard simply by using the services of a tax agent or tax advisor. Your agent must also take reasonable care in preparing your taxation return. Application to your circumstances We consider that you or your tax agent did not take reasonable care in declaring your salary and wage income and claiming your PAYE & PAYG withholding credits. We have made this decision based on the following factors: · it is your responsibility to lodge a tax return that is correct. · you were a director of "CF" Pty Ltd during the years ended 30 June 2001 to 30 June 2003 inclusive. · as a director you have a responsibility to deduct, report and remit PAYGW from salary and wages to the Commissioner, and · you have failed to provide sufficient evidence to support that PAYGW included in your income tax return was deducted from payments made to you by "CF" Pty Ltd. Therefore, as we consider that you did not take reasonable care in the preparation of your 2001 to 2003 taxation returns, the base penalty will be imposed on your shortfall amount for the 2001, 2002 and 2003 years at the rate of 25%. Reasonably arguable position Where a shortfall amount exceeds the greater of $10,000 or 1% of your tax payable, a different penalty provision can apply. This penalty can apply where your shortfall amount results from you applying a tax law to a matter or identical matters in a way which is not 'reasonably arguable.' In your income tax returns for the years ended 30 June 2001 to 2003, you claimed PAYG withholding credits (from salary and wages) which your company has not remitted. As PAYG withholding credit was overstated - $44,668, $49,140 and $49,179 respectively, the shortfall amount is more than the greater of $10,000 or 1% of the income tax payable by you. We consider that you do not have a reasonably arguable position in regard to the application of the law to the over-claimed credits. We have made this decision based on the following: · as a director of "CF" Pty Ltd, you were fully aware that the credit did not exist, Therefore, you are liable for a base penalty of 25% of your shortfall amount resulting from the overstated PAYG withholding credit. Base Penalty Where one or more base penalty amounts arises in relation to the same shortfall amount, and the two base penalty amounts are the same, then that is the base penalty which will apply. As the base penalty amounts for lack of reasonable care and not having a reasonably arguable position are both 25%, base penalty will be imposed on your shortfall amount on your shortfall amount resulted (sic) from the overstated PAYG withholding credit for the years ended 30 June 2001 to 2003 at the rate of 25%. Remission of penalty Under section 298-20 of Schedule 1 to the TAA 1953, the Commissioner of Taxation may remit all or part of a penalty imposed on a shortfall amount. Taxation Ruling TR 94/7 provides guidelines as to when this discretion may be exercised. The Ruling states that the discretion to remit tax penalty should be exercised in only those exceptional cases where, having regard to all the circumstances, the application of penalty would provide a clearly unreasonable or unjust result. We have considered all the facts and circumstances concerning your over-claimed credit for tax deducted and tax withheld. Based on the guidelines in TR94/7, we do not consider that the application of penalty in your case would provide an unreasonable or unjust result. Therefore, the penalty imposed on your shortfall amounts (for the 2001 – 2003 years) will not be remitted.' 18 Year ended 30 June 1998 · Income tax return signed by the taxpayer against the date 15 September 2005, declaring the information provided to be 'true and correct'. · On page 2 of 4 of the return a taxable income of $79,404 was disclosed. Under the heading 'INCOME' the following appeared: INCOME 1 Group certificates Main salary and wage occupation ADMINISTRATIVE OFFICER Occupation code X 5999 Clean Fast Pty Limited 32448.00 C 79404 … = = = = = = = Total tax instalments deducted $ 32448.00 = = = = = = = · The income tax return when lodged was accompanied by a 1998 Group Certificate said to have been issued by Clean Fast Pty Limited ACN 062 002 019 on 24 July 1998. The Group Certificate suggested that in the period 1 July 1997 to 30 June 1998 the applicant had been employed by Clean Fast Pty Limited ACN 062 002 019 and had been paid $79,404 by way of salary, wages, etc and that tax instalments deducted from that income had totalled $32,448.00. · As at 24 July 1998 there was no company in existence by the name 'Clean Fast Pty Limited'. On 8 October 1993 Clean Fast Pty Limited was registered with the ACN 062 002 019, but it changed its name to C P Agents Pty Limited on 29 April 1997. · On 13 August 1997 the company was wound up under a Creditors' Voluntary Winding Up, Christopher Damien Darin having been appointed as the liquidator of the company on that day. · There is no evidence to suggest that the applicant was an employee or otherwise entitled to remuneration from C P Agents Pty Limited ACN 062 002 019, formerly known as Clean Fast Pty Limited, between 1 July 1997 and 30 June 1998. It is highly unlikely that the company had any employees after it entered into liquidation on 13 August 1997. · On 28 December 2006 a Notice of Assessment was issued to the applicant assessing his taxable income at $79,404, as returned. On that income, tax of $27,921.88 was assessed together with $1,191.06 by way of Medicare levy and $30,925.78 by way of additional tax for the late lodgement of the return, a total of $60,038.72 being due for payment on the assessment. · An 'Explanation of Changes' endorsed on the foot of the Notice of Assessment recorded that there had been an adjustment to the credits of $'-32448.00' against which the relevant entry was 'Tax Instalment Deductions – Adjusted as a result of audit or investigation'. · The Notice of Assessment issued on 28 December 2006 followed the transmission of a letter from the Deputy Commissioner of Taxation to the applicant dated 30 November 2006 referred to at [16] in respect of the year ended 30 June 1996. · The attached Adjustment Sheet in respect of the year ended 30 June 1998 relevantly provided: 'Adjustments to PAYE Instalment Deductions PAYE Instalment Deductions claimed $32,448 Less Overstated PAYE Instalment Credits - $32,448 Amended PAYE Instalment Credits $ 0.00' The attached 'REASONS FOR DECISION' dealt compendiously with the PAYE credits claimed by the applicant for the years ended 30 June 1996, 30 June 1998, 30 June 1999 and 30 June 2000. It is unnecessary for present purposes to quote any more of the Reasons for Decision than have already been quoted at [16] above. It will be recalled that under the heading 'Our Decision' the following relevantly appeared: 'Are you entitled to a PAYE credit of $32,448 for the year ended 30 June 1998? No.' 19 Year ended 30 June 1999 · Income tax return signed by the taxpayer against the date 15 September 2005, declaring the information provided to be 'true and correct'. · On page 2 of 6 of the return a taxable income of $81,640 was disclosed. Under the heading 'INCOME' the following appeared: 'INCOME 1 Group certificates Main salary and wage occupation ADMINISTRATIVE OFFICER Occupation code X 5999 Clean Fast Pty Limited 33592.00 C 81640 … = = = = = = = Total tax instalments deducted $ 33592.00 = = = = = = =' · The income tax return when lodged was accompanied by a 1999 Group Certificate said to have been issued by Clean Fast Pty Limited ACN 062 002 019 on 13 August 1999. The Group Certificate suggested that in the period 1 July 1998 to 30 June 1999 the taxpayer had been paid $81,640 by way of salary, wages, etc and that tax instalments deducted from that income had totalled $33,592.00. · As at 13 August 1999 there was no company in existence by the name 'Clean Fast Pty Limited'. On 8 October 1993 Clean Fast Pty Limited was registered with the ACN 062 002 019, but that company changed its name to C P Agents Pty Limited on 29 April 1997. · On 13 August 1997 the company was wound up under a Creditors' Voluntary Winding Up, Christopher Damian Darin becoming the liquidator of the company on that day. · There is no evidence to suggest that the applicant was an employee or otherwise entitled to remuneration from C P Agents Pty Limited ACN 062 002 019, formerly known as Clean Fast Pty Limited, between 1 July 1998 and 30 June 1999. It is highly unlikely that the company had any employees after it entered into liquidation on 13 August 1997. · On 28 December 2006 a Notice of Assessment was issued to the applicant assessing his taxable income at $81,640, as returned. On that income, tax of $28,972.80 was assessed together with $2,041.00 by way of Medicare levy and $30,049.90 by way of additional tax for the late lodgement of the return, a total of $61,063.70 being due for payment on the assessment. · An 'Explanation of Changes' endorsed on the foot of the Notice of Assessment recorded that there had been an adjustment to the credits of $'-33592.00' against which the relevant entry was 'Tax Instalment Deductions – Adjusted as a result of audit or investigation'. · The Notice of Assessment issued on 28 December 2006 followed the transmission of a letter from the Deputy Commissioner of Taxation to the applicant dated 30 November 2006 referred to at [16] in respect of the year ended 30 June 1996. · The attached Adjustment Sheet in respect of the year ended 30 June 1999 relevantly provided: 'Adjustments to PAYE Instalment Deductions PAYE Instalment Deductions claimed $33,592 Less Overstated PAYE Instalment Credits - $33,592 Amended PAYE Instalment Credits $ 0.00' · The attached 'REASONS FOR DECISION' dealt compendiously with the PAYE credits claimed by the taxpayer for the years ended 30 June 1996, 30 June 1998, 30 June 1999 and 30 June 2000. It is unnecessary for present purposes to quote any more of the Reasons for Decision than have already been quoted at [16] above. It will be recalled that under the heading 'Our Decision' the following relevantly appeared: 'Are you entitled to a PAYE credit of $33,592 for the year ended 30 June 1999? No.' 20 Year ended 30 June 2000 · Income tax return signed by the taxpayer against the date 15 September 2005, declaring the information provided to be 'true and correct'. · On page 2 of 7 of the return a taxable income of $83,720 was disclosed. Under the heading 'INCOME' the following appeared: 'INCOME 1 Group certificates Main salary or wage occupation ADMINISTRATIVE OFFICER Occupation code X 5999 Clean Fast Pty Limited 34476.00 C 83720 … = = = = = = = Total tax instalments deducted $ 34476.00 = = = = = = =' · The income tax return when lodged was accompanied by a 2000 Group Certificate said to have been issued by Clean Fast Pty Limited ACN 062 002 019 on 18 July 2000. The Group Certificate suggested that in the period 1 July 1999 to 30 June 2000 the taxpayer had been employed by Clean Fast Pty Limited ACN 062 002 019 and had been paid $83,720 by way of salary, wages, etc and that tax instalments deducted from that income had totalled $34,476.00. · As at 18 July 2000 there was no company in existence by the name 'Clean Fast Pty Limited'. On 8 October 1993 Clean Fast Pty Limited was registered with the ACN 062 002 019 but it changed its name to C P Agents Pty Limited on 29 April 1997. · On 13 August 1997 the company was wound up under a Creditors' Voluntary Winding Up, Christopher Damian Darin becoming the liquidator of the company on that day. · There is no evidence to suggest that the applicant was an employee or otherwise entitled to remuneration from C P Agents Pty Limited (in liquidation) ACN 062 002 019, formerly known as Clean Fast Pty Limited, between 1 July 1999 and 30 June 2000. It is highly unlikely that the company had any employees after it entered into liquidation on 13 August 1997. · On 28 December 2006 a Notice of Assessment was issued to the applicant assessing his taxable income at $83,720, as returned. On that income, tax of $29,950.40 was assessed together with $2,093.00 by way of Medicare levy and $25,801.53 by way of additional tax for the late lodgement of the return, a total of $57,844.93 being due for payment on the assessment. · An 'Explanation of Changes' endorsed on the foot of the Notice of Assessment recorded that there had been an adjustment to the credits of $'-34476.00' against which the relevant entry was 'Tax Instalment Deductions – Adjusted as a result of audit or investigation'. · The Notice of Assessment issued on 28 December 2006 followed the transmission of a letter from the Deputy Commissioner of Taxation to the applicant dated 30 November 2006 referred to at [16] in respect of the year ended 30 June 1996. · The attached Adjustment Sheet in respect of the year ended 30 June 2000 relevantly provided: 'Adjustments to PAYE Instalment Deductions PAYE Instalment Deductions claimed $34,476 Less Overstated PAYE Instalment Credits - $34,476 Amended PAYE Instalment Credits $ 0.00' · The attached 'REASONS FOR DECISION' dealt compendiously with the PAYE credits claimed by the applicant for the years ended 30 June 1996, 30 June 1998, 30 June 1999 and 30 June 2000. It is unnecessary for present purposes to quote any more of the Reasons for Decision than have already been quoted at [16] above. It will be recalled that under the heading 'Our Decision' the following relevantly appeared: 'Are you entitled to a PAYE credit of $34,476 for the year ended 30 June 2000? No.' 21 Year Ended 30 June 2001 · Income tax return signed by the taxpayer against the date 15 September 2005, declaring the information provided to be 'true and correct'. · On page 2 of 5 of the return a taxable income of $110,969 was disclosed. Under the heading 'INCOME' the following appeared in respect of salary and wages: 'INCOME 1 Salary or wages Main salary or wage occupation Administrative officer Occupation code X 5999 Payer's ABN Tax withheld Gross payment 44668.00 C 92092 2 Allowances, earnings, tips, director's fees, etc K 0 Total tax withheld $ 44668.00' · The income tax return when lodged was accompanied by a PAYG Payment Summary – Individual Non Business for the year ended 30 June 2001 said to have been issued by Clean Fast Pty Limited on 16 July 2001. The Payment Summary suggested that in the year ended 30 June 2001 the taxpayer had been paid gross payments of $92,092 and that 'tax withheld' from that income totalled $44,668. · As at 16 July 2001 there was no company in existence by the name 'Clean Fast Pty Limited'. On 8 October 1993 Clean Fast Pty Limited was registered with the ACN 062 002 019, but it changed its name to C P Agents Pty Limited on 29 April 1997. · On 13 August 1997 C P Agents Pty Limited was wound up under a Creditors' Voluntary Winding Up, Christopher Damian Darin becoming the liquidator of the company on that day. · There is no evidence to suggest that the applicant was an employee or otherwise entitled to remuneration from Clean Fast Pty Limited at any time between 1 July 2000 and 30 June 2001. It is highly unlikely that the company had any employees after it entered into liquidation on 13 August 1997. · On 28 December 2006 a Notice of Assessment was issued to the applicant assessing his taxable income at $110,969, as returned. On that income, tax of $39,535.43 was assessed together with $2,774.22 by way of Medicare levy, a total of $42,309.65 being due for payment on the assessment. · An 'Explanation of Changes' endorsed on the foot of the Notice of Assessment recorded that there had been an adjustment to the credits of $'-44668.00' against which the relevant entry was 'Tax Withheld – Adjusted as a result of audit or investigation'. · The Notice of Assessment issued on 28 December 2006 followed the transmission of a letter from the Deputy Commissioner of Taxation to the applicant dated 28 September 2006 headed: 'DECISION ON INCOME TAX AUDIT PAYG Withholding Credit – For Income Years 2001, 2002 and 2003' The Deputy Commissioner's letter was accompanied by 'Adjustment Sheets' and 'Reasons for Decision'. · The attached Adjustment Sheet in respect of the year ended 30 June 2001 relevantly provided: 'Adjustments to PAYG Withholding Credits PAYG withholding credits claimed $44,668 Less Overstated PAYG Withholding Credits - $44,668 Amended PAYG Withholding Credits $ 0.00' · The attached 'REASONS FOR DECISION' dealt compendiously with the PAYE credits claimed by the applicant for the year ended 30 June 1997 and the PAYG credits claimed by the applicant for the years ended 30 June 2001, 30 June 2002 and 30 June 2003. It is unnecessary for present purposes to quote any more of the Reasons for Decision than have already been quoted at [17] above. 22 Year ended 30 June 2002 · Income tax return signed by the taxpayer against the date 15 September 2005, declaring the information provided to be 'true and correct'. · On page 2 of the return a taxable income of $118,331 was disclosed. Under the heading 'Income' the following appeared in respect of salary or wages: 'Income 1 Salary or wages Your main salary or wage occupation Administrative officer Occupation code X 5999 Payer's Australian Business Number Tax withheld Gross payment 49140.00 C 101296.00 … Total tax withheld $ 49140.00 ' · The income tax return when lodged was accompanied by a PAYG Payment Summary – Individual Non Business for the year ended 30 June 2002 said to have been issued by Clean Fast Pty Limited on 13 July 2002. The Payment Summary suggested that in the year ended 30 June 2002 the applicant had been paid gross payments of $101,296 and that 'tax withheld' from that income totalled $49,140. · As at 13 July 2002 there was no company in existence by the name 'Clean Fast Pty Limited'. On 8 October 1993 Clean Fast Pty Limited was registered with the ACN 062 002 019 but it changed its name to C P Agents Pty Limited on 29 April 1997. · On 13 August 1997 C P Agents Pty Limited was wound up under a Creditors' Voluntary Winding Up, Christopher Damian Darin becoming the liquidator of the company on that day. · There is no evidence to suggest that the applicant was an employee or otherwise entitled to remuneration from Clean Fast Pty Limited at any time between 1 July 2001 and 30 June 2002. It is highly unlikely that the company had any employees after it entered into liquidation on 13 August 1997. · On 28 December 2006 a Notice of Assessment was issued to the applicant assessing his taxable income at $118,331, as returned. On that income, tax of $42,995.57 was assessed together with $2,958.27 by way of Medicare levy, a total of $45,953.84 being due for payment on the assessment. · An 'Explanation of Changes' endorsed on the foot of the Notice of Assessment recorded that there had been an adjustment to the credits of $'-49140.000' against which the relevant entry was 'Tax Withheld – Adjusted as a result of audit or investigation'. · The Notice of Assessment issued on 28 December 2006 followed the transmission of a letter from the Deputy Commissioner of Taxation to the applicant dated 28 September 2006 to which reference was made at [17] above. · The attached Adjustment Sheet in respect of the year ended 30 June 2002 relevantly provided: 'Adjustments to PAYG Withholding Credits PAYG Withholding Credits claimed $49,140 Less Overstated PAYG Withholding Credits - $49,140 Amended PAYG Withholding Credits $ 0.00' · The attached 'REASONS FOR DECISION' dealt compendiously with the credits claimed by the applicant for PAYE deducted for the year ended 30 June 1997 and credits claimed by the applicant for PAYG withheld for the years ended 30 June 2001, 30 June 2002 and 30 June 2003. It is unnecessary for present purposes to quote any more of the Reasons for Decision than have already been quoted at [17] above. 23 Year ended 30 June 2003 · Income tax return signed by the taxpayer against the date 15 September 2005, declaring the information provided to be 'true and correct'. · On page 2 of the return a taxable income of $125,995 was disclosed. Under the heading 'Income' the following appeared in respect of salary or wages: 'Income 1 Salary or wages Your main salary or wage occupation Administrative officer – type unspe Occupation Code X 6111 Payer's Australian Business Number 49179.00 C 101400.00 … Total tax withheld $ 49179.00 ' · The income tax return when lodged was accompanied by a PAYG Payment Summary – Individual Non Business for the year ended 30 June 2003 said to have been issued by Clean Fast Pty Limited on 9 August 2003 (a Saturday). The Payment Summary suggested that in the year ended 30 June 2003 gross payments were made to the applicant of $101,400 and that 'tax withheld' from that income totalled $49,179. · As at 9 August 2003 there was no company in existence by the name 'Clean Fast Pty Limited'. On 8 October 1993 Clean Fast Pty Limited was registered with the ACN 062 002 019 but that company changed its name to C P Agents Pty Limited on 29 April 1997. · On 13 August 1997 the company was wound up under a Creditors' Voluntary Winding Up, Christopher Damian Darin becoming the liquidator of the company on that day. · On 28 December 2006 a Notice of Assessment was issued to the applicant assessing his taxable income at $125,995, as returned. On that income, tax of $46,597.65 was assessed together with $3,149.87 by way of Medicare levy, a total of $49,747.52 being due for payment on the assessment. · An 'Explanation of Changes' endorsed on the foot of the Notice of Assessment recorded that there had been an adjustment to the credits of $'-49179.000' against which the relevant entry was 'Tax Withheld – Adjusted as a result of audit or investigation'. · The Notice of Assessment issued on 28 December 2006 followed the transmission of a letter from the Deputy Commissioner of Taxation to the applicant dated 28 September 2006 to which reference has been made at [17] above. · The attached Adjustment Sheet in respect of the year ended 30 June 2003 relevantly provided: 'Adjustments to PAYG Withholding Credits PAYG Withholding Credits claimed $49,179 Less Overstated PAYG Withholding Credits - $49,179 Amended PAYG Withholding Credits $ 0.00' · The attached 'REASONS FOR DECISION' dealt compendiously with the credits claimed by the applicant for PAYE deducted for the year ended 30 June 1997 and credits claimed by the applicant for PAYG withheld for the years ended 30 June 2001, 30 June 2002 and 30 June 2003. It is unnecessary for present purposes to quote any more of the Reasons for Decision than have already been quoted at [17] above. Penalty in respect of the years ended 30 June 2001, 30 June 2002 and 30 June 2003 24 It may be observed that in respect of the Notices of Assessment for the years ended 30 June 2001, 30 June 2002 and 30 June 2003 no late lodgement penalty was included as it had been in the Notices of Assessment for the years ended 30 June 1996 – 30 June 2000 inclusive. The reason for this was that a separate 'Notice of assessment and liability to pay penalty' was issued to the applicant on 5 December 2006 which relevantly provided as follows: 'This notice is to advise you that a penalty has been imposed in relation to your Income Tax Return because you have a shortfall amount. This occurs when the tax liability you previously worked out is less than it should have been, or your entitlement to a payment or credit is more than it should have been. Income Year Penalty Amount Reason for penalty Due date for payment 2001 $11167.00 Lack of reasonable care 2002 $12285.00 Lack of reasonable care 2003 $12294.75 Lack of reasonable care TOTAL $35746.75 29 Dec 06 This penalty has been recorded on your account. It is in addition to your liability to pay the shortfall amount and any interest charge, which are not shown on this notice. …' (Emphasis added) The making of deductions and the remittance thereof to the Commissioner 25 In respect of the years ended 30 June 1996, 30 June 1997, 30 June 1998, 30 June 1999 and 30 June 2000 s 221C of the Assessment Actprovided for regulations to be made prescribing the rates of deductions to be made by employers from payments of salary or wages that employees receive or are entitled to receive in respect of a week or part of a week. 26 By s 221C(1A) of the Assessment Act employers were to make deductions under the PAYE system. Section 221C(1A) relevantly provided: '221C(1A) Where an employer pays to an employee salary or wages [before 1 July 2000], the employer shall, at the time of paying the salary or wages, make a deduction from the salary or wages at such rate (if any) prescribed in accordance with subsection (1) as is applicable. …' (The words in square brackets were introduced into the Assessment Act effective 22 December 1999) 27 At all material times the Assessment Act has made provision for the payment to the Commissioner of amounts deducted by employers from salaries or wages paid to employees in accordance with s 221C(1A) of the Assessment Act. Until 30 June 1998 the relevant obligation to remit the amounts deducted to the Commissioner was to be found in s 221F of the Assessment Act. In respect of the period 1 July 1998 – 30 June 2000 the relevant obligation was to be found in Division 1AAA of Part VI of the Assessment Act. Needless to say, strict time limits were imposed upon employers to make payments of amounts deducted from the salaries or wages of employees in accordance with s 221C(1A) of the Assessment Act. 28 In relation to the PAYG system, corresponding provisions required employers as 'entities' (see s 960-100 of the Income Tax Assessment Act 1997 (Cth)) to withhold amounts from salaries and wages paid to individuals as employees (see section 12-35 and 15-10 of Schedule 1 to the Administration Act). 29 A corresponding provision in respect of the remittal of amounts withheld under the PAYG system to the Commissioner was to be found in section 16-70 et seq of Schedule 1 to the Administration Act. Once again there were strict time limits imposed within which amounts that had been withheld were to be paid to the Commissioner. 30 Under section 16-20 of Schedule 1 to the Administration Act an entity that withheld amounts as required by Division 12 of Schedule 1 from the salary or wages of an employee was discharged from 'all liability to pay or account for that amount to any entity except the Commissioner'. 31 There was no comparable provision to that contained in section 16-20 of Schedule 1 to the Administration Act in the Assessment Act in respect of deductions made by an employer from the salary or wages of an employee as required by s 221C(1A) of the Assessment Act under the PAYE system. 32 At no material time was there a requirement that employers retain amounts deducted or withheld under the PAYE system or the PAYG system in some identifiable form. Although the provisions of the relevant legislation assumed that the relevant employer would have sufficient funds to pay the Commissioner the amount of the deductions or amounts withheld as required, the employer was never obliged to pay those amounts into a trust account or any other separate bank account or to deal with them in a way which separated those amounts from its other monies (see per Ormiston J in Deputy Federal Commissioner of Taxation v Sargon (1985) 85 ATC 4206 at 4209). 33 In respect of the audits of the applicant's claim for credit in respect of PAYE tax instalment deductions referred to in his tax return for the year ended 30 June 1997 and his claims for PAYG withholding credits as referred to in his tax returns for the years ended 30 June 2001, 30 June 2002 and 30 June 2003, the letters initiating them were two letters from the Deputy Commissioner of Taxation to the applicant dated 17 March 2006. The letter in respect of the year ended 30 June 1997 included the following: '… we sometimes check the accuracy of information given to us in tax returns. As part of this process, we are reviewing the amount of Pay As You Earn (PAYE) Tax Instalment Deductions (TIDs) paid by CP Agents Pty Ltd during the year ended 30 June 1997. We have no record of the company remitting PAYE TIDs or lodging a Reconciliation Statement in respect of group certificates for the period 1 July 1996 to 30 June 1997. Therefore, we are unable to confirm if any PAYE TID credit is available for the employees of the company. In order that we can consider your claim for PAYE TID credit, please provide details of the amount of all salary and wages paid and PAYE TIDs deducted from such payments during the year ended 30 June 1997. You should also provide any documentary evidence that is available to support your entitlement to PAYE TID credit. If the PAYE TIDs have been remitted, please provide full details of the name of the entity including the Group Employer Number under which these documents have been lodged and details of any payments that have been made. If you are unable to provide evidence that the salary and wages payments have been made and PAYE TIDs deducted, then we may be unable to allow any PAYE TID credit claimed by you in your income tax return. … Please note, we have sent you a separate letter requesting information about the amount of Pay As Yo (sic) Go (PAYG) Total Tax Withheld paid by Clean Fast Pty Ltd for the years ending 30 June 2001 till 2003.' 34 The 'separate letter' referred to was the second letter from the Deputy Commissioner of Taxation to the applicant dated 17 March 2005 (sic). It related to the applicant's claims for PAYG withholding credits as referred to in his tax returns for the years ended 30 June 2001, 30 June 2002 and 30 June 2003. In its terms it mirrored the other letter dated 17 March 2006. It included the following: '… we are reviewing the amount of Pay As You Go (PAYG) Withholding paid by Clean Fast Pty Ltd for the income years 30 June 2001 till 2003. We have no record of Business Activity Statements (BAS) or a Payment Summary Statement being lodged by the company for the income years 1 July 2001 till 30 June 2003. Therefore, we are unable to confirm if any PAYG Withholding credit is available for employees of the company. In order that we can consider your claim for PAYG Withholding credit, please provide details of the amount of all salary and wages paid to you and PAYG Withholding deducted from such payments for the income years 30 June 2001 till 2003. You should also provide any documentary evidence that is available to support your entitlement to PAYG Withholding credit. If you are unable to provide evidence that the PAYG Withholding has been deducted from your salary and wages payments, then we may be unable to allow the PAYG Withholding credit claimed by you in your income tax return. Penalties may also be applied where a shortfall amount results from the disallowance of a PAYG Withholding credit. Our decision will be based on your particular circumstances so you should provide an explanation and supporting evidence as to why any mistake has occurred. If the company has lodged its BAS and remitted PAYG Withholding, please provide full details of the name of the entity including the Australian Business Number (ABN) under which these documents have been lodged and details of any payments that have been made. If the company has not lodged its BAS and Payment Summary Statement, you should ensure that any outstanding Business Activity Statements and Payment Summary Statement are lodged immediately. …' 35 By a letter dated 3 April 2006, the applicant's tax agents responded to the letters of 17 March 2006 directed to the applicant, the second of which was referred to as a letter of 17 March '2005'. The relevant letter was headed: 'Re: Cleanfast Property Maintenance Agents Pty Ltd ABN: 29 078 361 369' Inter alia, it provided: 'I understand you seek clarification on Pay As You Go credits paid by the above mentioned company. Our office has also received correspondence from yourself in regards to CP Agents Pty Ltd. There seems to be a misunderstanding. CP Agents Pty Ltd does not exist. The trading entity has always been Cleanfast Property Maintenance Agents Pty Ltd. In the 1997 period Cleanfast Property Maintenance Agents Pty Ltd was trading as CP Agents. A registered trading name belonging to the above company. We possess no records in relation to the company. … …' 36 It will be recalled that on 8 October 1993 Clean Fast Pty Limited was registered with the ACN 062 002 019 and that it changed its name to C P Agents Pty Limited on 29 April 1997. On the same day, namely 29 April 1997, Cleanfast Property Maintenance Agents Pty Limited was registered with the ACN 078 361 369 and ABN 29 078 361 369. That company, in turn, changed its name to C P Jiff Pty Limited on 6 April 2004. 37 Between 29 April 1997 and 31 October 1997 the sole director and secretary of Cleanfast Property Maintenance Agents Pty Ltd was Scott Van Houten. Between 31 October 1997 and 22 February 1999 the sole director and secretary of Cleanfast Property Maintenance Agents Pty Limited was the applicant. Between 22 February 1999 and 1 July 2000 the sole director and secretary of Cleanfast Property Maintenance Agents Pty Limited was Con Mitropolos. On 1 July 2000 the applicant again became the sole director of Cleanfast Property Maintenance Agents Pty Limited, later C P Jiff Pty Limited. 38 On 11 May 2004 C P Jiff Pty Limited, formerly Cleanfast Property Maintenance Agents Pty Limited, was wound up under a Creditors' Voluntary Winding Up, Christopher Damian Darin becoming the liquidator of the company on that day. On 12 July 2007 C P Jiff Pty Limited (in liquidation) was deregistered. The applicant was the sole shareholder of C P Jiff Pty Limited, formerly known as Cleanfast Property Maintenance Agents Pty Limited, with two shares on which a total of $2 had been paid. 39 On 6 December 2005 Mr Constantine Savell, a partner in the accountancy firm Girtos Savell Katos, who were the applicant's tax agents, telephoned Mr Mario Tomaras, an Active Compliance Officer in the Micro Enterprises and Individuals business line of the Australian Taxation Office. According to paragraph 6 of an affidavit sworn by Mr Savell on 14 May 2007 he provided Mr Darin's details to Mr Tomaras. By 6 December 2005 Mr Darin had become the liquidator of both C P Agents Pty Limited, formerly known as Clean Fast Pty Limited, and also C P Jiff Pty Limited, formerly known as Cleanfast Property Maintenance Agents Pty Limited. In paragraph 6 Mr Savell said that on or about 6 December 2005 he provided Mr Tomaras with 'the details of the Liquidator who had the carriage of the matter to wind up CP Agents Pty Ltd (1996-1997 year) and Clean fast Property Maintenance Agents Pty Ltd A.C.N. 078 361 369 (Years ending 30th June 1998-2001, 2002 and 2003)'. 40 In response to Mr Savell's evidence, Mr Tomaras, in paragraph 50 of his affidavit sworn 3 October 2007 said: '… While I admit Mr Savell gave me the details of Christopher Darin being the liquidator of C P Agents (formerly known as Clean Fast Pty Limited) at no time did he: 50.1 mention the company name Cleanfast Property Maintenance Agents Pty Limited or provide me with the ACN 078 361 369; or 50.2 suggest that Cleanfast Property Maintenance Agents Pty Limited was the payer of salary and wages to the Applicant in respect of the years of income ended 30 June 2001 to 2003; or 50.3 suggest that Cleanfast Property Maintenance Agents Pty Limited had withheld PAYG amounts in respect of any payments made to the Applicant in respect of the years of income ended 30 June 2001 to 2003; or 50.4 tell me that Christopher Darin "had carriage of the matter to wind up Cleanfast Property Maintenance Agents Pty Limited ACN 078 361 369" …' 41 Mr Tomaras was not challenged in respect of this evidence, which I accept as correct. In my opinion Mr Savell's evidence goes no further than establishing that he provided Mr Darin's details to Mr Tomaras. The words 'who had the carriage of the matter to wind up CP Agents Pty Ltd (1996-1997 year) and Clean fast Property Maintenance Agents Pty Ltd A.C.N. 078 361 369 (Years ending 30th June 1998-2001, 2002 and 2003)' are nothing other than commentary. They do not provide evidence as to the words that were used by Mr Savell when he provided Mr Tomaras with Mr Darin's details. 42 The 'second' audit in respect of the applicant's claims for credits in respect of PAYE tax instalment deductions said to have been made for the years ended 30 June 1996, 30 June 1998, 30 June 1999 and 30 June 2000 was initiated by a letter from the Deputy Commissioner of Taxation to the applicant dated 28 September 2006. Inter alia, that letter stated: 'In order that we can consider your claim for PAYE TIDs, please provide details of the amount of all salary and wages paid and PAYE TIDs deducted from such payments during the years ended 30 June 1996, 1998, 1999 and 2000. You should also provide any documentary evidence that is available to support your entitlement to PAYE TIDs. If you have remitted PAYE TIDs, please provide full details of the name of the entity including the Group Employer Number under which these documents have been lodged and details of any payments that have been made. If you are unable to provide evidence that the salary and wages payments have been made and PAYE tax instalments deducted, then we may be unable to allow any PAYE TID credit claimed by you in your income tax returns. …' 43 In a facsimile sent on 1 November 2006 to the Australian Taxation Office by Mr Tsoukatos of Gertos Savell Katos, the applicant's tax agents, he said: 'Further to our telephone conversation today, we confirm that we are in receipt of your letters dated 28 September 2006 that relate to the income tax audit of Mr Perdikaris for the years 1996 to 2003 inclusive. We note that the letters had specified a past due date for the return of any additional information to substantiate the taxpayer's withholding credits. The process of sourcing this additional information is a lengthy process, given the age of the records, access to archives and access to records held by the liquidator of the taxpayer's former employer. This is an onerous task that cannot be completed by the due dates imposed in your letters, and for this reason, we respectfully request that you defer the issue of any assessments, allowing the taxpayer sufficient time to table the substantiating records. We trust that the taxpayer will have additional information provided to you on or before 10 November 2006. …' 44 By a letter dated 10 November 2006 to the Deputy Commissioner of Taxation, the applicant's tax agents said in respect of the applicant: 'We refer to the Income Tax Returns lodged for the years ending 30 June 1996, 1997, 1998, 1999, 2000, 2001, 2002 and 2003 wherein the Taxpayer claimed credits pursuant to PAYG amounts withheld (sic) from his salary. We understand the basis to defer assessment of the Income Tax Returns lodged was that there was no evidence that the relevant employer had set aside payments for services having the character of wages and salaries. It is submitted that the relevant issue at law is whether the characterisation of the payments received by the Taxpayer is in consideration for services provided by the Taxpayer in his capacity as an employee. The following documents are submitted in support of the claim that the Taxpayer received or was entitled to receive payments in his capacity as an employee. a) Duty Statement b) Inchoate Group Certificates and PAYG Payment summaries …' (Emphasis added) No 'additional information to substantiate the taxpayer's withholding credits' was forthcoming. 45 The evidence does not sheet home any responsibility whatsoever to the Australian Taxation Office for any understanding that the applicant's tax agents may have had in relation to the deferral of assessment of the applicant's income tax returns. 46 Notwithstanding the identification of the applicant's employer as Clean Fast Pty Limited in each of the applicant's tax returns for the years ending 30 June 1998, 30 June 1999 and 30 June 2000, the applicant's tax agents, who prepared those returns, said in their letter to the respondent of 10 November 2006: '1998, 1999 and 2000 Group Certificates were issued showing the employer as Clean Fast Pty Ltd ACN 062 002 019. It is observed that the identity of the employer was in fact Cleanfast Property Maintenance Agents Pty Ltd ACN 078 361 369. This error was made presumably by a member of the staff of Cleanfast Property Maintenance Agents Pty Ltd ACN 078 361 369, who appears to have copied the ACN of the former employer, probably believing that a name change had occurred and not the creation of a new company that was made on the 29/04/1997.' No errant 'member of the staff of Cleanfast Property Maintenance Agents Pty Ltd ACN 078 361 369' provided any evidence to the Deputy Commissioner to support the applicant's tax agents' speculation. Furthermore, no Group Certificates issued by Cleanfast Property Maintenance Agents Pty Limited ACN 078 361 369 in respect of salary or wages paid by that company to the applicant and deductions therefrom, were ever submitted to the respondent. 47 In respect of the years ended 30 June 2001, 30 June 2002 and 30 June 2003 the applicant's tax agents said in their letter of 10 November 2006: 'It is observed in respect of these years that name of the employer is in error and that there is no ACN stated in the PAYG Payment Summary. The correct name is Cleanfast Property Maintenance Agents Pty Ltd and the ACN is 078 361 369.' Once again it may be observed that no evidence was provided to the Deputy Commissioner to support the tax agents' assertion that there had been an error made in the preparation of the relevant PAYG payment summaries. No evidence was provided to the Deputy Commissioner by the 'authorised person' who issued the payment summaries on behalf of Clean Fast Pty Limited to establish that he or she had inadvertently referred to the wrong company when nominating Clean Fast Pty Limited as the relevant payer. Furthermore, no evidence was provided to explain the omission by the relevant authorised person of the 'Payer's ABN or withholder payer number' from the relevant PAYG payment summaries. In addition, no PAYG payment summaries issued, if at all, by Cleanfast Property Maintenance Agents Pty Limited ACN 078 361 369 in respect of tax withheld from salary or wages paid by that company to the applicant, were ever submitted to the respondent. 48 The so called 'Duty Statement' referred to in the tax agents' letter would appear to have been a document signed by the applicant and dated 9 November 2006 which relevantly provided as follows: '1, Chris Perdikaris … hereby declare that I was employed by Clean Fast Pty Ltd (ACN 062 002 019) as a Working Director and General Manager during the period October 1993 to April 1997 and by Cleanfast Property Maintenance Agents Pty Ltd (ACN 078 361 369) as a Working Director and General Manager during the period July 1997 to April 2004. …' The declaration was silent in relation to, firstly, the making by Clean Fast Pty Limited of deductions from any salary or wages that may have been paid by it to the applicant in the years of income ended 30 June 1996 and 30 June 1997, secondly, the making by Cleanfast Property Maintenance Agents Pty Limited of deductions from any salary or wages that may have been paid by that company to the applicant in the years of income ended 30 June 1998, 30 June 1999 and 30 June 2000 and thirdly, the withholding of any amounts by Cleanfast Property Maintenance Agents Pty Limited from any salary or wages that may have been paid by it to the applicant in the years of income ended 30 June 2001, 30 June 2002 and 30 June 2003. 49 Somewhat curiously, the applicant's income tax return for the year ended 30 June 1997, signed against the date 15 September 2005 and apparently lodged on 30 September 2005, was accompanied by one only Group Certificate which was purportedly issued on 9 August 1997 in respect of the whole of the period from 1 July 1996 to 30 June 1997 and not just 1 July 1996 to April 1997. Furthermore, the assertion in the applicant's declaration of 9 November 2006 that his service was as a 'Working Director and General Manager' for the two different companies mentioned in the financial years ended 30 June 1997 and 30 June 1998 respectively, does not sit comfortably with his identification of himself in his tax return for the year ended 30 June 1997 as an 'administrative officer' of 'C P Agents Pty Limited' and in his return for the year ended 30 June 1998 as an 'administrative officer' of Clean Fast Pty Limited. 50 On the applicant's own evidence the conclusion is inescapable that, in the eight relevant years of income, he derived assessable income as disclosed by him in the several returns which he lodged, declaring the information therein to be 'true and correct'. Whether he received the whole of his assessable income from his employment with whomsoever may have been his employer in cash or in some other form is irrelevant. This case is only concerned with his entitlement to credits against his tax liability for deductions said to have been made or amounts said to have been withheld by his relevant employer. 51 The applicant submitted that the respondent's 'decisions were that the particular amounts claimed to have been deducted [or withheld] were not deducted [or withheld]' i.e. the decisions were 'that these amounts were in fact paid by the employer and received by the employee'. The applicant further submitted that the taxpayer's returns were not admissions that he received the gross amounts. 52 As previously explained (at [5]-[9]) the notices of assessment that are in evidence have a conclusive evidentiary character both in respect of the due making of the assessments and that the amounts and all the particulars of the assessments were correct. 53 The declarations by the applicant in the returns in question that he derived assessable income by way of salary or wages as an 'administrative officer' in the amounts of $76,804, $79,508, $79,404, $81,640, $83,720, $92,092, $101,296 and $101,400 in the respective years of income, cannot be disputed in these proceedings. A finding that the applicant derived the income which he said he derived and thus that his taxable income was as returned in each of the years of income, did not require the respondent to draw any inferences from any rejection of claims that amounts said to have been deducted or withheld by the applicant's employer from his salary or wages had in fact been deducted or withheld. 54 Whilst it may be accepted, as the applicant submitted, that 'in general a false denial that a fact occurred does not provide evidence that it did occur' (per Clarke JA, with whom Gleeson CJ and Studdert J agreed, in R v Heyde (1990) 20 NSWLR 234 at 241-2), here, there was 'evidence aliunde' to support the Commissioner's assessments (cf Edmunds v Edmunds and Ayscough (1935) VLR 177 at 186-7). Furthermore, it was not necessary for the respondent to draw any inferences from circumstantial evidence to found her assessments. 55 The deduction of amounts under the PAYE system and the withholding of payments under the PAYG system are relevant to the discharge by a taxpayer of his or her liability to pay tax under a notice of assessment, not to the making of the assessment of the amount of a taxpayer's taxable income and of the tax payable thereon. 56 The applicant effectively argues that the respondent can't accept that the taxpayer derived the assessable income by way of salary or wages, which he declared that he had derived, unless the respondent also accepted that the company said to have paid that salary or wages, deducted or withheld the amounts said to have been deducted in the relevant group certificates/payment summaries. 57 Putting it another way, the applicant submits that, if the respondent accepts that the taxpayer derived the assessable income by way of salary and wages which he said that he derived in a given tax return, then the respondent must accept that the company whose group certificate/payment summary was attached to that return, as lodged, in fact deducted/withheld the amounts said to have been deducted/withheld from the relevant salary or wages. 58 Whether these propositions bear analysis or not will depend in part on the utility of placing reliance upon: · group certificates/payment summaries attached to income tax returns which were lodged out of time by 2 – 9 years, the relevant company issuing same having been wound up 8 years previously and deregistered six months' previously; · a group certificate issued in the name of a company which name the company did not assume until 9 months after the relevant group certificate was said to have been issued; · group certificates/payment summaries issued in the name of a company which that company ceased to have for up to seven years previously; · group certificates/payment summaries issued by a company which had been in liquidation for 1 – 6 years at the time of the issue thereof; · group certificates/payment summaries said to have been issued by a company which the applicant has since said was not his employer for 6 out of the 8 relevant years of income, notwithstanding that for 3 out of those 6 years the applicant specifically named the company in question as his employer in his income tax returns. 59 The relevant background facts having been stated, attention should now be given to the circumstances in which a taxpayer is entitled to a credit in respect of tax that is payable by him, by reference to deductions he believed that his employer may have made from his salary or wages under the PAYE system or to amounts he believed that his employer may have withheld from his salary or wages under the PAYG system. 60 In respect of the eight tax years presently under consideration there were three different statutory regimes. The relevant provisions for the years ended 30 June 1996, 30 June 1997, 30 June 1998 and 30 June 1999 were to be found in the Assessment Act, as were the relevant provisions for the year ended 30 June 2000. In respect of the years ended 30 June 2001, 30 June 2002 and 30 June 2003 the relevant provisions were to be found in the Administration Act. The provisions were as follows: Years of income ended 30 June 1996 – 30 June 1999 inclusive 61 Section 221H of the Assessment Act relevantly provided: '221H(2) Subsections (3) to (5) apply if: (a) an employer has made any deductions in respect of an employee under this Division … during a year of income; and (b) an assessment has been made of the tax payable … by the employee … in relation to the year of income (3) If the sum of the deductions … is less than or equal to the tax payable, the Commissioner must credit the sum in payment or part payment of the tax. (4) If the sum is more than the tax, the Commissioner must: (a) credit so much of the sum as is required in payment of: (i) firstly, the tax; and (ii) secondly, any other liability of the employee … that arises under or because of an Act of which the Commissioner has the general administration; and (b) pay to the employee … an amount equal to any excess. … (4B) The employee … is taken to have paid any amount credited by the Commissioner in payment of the tax or other liability, at the time at which the Commissioner credits the sum or at any earlier time that the Commissioner determines. (5) If the … sum credited … by the Commissioner exceeds the amount to which the employee … is entitled, the Commissioner may recover the excess as if it were income tax due and payable by the employee …' Year of income ended 30 June 2000 62 Section 221H of the Assessment Act relevantly provided: '221H(2) If: (a) an employer has made any deductions in respect of an employee under this Division during a year of income; and (b) an assessment has been made of the tax payable … by the employee in relation to the year of income; the employee is entitled to a credit equal to the sum of the deductions. … (4B) The employee … is taken to have paid any amount credited by the Commissioner in payment of the tax or other liability, at the time at which the Commissioner credits the sum or at any earlier time that the Commissioner determines. (5) If the … sum credited … by the Commissioner exceeds the amount to which the employee … is entitled, the Commissioner may recover the excess as if it were income tax due and payable by the employee …' Years of income ended 30 June 2001 – 30 June 2003 inclusive 63 Section 18-15 of Schedule 1 to the Administration Act relevantly provided: '18-15(1) A person is entitled to a credit equal to the total of the amounts withheld [amounts that the entity withheld from payments under Division 12 in Schedule 1 to the Administration Act] from withholding payments [payments from which amounts must be withheld under Division 12 in Schedule 1 to the Administration Act (even if the amount is not withheld)] made to the person during an income year if: (a) an assessment has been made of the income tax payable by the person for the income year; …' (The words in square brackets have been derived from the applicable definitions in s 995-1 of the Income Tax Assessment Act 1997 (Cth).) The Application 64 Following the institution of proceedings in the Federal Magistrates Court of Australia in 2006 (Perdikaris v Deputy Commissioner of Taxation SYG 3824 of 2006) leave was granted to the applicant to discontinue those proceedings noting an agreement between the parties dated 27 February 2007. The agreement provided: '1 the Applicant will discontinue these proceedings and commence fresh proceedings in the Federal Court of Australia within 28 days of today. 2. the respondent consents to such extension of time as may be required for the commencement of these proceedings in the Federal Court in relation to the subject matter of these proceedings and in relation to the 1997, 2001, 2002 and 2003 income years. 3 the parties agree that the costs of these proceedings will be costs in the cause in the Federal Court proceedings, and that the right of each party to contend in the Federal Court that those costs or any part thereof should be allowed or disallowed is expressly reserved, save that no objection will be made that such costs are not costs of the Federal Court proceedings. These costs are to be party/party costs as agreed or taxed. 4 In consideration of these terms the respondent agrees to make no application under Federal Magistrates Court Rule 13.02.' 65 The proceedings in this Court were instituted by the applicant on 27 March 2007 by the filing of an 'Application for an Order of Review'. The application was formulated as one under Order 54 of the Federal Court Rules i.e. one in which relief was sought under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the 'ADJR Act'). It is clear from paragraphs 1, 2 and 3 of the Application for an Order of Review that the applicant seeks relief in respect of what he claims to be 'a decision to which this Act applies' within the meaning of s 5(1) of the ADJR Act, relief in respect of conduct in which the respondent is said to have engaged for the purpose of making a decision to which the ADJR Act applies within the meaning of s 6(1) of the ADJR Act and relief in respect of an alleged failure by the respondent to make a decision to which the ADJR Act applies within the meaning of s 7 of the ADJR Act. 66 Paragraphs 1 – 3 of the Application for an Order of Review were expressed as follows: '1.Application to review the decision of the respondent that the Applicant: (a) is not entitled to PAYE credit of $31,252 for the year ended 30 June, 1996. (b) is not entitled to PAYE credit of $32,448 for the year ended 30 June, 1998. (c) is not entitled to PAYE credit of $33,592 for the year ended 30 June, 1999. (d) is not entitled to PAYE credit of $34,476 for the year ended 30 June, 2000. (e) is not entitled to PAYE credit of $33,436 for the year ended 30 June, 1997. (f) is not entitled to a PAYG withholding credit of $44,668 for the year ended 30 June, 2001. (g) is not entitled to a PAYG withholding credit of $49,140 for the year ended 30 June, 2002. (h) is not entitled to a PAYG withholding credit of $49,179 for the year ended 30 June, 2003. (i) is to be visited with tax shortfall penalties (in respect of 2001-2003) and general interest charges arising out of the above matters. 2.Further, or in the alternative, Application to review the conduct of the respondent under which: the respondent has made the determinations referred to in par. 1 (a) to (h) above for the purpose of making decisions under s.221H of the Income Tax Assessment Act, 1936 and Sch. 1, Pt. 2-5 of the Taxation Administration Act, 1953 and Pt IIB of the Taxation Administration Act, 1953 to refuse to credit the Applicant and to refuse to credit the Applicant's running balance account with the said amounts and for the purpose of making findings and decisions concerning tax shortfall amounts and for the purpose of making decisions concerning the application of general interest charges. 3.Further, or in the alternative, Application to review the failure of the respondent to: credit the amounts mentioned in par. 1(a) to (h) above pursuant to s. 221H(2) of the Income Tax Assessment Act, 1936 and Sch. 1, Pt. 2-5 of the Taxation Administration Act, 1953 and Pt. IIB of the Taxation Administration Act, 1953. 67 The applicant claimed to be aggrieved by the decision of the respondent or conduct or proposed conduct of the respondent or failure of the respondent because: '1.The respondent has proceeded on the basis that the applicant received the amounts the subject of his claims for PAYE and PAYG credits and has refused to make the said credits and has made entries on the applicant's running balance account and has imposed penalties and interest accordingly.' 68 The relief sought by the applicant was expressed as follows: 'The applicant claims – 1.Orders pursuant to s. 16 of the Administrative Decisions (Judicial Review) Act, 1977 that the said decisions be quashed or set aside and that the matters be referred to the respondent for determination according to law. 2.Further, or in the alternative, an Order pursuant to s. 16 of the Administrative Decisions (Judicial Review) Act, 1977 that the respondent do make decisions, or give further consideration, pursuant to s. 221H of the Income Tax Assessment Act, 1936 and Sch. 1, Pt. 2-5 of the Taxation Administration Act, 1953 and Pt IIB of the Taxation Administration Act, 1953 and sub-div. 284B of Sch. 1 of the Taxation Administration Act, 1953 concerning the applicant's claimed entitlements to credits, and concerning his liability to tax shortfall penalties and concerning his liability to interest. 3.An Order that time for the commencement of this Application be extended until the date of filing hereof. 4.Costs In the alternative to the foregoing relief, the Applicant claims: 5.An order of certiorari, that the said decisions of the respondent be quashed and that the matters be remitted to the respondent for determination according to law. 6.Further or in the alternative to par. 4, an order of prohibition against the respondent, prohibiting the respondent from acting on or proceeding further on the said decisions. 7.Costs. 8.Such further or other order as to the Court seems fit.' 69 It may be observed that in paragraphs 5-8 constitutional writ relief is sought in the alternative to the prayers for relief under the ADJR Act. Under s 39B(1) of the Judiciary Act 1903 (Cth) (the 'Judiciary Act') the original jurisdiction of the Federal Court of Australia includes jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth (see also ss 75(v) and 77(1) of the Constitution of the Commonwealth). 70 The application for an order of review included a series of grounds, nos 3 and 5(a) of which were abandoned by the applicant on 24 October 2007. The remaining grounds were as follows: '1.The respondent misdirected herself in that the procedures required by law to be observed in connexion with the making of the decisions, or in connexion with the conduct, were not observed in that it was a condition of the power, or alternatively, was a legal requirement to be observed in exercising the power, to make the decisions to make or not make the credit, that before the decision is made the Commissioner must first have made an assessment of the tax payable by the applicant or must be satisfied that no tax is payable, and the respondent proceeded without first making an assessment of the tax payable and the respondent did not determine that she was satisfied that no tax was payable. 2.The respondent misdirected herself in that she failed, in connexion with the making of the decision, or in connexion with the conduct, to ask herself and determine what were the assessable wages or salary of the applicant during the income years in question and whether the amounts of the credits claimed were or were not part of those assessable wages or salaries. … 4.The respondent acted on no evidence in concluding that the applicant had received the amounts of the claimed PAYE and PAYG deductions. 5.The respondent denied procedural fairness to the applicant in that the respondent in making the decision: … (b)did not identify and call for comment by the applicant on the material evidence that the respondent proposed to take into account, so far as it was considered to be adverse to him; and (c)did not identify the material issues in relation to the decisions or conduct, and did not call upon the applicant to address them. 6.The respondent took into account an irrelevant consideration, namely, that information available within the Tax Office that the employer company has not fulfilled its obligation to deduct and remit the amounts of PAYE deductions during the years ending 30 June, 1996-2000. 7.The respondent took into account an irrelevant consideration, namely, that information available within the Tax Office that the employer company has not fulfilled its obligation to report and remit the amounts of PAYG withholding deductions during the years ending 30 June, 2001-2003. 8.The aforementioned grounds consequentially affected the respondent's determination (in relatin (sic) to the imposition of tax shortfall penalties) of the existence of shortfall amounts, false or misleading statements, want of reasonable care and want of a reasonably arguable position. 9.Further, or in the alternative, the respondent misdirected herself as to the meaning or application of the concept 'want of reasonable care' in sub-div. 284B of Sch. 1 of the Taxation Administration Act, 1953, in that she failed to consider whether or not it was reasonable to claim the credits on the basis that that (sic) the credited income to which it referred was included as income in the group certificates and had not been received from the employer by the applicant. 10.Further, or in the alternative, the respondent misdirected herself in that table item 4 of s. 284-80(1) of sub-div. 284B of Sch. 1 of the Taxation Administration Act, 1953 was not capable of application in the circumstances.' Jurisdiction 71 On 5 April 2007 the respondent filed a 'Notice of Objection to Competency' which provided as follows: 'The Respondent objects to the jurisdiction of this Court to try this application to the extent that it seeks an order under the Administrative Decisions (Judicial Review) Act 1977 on the grounds that: 1. The application is incompetent because it seeks review under the Administrative Decisions (Judicial Review) Act 1977 (the ADJR Act) of alleged decisions that are not "decisions to which this Act applies", as defined in s.3 of the ADJR Act. 2. The alleged "decisions" do not exhibit the criteria of a "reviewable decision": (a) as stated by Mason CJ in Australian Broadcasting Tribunal v Bond [1990] 170 CLR 321 at 337 in that the "decisions" are not decisions "for which provision is made by or under a statute" or decisions "which are final or operative or determinative, at least in a practical sense…", nor (b) as stated by Gummow, Callinan and Heydon JJ in Griffith University v Tang [2005] 221 CLR 99 at [89], namely: i. the decision(s) must be expressly or impliedly required or authorised by the enactment; and ii. the decision must itself confer, alter or otherwise affect legal rights or obligations, and in that sense the decision must derive from the enactment. 3. In respect of the years of income ended 30 June 1996 to 30 June 2000 inclusive, section 221H (2) of the Income Tax Assessment Act 1936 itself prescribes the consequences that apply if a taxpayer's employer has in fact made instalment deductions from the taxpayer employee's income. 4. In respect of the years of income ended 30 June 2001 to 30 June 2003 inclusive, section 18-15 of Schedule 1 of the Taxation Administration Act 1953 itself prescribes the consequences that apply if a taxpayer's employer has in fact withheld amounts (i.e. income tax instalment deductions) from the taxpayer employee's income. 5. The Respondent has merely informed the Applicant of the consequences of the application of those provisions in the absence of evidence that the Applicant's employer did: 5.1. make instalment deductions (in respect of the years ended 30 June 1996 to 30 June 2000 inclusive); or 5.2. withhold amounts (in respect of the years of income ended 30 June 2001 to 30 June 2003 inclusive) from the Applicant's income in each of the relevant years of income. 6. The Respondent has not made reviewable decisions to which the ADJR Act applies.' 72 Putting to one side whether any ground was established or whether any relief would be futile or should be refused on some other basis, the respondent conceded that the Court had jurisdiction to deal with the application under s 39B of the Judiciary Act (see Richard Walter). 73 In relation to the prayers for relief under the ADJR Act the respondent submitted that the Court was without jurisdiction for the following reasons: · 'No alleged decision of the respondent, referred to in these proceedings, was a "decision" to which the ADJR Act applies, as it had neither of the indicia of such a decision identified in Griffith University v Tang (2005) 221 CLR 99 per Gummow, Callinan and Heydon JJ at [89]. ".. See also Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 337.. Section 221H of the Income Tax Assessment Act 1936 ("ITAA 36") does not "require or authorise" a decision (to use the language of Griffith University) or provide for the making of a decision (to use the language of Bond) that alters or affects legal rights or obligations. It is section 221H itself that has that effect; not any decision made by the respondent. The fact that the respondent, as a practical matter, forms a view as to how that section applies to the applicant and acts upon that view does not mean that the respondent is making a "decision…under an enactment". The position is comparable with Century Yuasa Batteries Pty Ltd v FC of T (1997) 143 ALR 477 at 487 (lines 40-47). The respondent's point is not that the decision is excluded by Sched 1 of the ADJR Act (as to which see Coco v Commissioner of Taxation (1993) 42 FCR 219;' (Footnotes omitted) · 'Nor was it "conduct" to which section 6 of the ADJR Act applies, as it was not for the purpose of making any "decision" to which that Act applies;' · 'Equally, there cannot here be said to have been any failure to make a "decision" to which the ADJR Act applies, such as might be actionable under section 7 of that Act, because there was no relevant duty: The alleged "decision" which the applicant claims was not made was not one to which the ADJR applies – see (a) above.' 74 In Griffith University v Tang (2005) 221 CLR 99, Gummow, Callinan and Heydon JJ said at [89]: '89 The determination of whether a decision is "made … under an enactment" involves two criteria: first, the decision must be expressly or impliedly required or authorised by the enactment; and, secondly, the decision must itself confer, alter or otherwise affect legal rights or obligations, and in that sense the decision must derive from the enactment. A decision will only be "made … under an enactment" if both these criteria are met. It should be emphasised that this construction of the statutory definition does not require the relevant decision to affect or alter existing rights or obligations, and it will be sufficient that the enactment requires or authorises decisions from which new rights or obligations arise. Similarly, it is not necessary that the relevantly affected legal rights owe their existence to the enactment in question. Affection of rights or obligations derived from the general law or statute will suffice.' Inquiries 75 The respondent's records revealed that C P Agents Pty Limited was not registered with the respondent as a group employer in respect of the years of income ended 30 June 1996 to 30 June 2000 or for any other years of income. 76 The respondent's ATO matching system records indicated that the company with the ABN 29 078 361 369 did not report or pay any amounts for PAYG withholding to the respondent for any period subsequent to 1 July 2000. 77 After receiving a letter from the applicant's tax agents, Gertos Savell Katos, dated 24 November 2005, Mr Tomaras had a conversation with Mr Savell in which conversation to the following effect took place: Tomaras: 'We have received your letter and supporting documentation. I have looked at the information you have sent me but you have sent the payee copies and not the payer copies of the relevant group certificate and payment summaries.' Savell: 'This is all the information that I have on file for Mr Perdikaris and the company. All the other information in respect of the company is with the liquidator …' 78 On 27 February 2006 Christopher Darin said to Mr Tomaras 'I've searched through all the records for the companies and Mr Perdikaris for 1997, 2001, 2002 and 2003 years as to whether any group tax has been paid to the Tax Office but I can't find any documents. I assume that none of the documents have been sent to the ATO and no group tax has been paid'. 79 On 6 March 2006 Mr Tomaras had a further conversation with Mr Savell in which conversation to the following effect took place: Tomaras: 'I rang in relation to Mr Perdikaris' matter. I have spoken with the liquidator and he says he doesn't have any documents that give me any information or any proof that the PAYE tax for the year ended 1997 and the PAYG Withholding for the years ended 30 June 2001, 2002 and 2003 for the companies concerned has been paid to the Tax Office or document have been lodged.' Savell: 'We don't hold any documents. They should all be with the liquidator. I will contact the liquidator to see what he has got on file or what information he has in relation to Mr Perdikaris. I will also contact Mr Perdikaris to see whether he has any information or proof that PAYG Withholding or group tax has been paid by the companies that issued the payment summaries and group certificates. I'll get back to you.' Consideration 80 It is clear that proper enquiries were made by the respondent of the applicant in relation to evidence that might have established that PAYE deductions had been made by the applicant's employer in respect of the applicant in relation to the years of income ended 30 June 1996, 30 June 1997, 30 June 1998, 30 June 1999 and 30 June 2000, and further, that PAYG amounts had been withheld by the relevant payer from amounts paid to the applicant in respect of the years of income ended 30 June 2001, 30 June 2002 and 30 June 2003 (see the letters from the respondent to the applicant of 28 September 2006 and 17 March 2006 (two letters) referred to above). 81 It will be recalled that in her first-mentioned letter the respondent said: 'In order that we can consider your claim for PAYE TIDs, please provide details of the amount of all salary and wages paid and PAYE TIDs deducted from such payments …. You should also provide any documentary evidence that is available to support your entitlement to PAYE TIDs. … If you are unable to provide evidence that the salary and wages payments have been made and PAYE tax instalments deducted, then we may be unable to allow any PAYE TID credit claimed by you in your income tax returns. …' 82 In the first letter of 17 March 2006 referred to above the respondent had said to the applicant: 'We have no record of the company remitting PAYE TIDs or lodging a Reconciliation Statement in respect of group certificates for the period 1 July 1996 to 30 June 1997. Therefore, we are unable to confirm if any PAYE TID credit is available for the employees of the company. In order that we can consider your claim for PAYE TID credit, please provide details of the amount of all salary and wages paid and PAYE TIDs deducted from such payments during the year ended 30 June 1997. You should also provide any documentary evidence that is available to support your entitlement to PAYE TID credit. … If you are unable to provide evidence that the salary and wages payments have been made and PAYE TIDs deducted, then we may be unable to allow any PAYE TID credit claimed by you in your income tax return.' 83 The second letter of 17 March 2006 the respondent had said to the applicant: 'We have no record of Business Activity Statements (BAS) or a Payment Summary Statement being lodged by the company for the income years 1 July 2001 till 30 June 2003. Therefore, we are unable to confirm if any PAYG Withholding credit is available for employees of the company. In order that we can consider your claim for PAYG Withholding credit, please provide details of the amount of all salary and wages paid to you and PAYG Withholding deducted from such payments for the income years 30 June 2001 till 2003. You should also provide any documentary evidence that is available to support your entitlement to PAYG Withholding credit. If you are unable to provide evidence that the PAYG Withholding has been deducted from your salary and wages payments, then we may be unable to allow the PAYG Withholding credit claimed by you in your income tax return. …' 84 The respondent's 'Reasons for Decision' forwarded to the applicant under cover of the respondent's letters dated 30 November 2006 and 28 September 2006 (two letters) make it clear that the paucity of relevant information in relation to the making of PAYE deductions and the withholding of PAYG payments, provided by the applicant, told against his claims for credits. 85 It will be recalled that the in the 'Reasons for Decision' accompanying the respondent's letter of 30 November 2006 the respondent said: 'We requested from you the employer copies of your group certificates for the years ending 30 June 1996, 1998, 1999 and 2000. Other than the employee copies of your group certificate for 1996 – 2000, you have not provided any evidence to support your contention that PAYE was deducted from payments of salary and wages made to you.' (Emphasis added) 86 Similarly, in the respondent's 'Reasons for Decision' forwarded to the applicant under cover of the respondent's letters of 28 September 2006 the respondent said: 'We contacted your tax agent by phone on 1 December 2005 requesting payer copies of the above [the applicant's group certificate for the year ended 30 June 1997]. He was unable to assist us, as all the information was with the liquidator, so on 6 December 2005 we contacted the liquidator's office by phone requesting the above and asking for evidence that PAYE was withheld (sic) from payments of salary and wages paid to you for the year ended 30 June 1997. … Other than the payee copies of your group certificate for 1997 and payment summaries for 2001 – 2003 years, you have not provided any other evidence to support your contention that PAYE was deducted from payments of salary and wages made to you. … We contacted your tax agent by phone on 1 December 2005 requesting payer copies of the above [the applicant's payment summaries for the years ended 30 June 2001, 30 June 2002 and 30 June 2003]. He was unable to assist us, as all the information was with the liquidator, so on 6 December 2005 we contacted the liquidator's office by phone requesting the above and asking for evidence that PAYGW was withheld from payments of salary and wages paid to you during the years ended 30 June 2001 to 30 June 2003 inclusive. You have not provided any other evidence to support your contention that PAYGW was deducted from payments of salary and wages made to you. …' (Emphasis added) 87 In the respondent's 'Reasons for Decision' forwarded under cover of her letter dated 30 November 2006 she also said: 'Information available within the Tax Office supports the conclusion that the company has not fulfilled its obligation to deduct and remit the amounts of PAYE deductions during the years ending 30 June 1996 – 2000.' (Emphasis added) 88 I do not consider that, by using the expression 'deduct and remit', the respondent was asserting that the applicant's employer had failed to relevantly make PAYE deductions as required. Rather, the respondent was focussing upon the failure of the applicant's employer to discharge its remittal obligation. A failure to remit will not, of itself, establish that there was a failure to make the requisite PAYE deductions, but a non-remittal will legitimately put into question whether deductions were made. 89 Similarly, in the respondent's Reasons for Decision forwarded under cover of her letters of 28 September 2006 she said: 'The issue of a group certificate is not conclusive evidence that PAYE deductions have been deducted from payments of salary and wages. Information available within the Tax Office supports the conclusion that the company has not fulfilled its obligation to deduct and remit the amounts of PAYE deductions during the year ended 30 June 1997. … … The issue of a Payment Summary solely is not conclusive evidence that PAYGW has been deducted (sic) from payments of salary and wages. Information available within the Tax Office supports the conclusion that the company has not fulfilled its obligation to report and remit the amounts of PAYGW during the years ended 30 June 2001 to 30 June 2003.' (Emphasis added) 90 Similar comments may be made in respect of these Reasons as were made in respect of the reasons previously considered at [88]. In relation to the three PAYG years, it may be observed that the respondent's reasons do not deal with the applicant's employer's obligation to 'withhold and remit' but rather, the payer's obligation to 'report and remit'. 91 The fact that the respondent forwarded letters to the applicant dated 30 November 2006 and 28 September 2006 reporting upon its audits, before the eight notices of assessment were issued on 28 December 2006, is of no moment. 92 Under the relevant legislation set out at [61] above the Commissioner was not obliged to credit any sum in payment or part payment of the relevant tax unless, firstly, the relevant employer had made PAYE deductions from which the sum of the deductions could be derived and, secondly, the Commissioner had assessed the amount of tax payable by the relevant employee, to the payment or part payment of which the sum of the deductions could be applied. 93 Plainly, until the relevant notices of assessment were issued, the occasion for the Commissioner to credit sums could not have arisen. But this did not preclude the respondent from addressing, before the notices of assessment were issued, whether the relevant employer had 'made any deductions' in respect of the relevant employee in the years in question. 94 Under the relevant legislation set out at [62] above, the respondent had no obligation to 'credit' any sums. The imperative 'must credit' was not employed. The legislation simply 'entitled' an employee to a credit equal to the sum of the deductions that had been made in respect of the employee. It was then for the Commissioner to credit the relevant sum of the deductions. 95 Under the relevant legislation applicable to the PAYG regime, set out at [63] above, the imperative 'must credit' was not used to impose an obligation upon the Commissioner rather, the legislation simply 'entitled' an employee to a credit equal to the total of the amounts withheld by the relevant payer from payments made to the relevant employee. 96 The obligatory crediting of the sums of the deductions in payment or part payment of the tax payable under an assessment, the entitlement of an employee to a credit equal to the sum of the deductions under the PAYE system and the entitlement of an employee to a credit equal to the total of the amounts withheld under the PAYG system did not form part of the assessment process. They were matters which were consequential upon the making by the Commissioner of assessments of the employee's taxable income and of the tax payable thereon. They were germane to the discharge by taxpayers, who had been employees in receipt of salaries or wages, of their tax liabilities, not to the determination of the relevant tax payable. 97 True it is that a determination that an employer has not made PAYE deductions or that a payer has not withheld PAYG amounts from payments made to an employee will negate any obligation on the Commissioner to credit the sum of the deductions in payment or part payment of the relevant tax or deny the entitlement of the employee to a credit equal to the sum of the deductions or the total of the PAYG amounts withheld, but such a determination will not constitute a decision made under an enactment. 98 In my opinion, the determinations did not answer the description of being decisions made under an enactment in the requisite sense as explained by Gummow, Callinan and Heydon JJ in Griffith University v Tang (see [74] above). They did not, in my opinion, by themselves confer, alter or otherwise affect legal rights or obligations and in that sense derive from the relevant enactment. 99 Were the respondent to bring recovery proceedings against the applicant, the applicant would not be precluded by the determinations from asserting that his employer had made the relevant PAYE deductions or withheld the relevant PAYG amounts, for which he contends. All that the determinations do is deny the applicant the credits which he contends the Commissioner must make or to which he submits that he has become entitled, unless and until he establishes, he carrying the onus of proof, that his employer made the deductions or withheld the payments as claimed. 100 Nothing that was said by Adams J in Laurent v The Law Society of New South Wales [2000] NSWSC 1103 ('Laurent') assists the applicant in the present case. In Laurent the plaintiffs sought to set aside a decision of the Council of the Law Society of New South Wales in relation to a claim made against the Solicitors' Fidelity Fund. Section 80 of the Legal Profession Act 1987 (NSW) ('the Legal Profession Act') made provision for claims against the Fidelity Fund to be made in writing in the form approved by the Law Society. Section 80(3) provided for the Law Society to investigate claims made against the Fidelity Fund and to determine the claims by wholly or partly allowing, compromising, settling or disallowing them. For there to be a successful claim against the Fidelity Fund it was necessary that there be a 'dishonest default' or a failure to account within the meaning of the Legal Profession Act. Absent a conviction, it was necessary for the Council of the Law Society to make a finding of dishonesty before a claim could be allowed on either basis. Plainly, determinations made by the Council of the Law Society under the Legal Profession Act had an entirely different character from determinations made by the respondent in respect of PAYE deductions said to have been made by an employer during a year of income and PAYG amounts said to have been withheld from payments by way of salary or wages made to a person such as the applicant during a year of income. 101 Were the determinations of the respondent open to review it could not be said that the respondent failed to accord the applicant procedural fairness. The applicant was afforded an opportunity to put information and submissions to the respondent in support of an outcome that supported his interests. In my opinion it was not incumbent upon the respondent to afford the applicant an interview before making the determinations which she made. 102 Natural justice and fairness are not to be equated. In the context of administrative decision-making it is more appropriate to speak of a duty to act fairly or to accord procedural fairness (per Mason J, as his Honour then was, in Kioa v West (1985) 159 CLR 550 at 583). 103 In most cases the critical question is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case? (see per Kitto J in Mobil Oil Australia Proprietary Limited v The Commissioner of Taxation (1963) 113 CLR 475 at 504, per Mason J in Kioa v West at 585 and per Ellicott J in Finch v Goldstein (1981) 36 ALR 287). 104 The expression 'procedural fairness' more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, i.e. in accordance with procedures that are fair to the individual in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations (per Mason J in Kioa v West at 585 cf Salemi v MacKellar [No. 2] (1977) 137 CLR 396 at 451 per Jacobs J). 105 Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice (per Gleeson CJ in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 ('Lam') at [37]). 106 The content of the requirement for procedural fairness may fluctuate during the course of particular administrative decision-making (per Gaudron and Gummow JJ in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 ('Aala') at [62]; see also per McHugh and Gummow JJ in Lam at [48]). 107 Insofar as the determinations of the respondent may have constituted decisions, it is clear that the respondent did not identify a wrong issue, ask herself a wrong question, ignore relevant material, rely on irrelevant material to make an erroneous finding or reach a mistaken conclusion. Furthermore there was no question of Wednesbury unreasonableness (see Williams v Minister for Justice and Customs of the Commonwealth of Australia [2007] FCAFC 33 at [32]-[39]). There was no jurisdictional error. 108 In considering the respondent's determinations, it is not in point to ask whether her factual conclusions were right. The relevant question related to the respondent's processes, not her actual decision. 109 The determinations of the respondent in this case were not determinations as to the time at which amounts credited by the Commissioner should take effect within the meaning of s 221H(4B) of the Assessment Act as in force in the years of income ended 30 June 1996 – 30 June 2000 inclusive. Determinations under s 221H(4B) are predicated upon an obligation or entitlement to a credit of the sum of the deductions made by an employer, in payment or part payment of the relevant tax. Discretion 110 Were the applicant otherwise entitled to Constitutional writ relief, in the circumstances of the present case, as recorded above, I would consider the matter to be one where, it would be appropriate for the Court, in the exercise of its discretion, to decline to order the relief sought (see generally per Gaudron and Gummow JJ in Aala at [43]-[62] and, in particular, [53]). Decision 111 For the reasons indicated above, grounds 1, 2, 4, 5(b), 5(c), 6 and 7 fail. It follows that grounds 8, 9 and 10 also fail. 112 Furthermore, it should be observed in relation to the applicant's challenges to the assessment of penalties in respect of the years of income ended 30 June 2001, 30 June 2002 and 30 June 2003 that such challenges were restricted by s 298-30 of Schedule 1 to the Administration Act to proceedings under Part IVC of the Administration Act on a review or appeal relating to the assessment. The application for an order for review presently before the Court is not such a proceeding. Section 298-30 provided: '298-30(1) The Commissioner must make an assessment of the amount of an administrative penalty under Division 284. (2) An entity that is dissatisfied with such an assessment made about the entity may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953. (3) The production of a notice of such an assessment, or of a copy of it certified by or on behalf of the Commissioner, is conclusive evidence of the making of the assessment and of the particulars in it. (4) Subsection (3) does not apply to proceedings under Part IVC of the Taxation Administration Act 1953 on a review or appeal relating to the assessment.' 113 In an affidavit of Mr Savell sworn 2 April 2007 he referred to a printout which he caused to be made on 21 February 2007 of what he described as 'the running balance of the Applicants intergrated account (sic)' which commenced 1 November 2006. The evidence of Farisha Ali, a Tax Technical Officer in the Micro Enterprises and Individuals business line of the Australian Taxation Office, was that the document in question, to which Mr Savell referred, was 'an itemised statement of account and not an RBA [a Running Balance Account under the Administration Act]'. Given the findings which have been made, it is unnecessary to make any finding as to whether or not the account to which Mr Savell referred was a Running Balance Account, or as to the consequences which may have flowed from it being such an account. 114 In my opinion the application should be dismissed with costs which will, of course, include the costs of the proceedings in the Federal Magistrates Court of Australia SYG 3824 of 2006, subject to the agreement of the parties in relation thereto, to which reference has been made. I certify that the preceding one hundred and fourteen (114) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 21 December 2007 Counsel for the Applicant: D E Grieve QC, D A Smallbone and J Cohen Solicitor for the Applicant: Ian J Kalaf Counsel for the Respondent: N J Williams SC and G T Johnson Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 24 and 25 October 2007 Date of Judgment: 21 December 2007	30,551
federal_court_of_australia:fca/single/2024/2024fca0395	decision	commonwealth	federal_court_of_australia	text/html	2024-04-04 00:00:00	Tam v 5 Autumndale Holdings Pty Ltd [2024] FCA 395	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2024/2024fca0395	2024-09-13T22:49:50.275265+10:00	FEDERAL COURT OF AUSTRALIA Tam v 5 Autumndale Holdings Pty Ltd [2024] FCA 395 File number(s): NSD 338 of 2024 Judgment of: HALLEY J Date of judgment: 4 April 2024 Date of publication of reasons 19 April 2024 Catchwords: CORPORATIONS – liquidator – appointment of provisional liquidator Legislation: Corporations Act 2001 (Cth) ss 462 and 472 Cases cited: Allstate Exploration v Batepro [2004] NSWSC 261 Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 2) (2013) 93 ACSR 189; [2013] FCA 234 Australian Securities and Investments Commission v Sino Australia Oil and Gas Ltd (2015) 106 ACSR 575; [2015] FCA 531 Australian Securities Commission v Solomon & Ors [1996] 19 ACSR 73 Constantinidis v JGL Trading Pty Ltd (1995) 17 ACSR 625 Grace v Grace [2007] NSWSC 6 Lubavitch Mazal v Yeshiva Properties No. 1 Pty Ltd (2003) 47 ACSR 197; [2003] NSWSC 535 Re Carapark Industries Pty Ltd (in liq) (1966) 9 FLR 297; [1967] 1 NSWR 337 Re Club Mediterranean Pty Ltd (1975) 11 SASR 481 Re J N Taylor Holdings Ltd; Zempilas v J N Taylor Holdings Ltd (1990) 3 ACSR 518 Tam v MLPG Holdings Australia Pty Ltd [2024] FCA 394 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 31 Date of hearing: 4 April 2024 Counsel for the Plaintiff: Mr J Baird Solicitor for the Plaintiff: Proctor Phair Lawyers ORDERS NSD 338 of 2024 BETWEEN: JEFFREY TAM Plaintiff AND: 5 AUTUMNDALE HOLDINGS PTY LTD Defendant order made by: HALLEY J DATE OF ORDER: 4 April 2024 THE COURT NOTES THAT: A. The plaintiff, by his counsel, has given the usual undertaking as to damages. THE COURT ORDERS THAT: 1. Pursuant to s 472(2) of the Corporations Act 2001 (Cth) (Act), Phillip Hosking of Helm Advisory is appointed provisional liquidator of 5 Autumndale Holdings Pty Ltd (ACN 653 551 458) (Company) until the making of a winding up order or otherwise until further order. 2. The provisional liquidator shall have, in respect of the Company, all the powers that a liquidator of a company would have pursuant to ss 472(3) and (4) and s 477 of the Act and, without limiting the foregoing, the following powers: (a) to enter into possession and take control of all assets of the Company including all assets of the Company used in or relating to its operations, together with all books, records, computers, computer disks, and any other papers or records relating thereto; (b) to deal with any monies held by or on behalf of the Company or its officers, employees or agents or any of them, being monies received in relation to or employed in the Company's operations; (c) to operate and inspect any account at any bank or other financial institution being an account operated by the Company or its officers, employees or agents or any of them and to withdraw any such monies and to pay any such monies into an account or accounts opened or maintained by or for the provisional liquidator; (d) to appoint a solicitor, accountant or other professionally qualified person either within or outside Australia to assist the provisional liquidator; (e) to delegate to his partners, directors, employees and agents whether within or outside Australia any business or matter that the provisional liquidator is unable to do himself or that can be done more conveniently by those others; (f) to receive any monies due to the Company relating to its operations; (g) to compromise any calls, liabilities to calls, liabilities capable of resulting in debts and any claims (present or future, certain or contingent, ascertained or sounding only in damages) subsisting or supposed to subsist between the Company and a contributory or other debtor or person apprehending liability to the Company, and all questions in any way relating to or affecting the property of the Company, on such terms as are agreed, and take any security for the discharge of, and give complete discharge in respect of, any such call, debt, liability or claim; (h) for the purposes of maintaining and securing the assets of the Company: (i) to pay any expense, including for the purposes of insurance; (ii) to execute any document; (iii) bring or defend any proceeding; (iv) to carry on business; (v) to obtain credit; and (vi) do any other act or thing, (vii) in the name of or on behalf of the Company, its officers, employees or agents or any of them; (i) to make any application to any court or regulatory agency for the purposes of exercising the powers in (a) to (h) above; (j) to apply for further orders, including the power to realise the assets and pay the liabilities of the Company and to seek directions as to the disposition of any remaining proceeds, and to apply for the power that a liquidator would have under s 568 of the Act to disclaim onerous property or unprofitable contracts and for leave to exercise the power; and (k) to receive remuneration on a time basis within the scale of charges approved by the Court, such remuneration to be paid from the proceeds of the winding up. 3. Within 28 days of his appointment in accordance with Order 1 above, Mr Hosking is to provide to the Court a report as to the provisional liquidation of the Company, including: (a) the identification of assets and liabilities of the Company; (b) an opinion as to the solvency of the Company; (c) an opinion as to the assets and liabilities of the Company; (d) an opinion as to whether the Company has proper financial records; and (e) any other information that might be necessary to enable the financial position of the Company to be assessed. 4. The proceedings be referred to the National Operations Registrar for allocation to a docket judge. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT HALLEY J: A. INTRODUCTION 1 On 4 April 2024, I made orders as the Commercial and Corporations Duty Judge pursuant to s 472(2) of the Corporations Act 2001 (Cth) (Act), that Phillip Hosking of Helm Advisory, be appointed as a provisional liquidator of the defendant, 5 Autumndale Holdings Pty Ltd (ACN 653 551 458) (5 Autumndale). 2 By an originating application filed on 26 March 2024, the plaintiff, Jeffrey Tam, seeks an order for the winding up of 5 Autumndale, both on the just and equitable ground and on the ground of insolvency. 3 In a related proceeding, Mr Tam also seeks an order for the winding up of MLPG Holdings Australia Pty Ltd (ACN 643 965 119) (MLPG), both on the just and equitable ground and on the ground of insolvency: Tam v MLPG Holdings Australia Pty Ltd [2024] FCA 394. 4 Mr Tam also seeks an order for the appointment of a liquidator provisionally to MLPG in the related proceeding. 5 Mr Tam relied on: (a) his affidavit sworn on 25 March 2024 and its exhibits; (b) the affidavit of Daniele Phair, a solicitor for the plaintiff, sworn on 3 April 2024; and (c) the preliminary report of Mr Hosking dated 27 March 2024. 6 These are my reasons for making the orders on 4 April 2024. B. BACKGROUND 7 Paul Jaque Giezekamp is the sole director and shareholder of 5 Autumndale. 8 On 30 September 2024, Mr Tam entered into a joint venture agreement with 5 Autumndale (JVA) for the construction of four townhouses on the property at 5 Autumndale Avenue, Reservoir, Victoria (5 Autumndale property). 9 Clause 3.1 of the JVA provided that Mr Tam had to contribute capital either by subscribing for shares in 5 Autumndale or by providing a loan advance to 5 Autumndale in an aggregate amount of $400,000. Clause 2.1(c) of the JVA provided that Mr Tam was to receive an agreed return of an additional amount of $200,000 by way of a profit share, in total an amount of $600,000. 10 On 30 September 2022, Mr Tam advanced $350,000 to 5 Autumndale and subsequently on 28 October 2022, Mr Tam paid the balance outstanding under cl 3.1 of the JVA of $50,000 to 5 Autumndale. 11 Clause 3.6 of the JVA provided that the monies advanced by Mr Tam were to be used by 5 Autumndale to reduce the loan amount advanced by Mr Giezekamp and his company, U Money Australia Pty Ltd, to 5 Autumndale. 12 Mr Tam gave evidence that 5 Autumndale (a) has failed to enter into a construction contract with a builder or to commence construction on the four townhouses, (b) has abandoned the project, (c) without his knowledge or consent, has sold the 5 Autumndale property on 24 August 2023 for $950,000, and (d) is not presently trading. 13 Mr Tam also gave evidence that he has not received any response from Mr Giezekamp, despite repeated requests, as to how the money that he has advanced to 5 Autumndale has been disbursed or received any information on the reconciliation of the monies received on the sale of the 5 Autumndale property. C. PRINCIPLES 14 In the related proceeding brought by Mr Tam against MLPG, I summarised the relevant principles in relation to the appointment of a liquidator provisionally pending the final hearing of a winding up application: MLPG Holdings at [17] to [24]. For convenience, I set out those principles below. 15 First, the usual, although not the only, purpose for which a provisional liquidator is appointed is to preserve the assets of the company and the status quo in relation to its affairs: Re J N Taylor Holdings Ltd; Zempilas v J N Taylor Holdings Ltd (1990) 3 ACSR 518 (King CJ, Cox and Olsson JJ); Australian Securities and Investments Commission v Sino Australia Oil and Gas Ltd (2015) 106 ACSR 575; [2015] FCA 531 at [10] (Davies J). 16 Second, the primary duty of a provisional liquidator is to preserve the status quo so as to ensure the least possible harm to all concerned and to enable the Court to decide, after a proper final hearing, whether the company should be wound up: Australian Securities and Investments Commission v ActiveSuper Pty Ltd (No 2) (2013) 93 ACSR 189; [2013] FCA 234 at [16(c)] (Gordon J) citing Re Carapark Industries Pty Ltd (in liq) (1966) 9 FLR 297; [1967] 1 NSWR 337 (Street J). 17 Third, the appointment of a provisional liquidator pending a determination of a winding up petition, is a drastic intrusion into the affairs of a company and is not to be contemplated if other measures would be adequate to preserve the status quo: Zempilas, Constantinidis v JGL Trading Pty Ltd (1995) 17 ACSR 625 at 635 (Kirby P, Meagher and Powell JJA); ActiveSuper Pty Ltd (No 2) at [7]. 18 Fourth, the Court should only appoint a provisional liquidator where it is satisfied that there is a reasonable prospect that a winding up order will be made at a final hearing: ActiveSuper Pty Ltd (No 2) at [15] (Gordon J) citing Australian Securities Commission v Solomon & Ors [1996] 19 ACSR 73 at [7] (Tamberlin J). 19 Fifth, in addition to considering whether there is an arguable case to establish a ground for winding up, the Court must consider the degree of urgency, the need established by the applicant creditor, and the balance of convenience: ActiveSuper Pty Ltd (No 2) at [16] citing Re Club Mediterranean Pty Ltd (1975) 11 SASR 481; Lubavitch Mazal v Yeshiva Properties No. 1 Pty Ltd (2003) 47 ACSR 197; [2003] NSWSC 535 at [106] (Austin J). 20 Sixth, a creditor has standing to seek a winding up order under s 462(2)(b) of the Act, and therefore has standing to seek the appointment of a provisional liquidator under s 472(2): Allstate Exploration v Batepro [2004] NSWSC 261 at [21]. 21 Seventh, the appointment of a provisional liquidator may be appropriate in a case involving a dispute between parties to a joint venture but that course is not lightly to be adopted: Grace v Grace [2007] NSWSC 6 at [28] (Brereton J) citing Zempilas and Constantinidis. D. CONSIDERATION 22 Mr Tam has standing to seek the appointment of a provisional liquidator to 5 Autumndale. He is a creditor of 5 Autumndale for at least the principal amount of the loan he has advanced of $400,000. It is not necessary to make any finding as to whether he was also presently entitled to the proposed return of $200,000 pursuant to cl 2.1(c) of the JVA. 23 I was satisfied that Mr Hosking should be appointed as a provisional liquidator of 5 Autumndale until the making of a winding up order or, otherwise until further order, in order to protect the interests of its creditors, in particular Mr Tam, for the following reasons. 24 First, Mr Tam advanced $400,000 to 5 Autumndale pursuant to the terms of the JVA in two tranches in September and October 2022 to fund, in substantial part, the development of townhouses on the 5 Autumndale property but no work has been commenced on the 5 Autumndale property, and the 5 Autumndale property has been sold. 25 Second, Mr Tam has not received any repayment of the $400,000 that he has advanced to 5 Autumndale and the sole director of the company, Mr Giezekamp, has not responded to any telephone calls or correspondence from Mr Tam, and 5 Autumndale is not currently trading. 26 Third, given that (a) 5 Autumndale presently owes Mr Tam an amount of at least $400,000, being the principal amount of the loans that he has advanced, (b) 5 Autumndale is not currently trading, (c) no work has been commenced on the 5 Autumndale property, and (d) the 5 Autumndale property has been sold, it is likely that 5 Autumndale is insolvent and a winding up order will be made against it at the final hearing. 27 Fourth, there is a particular need for an independent person to be appointed with power to investigate the affairs of each company, especially in relation to the conduct of Mr Giezekamp, the significant amounts advanced by Mr Tam to 5 Autumndale, and the whereabouts of the monies advanced by Mr Tam. These circumstances call for a proper and independent investigation. Relevantly, Mr Hosking has already commenced investigations in relation to the affairs of MHPG Holdings Australia Pty Ltd, a company of which Mr Giezekamp is also the sole director and shareholder. 28 Fifth, there is no apparent prejudice to 5 Autumndale should a provisional liquidator be appointed as the property has been sold and there is no suggestion that 5 Autumndale is presently trading. 29 Sixth, given Mr Giezekamp's failure to respond to any communications from Mr Tam, there is no reasonable alternative to the appointment of a provisional liquidator, and there is nothing to suggest that Mr Tam is not acting reasonably and bona fide in seeking Mr Hosking's appointment. 30 Seventh, the balance of convenience also favours the appointment of a provisional liquidator. The adverse consequences to Mr Tam of allowing the present position to continue significantly outweigh any possible adverse consequences to 5 Autumndale arising from the appointment of a provisional liquidator. DISPOSITION 31 By reason of the above matters, I was satisfied that this was an appropriate case to make an order that Mr Hosking be appointed provisional liquidator of 5 Autumndale. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Halley. Associate: Dated: 19 April 2024	3,802
federal_court_of_australia:fca/single/2007/2007fca0972	decision	commonwealth	federal_court_of_australia	text/html	2007-06-28 00:00:00	Lamb v Hog’s Breath Company Pty Ltd ( No 3) [2007] FCA 972	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2007/2007fca0972	2024-09-13T22:49:50.563749+10:00	FEDERAL COURT OF AUSTRALIA Lamb v Hog's Breath Company Pty Ltd ( No 3) [2007] FCA 972 PRACTICE AND PROCEDURE – interrogatories – pleadings – whether interrogatories should be permitted prior to filing of defence – no point of principle Copyright Act 1968 (Cth) s 115(4), s 116(1) Lamb v Hog's Breath Company Pty Ltd (No 2) [2007] FCA 201 cited JOHN CHARLES LAMB v HOG'S BREATH COMPANY PTY LTD ACN 011 054 970, HOG'S BREATH CAFE (AUSTRALIA) PTY LTD ACN 071 132 655, HB INVESTMENTS PTY LIMITED ACN 060 678 328, HOG'S BREATH CLOTHING CO PTY LTD ACN 060 678 355 AND DONALD RICHARD ALGIE WAD 300 OF 2006 FRENCH J 28 JUNE 2007 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 300 OF 2006 BETWEEN: JOHN CHARLES LAMB Applicant AND: HOG'S BREATH COMPANY PTY LTD ACN 011 054 970 First Respondent HOG'S BREATH CAFE (AUSTRALIA) PTY LTD ACN 071 132 655 Second Respondent HB INVESTMENTS PTY LIMITED ACN 060 678 328 Third Respondent HOG'S BREATH CLOTHING CO PTY LTD ACN 060 678 355 Fourth Respondent DONALD RICHARD ALGIE Fifth Respondent JUDGE: FRENCH J DATE OF ORDER: 28 JUNE 2007 WHERE MADE: PERTH THE COURT ORDERS THAT: On the First, Third, Fourth and Fifth Respondents' motion filed 15 June 2007: 1. The respondents are to file and serve their defences by 31 August 2007. 2. The applicant is to file and serve any reply by 21 September 2007. 3. The first, third, fourth and fifth respondents' motion is otherwise dismissed. 4. The costs of the motion are 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 WESTERN AUSTRALIA DISTRICT REGISTRY WAD 300 OF 2006 BETWEEN: JOHN CHARLES LAMB Applicant AND: HOG'S BREATH COMPANY PTY LTD ACN 011 054 970 First Respondent HOG'S BREATH CAFE (AUSTRALIA) PTY LTD ACN 071 132 655 Second Respondent HB INVESTMENTS PTY LIMITED ACN 060 678 328 Third Respondent HOG'S BREATH CLOTHING CO PTY LTD ACN 060 678 355 Fourth Respondent DONALD RICHARD ALGIE Fifth Respondent JUDGE: FRENCH J DATE: 28 JUNE 2007 PLACE: PERTH REASONS FOR JUDGMENT ON FIRST, THIRD, FOURTH AND FIFTH RESPONDENTS' MOTION TO VACATE ORDERS FOR INTERROGATORIES 1 John Lamb, a citizen of the United States, says he is the owner of copyright in a cartoon of a pig known as the "Wave Hog Work". He claims to have produced the work in 1987 for use on shirts in order to promote a restaurant called "The Hog's Breath Saloon" in Florida. 2 In proceedings commenced in this Court on 24 October 2006 Mr Lamb sought declarations that his copyright had been infringed by the respondents. He sought injunctive relief and damages and an account of profits. He alleged, in substance, that from 1996 onwards companies controlled by Mr Donald Algie, a former employee of the Hog's Breath Saloon in Florida, had infringed his copyright in the Wave Hog Work in various ways. These have involved the application of the cartoons to various articles including articles of clothing and in connection with restaurant services supplied by Hog's Breath cafes in Australia. 3 On 26 February 2007 I made orders in the following terms: 1. The applicant is to file and serve a substituted statement of claim on or before 26 March 2007. 2. The respondents are at liberty to provide to the applicant on or before 12 March 2007 information by way of letter or disclosure of documents or by an affidavit sworn by their solicitor upon instructions, setting out: (i) their respective functions as members of the Hog's Breath group of companies in Australia; (ii) their respective roles in the use of the Hog's Breath Works as defined in the statement of claim and/or the registered trade marks referred to in the statement of claim; (iii) the ways in which the Hog's Breath Works and/or the registered trade marks have been used by them in respect of the classes of goods and services to which they relate. I also made orders relating to the costs of the respondents' strike out motion and adjourned the directions hearing to 11 April 2007: Lamb v Hog's Breath Company Pty Ltd (No 2) [2007] FCA 201. 4 In argument prior to the delivery of that judgment counsel for Mr Lamb said that he did not have a clear picture of the respective functions of the respondent companies within the Hog's Breath group. In the original statement of claim it was said that HB Investments Pty Limited (HB Investments) held registered trade marks and that the principal case against it was that it had authorised infringement of Mr Lamb's copyright in the Wave Hog Work by licensing to the other corporate respondents the right to use those trade marks. What trade marks were licensed to which respondents did not appear. A significant obstacle in the way of a more precise pleading on Mr Lamb's part was the absence of information about which of the companies took that role within the Hog's Breath group and which was responsible for the production and marketing of the various articles said to bear infringing productions of the work or of a substantial part thereof. As noted in that judgment want of knowledge does not of itself excuse a pleading which does not identify which cause of action is raised against which respondent or which fails to identify the material facts constituting each such cause of action. Although O 15A of the Federal Court Rules may well have been available to enable Mr Lamb to identify the persons against which he might have a cause of action, or the causes of action he might have, it was not availed of. 5 A substituted statement of claim was filed on 10 April 2007. It was a much more substantial document than its predecessor and was settled by senior counsel. It identifies Hog's Breath Company Pty Ltd (Hog's Breath Company) as the master franchisor, since 24 October 2006, of a franchised chain of restaurants around the world known as "Hog's Breath Cafes". A list of Australian franchisees is scheduled to the statement of claim. Hog's Breath Cafe (Australia) Pty Ltd (Hog's Breath Cafe (Australia)), the second respondent, is identified as the master franchisee of the Australian franchisees since at least 24 October 2006. HB Investments is said to be the registered owner of Australian registered trade mark numbers 701388 and 1013512, both of which involve the image described, inter alia, as "Hog, cartoon wears sunglasses & crossed bandages, adhesive on body". Hog's Breath Clothing Co Pty Ltd (Hog's Breath Clothing) is said to be the owner and operator of a business selling merchandise under the name "Hog's Breath Clothing" through a website and through the Australian franchisees. The fifth respondent, Mr Algie, is said to be a director, secretary and majority shareholder of Hog's Breath Company and to have been a director of Hog's Breath Cafe (Australia) between September 1995 and April 2000. He is also said to be a director, secretary and majority shareholder of HB Investments and a director, secretary and majority shareholder of Hog's Breath Clothing. 6 Paragraphs 7 to 12 assert subsistence and ownership of copyright in the Wave Hog Work by Mr Lamb. Paragraphs 13 and 14 plead and particularise Mr Algie's access and exposure to the Wave Hog Work and his knowledge that the respondents are not, and have not, been the owners of copyright in that work. It is alleged that the work depicted in Schedule B to the application is a reproduction of the whole or a substantial part of the Wave Hog Work ([15]). Paragraphs 16 to 21 deal with the conduct of the Australian franchisees asserting, inter alia, that they have displayed the infringing work on restaurant signage and on banners and have distributed or offered for sale or exhibited to the public various items depicting that work. These items are set out in a schedule to the substituted statement of claim. 7 The substituted statement of claim then sets out the bases of Mr Lamb's copyright claim against Hog's Breath Company ([22]-[38]), Hog's Breath Cafe (Australia) ([39]-[54] inclusive), HB Investments ([55]-[66] inclusive), Hog's Breath Clothing ([67]-[83] inclusive) and Mr Algie ([84]-[103] inclusive). There are allegations of a common design entered into by the various respondents ([104]) and pleading of facts relied upon to support a claim for additional damages under s 115(4) of the Copyright Act 1968 (Cth) and conversion damages under s 116(1) of that Act ([105]-[106]). Moral rights claims are also raised against the respondents ([107]-[175]). The substituted statement of claim concludes with allegations that the registration by HB Investments of the Australian registered trade marks was and remains unlawful. 8 The day following the filing of the substituted statement of claim, the matter came back for directions and the hearing was adjourned to 24 April 2007. The parties were directed to confer with a view to agreeing so far as was possible further programming orders. 9 On 24 April 2007 orders were made extending the time which had been permitted for the applicant to file his substituted statement of claim to 10 April 2007. A stay of proceedings caused by Mr Lamb's failure to provide security for costs within a time limit previously fixed was lifted as security had been provided. The respondents were directed to serve any requests for particulars by 16 May 2007 and Mr Lamb to provide a response to any request by 31 May 2007. Order 6 gave Mr Lamb leave to administer interrogatories before 31 May 2007 relevant to: (a) the respondents' respective functions as member (sic) of the Hog's Breath group of companies in Australia; (b) the respondents' respective roles in the use of the HB Works as defined in the statement of claim and/or the registered trademarks referred to in the statement of claim; (c) the ways in which the HB Works and/or the registered trademarks have been used by the respondents in respect of the classes of goods and services to which they relate. The respondents were directed to provide answers to the interrogatories by 15 June 2007 subject to any just objections. The parties were also required to confer on or before 31 May 2007 with respect to categories of documents to be discovered and Mr Lamb by that date to file and serve a request for discovery by reference to agreed categories and otherwise by reference to such categories as he might specify. The directions hearing was adjourned to 22 June 2007. 10 The purpose of the order for leave to interrogate made on 24 April 2007 was to enable Mr Lamb to identify with precision the respective functions of the respondent companies in the Hog's Breath group in Australia, their roles in the use of the alleged infringing works and/or registered trade marks and the ways in which these had been used in respect of the classes of goods and services to which they related. 11 On 13 June 2007 a notice to answer interrogatories was filed on behalf of Mr Lamb directed to the various respondents. The scale and detail of those interrogatories went well beyond what I contemplated in making the orders in [6.1] of the orders made on 24 April 2007. Interrogatories were also delivered late and without the benefit of any extending order by the Court. This delay was explained in Mr Mallon's affidavit. Draft interrogatories, completed by 24 May 2007, were provided to junior counsel in Sydney on 25 May 2007 and submitted to senior counsel who informed Mr Mallon on 31 May 2007 that he would require further time to settle the interrogatories. It appears that the solicitors for the first and third to fifth respondents consented to the further time. As to that I note that an agreement between the parties is not effective to dispose of the obligation imposed by the Court's directions. 12 On 15 June 2007 the first, third, fourth and fifth respondents filed the motion presently before the Court asking that the orders relating to the filing of interrogatories be vacated and that they proceed directly to file their defences. They submitted that now that Mr Lamb has delivered a detailed and comprehensive statement of claim the appropriate course would be for the usual interlocutory steps to take place, ie pleadings followed by discovery, including interrogatories if necessary, and inspection of documents. They submitted that the mechanism put in place for conferral, early interrogatories and disclosure was largely designed to facilitate the resolution of issues concerning generalised allegations in the former statement of claim in the context of the vertical inter-relationship of each of the respondents. It was submitted that the delivery of their defences will assist in defining the real issues and necessarily limit the ambit of discovery and thereby reduce its burden. It would also mean that the interrogatories would not be necessary. Interrogatories recently served on behalf of Mr Lamb were said to contain 90 separate questions. 13 It was submitted on behalf of Mr Lamb that he still does not have a clear picture of the respective functions of the respondents in the group that they collectively constitute. Since the judgment given on 26 February 2007 no new information has emerged which changes this nor have the respondents elected to provide any information to him despite repeated requests on his behalf. The substituted statement of claim was filed and served on 10 April 2007, providing the respondents with two weeks prior to the directions hearing to review it and form the view apparently now held that Mr Lamb had delivered a detailed and comprehensive statement of claim such that the appropriate course would be for the usual interlocutory steps to take place. 14 Having regard to the procedural history of the matter to date and the extent to which the proposed interrogatories seem to go into a level of detail beyond what was contemplated under order 6, it is preferable that the respondents now be afforded the opportunity to file their defences before the question of discovery and interrogatories is revisited. 15 Having regard to the fact that the applicant did not comply with the time limit specified in the orders made on 24 April 2007 and that no extension was granted, there is no need to vacate those orders. The interrogatories that were filed, were filed without leave because the leave had expired. I will make orders accordingly for the filing of defences and replies. This does not of course prevent applications for leave to interrogate and for discovery after the close of pleadings. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. Associate: Dated: 28 June 2007 Counsel for the Applicant: Mr JD MacLaurin Solicitor for the Applicant: Mallon & Co Lawyers Pty Ltd Counsel for the First, Third, Fourth and Fifth Respondents: Mr A Crowe SC and Mr I Erskine Solicitor for the First, Third, Fourth and Fifth Respondents: Tucker & Cowen Counsel for the Second Respondent: Ms M Sedic Solicitor for the Second Respondent: Lavan Legal Date of Hearing: 22 June 2007 Date of Judgment: 28 June 2007	3,500
federal_court_of_australia:fca/single/2012/2012fca0541	decision	commonwealth	federal_court_of_australia	text/html	2012-05-14 00:00:00	SZQLR v Minister for Immigration and Citizenship [2012] FCA 541	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2012/2012fca0541	2024-09-13T22:49:50.613705+10:00	FEDERAL COURT OF AUSTRALIA SZQLR v Minister for Immigration and Citizenship [2012] FCA 541 Citation: SZQLR v Minister for Immigration and Citizenship [2012] FCA 541 Appeal from: SZQLR v Minister for Immigration and Citizenship [2012] FMCA 141 Parties: SZQLR v MINISTER FOR IMMIGRATION AND CITIZENSHIP and REFUGEE REVIEW TRIBUNAL File number: VID 185 of 2012 Judge: BROMBERG J Date of judgment: 14 May 2012 Legislation: Migration Act 1958 (Cth) ss 91R(1)(b), 474 Cases cited: SZQLR v Minister for Immigration and Citizenship [2012] FMCA 141 Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 SZKCQ v The Minister for Immigration and Citizenship [2009] FCA 578 SZMCA v Minister for Immigration and Citizenship (2009) 174 FCR 415 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 Date of hearing: 14 May 2012 Place: Melbourne Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 21 Counsel for the Appellant: The Appellant appeared in person assisted by an interpreter Counsel for the First Respondent: Ms K Whittemore of Sparke Helmore IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 185 of 2012 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZQLR Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: BROMBERG J DATE OF ORDER: 14 May 2012 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the first respondent's costs of the appeal. 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 185 of 2012 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZQLR Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: BROMBERG J DATE: 14 May 2012 PLACE: MELBOURNE REASONS FOR JUDGMENT INTRODUCTION 1 This is an appeal from a judgment of a Federal Magistrate published as SZQLR v Minister for Immigration and Citizenship [2012] FMCA 141, in which the Federal Magistrate dismissed the appellant's application for judicial review. The Federal Magistrate reviewed a decision of the Refugee Review Tribunal ("the Tribunal") which affirmed a decision of a delegate of the first respondent ("the delegate") not to grant the appellant a Protection (Class XA) visa ("Protection visa"). 2 The task of the Federal Magistrates Court in dealing with the judicial review proceedings brought by the appellant was to determine whether the Tribunal's decision was affected by jurisdictional error: s 474 of the Migration Act 1958 (Cth) ("the Migration Act"); Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476. 3 The task of this Court is to determine whether the judgment of the Federal Magistrate who determined the appellant's judicial review proceedings, is affected by appealable error. 4 For the reasons that I will now explain, I am satisfied that no error on the part of the Federal Magistrate has been demonstrated and that the appeal should be dismissed. BACKGROUND 5 The appellant is a male citizen of India who arrived in Australia on 9 June 2010. Shortly after his arrival, the appellant lodged an application for a Protection visa with the Department of Immigration and Citizenship, on the grounds that he feared harm and persecution in India because of his political activity. The appellant claimed that: he is an ex-Shiv Sena Party member, who left that party; upon leaving Shiv Sena, he became a member of the Samajwadi party, which is a secular political party; he was warned about his decision to join the Samawajdi party by a local Shiv Sena leader, and urged to return to Shiv Sena; he was threatened with violence as a result of refusing to continue to pay donations to Shiv Sena; and a customer of his, whom he took to court over a fake cheque, had made a deal with Shiv Sena, after which members of Shiv Sena came to his business and demanded party donations and told him that if he wished to continue his business he would have to pay them money. 6 The delegate refused the appellant's application for a Protection visa. By a decision made on 27 June 2011, the Tribunal affirmed the delegate's decision not to grant the appellant a protection visa. The Tribunal's Decision 7 The Tribunal found that the appellant was a credible witness, and accepted the appellant's claims of harassment on a number of occasions, including demands that he make donations to Shiv Sena. The Tribunal accepted that the appellant had been hit on two occasions with sticks by those making the demands, but found that the appellant was not injured. The Tribunal also accepted that the demands for donations were made because the appellant had been a member of Shiv Sena, and had made donations in the past. 8 However, the Tribunal found that despite the passage of many years since the commencement of the harassment, neither Shiv Sena nor the disgruntled customer of the appellant had seriously harmed the appellant. The Tribunal considered that there had been ample time since the threats against the appellant were made for those who made them to have acted on their threats. For that reason, the Tribunal did not accept that the threats made by Shiv Sena or the disgruntled customer gave rise to a real chance of serious harm being occasioned to the appellant in the reasonably foreseeable future. 9 The Tribunal was of the view that the past occasions of harassment did not constitute serious harm for the purposes of s 91R(1)(b) of the Migration Act. Consequently, the Tribunal did not accept that the appellant's fear of persecution is well founded. 10 In any event, the Tribunal found the appellant's claims to be localised within the appellant's city of residence, and that it would be reasonable for the appellant to relocate within India. THE FEDERAL MAGISTRATE'S DECISION 11 On 22 July 2011, the appellant lodged an application in the Federal Magistrates Court agitating the following grounds: (i) The Tribunal failed to [sic] integer of the applicant's claims, in failing to consider whether or not a liberal Hindu was at risk of harm from radical Hindus, and [sic] not able to access effective protection whilst the Tribunal formed the view that the applicant was a credible witness. (ii) The Tribunal failed to consider properly the test whether the applicant would suffer serious harm as per s 91(R)(2)(a) of the Migration Act (which is a mandatory jurisdictional requirement for the Tribunal to do), if he asked to relocate in India. The Tribunal failure to satisfy this statutory obligation was a serious jurisdictional error caused by the Tribunal. (iii) The Tribunal had no jurisdiction to make the said decision because its "reasonable satisfaction" was not arrived at in accordance with the requirements of the Migration Act. (iv) The applicants satisfy the four key elements of the Convention definition as detailed in page 2 and 3 of the Tribunal decision. The Tribunal has not considered this aspect and therefore committed factual and legal error. 12 In relation to the first ground, the Federal Magistrate held at [15] of her Honour's decision, that the applicant had not previously, before the Tribunal or otherwise, described himself as a "liberal Hindu". As such, while the Federal Magistrate found the Tribunal may be obliged to consider a claim not expressly made by the appellant, such a claim must be readily discernible from the material. Her Honour held that no claim was made either expressly or by implication that the appellant feared persecution as a liberal Hindu. 13 At [16], the Federal Magistrate rejected the second ground. The Federal Magistrate was satisfied that the Tribunal applied the relevant test under s 91R of the Migration Act to the facts in reaching its conclusion on that question. 14 In dismissing the appellant's third and fourth grounds, at [17] – [18], the Federal Magistrate found that those grounds raised what were essentially allegations that the Tribunal reached a wrong conclusion, and therefore went to the merits of the Tribunal's decision. As such, the Federal Magistrate found that both of those grounds fell outside the ambit of judicial review. the appeal to this court 15 On 1 March 2012, the appellant filed a Notice of Appeal in this Court which contained the following stated grounds of appeal: (i) The Federal Magistrate failed to consider that the Tribunal acted in a manifestly unreasonable way with the applicant's claim and ignoring [sic] the aspects of persecution and harm in terms of s 91R of the Act. The Tribunal failed to observe the obligation amounted to a breach of Statutory Obligation; and (ii) The learned Federal Magistrate has dismissed the case without considering the legal and factual errors contained in the decision of the Refugee Review Tribunal. 16 The second ground in the notice of appeal is not a proper ground of appeal. I agree with the submission of the Minister that it fails to identify any case of error on the part of the learned Federal Magistrate or any proper basis to assert that the Federal Magistrate failed to consider the errors that the appellant alleged were contained in the Tribunal's decision. 17 The appellant's first ground of appeal raises a new ground not raised before the Federal Magistrates' Court. To raise a new ground, the appellant requires the leave of the Court. The relevant principles relating to the raising of new grounds of appeal were the subject of detailed consideration in SZKCQ v The Minister for Immigration and Citizenship [2009] FCA 578 at [7] – [11] (Flick J). Leave should only be granted to raise new grounds on appeal where it is expedient in the interests of justice. For a ground to be argued and determined for the first time on appeal, it must be shown that the ground has a reasonable prospect of success. 18 Ground one is badly drafted and highly ambiguous. In substance, it seems to raise a complaint based upon an assertion that the Federal Magistrate failed to consider that the Tribunal had ignored the fear of persecution claimed by the appellant. That assertion is without merit. The Tribunal did not ignore the appellant's claimed fear of persecution and largely accepted the factual basis for that claim. The Tribunal did, however, come to the view that the appellant did not face a real chance of being subjected to serious harm of the kind that s 91R(1)(b) of the Migration Act contemplates. The Tribunal had a logical basis for doing so. The Tribunal considered that there had been ample time since the threats against the appellant were made for those threats to have eventuated if, in fact, there was a real chance of serious harm being occasioned to the appellant. 19 Neither in the grounds of appeal, nor in any submission made by the appellant before the Court, has the appellant identified how he asserts that the Tribunal misapplied s 91R of the Migration Act. It is not apparent that s 91R was not correctly applied by the Tribunal. Even if there was some error in the Tribunal's application of s 91R, the relocation finding made by the Tribunal provides an alternative and independent basis for affirming the delegate's decision: SZMCA v Minister for Immigration and Citizenship (2009) 174 FCR 415 at [122] (Tracey and Foster JJ). 20 I agree with the Minister's submission that the appellant's description in ground one, of the Tribunal's reasoning as being "manifestly unreasonable", should be viewed as merely an emphatic way of expressing disagreement with it: Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [40] (Gleeson CJ and McHugh J). In substance, this part of ground one amounts to an impermissible invitation to the Court to review the merits of the Tribunal's decision. If it were to be viewed as an allegation raising a want of logicality, there is no basis upon which it could be said that the Tribunal's decision was so unreasonable that no reasonable person could have come to it. 21 For those reasons, ground one of the appellant's notice of appeal has no prospect of success, and leave to raise it must be refused. As I have found no appealable error, the appeal must be dismissed. The appellant should pay the Minister's costs of the appeal. I will make orders to that effect. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. Associate: Dated: 28 May 2012	2,843
federal_court_of_australia:fca/single/2008/2008fca1672	decision	commonwealth	federal_court_of_australia	text/html	2008-11-13 00:00:00	Australian Pesticides and Veterinary Medicines Authority v Administrative Appeals Tribunal (No 2) [2008] FCA 1672	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2008/2008fca1672	2024-09-13T22:49:50.636541+10:00	FEDERAL COURT OF AUSTRALIA Australian Pesticides and Veterinary Medicines Authority v Administrative Appeals Tribunal (No 2) [2008] FCA 1672 COSTS – parties had divided success – whether costs should be ordered on an "issues" basis or upon the basis of the commercial result achieved – distinct issues – no evidentiary overlap – costs ordered on an issues basis utilising a percentage Agricultural and Veterinary Chemicals (Administration) Act 1992 (Cth) s 69B Administrative Decisions (Judicial Review) Act 1977 s 16(1)(a) Judiciary Act 1903 (Cth) s 39B(1) Federal Court of Australia Act 1976 (Cth)s 21(1) Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (No 2) [2003] FCAFC 163 cited Australian Pesticides and Veterinary Medicines Authority v Administrative Appeals Tribunal [2008] FCA 1393 referred to Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1568 cited Hughes v Western Australian Cricket Association (Inc) [1986] FCA 511; (1986) 8 ATPR ¶40‑748 referred to New South Wales Dairy Corporation v Murray-Goulburn Co-operative Co Ltd (1989) 14 IPR 75 discussed O'Keefe Nominees Pty Ltd v BP Australia Ltd, Trade Practices Commission (Intervener) (1991) 128 ALR 718 cited Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1987) 17 FCR 211 cited Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 cited Spotwire Pty Ltd v Visa International Service Association [2004] FCA 1481 cited AUSTRALIAN PESTICIDES AND VETERINARY MEDICINES AUTHORITY v ADMINISTRATIVE APPEALS TRIBUNAL and IMTRADE AUSTRALIA PTY LTD (ACN 090 151 134) WAD 118 of 2008 GILMOUR J 13 NOVEMBER 2008 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 118 of 2008 BETWEEN: AUSTRALIAN PESTICIDES AND VETERINARY MEDICINES AUTHORITY Applicant AND: ADMINISTRATIVE APPEALS TRIBUNAL First Respondent IMTRADE AUSTRALIA PTY LTD (ACN 090 151 134) Second Respondent JUDGE: GILMOUR J DATE OF ORDER: 13 NOVEMBER 2008 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The applicant pay 75% of the second respondent's 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 eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 118 of 2008 BETWEEN: AUSTRALIAN PESTICIDES AND VETERINARY MEDICINES AUTHORITY Applicant AND: ADMINISTRATIVE APPEALS TRIBUNAL First Respondent IMTRADE AUSTRALIA PTY LTD (ACN 090 151 134) Second Respondent JUDGE: GILMOUR J DATE: 13 NOVEMBER 2008 PLACE: PERTH REASONS FOR JUDGMENT 1 On 13 October 2008 I made final orders, except as to costs, which gave effect to reasons for judgment dated 12 September 2008: Australian Pesticides and Veterinary Medicines Authority v Administrative Appeals Tribunal [2008] FCA 1393. There was divided success in the proceedings. 2 These reasons concern the question of costs, as to which it was agreed that the Court should resolve this upon written submissions without the need for a further appearance. 3 In Hughes v Western Australian Cricket Association (Inc) [1986] FCA 511; (1986) 8 ATPR ¶40-748at 48,136, Toohey J said the following upon the question of the apportionment of costs in circumstances such as the present: (a) ordinarily, costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order; (b) where a litigant has succeeded only on a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which it has failed; (c) a successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs. "Issue" in that sense, does not mean a precise issue in the technical pleading sense, but any disputed question of fact or law. (citations omitted) 4 This approach has been approved by the Full Court: Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1987) 17 FCR 211; Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (No 2) [2003] FCAFC 163; and in Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [11]. The Application 5 The applicant (Authority) sought relief against the first respondent (the AAT)and second respondent (Imtrade)under s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 and also pursuant to s 39B(1) of the Judiciary Act 1903 and s 21(1) of the Federal Court of Australia Act 1976. In substance, the Authority sought, in relation to the proceedings brought by Imtrade in the AAT: (a) to quash interlocutory orders made on the application of Imtrade under s 43 of the AAT Act, and (b) to prohibit further proceedings in the AAT as it had no jurisdiction. 6 The applicant also sought relief against Imtrade by way of declarations that, because they were affected, procured or induced by the fraud of Imtrade: (a) the specified approvals of active constituents in the Record of Active Constituents were of no legal effect; and (b) the specified registrations of chemical products in the Register of Chemical Products were of no legal effect. The Cross Application 7 In its cross-application Imtrade sought: (a) an order of review under the ADJR Act in respect of what it asserted to be decisions of the Authority under the Agricultural and Veterinary Chemicals Code made on 21 May 2008; and (b) an injunction. 8 Imtrade also sought orders directing the Authority to withdraw a notice given to the Comptroller General of Customs under s 69B of the Agricultural and Veterinary Chemicals (Administration) Act 1992 (Cth), and an order requiring the Authority to issue a press release. Neither of these matters was pressed at the hearing. It was unnecessary to deal with the application for injunctive relief as the applicant proffered appropriate undertakings. 9 The primary contest was whether the approvals and registrations were invalid because they were affected, procured or induced by fraud. The Authority also argued that only the Court could decide authoritatively whether or not the approvals and registrations were legally valid or effective. It sought relief, including constitutional writs, to reflect the want of jurisdiction in the AAT to determine the dispute between the parties. Imtrade contended that the AAT had jurisdiction and was the appropriate Tribunal to deal with these matters. The Hearing 10 The hearing proceeded on affidavit evidence, with no cross examination. Imtrade had, prior to trial, served two notices to produce documents. The Authority complied with each notice, producing to Imtrade seven lever arch folders of documents ahead of the hearing as requested by the respondent. There were a further two lever arch folders to which objection was to be taken and, argued at the hearing. At trial, Imtrade did not press any further production, and tendered, by consent, one email from the documents produced. 11 The Court concluded that: (a) it was not satisfied that the misrepresentation by Imtrade about the identity of Evergreen induced the decisions to approve or register. It followed from this finding that the approvals and registrations were valid and the Authority had unlawfully removed them from the Record and Register; (b) the 47 variations to the Register to include the name and address of Evergreen were induced by misrepresentations so as to be invalid, but not so as to vitiate the underlying registrations; (c) the AAT did not have jurisdiction to review the actions of the Authority in the proceedings instituted before it by Imtrade. 12 Accordingly the Authority has not succeeded in its primary contention that the approvals and registrations were invalid. Imtrade too failed in its contention that the AAT has jurisdiction and is the appropriate tribunal to deal with these matters. 13 The Authority does not seek an order for costs against the AAT, which did not participate in the proceedings. 14 The Authority submits that it should have its costs to the extent that it has been successful on the issue going to the jurisdiction of the AAT, and the issue with respect to the validity of the 47 applications to vary registrations. It submits that there should be an apportionment of costs on an issues basis or alternatively upon a percentage basis. 15 Imtrade submits that costs should follow the event. The "event" it says can be considered as the commercial result, so that a successful litigant may recover all its costs where the objective sought by the litigation is achieved, even though the litigant does not succeed on every issue in the litigation: O'Keefe Nominees Pty Ltd v BP Australia Ltd, Trade Practices Commission (Intervener) (1991) 128 ALR 718 per Spender J at 720, citing New South Wales Dairy Corporation v Murray-Goulburn Co-operative Co Ltd (1989) 14 IPR 75. 16 Imtrade contends that the Authority's principal objective in the litigation was to have its actions in removing Imtrade's active constituents and chemical products from the Record and the Register upheld by the Court. Imtrade's objective was to have the active constituents and chemical products restored to those registers so that those products could continue to be imported, supplied and used. 17 As the Authority failed in its objective, and Imtrade succeeded, the costs of the proceedings should, Imtrade submits, follow the "event", characterised in that way. 18 By its cross-claim, Imtrade also sought an order directing the Authority to withdraw a notice given to the Comptroller General of Customs, in effect, prohibiting the importation of Imtrade's active constituents and chemical products. A formal order in this regard, I am informed, was not pressed because the Authority gave an undertaking to Imtrade, after the Reasons for Decision had been delivered, that it would withdraw the notice. 19 The Authority provided an interim undertaking in response to the injunctive relief sought by Imtrade on the day of the trial. After the Reasons for Decision were delivered, I am further informed that the Authority did issue a press release which stated the effect of the Court's decision and published it on its website. 20 The removal of the approvals and registrations from the Record and Register by the Authority was unlawful. Imtrade submitted that it would not have incurred any legal costs at all but for the unlawful actions of the Authority. 21 I held that the Authority should not have resorted to "self-help" remedies but rather should have sought appropriate relief from the Court: [48] and [53]. If the Authority had adopted that course, Imtrade submits that the questions concerning the jurisdiction of the Administrative Appeals Tribunal would not have arisen. 22 I do not accept Imtrade's submissions. It could have sought appropriate relief from this Court in the first instance. Imtrade elected to institute proceedings in the AAT. The Authority at the outset challenged the jurisdiction of the AAT. It was a quite distinct issue, unrelated to the merits of the substantive case. Imtrade chose to litigate that issue in this Court. Its failure on that issue ought be reflected in the costs order. I do not consider the approach taken by Gummow J in NSW Dairy Corporation to be apt in this case. There, although there were a range of issues, much of the evidence was common to a number of them. This is not such a case at least as far as concerns the jurisdiction issue. 23 The question as to the lawfulness of the removal by the Authority of the 9 active constituents consumed most of the applicant's written submissions as well as most of the time at the hearing. Although there is no inevitable correspondence between these facts and the make-up of the reasons, I think that they do reflect that this was, in every sense, the largest issue in the proceeding. Indeed I described it in the reasons as the "core legal contention": [89]. The question of the jurisdiction of the AAT, on the other hand, is the subject of but 12 out of 90 paragraphs. 24 It has been recognised that ordering costs on an "issues" basis can lead to difficulties in assessment: Spotwire Pty Ltd v Visa International Service Association [2004] FCA 1481 at [13]. Indeed the Court is reluctant generally to proceed on this basis: Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1568 at [40]. 25 I consider that a just result would be to order the Authority to pay 75% of the costs of Imtrade in the proceedings as a whole. I have taken into account the fact that notices to produce were served and complied with. The Authority made the assertion that the notices to produce were unnecessary and burdensome, in the circumstances of this case and further, that the categories of documents were largely directed to matters where the facts were not in dispute. There were no detailed submissions made in support of this assertion. I am unable to conclude that it was unreasonable for Imtrade to have taken these steps in aid of its case. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate: Dated: 13 November 2008 Counsel for the Applicant: Mr J D Allanson SC Solicitor for the Applicant: Clayton Utz Counsel for the Second Respondent: Mr K de Kerloy Solicitor for the Second Respondent: Freehills Date of Hearing: Heard on the papers Date of Judgment: 13 November 2008	3,198
federal_court_of_australia:fca/single/2005/2005fca1525	decision	commonwealth	federal_court_of_australia	text/html	2005-10-31 00:00:00	Needlework Warehouse Pty Ltd v Chansonette Pty Ltd [2005] FCA 1525	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2005/2005fca1525	2024-09-13T22:49:51.304863+10:00	FEDERAL COURT OF AUSTRALIA Needlework Warehouse Pty Ltd v Chansonette Pty Ltd [2005] FCA 1525 PRACTICE AND PROCEDURE – Federal Court has jurisdiction to enforce contract which settles proceeding before the Court – appropriate to do so on a motion brought within the proceeding. FEDERAL JURISDICTION – Federal Court has jurisdiction to enforce contract which settles proceeding before the Court – appropriate to do so on a motion brought within the proceeding. CONTRACT – contract settling a proceeding pending before Federal Court – contract made by correspondence between parties' solicitors – whether parties contemplated that the agreement would not become enforceable until written agreement signed. CONTRACT – 'without prejudice' – does not make correspondence inadmissible to prove that it constituted a concluded contract. WORDS AND PHRASES – 'without prejudice' – does not make correspondence inadmissible to prove that it constituted a concluded contract. Federal Court of Australia Act 1976 (Cth) ss 19, 22 Judiciary Act 1903 (Cth) s 39B(1A) Trade Practices Act 1974 (Cth) s 86 Re Wakim; Ex parte McNally (1999) 198 CLR 511 followed LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 followed Wenkart v Pantzer (No 3) (2004) 135 FCR 422 referred to Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 followed Reid v Interarch Australia Pty Ltd [2000] FCA 1328 followed We Two Pty Ltd v Shorrock (No 2) [2005] FCA 934 followed Jarraman Arts Aboriginal Corporation v Tourism Australia (No 3) [2005] FCA 983 followed Pallas v Finlay (1985) 61 ALR 220 distinguished Macteldir Pty Ltd v Dimovski (2003) 132 FCR 492 distinguished Fencott v Muller (1983) 152 CLR 570 referred to Minister for Immigration & Multicultural & Indigenous Affairs v SZANS (2005) 141 FCR 586 cited Bank of Western Australia Ltd v Commissioner of Taxation (1994) 55 FCR 233 cited Cooper v Commissioner of Taxation (2004) 139 FCR 205 cited Roberts v Gippsland Agricultural & Earth Moving Contracting Co Pty Ltd [1956] VLR 555 followed McLaren v Schuit (1983) 33 SASR 139 followed General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6 followed Donellan v Watson (1990) 21 NSWLR 335 followed Walker v Wilsher (1889) 23 QBD 335 cited Tellerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93 cited Bentley v Nelson [1963] WAR 89 cited Tomlin v Standard Telephones and Cables Ltd [1969] 1 WLR 1378 cited Rush & Tompkins Ltd v Greater London Council [1988] 3 WLR 939 cited Quad Consulting Pty Ltd v David R Bleakley & Associates Pty Ltd (1990) 27 FCR 86 cited Cedenco Foods Ltd v State Insurance Ltd [1996] 3 NZLR 205 cited Masters v Cameron (1954) 91 CLR 353 referred to McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 referred to NEEDLEWORK WAREHOUSE PTY LIMITED & ORS v CHANSONETTE PTY LIMITED & ANOR NSD 1302 of 2003 LINDGREN J 31 OCTOBER 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1302 OF 2003 BETWEEN: NEEDLEWORK WAREHOUSE PTY LIMITED (ACN 101 863 709) FIRST APPLICANT/CROSS RESPONDENT ALAN JAMES MEIER SECOND APPLICANT TANCOT PTY LIMITED (ACN 059 311 278) THIRD APPLICANT AND: CHANSONETTE PTY LIMITED (ACN 092 507 938) FIRST RESPONDENT/FIRST CROSS CLAIMANT WILLIAM LOWE EDGE SECOND RESPONDENT/SECOND CROSS CLAIMANT JUDGE: LINDGREN J DATE OF ORDER: 31 OCTOBER 2005 WHERE MADE: SYDNEY THE COURT DECLARES THAT: On or about 2 August 2005 the first applicant/cross respondent ('Needlework'), the second applicant ('Mr Meier') and the third applicant ('Tancot') of the one part entered into a contract with the second respondent/second cross claimant ('Mr Edge') of the other part whereby it was agreed that: (1) Mr Edge would pay to Needlework, Mr Meier and Tancot, $900,000 as follows: (a) $100,000 within 28 days of the date of settlement; (b) $100,000 within 56 days of the date of settlement; (c) $100,000 within 84 days of the date of settlement; (d) the balance of $600,000 within 4 months after the date of settlement. (2) Upon settlement, Needlework, Mr Meier and Tancot would execute and deliver a release in favour of Mr Edge of all causes of action set up against him in the proceeding or arising out of the circumstances leading up to, or associated with, the making of contracts of purchase the subject of proceeding NSD1302 of 2003 in this Court ('the contracts'), including a release of Mr Edge from the covenant in restraint of trade given by him; (3) Upon settlement, Mr Edge would execute and deliver a release in favour of Needlework, Mr Meier and Tancot of all causes of action arising out of the circumstances leading up to, or associated with, the making of the contracts, including a release of the claim in respect of the agreement relating to consultancy services, the subject of Mr Edge's cross-claim against Needlework; (4) Upon settlement, Mr Edge would execute and deliver, in favour of Needlework, Mr Meier and Tancot, securing payment to them of the amounts totalling $900,000, a charge over Lot 2 DP 803097 at Somersby, the subject of Folio 2/803097 ('the Property'), title to which was to be unencumbered, including a term that Needlework, Mr Meier and Tancot would be at liberty to lodge a caveat against the title to the Property, in respect of their equitable interest as chargees; (5) Upon settlement, the proceeding and cross-claim would be dismissed with no order as to costs; And that once the first three instalments totalling $300,000 were paid, (6) Needlework would assign (and deliver) the trailer and remaining stock to Mr Edge; (7) Needlework would assign to Mr Edge the registered business name, 'Leisurehouse'. THE COURT ORDERS THAT: The proceeding be stood over to 9 November 2005 at 9.30 am for directions. 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 1302 OF 2003 BETWEEN: NEEDLEWORK WAREHOUSE PTY LIMITED (ACN 101 863 709) FIRST APPLICANT ALAN JAME MEIER SECOND APPLICANT TANCOT PTY LIMITED (ACN 059 311 278) THIRD APPLICANT AND: CHANSONETTE PTY LIMITED (ACN 092 507 938) FIRST RESPONDENT WILLIAM LOWE EDGE SECOND RESPONDENT JUDGE: LINDGREN J DATE: 31 OCTOBER 2005 PLACE: SYDNEY REASONS FOR JUDGMENT INTRODUCTION 1 The applicants move to enforce an agreement in settlement of this proceeding. Their motion raises three questions: 1. Does the Court have jurisdiction to enforce an agreement of compromise of a proceeding in the Court? 2. If so, is it appropriate for the agreement to be enforced by notice of motion within the substantive proceeding, or should a separate proceeding have been commenced? and 3. Did the parties intend the agreement to be immediately enforceable, or was enforceability to be subject to their negotiating, concluding and executing a written instrument? The facts underlying the substantive proceeding 2 By a written contract dated 10 October 2002 the first applicant, Needlework Warehouse Pty Limited ('Needlework'), contracted to purchase from the first respondent, Chansonette Pty Limited ('Chansonette'), a 'craft work' business carried on under the name 'Leisure House' ('the Contract'). The second applicant, Alan James Meier ('Mr Meier'), is a director and shareholder of Needlework. The third applicant, Tancot Pty Limited ('Tancot'), is a company associated with Mr Meier. 3 The second respondent, William Lowe Edge ('Mr Edge'), at all material times worked in and managed Chansonette's business and acted as its agent and representative in all dealings with Needlework and Mr Meier. Apparently Mr Edge was in a de facto relationship with Chansonette's sole director, Ms Joyce Wakefield. 4 The priced fixed in the contract for the business was $600,000. Needlework also agreed to purchase trading stock up to a maximum value of $1,400,000. On 30 August 2002 Needlework paid $100,000 as a deposit. 5 The Contract was completed on 18 October 2002, when Needlework paid Chansonette $1,625,000. 6 In the substantive proceeding, Needlework sues Chansonette for breach of contract. As well, Needlework, Mr Meier and Tancot sue Chansonette and Mr Edge in respect of misrepresentations which preceded the making of the Contract. The misrepresentations are said to have constituted contraventions of s 52 of the Trade Practices Act 1974 (Cth) ('the TPA') by Chansonette, in which Mr Edge is said to have been 'involved' for the purpose s 82 of that Act. (In addition, Mr Edge is sued for having engaged in conduct that was misleading or deceptive in contravention of s 68 of the Fair Trading Act 1987 (NSW).) 7 According to the further amended statement of claim, Tancot was induced by the misleading or deceptive conduct to purchase for $1,375,000 industrial premises to be used in the business. 8 Chansonette and Mr Edge cross‑claim against Needlework for breach of agreements relating to the provision of post-completion consultancy services to Needlework. 9 Apparently, the business had to be closed down, Needlework sold such stock as could be sold, and Tancot sold the land at a loss. 10 The proceeding was commenced on 3 September 2003. The respondents were represented by John Dawson of Carneys, solicitors. In early 2005, apparently as a result of a falling out between Mr Edge and Ms Wakefield, Needlework began to be represented by Brendan Millar of Garland Hawthorne Brahe, solicitors. However, Mr Dawson continued to act for Mr Edge. The alleged settlement agreement and the present motion relate only to Mr Edge, not to Chansonette. 11 In late 2004 and early 2005 attempts were made to settle the proceeding. There was an unsuccessful Court‑directed mediation on 13 December 2004 and 15 February 2005. 12 On 23 March 2005, Hill J fixed the proceeding for hearing commencing on 19 September 2005. After the proceeding was set down, negotiations occurred between Mr Wenden of Barnes & Wenden, the solicitors for the applicants, and Mr Dawson on behalf of Mr Edge. THE settlement agreement 13 It is necessary to refer to the exchanges which are said to have resulted in the settlement agreement. 14 On 22 July 2005, Mr Dawson wrote to Mr Wenden a letter marked 'WITHOUT PREJUDICE SAVE AS TO COSTS', which was, relevantly, as follows: 'We are instructed by Mr Edge to make the following final offer: 1. Payment of $900,000.00 in full and final discharge of all claims made by the Applicants. 2. Payment of the settlement sum within four (4) months. 3. Assignment of the Business Name "Leisure House". 4. The parties enter into a Deed providing mutual releases and Mr. Edge be released from the covenant of restraint contained in the Sale of Business Contract. On our instructions this offer is to remain open until 5.00 pm Tuesday, 26 July 2005.' 15 On 27 July 2005 Mr Dawson and Mr Wenden had a telephone conversation as follows: 'Dawson: My client Mr Edge is coming in tomorrow at 3 pm and I expect that he will give written instructions to me tomorrow to make an offer of settlement. Those instructions may include a payment of $50,000 to $100,000 within 28 days and the balance as per my letter of 22nd July, namely within 4 months. Wenden: What about security? Dawson: He is prepared to offer security overt he Somersby vacant land which has no mortgage on it. He is waiting for a valuation of the property and says it is worth $700,000. Wenden: Can you please set it out for us so I can have a look at it. Dawson: There will possibly be a superior offer to that and I will write to you.' 16 Mr Edge was and is the registered proprietor of Lot 2 DP 803097 at Somersby being the land the subject of Folio 2/803097 ('the Property'), subject to a mortgage 9544895 to Atria Pty Limited (subject to Writ 8998220). 17 On 29 July 2005, Mr Wenden received a further letter from Mr Dawson, headed in the same way, which, relevantly, stated: 'We confirm that we have a final offer of settlement to be made in respect of these proceedings. Our client is prepared to settle on the following basis: 1. Payment of $900,000.00 in full and final settlement of all claims made by the applicants, such payment to be made as follows:- (a) $100,000.00 within twenty‑eight (28) days. (b) $100,000.00 within a further twenty‑eight (28) days. (c) $100,000.00 within a further twenty‑eight (28) days. (d) The balance within four (4) months. 2. Mr. Edge gives by way of security for repayments a caveatable interest in respect of the Somersby property. 3. Assignment to Mr. Edge or his nominee of the Business Name "Leisurehouse". 4. The assignment to Mr Edge of a trailer and the remaining stock which we understand is in Mr. Meier's possession and which was conveyed to the purchaser under the contract for sale. 5. That the parties enter into appropriate releases in respect of the Federal Court proceedings and the sale of business and that Mr Edge be released from the restraint provision contained in the contract for sale. We look forward to hearing from you to finalise this matter.' 18 Following receipt of the letter, Mr Wenden telephoned Mr Dawson's office. Mr Dawson was away from the office and Mr Wenden told David Gall, the clerk handling the proceeding in the absence of Mr Dawson, that he (Mr Wenden) was not rejecting the offer but needed clarification of what was meant by a 'caveatable interest in respect of the Somersby property'. He asked Mr Gall to ask Mr Dawson to phone back, as he (Mr Wenden) thought there was a mortgage over the Property. 19 On 1 August 2005 Mr Dawson emailed Mr Wenden, stating, relevantly: 'It is intended that the mortgage over the Somersby property is discharged – your client would get a charge over the land – or Edge simply consents to a caveat – I think it is fairly common in Family Court matters to have an order entitling a party to lodge a caveat to secure moneys to be paid to the party lodging the caveat. I note the trailer and stock is available – are you able to give some idea as to the amount of stock? I have another busy day on Tuesday – I get my emails out of the office so if you could respond by email or call on the mobile ….' 20 After obtaining instructions from Mr Meier, Mr Wenden telephoned Mr Dawson on 2 August 2005 and they conversed as follows: 'Wenden: I received your email this morning. What do you mean by the charge? Do you mean a mortgage? Dawson: Edge wants to develop this property and doesn't want to give a mortgage over it as he would need the security of the property for the purposes of a builder. Edge will give you a charge similar to what you get in the Family Court to secure payment of the settlement moneys and which will provide a caveatable interest. Wenden: I don't know what happens in the Family Court unless there is some equitable interest. In any case my searches indicate that there is an existing mortgage over the property. Dawson: The existing mortgage will be discharged and Edge will give a charge to secure payment of the settlement monies. Wenden: When is the stock and business name to be transferred? Dawson: That can be transferred once the $300,000 has been paid. Wenden: I think my client will accept the offer. I'll come back to you in writing once I have my client's instructions.' 21 On 2 August 2005, Mr Wenden wrote to Mr Dawson by facsimile as follows: 'I refer to:- 1. Your letter of offer of 29th July 2005 (copy attached); 2. Your email transmission (copy attached) sent to me on 1st August 2005 in clarification of that offer; 3. The telephone conversations between Mr Wenden of this office and Mr Dawson when Mr Dawson confirmed that:- (a) The security for repayment of the $900,000 is to be by way of charge over the Somersby property which would give the Applicants a caveatable interest in that property, with a caveat to be lodged by the Applicants, consented to by Mr Edge, prohibiting any dealings with that property. (b) The Assignments referred to in paragraphs 3 and 4 of your letter to take place after payment of the $300,000 referred to in paragraphs 1(a), (b) and (c). The Applicants accept the offer of settlement referred to above, made up of the three (3) elements itemised as 1, 2 and 3. A binding agreement has now been entered into between Mr Edge and our clients. I am able to advise that the value of the stock is between $1,500 and $2,500. I will commence preparation of Deeds of Release to reflect the terms as set out and will forward the same to you as soon as possible. I confirm that I have had the Directions Hearing set down for Wednesday 3rd August 2005, stood over for seven (7) days. You should receive confirmation of same from Justice Hill's Associate.' 22 On 3 August 2005, Mr Wenden received from Mr Dawson a letter stating: 'Thank you for your letter received by facsimile earlier today. I note your comment made on the first page, that the offer is accepted and that "a binding agreement has now been entered into between Mr Edge and our clients". With respect, the agreement is in principle and must be subject to agreement as to the terms of the Deed of Release and also agreement as to how these proceedings will be disposed of. We note that you are liaising with your counsel in relation to the Deed of Release. As soon as we receive the draft we shall be conferring with our client and also Mr. Bell. Would you also please advise your views in relation to the disposal of the proceedings.' 23 Apparently Mr Bell was senior counsel advising Mr Edge. 24 On 3 August 2005 Mr Wenden replied to Mr Dawson acknowledging receipt of his letter, noting his comments, and stating that a Deed of Release would be forwarded shortly. 25 Mr Wenden drafted a 'Deed of Settlement and Release' and a form of consent orders. The former document was expressed to be between Needlework, Mr Meier and Tancot of the one part and Mr Edge of the other part. I need not discuss the terms of the form of deed, beyond stating that it provided: · that Mr Edge would pay, in full and final settlement of the dispute and the proceeding as between himself and the applicants, $100,000 within twenty‑eight days of 2 August 2005, a further $100,000 within a further twenty‑eight days of 2 August 2005, a further $100,000 within a further twenty‑eight days of 2 August 2005 and a further $600,000 within four months of 2 August 2005; · that Mr Edge would procure a discharge of Mortgage 9544895 over the Property and charge the Property with payment of the sum of $900,000; and · that the applicants acquired an equitable interest in the Property as chargees and would be entitled to lodge a caveat to prohibit dealings with the Property. 26 In some respects, the draft went beyond the terms that had been agreed to. 27 The form of consent orders provided for the proceeding as between the applicants and Mr Edge and the cross claim as between Mr Edge and Needlework to be dismissed on the basis that all of the parties bear their own costs. 28 On 5 August 2005 Mr Wenden sent to Mr Dawson the draft Deed, and advised him that a directions hearing which had been fixed for 3 August 2005 had been stood over to 10 August 2005. Mr Wenden requested of Mr Dawson that if possible all the documents be executed by then, so that the proceeding could be dismissed on 10 August 2005. 29 Apparently Mr Dawson told Mr Wenden that Mr Edge owed his firm considerable fees and that Mr Dawson could not devote further time to the matter. 30 On 17 August 2005 Mr Wenden wrote to Mr Dawson noting this advice and seeking a resolution of the matter. 31 On 22 August 2005 Mr Dawson filed and served a notice of his ceasing to act for Mr Edge. 32 The applicants' present notice of motion seeking a declaration that a binding settlement agreement is on foot and an order for specific performance of that agreement was filed on 8 September 2005. 33 The applicants experienced difficulty in serving the notice of motion and supporting documents on Mr Edge. On 5 October 2005, I ordered pursuant to O 7 r 10 of the Federal Court Rules, that the notice of motion and other documents be taken to have been served on Mr Edge on 28 September 2005, and, pursuant to O 1 r 8, that to the extent that it may be necessary, the requirements of the Rules as to the time for service of those documents be dispensed with. CONSIDERATION Does the Court have jurisdiction to enforce an agreement of compromise of a proceeding in the Court? 34 Before considering the authorities, I will indicate my reasons for thinking that the Court has jurisdiction to enforce the compromise agreement. 35 Section 76(ii) of the Constitution provides that the Parliament may make laws conferring original jurisdiction on the High Court in any matter 'arising under any laws made by the Parliament'. Section 77(i) provides that with respect to, relevantly, the matter just mentioned, the Parliament may make laws 'defining the jurisdiction of any federal court other than the High Court'. 36 The TPA is a law made by the Parliament and s 86(1) of the TPA confers jurisdiction on this Court in any matter arising under the TPA in respect of which a civil proceeding has, whether before or after the commencement of s 86, been instituted under Pt VI of the TPA. 37 The present proceeding is a civil proceeding instituted under Pt VI. Section 82 of the TPA occurs in Pt VI, as does s 75B, which defines the notion of 'a person involved in a contravention' for the purposes of, relevantly, s 82. 38 The Court is a federal court created by s 5 of the Federal Court of Australia Act 1976 (Cth) ('the FCAA'). Subsection 19(1) of the FCAA provides that the Court has such original jurisdiction as vested in it by laws made by the Parliament. It is original jurisdiction which s 86 of the TPA vests in the Court. 39 The general jurisdiction to enforce contracts is non-federal jurisdiction. There are two bases, however, on which the Court has jurisdiction to enforce the compromise agreement: accrued jurisdiction, and s 39B(1A)(c) of the Judiciary Act 1903 (Cth) ('the Judiciary Act'). Accrued jurisdiction 40 The 'accrued' jurisdiction of the Court depends on the nature of the 'matter' referred to in s 76(ii) of the Constitution and in s 86(1) of the TPA. 41 I do not intend to explore this question as fully as it would be possible for me to do. In Re Wakim; Ex parte McNally (1999) 198 CLR 511, Gummow and Hayne JJ (with whom Gleeson CJ agreed) stated (at [139], [140]): '[139] The central task is to identify the justiciable controversy. In civil proceedings, that will ordinarily require close attention to the pleadings (if any) and to the factual basis of each claim. [140] In Fencott [v Muller (1983) 152 CLR 570 ('Fencott')] it was said that "in the end, it is a matter of impression and of practical judgment whether a non‑federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter". The references to "impression" and "practical judgment" cannot be understood, however, as stating a test that is to be applied. Considerations of impression and practical judgment are relevant because the question of jurisdiction usually arises before evidence is adduced and often before the pleadings are complete. Necessarily, then, the question will have to be decided on limited information. But the question is not at large. What is a single controversy "depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships" [Fencott at 608 per Mason, Murphy, Brennan and Deane JJ]. There is but a single matter if different claims arise out of "common transactions and facts" or "a common substratum of facts" [Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 ('Philip Morris')], notwithstanding that the facts upon which the claims depend "do not wholly coincide" [Fencott at 607 per Mason, Murphy, Brennan and Deane JJ]. So, too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other [Philip Morris at 512 per Mason J], as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination. Conversely, claims which are "completely disparate" [Felton v Mulligan (1971) 124 CLR 367 at 373 per Barwick CJ],"completely separate and distinct" [Philip Morris at 521 per Murphy J] or "distinct and unrelated"[Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 482 per Stephen, Mason, Aickin and Wilson JJ] are not part of the same matter.' 42 Usually the notion of 'common transactions and facts' and 'a common substratum of facts' has been invoked with reference to facts, all of which precede the commencement of a proceeding. However, at least in the ordinary course, I think it also encompasses such facts as part of the substratum of facts underlying the making of a post-commencement agreement of compromise. 43 The starting point is the compromise agreement, not the initial claim. That agreement cannot be understood without an appreciation of its subject matter: the applicants' federal claim that Mr Edge was involved in misleading or deceptive conduct by Chansonette which induced Needlework and Tancot to enter into contracts of purchase (TPA, ss 52, 82, 75B). The compromise agreement provided for a release of that claim and for Needlework to assign to Mr Edge certain property which was part of the subject matter of the Contract. The applicants sought to recover from Mr Edge damages under s 82 of the TPA, and the compromise agreement provides for the payment of money by him to them in compromise of that claim. 44 When s 86(1) of the TPA confers jurisdiction on this Court 'in any matter arising under' that Act, it confers jurisdiction to quell justiciable controversies – in the present case, initially the justiciable controversy over Mr Edge's federal statutory liability to the applicants arising out of his involvement in Chansonette's misleading and deceptive conduct which caused loss to the applicants. The justiciable controversy arising out of the compromise agreement, the parties' own attempt to quell that initial justiciable controversy, takes that initial federal justiciable controversy as its very subject matter: cf LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 ('LNC') discussed in a different context below. The substratum of facts underlying the justiciable controversy arising out of the compromise agreement includes at its core, the substratum of facts underlying the initial controversy. 45 For the above reasons, it is within the accrued jurisdiction of the Court to enforce the compromise agreement. Section 39B(1A)(c) of the Judiciary Act 1903 (Cth) 46 Section 39B(1A)(c) provides: 'The original jurisdiction of the Federal Court of Australia also includes jurisdiction in any matter: (a) ...; or (b) ...' or (c) arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter.' (See the discussion of the conferral of jurisdiction on the Court by s 39B(1A) by Justice Ronald Sackville in 'The re‑emergence of federal jurisdiction in Australia' (2001) 21 Aust Bar Rev 133 at 138 et seq; and by Justice JLB Allsop in 'Federal jurisdiction and the jurisdiction of the Federal Court of Australia in 2002' (2002) 23 Aust Bar Rev 29 at 33 et seq.) 47 In my opinion the enforcement of the compromise agreement is a 'matter' or part of a 'matter' (see the discussion at [41] above) arising under a law made by the Parliament, namely, ss 52, 82 and 75B of the TPA. 48 LNCconcerned a contract for the transfer of quota under a licence to import motor vehicles issued under the Customs (Import Licensing) Regulations made under the Customs Act 1901 (Cth). The transferor claimed a declaration that the transferee held the quota units on trust, an order that they be transferred, and damages. If the claim arose under a law of the Commonwealth Parliament within s 76(iii) of the Constitution, by reason of s 39(2) of the Judiciary Act an appeal did not lie to the Privy Council from a decision of the Supreme Court of New South Wales in favour of the transferee. 49 The High Court held that the claim did arise under a law of the Commonwealth, because the property the subject of the contract and of the alleged trust was the creature of such a law. This was so even though the contract and the alleged trust, considered independently of their subject matter, were creatures of State law and no question of construction of a Commonwealth law was involved. Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ stated (at 581): 'When it is said that a matter will arise under a law of the Parliament only if the right or duty in question in the matter owes its existence to a law of the Parliament that does not mean that the question depends on the form of the relief sought and on whether that relief depends on federal law. A claim for damages for breach or for specific performance of a contract, or a claim for relief for breach of trust, is a claim for relief of a kind which is available under State law, but if the contract or trust is in respect of a right or property which is the creation of federal law, the claim arises under federal law. The subject matter of the contract or trust in such a case exists as a result of the federal law.' Their Honours also said (at 582): 'The contracts in the present matter were concerned solely with entitlements under the Regulations. The object of the plaintiff's claim was identified in the statement of claim as "any benefit accruing" after a certain time as a result of the utilization of a quota under the Regulations. It is common ground that the "benefit" mentioned is any "benefit" which might accrue under the Regulations. The subject matter of the contracts and of the action arose under and existed only by reason of the provisions of the Regulations and the Act in pursuance of which the Regulations were made. The Act was of course a law of the Parliament and the Regulations were made under it.' 50 In Wenkart v Pantzer (No 3) (2004) 135 FCR 422 ('Wenkart v Pantzer (No 3)', I held, applying LNC, that the Court had jurisdiction to enforce an agreement between a bankrupt and the trustee in bankruptcy of his estate. The bankrupt desired to put a proposal to his creditors, acceptance of which would result in immediate annulment of his bankruptcy. The problem was that the trustee was entitled to a sizeable amount by way of remuneration, costs, charges and expenses ('fees'). 51 By the agreement, in consideration of the trustee's agreeing forthwith to convene a meeting of the bankrupt's creditors to consider the bankrupt's proposal, the bankrupt charged certain land in favour of the trustee as security for his fees, and acknowledged that the trustee would be entitled to recover the fees from the bankrupt after the annulment of the bankruptcy. Upon the creditors passing a special resolution accepting the proposal, the bankruptcy was annulled by the operation of s 74(5) of the Bankruptcy Act 1966 (Cth). 52 In relation to the Court's jurisdiction to enforce the charge, I held (at [98]): 'In my opinion, the fact that the charge secured the amount of Mr Pantzer's entitlement to remuneration under the Act and Regulations, and the fact that the consideration for the giving of the charge was Mr Pantzer's agreeing to perform a task assigned to him by the Act (calling a meeting of creditors) without asking the Court to impose terms and conditions safeguarding his entitlement under the Act and Regulations, suffice to characterise his claim to enforce the charge as a matter arising under the Act for the purposes of s 39B(1A)(c) of the Judiciary Act.' 53 In the present case, s 82 of the TPA gave the applicants a right to recover an amount of loss or damage from Mr Edge. That right owed its existence exclusively to a law of the Parliament. At the heart of the compromise agreement was the applicants' promise to release that right in exchange for Mr Edge's promise to pay. Therefore, the compromise agreement falls squarely with the words of Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ (with whom Murphy J agreed) in LNC noted at [49] above: ' [a] claim for damages for breach, or for specific performance, of a contract ... if the contract ... is in respect of a right ... which is the creation of federal law, ... arises under federal law. The subject matter of the contract ... in such a case exists as a result of federal law.' Authorities 54 Authorities supporting the existence of jurisdiction are: Darling Downs Investments Pty Ltd v Ellwood (1988) 18 FCR 510 ('Darling Downs'); Reid v Interarch Australia Pty Ltd [2000] FCA 1328; We Two Pty Ltd v Shorrock (No 2) [2005] FCA 934 ('We Two') at [13]‑[16]; and Jarraman Arts Aboriginal Corporation v Tourism Australia (No 3) [2005] FCA 983 at [48]‑[50]. 55 The only authorities which might be thought to suggest a negative answer are Pallas v Finlay (1985) 61 ALR 220 ('Pallas v Finlay') and Macteldir Pty Ltd v Dimovski (2003) 132 FCR 492 ('Macteldir'), which I will now consider. 56 In Pallas v Finlay, Dr Finlay sued Lincoln Hunt Australia Pty Ltd ('Lincoln Hunt'). Dr Finlay's federal claim was one of contravention of ss 52 and 53 of the TPA. He sought various forms of relief. Generally speaking, they can be described as an undoing of contracts which Dr Finlay had been induced to enter into by Lincoln Hunt's misleading and deceptive conduct. Pursuant to the contracts, Dr Finlay had transferred real estate to Lincoln Hunt and deposited $150,000 with it. Dr Finlay sought an order that Lincoln Hunt obtain a discharge of a mortgage over the property, reconvey the property unencumbered to him, and repay to him the $150,000. By a cross‑claim, Lincoln Hunt sought an order that Dr Finlay withdraw a caveat which he had lodged over the title to the property. 57 In the course of the final hearing, it was announced that the matter had been settled. By consent it was ordered that the proceeding be stood over generally, with liberty to either party to restore. 58 Two individuals, Messrs Pallas and Dubinski-Hunt, who had not been parties to the substantive proceeding, entered into terms of settlement with Dr Finlay by which they agreed that in consideration of his releasing Lincoln Hunt, they would pay him $150,000, and that upon default in payment he should be at liberty to enter judgment against them for that sum. To that end, Messrs Pallas and Dubinski-Hunt agreed, in the event of default by them, to be joined as parties to the proceeding for that purpose. Lincoln Hunt agreed that Dr Finlay should be entitled to maintain the caveat until payment of the sum of $150,000. Although the terms were signed by the parties to the proceeding, their counsel, and Messrs Pallas and Dubinski-Hunt, they were not filed in Court. 59 Messrs Pallas and Dubinski‑Hunt defaulted, and Dr Finlay obtained leave to add them as respondents. He successfully moved for judgment against them. 60 The Full Court allowed their appeal on the ground that the Court lacked jurisdiction to enforce the agreement between Dr Finlay and Messrs Pallas and Dubinski-Hunt. 61 The case is distinguishable. First, of course the case was decided prior to the enactment of s 39B(1A) of the Judiciary Act by the Law and Justice Amendment Act 1997 (No 34, 1997) s 3, Sch 11, Item 1. Secondly, the Full Court emphasised that Messrs Pallas and Dubinski-Hunt were not parties to the primary proceeding (except upon being joined pursuant to the terms of settlement and for the purpose of their enforcement). Beaumont J, with whom Northrop and Lockhart JJ agreed, observed that in these circumstances there was no common substratum of facts as between the federal cause of action and the making of the compromise, as is required to confer 'accrued' or 'pendent party' jurisdiction (citing Fencott v Muller (1983) 152 CLR 570 at 607). His Honour added that the position may have been different if, for example, Dr Finlay had joined the two men on the footing that they were involved in the contraventions: cf ss 82 and 75B of the TPA. His Honour observed that in such a situation, 'as the decision in Fencott v Muller demonstrates, the accrued jurisdiction of the Court, if not the associated jurisdiction under s 32 of the Federal Court of Australia Act 1976, may well have been attracted' (at 223). 62 In the present case, Mr Edge has been a respondent throughout. In the application which commenced this proceeding, the applicants (then only Needlework and Mr Meier) claimed, relevantly, damages under ss 82 and 75B of the TPA against him. The accompanying statement of claim alleged, relevantly, that Mr Edge made misleading and deceptive statements for himself and as agent for Chansonette; that, in consequence, Chansonette contravened s 52 of the TPA; and that Mr Edge was 'involved' in that contravention and was liable to Needlework and Mr Meier in damages under s 82 of the TPA. 63 Tancot became third applicant subsequently, and by an amended application and an amended statement of claim, both filed on 2 December 2003, it made similarly based claims for relief against Mr Edge. 64 The current further amended application and further amended statement of claim, both filed on 28 July 2004, continue to make claims against Mr Edge under ss 82 and 75B of the TPA, based on his involvement in the contraventions of s 52 by Chansonette. 65 Pallas v Finlay was distinguished by majority (Pincus and Einfeld JJ; Fisher J dissenting) in Darling Downs, another claim under the TPA which was settled by an agreement to pay money, this time, however, by the only respondent to the only applicant. The basis on which Pallas v Finlay was distinguished was that in Pallas v Finlay, Messrs Pallas and Dubinski-Hunthad not been respondents in the primary proceeding, and for this reason the motion to enforce the settlement against them had not been 'properly brought forward … in the matter' within s 22 of the FCAA. 66 The majority in Darling Downs saw the question in that case as being whether enforcement of the settlement agreement was permissible as part of the Court's disposition of the federal matter (at 521). Their Honours thought that the grant of remedies to enforce the agreement was within s 22 of the FCAA. 67 I turn now to Macteldir. As I observed in Wenkart v Pantzer (No 3) at [87], the Full Court decision in that case has been criticised: see Mark Leeming, 'Breach of Contract in the Federal Court' (2004) 78 ALJ 96‑98. As I also observed in that case (at [94]), Macteldir is not binding on me because the Full Court was exercising original jurisdiction. Reference may be made to Minister for Immigration and Multicultural and Indigenous Affairs v SZANS (2005) 141 FCR 586 ('SZANS') at [35]-[38] and the authorities their cited. However, again as I observed in Wenkart v Pantzer (No 3), I would decide inconsistently with Macteldir only if I thought it 'clearly' or 'plainly' wrong. The reason is that this very restraint should characterise my approach if the three Judges who composed the Full Court in Macteldir had given three single‑Judge decisions to the same effect in the original jurisdiction of the Court: see Bank of Western Australia Ltd v Commissioner of Taxation (1994) 55 FCR 233 at 255; Cooper v Commissioner of Taxation (2004) 139 FCR 205 at [46]; SZANS at [38]. 68 In Wenkart v Pantzer (No 3) I said that I did not need to form an opinion as to whether Macteldir was clearly or plainly wrong, because it was distinguishable. I noted that no submission had been made in Macteldir based on s 39B (1A)(c) of the Judiciary Act 1903 (Cth), and held that I had jurisdiction under that provision to enforce the charge. For that reason I said that I did not need to determine whether I also had jurisdiction to do so within the accrued jurisdiction of the Court. 69 The facts of Macteldir were unusual. The applicants sought relief against the respondents under ss 115 and 116 of the Copyright Act 1968 (Cth) in respect of the respondents' publication of a directory-calendar for 2001 ('the 2001 Directory‑Calendar'). The proceeding was compromised, but subsequently, according to the applicant, the same respondents published a directory-calendar for 2002 ('the 2002 Directory‑Calendar'). The applicant contended that publication of the 2002 Directory‑Calendar constituted a breach of the terms of settlement. An order had been made dismissing the substantive proceeding. 70 By the opening words of the terms of settlement, the parties agreed to 'the following orders'. There followed numbered paragraphs. Paragraphs 2, 3, 5 and 7 were expressed as promises by the first and second respondents not to do, or to do, certain things. 71 The Full Court noted that at a directions hearing before the Docket Judge those paragraphs had been 'transformed' into undertakings to the Court. The applicant did not however, institute a proceeding for contempt of court constituted by a breach of the undertakings. 72 At [49]‑[51], the Full Court noted that the applicant did not seek to enforce 'just an agreement in the nature of a contract between the parties, but an agreement to seek certain orders of the Court'. As noted above, the opening words of the terms of settlement were indeed expressed as an agreement to consent to orders. The Full Court appears in these paragraphs to have considered that the agreement was overtaken by the Judge's noting of undertakings to the Court in the same terms. As a result, the Full Court appears to have treated enforcement of the agreement by the making of orders as a remedy no longer available. That is to say, the Court appears to have treated the substitution of undertakings to the Court for the making of orders by consent, as a 'substituted performance' of the agreement. 73 The present applicants, by contrast, seek precisely to enforce the agreement of compromise according to its terms, and there can be no suggestion of such enforcement having ceased to be available by reason of its having been replaced by a substituted performance. 74 At [57] their Honours said that it was unnecessary for them to make 'any general statement about the jurisdiction of the court to enforce compromises of existing proceedings' (my emphasis). Thus, their Honours appear to have intended not to touch upon the jurisdictional issue presented here. 75 At [60] their Honours observed that 'it might have been possible' for the applicant to have moved for an injunction to restrain conduct which would otherwise have amounted to a contempt of court, but that the applicant had not done so. 76 At [62], the Full Court said that it was 'the applicant's departure from a claim to enforce the existing undertakings which takes the notice of motion away from the ordinary case'. The reference seems to be to the fact that the notice of motion sought an injunction expressed, not in the terms of the undertakings, but in terms which related expressly and specifically to the 2001 Directory‑Calendar. With respect, I have difficulty in understanding the nature of any problem to which this circumstance was thought to give rise. 77 While I have difficulty in understanding certain aspects of the reasons in Macteldir, it seems clear that their Honours were at pains to emphasise that the case was not, in their view, one in which the motion was simply one for enforcement of the compromise agreement according to its terms. They appear to have thought that this had become impossible by reason of the supervening undertakings given to the Court. A refusal to enforce on this ground did not go to jurisdiction. Moreover, their Honours said that they were not intending to make any general statement about the Court's jurisdiction to enforce agreements in settlement of proceedings before the Court. 78 For the above reasons, I would distinguish Macteldir. 79 Their Honours considered at some length Roberts v Gippsland Agricultural & Earth Moving Contracting Co Pty Ltd [1956] VLR 555 ('Roberts v Gippsland'); McLaren v Schuit (1983) 33 SASR 139 ('McLaren v Schuit') and General Credits (Finance) Pty Ltd v Fenton Lake Pty Ltd [1985] 2 Qd R 6 ('General Credits'). Those cases were, however, concerned with the procedural question whether a compromise agreement could be enforced by motion in the substantive proceeding, not with the anterior question of the jurisdiction of the Court to enforce the agreement at all. It is important to distinguish between the fundamental question of jurisdiction, and the non-jurisdictional question, whether a claim is properly brought forward in a proceeding already before the Court: cf s 22 of the FCAA, and Philip Morris. Is it appropriate for the agreement to be enforced by notice of motion within the substantive proceeding, or should a separate proceeding have been commenced? 80 The answer to this non-jurisdictional and procedural question is yes: Roberts v Gippsland; McLaren v Schuit; General Credits; We Two. 81 The first three of these cases were decided in State Supreme Courts – courts of general jurisdiction, whose jurisdiction to enforce contracts could not be in question. 82 In the present case: · the proceeding has not been dismissed but remains on foot; · the applicants seek to enforce only a promise by Mr Edge to pay money; · Mr Edge has not appeared to dispute any of the facts; · the compromise agreement does not raise any matters extraneous to the substantive proceeding; · there has been no likelihood that pleadings or discovery would be required. All these considerations make it appropriate to enforce the compromise agreement by motion in the existing proceeding. Did the parties intend the agreement to be immediately enforceable, or was the enforceability to be subject to their negotiating and executing a form of deed? 83 As Mr Edge's solicitor, Mr Dawson had at least ostensible authority to settle the proceeding and cross claim on his behalf: Donellan v Watson (1990) 21 NSWLR 335 at 342 per Handley JA, with whom Mahoney JA and, indirectly, Waddell AJA, agreed. 84 The appearance of the words 'without prejudice' in the headings to Mr Dawson's letters dated 22 July 2005 and 29 July 2005 present no obstacle to their being received as part of the evidence that an agreement of compromise was reached: Walker v Wilsher (1889) 23 QBD 335 at 337 per Lindley LJ; Tellerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd (1957) 98 CLR 93 at 110 per Dixon CJ and Fullagar J; Bentley v Nelson [1963] WAR 89; Tomlin v Standard Telephones and Cables Ltd [1969] 1 WLR 1378; Rush & Tompkins Ltd v Greater London Council [1988] 3 WLR 939 at 943 per Lord Griffiths (with whom the other Law Lords agreed); Quad Consulting Pty Ltd v David R Bleakley & Associates Pty Ltd (1990) 27 FCR 86 at 92; Cedenco Foods Ltd v State Insurance Ltd [1996] 3 NZLR 205 at 211. 85 The applicants submit that there was an agreement within the first category discussed in Masters v Cameron (1954) 91 CLR 353. In Masters v Cameron, Dixon CJ, McTiernan and Kitto JJ stated in a famous passage at (360): 'Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common.' 86 The concluding words in Mr Dawson's letter of 29 July 2005 were: 'We look forward to hearing from you to finalise the matter'. Although Mr Wenden sought clarification on one point, nothing in his letter of 2 August 2005 represented a departure from Mr Dawson's letter of 29 July 2005 and Mr Dawson's subsequent clarification. In my opinion, when Mr Dawson wrote his letter of 29 July 2005, he was inviting an acceptance which would bring into being a contract immediately enforceable, even though various instruments would have to be executed in order to implement the agreement. 87 The agreement contemplated a 'settlement occasion'. This is made clear by the provision for the giving of security in respect of the payment of the instalments. The first twenty-eight day period was to run from that occasion. At that time: (1) Mr Edge was to pay to Needlework , Mr Meier and Tancot, $900,000 as follows: (a) $100,000 within 28 days of the date of settlement; (b) $100,000 within 56 days of the date of settlement; (c) $100,000 within 84 days of the date of settlement; (d) the balance of $600,000 within 4 months after the date of settlement. (2) Upon settlement, Needlework, Mr Meier and Tancot were to execute and deliver a release in favour of Mr Edge of all causes of action set up against him in the proceeding or arising out of the circumstances leading up to, or associated with, the making of the Contract and the contract for the purchase of the land by Tancot, including a release of Mr Edge from the covenant in restraint of trade given by him; (3) Upon settlement, Mr Edge was to execute and deliver a release in favour of Needlework, Mr Meier and Tancot of all causes of action arising out of the circumstances leading up to, or associated with, the making of those contracts, including a release of the claim in respect of the agreement relating to consultancy services, the subject of Mr Edge's cross‑claim against Needlework; (4) Upon settlement, Mr Edge was to execute and deliver, in favour of Needlework, Mr Meier and Tancot, securing payment to them of the amounts totalling $900,000, a charge over the Property, title to which was to be unencumbered, and a term of the charge was to be that Needlework, Mr Meier and Tancot should be at liberty to lodge a caveat against the title to the Property, in respect of their equitable interest as chargees; (5) Upon settlement, the proceeding and cross‑claim were to be dismissed with no order as to costs. Once the first three instalments totalling $300,000 were paid, (6) Needlework was to assign (and deliver) the trailer and remaining stock to Mr Edge; (7) Needlework was to assign to Mr Edge the registered business name, 'Leisurehouse'. 88 Two matters should be noted. First, there was no express agreement as to when Needlework was to assign the trailer to Mr Edge. I do not think, however, that this was a matter remaining to be negotiated. The reference to the 'trailer and the remaining stock' in Mr Dawson's letter to Mr Wenden dated 29 July 2005 makes it clear that the trailer was to be treated identically with the remaining stock, and I think it is implied that the agreement reached in relation to the time for the assignment of the remaining stock also applied to the trailer. 89 Secondly, there was no express agreement as to the mode of disposition of the proceeding. Again, I do not think that this was a matter remaining to be agreed upon. I think it was implied from the agreement upon mutual releases, that the application and cross‑claim were both to be dismissed with no order as to costs, contemporaneously with execution and delivery of the mutual releases. 90 Either the agreement was within the first category recognised in Masters v Cameron or it was not within Masters v Cameron at all. Masters v Cameron is concerned with the situation in which the parties agree that the terms of their bargain are to be formally restated in a written contract. The parties did not agree expressly that the terms of their bargain were to be more formally restated. The releases and charge would not necessarily include the terms as to the assignment of the business name, the trailer and the remaining stock. Why, it may be asked rhetorically, is it not consistent with the parties' intention, that their agreement in the latter respects be allowed to remain a matter of parol contract? 91 I think that the better view is that the agreement was not within Masters v Cameron, even though aspects of it were to be implemented by written instruments, namely, the mutual releases and the assignment of the business name and the stock. conclusion 92 I caused the proceeding to be relisted on 19 October 2005 and raised with counsel for the applicants certain questions as to the practical outworking of an order for specific performance, in view of the likely non‑participation of Mr Edge. The point raised is that the applicants would not become entitled to the sum of $900,000 as a debt, unless they furnished the full consideration for that amount becoming due and payable (cf McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 475‑6 per Dixon J, with whom Rich and McTiernan JJ agreed), and difficulties in this respect might arise touching, for example, the assignment to Mr Edge of the business name, the stock in trade and the trailer, without his cooperation. 93 Counsel agreed that as a practical matter, his clients may prefer to seek damages. He said that for the time being he would seek only a declaration as to the existence and terms of the settlement agreement. I will make a declaration accordingly and stand over the proceeding to a date for further directions. I certify that the preceding ninety‑three (93) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 28 October 2005 Counsel for the Applicants: Mr M Dicker Solicitor for the Applicants: Barnes & Wenden William Lowe Edge, the respondent to the motion, did not appear Date of Hearing: 5 October 2005 Date of Judgment: 31 October 2005	12,991
federal_court_of_australia:fca/single/1999/1999fca0546	decision	commonwealth	federal_court_of_australia	text/html	1999-04-28 00:00:00	Shi v Minister for Immigration & Multicultural Affairs [1999] FCA 546	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca0546	2024-09-13T22:49:51.346708+10:00	FEDERAL COURT OF AUSTRALIA Shi v Minister for Immigration and Multicultural Affairs [1999] FCA 546 MIGRATION – application for a protection visa – no appearance by applicant at Refugee Review Tribunal hearing. JING FENG SHI v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS NG 618 of 1998 HILL J 28 APRIL 1999 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALESDISTRICT REGISTRY NG 618 OF 1998 BETWEEN: JING FENG SHI Applicant AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS Respondent JUDGE: HILL J DATE OF ORDER: 28 APRIL 1999 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Application be dismissed 2. Decision of the Refugee Review Tribunal be affirmed 3. Applicant to pay the 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 WALESDISTRICT REGISTRY NG 618 OF 1998 BETWEEN: JING FENG SHI Applicant AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS Respondent JUDGE: HILL J DATE: 28 APRIL 1999 PLACE: SYDNEY EX TEMPORE REASONS FOR JUDGMENT 1 The applicant Jing Feng Shi, also known as Yen Ching Tan is a citizen of the Peoples Republic of China. She arrived in this country in November 1995 and on 10 April 1996 lodged an application for a protection visa with the Department of Immigration and Multicultural Affairs. Her application was refused and on 19 June 1996 she applied to the Refugee Review Tribunal for review of the decision refusing to grant to her a protection visa. 2 On 21 April 1998 that Tribunal wrote to the applicant advising her that it had considered her application and other papers relating to it, but was unable to make a favourable decision on the basis of that information. She was advised that a hearing was to be conducted on 18 May 1998 and that she should contact the Tribunal within a specified period about that hearing. She was also advised that if she did not, a hearing would not take place and the Tribunal would reach its decision by reference to the evidence available then to it. That letter was sent, according to the Tribunal, to the address stipulated by her as being either her residential address or address for service. 3 She apparently also had an adviser. The adviser was notified but by that time apparently had no contact with her. The applicant did not respond to that letter. There is no evidence before me to suggest that it was not received, although this morning from the bar table she said not on oath that she may not have received papers from the Tribunal. Be that as it may the Tribunal proceeded to consider her case. Having done so it formed the view that it was not satisfied that she was a person to whom Australia had protection obligations and accordingly affirmed the decision not to grant to her a protection visa. 4 As it is required to do the Tribunal forwarded a copy of its decision to the applicant. The decision is dated 18 May 1998. The decision was forwarded to the applicant at the same address as the previous letter to which I have already referred inviting her to indicate whether she wished to attend the Tribunal hearing. 5 The applicant obviously received that letter because on 23 June 1998 she lodged with the Court an application for an order reviewing the Tribunal's decision. I note that in that application she stated her address for service to be a different address from that which she had previously notified the Refugee Review Tribunal. 6 The application to this Court came before Lindgren J on 24 July and was initially listed for hearing in September 1998. The applicant attended that directions hearing. On 7 September 1998 Lindgren J ordered that the application be fixed on a date to be advised. On 21 October 1998, over six months ago, my associate advised her that her application was listed for hearing before me today. He mentioned in that letter the importance of trying to obtain legal representation. He enclosed a list of organisations that might assist. 7 When the matter was called before me this morning the applicant requested that I stand over the hearing so that she could have a chance of obtaining legal representation. She suggested a period of three months. She said she had only recently come to know a Chinese solicitor. The initial impression she gave me was that the solicitor might or might not appear. Although ultimately she said that he had agreed last night that he would appear for her. It is somewhat strange if this was the case that he did not attend this morning. 8 Given the history of the case I am not convinced that standing over the case is ultimately likely to produce any real result. It is true that it is an almost impossible task for an applicant not legally represented to seek to convince the Court that there is some error of law in a decision adverse to them. Six months has elapsed since the applicant has known that the case would be heard today. If legal representation was possible, six months suffices to obtain it. 9 I am reinforced in my view that an adjournment should not be granted, both by the fact that the applicant did not turn up before the Refugee Review Tribunal and by the fact that in the result it would be virtually impossible to challenge the Refugee Review Tribunal's decision. Parliament in its wisdom has taken the view that the jurisdiction of this Court to carry out judicial review of decisions of the Refugee Review Tribunal is very limited. 10 It is unnecessary here to set out the precise grounds of review which are permitted. It suffices to say that in essence they require that there be shown some legal error. The Tribunal's reasons set out in very brief form the substance of what the applicant had said in her application for a protection visa. It noted that there were inconsistencies in the claims she made in her application for a protection visa and claims she made to departmental compliance officers. The Tribunal took the view that in the absence of an explanation from her of these inconsistencies it could not be satisfied of the credibility of her claims. 11 The fact that she did not ultimately attend no doubt led to this conclusion. The Tribunal pointed out, as well, that her claims concerning breaches of China's business laws and that she had failed to pay taxes in China together with her claim of illegal departure were not matters falling within the 1951 United Nations Convention Relating to the Status of Refugees as amended by the 1967 Protocol Relating to the Status of Refugees. For these reasons the Tribunal concluded that it could not be satisfied that she was a person satisfying the criterion set out in s 36(2) of the Migration Act 1958 for the grant of a protection visa. 12 It is difficult to see how in these circumstances any error of law can be shown. Her application to the Court does not suggest one, rather it proceeds on the basis that the Court in some way can decide the merits of her application. Unfortunately it cannot. The applicant says also that I should adjourn the proceedings because she is stateless. She says that there have been difficulties in obtaining passports both from the Malaysian Government and the Chinese Government. There is no evidence before me of that, but I am prepared to accept it is true. 13 However it is not a matter that has any relevance to the question of whether her application for judicial review to this Court should be proceeded with, let alone of course any basis for finding some error of law in the Tribunal's decision. In the circumstances I would refuse the adjournment and being unable to detect legal error in the Tribunal's decision would dismiss the application and affirm the decision of the Tribunal. 14 I order the applicant to 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 Hill. Associate: Dated: 28 April 1999 The Applicant appeared in person Counsel for the Respondent: F Backman Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 28 April 1999 Date of Judgment: 28 April 1999	1,792
federal_court_of_australia:fca/single/2007/2007fca1286	decision	commonwealth	federal_court_of_australia	text/html	2007-08-22 00:00:00	SZBXV v Minister for Immigration and Citizenship [2007] FCA 1286	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2007/2007fca1286	2024-09-13T22:49:52.672260+10:00	FEDERAL COURT OF AUSTRALIA SZBXV v Minister for Immigration and Citizenship [2007] FCA 1286 SZBXV v MINISTER FOR IMMIGRATION AND CITIZENSHIP AND REFUGEE REVIEW TRIBUNAL NSD 469 OF 2007 MOORE J 22 august 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 469 OF 2007 BETWEEN: SZBXV Applicant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MOORE J DATE OF ORDER: 22 august 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The name of the first respondent be amended to read "Minister for Immigration and Citizenship". 2. The applicant's father be appointed as tutor to act on behalf of the applicant pursuant to O 43 r 2(1) of the Federal Court Rules. 3. The application for an extension of time be allowed. 4. 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 NEW SOUTH WALES DISTRICT REGISTRY NSD 469 OF 2007 BETWEEN: SZBXV Applicant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MOORE J DATE: 22 august 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application for extension of time to file and serve a notice of appeal from a judgment of aFederal Magistrateof 22 February 2007. The application before the Federal Magistrate sought judicial review of a decision of the Refugee Review Tribunal ("Tribunal") of 8 May 2006 and handed down on 25 May 2006. The Tribunal affirmed a decision of a delegate of the first respondent not to grant a protection visa. 2 The applicant is a male child born on 5 June 2001 in Australia. His parents are both citizens of the People's Republic of China ("PRC"). The applicant's father had arrived in Australia in 1997 on a student visa, with the applicant's mother arriving in May 1998 on a dependent student visa. The applicant has an elder brother who was also born in Australia. 3 On 4 November 2002 the applicant's parents lodged an application for a protection visa on the applicant's behalf with the Department of Immigration and Multicultural Affairs. Included in the application was the applicant, his parents and his elder brother. A delegate of the first respondent refused the application on 14 November 2002. A previous protection visa application had been filed by the applicant's mother for herself, her husband and the applicant's elder brother. That application was refused on 2 February 2000. The delegate noted that the other applicants had been involved in the earlier application and thus did not include them in the decision. The delegate assessed the applicant as a citizen of the PRC. 4 On 9 December 2002 the applicant, through his parents, applied to the Tribunal for a review of the delegate's decision. The Tribunal affirmed the delegate's decision in a decision signed on 26 September 2003 and handed down on 22 October 2003. The applicant sought review in the Federal Magistrates Court. On 22 December 2005, a Federal Magistrate quashed the decision of the Tribunal and remitted the matter for determination by the Tribunal according to law. The matter was then redetermined by the Tribunal, differently constituted. The Tribunal conducted a hearing which the applicant's parents attended and at which they gave oral evidence. The applicant's migration agents made oral and written submissions. In a decision signed 8 May 2006, the Tribunal affirmed the delegate's decision not to grant the applicant a protection visa. An application for review to the Federal Magistrates Court was dismissed on 22 February 2007. Background 5 The factual background, based on the claims of the applicant's parents before the Tribunal, is as follows. The applicant's parents married in May 1996 in the PRC, where they had lived in Shandong province. In April 1997, the applicant's father came to Australia on a student visa. However, he had been unable to complete his studies and needed to work once his wife became pregnant. 6 The applicant's mother came to Australia in May 1998, with the intention of relieving the financial burden on her husband so that he could concentrate on his studies. Some time after, she became pregnant with the applicant's elder brother. She returned to the PRC to seek permission to have the child, but was refused permission and told the child could not be registered. She returned to Australia. The applicant's brother was then born in August 1999. 7 Some time later, the applicant's mother became pregnant with the applicant. She said that she had attended the consulate in Sydney to ask for a birth permit, and was told she would have to go back to Shandong province, where they had lived, to resolve the problem. She attended the consulate on subsequent occasions to ask about regularising the status of both children, and was again told she would need to go back to Shandong. 8 The applicant's mother said that because the applicant's father already had a child from a previous marriage, the family planning regulations in Shandong province meant that she had to wait until she was 30 to obtain consent to have a child. She had become pregnant twice in the PRC in 1996 but had to terminate both pregnancies because she did not have permission and would have lost her job. 9 The applicant's parents said that they no longer held a household registration in the PRC as this had been cancelled when they departed. To get household registration and identity cards, they would need to return to Shandong province, but that given that they were in breach of the "one child" policy, their chance of having household registration restored and obtaining identity cards was uncertain. They would first have to pay substantial social compensation fees. Until the fines were paid, the applicant would be denied access to basis services such as health care and education. He would be a "black child", which, the applicant's father explained, was a child who was not registered by the Chinese Government and who did not have an identity card or "hukou". 10 The applicant's parents said that because the applicant was born without a birth permit, he would be denied household registration and would be denied access to education, social welfare and employment. The applicant would be ill-treated and would face discrimination by authorities and the people in Shandong province, who strictly adhered to the "one child" policy. He would be denied a wide range of opportunities and rights including the right to serve in military forces, the right to work in a government job, the right to own property and the right to vote. He would not be able to register for marriage or have a child of his own. He would be discriminated against and socially ostracised. The Tribunal's decision 11 The Tribunal noted that the applicant's parents and brother were included in the application for review, but they had not been included in the delegate's decision. The Tribunal concluded it only had jurisdiction in relation to the applicant. 12 The Tribunal member referred to independent evidence regarding the Nationality Law of the PRC and found that the applicant was a national of the PRC. The applicant's citizenship has not been put in issue. 13 The Tribunal accepted that the applicant was born in breach of the family planning regulations because he was the second child of the parent's relationship. However, it referred to country information from the Department of Foreign Affairs and Trade ("DFAT") which included a translation of a circular issued by the State Family Planning Commission and the State Education Commission ("the circular"). The circular was dated 18 November 1989 and stated that regulations had been approved by the State Council about the issue of births outside the plan for Chinese people studying abroad. It stated that after people who had given birth in excess of the plan returned to China, they should be allowed to obtain household registration for their children by presenting a certificate issued by the embassy (or consulate) and the birth certificate issued in the country of birth. People who had given birth in excess of the plan who returned to China were not to be punished or fined by their work units. 14 Before the Tribunal, the applicant's representatives submitted that the regulation referred to in the circular only applied to students sent abroad to study by government instrumentalities. The Tribunal rejected this argument on the basis that the circular did not indicate any such restriction, nor did the DFAT advice which accompanied the circular. The Tribunal noted further that the circular had referred specifically to the situation of people outside China applying for refugee status on the basis that they would be punished for having given birth in excess of the plan, and that the regulations had been introduced to resolve this issue. Although the circular did set out the advice to be given to students sent abroad to study by government instrumentalities, this had not meant that the regulations did not apply equally to other students, even if the applicant's parents were not told of the regulation. 15 The applicant's representatives also submitted that the regulations only applied to those who returned to the PRC as students and therefore was not applicable to the applicant's parents who no longer held students visas. The Tribunal member found that again no such restriction was indicated by the circular or the DFAT advice. 16 The applicant's representatives also relied on the evidence of the applicant's mother about having approached the consulate in Sydney and been denied her request to register the applicant, to demonstrate that the regulation was not applicable or would not be applied to the applicant's situation. The Tribunal did not accept the applicant's mother's evidence in this regard, based on its adverse view of her credibility. The Tribunal stated that there was no reason to believe that the regulations would not be applied to the applicant's case. It also rejected an argument that the regulations would not be applied by local offices in Shandong because they would instead adhere to local practices. It noted that the regulations were made by the State Family Planning Commission with approval of the State Council and there had been no suggestion in the circular or the DFAT advice of any local variation. 17 The Tribunal's adverse view of the applicant's mother's credibility was based on perceived inconsistencies in the accounts given about her experiences. In an undated statement she had made to the Tribunal, she had claimed that she had terminated two pregnancies in the PRC because she would have lost her job if her work unit had become aware she was pregnant. However, in later submissions to the Tribunal, the applicant's representatives said that after her second termination, she had been named and criticised at a family planning rally organised by her work unit. It appears that what the Tribunal took from the second account that her work unit knew she had been pregnant and yet she had not been fired, as she claimed to fear she would be. When questioned by the Tribunal, she explained that what she had initially meant was that she would have been dismissed from her employment if she had not had an abortion, rather than if they knew she was pregnant. The Tribunal concluded that the mother had changed her evidence in a way she believed would be to the applicant's advantage. 18 The other perceived inconsistency relied upon by the Tribunal was the explanation the applicant's mother had given about what she was told when she returned to the PRC to seek permission to have her first child. The applicant's mother had claimed that she had been refused permission because she had been under 30 and the applicant's father already had a child. The Tribunal member put to the applicant's parents that the regulation in force in Shandong at the time required that she be over 25 to obtain permission in such circumstances. The applicant's mother had then said that she had to be aged 25 or over but also had to apply for permission before becoming pregnant, which she had not done. The Tribunal concluded that the applicant's mother had again changed her evidence to benefit the applicant's case. The Tribunal did not accept that the applicant's mother would have been in breach of the family planning regulations in relation to the first child, as they permitted her to have a child once she had reached 25. 19 In the original application for a protection visa, the applicant's father claimed to have been involved in the pro-democracy demonstrations in the PRC in 1989 and to have been involved in Falun Gong whilst in Australia. The applicant's father explained at the hearing that he had been involved in Falun Gong in the past but was no longer involved. The Tribunal gave the applicant's father further time to obtain evidence of his involvement. No evidence was provided. The Tribunal that the applicant's father was currently involved in Falun Gong or that he would wish to be in the foreseeable future. There was nothing to suggest that the authorities in the PRC were aware of any past involvement in Falun Gong in Australia. Further, the Tribunal did not accept that his involvement in pro-democracy demonstrations would adversely affect him now if he was to return to the PRC. 20 The applicant's father had expressed concern at the hearing that their household registration might be rejected in the PRC if the Government knew they had applied for refugee status in Australia. The Tribunal referred to DFAT advice that it was not aware of any substantiated claims if mistreatment by failed refugee claimants who returned to the PRC, and that the Chinese authorities did not take much notice of such claims because it viewed the claimants as seeking to take advantage of the Western legal system. The Tribunal therefore did not accept that the parents would be denied household registration because of any imputed political opinion. 21 Based on the regulations referred to in the circular, the Tribunal did not accept that the applicant's parents would be punished or fined, nor that the application would be denied household registration. It therefore did not accept that there was a real chance that the applicant would suffer the social, legal and economic disadvantages said to attend children who were denied household registration. 22 The Tribunal went on to consider the meaning of the term "black child". On the basis of independent evidence, it found that a black child was an unregistered child whose birth might or might not violate family planning regulations. By contrast, the Federal Magistrate determining the application for review of the first Tribunal decision had suggested that a black child actually referred to a child born in breach of the one child policy and that absence of registration was merely a consequence of being a black child. The Tribunal concluded that the Federal Magistrate's view was contrary to the evidence. It found, based on the independent evidence, that some children born in breach of family planning regulations could still be registered and conversely, that some children who are unregistered are considered black children even though their lack of registration had nothing to do with any breach of the family planning regulations. 23 The Tribunal went on to accept that the applicant could face social ostracism, even though it did not accept that he would be denied household registration (and therefore would not be a "black child"). The Tribunal accepted that he might face some discrimination and prejudice from having been born in breach of the one child policy. However, it did not accept that any social ostracism he might face would amount to serious harm. 24 The Tribunal also accepted that the applicant would not get the benefits conferred by Government policy on only children. However, if found that it was possible for governments to have policies benefiting certain people, provided that they were of general application and appropriate and adapted to achieving legitimate national objectives. The Tribunal did not accept that the denial of certain benefits would amount to serious harm. 25 The Tribunal also accepted that there was a real chance the applicant would be denied government employment. However, it did not accept that he would be denied employment in the private sector or that he would suffer discrimination from private sector employers that was so serious as to amount to persecution involving serious harm. Although employers might know he was not the only child in the family, they would not be able to tell if he was born in breach of family planning policy, since not all second children were born in breach of the regulations. 26 The Tribunal went on to consider whether the cumulative effect of the problems it accepted, and was not satisfied that the applicant had a well founded fear of persecution for a Convention reason. The proceedings in the Federal Magistrates Court 27 The applicant was represented by counsel in the Court below. The application for review filed on 22 June 2006 identified three grounds, which are set out in full at [15] of the Federal Magistrate's reasons. 28 As the Federal Magistrate noted, the underlying ground of review related to the alleged inconsistency between the Tribunal's finding that the applicant would not suffer social, legal and economic disadvantages, and the later finding that the application would suffer discrimination and prejudice and would be denied the benefits conferred by Government policy on only children. The Federal Magistrate found no inconsistency in the Tribunal's decision. Her Honour found that the Tribunal had made two separate findings. First, it had found that the applicant would not suffer the social, legal and economic disadvantages that were said to attend children who were not registered, because the applicant would be able to be registered. The Tribunal had there been referring to disadvantages which came about as a consequence of not being able to obtain household registration. Secondly, the Tribunal had gone on to find that the applicant might still suffer some discrimination and prejudice, but this was as a result of being born in breach of the one child policy. The Tribunal did not accept that this would amount to persecution. The Tribunal had also expressly addressed the issue of whether the cumulative effects amounted to persecution, and found that they did not. 29 The Federal Magistrate accepted that implicit in the Tribunal's earlier findings was an assumption that the parents would be willing and able to register the applicant. However, her Honour found that this assumption was reasonable based on the evidence. The Tribunal had addressed the issue of whether the parents would be punished or fined, and also the specific issue of whether the applicant would be denied registration because he was born in excess of the plan. 30 The Federal Magistrate did not accept that the Tribunal had failed to consider the nature and extent of the social ostracism the applicant might face. The only evidence of claims of this nature before the Tribunal was that the applicant's father had said that his peer group, friends and colleagues would "look at you with different eyes" if you were born in excess of the plan. In accepting that the applicant might suffer some discrimination and prejudice, it was to this evidence that the Tribunal had referred and had found that it did not amount to serious harm. Nothing broader than social ostracism had been claimed. 31 The Federal Magistrate considered that one of the reasons the Tribunal had found that denial of certain benefits did not amount to persecution was that they were conferred under laws of general application which the Tribunal saw as appropriate and adapted to meet a legitimate national objective. The Federal Magistrate did not accept the argument that the Tribunal had here been referring to the denial of equal access to education, medical treatment or the denial of other rights. Her Honour found that the Tribunal had drawn a distinction between the conferral of benefits on only children, such as financial incentives to parents, and the denial of basic rights, and had found that the former did not amount to persecution. Application for extension of time 32 On 23 March 2007, the applicant filed an extension of time to file and serve notice of appeal. The applicant explained that his reason for delay was that his previous solicitor had advised him that he had 28 days to make the application (whereas in fact he had 21 days, which expired on 15 March 2007). He had tried to file a notice of appeal on 19 March 2007 but was informed that he was out of time. 33 The applicant was not legally represented at the hearing in this Court. The applicant's father filed written submissions and made oral submissions at the hearing. 34 The draft notice of appeal raised four grounds: 1. The Tribunal erred in finding, and the Federal Magistrate Court in accepting, that the applicant was the second child of the family. 2. The Federal Magistrate Court erred in finding that social ostracism was not a denial of basic rights and did not constitute persecution. 3. The Federal Magistrate Court erred in finding that the applicant would obtain household registration upon return to China. 4. "In failing to find the matter before it the Federal Magistrate Court fell into jurisdictional error". 35 The Minister's position was that he was prepared to accept that the explanation for the delay would support an extension of time provided the case was one of substance, which, according to the Minister, it was not. 36 The applicant's father appeared at the hearing and made oral submissions on the applicant's behalf. At the hearing, the solicitor appearing for the Minister requested that the applicant's father be a formally appointed as a tutor to act on behalf of the applicant. That order should be made. The applicant's submissions 37 The written submissions filed on behalf of the applicant raised a number of issues. They do not expressly address the grounds identified in the draft notice of appeal. The written submissions were supplemented by brief oral submissions at the hearing. 38 The first contention advanced on behalf of the applicant was that the Tribunal had wrongly characterised the applicant as the second child, or simply treated him as a child in excess of the plan, whereas under the family planning regulations, he was a third child. It was said that under the family planning regulations, under no circumstances was a third child to be born. As an example of where the Tribunal had proceeded on the premise that the applicant was a second child, reference was made to that part of the Tribunal's reasons in which the Tribunal recorded its discussion with the applicant's parents regarding the applicant's prospects of gaining private sector employment. A key issue for the Tribunal had been whether an employer would know that the applicant was born in excess of the plan. The Tribunal concluded in effect that employers would not be able to tell because a second child was not necessarily born in breach of the family planning regulations. 39 A focus of the applicant's father's submissions was a contention that the effect that the regulations referred to in the circular would not enable the applicant to obtain household registration. Three main submissions were advanced. Firstly, it was said that the applicant's parents were not "students" to which the regulations would apply, because they were not "studying abroad" but rather had ceased studying abroad. Secondly, according to the circular, in order to obtain household registration, the applicant's parents would need to provide a certificate from an embassy or consulate. The applicant's father submitted that they were unable to obtain such a certificate because it required a diploma of study in Australia to be produced, and they did not have one. 40 The applicant's father also repeated the submission made before the Tribunal that the regulations referred to in the circular would be more strictly implemented in Shandong province. It was submitted that the wording of the regulations left enough room for local family planning authorities to implement the regulation more severely, requiring that both parents of the child have diplomas from an overseas institution. 41 The written submission also addressed the Tribunal's findings regarding the applicant's mother's credibility. It was submitted that the matters in relation to which adverse credibility findings were made were irrelevant to the matters in issue in the application, and should have been given no weight. They concerned the applicant's brother's circumstances and not the applicant's circumstances. The Tribunal had concluded that the applicant's mother had changed her evidence in way she viewed as being to the applicant's advantage, yet the applicant's father questioned how the evidence she gave could possibly advantage the applicant. The applicant's father also submitted that the mother's evidence about what had occurred when she went to the consulate was consistent with the circular, which stated that they would have to go back to the PRC to register the child. 42 It was submitted that the Tribunal's conclusions about the mother's credibility arose from a lack of knowledge on the part of the Tribunal about how a work unit in Shandong would treat a woman whose pregnancy had not been approved. The relevant regulations provided that a woman shall not fall pregnant without approval, and in the case of unapproved pregnancies, they must report in a timely manner to the director of the family planning department of the work unit to have an abortion under the supervision of the director. The applicant's father submitted that what the applicant's mother had meant when said she would be fired if her work unit knew she was pregnant was that she would have been fired if she did not have the terminations in a timely manner, as required by the regulations. As to what the applicant's mother said she had been told when she sought permission to have her first child, the applicant's father accepted that the regulations which applied at the time, as a result of 1996 amendments, meant that the applicant's mother only had to be over 25. However, the applicant's father said that notwithstanding this, the applicant's mother had been told that she had to be over 30 and the local family planning authority had not applied the 1996 amendments. 43 The applicant's father also contended that the Tribunal had failed to consider whether the applicant would be able to obtain household registration in view of the approach to family planning in the capital city of Shandong province. The written submissions set out some matters to illustrate the severity of the family planning policy and the way it was implemented in Shandong. 44 The applicant's father also repeated the submission made in the Court below that the Tribunal failed to evaluate the extent of harm as a result of the social discrimination the applicant would face as a child born in excess of the plan, even if he was registered. He would be judged by others and treated differently which, for a child, would mean enormous physical and psychological harm and might even be fatal. The Minister's submissions 45 In relation to the affidavit explaining the reason for the delay in filing a notice of appeal, the Minister referred to the fact that it purported to have been sworn by the applicant himself, despite the fact that he is six years of age. The Minister submitted that the applicant was not competent to swear the affidavit. Nonetheless, the Minister consented to the Court deciding the application on the facts asserted in the affidavit. However, it was submitted that even if those facts constitute special reasons for granting an extension of time pursuant to O 52 r 15(2) of the Federal Court Rules, the Court should exercise its discretion to refuse an extension of time as the proposed appeal had no prospects of success. 46 The Minister's written submissions addressed each of the grounds contained in the draft notice of appeal as well as the written submissions but only so far as they were thought to relate to the grounds in the draft notice of appeal. The Minister submitted that in large part, the written submissions had merely sought to challenge the merits of the Tribunal's decision. 47 The Minister submitted that the first ground, which related to the Tribunal's characterisation of the child as the second child in the family, was a new ground not raised in the Court below. It was submitted that leave to raise this ground should be refused on the basis that there were insufficient prospects of success, and the applicant had not provided any explanation for failing to raise it in the Court below. Further, it was submitted that the ground was misconceived. The Tribunal clearly understood that the applicant's father had a child from a previous relationship. The Tribunal had found that, based on the family planning regulations, the applicant's older brother was not treated as a breach of the regulations, and this conclusion had been open to the Tribunal on the evidence. 48 The Minister submitted that both the second and third grounds in the draft notice of appeal were misconceived. In relation to the second ground, the Minister submitted that the Federal Magistrate had correctly concluded that the Tribunal had properly considered the nature and extent of social ostracism. There had been no jurisdictional error by the Tribunal in failing to accept, on the evidence, that there was a real chance that any social ostracism would amount to persecution involving serious harm. In relation to the third ground, it was submitted that the Federal Magistrate had not found that the applicant would be able to obtain household registration, but rather that the Tribunal's findings in this regard were reasonable on the evidence. 49 In relation to the fourth ground, which was an unparticularised allegation of jurisdiction error, the Minister submitted that her Honour had been correct to dismiss the application for the reasons her Honour gave. Consideration 50 The issues that potentially arise in this matter concern: 1. The adverse credibility findings made by the Tribunal in relation to the applicant's mother; 2. The use to which those adverse credibility findings were put by the Tribunal; 3. The conclusions which the Tribunal made based on the translation of the circular referring to the new regulation and the accompanying the DFAT advice; 4. The Tribunal proceeding on the basis that the applicant was a second child; 5. The Tribunal's conclusion that the applicant might suffer some harm in the PRC but not such as would amount to persecution. 51 Turning to the first issue, there is some force in the applicant father's criticisms of the adverse view which the Tribunal took of the applicant's mother's evidence. However that finding was one of the Tribunal was authorised to make. It is not for this Court to evaluate the evidence for itself and form a view about the mother's credibility even when exercising appellate jurisdiction. 52 The next issue concerns the use which the Tribunal made of the adverse credibility findings it made of the applicant's mother. The Tribunal did not accept the applicant's mother's evidence about having gone to the consulate in Sydney or what she had been told by its officers, namely that she had to go back to Shandong to resolve the issue. This is important because what the applicant's mother's evidence could also have shown was that she was never told about the regulations applying to students studying abroad. The significance of this is that, based at least on the applicant's father's view of the circular, it appears the applicant's parents would have to first obtain a certificate from the consulate in order to register the applicant under the regulations. 53 Give that the Tribunal was entitled to make the adverse credibility findings it did about the applicant's mother, it was equally entitled to use those findings as a reason for rejecting the applicant's application. In particular, was it entitled to use those findings to reject the evidence about having gone to the consulate. 54 The third issue concerns the DFAT advice and the circular. This was the central evidence upon which the Tribunal relied in concluding that the applicant would not be denied household registration on return to the PRC. What is clear is that the Tribunal found that the regulations referred to in the circular would apply to the applicant and enable him to be registered. The applicant's father contended that the applicant would not be able to avail himself of the benefit of the regulations referred to in the circular. As to the argument that the local authorities in Shandong would not apply the regulations so as to enable the applicant to be registered, the Tribunal rejected these arguments on the basis that there was no support for them in the independent evidence, as it was entitled to do. An argument that the applicant's parents were not students to which the regulations would apply was made before the Tribunal and rejected, and the Tribunal was entitled to make these findings, based on the evidence before it. No basis has been shown for the assertion that the applicant's parents would first have to present a diploma in order to obtain a certificate from the embassy or consulate and in any event, it appears to be a fresh point not raised below. Again, any support which the applicant's mother's evidence may have provided for any of these matters was not available, because of the Tribunal's adverse credibility finding. 55 As the Minister has pointed out, the grounds before the Federal Magistrate did not specifically address the Tribunal's conclusion that the applicant would be able to be registered on his return, nor did the Federal Magistrate make a finding as such. However, the Federal Magistrate did give consideration to the issue, and accepted the contention put forward by counsel for the applicant that the Tribunal had proceeded on the assumption that the applicant's parents would be willing and able to register the applicant. Her Honour found that the Tribunal's assumption or conclusion was reasonable. I would prefer to put it on the footing that it was a conclusion the Tribunal was authorised to reach. 56 Similarly, whether the applicant was a second or third child and whether any harm he might suffer could amount to persecution were again matters peculiarly within the province of the Tribunal. 57 As to the Tribunal's conclusion that any social ostracism would not amount to persecution, the Tribunal properly considered the nature and extent of the harm the applicant might experience in this regard. Neither can any error be discerned in the approach of the Federal Magistrate to this issue. 58 It is not apparent to me that the Federal Magistrate erred in dismissing the applicant's application. I think, in the circumstances, the preferable course is to extend time but dismiss the appeal. I should add that, by way of a concluding observation, that there are several curious aspects to this case. One is whether the applicant was legally competent to make the application for the protection visa: see Soondur v Minister for Immigration and Multicultural Affairs [2002] FCAFC 324; (2002) 122 FCR 578 and Re Woolley; ex parte Applicants M276/2003 by their next friend GS [2004] HCA 49; (2004) 210 ALR 369. Another might be whether the Refugees Convention and the relevant provisions of the Act can found a claim to asylum and a protection visa in circumstances where the asylum seeker has never resided in the country of nationality. Specifically, is it essential that the applicant for a protection visa be outside the country of nationality owing to a well-founded fear of being persecuted: see Minister for Immigration and Multicultural Affairs v Savvin (2000) 98 FCR 168 at 175 and if so, could that be said of a person in the position of the applicant? However these issues were not raised in these proceedings and nothing further need be said. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. Associate: Dated: 22 August 2007 The Applicant's father appeared as the applicant's tutor Solicitor for the Respondent: Blake Dawson Waldron Date of Hearing: 17 May 2007 Date of Judgment: 22 August 2007	7,303
federal_court_of_australia:fca/single/2003/2003fca0954	decision	commonwealth	federal_court_of_australia	text/html	2003-09-10 00:00:00	NAHZ v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 954	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2003/2003fca0954	2024-09-13T22:49:53.339901+10:00	FEDERAL COURT OF AUSTRALIA NAHZ v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 954 MIGRATION – appeal from Federal Magistrate – no meaningful submissions advanced on appeal – appeal dismissed. NAHZ v MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS N 818 OF 2003 CONTI J 10 SEPTEMBER 2003 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 818 OF 2003 BETWEEN: NAHZ APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGE: CONTI J DATE OF ORDER: 10 SEPTEMBER 2003 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Appeal dismissed. 2. Appellant to 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 NEW SOUTH WALES DISTRICT REGISTRY N 818 OF 2003 BETWEEN: NAHZ APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGE: CONTI J DATE: 10 SEPTEMBER 2003 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal from the decision of Barnes FM given on 20 June 2003, whereby her Honour dismissed an application for review of the Refugee Review Tribunal (RRT) given on 19 December 2002, which had in turn affirmed the decision of the delegate of the Minister to refuse to grant the appellant a protection visa. 2 The grounds of appeal are framed and signed by the appellant in person in a now familiar form used in appeals to this Court, which I reproduce below: 'GROUNDS 2. The Single judge of the Federal Magistrate Court In his Honors (sic) Judgment delivered on the 20th June 2003 failed to find error of law, Jurisdictional error Procedural fairness and relief under Section 39B of the Judiciary Act 1903. 3. The grounds and relief is very much similar with a recent High Court Judgment – Muin v Refugee Review Tribunal; Lie v Refugee Review Tribunal [2002] HCA 30 (8 August 2002). Catchwords: Immigration – Refugee – Protection visa – Decision by Minister to refuse application for visa – Review of decision by Refugee Review Tribunal – Obligation of Secretary of Department of Immigration and Multicultural Affairs to give relevant documents to Register of Tribunal for purpose of review – Nature and extent of obligation – Migration Act 1958 (Cth), ss 148(3), 424(1). I will provide more grounds after receive the Judgment. Recent High Court judgment: Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 1 (4 February 2003). Recent Federal Court of Australia judgment: SGDB v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 74 (14 February 2003).' 3 The orders sought are three in number as follows: '1. To redirect the applicant's claim to the RRT for further consideration and advice to the tribunal to make a further consideration of this matter. 2. An order that no action is taken to remove the applicant from Australia while the decision is pending. 3. An order for costs. And any further order that this Honorable (sic) court may deem appropriates (sic).' 4 The applicant filed in Court on 3 September 2003 a so-called 'Submission', the main body whereof comprises four pages. Also attached was a bundle of non-paginated so-called 'latest country information', upon which no submission was actually articulated, and in relation to which the dates of publications, such as may be detected, at least for the most part precede the date of the hearing even before the RRT and the handing down of the RRT decision. 5 When I invited the appellant to address the Court upon the merits of his appeal from the decision of Barnes FM, he was unable to reply. The appellant is a pleasant but shy person, and was somewhat overawed by the occasion. He was entirely lacking in the presumptuousness or arrogance of many appellants I have experienced, whose appeals have been as misconceived as the present. 6 It is appropriate for me to place on record below the major segments of the written submissions of counsel for the Minister, which as I have implied, were not adverted to, much less addressed, by the appellant; I have done so to record my acceptance of the basis and content thereof for the record: '9. As is clear from her Honour's reasons for judgment (paragraphs 9, 10, 11) the written submissions filed by the Appellant made different claims to those which were contained in the application. Those submissions alleged that the Tribunal had denied the Appellant procedural fairness. 10. As stated by her Honour (paragraph 24), the only material before the Court in respect of the procedure adopted by the Tribunal was the published reasons and the "normal documentation of the letters and correspondence preceding the hearing", in other words, the Court Book prepared by the Respondent's solicitors. Her Honour found that there was no denial of procedural fairness on any of the bases put forward by the Appellant. Her Honour then dealt with the grounds of bias and lack of good faith, in each case rejecting the submission of the Appellant, and concluded that no error had been established and there was no alternative but to dismiss the application. 11. The factual bases for the Appellant's claims regarding procedural fairness were not established before the Federal Magistrate. Accordingly, the Appellant was unable to reply on the decision in Muin v Refugee Review Tribunal' Lie v Refugee Review Tribunal (2002) 76 ALJR 966: see NADR v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 293. Further the Appellant was unable to show that any procedure adopted by the Tribunal denied the Appellant the opportunity of a successful outcome: Stead v State Government Insurance Commission (1986) 161 CLR 141 and Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 77 ALJR 699. 12. The absence of any evidence apart from the bundle of relevant documents prepared by the Respondent also made it difficult for the Appellant to establish actual bias or want of good faith. In this respect, the Federal Magistrate considered also the possibility of an apprehension of bias and rejected it, taking the approach required by the High Court in Minister for Immigration and Multicultural Affairs v Jia (2001) 205 CLR 507 and Re Refugee Review Tribunal Ex parte H 92001) 75 ALJR 982 regarding the account to be taken of the different nature of Tribunal proceedings compared to Court proceedings and the Tribunal's inquisitorial role. 13. The submissions filed by the Appellant do not address the decision of her Honour Barnes FM apart from saying that the Appellant does not agree with it (paragraph 8). Despite this, it is clear that the absence of evidence to support the claim of denial of procedural fairness and lack of any indication of pre-judgment amounting to bias reveal that her Honour was correct to dismiss the application.' 7 Having earlier studied the reasons for judgment of her Honour below, it is unnecessary for me to add anything to those submissions, which I found to be correct. 8 The appeal is dismissed with costs. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 10 September 2003 Applicant appeared in person Counsel for the Respondent: J Smith Solicitor for the Respondent: Sparke Helmore Date of Hearing: 10 September 2003 Date of Judgment: 10 September 2003	1,758
federal_court_of_australia:fca/single/2012/2012fca0057	decision	commonwealth	federal_court_of_australia	text/html	2012-02-02 00:00:00	Kerr, in the matter of Angel's Castle Pre-School Pty Ltd (In Liquidation) (No 2) [2012] FCA 57	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2012/2012fca0057	2024-09-13T22:49:53.496751+10:00	FEDERAL COURT OF AUSTRALIA Kerr, in the matter of Angel's Castle Pre-School Pty Ltd (In Liquidation) (No 2) [2012] FCA 57 Citation: Kerr, in the matter of Angel's Castle Pre-School Pty Ltd (In Liquidation) (No 2) [2012] FCA 57 Parties: DAVID KERR IN HIS CAPACITY AS LIQUIDATOR OF ANGEL'S CASTLE PRE-SCHOOL PTY LTD (IN LIQUIDATION) (ACN 118 076 994); DEPUTY COMMISSIONER OF TAXATION v ANGEL'S CASTLE PRE-SCHOOL PTY LTD (IN LIQUIDATION) ACN 118 076 994 File number: NSD 404 of 2010 Judge: JACOBSON J Date of judgment: 2 February 2012 Catchwords: CORPORATIONS – court appointed receiver – receiver applying for his own discharge and release Legislation: Federal Court Rules 2011, r 14.25 Cases cited: Ide v Ide [2004] NSWSC 751 Kerr, in the matter of Angel's Castle Preschool Pty Ltd (In Liquidation) [2010] FCA 786 Lunn v Savage [2006] NSWSC 240 Mohamed & Anor v Hurstville Tower Medical Clinic Pty Ltd (in liquidation) & 9 Ors [2006] NSWSC 4 Wenkart v Pantzer [2005] FCA 1572 Date of hearing: 2 February 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 13 Solicitor for the Defendant: Ms Rae of Gadens Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 404 of 2010 IN THE MATTER OF ANGEL'S CASTLE PRE-SCHOOL PTY LTD (IN LIQUIDATION) ACN 118 076 994 BETWEEN: DAVID KERR IN HIS CAPACITY AS LIQUIDATOR OF ANGEL'S CASTLE PRE-SCHOOL PTY LTD (IN LIQUIDATION) (ACN 118 076 994) Applicant DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: ANGEL'S CASTLE PRE-SCHOOL PTY LTD (IN LIQUIDATION) ACN 118 076 994 Defendant JUDGE: JACOBSON J DATE OF ORDER: 2 FEBRUARY 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. David Kerr (the Receiver), forthwith be discharged and released from acting as receiver and manager of GGS Girgin Family Trust (the Trust). 2. Leave is granted to the Receiver to dispense with the requirement to pass his final accounts for acting as receiver and manager of the Trust. 3. The Receiver be paid remuneration for acting as Receiver of the Trust in the sum of $34,305.50. 4. The Receiver is authorised to retain possession of all document of the Trust in his capacity as liquidator of Angel's Castle Pre School Pty Ltd (in liquidation). 5. That the costs of the Interlocutory Process are to be paid out of the assets of the Trust, or if there are insufficient assets in the Trust, out of the assets of Angel's Castle Pre School Pty Ltd (in liquidation). 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 404 of 2010 IN THE MATTER OF ANGEL'S CASTLE PRE-SCHOOL PTY LTD (IN LIQUIDATION) ACN 118 076 994 BETWEEN: DAVID KERR IN HIS CAPACITY AS LIQUIDATOR OF ANGEL'S CASTLE PRE-SCHOOL PTY LTD (IN LIQUIDATION) (ACN 118 076 994) Applicant DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: ANGEL'S CASTLE PRE-SCHOOL PTY LTD (IN LIQUIDATION) ACN 118 076 994 Defendant JUDGE: JACOBSON J DATE: 2 FEBRUARY 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I have before me this morning an interlocutory process filed by Mr Kerr in his capacity as receiver and manager of the GGS Girgin Family Trust (the "Trust"). Mr Kerr seeks an order that he be discharged and released from acting as receiver, that he be granted leave to dispense with the requirement that he pass his final accounts, and that he be paid remuneration for acting as receiver of the Trust in the sum of $36,095.40. There are a number of other orders sought in the interlocutory process, but I need not refer to them. 2 The basis upon which Mr Kerr seeks to be discharged is that the objects of the receivership have now been achieved. He makes this application on his own initiative. There is authority for the proposition that a court appointed receiver may be discharged where the object of the appointment has been achieved. See the decision of Campbell J in Lunn v Savage [2006] NSWSC 240 at [27]. 3 I am satisfied in this case that the objects of the receivership have been achieved. The reasons are fully set out in the written submissions handed up to me this morning, which I will mark as MFI1. The principal reasons are that the property and the business have now been sold, Mr Kerr has not identified any pre-appointment creditors of the Trust other than the St George Bank, and all the receivership liabilities except for the receiver's remuneration have been paid in full by the receiver. 4 The circumstances in which Mr Kerr was appointed are explained in my reasons for judgment in Kerr, in the matter of Angel's Castle Preschool Pty Ltd (In Liquidation) [2010] FCA 786. It is clear from what I said in that case and in what I have said above, that the authorities which inform the exercise of the power to discharge a receiver have been satisfied, and I propose to make that order. 5 As to the passing of final accounts, the principle may be stated shortly: it is that courts have dispensed with the requirement of passing final accounts in cases where the cost of complying with the formal procedure exceeds any benefit that may accrue from doing so. 6 Ms Rae, who appears this morning for Mr Kerr, has taken me to the decision of Young CJ in Eq in Ide v Ide [2004] NSWSC 751 at [24] and [26]. I am satisfied in the present case that a number of factors demonstrate that the cost of passing final accounts exceeds any benefit that would accrue from doing so. 7 The reasons are fully explained in the written submissions. In particular, all of the assets of the receivership have been sold and the St George Bank, which was the sole creditor of the Trust, received the balance of the proceeds of sale of the land and the business. However, the total amounts paid to the bank were insufficient to pay the debt owed to the bank. Nevertheless, the St George Bank consents to the quantum of the remuneration for which the receiver seeks approval and the other "interested parties", namely, the directors and principals of the company, have indicated they do not wish to attend the hearing this morning. 8 In those circumstances, adhering to the requirement to pass final accounts would incur additional costs, which would outweigh any benefit that would accrue from the formal passing of accounts. Accordingly, it seems to me that notwithstanding rule 14.25 of the Federal Court Rules 2011, which require a receiver to file accounts and to pass them, I ought to make the order which is sought. 9 The other order which I need to address is the claim by Mr Kerr for his remuneration. The relevant principles were stated by Young CJ in Ide v Ide [2004] NSWSC 751 at [39]ff. The principles were summarised and stated with approval by Barrett J in Mohamed & Anor v Hurstville Tower Medical Clinic Pty Ltd (in liquidation) & 9 Ors [2006] NSWSC 4 at [8]. Barrett J observed at [9] that the principle stated by Young CJ in Eq, that a court never considers a review of quantum, may have been stated "too strongly". His Honour referred to the decision of Branson J in Wenkart v Pantzer [2005] FCA 1572, in which her Honour made that observation, and went on to say that "it will rarely, if ever, be appropriate for the Court to review a decision of a taxing officer on a line by line basis". 10 In the present case, subject to one exception which I will refer shortly, I am satisfied that the claim for remuneration is made in accordance with the principles to which I have referred. The qualification is that the receiver's records to which I have been taken show that the total amount of the charges is $34,305.50. 11 The receiver's records demonstrate that the timesheets do significantly more than merely detail the total number of hours spent by the receiver and officers. The documents, and in particular, annexure F to Mr Kerr's affidavit, contain a breakdown of the tasks that were undertaken by particular members of staff, and the time taken in carrying out the work which is described in the timesheets. Although, as Young CJ in Eq stated in Ide v Ide, the Court is ordinarily guided by professional scales of charges, it appears that there is no such relevant scale presently in force. Nevertheless, Mr Kerr is an officer of the court, and I am satisfied from the evidence filed by him that the charges which are proposed are proper charges to be approved. 12 However, having regard to the disparity between the amount claimed in the interlocutory process and the amount shown in the timesheets, I can only make an order which is in accordance with the receiver's records, and I will therefore order that Mr Kerr be paid remuneration in the sum of $34,305.30. 13 For the reasons stated above, I propose to make orders in terms of paragraphs 1, 2 and 3 (as amended). I also make an order in terms of paragraph 4, and I will make an order for costs in terms of paragraph 5 of the short minutes of order, which I will sign and date, and place with the court papers. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 2 February 2012	2,318
federal_court_of_australia:fca/single/2007/2007fca0145	decision	commonwealth	federal_court_of_australia	text/html	2007-02-09 00:00:00	Sheikholeslami v Brungs No 2 [2007] FCA 145	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2007/2007fca0145	2024-09-13T22:49:53.943068+10:00	FEDERAL COURT OF AUSTRALIA Sheikholeslami v Brungs No 2 [2007] FCA 145 ROYA SHEIKHOLESLAMI v MICHAEL BRUNGS AND ANOR NSD757 OF 2005 EMMETT J 9 FEBRUARY 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD757 OF 2005 BETWEEN: ROYA SHEIKHOLESLAMI Applicant AND: MICHAEL BRUNGS First Respondent UNIVERSITY OF NEW SOUTH WALES Second Respondent JUDGE: EMMETT J DATE OF ORDER: 9 FEBRUARY 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Applicant pay the Respondents' costs of the Notice of Motion on 8 December 2006 and there be no order as to the costs of 9 February 2007. 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 NSD757 OF 2005 BETWEEN: ROYA SHEIKHOLESLAMI Applicant AND: MICHAEL BRUNGS First Respondent UNIVERSITY OF NEW SOUTH WALES Second Respondent JUDGE: EMMETT J DATE: 9 FEBRUARY 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 28 July 2006, Tamberlin J ordered that a proceeding be dismissed summarily. His Honour ordered the applicant to pay the respondents' costs. The applicant then sought leave to appeal from the orders that his Honour then made. On 26 October 2006 Gyles J heard argument on the question of leave to appeal. While his Honour expressed a preliminary view that he thought that the appeal had little prospects of success, his Honour reserved his decision bearing in mind the finality of any order refusing leave. The applicant was represented by legal counsel in the argument before Gyles J on 26 October 2006. No application was made to Gyles J for a stay of any proceeding relating to the costs ordered by Tamberlin J. 2 Later on 26 October 2006 the respondent served on the applicant a bill of costs in respect of the costs ordered by Tamberlin J. The applicant then filed a notice of motion seeking some relief in relation to the bill of costs. The relief claimed was not entirely clear, it having been drafted by the applicant herself, who has no legal qualifications. 3 In effect, however, the motion sought a stay of proceedings in relation to the costs order made by Tamberlin J. The motion came before me for hearing on 8 December 2006. On that day, I observed that there was no evidence of any real prejudice on the part of the applicant if a bill for the costs ordered by Tamberlin J were to proceed to taxation. However, there was no opposition from the respondent to an order that no writ of execution for enforcement of the costs order be issued prior to the day on which Gyles J delivered judgment on the leave application or until after the expiration of 21 days from the time when a certificate of taxation was served. I therefore made orders in those terms. I stood the motion over to 9 February 2007. 4 In the meantime, Gyles J ordered on 20 December 2006 that the application for leave to appeal be dismissed and that the applicant pay the costs of that application. His Honour concluded there was not sufficient doubt about the judgment of Tamberlin J to warrant the grant of leave, taking into account the potential effect upon the interests of the applicant. The question remaining therefore is who should bear the costs of the motion that I heard on 8 December 2006. 5 There is obviously ill will between the applicant and the respondents. However, it does appear to me that the applicant's motion was unnecessary. It would have been a simple matter for the applicant's counsel to have asked Gyles J for a stay of proceedings concerning the costs pending his decision on the application for leave. It is really that omission that led to the need to file a motion, assuming there was indeed any need to do so. On the other hand, the respondents waited until after the hearing on 26 October before serving their bill of costs. 6 In all of the circumstances, I consider that it is appropriate to order the applicant to pay the respondents' costs of the motion of 8 December 2006. I make no order as to costs of today. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 16 February 2007 Counsel for the Applicant: Ms S Sloane Counsel for the Respondent: Mr J Mattson Solicitor for the Respondent: Bartier Perry Date of Hearing: 9 February 2007 Date of Judgment: 9 February 2007	1,112
federal_court_of_australia:fca/single/1979/1979FCA0022	decision	commonwealth	federal_court_of_australia	application/pdf	1979-03-15 00:00:00	Ali, David Ex Parte Abda Lahood [1979] FCA 22	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1979/1979FCA0022.pdf	2024-09-13T22:49:54.216872+10:00	IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION Bankruptcy District of the State of New South Wales and the Australian No. P.1582 of 1978 Capital Territory Re: ALI DAVID Debtor Ex parte: ABDA_LAHOOD Creditor EVATT J. 15 March, 1979 REASONS FOR JUDGMENT The bankruptcy petition herein, dated 13 October 1978, was presented on 5 December 1978 when the matter was fixed for hearing for 27 February 1979. On the latter date Mr Dowdy of Counsel appeared for the judgment debtor and Miss Marlow of Counsel appeared for the petitioning creditor . Mr Dowdy then informed the Court that, if the petitioning creditor sought to proceed, his original instructions were to seek an adjournment of the proceedings upon grounds which are not material to this judgment. On Miss Marlow objecting to any adjournment Mr Dowdy informed the Court that before making his application for an adjournment he, having had an opportunity, during the time whilst he was waiting for the matter to be called on for hearing, of inspecting the bankruptcy notice and the petition filed herein, wanted first to submit that the bankruptcy notice was invalid and consequently to ask that an appropriate order be made. ae/2.e Mr Dowdy submitted that the invalidity resulted from the fact that whereas the bankruptcy notice claimed that the sum of $5,000 together with an amount of $548.00 being interest thereon was due by the debtor to the judgment creditor under a final order obtained in the District Court held at Sydney on 21 June 1977, the petition in paragraph 2 thereof claimed that the debtor was "indebted in the sum of $8,644.94 being the sum of $5000 judgment debt and taxed costs of $3644.94 together with interest theron being the amount due under the final judgment recovered in the District Court at Sydney on 21 June 1977, the consideration for such debt being final judgment obtained in the proceedings commenced by the creditor for breach of promise to marry". Mr Dowdy submitted that a bankruptcy notice which understates the amount of indebtedness and gives no indication in the notice that such understatement is not intended to be claimed renders the notice bad. He referred the Court to the decisions in In re H.B. (1904) 1 K.B. 94; Re Jack; Ex parte C.V. Holland (Holdings) Ltd. 1959) 19 A.B.C. 268 and Re Schierholter; Ex parte Geis 19 A.L.R. 113. Miss Marlow, in her submissions, referred to the following facts, which were not disputed :- (a) the application for the issue of the bankruptcy notice herein dated 26 July 1978 and filed herein shows that at the time of that application a certified copy of the judgment against the judgment debtor obtained by the judgment creditor in the District Court of New South Wales at Sydney on 21 June 1977 was filed in the Bankruptcy Registry. (b) The certaficate, dated 1 December 1977, states that on 21 June 1977 it was adjudged that - .-/3.- (c) (a) (e) and (f) 1. The Plaintiff (judgment creditor) recover against the Defendant (judgment debtor) $5,000 on her claim and the costs of the action be taxed. 2. The Defendant pay $5,000 to the Registrar forthwith. 3. The Defendant pay the costs to the Registrar forthwith after taxation thereof. the bankruptcy notice was served on 23 August 1978 as appears from the affidavit of service filed herein. as the notice to comply with the said bankruptcy notice was a "21 days notice", the judgment debtor had until 13 September 1978 to comply therewith. that on 26 July, 1978 the date of the bankruptcy notice, the costs of the District Court action had not been taxed so that the amount of such costs were then not known. that on 24 August 1978 the Assistant Registrar of the District Court certified that the Plaintiff's (judgment creditor) costs of the District Court action had then been taxed and allowed at the sum of $3,644.94, Miss Marlow submitted that as the plaintiff's costs in the District Court action had not been taxed at the date of the issue of the bankruptcy notice such costs were not known and accordingly were not a liquidated amount. Further, she submitted that as such costs had not been taxed at that date they were not due and owing. This being so the bankruptcy notice was not misleading nor had it under- stated the amount then due and owing but that before the date of the act of bankruptcy, namely,13 September 1978, a further liquidated debt due and owing by the debtor to the petitioning creditor became known and that consequently the petitioning creditor was entitled to claim in the petition the total of both liquidated debts together with the appropriate interest thereon. -«/4.- ~4- Miss Marlow further submitted that the provisions of s.44 of the Bankruptcy act' Germitted the claiming of the total of the creditor's debts which had accrued due before the act of bankruptcy on which the petition is founded as long as such are liquidated debts. Miss Marlow stressed the fact that the liquidated debt for costs became due and payable before the act of bankruptcy, and not merely before the date of the petition. Mr Dowdy in reply submitted that the judgment creditor before issuing the bankruptcy notice should have waited until the costs of the action in the District Court had been taxed so that a liquidated amount (being the total of the verdict and taxed costs) could be claimed in a bankruptcy notice that the judgment creditor might issue. The Court, then being of the view that the submissions of Miss Marlow were correct, determined that the bankruptcy notice was valid/indicated that it would publish its reasons at a later date. Such reasons for judgment are published hereunder. In my view the decisions in In re H.B., re Jack: Ex parte C.V. Holland (Holdings) Ltd. and re Schierholter; Ex parte Geis (supra) are distinguishable from the present case. In each of those cases the total indebtedness of the debtor to the petitioning creditor referred to in the petition was greater than that claimed to be due in each respective notice even though the total of the indebtedness was known to each petitioning creditor at the date when each respective notice was issued. This clearly was not the position in the present case. Part 34, rule 3 of the District Court Rules 1973, provide : "3. Where -" (a) there is a judgment for the payment of money and for the payment of costs; and we/De- -5- (b) when the money (other than costs) becomes payable under the judgment the costs have not become payable (because the costs have not been taxed or for any other reason), a person entitled to enforce the judgment by execution may ~ (c) have execution issued to enforce payment of the money (other than costs); and (d}) when the costs become payable, have execution issued separately to enforce payment of the costs. " Such rule clearly shows that two separate writs of execution may issue, one to enforce payment of "money" (other than costs), and the other to enforce payment of costs when such costs become payable. The effect of this rule is similar to the old r.280 of the District Court Rules, the relevant part of which is set out in Re Jack; Ex parte C.V. Holland (Holdings) Ltd. (supra) at 270. In that case Manning J. after quoting the relevant part of r.280 said : - "This rule is based upon the English rule which is r.18 of O.XLII. The English rule was considered in the case of In re G.J., (1905) 2 K.B. 678. In that case judgment had been entered for the petitioning creditor for a sum with costs to be taxed. A bankruptcy notice was issued shortly after the judgment was entered and before the costs had been taxed and 1t was there held that the bankruptcy notice required the debtor to pay the judgment debt in accordance with the terms of the judgment. Vaughan Williams L.J. said (at p.682): "Having regard to the amount of the judgment debt as set forth in the judgment, and to the form of the bankruptcy notice, it seems to me that it was made quite plain to the debtor that what the notice required him to pay was the amount of the judgment debt independently of the costs, and I think the creditor was under no obligation to abandon the right given to him by rule 18 to levy execution afterwards for the costs". But where, as in this case, the judgment creditor's costs have been taxed. before the bankruptcy notice issues and the amount of the judgment, exclusive of costs, is described in the notice as the amount due on the judgment, there is much to be said for the view that the judgment creditor, in order to succeed, must waive the amount of the costs and make it clear in the notice that nothing /6 more is claimed beyond the amount specified. " In my view the present case is indistinguishable from in In re G.J. (supra). In that case Vaughan Williams L.J. at p.682 after stating the passage cited by Manning J. above said "in my opinion the bankruptcy notice complied with all the requirements of sub-s.1 (g) and was a valid notice." whilst Stirling L.J. at p.683 stated that "In re H.B.(supra) does not apply to the present case.". Sub-s.1(g) refers to s.4(1)(g) of the Bankruptcy Act 1883 which, together with Order XLII, r.18, is set out at the foot of p.679. In my view the effect of r.18 of Order XLII is the same as District Court r.3 of Part 34. With respect, the reasoning of the Court in In re G.J.(supra) in this regard is correct and applies to the instant case. Accordingly the bankruptcy notice herein is a valid notice. The Court on 27 February 1978, having determined that the bankruptcy notice was valid, granted an adjournment to the judgment debtor in order that he might, if so advised, seek to set aside the District Court judgment or prosecute an appeal which had apparently been instituted within time but which had not been set down for hearing and reserved the question of costs, this and the in-< are a true enpy of the a2 jonent herein of bis Honour Hlelenr 6 fphite rly Se ery \| SSA aL TY EE a TET oe ee TN EES AP TECmE IP Cee i mete	2,462
federal_court_of_australia:fca/single/2021/2021fca0219	decision	commonwealth	federal_court_of_australia	text/html	2021-03-12 00:00:00	Sturt on behalf of the Jaru People v State of Western Australia [2021] FCA 219	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca0219	2024-09-13T22:49:54.581751+10:00	Federal Court of Australia Sturt on behalf of the Jaru People v State of Western Australia [2021] FCA 219 File number(s): WAD 42 of 2019 WAD 401 of 2018 WAD 536 of 2018 WAD 65 of 2019 WAD 41 of 2019 WAD 569 of 2019 WAD 11 of 2021 WAD 45 of 2019 Judgment of: MORTIMER J Date of judgment: 12 March 2021 Catchwords: NATIVE TITLE – Practice and Procedure – East Kimberley region – case management hearings – delays in nomination of prescribed body corporate – Indigenous Land and Sea Council as prescribed body corporate – case management to determination after separate question – ongoing assistance from anthropologists – disputes over descendants from apical ancestors – difficulties with legal representation – need for detailed work plans – ongoing role for mediation and inclusion of claim group members in mediations Legislation: Native Title Act 1993 (Cth) ss 57(2)(c), 84(3), 87, 87A 203BC(3) Division: General Division Registry: Western Australia National Practice Area: Native Title Number of paragraphs: 46 Date of last submissions: 28 February 2021 Date of hearing: 2-5 March 2021 Solicitor for the Applicants in WAD42/2019: Ms Justine Toohey of the Kimberley Land Council Solicitor for the State of Western Australia in WAD42/2019: Ms Sheila Begg of the State Solicitor's Office Counsel for the WAD65/2019 Applicants: Ms Marina Georgiou Solicitor for the in WAD401/2018, WAD536 Applicants: Ms Justine Toohey of the Kimberley Land Council Solicitor for the State of Western Australia in WAD401/2018, WAD536/2018, WAD65/2019: Ms Sheila Begg of the State Solicitor's Office Solicitor for the Applicants in WAD41/2019, WAD569/2019: Ms Justine Toohey of the Kimberley Land Council Solicitor for the State of Western Australia in WAD41/2019, WAD569/2019: Ms Sheila Begg of the State Solicitor's Office Counsel for the Indigenous Land and Sea Corporation in WAD41/2019, WAD569/2019: Mr David Yarrow Solicitor for the Applicants in WAD11/2021: Mr Charles Wantrup of Wantrup & Associates Solicitor for the State of Western Australia in WAD11/2021: Ms Sheila Begg of the State Solicitor's Office Solicitor for the Applicants in WAD45/2019: Ms Justine Toohey of the Kimberley Land Council Mr Paul Sheiner of Roe Legal Services Solicitor for the State of Western Australia in WAD45/2019: Ms Sheila Begg of the State Solicitor's Office ORDERS WAD 42 of 2019 BETWEEN: BARBARA STURT, BONNIE EDWARDS, KIMBERLEY BAIRD, MAY BUTCHER, DEBORAH SKEEN KEDDIE, PETER WEIN, DESMOND JOHNSON, LESLIE WHIPPY, TIMMY CRANBELL, BARBARA COX, DEBORAH GORDON, ROSS JAMES, GEORGIA YEEDA, NEENYA TESLING, ROGER STURT AND EDWARD SMITH Applicant AND: STATE OF WESTERN AUSTRALIA, YOUGAWALLA PTY LTD, S. KIDMAN & CO PTY LTD, YEEDA PASTORAL COMPANY PTY LTD, THE NICHOLSON GRAZING COMPANY PTY LTD, KEVIN STEPHEN BROCKHURST, SHIRE OF HALLS CREEK, SOPHIE DOWNS STATION PTY LTD, VICDON HOLDINGS PTY LTD, HEYTESBURY PASTORAL PTY LTD Respondents WAD 401 of 2018 BETWEEN: SHIRLEY DRILL, BERNARD STRETCH, CHERYLENE NOCKETTA, JEREMY MCGINTY, PAMELA ALBERTS, ROBERTA DAYLIGHT, LORRAINE DAYLIGHT, CHRISTINE FARRER, QUEENIE MALGIL Applicant AND: STATE OF WESTERN AUSTRALIA Respondent WAD 536 of 2018 BETWEEN: SHIRLEY DRILL, BERNARD STRETCH, QUEENIE MALGIL, PAMELA ALBERTS, TIMOTHY MOSQUITO, JUDITH BUTTERS, SOPHIA MUNG, BENJAMIN CROSS, ROBERTA DAYLIGHT, LORRAINE DAYLIGHT, CHRISTINE FARRER, CHERYLENE NOCKETTA, DARREN GORE, CORAL GORE-BIRCH, JEREMY MCGINTY Applicant AND: STATE OF WESTERN AUSTRALIA, N E DAHL, YEEDA PASTORAL COMPANY PTY LTD, MONA PHILLIPS, BONNIE EDWARDS, LILY BANKS, TANBA BANKS, SHIRE OF HALLS CREEK, TELSTRA CORPORATION LIMITED Respondents WAD 65 of 2019 BETWEEN: BONNIE EDWARDS, TANBA BANKS, LILY BANKS, DOUGLAS LANNIGAN Applicant AND: STATE OF WESTERN AUSTRALIA, SHIRE OF HALLS CREEK Respondents WAD 41 of 2019 BETWEEN: JOSEPHINE FARRER, MATT DAWSON, PHYLLIS WALLABY, MARTY STEVENS, MARK BIN BAKAR AND GREGORY DONALD TAIT Applicant AND: STATE OF WESTERN AUSTRALIA First Respondent TELSTRA CORPORATION LIMITED Second Respondent SHIRE OF HALLS CREEK Third Respondent WAD 569 of 2019 BETWEEN: JOSEPHINE FARRER, GREGORY DONALD TAIT, MATT DAWSON, PHYLLIS WALLABY, MARTY STEVENS AND MARK BIN BAKAR Applicant AND: STATE OF WESTERN AUSTRALIA Respondent WAD 11 of 2021 BETWEEN: MARK BIN BAKAR, MATT DAWSON, JOSEPHINE FARRER, MARTIN STEVENS, GREGORY DONALD TAIT AND PHYLLIS WALLABY Applicant AND: STATE OF WESTERN AUSTRALIA Respondent WAD 45 of 2019 BETWEEN: SCOTTY BIRRELL, KIMMY BOOMER, PACKER BROCKMAN, MAY BUTCHER, JACK JUGARI, NANCY LEE, PAULINE MANNING, FRANK SAMPI AND EDNA SKEEN Applicant AND: STATE OF WESTERN AUSTRALIA, SHIRE OF HALLS CREEK AND TELSTRA CORPORATION LIMITED Respondent order made by: MORTIMER J DATE OF ORDER: 12 march 2021 IN BOTH WAD45/2019 AND WAD11/2021 THE COURT ORDERS THAT: 1. Proceeding WAD45/2019 Scotty Birrell & Ors on behalf of the Koongie-Elvire Native Title Claim Group and State of Western Australia & Ors (Koongie-Elvire) be case managed together with proceeding WAD11/2021 Gregory Donald Tait & Ors on behalf of the Ngarrawanji #3 Yarlil Native Title Claim Group and State of Western Australia (Ngarrawanji #3). 2. The Kimberley Land Council is to provide copies of all relevant anthropological materials held by the Kimberley Land Council relating to the area of: (a) the Koongie-Elvire claim, including the Anthropological Report for the Jaru WAD45/2012 and Koongie-Elvire WAD6157/1998 Native Title Claims by Dr Anthony Redmond dated 25/04/2017, Volumes 1 – 3; and (b) material relating to the area of the Ngarrawanji #3 claim, to the new legal representative for the Koongie-Elvire applicant and the legal representative for Ngarrawanji #3 applicant. 3. The Kimberley Land Council is to provide the material referred to in order 2 (a) and (b) above to any expert appointed by the Court. 4. Both Koongie-Elvire and Ngarrawanji #3 be placed in joint mediation and case management before Judicial Registrar McGregor. 5. Any parties joined to Ngarrawanji #3 pursuant to s 84(3) of the Native Title Act 1993 (Cth) have leave to apply to the Court by interlocutory application supported by affidavit material for the variation or discharge of any or all of orders 1-4 above. IN WAD45/2019 THE COURT ORDERS THAT: 1. On or before 16 April 2021, the applicant in WAD45/2019 Koongie-Elvire advise the Court of any new legal representative it has retained. 2. By 16 April 2021 the present and proposed replacement legal representatives take all necessary steps to regularise their appearances on the Court record. IN WAD45/2019 THE COURT DIRECTS THAT: 1. Judicial Registrar McGregor provide to the legal representative for the applicant in WAD11/2021 Ngarrawanji #3, copies of: (a) Mediation Report to the Court dated 24 June 2019; (b) Conference of Experts Report dated 12 December 2019; and (c) Mediation Report to the Court dated 5 February 2021. IN WAD536/2018, WAD401/2018 AND WAD65/2019 THE COURT ORDERS THAT: 1. The parties will undertake steps in accordance with the Workplan at Attachment A to these orders (Workplan), as modified from time to time by the Court or Judicial Registrar McGregor. 2. Judicial Registrar McGregor is to supervise the progress of the parties in relation to the steps required under the Workplan as the Registrar sees fit from time to time, including by holding a monthly case management hearing with the Applicant and the State (and, if the Registrar considers it appropriate, any other parties) commencing on a date to be fixed in April 2021. 3. The proceeding be listed for a further case management hearing in early May 2021, at a location and on a date to be advised to the parties. 4. At least three working days prior to the case management hearing referred to in order 3, the Applicant file and serve a report identifying progress under the Workplan. IN WAD569/2019 AND WAD41/2019 THE COURT NOTES THAT: 1. The purpose of the mediation is to consider: (a) the procedural steps to be taken to establish a prescribed body corporate and identify any issues which will affect the procedural steps from being effectively taken; and (b) procedural steps for valid and effective native title decision making of common law holders for the Ngarrawanji determination area. 2. The mediation may not occur until late June 2021 because of competing commitments in the East Kimberley region which mean that Kimberley Land Council staff are not available to organise and facilitate participation of members of the claim group in the mediation until after 11 June 2021. IN WAD569/2019 AND WAD41/2019 THE COURT ORDERS THAT: 1. The matter be referred to Judicial Registrar McGregor for mediation on a date prior to 25 June 2021. 2. Judicial Registrar McGregor report to the Court on the outcome of the mediation within 10 working days of its conclusion. 3. The matter be listed for further case management hearing on a date to be fixed following the mediation. 4. The Applicant and the Kimberley Land Council to take steps to convene a meeting of Ngarrawanji native title holders on a date prior to 27 August 2021. 5. The date for compliance with order 3 of the orders of Justice Mortimer made 8 July 2020 be varied to 17 September 2021. 6. The Legal Representatives for the Applicant and the Kimberley Land Council to provide a copy of these orders to all members of the Ngarrawanji native title holding group the Kimberley Land Council holds contact details for. IN WAD569/2019 AND WAD41/2019 THE COURT DIRECTS THAT: 1. The participants in the mediation shall include any individual member of the Ngarrawanji native title holding group who attended the case management hearing on 3 March 2021, as well as the legal representatives and instructors if required for the Applicant, the First Respondent, the Indigenous Land and Sea Council and the Kimberley Land Council. 2. Any other individual member of the Ngarrawanji native title holding group who did not attend the case management hearing on 3 March 2021 but who wishes to participate in the mediation may seek leave of the Court to participate. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MORTIMER J: 1 In the week commencing 1 March 2021, the Court held a series of case management hearings for native title proceedings in the East Kimberley. One of the purposes of these hearings was to enable the Court to listen directly to the concerns of claim group members and native title holders in several proceedings. The Court had intended to travel to Halls Creek and hold the hearings in person, but the COVID-19 restrictions imposed by the Western Australian government on Victorians meant this was not possible. 2 The Court had to hold the hearings over Microsoft Teams, with the assistance of the Kimberley Land Council in relation to setting up rooms for claim group members and native title holders in Halls Creek and Kununurra. The court expresses its gratitude to the Kimberley Land Council for this assistance. In addition, many people joined by telephone or video from other locations. 3 The Court thanks all claim group members and native title holders for their participation; it was valuable for the Court to have a chance to engage directly with claim group members and native title holders. 4 Many people are involved on more than one claim or proceeding. The purpose of these reasons is to explain the orders made in each proceeding, so that everyone involved can understand the plans from this point onwards, and only has to look at one document for all of the proceedings. Jaru 5 The Court made a determination of native title in the Jaru claim in December 2018. The native title holders were given a year after that date to nominate a prescribed body corporate (PBC) to hold the native title for all the common law holders. No PBC was nominated, and a new timetable had to be made. That timetable says there has to be a claim group meeting by 2 April 2021, and all the PBC documents have to be filed with the Court by 30 April 2021. 6 On Tuesday 2 March 2021, the Kimberley Land Council lawyer for the Jaru applicant told the Court everything was on track to meet those deadlines. 7 If no PBC is nominated, the Jaru native title holders might end up in the same difficult situation that the Ngarrawanji #1 and #2 native title holders are in. The Court might also have to consider appointing the ILSC if the Jaru group cannot agree on the structure of a PBC. Purnululu and Gajangana Jaru 8 On 22 October 2020 the Court handed down its decision on the dispute between the Purnululu and Gajangana Jaru claim groups over Purnululu National Park. That decision settled the arguments about who are the correct apical ancestors for the National Park (possibly aside from any additional Malgnin ancestors who might be identified), and also settled a dispute about which descendants from Fred Jalwarta held rights and interest in that area. 9 However, there remain a number of matters to be decided before a determination of native title can be made. The following issues need to be sorted out: (a) Is there anyone who has rights and interest as a Malgnin-identifying person in the north east area of the park? (b) Should there be one determination over both the National Park and the area to the north and west which is claimed only by the Purnululu applicant? Or should there be two separate determinations? (c) Should there only be one PBC covering both areas, or a PBC for each area? (d) Whichever choice is made, how should the PBC be structured for ordinary PBC decisions and how should native title decisions be made? (e) What is the correct and complete list of apical ancestors for both the National Park and the rest of the Purnululu claim area? There are also some "technical issues" about whether the determination can or should be by consent or by a decision of the Court, and the State needs to update its tenure searches before any determination can be drafted. There is also the wording of the determination, which needs to be agreed, or decided by the Court if there is no agreement. 10 At the case management hearing, the Court asked the lawyers for the parties to come up with a Workplan. They had discussions over several days and came up with a detailed Workplan which is attached to the orders the Court has made. The Workplan is in two forms – by topic, and chronological. There are a lot of steps to go through, with Judicial Registrar McGregor mediating along the way where the parties cannot agree. If necessary, the Court will step in and decide issues, but it is to be hoped that will not be necessary. 11 The end point is a determination of native title in approximately May 2022. That is still quite a long way off, but the Court intends to ensure the parties can stick to the Workplan and the timetable so there are no delays beyond this. 12 The Court will continue to have case management hearings to make sure the parties are sticking to the plan and the timetable. Some of these may involve claim group members if there is a wish for that to occur, and the Court agrees it is appropriate. Ngarrawanji #1 and #2 13 The Court made orders recognising native title in Ngarrawanji #1 on 21 May 2019. Ngarrawanji #2 was determined on 8 July 2020. 14 Like in the Jaru determination, the Ngarrawanji applicant was given 12 months from May 2019 to nominate a PBC. 15 That date was not met. There was an authorisation meeting in Halls Creek in September 2020 but that was abandoned before it could start. Different people have different explanations for why this happened. What is clear is that there was, and there remains, a dispute about which people can rightfully be within the native title holding group, and which people cannot. 16 There was no sign that a PBC was likely to be nominated because of the conflicts in the group. So the Court asked Judicial Registrar McGregor to contact the Indigenous Land and Sea Corporation (ILSC) to give the Court an affidavit about whether the ILSC could be nominated under the Native Title Act 1993 (Cth), as the PBC. Everyone accepts, including the ISLC, that the law gives the ILSC this job – to be a PBC where native title holders do not nominate one themselves. But in the 10 years since it has had this job, the ILSC has never been appointed as a PBC. 17 The Court held a case management hearing on 16 February 2021. Some of the members of the Ngarrawanji #1 and #2 applicant spoke at that hearing. The ILSC briefed a barrister to appear and he spoke on behalf of the ILSC. He told the Court the ILSC felt it needed more time to prepare to perform its role as a PBC, but it was willing to do so if the Court decided that was what should happen. 18 At the case management hearing last week, the Court outlined some options: (1) The members of the applicant can nominate a PBC in accordance with the Native Title Act and the regulations, as a PBC approved at an authorisation meeting to which all Ngarrawanji native title holders are invited, and can do this within a reasonable time – in the Court's view not more than 6 months from now. (2) If that cannot happen, then the Court will then be obliged to act if the applicant cannot. The Court cannot stand by while the native title is "in limbo", and cannot be exercised by the native title holders. There are two options available to the Court: (a) First, the Court could appoint the ILSC. The ILSC has told the Court it sees its role as a short term one, to act as a PBC while helping the native title holders to form their own PBC. (b) Second, the Court could do what s 57(2)(c) of the Native Title Act says should happen where no PBC has been nominated, and make a decision that because there is no PBC all the native title holders hold the native title communally. That would be unworkable in terms of how the whole group could ever exercise native title rights, make ILUAs or benefit at all from their native title. But the Native Title Act provides for that to be the fall-back position. The Native Title Act does not say people can go on and on after a determination without a PBC and without the Court making some alternative arrangement. 19 At the case management hearing, the Court heard from a number of native title holders about whether the ILSC should be appointed, and how it was best to solve the dispute about which people are inside and outside the native title holding group. 20 There was a suggestion that it would be helpful for the native title holders to have a meeting with Dr Redmond. The Kimberley Land Council told the Court Dr Redmond is not available to come to the East Kimberley until June 2021. 21 It is important to understand that the Ngarrawanji native title is held communally – that is, by all descendants of the apical ancestors in the Ngarrawanji determination, as a single group. The apical ancestors have already been identified in the two determinations made by the Court. 22 Therefore, the only issues which can be sorted with Dr Redmond's help are which people are descended from these apical ancestors. If the group itself cannot agree on who those people are, then it may be that the Court has to sort that out by a binding decision, so that a workable PBC can be established. That would be a sad day if the group could not agree on some ground rules for PBC membership, and the Court had to step in at this late stage. 23 To help avoid that situation, the orders which have been made will give the parties, and especially the native title holders who want to be actively involved, a chance for further mediation with Judicial Registrar McGregor. That is because it is clear the real problem in getting a PBC established is because of disputes amongst the group. The Court has specifically directed that any individual member of the Ngarrawanji native title holding group who attended the case management hearing on 3 March 2021 can attend the mediation. Those are the people who showed interest in the matter, and who took the time to attend and participate in the hearing. If other individuals want to attend any mediation, they will have to seek permission of the Court separately. 24 The mediation may not happen until June 2021 because of limits on the funding available to the Kimberley Land Council to support native title holders participating in the mediation (and also using the services of Dr Redmond). 25 The Court has set a deadline for a meeting of native title holders to decide on a PBC. That deadline is 27 August 2021. 26 The Court has also set a deadline for the nomination of a PBC. That deadline is 17 September 2021. If the native title holders have not nominated a PBC by that date, it is likely the Court will appoint the ILSC. 27 Further, if it is clear from Judicial Registrar McGregor's reports back to the Court prior to 17 September 2021 that the dispute continues and no agreed outcome is likely, the Court may decide to appoint the ILSC at an earlier date. 28 This process is the last chance for the Ngarrawanji #1 and #2 native title holders to come up with a solution themselves which includes, and which will be on behalf of, all people descended from the apical ancestors in the two consent determinations. Koongie-Elvire and Ngarrawanji #3 29 The Koongie-Elvire claim is over 20 years old. There is a written proposed consent determination prepared by the State, and that has existed for some time. Again, it seems that what is stopping people getting their native title recognised and being able to exercise it are differences within the group itself. 30 Until the case management hearing, it seemed there were two sides – a Wawarl Jaru identifying group, and a Kija/Lunga identifying group who had the support of a Nyinin Jaru identifying group. As people spoke at the case management hearing, it became apparent that the Nyinin Jaru identifying people might really see themselves as separate from the Kija/Lunga identifying group. 31 At the request of group members, the Court had organised for Dr Rumsey to assist the Court by participating in a conference of experts, and to engage with the details of Dr Redmond's expert opinions. In the process of preparation for this, Dr Rumsey did meet with some claim group members in the East Kimberley. The State contributed to the costs of this process. However, there is still no agreed outcome. 32 It became clear through the mediation report to the Court, and from what people said at the case management hearing, that not only is the group divided, but the fact there is now a new claim over Halls Creek – called Ngarrawanji #3 – has not helped agreement being reached on the Koongie-Elvire claim. That is because the Jaru identifying people feel they have been left out of the Ngarrawanji #3 claim, even though they say that claim area includes their country, at least in part. 33 Ms Toohey, the Principal Legal Officer at the Kimberley Land Council remains on the record as the solicitor for the Koongie-Elvire applicant. However, she fairly and candidly acknowledged that she was not being given any current instructions by the people who make up the applicant. The general views expressed at the case management hearing were that many people were not happy with the Kimberley Land Council. The Court takes no sides on that issue, but is just recording the views it heard. 34 A major suggestion from almost everyone the Court heard from was that somehow the different groups needed to get advice from different lawyers, ones they felt confident with. 35 There was also a general view expressed that a new anthropologist might help people reach agreement, as people felt the anthropologists who had been more recently assisting had fixed ideas and views. 36 However, it is clear there are real problems in getting funding for any more anthropological work. The Court suggested more use could be made of Kimberley Land Council employed anthropologists, and Ms Toohey agreed. A further suggestion by the State was that Dr Levitus may be able to assist, in a supervisory role over the Kimberley Land Council anthropologists, as he has a long history in this region. Ms Toohey agreed this might be possible, if funding was agreed, perhaps also with some input from Dr Redmond. She agreed that using Kimberley Land Council anthropologists would be much more cost effective. The Court considers this is an important point to consider for the future steps in this claim. 37 The present Ngarrawanji #3 applicant is represented by Mr Charles Wantrup. Mr Wantrup attended some of the case management hearings by video, and sought to assist the Court, for which the Court is grateful. Presently, the claim group description on Ngarrawanji #3 appears to be dominated by Lunga/Kija identifying people. 38 Mr Paul Sheiner appeared with the leave of the Court, to assist those in the Koongie-Elvire group who were Wawarl Jaru identifying. 39 The Koongie-Elvire claim area and the Ngarrawanji #3 claim area are next to each other. The Court's view is that while there might be differences between the claims, and while it is true that Ngarrawanji #3 is a new claim not yet out of the notification period, it is efficient for the Court to manage them together. Many of the same people are involved, or will be involved, because from what people said at the case management hearing, Wawarl Jaru people are also likely to claim interests in at least some of the Ngarrawanji #3 claim area, and they will end up as respondents if there is no change to the claim group description. In other words, one way or another, their interests in the Ngarrawanji #3 claim area will have to be considered. 40 Therefore, the Court has decided to manage these two claims together. The Court heard and understood the strong view expressed by people that Koongie-Elvire is an old claim and needs to be determined. The Court agrees, but the problem is the disputes in the group. So, it is hoped that if the two claims are managed together and different sides of the group feel they have different lawyers they can speak to, this might help. 41 Quite properly, Mr Sheiner asked for some time to see if he received instructions from the Koongie-Elvire applicant as a whole, and also to consider whether, if he ends up acting for any Wawarl Jaru respondents in the Ngarrawanji #3 claim, this poses any kind of conflict of interest for him and his firm. That is a proper matter for him to have some time to consider. There will also need to be funding applications to the Kimberley Land Council for legal representation. However this new case management structure may assist the Kimberley Land Council in considering funding applications, especially when the obligations in s 203BC(3) of the Native Title Act are taken into account – the need for streamlining of processes to make them cost-effective. 42 The Court gave the lawyers some time to discuss what programming orders should be made. Orders have been made which: (a) make sure all the new lawyers (and therefore also claim group members) have access to any anthropological work for the Koongie-Elvire claim; (b) give a month or so for any changes to legal representation in the Koongie-Elvire claim; and (c) allow Judicial Registrar McGregor to continue discussing in a confidential mediation process what is the best way to move both claims towards consent determinations, whether they should be moved together or separately, whether the claims should be divided into parts or kept as a whole, and what is the best way to ensure that a workable PBC can be nominated at the same time as the consent determination is to be made. Conclusion 43 In all three sets of proceedings, the main sticking points are disputes between members of the claim groups, or native title holding groups. The State of Western Australia has been proactive and cooperative in trying to assist groups to secure determinations. There are no real obstacles from the State, but quite properly the State wants to be sure the right people are being identified as native title holders and that everyone who should be included is included. 44 The Kimberley Land Council has attempted to assist in a number of ways, but it is clear that many people in the East Kimberley are frustrated with the Kimberley Land Council's role in native title applications. Again, the Court accepts those frustrations exist, but reminds people it is not its job to take sides about that issue. The challenges the Kimberley Land Council faces with its native title funding are real obstacles, and the annual funding cycles from the Commonwealth are responsible at least in part for the delays and restrictions on funding. To change that requires political action, not legal action. 45 The tragedy of elders passing away before determinations are made was brought home to everyone last week during the case management hearings as communities lost yet another elder whose evidence had been very important in past court hearings. 46 Getting final outcomes in these claims is largely in the hands of the First Nations peoples involved. Lawyers can advise, but it is the people themselves who will need to negotiate and compromise. No-one is likely to get exactly what they want. The Court will not hesitate to step in and decide issues in these old and delayed cases if the groups cannot do so after a reasonable time. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Mortimer. Associate: Dated: 12 March 2021 Federal Court of Australia District Registry: Western Australia Division: General No: WAD536/2018 WAD401/2018 WAD65/2019 SHIRLEY DRILL & ORS ON BEHALF OF THE PURNULULU NATIVE TITLE CLAIM GROUP Applicant SHIRLEY DRILL & ORS ON BEHALF OF THE PURNULULU #2 NATIVE TITLE CLAIM GROUP Applicant BONNIE EDWARDS & ORS ON BEHALF OF THE GAJANGANA JARU NATIVE TITLE CLAIM GROUP Applicant STATE OF WESTERN AUSTRALIA & ORS Respondents ATTACHMENT A Federal Court of Australia District Registry: Western Australia Division: Division: General No: WAD536/2018 WAD401/2018 WAD65/2019 SHIRLEY DRILL & ORS ON BEHALF OF THE PURNULULU NATIVE TITLE CLAIM GROUP Applicant SHIRLEY DRILL & ORS ON BEHALF OF THE PURNULULU #2 NATIVE TITLE CLAIM GROUP Applicant BONNIE EDWARDS & ORS ON BEHALF OF THE GAJANGANA JARU NATIVE TITLE CLAIM GROUP Applicant STATE OF WESTERN AUSTRALIA & ORS Respondents _________________________________________________________________________________________________________________ TIMETABLE FOR PROGRESSING TOWARDS DETERMINATION – CHRONOLOGICAL ORDER Dated 8 March 2021 _________________________________________________________________________________________________________________ Key • GJA is a reference to Gajangana Jaru Applicant • PA is a reference to Purnululu Applicant • SWA is a reference to the State of Western Australia, First Respondent Issues A. Apical Ancestors B. Technical issues regarding the nature of the claims and the determination to be made C. Malngin D. Prescribed Body Corporate (PBC) E. Determination No. Issue Event Party Due date Status/comment 1 A Gajangana Jaru (GJA) to provide a response to the Purnululu Applicant's (PA) draft list of apical ancestors to the First Respondent (SWA) and PA (with the proviso that the ultimate list of apical ancestors will be determined by the form of the determination). GJA 24 March 2021 2 A Mediation to be scheduled if parties cannot reach an agreed position on the draft list of apical ancestors, subject to the proviso regarding the form of the determination. All parties Mediation by 31 March 2021 Note: GJA unavailable for mediation on 29, 30 and 31 March 2021. 3 B The parties to exchange positions on whether the matter can progress to be determined by consent determination or by determination. All parties 31 March 2021 4 E The State to amend the draft minute of consent determination previously prepared in the Purnululu proceedings and send to the parties. State 31 March 2021 5 C PA to provide evidence document regarding Malngin interests in the PDA and position as to whether further research is required. PA 1 April 2021 6 B The PA and the GJA exchange, with each other and the SWA, their positions on whether their respective Form 1s need to be amended (see paragraph [8] of the SWA's issues to be resolved prior to determination dated 26 February 2021) in order for a determination to be made in any of the proceedings before the Court. All parties 9 April 2021 7 B The parties report to Judicial Registrar McGregor if they are in agreement regarding their positions on the technical issues. All parties Report to Court by 16 April 2021 8 B OR if the parties are not in agreement, the matter to be listed for mediation. All parties Mediation by 22 April 2021 Note: GJA unavailable for mediation on 23 April 2021. 9 B Mediator report to the court on the mediation regarding technical issues. Judicial Registrar By 29 April 2021 10 B Judicial Case Management Hearing to be scheduled if parties are not in agreement regarding technical issues. All parties After 29 April 2021 Note: GJA unavailable for Case Management Hearing on 7, 4 and 11 May 2021. 11 D The PA and the GJA confer to map out how to proceed with options for a PBC. PA By 30 April 2021 GJA 12 C SWA and GJA to respond to the PA's document on Malngin evidence and put forward their position as to whether further research is required. SWA and GJA 3 May 2021 13 D Depending on the outcomes of the conferral regarding the PBC by 30 April 2021, the PA and the GJA exchange options or considerations regarding the PBC. PA 10 May 2021 GJA 14 C The parties to report to Judicial Registrar McGregor if they are in agreement regarding their position on Malngin rights and interests and/or necessity to brief an expert. All parties Report to Court by 12 May 2021 15 D PA and GJA to provide a position paper to Judicial Registrar McGregor and SWA identifying each party's position regarding: PA By 13 May 2021 Note: Position paper to be provided prior to PBC issue mediation to be scheduled. • The structure of the PBC; GJA • Decision-making for operational decisions of the PBC; and Native title decision making processes for the holders of native title represented by the PBC. 16 D The parties attend mediation regarding options for a PBC (acknowledging that this may depend on the form of the determination). All parties By 17 May 2021 Note: GJA unavailable for mediation on 7, 11 and 14 May 2021. 17 C OR mediation to be scheduled if parties cannot reach an agreed position on Malngin rights and interests to be recognised in the PDA and/or necessity to brief a single expert. All parties Mediation by 21 May 2021 18 C Mediator report to the court on the mediation regarding Malngin issue. Judicial Registrar By 28 May 2021 19 C Judicial Case Management Hearing to be scheduled if parties are not in agreement regarding how to address Malngin issue. Court After 28 May 2021 Note: GJA unavailable for mediation on 2 – 4, 7 – 30 June 2020. 20 C If an expert is possibly required to be briefed, the parties are to agree the content of a brief for an identified expert to consider outstanding questions regarding Malngin rights and interest in the PDA and prepare an expert report for the purposes of mediation. All parties 31 May 2021 21 C The parties to report to the court if: All parties By 31 May 2021 • there are no outstanding Malngin interests to be addressed; OR • if an expert is required to be briefed; OR • parties agree on description of rights holders to address Malngin interests. 22 E The parties exchange positions on the form of a determination to be made, including any draft determination document/s. All parties 1 June 2021 Note: timing to allow for GJA to obtain instructions on the form of the determination 23 D The PA to provide to the other parties a draft PBC Rule Book and any other draft ancillary document for a PBC. PA Week of 4 June 2021 Note: This will have to accommodate Malngin interests provisionally. 24 E If agreement is reached between the parties on the form of a draft determination, a draft form of determination be provided to the Court. All parties 28 June 2021 25 E OR Mediation to be scheduled if parties cannot reach an agreed position regarding the form of determination. All parties By 2 July 2021 Mediation Note: GJA unavailable for mediation between 1-2 July 2021. 26 D The GJA to provide to the other parties its response to the PA's draft PBC Rule Book and any other draft ancillary document for a PBC. GJA Week of 19 July 2021 27 C Expert report, in summary form, on Malngin interests in the PDA be provided to the Parties and/or Party briefing the expert if expert is not jointly briefed. Expert 27 July 2021 28 C If expert is not jointly briefed, expert report to be provided to active parties. Briefing party (if necessary) 3 August 2021 29 C The parties confer regarding the expert opinion on Malngin rights and interests in the PDA. All parties 11 10 August 2021 30 D The SWA to provide to the parties its response to the drafts. SWA Week of 16 August 2021 31 C The parties to report to the court if there are no outstanding Malngin interests to be addressed All parties Report to court by 17 August 2021 32 E If the parties agree on the form of the determination, the parties provide a joint position to the court regarding the form of the determination, including: All parties 27 September 2021 • joint submissions; • the evidence; any other relevant material. 33 E OR if the parties do not have a joint position regarding the form of the determination, the matter be listed for a case management hearing before Justice Mortimer to consider how the issue can be resolved and whether the issue needs to be programmed for hearing or can be heard on the papers. PA After 27 September 2021 – on a date to be fixed by the Court Note: GJA unavailable for mediation between 20-30 September 2021 and 1-22 October 2021. GJA 34 C OR If parties cannot reach an agreed position on Malngin rights and interests, a case management hearing be scheduled before Justice Mortimer to consider how the parties submit the Malngin issue should be resolved. All parties CMH – on a date to be fixed by the Court between 17 September 2021 and 29 October 2021 Note: GJA unavailable for mediation between 20-30 September 2021 and 1-22 October 2021. 35 D Subject to the parties' responses and consultation with the relevant Applicant parties the parties to confer regarding the draft PBC Rule Book to attempt to narrow any outstanding issues regarding the PBC Rule Book. All parties By 4 October 2021 36 C If no agreement at time of CMH listing regarding the Malngin issue, the matter be listed for a separate question to be determined regarding the Malngin issue. All parties By 15 November 2021 37 D Consultation with GJA and PA claimant groups, including on-country meetings regarding draft PBC Rule Book. GJA and PA October-December 2021 38 D GJA and PA to exchange responses to the draft PBC Rule Book. GJA and PA By 6 December 2021 39 E SWA to circulate final draft of the determination and mapping to the parties. SWA 6 December 2021 Note: Timing of this step and proceeding steps will be dependent on outcome of any prior agreement, hearing and decision regarding this issue E. 40 D The parties to report to the Court if they have reached an agreed position regarding the PBC Rule book. All parties Report to Court by 13 December 2021 41 E Respondent parties to respond to final draft of the determination. All non-State respondent parties 20 December 2021 42 E In-principle draft of determination settled at legal representative level. All parties 31 January 2022 43 D Mediation to be scheduled if parties cannot reach an agreed position regarding the PBC Rule Book. All parties Mediation - on a date to be fixed by Judicial Registrar McGregor between 31 January and 18 February 2022 44 D Subject to resolution of the Determination issue (at E below), the parties to inform the Court of either their agreed position, or the individual positions regarding the structure of the PBC. All parties February 2022 [depending on timing for E below] 45 D If the parties are not agreed regarding the structure of the PBC, the matter be listed for a case management hearing before Justice Mortimer. All parties On a date to be fixed by the Court. 46 E All parties to consider approving or authorising the draft determination (dependent on consideration of form of determination question and whether the determination is to be made pursuant to s 87 or s 87A). All parties By 31 March 2022 Note: This will be dependent on the weather conditions for the Applicant parties Note: These dates are also dependent on ultimate outcome as to whether the determination to be made is by consent or otherwise. 47 E SWA to circulate, and all parties to confer in relation to, the final draft of the determination or consent determination. SWA By 31 March 2022 Respondent parties 48 E Applicants to advise as to whether the determination is intended to take place on-country and if it is, the location of the determination. PA By 31 March 2022 GJA 49 E Final determination circulated for execution (if a consent determination). All parties – circulated by SWA By 11 April 2022 50 E Filing of minute of determination and supporting documents filed. SWA By 18 April 2022 51 E Consent Determination or Determination Hearing. Court and relevant parties By 30 May 2022 Federal Court of Australia District Registry: Western Australia Division: Division: General No: WAD536/2018 WAD401/2018 WAD65/2019 SHIRLEY DRILL & ORS ON BEHALF OF THE PURNULULU NATIVE TITLE CLAIM GROUP Applicant SHIRLEY DRILL & ORS ON BEHALF OF THE PURNULULU #2 NATIVE TITLE CLAIM GROUP Applicant BONNIE EDWARDS & ORS ON BEHALF OF THE GAJANGANA JARU NATIVE TITLE CLAIM GROUP Applicant STATE OF WESTERN AUSTRALIA & ORS Respondents _______________________________________________________________________________________________________________ TIMETABLE FOR PROGRESSING TOWARDS DETERMINATION – ISSUES BASED Dated 8 March 2021 _______________________________________________________________________________________________________________ Key • GJA is a reference to Gajangana Jaru Applicant • PA is a reference to Purnululu Applicant • SWA is a reference to the State of Western Australia, First Respondent No Event Party A. Apical Ancestors 1. Gajangana Jaru (GJA) to provide a response to the Purnululu Applicant's (PA) draft list of apical ancestors to the First Respondent (SWA) and PA (with the proviso that the ultimate list of apical ancestors will be determined by the form of the determination). GJA 2. Mediation to be scheduled if parties cannot reach an agreed position on the draft list of apical ancestors, subject to the proviso regarding the form of the determination. All parties B. Technical issues regarding the nature of the claims and the determination to be made 3. The parties to exchange positions on whether the matter can progress to be determined by consent determination or by determination. All parties 4. The PA and the GJA exchange, with each other and the SWA, their positions on whether their respective Form 1s need to be amended (see paragraph [8] of the SWA's issues to be resolved prior to determination dated 26 February 2021) in order for a determination to be made in any of the proceedings before the Court. All parties 5. The parties report to Judicial Registrar McGregor if they are in agreement regarding their positions on the technical issues. All parties 6. OR if the parties are not in agreement, the matter to be listed for mediation. All parties 7. Mediator report to the court on the mediation regarding technical issues. Judicial Registrar 8. Judicial Case Management Hearing to be scheduled if parties are not in agreement regarding technical issues. All parties C. Malngin 9. PA to provide evidence document regarding Malngin interests in the PDA and position as to whether further research is required. PA 1 April 2021 10. SWA and GJA to respond to the PA's document on Malngin evidence and put forward their position as to whether further research is required. SWA and GJA 3 May 2021 11. The parties to report to Judicial Registrar McGregor if they are in agreement regarding their position on Malngin rights and interests and/or necessity to brief an expert. All parties Report to Court by 12 May 2021 12. OR mediation to be scheduled if parties cannot reach an agreed position on Malngin rights and interests to be recognised in the PDA and/or necessity to brief a single expert. All parties Mediation by 21 May 2021 13. Mediator report to the court on the mediation regarding Malngin issue. Judicial Registrar By 28 May 2021 14. Judicial Case Management Hearing to be scheduled if parties are not in agreement regarding how to address Malngin issue. Court After 28 May 2021 15. If an expert is possibly required to be briefed, the parties are to agree the content of a brief for an identified expert to consider outstanding questions regarding Malngin rights and interest in the PDA and prepare an expert report for the purposes of mediation. All parties 31 May 2021 16. The parties to report to the court if: All parties By 31 May 2021 • there are no outstanding Malngin interests to be addressed OR • if an expert is required to be briefed; OR • parties agree on description of rights holders to address Malngin interests. 17. Expert report, in summary form, on Malngin interests in the PDA be provided to the Parties and/or Party briefing the expert if expert is not jointly briefed. Expert 27 July 2021 18. If expert is not jointly briefed, expert report to be provided to active parties. Briefing party (if necessary) 3 August 2021 19. The parties confer regarding the expert opinion on Malngin rights and interests in the PDA. All parties 10 August 2021 20. The parties to report to the court if there are no outstanding Malngin interests to be addressed All parties Report to court by 17 August 2021 21. OR If parties cannot reach an agreed position on Malngin rights and interests, a case management hearing be scheduled before Justice Mortimer to consider how the parties submit the Malngin issue should be resolved. All parties CMH – on a date to be fixed by the Court between 17 September 2021 and 29 October 2021 22. If no agreement at time of CMH listing regarding the Malngin issue, the matter be listed for a separate question to be determined regarding the Malngin issue. All parties By 15 November 2021 D. Prescribed Body Corporate (PBC) 23. The PA and the GJA confer to map out how to proceed with options for a PBC. PA By 30 April 2021 GJA 24. Depending on the outcomes of the conferral at [23], the PA and the GJA exchange options or considerations regarding the PBC. PA 10 May 2021 GJA 25. PA and GJA to provide a position paper to Judicial Registrar McGregor and SWA identifying each party's position regarding: PA By 13 May 2021 • The structure of the PBC; GJA • Decision-making for operational decisions of the PBC; and • Native title decision making processes for the holders of native title represented by the PBC. 26. The parties attend mediation regarding options for a PBC (acknowledging that this may depend on the form of the determination). All parties By 17 May 2021 27. The PA to provide to the other parties a draft PBC Rule Book and any other draft ancillary document for a PBC. PA Week of 4 June 2021 28. The GJA to provide to the other parties its response to the PA's draft PBC Rule Book and any other draft ancillary document for a PBC. GJA Week of 19 July 2021 29. The SWA to provide to the parties its response to the drafts. SWA Week of 16 August 2021 30. Subject to the parties' responses and consultation with the relevant Applicant parties the parties to confer regarding the draft PBC Rule Book to attempt to narrow any outstanding issues regarding the PBC Rule Book. All parties By 4 October 2021 31. Consultation with GJA and PA claimant groups, including on-country meetings regarding draft PBC Rule Book. GJA and PA October-December 2021 32. GJA and PA to exchange responses to the draft PBC Rule Book. GJA and PA By 6 December 2021 33. The parties to report to the Court if they have reached an agreed position regarding the PBC Rule book. All parties Report to Court by 13 December 2021 34. Mediation to be scheduled if parties cannot reach an agreed position regarding the PBC Rule Book. All parties Mediation - on a date to be fixed by Judicial Registrar McGregor between 31 January and 18 February 2022 35. Subject to resolution of the Determination issue (at E below), the parties to inform the Court of either their agreed position, or the individual positions regarding the structure of the PBC. All parties February 2022 [depending on timing for E below] 36. If the parties are not agreed regarding the structure of the PBC, the matter be listed for a case management hearing before Justice Mortimer. All parties On a date to be fixed by the Court. E. Determination 37. The State to amend the draft minute of consent determination previously prepared in the Purnululu proceedings and send to the parties. State 31 March 2021 38. The parties exchange positions on the form of a determination to be made, including any draft determination document/s. All parties 1 June 2021 39. If agreement is reached between the parties on the form of a draft determination, a draft form of determination be provided to the Court. All parties 28 June 2021 40. OR Mediation to be scheduled if parties cannot reach an agreed position regarding the form of determination. All parties By 2 July 2021 Mediation 41. If the parties agree on the form of the determination, the parties provide a joint position to the court regarding the form of the determination, including: All parties 27 September 2021 • joint submissions; • the evidence; • any other relevant material. 42. OR if the parties do not have a joint position regarding the form of the determination, the matter be listed for a case management hearing before Justice Mortimer to consider how the issue can be resolved and whether the issue needs to be programmed for hearing or can be heard on the papers. PA After 27 September 2021 – on a date to be fixed by the Court. GJA 43. SWA to circulate final draft of the determination and mapping to the parties. SWA 6 December 2021 44. Respondent parties to respond to final draft of the determination. All non-State respondent parties 20 December 2021 45. In-principle draft of determination settled at legal representative level. All parties 31 January 2022 46. All parties to consider approving or authorising the draft determination (dependent on consideration of form of determination question and whether the determination is to be made pursuant to s 87 or s 87A). All parties By 31 March 2022 47. SWA to circulate, and all parties to confer in relation to, the final draft of the determination or consent determination. SWA By 31 March 2022 Respondent parties 48. Applicants to advise as to whether the determination is intended to take place on-country and if it is, the location of the determination. PA By 31 March 2022 GJA 49. Final determination circulated for execution (if a consent determination). All parties – circulated by SWA By 11 April 2022 50. Filing of minute of determination and supporting documents filed. SWA By 18 April 2022 51. Consent Determination or Determination Hearing. Court and relevant parties By 30 May 2022	13,048
federal_court_of_australia:fca/single/2015/2015fca0862	decision	commonwealth	federal_court_of_australia	text/html	2015-08-19 00:00:00	Mbuzi v Griffith University [2015] FCA 862	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2015/2015fca0862	2024-09-13T22:49:55.371085+10:00	FEDERAL COURT OF AUSTRALIA Mbuzi v Griffith University [2015] FCA 862 Citation: Mbuzi v Griffith University [2015] FCA 862 Appeal from: Application for leave to appeal: Mbuzi v Griffith University [2014] FCA 1323 Parties: JOSIYAS MBUZI v GRIFFITH UNIVERSITY File number: QUD 687 of 2014 Judge: RANGIAH J Date of judgment: 19 August 2015 Catchwords: PRACTICE AND PROCEDURE – applicant seeking to appeal vexatious proceedings order and other orders – whether applicant requires leave to appeal or leave to institute an appeal – whether grounds of appeal are vexatious or abuse of process – leave to file notice of appeal to be granted on some grounds subject to conditions being met Legislation: Federal Court of Australia Act 1976 (Cth) ss 37AM, 37AO, 37AQ, 37AR, 37AS and 37AT Federal Court Rules 2011 (Cth) rr 11.06 and 36.01 Cases cited: Attorney-General (NSW) v Chan [2011] NSWSC 1315 cited Fuller v Toms [2015] FCAFC 91 cited Griffith University v Tang (2005) 221 CLR 99; HCA 7 cited Hogan v Hinch (2011) 243 CLR 506; HCA 4 cited Lange v Australian Broadcasting Corporation (1997) 189 CLR 520; HCA 25 cited Mbuzi v Griffith University [2014] FCA 1323 cited Tajjour v New South Wales (2014) 88 ALJR 860; HCA 35 cited Walton v Gardiner (1993) 177 CLR 378; HCA 77 cited Date of hearing: 1 April 2015 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 53 Counsel for the Applicant: The applicant appeared in person Counsel for the Respondent: Mr P McCafferty Solicitor for the Respondent: Minter Ellison IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 687 of 2014 BETWEEN: JOSIYAS MBUZI Applicant AND: GRIFFITH UNIVERSITY Respondent JUDGE: RANGIAH J DATE OF ORDER: 19 August 2015 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The applicant file and serve a draft notice of appeal by 4 pm on 26 August 2015. 2. The draft notice of appeal is to be confined to: (a) grounds reflecting grounds b, c, d, e, f, g, i, m and o appearing after the words "Error of fact and law as follows" in the draft notice of appeal annexed to the affidavit of the applicant filed on 24 December 2014; and (b) a further ground to the effect that the respondent did not have a sufficient interest in the matter to warrant an order of the width of the vexatious proceeding order made by the primary judge. 3. The draft notice of appeal is to comply with r 36.01 of the Federal Court Rules 2011 (Cth). 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 687 of 2014 BETWEEN: JOSIYAS MBUZI Applicant AND: GRIFFITH UNIVERSITY Respondent JUDGE: RANGIAH J DATE: 19 August 2015 PLACE: BRISBANE REASONS FOR JUDGMENT 1 The applicant has applied for leave to institute an appeal. In some of the material, he has also described his application as an application for leave to appeal. 2 The applicant wishes to appeal against the whole of a judgment given by Collier J on 5 December 2014: Mbuzi v Griffith University [2014] FCA 1323. Her Honour ordered that: 1. The amended originating application filed 25 November 2013 of Josiyas Mbuzi is dismissed with costs, to be taxed if not otherwise agreed. 2. Pursuant to s 37AO(2)(b) of the Federal Court of Australia Act 1976 (Cth) Josiyas Mbuzi is hereby prohibited from instituting any proceedings in any Registry of the Federal Court of Australia against Griffith University or any employee, officer, Council member or student of Griffith University without the leave of the Court. 3. Josiyas Mbuzi pay Griffith University the costs of the cross-claim filed 15 August 2013, to be taxed if not otherwise agreed. 3 It may be seen that the second order is a vexatious proceedings order. Section 37AQ(1) of the Federal Court of Australia Act provides that if the Court makes a vexatious proceedings order prohibiting a person from instituting proceedings of a particular type in the Court, the person must not institute a proceeding of that type in the Court without the leave of the Court under s 37AT. The proceeding before the primary judge 4 The proceeding before the primary judge concerned the termination of the applicant's PhD candidature in the respondent's School of Humanities. The respondent's Higher Degree Research Policy required the applicant to have two university supervisors (a principal and an associate supervisor). The applicant requested that the two supervisors appointed to him be removed. His associate supervisor was removed and replaced by Prof Chu. His principal supervisor remained until a replacement could be found, but eventually she was unwilling to continue any longer. Prof Chu then withdrew after an incident in which the applicant allegedly engaged in aggressive behaviour towards her colleague. The respondent's position was that it could not identify any qualified supervisors who were willing to take on the role, and it terminated the applicant's candidature. 5 The applicant sought orders to the effect that the respondent's decision to terminate his candidature be overturned, that his candidature be reinstated and that he receive compensation. The applicant's grounds for seeking these orders were in three categories: (a) the respondent's breach of the applicant's implied constitutional rights of freedom of communication and due process; (b) the respondent's alleged breach of an alleged contract with the applicant; (c) the respondent's breach of the Australian Consumer Law by engaging in unconscionable conduct and misleading or deceptive conduct. 6 The respondent cross-claimed, seeking a vexatious proceedings order against the applicant. The applicant had engaged in litigation prolifically in the Queensland courts, including against the respondent and its staff, and he is the subject of a vexatious proceedings order in the Supreme Court of Queensland. 7 The primary judge concluded that the applicant's application had "no merit" and should be dismissed: [144]. Her Honour was not prepared to find that the applicant's proceeding was vexatious, in the sense of being instituted or pursued without reasonable ground: [178]. However, her Honour found that the requirements of s 37AO(1) were satisfied: [183]. Her Honour decided that the Court's discretion under s 37AO(2) should be exercised in favour of making the vexatious proceedings order, primarily because of threats of litigation made by the applicant against various members of the respondent's staff: [194]. Whether leave to institute an appeal or leave to appeal is required 8 Although the applicant seeks leave to institute an appeal or leave to appeal, his primary submission is that such leave is not required in order to appeal against the vexatious proceedings order itself. The respondent submits that leave to institute the appeal is required. 9 Since I reserved my judgment, the issue has been decided by the Full Court in Fuller v Toms [2015] FCAFC 91. The effect of that judgment is that the applicant does not require leave to appeal, but does require leave to file a notice of appeal. Whether the applicant should be granted leave to file a notice of appeal 10 I will turn to the question of whether the applicant should be granted leave to file a notice of appeal. 11 Sections 37AR to 37AT of the Federal Court of Australia Act provide, relevantly: 37AR Application for leave to institute proceedings (1) This section applies to a person (the applicant) who is: (a) subject to a vexatious proceedings order prohibiting the person from instituting proceedings, or proceedings of a particular type, in the Court; or … (2) The applicant may apply to the Court for leave to institute a proceeding that is subject to the order. (3) The applicant must file an affidavit with the application that: (a) lists all the occasions on which the applicant has applied for leave under this section; and (b) lists all other proceedings the applicant has instituted in any Australian court or tribunal, including proceedings instituted before the commencement of this section; and (c) discloses all relevant facts about the application, whether supporting or adverse to the application, that are known to the applicant. (4) The applicant must not serve a copy of the application or affidavit on a person unless an order is made under paragraph 37AT(1)(a). If the order is made, the applicant must serve the copy in accordance with the order. 37AS Dismissing application for leave (1) The Court or a Judge may make an order dismissing an application under section 37AR for leave to institute a proceeding if the Court or Judge considers the affidavit does not substantially comply with subsection 37AR(3). (2) The Court or a Judge must make an order dismissing an application under section 37AR for leave to institute a proceeding if the Court or Judge considers the proceeding is a vexatious proceeding. (3) The Court or a Judge may dismiss the application without an oral hearing (either with or without the consent of the applicant). 37AT Granting application for leave … (3) The Court may make an order granting the application. The order may be made subject to the conditions the Court considers appropriate. (4) The Court may grant leave only if it is satisfied the proceeding is not a vexatious proceeding. 12 The respondent submits that the Court is required by ss 37AS(2) and 37AT(4) to refuse the applicant leave because the proposed appeal is a vexatious proceeding. It also submits that the Court should exercise its discretion under s 37AS(1) to dismiss the application because the applicant's affidavit does not list all of the other proceedings the applicant has instituted in Australian courts or tribunals. It further submits that the Court should refuse leave in the exercise of its discretion because the applicant contravened s 37AR(4) by serving a copy of his application and affidavit on the respondent. 13 The vexatious proceedings order represents a serious restriction of the applicant's access to the Court. In the absence of the vexatious proceedings order, the appellant would have the right to appeal against the dismissal of his amended originating application. In these circumstances, I do not regard the appellant's non-compliance with s 37AR(3) and (4) as being of such significance that leave to institute the appeal ought not be granted if the applicant is able to demonstrate that the proposed appeal is not a vexatious proceeding. 14 The expression "vexatious proceeding" is defined in s 37AM to include: (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. 15 These categories are not discrete, since each category could properly be described as an abuse of process: Attorney-General (NSW) v Chan [2011] NSWSC 1315 at [33] per Adamson J. 16 It is not my role to decide upon the merits of the applicant's proposed appeal beyond considering whether the proposed appeal is so lacking in merit that it is a vexatious proceeding. In the context of this case it is particularly relevant to note that a proceeding can be regarded as an abuse of process if it is "foredoomed to fail": Walton v Gardiner (1993) 177 CLR 378; HCA 77 at 393. The vexatious proceedings order 17 The draft notice of appeal commences with 15 grounds numbered 1 a to o which challenge the vexatious proceedings order and the primary judge's rejection of the applicant's Constitutional grounds and his allegations of breach of contract and the Australian Consumer Law. 18 The proposed grounds of appeal which challenge the vexatious proceedings order are: 1. Error of fact and law as follows: … h. In finding that Respondent "at the very least" falls within s37AO 3d as an "interested party". Such a finding is so erroneous that it ·is difficult to understand how it could have been made as the "interested party" referred to is about an entity not originally a party to the proceedings, but applies in the course of the proceedings to make itself a party upon establishing its interest. The principal and original parties could not be said to fall under that category. The respondent should have been found to lack standing in bringing the so-called counterclaim. i. In accepting the validity of the counter-claim as it was filed in a way that did not meet the threshold. … m. In making an order under s37AO 2 b in circumstances where the Appellant's proceeding was specifically not found by herself to be vexatious. 19 Ground h challenges the primary judge's finding that the respondent had standing to apply for the vexatious proceedings order. Section 37AO(3) provides, relevantly: (3) The Court may make a vexatious proceedings order on its own initiative or on the application of any of the following: … (c) a person against whom another person has instituted or conducted a vexatious proceeding; (d) a person who has a sufficient interest in the matter. 20 The primary judge held at [177]: Clearly Griffith University does not fall into the categories described in s 37AO(3)(a) and (b). However I am satisfied that, at the very least, Griffith University has standing to commence this cross-claim because it is currently being sued by Mr Mbuzi, and Mr Mbuzi has already forecast future litigation against the university and persons associated with it. As a result Griffith University has sufficient interest in the matter within the meaning of s 37AO(3)(d). 21 Collier J apparently considered that the respondent did not come within s 37AO(3)(c) because her Honour did not regard the applicant's proceeding as being a vexatious proceeding. 22 Ground h seems to dispute the respondent's standing to bring the application on the basis that a party that is a respondent to a proceeding cannot apply for a vexatious proceedings order. The applicant submits that an applicant for a vexatious proceedings order must make an application in the course of the proceeding to become a party upon establishing its interest. Section 37AO(3) merely requires that an "application" be made by a party who has a sufficient interest in the matter. The applicant for a vexatious proceedings order is required to prove that it has a sufficient interest at the trial. There is nothing to support the applicant's construction that a respondent to a proceeding cannot make such an application by way of cross-claim. I consider that the argument is foredoomed to fail and is an abuse of process. 23 However, in oral argument the applicant seemed to also rely on Ground h to allege more generally that the respondent did not have a sufficient interest in the matter to obtain an order of the width of the vexatious proceedings order that was made. He also seemed to rely on Ground m for that proposition. I consider that an appeal on that basis would not be an abuse of process, but Ground h will have to be redrafted to make that allegation clear. 24 In oral submissions the applicant explained that Ground i relies on r 11.06 of the Federal Court Rules 2011 (Cth) which requires a respondent to file a notice of address for service before filing any other document in the proceeding. In the proceeding at first instance, the respondent filed its cross-claim before filing its notice of address for service. It does not appear that any order was sought or made dispensing with compliance with r 11.06. While the Court hearing the appeal has the power to make orders regularising the procedure adopted, I cannot conclude that the proposed appeal on this ground will be an abuse of process. 25 Accordingly, I consider that the applicant should have leave to appeal based on Grounds i and m. Constitutional grounds 26 The grounds of the proposed appeal relevant to the Constitutional arguments raised by the applicant before the primary judge are: a. In not accepting that the implied right to communication on political and governmental matters; and due process apply to this case. This should have been accepted because Griffith University is a statutory authority established by statute – Griffith University Act and formed and operated by public funding. Only matters "NOT RELEVANT TO AUSTRALIA" should not be accepted. … j. In finding that there is no evidence supporting the fact that the Appellant's candidature was terminated because of allegations he used "aggressive, impolite and insulting language" (Page 71 of judgment). Her Honour's finding fails to take into account what Prof. Chu wrote as basis for not wanting to continue being supervisor. k. In being unable to see the relevance of the point of breach of due process (at Page 75). The purported lack of availability of supervisors resulted from allegations which were never subject of the due process of being reported, investigated and established. 27 Before the primary judge, the applicant argued that his implied right of communication under the Constitution had been infringed because the decision to terminate his PhD candidature arose from allegations of him being "aggressive", "impolite", "loudly speaking" and using "offensive language". He also alleged that the respondent took steps to terminate his candidature because his doctoral thesis was critical of the impact of Europeans and their arrival in Australia on indigenous Australians, and that he was disseminating information, opinions and arguments about federal government policies relating to indigenous affairs. 28 The primary judge rejected the applicant's argument, holding that the implied freedom of political communication operates as a constraint upon legislative power and does not confer personal rights on individuals, relying on Hogan v Hinch (2011) 243 CLR 506; HCA 4 at [92], Lange v Australian Broadcasting Corporation (1997) 189 CLR 520; HCA 25 at 560 and Tajjour v New South Wales (2014) 88 ALJR 860; HCA 35 at [32], [60], [104], [140] and [195]. Her Honour held that a decision of the respondent in respect of the applicant's PhD candidature pursuant to the respondent's internal policies was not one that attracted the implied right of freedom of political communication: [67]. 29 Her Honour also rejected the factual premises underlying the applicant's argument, holding, amongst other things, that there was no evidence that his candidature was terminated because he used aggressive, impolite and insulting language: [71]. It is that finding that the applicant wishes to challenge in Ground j. However, even if the applicant's argument contained in that ground is right, her Honour's conclusion that the circumstances would not attract the implied freedom of political communication was clearly correct. 30 The applicant also claimed that the Constitution protects due process rights. His argument seems to have been that he should have been provided with a hearing in respect of complaints made about him by Prof Chu. 31 Even assuming that the Constitution does give some implied right to due process, her Honour was unable to see how it was relevant in this case: [75]. The applicant's candidature was not terminated because of complaints made against him by Prof Chu, but because Prof Chu was unwilling to continue as his supervisor and because the University asserted that there were no suitable supervisors available. Her Honour's conclusion must have been that a hearing concerning Prof Chu's complaints would have had no bearing on the termination of his candidature. The proposed Ground k does not deal with or address her Honour's findings. 32 Her Honour described these Constitutional grounds as having no reasonable prospect of success. I respectfully agree. The appeal is a vexatious proceeding insofar as it is based on Grounds a, j and k. Contract grounds 33 The following grounds of the proposed appeal allege errors in the primary judge's findings concerning the alleged respondent's breaches of an alleged contract with the applicant: b. In finding that the Appellant's case was similar to that of Tang v. Griffith University, as the two cases are very distinguishable: … c. In not accepting the contractual relationship between the parties. This should have been accepted especially that Her Honour agreed with the Appellant that the provision of supervisory services to him by the respondent was as a result of dealing in "trade and commerce" (Judgment pages 35-36 and points 113; 114; 115; and 116). d. In stating that I relied on a signed document by Professor Chu to be my supervisor as evidence of my contract with the university. What I stated as bases for the contract were the OFFER; ACCEPTANCE and CONSIDERATION. Agreement by Professor Chu signing to be my supervisor was only given as evidence of performance by the respondent under the terms of the contractual agreement. e. In finding at page 29 and paragraph 86 that the University's policy and clause 4.13.3 and paragraphs c and d are alternatives in respect of PhD students. If that were the case, then "and" would have been used instead of "or". Not even the respondent's lawyers attempted to make such an interpretation. Termination provided for in the clause only relates to masters' degree students. The judge should have found that under that policy, termination of a PhD student like the appellant is not what that clause empowers. … l. In refusing to accept evidence which is unchallenged and uncontradicted in terms of the availability of supervisors identified by the appellant and also the threat by Prof. Chu to withdraw being a supervisor upon the appellant reporting the crime of assault against him by an employee of the respondent. … n. In stating that I previously had my candidature terminated on 14 March 2003 when in fact I withdrew at the end of my part-time work tenure as a research assistant to take up another part-time tenure as a research assistant at the University of Queensland (UQ) where my PhD candidature on a part-time basis was confirmed. o. In ignoring evidence of the availability of other staff members at Griffith University, apart from Prof. Chu and Dr Chamberlain, who are willing and able to supervise me. Even respondent's own witness, Associate Professor Jock Macleod said from the witness box that it would not be correct to say that there were no staff member available to supervise the appellant. 34 The primary judge was not satisfied that there was a contract between the respondent and the applicant for the provision of supervisory services to him as part of his PhD candidature: [82]. Her Honour was also not satisfied that the respondent no longer wished to provide supervisory services to the applicant, contrary to the applicant's contention. 35 The question of whether the primary judge erred in finding that there was no contract between the applicant and the respondent depends upon an assessment of the whole of the relevant evidence. The primary judge's reasons for finding that there was no such contract are relatively brief and not all of the evidence has been placed before me. I cannot conclude that the applicant's contentions in Grounds b, c and d, which are to the effect that the primary judge erred in finding that there was no contract between the respondent and the applicant, have no reasonable prospect of success or are foredoomed to fail. 36 However, Ground b, in particular, will have to be substantially recast so that it states only the ground and not the argument relied on by the applicant. I understand the ground to be that her Honour was not entitled to rely upon the judgment of Griffith University v Tang (2005) 221 CLR 99; HCA 7 to reach or assist her in reaching the conclusion that there was no contract. 37 Ground e involves construction of the respondent's Higher Degree Research Policy. I consider that it is not so unarguable as to amount to an abuse of process. 38 Grounds l and o concern the applicant's allegation that the respondent breached the alleged contract by refusing to appoint supervisors for him. Those grounds depend upon an examination of all the relevant evidence. Ground l also alleges in part that her Honour ought to have accepted evidence that Prof Chu threatened to withdraw as the applicant's supervisor for a particular reason. Her Honour accepted that Prof Chu did withdraw. The precise characterisation of why she withdrew did not matter. The remainder of Ground l overlaps with Ground o. For these reasons, the applicant should be permitted to rely on Ground o, but not Ground l. 39 Ground n would not affect the outcome of the proceeding even if the applicant's claim that he withdrew his earlier candidature, rather than it being terminated, is correct. None of her Honour's critical findings turned on that alleged error. That ground does not give the proposed appeal any reasonable prospect of succeeding and is an abuse of process. Contraventions of Australian Consumer Law 40 The proposed grounds dealing with the primary judge's finding that the respondent had not contravened the Australian Consumer Law are: f. In not finding that the respondent's conduct contravened the ACL, especially after agreeing with the Appellant that the parties were dealing in trade and commerce. g. In claiming that there is no evidence that Griffith University directed Mr Mbuzi to accept Dr Chamberlain as principal supervisor. … 41 Ground f depends, at least in part, upon the question of whether there were any of the respondent's staff who were willing to supervise the applicant. This is a factual question which depends upon an examination of the whole of the relevant parts of the evidence. I consider that this ground is not foredoomed to fail 42 Ground g alleges that the primary judge erred in finding that there was no evidence that the respondent directed the applicant to accept Dr Chamberlain as a principal supervisor. If the primary judge did make the error alleged, it is not apparent that this would have affected the outcome of the proceeding. However, the applicant's case that her Honour erred in making such a finding cannot be regarded as foredoomed to fail. I cannot conclude that the ground amounts to an abuse of process. Apprehended bias 43 The applicant's draft notice of appeal contains the following grounds under the heading "Apprehended bias": a. In the case of Webb V. The Queen (105), it is held that apprehension of bias includes where the judge has engaged in conduct, in the course of, or outside, the proceedings, giving rise to such an apprehension of bias. Therefore, the conduct outline in the above grounds of appeal fits such conduct. b. The Judge below did not take into account the fact that the appellant successfully resisted Griffith University's application to have his application summarily dismissed. 44 The allegations made and the passages and material relied on by the applicant in oral argument are not capable of supporting the allegation that the primary judge engaged in conduct that could give rise to an apprehension of bias. The applicant's argument seems to be no more than that an apprehension of bias arises because her Honour rejected his arguments and found against him. The allegation that the primary judge did not take into account the applicant's successful resistance of an application for summary judgment is irrelevant. These grounds are simply unsustainable. They are an abuse of process. 45 The applicant will not be permitted to file a notice of appeal which contains his grounds of apprehended bias. Miscarriage of justice 46 The draft notice of appeal contains the following grounds under the heading "Miscarriage of Justice": a. The errors of fact and law, coupled with apprehension of bias, amounts to miscarriage of justice. b. The lengthy delay (about 9 months) in delivery of judgment as it is generally said that justice delayed is justice denied. 47 I have already dealt with the applicant's allegation of apprehension of bias. To the extent that Ground a alleges other errors of fact or law in the judgment, it lacks particularity and appears to add nothing to the other grounds. The applicant should not be permitted to rely on this ground. 48 As to Ground b, the length of time it took her Honour to produce the judgment is readily understandable and was not inordinate. Her Honour was required to sift through and try to comprehend the diffuse arguments of the applicant and the significant volume of material that had been placed before the Court. Her Honour was also required to understand the lengthy history of proceedings that the applicant had instituted in other Courts. I have had similar difficulties in understanding and dealing with the applicant's material in the present application. Ground b has no reasonable prospect of succeeding and is an abuse of process. Summary 49 In summary, I am satisfied that an appeal based on Grounds b, c, d, e, f, g, i, m and o appearing after the words "Error of fact and law as follows" in the draft notice of appeal will not be a vexatious proceeding. The applicant should be granted leave to file a notice of appeal based on those grounds. 50 I consider that the remaining grounds, namely Grounds a, h (in its present form), j, k, l and n and the grounds under the headings "Apprehended bias" and "Miscarriage of Justice", have no reasonable prospect of success and are an abuse of process. The applicant will not be permitted to file a notice of appeal containing those grounds. 51 If the applicant is able to draft a ground properly reflecting his argument that the respondent did not have a sufficient interest in the matter to obtain an order of the width of the vexatious proceedings order that was made, such a ground should be allowed to proceed. 52 Rule 36.01(2)(c) of the Federal Court Rules requires that the notice of appeal must state briefly, but specifically, the grounds relied on in support of the appeal. In my opinion, at least the proposed Grounds b, e and g do not comply with this rule. Those grounds should be redrafted by the applicant so that they do comply. The other grounds are capable of being redrafted so they are more precise. Although the applicant does not have legal qualifications, he is a former PhD candidate, so he should be able to express his grounds of appeal more clearly, precisely and succinctly. It is unnecessary for the grounds to contain references to the parts of the primary judge's reasons referred to, but if the applicant wishes to include these references, they should be accurate. The draft grounds mistakenly refer to "page" numbers in the judgment when they should refer to paragraph numbers. The notice of appeal should be in accordance with Form 122. The parts of the standard form that do not apply should be deleted. The address of the Court should be inserted. 53 I propose to direct the applicant to file a draft notice of appeal confined to the grounds which I have indicated are not an abuse of process. The notice of appeal should also be redrafted so that it complies with r 36.01. I will consider the draft notice of appeal and, provided that it complies with these requirements, I will give the applicant leave to file a notice of appeal in terms of the draft. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah. Associate: Dated: 19 August 2015	6,818
federal_court_of_australia:fca/single/2002/2002fca0082	decision	commonwealth	federal_court_of_australia	text/html	2002-02-12 00:00:00	W308/01A v Minister for Immigration & Multicultural Affairs [2002] FCA 82	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2002/2002fca0082	2024-09-13T22:49:56.451463+10:00	FEDERAL COURT OF AUSTRALIA W308/01A v Minister for Immigration & Multicultural Affairs [2002] FCA 82 Migration Act 1958 (Cth) ss 36(2), 476(1)(e), 476(1)(g) Abebe v Commonwealth of Australia (1999) 197 CLR 510 cited W308/01A v MINISTER FOR IMMIGRATION & MULTICULTURAL AFFAIRS W 308 of 2001 RD NICHOLSON J 12 FEBRUARY 2002 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY 308 of 2001 BETWEEN: W308/01A APPLICANT AND: MINISTER FOR IMMIGRATION & MULTICULTURAL AFFAIRS RESPONDENT JUDGE: RD NICHOLSON J DATE OF ORDER: 12 FEBRUARY 2002 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the respondent'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 WESTERN AUSTRALIA DISTRICT REGISTRY 308 of 2001 BETWEEN: W308/01A APPLICANT AND: MINISTER FOR IMMIGRATION & MULTICULTURAL AFFAIRS RESPONDENT JUDGE: RD NICHOLSON J DATE: 12 FEBRUARY 2002 PLACE: PERTH REASONS FOR JUDGMENT 1 This is an application seeking an order for review of a decision made by the Refugee Review Tribunal ("the Tribunal") on 27 June 2001. The decision was to the effect that the Tribunal affirmed a decision of a delegate of the respondent not to grant to the applicant a protection visa (class XA). The application seeks to invoke aspects of the jurisdiction of the Court pursuant to s 476(1) of the Migration Act 1958 (Cth) ("the Act"). 2 The application was first set down for hearing on 13 December 2001. However, due to stress and anxiety then said to be experienced by the applicant (a factor which he claimed continued at this hearing of the application), the hearing was changed to 5 February 2002. Notice of that change was given to the applicant in writing by letter from the District Registrar dated 17 December 2001. 3 The applicant is a citizen of Iran. He arrived in Australia on 27 December 2000. He applied for the visa on 20 January 2001. Relevant provisions 4 Under s 36(2) of the Act a non-citizen in Australia is eligible for a protection visa if that person is someone: "… to whom Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol." The Refugees Convention is the Convention Relating to the Status of Refugees 1951 and the Refugees Protocol is the Protocol Relating to the Status of Refugees 1967. The expression "Convention" will be used to mean the Convention as amended by the Protocol. The same criterion appears in Sch 2 of the Migration Regulations in which item 785 and 866 both include the same criterion. 5 Article 1a(2) of the Convention defines a "refugee" to be any person who: "…owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside 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". 6 The reasons specified in Art 1a(2) are known as Convention reasons. The existence of such reasons threatening the life or freedom of a refugee in a territory to which it is proposed he or she be expelled or returned gives rise to a protection obligation prohibiting such expulsion or return as a consequence of Art 33 of the Convention. 7 The applicant's claim was that he had a well-founded fear of persecution if he is returned to Iran by reason of his political profile or imputed political profile. Applicant's claimed circumstances 8 When the Tribunal came to review the decision of the delegate it had in the evidence before it two accounts from the applicant in relation to which there were potentially significant inconsistencies. 9 The first account was given in the applicant's departmental interview on 29 December 2000. There he stated that his problems had begun in April 2000 when he went to visit the city of Khoramabad with friends. Significant facts in that account were the following: § Clashes had occurred in the city with students and a group supported by Sepah (Iranian Intelligence). § On departing from the city he and his friends were stopped at a checkpoint by Basiji (a paramilitary volunteer force often aligned with specific members of the leadership authorities acting as vigilantes). § He was detained because he did not have his ID with him and was questioned for hours. § He had with him books and magazines belonging to a political party. § Authorities concluded that he belonged to the political party and was in the city to attend the seminar and had been involved in the disturbance against the government. § The authorities took his name and details. § He attended the authorities for further questioning including providing details of himself and his family. The authorities disputed information he had given on a nephew and wanted further information on his brother, who had escaped to Pakistan. § The authorities obtained his notebooks. § His employer retrenched him due to political reasons. § He was continually being questioned. § So were his neighbours. § He could not obtain employment as a result and could not survive without employment. § In his view the authorities were expanding on the political issue and wanted to "get me". 10 In his application for a protection visa the applicant provided a written statement prepared on his behalf by migration agents. In that statement he gave the following additional facts in relation to the events previously set out, namely: § The book which was found in his briefcase at the Basiji checkpoint was by an author who was in jail for opposing the regime. § The authorities at that point also found a newspaper (against the regime). § They also found some documents belonging to his company. § He was detained and interrogated for two days. § On return to work he was interrogated by two people under the Sepah Pastarans (the owner of the construction company with which he was employed) Protection Section. He had to fill in a comprehensive questionnaire concerning his family background and education, past employment, information about close friends and whether he had relatives/friends who were political activists. § He was made to give an undertaking he would not pass on any information to anyone about the company. § One week later he was fired from his employment. § He lodged a complaint letter and the Department of Employment reinstated him but that was not accepted by his company. § He lodged a second complaint letter and was told that nothing could be done as his company refused to accept him back. His formal retrenchment occurred on 21 September. § As he was living in company accommodation he was obliged to move. § While he was packing his belongings, three people from the Information Section of the security forces came to search his room. They found some documents which linked the directors of the company with embezzlement and contained secrets about the policies of the organisation. The documents were a threat to the organisation. He was looked upon like a spy by the security forces. § He was detained for 20 days and interrogated 16 – 17 times. During the interrogations he was shown his undertaking and the questionnaire and told that although he had said no friends or relatives were involved in political activities his cousin was with the Mojahedin and was executed 10 – 13 years ago and his brother had fled to Pakistan 5 years ago. § They accused him of collecting all relevant financial information and embezzling documents to send them to outsiders and particularly to the cousin in Pakistan. § He was tortured by being hung from a ceiling fan with his hands tied. § After 20 days an apology was given to him for the mistreatment. He was told they had made a mistake and he was released. § On returning home, brothers of his girlfriend told her (who told the applicant's sister) that he had been released so that he could be followed and lead to more information. § They also said that the applicant was being used for bait and when he was not needed any more he would be executed. 11 On 20 June 2001 the Tribunal wrote to the applicant referring to the difference between the above two accounts, particularly in relation to the possession of documents exposing the corruption of his employers and his detention and torture for 20 days. He was invited to comment on the fact that it was open to the Tribunal to conclude this situation did not occur since he had not reported it at the first interview and the accounts differed significantly. He was also given two reports on the treatment of people involved in corruption which indicated, it was said, that he could have dealt with his corrupt employers by reporting their corruption. He was invited to comment on that information. 12 By letter dated 21 June 2001, consultants representing the applicant made submissions on his behalf. They said that the applicant having recently arrived in Australia after a long and stressful journey was tired and nervous at his first interview and did not feel he was in a safe environment and that it was only after obtaining legal advice that he disclosed his complete story. Secondly, the submission sought to reconcile his two statements in relation to the company documents by saying that these were the notebooks referred to in the first interview in which he believed he was to give a general overview. Thirdly, it was asserted that he had consistently claimed he was dismissed from his position for "political reasons". Tribunal's reasons 13 In its reasons for decision the Tribunal set out a number of matters which emerged from its interview with the applicant. The Tribunal noted the applicant agreed he had never belonged to any political organisation, although he had a relative who was executed for his membership in the Mojahadin. The applicant said it was correct he first faced problems with the authorities around August 2000 when he went to Khoramabad. He said he was aware that a book, he claimed to be co-written by Akbar Gangi, was written by the author who was arrested and sentenced to 10 years in prison in January 2001 and that he (the applicant) said he had not thought he would be arrested or checked even though he was aware the demonstration would be monitored by the Basiji who were known for their intrusiveness. The Tribunal considered it strange the applicant would borrow a banned book and take such a risk in those in those circumstances. It was put to the applicant that he made no mention of any detention and torture for 20 days following his dismissal and that was a significant matter which he failed to mention. The applicant said he was interviewed about two days after his arrival in Australia and he was not sure who he was talking to or whether or not he was in safe hands. 14 In regard to the applicant's claimed illegal departure from Iran, the delegate referred to country information from the Department of Foreign Affairs Trade which stated at worst, knowledge that an individual has sought political asylum would not result in much more than verbal harassment, unless the asylum seeker concerned had a high opposition political profile. 15 The Tribunal made the following findings: (1) The applicant was briefly questioned for a period of hours by the Basiji when he was unable to identify himself travelling out of Khoramabad, he was released after questioning and accordingly he was not of significant interest or concern to the authorities. The Tribunal accepted the Basiji were not interested in speaking to is witnesses and concluded this was because they were not sufficiently concerned about the applicant's profile and therefore felt no need to check his story. He would not have been released if the Basiji had any reservations in regard to his involvement in the demonstrations. (2) It was implausible that the applicant risk taking a copy of a banned book in circumstances where he knew the Basiji was an intrusive body and there were significant numbers of them in the area at the time. (3) If the Tribunal was wrong and the applicant did have the book and it was found by the Basiji, it was not of serious concern, since, by his account they released him which they would not have done given the nature and powers of this body if they believed he was of political concern. (4) In relation to his claimed dismissal as a consequence of investigations in regard to his political status and problems associated with two of his cousins, the Tribunal concluded that the authorities would have raised any concerns about his links with the Mojahadin, or any opposition group in the past 5 – 10 years, if they had any. The Tribunal did not accept the applicant's claims they became concerned in this regard in August or September 2000 because of his visit to Khoramabad without his identification card even if the book he claimed to have was in his possession. (5) In his application for a protection visa the applicant claimed he had voiced his opposition to the government at work since 1998. The Tribunal concluded the claims were general and without substance. (6) At the Tribunal hearing the applicant claimed he had spoken out against corrupt practices and his problems at work were not political. The applicant provided two documents to support his claim to have been dismissed. One of the documents indicated that he was transferred from one work place to another from 21 January 1999 and he made no claims that this was for any adverse reason. The second document lists the applicant as a "plaintiff" and the he was to attend the Office of the Employment and Social Affairs at 8.30am on 21 September 2000. He made no claims that this was for any adverse reason, the nature of the form led the Tribunal to find the applicant had been dismissed and had appealed against the dismissal and his case was heard on 21 September 2000. The Tribunal accepted that the applicant appealed against a dismissal he believed to be wrongful and the decision to dismiss him was upheld. However, it did not accept the reason for the dismissal was political since the applicant claimed the main problem he had at work was making complaints against the corrupt practices of his superiors. Furthermore, the Tribunal did not accept he would have appealed to the government if the grounds of his dismissal were political. (7) The Tribunal did not accept the applicant had been detained and tortured for 20 days for the reason he had documents which linked the directors of his company with corruption because the claim was the most serious harm he suffered and was not made when he was first interviewed and if the incident had occurred the applicant would not have failed to refer to it. (8) The Tribunal did not accept the reason for not disclosing this was because the applicant was tired and stressed. It noted the applicant provided full details of his work history, his addresses and family background and made claims which were critical of the Iranian regime and authorities at the interview shortly after his arrival. Accordingly, it was not satisfied the claimed stress and lack of trust in the authorities was the reason he failed to mention his alleged detention and torture. In this regard the applicant acknowledged and understood he was warned and put on notice at the beginning of the interview that any variation or inconsistency in his accounts could raise doubts about the reliability of what he had said. The Tribunal concluded the failure to make the claim was because it had been fabricated. (9) Even if the Tribunal accepted the applicant's claims to have argued with his employers about corruption for a period of time and that he was later found to have documents to show that corruption and he was unfairly dismissed, the Tribunal found that was not for a Convention reason. (10) The applicant was dismissed, but not for a Convention related reason. (11) Failed asylum seekers can return to Iran where they may face questioning and possibly verbal harassment. The consequences of illegal departure, without more, (that is with no political profile) is a fine. (12) The applicant did not face a "real chance" of persecution and any fears that he may hold in this regard were not well-founded. Grounds of review 16 At one stage it seemed the applicant may retain the services of pro bono counsel. However, counsel withdrew, apparently without notice to the applicant. Experience in the Registry is that other counsel, exhausted by the demands of pro bono appearances generally in this jurisdiction, are not presently available. Therefore the applicant appeared unrepresented. 17 In his application for review he relied on grounds commonly used from the place where he is detained and based on s 476(1)(g) (no evidence) and s 476(1)(e) (error of law and interpretation and application). However, being unskilled in law he was entirely unable to, nor could be expected to, support the grounds by way of legal argument. Applicant's submissions 18 The principal thrust of the applicant's submissions was that his campaign against corruption was a political activity. He said this was the case because corruption was so wide-spread among the leadership of his country that any action against corruption must be taken as a political activity. 19 The other principal thrust of the applicant's submissions was that the Tribunal, approaching the matter negatively, had ignored the significance of matters which he had put to it. In effect, his submissions were inviting the Court to remake findings of fact made by the Tribunal by giving a different weight to the evidence which had been before the Tribunal. Reasoning 20 It is not surprising the applicant, as a person without legal skills, would not appreciate that this Court does not have the jurisdiction which would enable it to remake findings fact made by the Tribunal. Its jurisdiction is limited to examining the reasons of the Tribunal to find if there are any errors of law within the permissible heads set out in s 476(1) of the Act. Importantly, the applicant must appreciate that this Court cannot go behind adverse findings of credibility made by the Tribunal save in accordance with the provisions of s 476(1). 21 Furthermore, in response to matters submitted by the applicant in reply, it is not the case that the Tribunal can be said to have ignored or not been interested in his claims concerning corruption. This is apparent from an examination of the reasons of the Tribunal which include the full text of his written statement of 20 January 2001 concerning which the Tribunal wrote to him. 22 Furthermore, the applicant in common with other applicants had, as the Tribunal's reasons record, been put on notice at the beginning of his first interview that any variation or inconsistency in his account could raise doubts about the reliability of what he had said, a warning which he acknowledged and understood. The Tribunal was entitled to conclude on the material before it that if the 20 day detention had occurred, it would have been of the category of the most significant harm he had suffered in Iran so that he could be expected to have mentioned it. 23 In relation to his claims that his case against corrupt practices was in the character of political activity, the Tribunal recorded that he had provided two documents to support his claims but neither of these supported a claim that his problems at work were political. There was therefore evidence upon which the Tribunal could reach its decision that it did not accept the reason for his dismissal was political. 24 There is nothing in the Tribunal's decision to suggest it made an error in relation to the interpretation of the Refugees Convention as amended by the Refugees Protocol of 1967 or incorrectly applied the Convention. The essential basis for the Tribunal's decision was it simply did not believe the applicant's alleged mistreatment at the hands of the authorities. The Tribunal gave reasons why it disbelieved the applicant. Whether or not the Court agrees with those reasons does not give rise to an error of law or jurisdictional error. 25 There was evidence and material justifying the making of the decision that the applicant did not have a well-founded fear of persecution by reason of his political opinion, real or imputed, if he returned to Iran within the reasonably foreseeable future. The Tribunal's conclusion that it was not satisfied the applicant was a person to whom Australia has protection obligations under the Refugees Convention was open to it on the material before it. 26 Indeed, the factual findings of the Tribunal made it inevitable the applicant's claim of having a well-founded fear of persecution, on the basis of imputed political opinion and because of his claimed fleeing from authorities, would fail: compare Abebe v Commonwealth of Australia (1999) 197 CLR 510, per Gleeson CJ and McHugh J at [84] – [86]. 27 There was not reviewable error within the meaning of S 476(1) of the Act. Conclusion 28 For these reasons I consider the application must be dismissed. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson . Associate: Dated: 12 February 2002 Counsel for the Applicant: The applicant represented himself Counsel for the Respondent: Mr L Tsaknis Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 5 February 2002 Date of Judgment: 12 February 2002	4,567
federal_court_of_australia:fca/single/1999/1999fca0950	decision	commonwealth	federal_court_of_australia	text/html	1999-06-28 00:00:00	Australian Competition & Consumer Commission v MHG Plastic Industries Pty Ltd [1999] FCA 950	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca0950	2024-09-13T22:49:57.629057+10:00	FEDERAL COURT OF AUSTRALIA Australian Competition & Consumer Commission v MHG Plastic Industries Pty Ltd [1999] FCA 950 TRADE PRACTICES – consumer protection – non-compliance with consumer product safety standard – appropriate relief – declaration - injunctions – relevance of whether respondent will continue to supply the goods if not restrained – policy of Pt V Trade Practices Act and associated remedial provisions – whether risk to members of public in using non-complying goods – relevance of past industry testing practice to question of relief – relevance of claim of selective enforcement to question of relief – relevance of asserted hardship to respondent if injunction granted – whether balancing exercise between public safety and asserted hardship permitted when determining appropriate relief Trade Practices Act 1974 (Cth) s65C, s80(1), s80(4) and s80(5) Commodore Business Machines Pty Limited v Trade Practices Commission (1990) 92 ALR 563, referred to. Campomar Sociedad Limitada v Nike International Limited (1998) 156 ALR 316, referred to. AUSTRALIAN COMPETITION & CONSUMER COMMISSION v MHG PLASTIC INDUSTRIES PTY LTD N 418 OF 1999 EMMETT J 28 JUNE 1999 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N418 OF 1999 BETWEEN: AUSTRALIAN COMPETITION & CONSUMER COMMISSION Applicant AND: MHG PLASTIC INDUSTRIES PTY LIMITED Respondent JUDGE: EMMETT J DATE OF ORDER: 28 JUNE 1999 WHERE MADE: SYDNEY THE COURT DECLARES THAT: 1. Motor cycle helmets model "EXR", "MXR" and "RXR" manufactured by the respondent since 1 July 1996 do not comply with Australian Standard AS1698-1988 in that they do not satisfy the performance requirements specified in clauses 6.1 and 6.3 of that Australian Standard. 2. The respondent, by supplying to wholesalers and other purchasers motor cycle helmets models "EXR", "MXR" and "RXR" manufactured by the respondent since 1 July 1996, has in trade or commerce supplied goods that were intended to be used, or were of a kind likely to be used, by consumers and which did not comply with the prescribed consumer product safety standard relating to the goods, namely Australian Standard AS1698-1988, contrary to s65C(1) of the Trade Practices Act 1974. THE COURT ORDERS THAT: 3. The respondent, by its servants or agents or otherwise howsoever, be restrained from supplying to wholesalers and other purchasers motor cycle helmets models "EXR", "MXR" or "RXR" manufactured by the respondents since 1 July 1996. 4. The respondent, at its own expense, establish a 1800 telephone number within 14 days of the date of these orders and cause that telephone number to be answered at all times until 31 December 1999. 5. The respondent, at its own expense, cause to be published in a major daily newspaper in each State or Territory and in each of the magazines "Two Wheels", "Live to Ride" and "Performance Streetbike" an advertisement in the form of Annexure A hereto and further that the respondent take all reasonable steps to ensure that each advertisement be: (i) of a size not less than three columns wide by 20cm deep; (ii) in text which is in a type size not less than 12 point; (iii) within the first six pages of the newspaper or magazine; (iv) published in newspapers once per week over three consecutive weeks with the first advertisement appearing in the first issue appearing within 14 days of the making of these Orders in which advertising space is available; and (v) published in magazines once per issue over two consecutive issues with the first advertisement appearing in the first issue appearing within two months of the making of these Orders in which advertising space is available. 6. The respondent pay to any person who: (i) telephones the 1800 number established by the respondent in accordance with Order 3 on or before 31 December 1999; and (ii) quotes the serial number of a model "EXR", "MXR" or "RXR" helmet having a date of manufacture after 1 July 1996; an amount equal to the greater of: (iii) the purchase price of that helmet where the person provides to the respondent proof of purchase; or (iv) the respondent's recommended retail price at the date of manufacture. 7. The respondent use its best endeavours diligently to obtain the helmet in question from any person who: (i) telephones the 1800 number established by the respondent in accordance with Order 3 on or before 31 December 1999; (ii) quotes the serial number of a model "EXR", "MXR" or "RXR" helmet having a date of manufacture after 1 July 1996. 8. The respondent use its best endeavours to purchase or otherwise obtain from all wholesalers or retailers in Australia all model "EXR", "MXR" or "RXR" helmets held by them and manufactured by the respondent after 1 July 1996. 9. The seal of the Court be affixed to the reasons for judgment dated 15 June 1999. 10. The respondent pay the applicant's costs of the proceedings. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. His Honour has ordered that Orders 5(iv) and (v), 6 and 7 above be stayed up to and including 13 July 1999 pending further argument on that day as to final orders. "Annexure A" (Eldorado Logo) Product Safety Recall MHG Plastic Industries Pty Limited Motor Cycle Helmets Models "EXR", "MXR" AND "RXR" Important Notice to Purchasers Of MHG Eldorado Motor Cycle Helmets Models "EXR", "MXR" AND "RXR" The Federal Court, on 15 June 1999, found that the above model helmets did not comply with the prescribed consumer safety standard, namely Australian Standard AS1698-1988, which is contrary to section 65C(1) of the Trade Practices Act, 1974. These model helmets do not comply with AS1698-1988 in that they do not satisfy the performance requirements specified in clauses 6.1 and 6.3 of the Standard. This relates to penetration testing of the helmets. The purpose of penetration testing is to measure the ability of a motor cycle helmet to resist a striker passing through the interior surface of the helmet. The failure of the helmets to comply with AS1698-1988 so far as the penetration testing performance requirements are concerned means that there is a significant risk of head injuries to motor cyclists in the event of an accident. MHG have been directed by the Federal Court to recall all Eldorado model "EXR", "MXR" and "RXR" helmets manufactured since 1 July 1996 and any purchaser of such a helmet should not now continue to use that helmet and if any purchaser wishes to obtain a refund they may do so by calling MHG on Freecall number 1 800 to arrange a refund and collection of the helmet. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N418 OF 1999 BETWEEN: AUSTRALIAN COMPETITION & CONSUMER COMMISSION Applicant AND: MHG PLASTIC INDUSTRIES PTY LIMITED Respondent JUDGE: EMMETT J DATE: 28 JUNE 1999 PLACE: SYDNEY EX TEMPORE REASONS FOR JUDGMENT (No.2) 1 On 15 June 1999, I delivered my reasons for concluding that each of the models of protective helmets for motorcycle riders marketed by MHG does not satisfy the performance requirements specified in clauses 6.1 and 6.3 of the Standard, as I defined that term in my reasons. As I indicated on 15 June 1999, I had not yet heard argument upon the relief that might be appropriate in the light of the conclusions that I then reached. Accordingly, I indicated to the parties that I would publish my findings on the question of compliance with the Standard and then give the parties the opportunity of addressing on the question of relief in the light of my findings. I have now heard the parties' submissions on the question of relief. 2 The Commission's case is based on section 65C of the Trade Practices Act 1974 (Cth) ("the Act"). Section 65C, which appears in Part V of the Act, relevantly provides as follows: "(1) A corporation shall not, in trade or commerce, supply goods that are intended to be used, or are of a kind likely to be used, by a consumer if the goods are of a kind: (a) in respect of which there is a prescribed consumer product safety standard and which do not comply with that standard." 3 The findings which I have made indicate that there has been a contravention of section 65C, and that there is threatened further contravention in the event that there is no injunction restraining the respondent from supplying the models of helmet in question. 4 Section 80(1) of the Act relevantly provides as follows: "Where, on the application of the Commission […], the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute: (a) a contravention of a provision of Part V………. …………. the Court may grant an injunction in such terms as the Court determines to be appropriate." 5 Sections 80(4) and (5) relevantly provide as follows: "(4) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised: a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; ………….. (5) The power of the Court to grant an injunction requiring a person to do an act or thing may be exercised: a) whether or not it appears to the court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing. ………….." 6 In Commodore Business Machines Pty Limited v Trade Practices Commission (1990) 92 ALR 563 at 574-5, the Full Court said, inter alia, as follows: "A final injunction should bear on the case alleged and proved against the defendant, and should indicate that conduct which is enjoined or commanded to be performed, so that the defendant knows what is expected of him as a matter of fact. …………. [I]n some cases there is a risk that an injunction drawn too precisely may encourage evasion of the spirit but not the letter, while a wider form of injunction will not place the defendant in any real position of doubt as to what is expected of him." 7 In Campomar Sociedad Limitada v Nike International Ltd (1998) 156 ALR 316, Sackville J, a member of the Full Court that decided that case, said as follows (at 340): "Some judicial pronouncements suggest a more flexible link between the case proved and the form of injunctive relief. In ICI v TPC, Lockhart J (with whom Gummow and French JJ relevantly agreed) characterised section 80 of the TP Act as, "essentially a public interest provision". The section departed from the traditional basis for the grant of injunctions because an applicant need not establish a proprietary right or interest to gain standing, and because subss (4) and (5) empower the court to grant injunctive relief, notwithstanding that the defendant has not previously engaged in the prohibited conduct or does not intend to engage in it again. Lockhart J summarised the effect of subss (4) and (5) as follows: In my opinion, subss (4) and (5) are designed to ensure that once the condition precedent to the exercise of injunctive relief has been satisfied (ie contraventions or proposed contraventions of Part IV or Part V of the Act) the court should be given the widest possible injunctive powers, devoid of traditional constraints, though the power must be exercised judicially and sensibly. Notwithstanding the provision of subss (4) and (5), which permit an injunction to be granted whether or not there appears to be a likelihood of future contravention, the likelihood of future contravention by the defendant is regarded in the judgments of the court as a relevant factor." 8 As I have indicated, I have found that there has been a contravention and that, if not restrained, there is no reason to assume that MHG would not continue to supply the helmets which it has manufactured to date in contravention of the Act. 9 The Commission has promulgated short minutes of the orders which it contends are appropriate in the light of the findings which I have made, and in the light of the principles which I have briefly summarised above. MHG not make any attack on the form of the short minutes of order, but rather disputes, as a matter of principle, the Commission's entitlement to those orders. There are four bases upon which MHG seeks to resist the orders sought by the Commission. 10 The first concerns the question of public safety. It is clear, in my view, that the object of section 65C, coupled with the provisions of section 80 of the Act, is to ensure the protection of the public. The policy, which is to be found in Part V generally and in section 65C in particular, is the protection of members of the community. The Parliament has concluded that an appropriate way of doing that is, in effect, to make compliance with certain standards compulsory. The primary object, therefore, of a court, after it has been established that there is a possible contravention of section 65C, is the protection of the members of the community who might use products in respect of which standards have been prescribed. 11 The Commission relied on the evidence of Mr Andrew Stuart McIntosh, who is a lecturer in Biomechanics and Ergonomics at the School of Safety Science at the University of New South Wales. Mr McIntosh was asked to assume, in relation to the three models of motor cycle helmets in question, that it is very likely that the helmets will fail at test site G. Mr McIntosh said the following in his written report which was in evidence: "Helmet impacts occur most frequently to the front of the helmet, followed by the rear and sides and least frequently to the top of the helmet." He then cited studies which supported that conclusion, and said: "These results demonstrate that impacts at Crashlab sites E and F are infrequent and that impacts at Crashlab site G are more consistent with real accidents." Mr McIntosh then went on to say: "If it is assumed that it is very likely that MHG's helmets will fail the resistance to penetration test at Crashlab site G, then this failure is of concern to safety given that this region receives a high proportion of impacts. Although the risk of injury is reduced due to the infrequent occurrence of impacts with a sharp object, impacts do occur against angled objects and there is a higher risk of injury associated with these impacts then against impacts against a flat surface. The penetration test is an indirect measure of the helmet's performance to resist these types of impacts. Finally, if it is recognised that head injuries causes by high localised loads with or without penetration are severe, then there is a considerable risk of injury which would be less if the helmet conformed to the Standard." 12 The report contained the following summary of conclusions: "1. High localised forces have the potential to cause severe head injuries. These forces can be modified through helmet design. Some of the associated helmet performance can be assessed using the resistance to penetration test. 2. Impact energy attenuation is an important helmet function with relationship to head injury. 3. Incidences of impacts resulting in helmet penetration are infrequent but are more likely to occur in off-road environments. 4. Failure ofMHG's helmets in the resistance to penetration test at site G presents a significant injury risk. Even though the likelihood of impacts of this nature is low, the likely injuries are severe." 13 One of the studies relied on by Mr McIntosh was the study of helmet damage and rider head/neck injuries for crash-involved motor cyclists by B. Dowdell, G.J. Long, J. Ward and M. Griffiths ("the Dowdell Study"). It is significant that that is not the only material relied upon by Mr McIntosh. Senior counsel for the respondent drew attention to the fact that in the Dowdell Study there was no evidence of penetration impacts other than those that were associated with extreme helmet damage. I was invited to conclude, therefore, that the evidence of that study did not support a conclusion that a helmet which complied with the Standard, so far as the penetration test is concerned, was likely to be of any advantage to a wearer in the event of an accident which resulted in damage intended to be resisted by the helmet which would satisfy the tests in the Standard. 14 While there is much to be said for MHG's submission concerning the material contained in the Dowdell Study, MHG is faced with the evidence of Mr McIntosh whose curriculum vitae indicates that he has had extensive experience in relation to the question of head injury resulting from motor vehicle accidents. There was no cross examination of Mr McIntosh on the conclusions to which he deposed in his affidavit. In those circumstances, I am not prepared to discount the conclusions which he reached concerning the risk of injury to a motor cyclist who wears one of the respondent's helmets in circumstances where, as I have said, the helmet does not satisfy the penetration test specified by the Standard. 15 I am satisfied on the evidence before me that there is a significant risk to members of the public in wearing protective helmets which do not satisfy the penetration test specified in the Standard and that that risk could be significantly reduced if the helmet did, in fact, comply with that test. 16 Secondly, reliance was placed by MHG on past practices (about which I said something in my earlier reasons). For reasons which I do not think have been satisfactorily explained, there appears to have been no practice within Crashlab prior to March of this year, of conducting penetration tests on helmets otherwise than at sites E and F. Further, MHG, in its own testing, which has been approved as I have indicated in my earlier reasons, has been accustomed to testing only at sites E and F. 17 However, there was evidence before me to indicate that industry practice should have required testing at other than those two sites. The QAS Technical Schedule, current as at the last quarter of 1994, contained the following paragraph: "5.5 Testing. Tests shall be conducted in accordance with the following clauses of AS1698-1988. Impact energy intenuation Clause 6.2 Penetration resistance Clause 6.3 Retention system strength Clause 6.4 Marking Clause 8 Instructions for use and care Clause 9 Laboratories that routinely test the same or similar models from one manufacturer will vary the test sites in order to test a variety of locations. Accordingly, manufacturers should ensure through their design verification activities that all possible test sites above the test line are capable of meeting the required performance level." 18 Mr Gibson, to whom I referred in my earlier reasons, said in one of his reports as follows: "It is interesting to note in the Technical Schedule for AS1698 that a requirement is made for Batch Testing Section 5.5, that "Laboratories that routinely test the same or similar models from the one manufacturer should vary the test sites in order to test a variety of locations." This accords with standard laboratory practice." In oral examination, Mr Gibson also said that he had been connected with several laboratories over the years and that the ones that he was referring to in that paragraph were Biokinetics and Associates Ltd in Canada and Imtest in New Zealand, both of which he said regularly test in a variety of locations on the helmet. 19 While I have a degree of sympathy for MHG in the practices which it has adopted in the past, I do not accept on the evidence before me that it was invariable in the industry to test only at sites E and F. Indeed, the material before me suggests that good practice (and commonsense also suggests the same) would require testing at various sites of the helmet. That, of course, is the construction of the Standard which I have said in my earlier reasons is the correct construction. In the circumstances, I do not consider that any past practice is a basis for resisting the orders sought by the Commission. 20 Thirdly, it was suggested that there has been some selective enforcement of section 65C of the Act. In reasons which I have already given this morning for rejecting certain affidavit evidence, I do not consider that to be material. Even if it be the case that there was selective enforcement, that may be a ground for reviewing the conduct of the enforcement authority. As a member of the community, one would be very much concerned if there was evidence of non-compliance with section 65C and that non-compliance was not investigated. Be that as it may, I do not consider that it is an answer to the Commission's claim to say, as MHG does, that there is no evidence of any testing of other manufacturers or of proceedings in relation to non-compliance by other manufacturers. 21 In this context, and also possibly in the context of the first basis for resistance, MHG referred to what it said was a small proportion of the market to which MHG is entitled. That appears to me to be irrelevant. It does not matter whether a supplier supplies a minuscule part of the market or a very substantial part of the market. Section 65C should be equally applicable to all participants in the market irrespective of their size and irrespective of whether, for whatever reason, the regulating authority chooses to enforce the law against all participants. 22 The final matter relied on by MHG was asserted hardship. I would accept that, in determining what relief is appropriate in a case such as this, the court must engage in a balancing exercise. That is to say, the court must balance the interest of the community against the cost to a respondent in complying with appropriate orders. However, where the item in the balance in favour of the community concerns safety in the context of what could be very severe head injury, it would need to be very, very significant hardship to outweigh that interest of the community. 23 Mr Hadanich, in oral evidence, said that in January of this year, a market survey indicated that MHG's market share is approximately 5 to 5.2 per cent. He also said that since the Commission had approached MHG, MHG had taken action to quarantine all stock and had ceased production. Production was ceased at the beginning of March and MHG subsequently quarantined all stock at both dealers and stock that had been distributed. Mr Hadanich said that the value of that stock was in the vicinity of half a million dollars and that, if it cannot be sold, it would "certainly cause an enormous financial burden to the company." He also said that it had already caused a severe amount of hardship with lay-offs at work. However, no quantification was offered of that financial burden and, in cross-examination, Mr Hadanich said that, so far as sales turnover is concerned, only about 10 per cent of the output of MHG is taken up with the production of motor bike helmets. 24 While I am prepared to accept that, in absolute terms, the cost of compliance with the short minutes proposed by the Commission would be quite significant, I have no way of knowing, in relative terms, what sort of an impact the cost of compliance would have on MHG overall. Even so, where the safety of the community is at risk, I am not satisfied that mere financial burden would be sufficient to outweigh the interest of the community in the light of the findings which I make, based on acceptance of Mr McIntosh's evidence. 25 In all the circumstances, I consider that it is appropriate to make orders in accordance with the short minutes promulgated by the Commission. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 28 June 1999 Counsel for the Applicant: S.J. Gageler Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: G.A. Flick SC Solicitor for the Respondent: Freehill Hollingdale & Page Date of Hearing: 28 June 1999 Date of Judgment: 28 June 1999	5,357
federal_court_of_australia:fca/single/2020/2020fca0177	decision	commonwealth	federal_court_of_australia	text/html	2020-02-21 00:00:00	Sayer-Jones v Juju Bean Investments Pty Ltd [2020] FCA 177	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2020/2020fca0177	2024-09-13T22:49:58.036181+10:00	FEDERAL COURT OF AUSTRALIA Sayer-Jones v Juju Bean Investments Pty Ltd [2020] FCA 177 File number: NSD 1594 of 2019 Judge: BROMWICH J Date of judgment: 21 February 2020 Catchwords: BANKRUPTCY – application to set aside a bankruptcy notice – whether the issue of a bankruptcy notice was sought for a collateral purpose or was otherwise an abuse of process – whether irregularities in a bankruptcy notice caused substantial injustice – whether there were circumstances that would warrant going behind the judgment/order – application dismissed. Legislation: Bankruptcy Act 1966 (Cth) s 40(1)(g), s 41, s 306 Bankruptcy Regulations 1996 (Cth) reg 16.01 Civil Procedure Act 2005 (NSW) s 101 Civil Procedure Rules 2005 (NSW) r 36.7 Cases cited: Adams v Lambert [2006] HCA 10; 228 CLR 409 Australian Securities and Investments Commission v Forge [2003] FCAFC 274; 133 FCR 487 Autron Pty Ltd v Benk [2011] FCAFC 93; 195 FCR 404 Batterham v Nauer, in the matter of Peter James Batterham [2019] FCA 485 Corney v Brien (1951) 84 CLR 343 Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144; 225 FCR 458 Dunkerly v Comcare [2019] FCA 1002 Dunkerly v Comcare [2020] FCAFC 8 Fuller v Alford [2017] FCA 782; 252 FCR 168 Mastronardo v Commonwealth Bank of Australia Limited [2019] FCAFC 127 Matheson v Scottish Pacific Business Finance Pty Ltd [2005] FCA 670 Maxwell-Smith v S & E Hall Pty Ltd, in the matter of Maxwell-Smith [2006] FCA 825; 233 ALR 81 Nand v Fuji Xerox Australia Pty Ltd [2015] FCAFC 51 Date of hearing: 11 February 2020 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 54 Counsel for the Applicant: The Applicant appeared in person on his own behalf Counsel for the Respondent: Mr R Perla Solicitor for the Respondent: Mitry Lawyers ORDERS NSD 1594 of 2019 BETWEEN: ROBERT LYNDON SAYER-JONES Applicant AND: JUJU BEAN INVESTMENTS PTY LTD Respondent JUDGE: BROMWICH J DATE OF ORDER: 21 FEBRUARY 2020 THE COURT ORDERS THAT: 1. The originating application be dismissed. 2. The applicant 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 BROMWICH J: Introduction 1 By an originating application filed on 2 October 2019, the applicant, Mr Robert Lyndon Sayer-Jones, seeks to have a bankruptcy notice set aside. The creditor respondent, Juju Bean Investments Pty Ltd, obtained the issue of the bankruptcy notice based upon a "judgment/order" of the Local Court of New South Wales. That judgment/order required Mr Sayer-Jones to pay Juju Bean $55,391.14, made up of the amount claimed of $49,997.18 plus pre-judgment interest of $5,393.96. The bankruptcy notice additionally claims post-judgment interest of $1,247.44, giving rise to a total debt of $56,638.58. 2 The bankruptcy notice was issued by the Official Receiver on 10 September 2019, numbered BN 246234. It required payment within 21 days after service. Juju Bean's case is that the bankruptcy notice was served by way of an email to Mr Sayer-Jones' email address sent on 11 September 2019, to which was attached both the bankruptcy notice itself and the Local Court judgment/order. The time for compliance with the bankruptcy notice has been extended three times, on 2 October 2019 (the last day for compliance if the service date was in fact 11 September 2019), on 22 October 2019 and on 3 December 2019, most recently until 21 February 2020. 3 There is no evidence before the Court of any stay of the Local Court judgment/order application to appeal from, or otherwise set aside, the Local Court judgment/order. Mr Sayer-Jones asserted during the course of the hearing of the application that he was unable to take any step to challenge the Local Court judgment/order because, despite being present when the oral judgment was delivered, he was not able to obtain a transcript before the time to appeal had elapsed. Legal principles 4 Section 40(1)(g) of the Bankruptcy Act 1966 (Cth) provides that a debtor commits an act of bankruptcy in the following circumstances as relevant in this case: [I]f a creditor who has obtained against the debtor a final judgment or final order, being a judgment or order the execution of which has not been stayed, has served on the debtor in Australia or, by leave of the Court, elsewhere, a bankruptcy notice under this Act and the debtor does not: (i) where the notice was served in Australia—within the time specified in the notice; or (ii) where the notice was served elsewhere—within the time fixed for the purpose by the order giving leave to effect the service; comply with the requirements of the notice or satisfy the Court that he or she has a counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt or sum payable under the final order, as the case may be, being a counter-claim, set-off or cross demand that he or she could not have set up in the action or proceeding in which the judgment or order was obtained … 5 Regulation 16.01 of the Bankruptcy Regulations 1996 (Cth) make provision for the service of documents for the purposes of the Bankruptcy Act. In particular: (1) reg 16.01(1)(e) provides: Unless the contrary intention appears, where a document is required or permitted by the Act or these Regulations to be given or sent to, or served on, a person (other than a person mentioned in regulation 16.02), the document may be: … (e) sent by facsimile transmission or another mode of electronic transmission: (i) to a facility maintained by the person for receipt of electronically transmitted documents; or (ii) in such a manner (for example, by electronic mail) that the document should, in the ordinary course of events, be received by the person. (2) reg 16.01(2)(b) provides: A document given or sent to, or served on, a person in accordance with subregulation (1) is taken, in the absence of proof to the contrary, to have been received by, or served on, the person: … (b) in the case of service in accordance with paragraph (1)(c), (d) or (e)—when the document is left, delivered or transmitted, as the case requires. 6 A bankruptcy notice that is issued and served is required to be in the prescribed form, which includes attaching a final judgment or order when that is what is relied upon for its issue: see Bankruptcy Act s 41(2); Curtis v Singtel Optus Pty Ltd [2014] FCAFC 144; 225 FCR 458 at [29]. In Curtis, the Full Court made it clear that this requirement was satisfied, and service was satisfied in accordance with reg 16.01, the bankruptcy notice and the final judgment or order were attached as separate pdf documents to an email sent to the debtor: see [29]-[53], especially [51]. Mr Sayer-Jones submits that Curtis was wrongly decided, accepting that I am bound by the Full Court's decision. I am fortified in the conclusion I had independently reached that Curtis is plainly correct by a recent Full Court decision to that effect: see Mastronardo v Commonwealth Bank of Australia Limited [2019] FCAFC 127 at [16]-[20]; see also [8]-[15]. 7 Section 306(1) of the Bankruptcy Act 1966 (Cth) provides that a formal defect is not to invalidate bankruptcy proceedings commenced by serving an otherwise valid bankruptcy notice: Proceedings under this Act are not invalidated by a formal defect or an irregularity, unless the court before which the objection on that ground is made is of opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by an order of that court. 8 Following Adams v Lambert [2006] HCA 10; 228 CLR 409, the modern focus is on substance rather than form in the application of s 306 of the Bankruptcy Act: see Adams v Lambert at [34]; see also [5]. Following Adams v Lambert, especially at [27], when an error in a bankruptcy notice is proven, the issue is whether, objectively determined, a debtor could be misled as to what it is necessary to do in order to comply with the requirements of the bankruptcy notice. If a debtor could be so misled, such an error is a defect that s 306 cannot cure. For example, in Adams v Lambert, there was no doubt that the bankruptcy notice was directing the debtor to pay a sum which included post-judgment interest: [19]-[20]. The fact that a mistake had been made in referring to the wrong provision of the District Court Act 1973 (NSW) was held to be covered by s 306: [30]-[31]. Thus the bankruptcy notice was misleading in form but not in substance, because it was clear what the debtor was required to do. 9 Mr Sayer-Jones submits that Adams v Lambert is wrongly decided, while again accepting that I am bound by that decision. I have no reason to think that the High Court is remotely likely to entertain reopening that decision, for the very simple reason that it makes perfect sense. 10 There is an undoubted power reposed in this Court to go behind a judgment or order upon which a bankruptcy notice is based if a proper basis for doing so has been established. That is what ultimately happened in Corney v Brien (1951) 84 CLR 343, where the High Court found that a default judgment had been obtained upon the basis of an agreement that had never existed, which in turn was the basis for the issue of the bankruptcy notice. In a separate judgment, Fullagar J observed (at 356-7) that: if the judgment in question followed a full investigation at a trial on which both parties appeared, [a bankruptcy court] will not reopen the matter unless a prima-facie case of fraud or collusion or miscarriage of justice is made out. 11 More recently, Griffiths J refused to go behind a judgment debt upon which a bankruptcy notice was based: Dunkerly v Comcare [2019] FCA 1002. In reaching that conclusion, his Honour helpfully summarised the applicable principles as follows (at [68]): I turn now to summarise the principles relating to the circumstances in which the Court may go behind a judgment debt. It is generally accepted that a Court will accept a judgment as being conclusive of the existence of a debt, however, the Court has a discretion in an appropriate case to go behind a judgment debt to examine whether there is in truth consideration for it. The relevant principles may be summarised as follows: (a) The Court has the power in an appropriate case to go behind a judgment in an application to set aside a bankruptcy notice, but that power "is not readily exercised if there has been a substantive hearing of the matter on its merits by the court in which the judgment was granted" (see Xu v Wan Ze Property Development (Aust) Pty Ltd (in liq) [2014] FCA 461; 315 ALR 523 at [55] (Xu) per Robertson J). (b) In determining whether to go behind a judgment on which a bankruptcy notice is based, the Court will take into account similar considerations to those which apply when determining whether or not to go behind a judgment on the hearing of a creditor's petition (see Xu at [55], [118]-[120] and [131] per Robertson J). (c) Although the Court has the power in an appropriate case to go behind a judgment on which a bankruptcy notice is based, the Court does not have the power to set aside the judgment itself and it is also important to bear in mind that the Court is not hearing an appeal from the judgment on which a bankruptcy notice is based (Xu at [57]). (d) A judgment debt is usually expected to provide the most reliable statement of debt humanly attainable because the ordinary processes of the adversarial system provide a practical guarantee of reliability. That is why there usually is no occasion in a bankruptcy proceeding to investigate whether the judgment debt is a true reflection of the underlying debt (Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28; 261 CLR 132 (Ramsay) at [68] per Kiefel CJ, Keane and Nettle JJ). (e) Ms Dunkerley must establish special circumstances for the Court to go behind the underlying judgment debt (Petrie v Redmond [1943] St R Qd 71 at 75-76 per Latham CJ, with whom Rich and McTiernan JJ agreed and see also Ramsay at [69] per Kiefel CJ, Keane and Nettle JJ). As a matter of practical experience, special circumstances of this nature are usually only when there has been a consent judgment, default judgment or some other circumstance which means the judgment debtor was unable to present his or her case on its merits in the litigation leading to the judgment debt (Ramsay at [70] per Kiefel CJ, Keane and Nettle JJ). (f) The Court is reluctant to go behind a judgment once it has been the subject of adjudication by a Court, even if there were problems relating to such matters as the debtor's representation or some other unusual feature. It is accepted, however, that the Court can inquire into the validity of a judgment where there is evidence that it has, for example, been obtained by fraud, collusion or a miscarriage of justice, but the debtor carries the onus of establishing that the fraud was "directly material to the judgment" (see Kirk v Ashdown [1999] FCA 522) and Emerson v Wreckair Pty Ltd (1992) 33 FCR 581 (Emerson) at 588). There may be other substantial reasons for going behind a judgment debt, however, in the absence of some evidence of fraud, collusion or miscarriage of justice, a court sitting in bankruptcy will rarely have substantial reasons to investigate whether the judgment debt was truly owed (Ramsay at [111] per Edelman J). (g) It is insufficient to set aside a bankruptcy notice merely because the debtor establishes that a judgment is irregular because, for example, the pleadings or proof that were offered were inadequate to support the judgment or the judgment is for the wrong amount (see, for example, Re Skaff; Ex parte Farrow Mortgage Services Pty Ltd (1993) 41 FCR 331 per Drummond J and Re Bedford; Ex parte H E Sleigh (Queensland) Pty Ltd (1967) 9 FLR 497 per Gibbs J). (h) Absent some good reason for doing so, a Court exercising bankruptcy jurisdiction should avoid embarking on a course which amounts to a re-trial of the issues that have been determined by another Court after a contested hearing. This is, particularly so where that other Court's determination has been the subject of an appeal because the appeal is the appropriate form in which to review the correctness of the judgment (Emerson at 588). (i) A court exercising jurisdiction in a bankruptcy proceeding should not re-litigate on the same evidence, a dispute which has already been fully litigated in adversarial proceedings (Doggett v Commonwealth Bank of Australia [2019] FCAFC 19 (Doggett) at [49] per Kerr, Davies and Thawley). 12 In a decision handed down the day after the hearing of this application, the Full Court in dismissing the debtor's appeal in Dunkerly, said (Dunkerly v Comcare [2020] FCAFC 8 at [52]): The primary judge considered the relevant principles and applied them. In so doing, he did not fall into appealable error. Indeed, we respectfully agree with his Honour that the appellant did not provide any reason to warrant the Court going behind the costs orders and judgments underlying the bankruptcy notice. Grounds relied upon 13 Mr Sayer-Jones raises the following 16 grounds for setting aside the bankruptcy notice, each of which is said to be independent, as follows: (i) The bankruptcy notice is invalid because the debtor's name is misdescribed. [ground 1] (ii) The bankruptcy notice is invalid because the interest amount claimed has been miscalculated. [ground 2] (iii) The bankruptcy notice is invalid because the debtor's address is not correctly listed. [ground 3] (iv) The bankruptcy notice is invalid because the respondent has no proper basis to believe that the applicant is insolvent whatsoever. [ground 4] (v) The bankruptcy notice is invalid because its issuance can be properly described as an abuse of process. [ground 5] (vi) The bankruptcy notice is invalid because the judgment was not "attached" to the notice as required by the Bankruptcy Act 1966 (Cth). [ground 6] (vii) The bankruptcy notice is invalid because the issuance of a document by email is inconsistent with the Bankruptcy Act 1966 (Cth). [ground 7] (viii) The bankruptcy notice is invalid because the judgment or order cannot be described as "final". [ground 8] (ix) The bankruptcy notice is an abuse of process by the respondent because the applicant has a set off against the respondent in respect to the claimed debt. [ground 9] (x) The bankruptcy notice is an abuse of process because it was obtained in circumstances which can be properly described as a miscarriage of justice. [ground 10] (xi) The bankruptcy notice is invalid because solicitor issuing the bankruptcy notice was not specified. [ground 11] (xii) The bankruptcy notice is invalid because it provides no articulation of what "service" means under the notice. [ground 12] (xiii) The bankruptcy notice is invalid because it was never capable of being properly served to the purported debtor's last known address. [ground 13] (xiv) The bankruptcy notice is invalid because it was never capable of being received by the debtor by post to their residential address. [ground 14] (xv) The bankruptcy notice is invalid because the conducts of Mitry Lawyers in their capacity as the solicitors acting for Juju Bean Investments Pty Ltd represent an abuse of process because the circumstances in which the document was issued and formulated amount to an abuse of process. [ground 15] (xvi) In light of the constellation of matters [(i) to (xvi)], the bankruptcy notice is invalid because it has the capacity to mislead. [ground 16] 14 At the hearing, ground 11 was not pressed and no oral submissions were made in support of it. However it is still addressed below for completeness, lest any point be taken later about the abandonment. 15 At a case management hearing on 31 January 2020, Mr Sayer-Jones resisted a request by Juju Bean to compel him to file an amended originating application, so as to provide clarity as to the case that it was required to meet and to make it clear which grounds were not going to be relied upon. Mr Sayer-Jones stated that he relied upon all the grounds in his existing originating application and opposed being required to file an amended originating application at that late stage. Juju Bean's request was not granted. Evidence 16 Mr Sayer-Jones relied upon his affidavit sworn 2 October 2019 (read without objection or cross-examination), and the oral evidence he adduced from a solicitor formerly employed by Mitry Lawyers, Ms Chauntelle Ingenito. Ms Ingenito had carriage of the proceedings brought in the Local Court against Mr Sayer-Jones, took steps to enforce the judgment prior to the issue of the bankruptcy notice, arranged for the issue and service of the bankruptcy notice, and, until recently moving to another law firm, had carriage of this proceeding. 17 Mitry Lawyers arranged for Ms Ingenito to voluntarily attend court to give evidence at the request of Mr Sayer-Jones. The burden of her oral evidence achieved the opposite of what Mr Sayer-Jones evidently intended. He sought to prove impropriety in the conduct of the proceedings in the Local Court and impropriety in the issue of bankruptcy notice, going to invalidity and rising to the level of an abuse of process. 18 Ms Ingenito was a careful and impressive witness and I am comfortably of the view that, far from engaging in any impropriety, the evidence did not come close to establishing, at a factual level, any impropriety on her part, on the part of her principal, Mr Mitry, or on the part Juju Bean. While the steps Ms Ingenito took of seeking to garnishee money from a number of different banks were unsuccessful, and while an examination notice was sent to the wrong address, I find that she took genuine steps and made reasonable efforts to secure payment of the judgment debt before resorting to the obtaining and service of a bankruptcy notice. 19 Juju Bean relied upon the following evidence in opposing the application: (1) An affidavit of Mr Michael D'Anella, a former paralegal from the solicitors acting for it in this proceeding, Mitry Lawyers, to prove that Mr Sayer-Jones went to the offices of that law firm on 30 November 2017, at which time he signed the deed upon which the Local Court judgment/order was based at the offices of that firm. This evidence was relied upon to demonstrate that Mr Sayer-Jones knew where Mitry Lawyers' office was, being the address identified in the bankruptcy notice where payment could be made. Mr D'Anella produced a copy of the deed and a copy of an email that he sent to Mr Mitry at 12.57 pm on 30 November 2017, describing his meeting with Mr Sayer-Jones. Mr D'Anella was cross-examined by Mr Sayer-Jones to little effect. Mr Sayer-Jones repeatedly accused Mr D'Anella of lying and otherwise giving false, fabricated or unreliable evidence. I am satisfied that Mr D'Anella is a witness of truth and that Mr Sayer-Jones did in fact go to the offices of Mitry Lawyers on 30 November 2017, and therefore knew where he had to go to make payment in satisfaction of the bankruptcy notice. I refused an application by Mr Sayer-Jones to adjourn the hearing and to grant leave to issue subpoenas to obtain telephone records which he contended would prove that he was not in that location at that time, noting that he did not give any evidence to that effect and did not provide any adequate explanation for not having done this in time for the hearing. (2) Paragraph 8 of the affidavit of Ms Ingenito, which refers to and produces as annexure "D" the documentary evidence that was before the Local Court magistrate, but only tendering pages 102-113 of that annexure, being a fully executed copy of the deed and a chain of emails, including a covering email by which it was sent to Mr Sayer-Jones on 30 November 2017 at 6.53 pm. Mr Sayer-Jones' conduct during the hearing of his application 20 During the course of the hearing of the application, Mr Sayer-Jones made numerous applications to adjourn the proceeding, all of which were refused because each involved him being given time to take further steps in the proceeding that could and should have been made in time for the hearing. He made, but did not persist with, a recusal application. He sought several times to discontinue the proceeding, including seeking leave to do so, which was opposed by Juju Bean, and refused. 21 Despite being given considerable latitude in the conduct of the application, Mr Sayer-Jones made numerous allegations during the course of the hearing to the effect that he had not been treated fairly, but did not, in the greater part, identify what else should have happened apart from acceding to his demands. Mr Sayer-Jones ultimately was able to complete adducing evidence and was able to complete his oral submissions, supplementing his written submissions which he sought, at one stage, to withdraw. 22 Counsel for Juju Bean was permitted to rely upon and speak to an outline of further submissions, supplementing prior written submissions, which largely addressed the new issues that had emerged during the course of Mr Sayer-Jones' cross-examination of Ms Ingenito and during his oral submissions. Mr Sayer-Jones objected to that outline being received, and after listening to the oral submissions for a short time, asked to be allowed to leave the court, and then did so without being formally excused. As he was leaving the bar table and before he left the court room, I advised him that judgment would be delivered at 9.00 am on 21 February 2020 (that is, 10 days after the hearing). I doubt that there was much, if anything, more that Mr Sayer-Jones could have said in support of his case. Formal defect grounds 23 Mr Sayer-Jones asserts that the bankruptcy notice is defective on its face because: (1) his middle name was not stated: ground 1; (2) the amount of interest has been miscalculated: ground 2; (3) his address is incorrectly stated: ground 3; (4) the solicitor issuing the bankruptcy notice was not specified: ground 11; (5) the bankruptcy notice was never capable of being properly served at his last-known address: ground 13; (6) the bankruptcy notice was never capable of being received by him by post at his residential address: ground 14. 24 Mr Sayer-Jones' middle name is not stated in the bankruptcy notice (ground 1), his then address was apparently not stated (ground 3), and the individual solicitor issuing the bankruptcy notice (as opposed to the law firm) was not stated (ground 11, albeit not pressed). However, none of those matters have been shown to be defects, let alone defects that could in any way have impeded his understanding of what he was required to do to satisfy the bankruptcy notice. As Kiefel J observed when a member of this Court in Matheson v Scottish Pacific Business Finance Pty Ltd [2005] FCA 670 at [10] (a decision that preceded, but conforms with, Adams v Lambert): Mr Matheson has referred me to the definition of 'legal name' in Black's Law Dictionary, 8th edn, ed BA Garner, West Pub Co, USA (2004) pg 1048 as 'a person's full name as recognised in law'. That does not however mean that a court document such as a bankruptcy notice or petition is void if the full legal name of the person is not provided. There is no doubt that Mr Matheson is the person named in the District Court proceedings and in these proceedings and that he has understood that to be the case. He has represented himself and appeared. There was no ambiguity created by the bankruptcy notice or petition. In any event if there was an irregularity in the mode of description, it is of a formal nature and one that can be validated by s 306(1) of the Bankruptcy Act: Re Draper; Ex parte Australian Society of Accountants (1989) 154 FCR 41. A 'formal defect or an irregularity' within the meaning of that section is one that could not reasonably mislead the debtor: Re Wimbourne; Ex parte The Debtor (1979) 24 ALR 494. In my opinion, the petition notice does not cause any injustice as it was not likely to mislead the debtor. 25 Each of grounds 1, 3 and 11 must therefore fail. 26 As to ground 2 concerning interest, Mr Sayer-Jones written submissions proceed upon the false premise that post-judgment interest must be claimed in the statement of claim upon which judgment was obtained. His oral submissions took a different tack, perhaps because it is clear from the terms of s 101 of the Civil Procedure Act 2005 (NSW) that interest is payable by force of legislation, supplemented by regulation, and that interest is payable on so much of a judgment (excluding costs) as is unpaid from time to time. Rule 36.7 of the Civil Procedure Rules 2005 (NSW) prescribes the rate of interest for the purposes of s 101. The bankruptcy notice only referred to r 36.7 of the Civil Procedure Rules and should instead have referred to s 101 of the Civil Procedure Act as the source of the entitlement to post-judgment interest. Mr Sayer-Jones submits that this is a fatal defect. This very issue was addressed adversely to that submission in Nand v Fuji Xerox Australia Pty Ltd [2015] FCAFC 51. After referring to Adams v Lambert, the Full Court held (at [18]): Here, the reference in the notice to r 36.7, as opposed to s 101, could not have misled the debtor as to what was necessary for her to do to comply with the notice. In any event, had she referred to that rule, she would have seen that the calculation of post-judgment interest in the notice was justified by the rule and that it was based on s 101 of the Civil Procedure Act. The omission of the correct statutory source, namely, a reference to s 101 of the Civil Procedure Act, in the circumstances, was not a failure to comply with an essential requirement prescribed in Form 1. It was a formal defect or irregularity of the kind contemplated by s 306(1) and its omission was not reasonably capable of misleading the debtor in relation to what she had to do in order to comply with the notice. 27 Following Nand, ground 2 must therefore fail. 28 As to grounds 13 and 14, Mr Sayer-Jones has not shown why service of the bankruptcy notice had to be effected at his last-known address (as opposed to being one of the ways in which it could have been effected), nor why the bankruptcy notice had to be capable of being received by him by post at his residential address unless that was the mode of service that was relied upon. Nor does he demonstrate that the error in his address misled him in any way about what he was required to do to satisfy the bankruptcy notice. I am satisfied that any error in the address recorded for Mr Sayer-Jones was not a material defect and could not in any way have misled him about what he was required to do to satisfy the bankruptcy notice. Each of grounds 13 and 14 must therefore fail. 29 In oral argument, Mr Sayer-Jones also asserted as part of ground 12 that no timeframe was given within which payment could be made, addressed further below. 30 Separately, and apart from the grounds pleaded, Mr Sayer-Jones asserted that he was misled because the bankruptcy notice advised that payment of the debt could be made to (using the sans serif font in the original): Mitry Lawyers Level 1, I67 Castlereagh Street, Sydney, NSW 2000 Phone: [number] Email: [email address] 31 Mr Sayer-Jones' complaints in this regard were: (1) the street address in Castlereagh Street, commenced with a the capital letter "I", instead of the numeral "1", so that it read "I67 Castlereagh Street" instead of "167 Castlereagh Street" – he seemed to be suggesting that with this typographical error he would not know where to go to make a payment; (2) the correct street address for Mitry Lawyers was 161-167 Castlereagh Street; (3) the opening hours or Mitry Lawyers were not disclosed, and in particular did not say when the office would be closed for the Christmas break (remembering that the bankruptcy notice was dated and served in September 2019) – this point was also advanced in relation to ground 12, but it is difficult to see how it arises from that ground. 32 Juju Bean responds by relying upon Fuller v Alford [2017] FCA 782; 252 FCR 168, wherein Perry J said (at [64]): Finally, notwithstanding that the test for determining whether a bankruptcy notice is misleading is an objective one, the question of whether the notice is misleading is not determined in a vacuum. Rather, the Court may have regard to facts extraneous to the notice itself, including relevantly the surrounding circumstances from the perspective of the actual debtor served with the notice as opposed to a hypothetical debtor: Re Crisafulli; ex parte National Commercial Banking Corporation of Australia Ltd (1985) 11 FCR 272. Thus, for example, in Northam v Commonwealth Bank of Australia [1999] FCA 544, Weinberg J at [22] said that "a bankruptcy notice must, while being read strictly, also be read sensibly, and not perversely. It must also be read as a whole, and may be read in light of facts extraneous to the notice itself". 33 In keeping with Fuller v Alford, Juju Bean adduced evidence of extraneous facts to establish that Mr Sayer-Jones could not have been misled as to the address for Mitry Lawyers because he had attended Mitry Lawyers when he went there to sign the deed on 30 November 2017, and the address for Mitry Lawyers was recorded on the judgment/order electronically attached to the bankruptcy notice (see below), on the front page of the deed (as 161-167 Castlereagh Street), and in the originating process for the proceedings which gave rise to the deed (as 161 Castlereagh Street). I am satisfied, especially by the evidence of Mr D'Anella about the signing of the deed, that Mr Sayer-Jones could not possibly have been misled by the use of a letter instead of a numeral for the street address. I would have reached that conclusion in any event, without any of that extraneous evidence. This argument, not pleaded in the originating application, must fail. 34 I do not accept that there was any need for the bankruptcy notice to disclose the hours that Mitry Lawyers were ordinarily open, nor that, even if this was required, that any such defect could possibly have resulted in Mr Sayer-Jones being misled about what the bankruptcy notice required him to do, or when he would be able to do it. The use of a business address ordinarily connotes ordinary business hours, which are usually from at least 9.00 am to 5.00 pm. The absence of any precise statement of opening hours could not possibly have mislead Mr Sayer-Jones. He must have known that he could attend at the offices of Mitry Lawyers during ordinary business hours to pay the sum required by the bankruptcy notice, had he any intention of doing so. This argument, also not pleaded in the originating application, must fail as well. Insolvency 35 Mr Sayer-Jones also asserts that the bankruptcy notice is invalid because there was there is no basis to believe he was insolvent: ground 4. 36 In Australian Securities and Investments Commission v Forge [2003] FCAFC 274; 133 FCR 487: (1) Branson and Stone JJ said (at [15]): Nothing in the language of s 40(1)(g) indicates a legislative intention that the general description 'a creditor who has obtained against the debtor a final judgment or final order' should be subject to any limitation. Nor, in our view, does the context provided by s 40, or the Act as a whole, suggest that any limitation on the generality of the expression is intended to be found by implication. The conduct encompassed by s 40(1)(g), even where undertaken in respect of a final judgment or final order in respect of a debt not provable in bankruptcy, is an act which prima facie demonstrates insolvency. All persons are under an obligation to comply with final judgments or final orders. Failure to do so, especially after having been placed on notice that compliance is required by the party in whose favour the final judgment or final order was made, may be assumed to indicate an inability to do so; that is, to indicate insolvency. The public interests with which the Act is concerned are thus engaged. (2) Emmett J said (at [32]): It is clear that the Commission is a creditor for the purpose of s 40(1)(g). There is no reason, in the scheme of the Act, to suggest that s 40(1)(g) is limited to the case where a bankruptcy notice is founded upon a judgment debt that could be proved in the bankruptcy. Further, the fact that such a debt is not paid after demand by the judgment creditor is just as much a marker or criterion of insolvency as where the bankruptcy notice is based upon a debt that is provable in the bankruptcy. 37 Mr Sayer-Jones submits that Forge is wrongly decided. That submission is recorded, but I consider that Forge is plainly correct, and that I would follow it even if I was not bound to do so by reason of being a decision of a Full Court. 38 In this case, the judgment/order was provable in bankruptcy. If, as Forge makes clear, independent proof of insolvency is not to be read as a requirement when the debt in question is not provable in bankruptcy, before relying upon the plain words in s 40(1)(g) of the Bankruptcy Act containing no such requirement, it follows that it certainly is not required for a debt that is so provable, being the situation in this case. Non-payment of a judgment debt is in any event prima facie evidence of insolvency; and Mr Sayer-Jones did not attempt to adduce any evidence to the contrary. 39 Mr Sayer-Jones has not demonstrated any error in proceeding to issue a bankruptcy notice in reliance upon the Local Court judgment/order, especially as this was only done after attempts to garnish several banks, and after an attempt was made to summons him to appear at an examination (albeit that an error was made in the address used). Ground 4 must fail. Invalid service grounds 40 Mr Sayer-Jones asserts that the bankruptcy notice was not validly served because: (1) the judgment was not "attached" to the bankruptcy notice as said to be required by the Bankruptcy Act: ground 6; (2) the bankruptcy notice was issued by email, as said to be inconsistent with the Bankruptcy Act: ground 7. 41 While Mr Sayer-Jones complains about the email address to which the 11 September 2019 email attaching the bankruptcy notice and judgment/order was sent resulting in that email going to his "junk" email box, his affidavit at [9] (handwritten) states "The respondent served the bankruptcy notice BN 246234 on 11th September 2019", an express admission as to that fact. He also said in the course of the hearing that he received a copy of those documents on 30 September 2019, a fact that is supported by his own affidavit evidence. Thus his complaint is left with the pleaded technical points as to service, rather than any dispute that he was in fact served with copies of those documents. 42 Both of these grounds must fail, following Curtis at [51] (endorsed in Mastronardo at [8]-[20]) as to ground 6 and the plain terms of reg 16.01(1)(e) and reg 16.01(2)(b) of the Bankruptcy Regulations as to ground 7. There was nothing wrong with the judgment/order and the bankruptcy notice being attached as separate pdf documents, nor with those documents being served by email. Judgment/order not final 43 Mr Sayer-Jones asserts that the Local Court judgment/order cannot be relied upon because it is not "final": ground 8. 44 In Autron Pty Ltd v Benk [2011] FCAFC 93; 195 FCR 404, the Full Court observed on the topic of a "final" judgment or order (at [21]): The Bankruptcy Act does not define the expressions "final judgment" and "final order" as used in ss 40(1)(g) and 41(1). Historically, in bankruptcy law, a rigid distinction has been drawn between a "final judgment" and a "final order". In context, a "final judgment" is strictly construed to mean a final judgment "obtained in an action". Thus, in Clyne v Deputy Commissioner of Taxation (NSW) (1983) 57 ALJR 673 at 675; 48 ALR 545 at 547-548 Gibbs CJ (with whom the other members of the High Court agreed) said: A final judgment within the meaning of the provisions of the Bankruptcy Act has been held to mean a judgment obtained in an action by which the question whether there was a pre-existing right of the plaintiff against the defendant is ascertained or established: Opie v Opie (1951) 84 CLR 362 at 372. In other words it is a judgment which finally disposes of the rights of the parties: see Licul v Corney (1976) 8 ALR 437; 50 ALJR 439 at 444. The fact that a judgment is subject to appeal or that it may later be set aside or become inoperative does not mean that it is not final: Re Hanby; Ex parte Flemington Central Spares Pty Ltd (1967) 10 FLR 378. 45 Mr Sayer-Jones' basis for saying that the judgment/order is not final turns on asserted irregularities in the conduct of the Local Court proceedings leading to the judgment/order made against him. The substance of his complaint is that instead of reading an affidavit, Juju Bean tendered business records that were annexures to that affidavit, depriving him of an opportunity to cross-examine the deponent. The hearing was then adjourned for written submissions. When the matter was back before the magistrate for delivery of an oral judgment, Mr Sayer-Jones unsuccessfully sought to reopen the proceedings, complaining about the way in which Juju Bean chose to prove its case. He also complains about the refusal of a stay upon delivery of the judgment/order, but this does not create a lack of finality in the sense described in the passage from Autron Pty Ltd v Benk reproduced in the preceding paragraph. None of Mr Sayer-Jones' complaints come close to any proper basis for going behind the judgment, as set out in Dunkerly v Comcare at [68], reproduced at [11] above. 46 I go further. I cannot see anything wrong with the course that Juju Bean took in the way in which it ran its case in the Local Court. This is especially so given that Mr Sayer-Jones was able to advance a defence, albeit an unsuccessful one, as is made clear by the magistrate's reasons annexed to Mr Sayer-Jones' affidavit. But even if I was wrong about that, I would not be satisfied that any sufficient basis had been established for going behind the judgment/order as a matter of discretion. Bankruptcy proceedings must not be allowed to descend into a means of collaterally attacking antecedent litigation as an alternative to using the usual appeal processes. Ground 8 must fail. Abuse of process grounds 47 Mr Sayer-Jones asserts that the bankruptcy notice is an abuse of process because of: (1) the way in which the bankruptcy notice was issued, including an asserted failure to find out if he was insolvent before taking that step, not using his middle name (ground 1 again), the way in which interest was claimed in the bankruptcy notice (ground 2 again) and the use of his incorrect address (ground 3 again): ground 5; (2) the fact that he has a set-off against Juju Bean in respect of the claimed debt, implicitly relying upon the set-off provisions in s 40(1)(g) of the Bankruptcy Act, with the existence of that set-off to be divined by the Court reading and interpreting the deed, without any meaningful assistance from Mr Sayer-Jones: ground 9: (3) the bankruptcy notice being obtained in circumstances that were a miscarriage of justice – a complaint about the terms of the deed upon which he was sued, including a complaint about the way in which the judgment/order was obtained, apparently a reference to the matters considered in relation to ground 8 above: ground 10; (4) the conduct of Juju Bean's solicitors, because of the circumstances in which the bankruptcy notice was issued and formulated, accepted by Mr Sayer-Jones to be a restatement of ground 5: ground 15. 48 I am not satisfied that Mr Sayer-Jones has come close to establishing any abuse of process in causing a bankruptcy notice to issue and be served, or on any of the other grounds and arguments relied upon. To the contrary, I am positively satisfied that the purpose of the bankruptcy notice was genuinely to invoke the insolvency jurisdiction, and readily infer a genuine intention to pursue the exercise of that jurisdiction if Mr Sayer-Jones does not comply with that notice: Maxwell-Smith v S & E Hall Pty Ltd, in the matter of Maxwell-Smith [2006] FCA 825; 233 ALR 81 at [43]-[44]. Unlike the situation in Maxwell-Smith, in which an abuse of process was found to be established (at [45]-[51]), there is no evidence of any collateral purpose or undue pressure, the onus lying on Mr Sayer-Jones to adduce any such evidence. As Gleeson J pointed out in Batterham v Nauer, in the matter of Peter James Batterham [2019] FCA 485 at [76]: The onus of proving the existence of a collateral purpose lies on the debtor: Cavoli v Etl [2007] FCA 1191 at [17] per Heerey J, and more than mere assertion is required: Watts v Adelaide Bank Limited [2009] FCA 420 at [19]". 49 During the course of argument, Mr Sayer-Jones suggested that the judgment/order was not a sufficient basis for the issue of a bankruptcy notice, and that the transcript of the magistrate's reasons were required also to be attached to the bankruptcy notice (which would then not be valid because there was no court seal affixed to the transcript). There is no foundation for the claim that reasons are required for the issue of a bankruptcy notice to be valid. The issue of bankruptcy notices based upon the orders made following judgment is routine and unexceptional. In the absence of evidence adduced by Mr Sayer-Jones as to the irregularity of the notice or its issue, there was never any serious prospect of the bankruptcy notice being set aside upon this basis. 50 Grounds 5, 9, 10 and 15 must fail. Ground 16: In light of the constellation of matters (i) [ground 1] to (xv) [ground 15], the bankruptcy notice is invalid because it has the capacity to mislead. 51 As none of the foregoing grounds has been established, ground 16, which relies upon success on one or more of grounds 1 to 15, must also fail. Post-hearing/pre-judgment communication by Mr Sayer-Jones 52 At 12.34 pm on 19 February 2020, prior to judgment delivery scheduled at 9.00 am on 21 February 2020, Mr Sayer-Jones sent the following email to my associate, copied to Mr Mitry and to the registry: Dear Associate, In this matter I would like to advise the Court that I do not wish to make any submissions on the question of costs if my originating application is dismissed. Costs follow the event and I kindly and respectfully do not want to waste the Court's time with submissions on the question. Given the way proceedings were conducted by the respondent there will be no practical difference between indemnity costs and costs on the ordinary basis. May I also please note that I have no objection whatsoever as to the judgment being published and then sent to me via email to avoid Costs to the Court of reconvening. I emphasize, for clarity, the judgment can be emailed and there is no need to reconvene the Court. There will also be no application to stay the judgment pending an appeal to the Full Court which would necessitate an oral hearing either. I raise these matters in a direct way to avoid any delay at the Registry. Thanking you very much indeed, Robert Sayer-Jones. 53 It is a requirement of open justice that at least the making of dispositive orders, and usually (but not always) the reason for making such orders, takes place in open court. I see no reason why that should not take place in this case, and accordingly this judgment will be delivered in the usual way as scheduled, with a copy then sent to the parties by email. It is a matter for Mr Sayer-Jones as to whether or not he attends Court. An email was sent to Mr Sayer-Jones, copied to the solicitors for Juju Bean, to that effect. Conclusion 54 As no basis for setting aside the bankruptcy notice has been established, the originating application must be dismissed with costs. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromwich. Associate: Dated: 21 February 2020	10,685
federal_court_of_australia:fca/single/2008/2008fca0741	decision	commonwealth	federal_court_of_australia	text/html	2008-05-23 00:00:00	Heartbeat Nursing Agency Pty Ltd v Horne [2008] FCA 741	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2008/2008fca0741	2024-09-13T22:49:58.348845+10:00	FEDERAL COURT OF AUSTRALIA Heartbeat Nursing Agency Pty Ltd v Horne [2008] FCA 741 HEARTBEAT NURSING AGENCY PTY LTD ACN 084 686 760 v GREGORY HORNE AND ANGELA BEEKMAN 1360 OF 2005 MOORE J 23 MAY 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY 1360 OF 2005 BETWEEN: HEARTBEAT NURSING AGENCY PTY LTD ACN 084 686 760 Applicant AND: GREGORY HORNE First Respondent ANGELA BEEKMAN Second Respondent JUDGE: MOORE J DATE OF ORDER: 23 MAY 2008 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Each party bears its own costs of the proceedings. 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 1360 OF 2005 BETWEEN: HEARTBEAT NURSING AGENCY PTY LTD ACN 084 686 760 Applicant AND: GREGORY HORNE First Respondent ANGELA BEEKMAN Second Respondent JUDGE: MOORE J DATE: 23 MAY 2008 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This judgment concerns the appropriate costs order that should be made in these proceedings, which were dismissed for want of prosecution on 6 March 2008. 2 The applicant provides labour hire to hospitals and aged-care facilities throughout New South Wales. It commenced proceedings against the first and second respondent on 9 August 2005. It sought,amongst other things, declarative and injunctive relief. At the same time it filed a notice of motion seeking an ex-parte Anton Piller order. The applicant alleged that the first and second respondent, in concert, misused the applicant's confidential information in the course of undertaking a labour-hire business known as All Saints Nursing Agency. The applicant sought an Anton Piller order to allow it to enter the premises of All Saints Nursing Agency and seize documents and computer records. On 9 August 2005, Graham J made the Anton Piller order and it was executed on 10 August 2005. 3 The applicant's notice of motion was made returnable before a duty judge on 15 August 2005. No orders were made on this occasion by the duty judge other than adjourning the proceedings and giving liberty to apply. On 15 August 2005, the applicant filed a statement prepared by Mitchell Bezzina of Forensic Data Services Pty Ltd setting out the steps undertaken by Forensic Data during the course of the execution of the Anton Piller order and the steps taken to copy the respondents' computer hard drive. 4 On 6 October 2005, the respondents filed a notice of motion seeking orders that: (a) the orders made on 9 and 10 August 2005 be vacated; (b) the proceedings be dismissed; (c) an inquiry be made and the damages payable by the applicant to the respondents pursuant to its undertaking to the Court; and (d) costs on an indemnity basis of the costs incurred by the Respondents in these proceedings. The respondents' notice of motion was made returnable before me on 25 October 2005. 5 On 24 October 2005, the applicant served on the respondents the final forensic report prepared by Mitchell Bezzina (dated 23 September 2005), and an affidavit of Jonathan O'Riordan (dated 24 October 2005), who is the applicant's solicitor. The affidavit concerned material obtained during the execution of the Anton Piller order. 6 On 25 October 2005, I made the following orders substantially by consent: 1. The applicant file and serve a verified statement of claim by 4 pm on 1 November 2005. 2. The parties be granted liberty to restore the matter for directions on three days' notice. 3. The matter be stood over for further directions at 4.30 pm on 28 November 2005. 4. Costs be reserved. 7 Shortly before the matter next came before me on 28 November 2005, the applicant served on the respondents a draft statement of claim, as well as an affidavit of Catherine Bouvy, sworn 28 November 2005. 8 The matter was adjourned to 29 November 2005. I then made the following orders: 1. Order 6(e) made by this Court on 9 August 2005be varied to enable the Applicant's legal advisors to show the Applicant's Managing Director, Johan Vitali, and its General Manager, Catherine Bouvy, the draft Statement of Claim served upon the Respondents on 28 November 2005 and all documents referred to therein and only those documents. 2. The Applicant provide the Respondents with copies of all documents seized during the execution of the orders of this Court of 9 August 2005, including the documents listed in Schedule C of the draft Statement of Claim served upon the Respondents on 28 November 2005, by 4pm 30 November 2005. 3. The Applicant file and serve a verified Statement of Claim by 4pm 9 December 2005. 4. The Respondents file a Defence and Cross Claim, if any, by 3 February 2006. 5. The matter be listed for directions at 9:45 am on 10 February 2006. 6. The notice of motion filed on behalf of the First and Second Respondents dated 6 October 2005 be stood over until 10 February 2006. 7. The parties exchange any submissions in relation to costs on or before 7 February 2006 in order that the Court might deal with the question of costs on 10 February 2006. 8. Costs reserved. 9 The applicant filed its statement of claim on 28 December 2005. 10 On 9 February 2006, the respondents' solicitor wrote to the applicant's solicitor suggesting that the matter be referred to mediation. At this stage the respondents had not filed a defence or cross-claim. 11 On 10 February 2006, I was informed that the parties wanted to explore mediation. I made the following orders: 1. The respondent serve on the applicant details and particulars of the basis of the defence and the basis of any cross claim if pursued, within 7 days. 2. The parties have liberty to apply on 3 days' notice. 12 No further orders were made in the proceedings until they were dismissed for want of prosecution at a directions hearing on 6 March 2008. Both parties consented to this course. The hearing on that day resulted not from a request of either party, but at my initiative. It appears the parties may have corresponded in relation to mediating the matter, however there is nothing to indicate that the parties actually engaged in mediation. 13 Against this background, the respondents seek their costs from the applicant on an indemnity basis. They have made perfunctory written submissions in support of that order. 14 The general discretion conferred by s 43 of the Federal Court of Australia Act 1976 (Cth) to award costs is absolute and unfettered, except that it must be exercised judicially, not arbitrarily or capriciously, and cannot be exercised on grounds unconnected with the litigation: Trade Practices Commission v Nicholas Enterprises Pty Ltd and Ors (No. 3) (1979) 42 FLR 213 at 219 per Fisher J; Probiotec Limited v The University of Melbourne [2008] FCAFC 5 at [45] – [47] per Rares J. 15 Ordinarily, costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order: Ruddock v Vardalis (No 2) (2002) 115 FCR 229 at 235. Awards of costs are compensatory, not punitive: Latoudis v Casey (1990) 170 CLR 534 per McHugh J at 567. 16 As a general principle, costs are awarded on a party-party basis unless there are special or unusual circumstances. Some of the broad classes of circumstances in which the exercise of discretion to award indemnity costs may be appropriate are referred to by Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233-234. 17 The issue of the interaction between Anton Piller orders and costs was considered by Brereton J in Austress Freyssinet Pty Limited v Michael Joseph & 2 ors [2007] NSWSC 1513. In Austress, the plaintiff alleged that the defendants were using the plaintiff's confidential information obtained by the first defendant while he was employed by the plaintiff, and sought (and was granted) an Anton Piller order. His Honour said: (at [4]): … it was well open to his Honour [the judge who issued the Anton Piller order] to take the view that there was an extremely strong prima facie case that confidential information was being misused during the period Mr Joseph was still employed by the plaintiff. If an employee with knowledge of the methods by which an entity such as the plaintiff prepares its tenders and its margins goes into opposition, it seems to me that the damage, potential or actual, from misuse of this information is shown to be very serious to the plaintiff. There was, however, no final hearing of the matter as the proceedings were settled. Nevertheless, the Court awarded the plaintiff its costs of the proceedings. As Brereton J said (at [15]): In my view, this is a case in which the plaintiff has had to come to Court to obtain relief to which it was entitled, in the face of threatened and actual breaches of confidence by a senior employee which had the potential to occasion it serious damage. I am unable to see why the circumstance that [the first defendant] recognised the inevitable by consenting to the injunctive relief sought a year after the proceedings were initiated, after contesting the interlocutory relief initially, should deprive Austress of the costs to which it would have been entitled had the same relief been obtained over opposition. 18 Notwithstanding the approach of the Court in Austress, the Court must weigh the difficulty of deciding how the costs of the litigation should be borne when there has been no hearing on the merits. As McHugh J stated in Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622 at 624 – 625: In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action ... Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases. (Footnotes omitted) 19 The respondents submit that following the execution of the Anton Piller order, the applicant took no further significant steps in the proceedings, and it should be inferred that the applicant: (a) did not have a case fit to be taken to trial and brought the Anton Piller proceedings to inhibit a commercial competitor: or (b) brought the proceedings bona fide but realised on mature consideration at some early stage that it did not have a case. 20 Neither of the respondents' contentions should be accepted. As the applicant submits, the Anton Piller order was made on the basis of detailed affidavit evidence accepted by the Court. As Einstein J said in Woolworths Limited v Mark Konrad Olson and Anor [2004] NSWSC 896 at [8], an application for an Anton Piller order: … is one where the strength of the prima facie case … must be considerable. An applicant for relief of this type must be in a position to put forward strong proof of the highest justifiable suspicion of misconduct which, absent the making of the order sought, would extremely likely lead to irreparable loss or damage. There is nothing to suggest that the applicant in these proceedings acted unreasonably in seeking, and obtaining, the Anton Piller order. 21 The issue of the appropriate costs order that should be made in circumstances where interlocutory relief has been granted, but the parties have decided not to continue with the litigation, was considered by Hill J in Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194. After reviewing a number of the authorities on the issue, his Honour distilled the following principles (at 201): (1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order. (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial … This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them. (4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation. (5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted. (References omitted) 22 Justice Hill also referred (at 201) to the decision of the English Court of Appeal in J T Stratford & Son Ltd v Lindley (No 2) [1969] 3 All ER 1122, describing it in the following terms: Stratford was a case where an interlocutory injunction had been granted. The interlocutory proceedings were, however, fought through until the House of Lords. Thereafter the proceedings went to sleep and never came to trial. Ultimately the defendants applied to dismiss the proceedings for want of prosecution. The plaintiff countermanded with an application to discontinue the proceedings. Ultimately it was held that the plaintiff should be given leave to discontinue. As Lord Denning MR put it: "Nobody has lost. Nobody has won ... Neither side wanted to go on. But neither side wanted to pay the costs of the other side." Speaking rhetorically his Lordship continued): "So what is to be done? Is this case to go on simply about costs? I think not." (References omitted) 23 In my view, it is apt to describe the present proceedings as having 'gone to sleep'. As the applicant noted in its submissions, the respondents have not, since late March 2006, taken any steps to re-list the matter. Nor have the respondents filed any defence or cross-claim, as contemplated in the orders made on 29 November 2005. The matter came before me on 6 March 2008 only after my associate wrote to the parties suggesting that the matter be listed for further directions. 24 I consider the appropriate order in the circumstances is that each party bears its own costs. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. Associate: Dated: 23 May 2008 The matter was dealt with on the papers Solicitor for the Applicant Brown Wright Stein Counsel for the Applicant JT Svehla Counsel for the Respondents CA Sweeney QC Solicitor for the Respondents John M Barbouttis Solicitors Date of Judgment: 23 May 2008	3,796
federal_court_of_australia:fca/single/2019/2019fca0980	decision	commonwealth	federal_court_of_australia	text/html	2019-06-03 00:00:00	Pilkin v Sony Australia Limited (No 2) [2019] FCA 980	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca0980	2024-09-13T22:49:59.654771+10:00	FEDERAL COURT OF AUSTRALIA Pilkin v Sony Australia Limited (No 2) [2019] FCA 980 File number: NSD 214 of 2018 Judge: RARES J Date of judgment: 3 June 2019 Catchwords: INTELLECTUAL PROPERTY – patents – whether patent had deferred priority date under Patents Act 1990 (Cth) ss 102, 114 and Patents Regulation 1991 (Cth) reg 3.14 – where result of amending complete specification disclosed matter that extended beyond that disclosed in complete specification as filed – whether patent lacked novelty – where prior art disclosed all integers of invention in patent in suit PRACTICE AND PROCEDURE – application for leave to serve outside the jurisdiction under r 10.43 of the Federal Court Rules 2011 – whether prima facie case for relief established under r 10.43(4) – where foreign respondent did not exist at the time of alleged patent infringement – where new foreign respondent did not assume pre-incorporation liabilities for another entity's alleged patent infringement PRACTICE AND PROCEDURE – summary dismissal of the proceeding under Federal Court of Australia Act 1976 (Cth) s 31A(2) – where applicant has no reasonable prospect of successfully prosecuting the proceeding Legislation: Federal Court of Australia Act 1976 (Cth) s 31A Federal Court Rules 1979 O 8 r 2(2)(c) Federal Court Rules 2011 rr 10.43, 26.01 Patents Act 1990 (Cth) ss 102, 114, 117 Patents Regulations 1991 (Cth) reg 3.14 Cases cited: Apotex Pty Ltd v Les Laboratoires Servier [2013] FCA 1426 Damorgold Pty Limited v Blindware Pty Limited (2017) 130 IPR 1 Ho v Akai Pty Limited (in liq) (2006) 247 FCR 205 Meyers Taylor Pty Limited v Vicarr Industries Limited (1997) 137 CLR 228 Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2011) 119 IPR 194 Trkulja v Google LLC (2018) 263 CLR 149 Welch Perrin & Co Pty Limited v Worrel (1961) 106 CLR 588 Date of hearing: 3 June 2019 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 62 Counsel for the Applicant: The applicant appeared in person assisted by an interpreter Counsel for the First and Fifth Respondents: Mr R Cobden SC and Mr P W Flynn ORDERS NSD 214 of 2018 BETWEEN: VITALY EVGENIEVICH PILKIN Applicant AND: SONY AUSTRALIA LIMITED First Respondent SONY INTERACTIVE ENTERTAINMENT LLC Second Respondent SONY INTERACTIVE ENTERTAINMENT EUROPE LIMITED (and others named in the Schedule) Third Respondent JUDGE: RARES J DATE OF ORDER: 3 JUNE 2019 THE COURT ORDERS THAT: 1. The proceeding be dismissed summarily under s 31A of the Federal Court of Australia Act 1976 (Cth). 2. The applicant pay the first and fifth respondents' costs. 3. The time within which the applicant may seek leave to appeal from these orders be extended to 21 days after the publication of the written reasons given orally today. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) RARES J: 1 These are two interlocutory applications by, first, the applicant, Vitaly Pilkin, to serve three respondents outside Australia under r 10.43 of the Federal Court Rules 2011 and, secondly, by the first and fifth respondents, Sony Australia Limited and Sony Interactive Entertainment Australia Pty Ltd (the Sony parties), seeking orders that the proceeding be summarily dismissed pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act) or that many paragraphs in the further amended statement of claim and, the corresponding prayers for relief in the amended originating application, be struck out. I heard the interlocutory applications together today, substantively on the same material. Background 2 Mr Pilkin claims in the proceeding that the Sony parties, together with their related companies, the second respondent, Sony Interactive Entertainment LLC (Sony LLC), a company incorporated in the United States of America in about April 2016, the third respondent, Sony Interactive Entertainment Europe Limited, a company incorporated in the United Kingdom, and the fourth respondent, Sony Interactive Entertainment Network Europe Limited, also incorporated in the United Kingdom, infringed innovation patent AU2010101517B4 in which Mr Pilkin and his deceased co-patentee, Vladimir Miroshnichenko, were named as patentees. On 16 November 2018, I ordered that, upon Mr Miroshnichenko's decease, the whole of his interest in the patent passed to Mr Pilkin. The patent had a term of 8 years commencing on 7 September 2010. 3 Essentially, the Sony parties argued that the only causes of action that Mr Pilkin alleged against Sony LLC and Sony Network, in pars 16 and 20 of the statement of claim, were so deficient that they should be struck out, and that once that occurred, there will be no cause of action against either of those companies to justify an order for service outside the jurisdiction. The Sony parties contended that, even though those paragraphs made no claim against them, the proceeding should not be burdened by leaving those allegations on foot, in the event that I were otherwise against the Sony parties' claim for relief under s 31A(2) of the Federal Court Act. The Sony parties accepted, in the event that I refused the relief they sought in their interlocutory application, that they could not otherwise resist Mr Pilkin's application for leave to serve Sony Europe, although they did not act for it. 4 Mr Pilkin alleges that all of the respondents infringed the patent by offering for sale, and selling, in Australia, the PS Vita or PlayStation 3 console and PlayStation 4 console (collectively, the console), used in Sony's well-known popular device, marketed under the Sony PlayStation brand. The first time that the Sony parties offered a version of the console for sale, or sold it in Australia, was on 22 February 2012 and they continued to offer to sell, and sold, the console for the balance of the term of the patent up to 7 September 2018. 5 It was common ground that the console matched the description in claim 1 of the patent; namely that it is an electronic device comprising a body that has a front side and a rear side, a touchpad that is arranged on the rear side, a visual display that is arranged on the front side and a joyWstick. The visual display on the electronic device is a touchscreen that enables a user of the device, by manipulating the touchpad itself or using the joystick controls, to control at least one visual symbol that is displayed on the visual display. In other words, the ability to manipulate the touchpad or joystick of the console allows the user to play the game appearing on the visual display. 6 Mr Pilkin also alleges that, in contravention of s 117 of the Patents Act 1990 (Cth), Sony Network infringed his patent by offering to sell, or selling, games to play on the console. The legislative context 7 The Patents Act provided relevantly: 102 What amendments are not allowable? Amendment of complete specification not allowable if amended specification claims or discloses matter extending beyond that disclosed in certain documents (1) An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim or disclose matter that extends beyond that disclosed in the following documents taken together: (a) the complete specification as filed; (b) other prescribed documents (if any). 114 Priority date of claims of certain amended specifications (1) This section applies if: (a) a complete specification has been amended; and (b) the amendment was not allowable under subsection 102(1); and (c) as a result of the amendment, a claim of the amended specification claims an invention that: (i) was not disclosed by the complete specification as filed in a manner that was clear enough and complete enough for the invention to be performed by a person skilled in the relevant art; but (ii) is disclosed in that manner by the amended specification. (2) If this section applies, the priority date of the claim must be determined under the regulations. 117 Infringement by supply of products (1) If the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier unless the supplier is the patentee or licensee of the patent. (2) A reference in subsection (1) to the use of a product by a person is a reference to: (a) if the product is capable of only one reasonable use, having regard to its nature or design—that use; or (b) if the product is not a staple commercial product—any use of the product, if the supplier had reason to believe that the person would put it to that use; or (c) in any case—the use of the product in accordance with any instructions for the use of the product, or any inducement to use the product, given to the person by the supplier or contained in an advertisement published by or with the authority of the supplier. (emphasis added) 8 Regulation 3.14 of the Patents Regulations 1991 (Cth) provided: 3.14 Priority dates: certain amended claims If section 114 of the Act applies to a claim of a specification, the priority date of the claim is: (a) in the case of an amendment to which subsection 29A(3) of the Act applies—the date on which the amendment is taken to have been made under that subsection; and (b) in any other case—the date of filing of the statement of proposed amendments that resulted in the disclosure referred to in subparagraph 114(1)(c)(ii) of the Act. (emphasis added) 9 And, s 31A(2) of the Federal Court Act provided: 31A Summary judgment […] (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. The patent's history 10 The present claim is complicated because the present form of the patent results, to some extent, from, first, a narrowing, and, secondly, a different expression (which the Sony parties argue is substantive) of the contents of a PCT international application based on an application that the then patentees (Messrs Pilkin and Miroshnichenko) originally lodged on 5 October 2009 in the Russian Federation and asked to be recognised through the international system. 11 On 7 September 2010, the patentees lodged the PCT application in Australia. The PCT application contained, in its complete specification, a much fuller description of what the patentees claimed to be the invention that relevantly was the subject of nine claims. However, the patent is disarmingly simple in comparison to the PCT application. 12 The patent now asserts only a single claim as follows: 1. An electronic device comprising: a body having a front side and a rear side, a touchpad arranged on the rear side, a visual display arranged on the front side, and a joystick, wherein a visual display is a touch screen display, wherein a user of the electronic device through manipulations with the touchpad or with the joystick controls at least one virtual symbol displayed on said visual display. 13 It is common ground that all of the terms used in both the PCT application and patent are ordinary English words and require no expert evidence from a person skilled in the art to explain any aspect of either document. The PCT application 14 Relevantly, the PCT application claimed two inventions. It is common ground that only the first of those inventions is relevant for present purposes. The PCT application was entitled "Touchpad Visual Display and Joystick Arrangement in an Electronic Device" and made nine claims in relation to the first invention. The patentees did not include any abstract in the PCT application. However, after the PCT application was filed, officers of the World Intellectual Property Organization appear to have prepared an abstract for it that (as is also common ground) is not part of the PCT application for present purposes. The field of the invention that the PCT application disclosed was that it related to electronic devices that were "designed for arrangement of a touch pad and/or a visual display and/or a joystick in electronic devices" (emphasis added). 15 The PCT application described the disadvantages of the current art, relevantly noting that: nearest embodiment to the invention described herein is the method of arrangement of a touchpad inside the body of an electronic device (e.g. a mobile phone) … The disadvantage of the above mentioned method is that the touchpad is arranged on the lateral side of the body of the electronic device, which prevents the user from performing manipulations on this touchpad by the hand, which holds the device. 16 The PCT application described the objective and description of the invention as being: …aimed at a user-friendly arrangement of a touchpad or a joystick in an electronic device, wherein: 1) at least one touchpad or at least one part (sector) of a touchpad or at least one joystick or a part of it is arranged on the rear side of the electronic device body to function in said arrangement, or 2) a touchpad or a part (sector) of a touchpad or a joystick is arranged partially on the rear side of the electronic device body, or 3) a touchpad or a part (sector) of a touchpad is arranged at once on the lateral side and the rear side of the electronic device body, and a touchpad itself has at least one bending, or 4) a touchpad or a part (sector) of a touchpad is arranged at once on the front side, lateral side and rear side of the electronic device body, or 5) a joystick is arranged on the lateral side of the electronic device body, or 6) a touchpad or a part (sector) of a touchpad or a joystick are made so as to move along the electronic device body, or 7) at least one sector is created on a touchpad or on one part of a touchpad or on a touch screen display, and/or a) a touchpad or a part (sector) of a touchpad has partially or completely convex shape and/or b) a touchpad or a part of it (sector) or a joystick is protected with a cover and/or c) a touchpad or a part (sector) of it or a joystick replaces the protective cover of a camera lens and/or camcorder lens or is placed on the protective cover of a camera lens and/or on the protective cover of a camcorder lens. (emphasis added) 17 The PCT application contained definitions for each of "virtual symbol control", "touchpad", "touch screen display", "joystick" and "electronic device". Importantly, the PCT application linked the functions of each of the relevant terms to the control of a virtual symbol, being for example a cursor on a screen. 18 After describing the definitions, the PCT application stated that "The above mentioned technical result is achieved as follows" and then set out a consistory clause largely corresponding to both the objective and description in [16] above and claim 1 of the patent: 1. At least one touchpad or at least one part (sector) of a touchpad or at least one joystick or a part of it is placed on the rear side of an electronic device body to function in the said arrangement, and the user of the electronic device through manipulations with the touchpad or a part (sector) of the touchpad or with the joystick or a part of the joystick controls at least one virtual symbol displayed at least on one visual display, placed on the front side of the electronic device body, or a touchpad or a part (sector) of a touchpad or a joystick is partially placed on the rear side of an electronic device body or a touchpad or a part (sector) of a touchpad is arranged at once on both, i.e. on the lateral side and on the rear side of an electronic device body, herewith the touchpad itself has at least one bending, or a touchpad or a part (sector) of a touchpad is arranged at once on the front side, lateral side and on the rear side of an electronic device body, or a joystick is placed on the lateral side of an electronic device body, or a touchpad or a part (sector) of a touchpad or a joystick are made so as to move along the electronic device body, or at least one sector is created on a touchpad or on one part of a touchpad or on a touch screen display, herewith through said sector at least one virtual symbol displayed at least of one visual display screen placed on the front side of the electronic device body is controlled, and/or a touchpad or a part (sector) of a touchpad has partially or completely convex shape and/or a touchpad or a part (sector) of a touchpad or a joystick is protected with a cover and/or a touchpad or a part (sector) of a touchpad or a joystick replaces the protective cover of a camera lens and/or a camcorder lens or is placed on the protective cover of a camera lens and/or on the protective cover of a camcorder lens. […] (emphasis added) 19 The PCT application, under the heading "Embodiment of the Invention", restated that, relevantly, the invention described in it was feasible and could be realised "due to application of prior technical art solutions and technology". It described the "Applications of the Invention" as being "for a user-friendly arrangement of a touchpad and/or touch screen display and/or joystick in electronic devices". 20 Claim 1 of the PCT application was as follows: 1. Arrangement of a touchpad, a visual display and a joystick in an electronic device, herewith said arrangement comprises a touchpad or a touch screen display or a joystick, characterized in that: 1) at least one touchpad or at least one part (sector) of a touchpad or at least one joystick or a part of it is arranged on the rear side of the electronic device body to function in said arrangement, and the user of the electronic device through manipulations with the touchpad or a part (sector) of the touchpad or with the joystick or a part of the joystick controls at least one virtual symbol displayed at least on one visual display placed on the front side of the electronic device body, or 2) a touchpad or a part (sector) of a touchpad or a joystick is arranged partially on the rear side of the electronic device body, or 3) a touchpad or a part (sector) of a touchpad is arranged at once on the lateral side and on the rear side of the electronic device body, and a touchpad itself has at least one bending, or 4) a touchpad or a part (sector) of a touchpad is located at once on the front side, lateral side and on the rear side of the electronic device body, or 5) a joystick is located on the lateral side surface of the electronic device body, or 6) a touchpad or a part (sector) of a touchpad or a joystick are made so as to move along the electronic device body, or 7) at least one sector is created on a touchpad or on part of a touchpad or on a touch screen display, herewith through said sector at least one virtual symbol displayed at least on one visual display placed on the front side of the device is controlled, and/or a) a touchpad or a part (sector) of a touchpad has partially or completely convex shape and/or b) a touchpad or a part of it (sector) or a joystick is protected with a cover and/or c) a touchpad or a part (sector) of it or a joystick replaces the protective cover of a camera lens and/or camcorder lens or is placed on the protective cover of a camera lens and/or on the protective cover of a camcorder lens. (emphasis added) The patent 21 As I have said, the patent was much simpler than, no doubt because it deleted much of the detail of, the PCT application. Crucially those deletions resulted in the removal of all references to a specified location for the joystick that the PCT application had contained. Thus, the patent described the field of the invention as: [0002] The invention relates to electronic device comprising a touchpad, a joystick and a visual display which is arranged on the front side of the body of the electronic device for controlling virtual symbols displaced on the visual display. 22 While both the PCT application and the patent referred to joysticks as being a known part of the art, the section headed "Background of the Invention" in each document did not refer to the use of a joystick to provide an opportunity to control an active element displayed on the visual display through manipulations of either the joystick or the touchpad and the joystick together. 23 In contrast to the objective and description of the invention in the PCT application (set out at [16] above), those in the patent were: [0004] The object and the technical result of the declared invention is to expand functional capabilities of the electronic device comprising a touchpad, a joystick and a visual display which is arranged on the front side of the body of the electronic device for controlling virtual symbols displayed on the visual display. (emphasis added) 24 Next, [0005] of the patent said that for the proper understanding and interpretation of the text of the claims, it used the term "joystick" as being "an input device consisting of a stick that pivots on a base and reports its angle or direction to the device it is controlling". The patent explained the technical result of the claimed invention in the consistory clause in [0007] that mirrored the only claim (set out at [12] above). The balance of the descriptions in the patent again rehearsed, without describing (in stark contrast to the PCT application), any location for the joystick or the potential use of a joystick in connection with the newly claimed arrangement. 25 The patent described its preferred embodiments and application of the invention as follows: [0015] The electronic device comprising a touchpad, a joystick and a visual display which is arranged on the front side of the body of the electronic device and described herein is technically feasible since it may be implemented through the use of technical solutions, software and hardware known from the prior art. The above configuration of the touchpad, joystick, and visual display of the electronic device could be realized by the above descriptions in view of the above prior art and the above closest comparative art in the specification. […] [0016] The declared invention is aimed to expand functional capabilities of the electronic device comprising a touchpad, a joystick and a visual display which is arranged on the front side of the body of the electronic device for controlling virtual symbols displayed on the virtual display. (emphasis added) The Sony parties' case under s 31A(2) of the Federal Court Act 26 There is no issue for the purposes of the present argument that, relevantly, the console has all the features claimed in the sole claim of the patent. First, the Sony parties argued that the effect of the patentees' broadening of the complete specification and the claims from what was in the PCT application to what was in the patent as granted, resulted in the patent having a deferred priority date that was later than the introduction of the console into the Australian market on 22 February 2012. They contended that the deferred priority date was 11 July 2014, being the date on which the patentees applied for the conversion of their Australian application for a standard patent, based on the PCT application, to an application for an innovation patent, as it came to be granted. They relied on ss 114 and 102(1) of the Act and reg 3.14 of the Regulations in support of their argument that the amendments were not allowable under s 102 of the Act because they disclosed matter that extended beyond that disclosed in the complete specification in the PCT application as filed. They submitted that, by force of reg 3.14(b), the date of filing of the statement of proposed amendments, namely 11 July 2014, became the deferred priority date and, as a result, Mr Pilkin could not successfully make out a case for infringement. 27 Secondly, the Sony parties argued that the invention claimed in the patent was not novel because of the publication, on 27 August 2009, of a United States patent application by Charlie W. Case Jr for a portable electronic device touchpad input controller: US 20090213081A1 (the Case application). 28 Mr Pilkin has represented himself, if I may say, very ably and with a commendable grasp of many aspects of the law, not limited to patent law. He has presented his case with admirable clarity and initiative. He has been assisted by an interpreter in the Russian language throughout the course of the hearing today, but has demonstrated a substantial fluency in English as he has made clear in the presentation of his argument that he gave to me, himself, in English. Summary dismissal – principles 29 The principles for the application of s 31A(2) of the Federal Court Act, on which the Sony parties move, require the Court to be satisfied Mr Pilkin has no reasonable prospect of successfully prosecuting the proceeding, or part of it. The power to dismiss a proceeding on this basis must not be lightly exercised. However, the test under s 31A is not as stringent as the test at common law or under r 26.01 of the Federal Court Rules 2011 as Kiefel CJ, Bell, Keane, Nettle and Gordon JJ explained in Trkulja v Google LLC (2018) 263 CLR 149 at 157-158 [22]-[23]. As they said, a provision analogous to s 31A (at 158 [23]): permits of the possibility of cases in which, although the plaintiff's case is not "hopeless" or "bound to fail", it does not have a real prospect of succeeding. (footnote omitted) 30 In Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2011) 119 IPR 194 at 208-209 [63]-[66], Bennett J, with whom Yates J agreed at 231 [183] (and see too at 225-226 [152]-[155] per Nicholas J and 233-234 [198], 240 [246], [249] per Yates J) explained the principles on which an assessment is made as to whether a complete specification provides a fair basis for a claim, either in the patent of which the claim forms part or for a later amendment of those claims, as follows: [63] A patent, conventionally drafted, records the background to the invention, generally describing a problem in the art, realised or unrealised by others. It explains how the inventor solved the problem and what he, she or they found. It then sets out the extent of the monopoly claimed for the invention described. It is necessary to read the whole of the patent to understand what the invention is. In order to gain the monopoly sought, the patent must satisfy the statutory tests in the Act. Some tests are directed to the way in which the patent is drafted, others to the right of the patentee to the claimed monopoly. A patent that satisfies the drafting requirements, for example where claims are fairly based on the description in the body of the specification, may still be liable for revocation, for example for want of novelty, lack of utility, the absence of an inventive step in "the journey" to the invention as outlined in the patent, or lack of sufficient description of the invention. [64] Section 40(3) of the Act provides that the claims of a patent must be fairly based on the matter described in the specification. The test for determining whether a claim is fairly based is determined by the application of the principles set out in Lockwood (No 1) [(2004) 217 CLR 274] at [69]. Section 40(3) requires a 'real and reasonably clear disclosure' of what is claimed. The invention must be broadly described in the body of the specification and not travel beyond the matter disclosed. As the High Court emphasised in Lockwood (No 1), s 40(3) does not involve an analysis of the inventor's rights to the invention but whether, as a matter of drafting, the claims can be said to reflect what is disclosed or stated in the body of the specification. [65] The same principles apply to a determination of external fair basis (Inverness Medical Switzerland GmbH v MDS Diagnostics Pty Ltd (2010) 85 IPR 525; [2010] FCA 108 at [142]); the claims must be fairly based on matter disclosed in a parent patent or a priority document. If the patentee asserts an earlier priority date than the filing date of the patent, by reason of the filing of an earlier patent or document in Australia or overseas, the claims of the patent must be supported by the description of the invention in the earlier patent or document. If the patentee changes the claims, the priority date of the claims may be deferred to the date that those changes were made. [66] In essence, even if an amended patent itself complies with the drafting rules, for example by amendments to add information to the specification to provide support for amended claims, a patentee cannot set forth one basis for and description of the invention to obtain an early priority date and then change the basis and the characterisation and description of the invention while keeping the same earlier priority date. (italic emphasis in original; bold emphasis added) (a) Deferred priority date Mr Pilkin's submissions on deferred priority date 31 Mr Pilkin argued that all that the patentees had done in filing the amendments on 11 July 2014, to convert the application for a standard patent, based on their PCT application, to one for an innovation patent, was to remove irrelevant words from the text of the PCT application. He said that those amendments had not added anything to the text of the PCT application as filed in Australia. Rather, he contended, the patentees had only deleted words and, thus, had retained in the amended complete specification everything disclosed in the original. He asserted that the patentees had used the word "or" in both versions to connect a number of variants in the potential configurations for the arrangement, the subject of the claimed invention. He said that, in the 11 July 2014 amendments, the patentees had narrowed the protection claimed for the inventions by deleting alternatives, and had not expanded the disclosure or (what became the sole) claim in any way. He argued that the amendments added no new integers to the description or claims included in the PCT application. But, he noted, the PCT application had provided for two alternatives, one where there was a touchpad on the rear of the device and the other where the joystick was on the rear of the device. He submitted that, in substance, the location of the joystick was not an essential integer in any part of the PCT application and, accordingly, the deletion in the innovation patent of all references to the location of a joystick was not something that fell within the meaning, in ss 102(1) and 114(1), of a specification that "disclose matter that extended beyond that disclosed in the…complete specification" in the PCT application as filed. Consideration – deferred priority date 32 The only use or function of a joystick that the PCT application described was on the rear, or lateral or side of the device, or of a joystick that either moved along the device's body or was protected with or replaced a cover. The PCT application contained no description of a joystick on the front side of the device in any arrangement, or any functionality for the placement of a joystick there. The PCT application always described a joystick as being in a particular location (as opposed to describing one as able to be located anywhere) on the electronic device. 33 The essential description of the arrangement in the complete specification for the PCT application (at p 1.10), excluding claims 1 to 9, is of "a user friendly arrangement of a touchpad or joystick in an electronic device" to enable the user to utilise that touchpad or joystick, as so arranged, in various specifically described locations, all of which the PCT application described in positions other than on the front of the device. 34 The PCT application stated (at p 2.10) that the "above mentioned technical result is achieved as follows" and then described in consistory clauses for claims 1 to 9 (inclusive), the same elements, again, without disclosure of any necessary function, in the described arrangement, that involved a joystick located on the front side of the device. The PCT application stated that the first invention (p 4.10) "may be applied for [sic] a user friendly arrangement of a touch pad and/or touch screen display and/or a joystick in electronic devices" (emphasis added). 35 Thus, a joystick was not an essential integer of the invention of the arrangement as described in the PCT application, except when it was located at positions other than the front of the device. Hence, claim 1 in the PCT application began with a description of the role of each of the three elements, or possible elements, in an arrangement by using the disjunctive "or" between "touch screen" and "joystick". That form of expression had the function, read in light of the complete specification as a whole, of limiting the use of those elements, so far as they described the location of a joystick in the arrangement, to a location described in the relevant particularised applications that included a joystick given in claim 1. 36 In my opinion, the proper construction of claim 1 of the PCT application, reading the complete specification as a whole is that, so far as the joystick had importance or significance in the claimed invention consisting of an arrangement, the actual location of the joystick at a specified position (other than the front of the device) or on a cover constituted its essential place in the claimed invention. 37 In other words, a person skilled in the art, reading the complete specification as a whole, as well as claims 1 to 9 in the PCT application separately, would understand claims 1 to 9 to be limiting the invention to require that any joystick that was to be included as part of the arrangement claimed, would be in a specific location, usually somewhere other than on the front of the device or on a cover. A person skilled in the art (and, indeed, the ordinary reasonable person), reading the PCT application as a whole, would have understood the multiple references, in the complete specification, and claims 1 to 9, to a joystick located on the rear, lateral or side of the device or on a cover or made so as to move along the device's body to signify that the joystick had a role in the invention elsewhere than simply on the front of the device. 38 The natural and ordinary meaning of the complete specification of the PCT application, describes an invention comprising arrangements of three elements, being a touchpad, a touch screen display and, where it included one, a joystick that was described as being in particular configurations and locations. The disclosure of the invention in the specification concerning the possible locations of a joystick was set out before the claims for a monopoly. Throughout the part of the complete specification of the PCT application that preceded the claims, wherever it described the joystick being used in the arrangements comprising the invention, it did so in terms that, relevantly, required the joystick to be deployed on a cover or on locations other than the front of the device. 39 I am of opinion that the natural and ordinary meaning of the complete specification of the PCT application, as filed, is that the arrangements the subject of the claims were limited to uses of the joystick in specified locations other than the front of the device or on a cover, so that an unlimited or unqualified use of a joystick on the front of the device (or at any location) was not the subject of any disclosure to support (or base) a claim for a monopoly for such a use: Welch Perrin & Co Pty Limited v Worrel (1961) 106 CLR 588 at 609-610 per Dixon CJ, Kitto and Windeyer JJ. Nor do any of claims 1 to 9 in the PCT application refer to any use of a joystick on the front of the device or dissociated from a specific location, such as a cover. 40 It follows that the sole claim in the patent in suit travels beyond matter that was disclosed in the complete specification as filed with the PCT application. That is because the claim permits a joystick to be used, without any limitation, at any place on the electronic device, the subject of the claimed arrangement, including the front. In contrast, the complete specification as filed with the PCT application attributed the uniqueness of the claimed invention of an arrangement to one in which, when a joystick was employed, that integer would be used in specified locations other than on the front of the electronic device or used on a cover. 41 It follows that none of the claims of infringement of the patent in the statement of claim would have any reasonable prospect of succeeding. That is because the complete specification in the patent in suit discloses matter (being that a joystick can be located anywhere, including on the front of a device without being on a cover) that was not disclosed in the PCT application as filed. As a result, the sole claim in the patent must have a deferred priority date of 11 July 2014. That claim extended the scope of the monopoly beyond matter disclosed in the complete specification of the PCT application as filed (see s 102(1)(a) of the Patents Act). (b) Novelty – Introduction 42 In the event that I am wrong in that conclusion, it is necessary to look at the novelty case. The Case application contained 14 figures, being illustrations, as examples, of possible embodiments of the claimed invention. One figure was of an electronic device that was hand-held and had a display on its facing side with a touchpad on the non-facing, bottom, or rear surface. However, as illustrated and explained in the complete specification's detailed description of preferred embodiments in the Case application, that device did not include a joystick. Other preferred embodiments and figures in the Case application comprised computers, including a laptop computer, that, as Mr Pilkin explained, comprised four faces, two of which were on the top section of a device that could be opened to face the user, and the other two faces were on the bottom section of the device that would open to allow the user to see the screen facing him or her from the top section while using the keyboard and touchpad on the upper part of the bottom section. Thus, the user would enter data on the lower section of the device by using his or her hand while the display was in a screen on the opened top section of the device. It follows that a laptop computer itself could not meet the description in the claim made in the patent in suit. 43 However, as usually occurs in patent wording, the Case application recorded that all of the embodiments that it contained were descriptive and not definitional. It also described (in [0061]) the display of the laptop computer as one that faced a user when the device was in use and the touch pad of the laptop was positioned opposite the display also on a facing surface. The Case application also described the underside of figures 1A, 1B and 9 (reproduced below) in as being a non-facing surface ([0020] and [0065]). 44 Relevantly, [0067] and [0069] in the Case application provided: [0067] In any of the implementations of the invention, the display may also be touch sensitive to provide input [of] more modes and flexibility. As described throughout, the touchpad may correspond to a full keyboard. A joystick or thumb controller may also be added to provide free motion cursor operation. […] [0069] The front facing side of this display could also include a touchpad in addition to the touchpad or touchpads on the reverse side to provide additional usage flexibility, including the ability to grab a graphical object from either side of the device. (emphasis added) 45 Importantly, as the Case application made clear in [0067], a joystick could be added to provide free motion cursor operation, being the very operation which the joystick and touchpad in the patent in suit claimed. And [0069] said that, through the use of a touchpad, the invention described could provide the ability to grab a graphical object from either side of the device. In [0072] the inventor claimed, before detailing the 29 claims, that: … In view of the many possible embodiments to which the principles of our invention may be applied, it should be recognized that the detailed embodiments are illustrative only and should not be taken as limiting the scope of our invention. Rather, I claim as my invention all such embodiments as may come within the scope and spirit of the following claims and equivalents thereto. (emphasis added) 46 The complete specification of the Case application disclosed that there could be an arrangement of the electronic device, comprising a touchpad on its rear side, a visual display arranged on its front side, and a joystick, in which a user of the electronic device, by manipulating the touchpad and/or the joystick could control at least one virtual symbol displayed on the visual display of the device. Importantly, the Case application did not specify that the joystick should be in any particular location on the electronic device. Mr Pilkin's submissions on novelty 47 Mr Pilkin argued that the electronic device or devices that the Case application described did not sufficiently anticipate the invention claimed in the patent in suit. He said that there was no explicit indication that any of the figures of preferred embodiments or the descriptive part of the complete specification of the Case application identified precisely what the patent in suit claimed, being control over one virtual symbol using a touchpad or joystick. Consideration – Novelty 48 Aickin J held in Meyers Taylor Pty Limited v Vicarr Industries Limited (1997) 137 CLR 228 at 235 that: The basic test for anticipation or want of novelty is the same as that for infringement and generally one can properly ask oneself whether the alleged anticipation would, if the patent were valid, constitute an infringement… 49 Importantly, an anticipation must be precise and give clear and unmistakable directions to do what the patentee claims to have invented. Signposts along the road to the patentee's invention do not suffice to make out an anticipation of an invention. The position is as I explained in Apotex Pty Ltd v Les Laboratoires Servier [2013] FCA 1426 at [70]-[73] (see also Damorgold Pty Limited v Blindware Pty Limited (2017) 130 IPR 1 at 30 [142]-[145] per Middleton J): It is necessary that the prior art (here one or both earlier patents) disclose an invention that, if performed, would necessarily infringe the patent in suit: H Lundbeck A/S v Alphapharm Pty Ltd (2009) 177 FCR 151 at 194 [189] per Bennett J, with whom Middleton J agreed. Her Honour added (at 194 [189]-[190]): "Once the very subject matter of the invention has been disclosed, the person skilled in the art is assumed to be willing to make trial and error experiments to get it to work ... where the prior publication is of the subsequently claimed invention, that is sufficient. Where the prior disclosure falls short of a complete disclosure, the question of the sufficiency of that disclosure arises. It is there that consideration must be given to the quality of a disclosure to the skilled addressee armed with common general knowledge … the Court, armed with the evidence of the skilled addressee as to terms of art and the nature and extent of the disclosure in the prior art document, must determine whether the prior disclosure is sufficient to enable the skilled addressee to perceive, understand and, where appropriate, apply the prior disclosure necessarily to obtain the invention." (emphasis added) The invention will be disclosed to a skilled addressee by the prior art provided that any trial and error experimentation needed is a standard or ordinary procedure or something that is part of common general knowledge as a practical means of performing the invention: Lundbeck 177 FCR at 190 [173]. However, if all the prior art does is to describe the earlier invention without disclosing the effective means by which it could be produced, it will not anticipate a subsequent invention: Olin Corporation v Super Cartridge Co Pty Ltd (1977) 180 CLR 236 at 261 per Stephen and Mason JJ, Barwick CJ agreeing on this point at 239. For an anticipation of a subsequent discovery, the prior art, coupled if need be with common general knowledge, must disclose to the skilled addressee "a practicable mode of producing the result which is the effect of the subsequent discovery": Olin Corporation 180 CLR at 261. And as Bennett J observed in Lundbeck 177 FCR at 192 [181]: "If the prior art discloses some but not all integers of a claimed patent to a product, such as a combination, there is anticipation if the skilled addressee would add the missing information as a matter of course and without the application of inventive ingenuity or undue experimentation (Nicaro [Holdings Pty Ltd v Martin Engineering Co (1990)] 91 ALR [513] at 530-531)." In ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc (2000) 106 FCR 173 at 230 [51] Lee, Heerey and Lehane JJ applied the "flag metaphor" used by Sachs, Buckley and Orr LJJ in General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485-486 to illustrate the concept of anticipation. Their Lordships said: "To anticipate the patentee's claim the prior publication must contain clear and unmistakable directions to do what the patentee claims to have invented: Flour Oxidizing Co Ltd v Carr & Co. Ltd. (1908) 25 RPC 428 at 457, line 34, approved in BTH Co Ltd v Metropolitan Vickers Electrical Co Ltd (1928) 45 RPC 1 at 24, line 1). A signpost, however clear, upon the road to the patentee's invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentee." The Full Court in Lubrizol 106 FCR at 230 [51] added that anticipation was not proved if the skilled addressee had to rummage through the prior inventor's flag locker to find a flag there that could have been (but was not) planted. (emphasis in original) 50 In my opinion, the Case application disclosed all of the integers of the invention in the claim made in the patent in suit. That is because the Case application disclosed the use of a touch screen device having a front and rear face or side, that was an electronic device in an arrangement with a joystick. Thus, the Case application disclosed the entire subject matter of the invention that is claimed in the patent in suit. A person skilled in the art, who was willing to make trial and error experiments, to get it to work, would have been able to produce from that disclosure an article the subject of the sole claim on which Mr Pilkin relies. 51 Indeed, the arrangement that the patent in suit claimed involved elements that were well-known to persons in the art, as the definitional provisions in the PCT application confirmed. The real substance of the claimed invention consisted of what was already disclosed in the Case application, namely, an arrangement that allowed the ability to integrate, in one electronic device, a screen that faced the user and, on the non-facing side of the device, a touch screen, or touchpad, together with an optional arrangement incorporating, at any location, a joystick that could control at least one virtual symbol or graphical object on the display. Accordingly, the Case application disclosed the essential integers that are the same as those in the claim subsequently made by the patent in suit. 52 It follows that Mr Pilkin has no reasonable prospect of successfully prosecuting a claim for infringement against any respondent, within the meaning of s 31A(2) of the Federal Court Act, because his patent would be found invalid for lack of novelty in light of the prior disclosure, on 27 August 2009, in the Case application that preceded the filing on 5 October 2009 of the Russian application, the basis of the later PCT application. 53 Alternatively, the console had all of the features of the accused product and, as Mr Pilkin alleges, it went on public sale in Australia from 22 February 2012. Therefore, its sale after the priority date of 11 July 2014 could not have infringed the patent because all of its features were in the public domain and had been exploited for over 2 years before then. 54 For those reasons, the whole of Mr Pilkin's case does not have any reasonable prospect of succeeding and therefore, the proceeding must be dismissed under s 31A(2) of the Federal Court Act. (c) Service out of the jurisdiction 55 In the event that my findings under s 31A(2) of the Federal Court Act are wrong, I would have refused Mr Pilkin leave to serve Sony LLC out of the jurisdiction because I am not satisfied that he has demonstrated a prima facie case for relief against it on any basis in accordance with r 10.43(4)(c) of the Federal Court Rules. In Ho v Akai Pty Limited (in liq) (2006) 247 FCR 205 at 208 [10], Finn, Weinberg and Rares JJ said of the test under the analogous rule in O 8 r 2(2)(c) of the Federal Court Rules 1979: As has been observed on many occasions, the prima facie case requirement has to be met at the outset, usually on an ex parte basis, and without the advantage of discovery and other procedural aids to the making out of a case: see e.g. Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387 at 390. It "should not call for a substantial inquiry": WSGAL Pty Ltd v Trade Practices Commission (1992) 39 FCR 472 at 476; see also Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539 at 549. For present purposes it is sufficient to say that a prima facie case for relief is made out if, on the material before the court, inferences are open which, if translated into findings of fact, would support the relief claimed: Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110. Or, to put the matter more prosaically as Lee J did in Century Insurance Ltd (in prov liq) v New Zealand Guardian Trust [1996] FCA 376: What the Court must determine is whether the case made out on the material presented shows that a controversy exists between the parties that warrants the use of the Court's processes to resolve it and whether causing a proposed respondent to be involved in litigation in the Court in Australia is justified. 56 The statement of claim alleged in par 16 that, although Sony LLC was incorporated only in 2016, it had infringed the patent by selling the console in Australia from 22 February 2012. That allegation must fail. First, Sony LLC did not exist until about April 2016 and so could not have infringed the patent before it existed. Secondly, the evidence on which Mr Pilkin relied to establish a prima facie liability of Sony LLC did not succeed in doing so. He relied on a press release issued by Sony Computer Entertainment and Sony Network Entertainment, to announce the formation of Sony LLC that would begin business worldwide on 1 April 2016. The press release stated that Sony Computer Entertainment Inc, that is now named Sony Interactive Entertainment Inc (SIE Inc), manufactured, distributed, developed and marketed the PlayStation models, including the PS Vita portable entertainment system (which incorporated the accused product, being the console). 57 The evidence before me established that, as at March 2019, SIE Inc owned the trademark for the PlayStation Vita and the copyright in the user guide and other documents for it, all of which tended to suggest that SIE Inc, and not Sony LLC, continued to manufacture the accused product. Mr Pilkin argued that because Sony LLC had been formed with the objectives stated in the press release, it had become both the assignee of all the rights and liabilities of SIE Inc, and the manufacturer of the PlayStation models, including the console. 58 That argument has no basis. In my opinion, the press release can only reasonably be understood as announcing that the formation of Sony LLC would effect a corporate reorganisation that would impose Sony LLC as the company controlling, in one location, or through one head office, the worldwide operations of a variety of related companies within the Sony group and, in that position, Sony LLC would coordinate the other companies' manufacture, sales and marketing of the PlayStation products. There is no textual basis for supposing, in the absence of any other evidence, that SIE Inc had ceased to manufacture the accused product, particularly having regard to SIE Inc's retention of ownership of the trademark for the subsequent three years after the introduction of Sony LLC. 59 Accordingly, I am not satisfied that Mr Pilkin has established a prima facie case warranting service out of the jurisdiction under r 10.43(4)(c). That is because the material before me does not supply a sufficient basis on which it would be reasonable to infer that, first, Sony LLC is, or has become, the manufacturer of the accused product or, secondly, it has somehow assumed obligations for SIE Inc's alleged infringement that arose from sales prior to Sony LLC's incorporation. 60 The claim that Mr Pilkin wishes to make in par 20 of the statement of claim against Sony Network is somewhat more refined. He claims that, because Sony Network manufactured games for use on the console, it infringed s 117 of the Act. Mr Pilkin argued that all of the respondents acted in concert to bring about an infringement of s 117, and that Sony Network did so because its games could only ever be played using the console. 61 Assuming that at a trial that fact would be found, it may have been possible for Mr Pilkin to argue that the use of a product, being one of the games, had infringed the patent within the meaning of s 117(2)(a) or (b) because the games could only be used and played on the accused product. However, it is not necessary for me to decide that question because of my findings that the other bases of the relief sought in the amended originating application cannot be sustained. Conclusion 62 For these reasons, I am of opinion that the appropriate order is that the proceeding must be dismissed summarily under s 31A(2) of the Federal Court Act and that Mr Pilkin must pay the Sony parties' 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: 21 June 2019 SCHEDULE OF PARTIES NSD 214 of 2018 Respondents Fourth Respondent: SONY INTERACTIVE NETWORK EUROPE LIMITED Fifth Respondent: SONY INTERACTIVE ENTERTAINMENT AUSTRALIA PTY LIMITED	11,991
federal_court_of_australia:fca/single/2008/2008fca1486	decision	commonwealth	federal_court_of_australia	text/html	2008-10-08 00:00:00	SBZF v Minister for Immigration and Citizenship [2008] FCA 1486	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2008/2008fca1486	2024-09-13T22:50:00.968918+10:00	FEDERAL COURT OF AUSTRALIA SBZF v Minister for Immigration and Citizenship [2008] FCA 1486 MIGRATION – appellant claimed asylum for reasons of ethnicity, religion and imputed political opinion – whether Tribunal fell into error by failing to address whether appellant had a well-founded fear of future persecution – whether Tribunal fell into error by failing to address whether appellant's association with her son who was granted a protection visa might give rise to an imputed political opinion of the appellant – whether Tribunal fell into error by failing to address whether appellant's claims of restriction of public practice of her religion amounted to persecution – whether Tribunal accepted evidence of deliberate persecution of people of Uigher ethnicity – whether Tribunal fell into error by not considering whether appellant would therefore be subject to future persecution – appeal allowed. Migration Act 1958 (Cth) s 91R Appellant S395/2002 v Minister for Immigration & Multicultural Affairs (2003) 216 CLR 473 followed Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 cited Wang v Minister for Immigration & Multicultural Affairs (2000) 105 FCR 548 followed SBZF v MINISTER FOR IMMIGRATION AND CITIZENSHIP and REFUGEE REVIEW TRIBUNAL SAD 29 of 2008 LANDER J 8 OCTOBER 2008 ADELAIDE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAD 29 of 2008 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SBZF Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: LANDER J DATE OF ORDER: 8 OCTOBER 2008 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The orders of the Federal Magistrates Court made on 22 February 2008 be set aside and in lieu thereof there be orders: (a) that the application for judicial review be allowed; (b) that the decision of the Tribunal handed down on 7 February 2007 be quashed; (c) that the application for a review of the delegate's decision be remitted to the Tribunal for further consideration according to law; (d) the Minister for Immigration and Citizenship pay the applicant's costs in the Federal Magistrates Court. 3. The first respondent pay the appellant'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 SOUTH AUSTRALIA DISTRICT REGISTRY SAD 29 of 2008 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SBZF Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: LANDER J DATE: 8 OCTOBER 2008 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 This is an appeal from an order of a Federal Magistrate made on 22 February 2008 dismissing an application for judicial review of a decision of the Refugee Review Tribunal (the Tribunal) made on 25 January 2007 and handed down on 7 February 2007. The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs (the first respondent) to refuse to grant a Protection (Class XA) visa to the appellant. 2 The appellant is a citizen of the People's Republic of China. She legally departed from China on 1 August 2006 and arrived in Australia on 2 August 2006 as the holder of a sponsored visitor visa (Class UL, subclass 679). On 17 August 2006 she lodged an application for a Protection (Class XA) visa with the Department of Immigration and Multicultural Affairs which was rejected by the Minister's delegate on 23 October 2006 and the appellant was notified accordingly. 3 On 26 October 2006 the appellant applied to the Tribunal for a review of that decision. Background 4 Although the appellant's documents show that she was born in 1950 she later said that she was born in 1947. She is of Uigher ethnicity. She was married in September 1962. She worked as a teacher whilst in China however her teaching career was interrupted for a time during the middle 1960's when she and her husband, who was also a teacher, were dispersed to work on a farm in difficult circumstances. They lived there for 13 years before returning to teach at their original schools in 1977. In 1990 her husband was detained by Chinese authorities and died in 1993 in detention. The appellant ceased working in 1991. She said she was made to retire. She said that she was given a pension because she had no other income and children to support. 5 The appellant claimed to have six children, three boys all older than their three sisters. Two of her children currently reside in Australia; her daughter emigrated to Australia in 1995 as the spouse of an Australian citizen; and her son arrived in Australia in 2006 claiming to be a refugee. He was initially refused a protection visa by the delegate of the Minister. He sought a review of that decision in the Tribunal which found him to be a person to whom Australia has protection under the Refugee's Convention. The circumstances and consequences of her son's entitlement to a protection visa form a part of the argument advanced before me on the appellant's behalf which I will address later in these reasons. 6 The appellant claimed that she feared persecution for reason of her ethnicity, religion and imputed political opinion. She is a Muslim and of Uigher ethnicity, who originates from Xinjiang province, formerly called East Turkestan. She claimed specifically that family members, particularly her husband, grandfather, son and son-in-law have all suffered at the hands of authorities because of their ethnicity and involvement in the Uigher community; that she was sent with her husband to work on a farm and that she was separated from him when he was imprisoned in 1990; that she was forced out of her job because she was the wife of a suspected "separatist"; and that she was not permitted to practise her religion or any religious rituals. She also asserted that she was suffering from unspecified "health problems" which could not be treated in China. She tendered a letter from a Dr Nareen Wilson dated 13 September 2006 stating, amongst other things, that the appellant was "a refugee" who suffered from Post Traumatic Stress Disorder and was "an epileptic" and had "not been able to get any medications in China due to persecutions." The Tribunal's Decision 7 The Tribunal accepted the appellant's statements regarding her family except in one particular. It determined that her claim that she was the mother of the sixth child was untrue. The Tribunal found that child could not possibly be the appellant's natural child, but be her granddaughter or her brother's child and later adopted by the appellant. 8 The Tribunal addressed the country information which it had received. The country information put before it was to the effect that the Uigher population in Xinjiang province continues to be at a disadvantage due to China's Develop the West Program. The Uighers are being deliberately persecuted for practising and preserving their culture and religion. It wrote: Country information indicates that East Turkistan came under the rule of the PRC in 1949 and is now known formally as Xinjiang Uigher Autonomous Region, or simply Xinjiang Province. The Chinese government initially introduced a two track education system but has since replaced it with a variation that requires all schools to teach in Chinese, although they may also teach in the local language as well. The dominant position of standard Chinese in government, commerce and education puts users of minority languages at a disadvantage. Amnesty International notes that the Uighur population in China's Xinjiang province continues to be at an economic and social disadvantage largely due to China's Develop the West Program and her (sic) subsequent influx of Han Chinese to the region. However, the repression of the Uighers stems deeper than mere disadvantage, as they are being deliberately persecuted for practising and preserving their culture and religion. The applicant's account of her grandfather and husband's experiences appear to be consistent with the country information cited above. However, the question to be addressed is whether the applicant herself is a victim of persecution. 9 The reference by the Tribunal to the Uighers being at more than a disadvantage but being "deliberately persecuted for practising and preserving their culture and religion" was extracted from a report of Amnesty International of 11 October 2006. The Tribunal made no comment on this aspect of the country information in that part of its decision under the heading of "Findings and Reasons". 10 As can be seen, the Tribunal stated that the question to be addressed was whether the applicant herself was a victim of persecution. The question the Tribunal posed itself is important. 11 It accepted the appellant's claim regarding her working life but noted that the practice of dispersing segments of urban populations to rural areas was widespread in China during the period the appellant and her family were forced to work as farmers, and it was not limited only to Uighers. The Tribunal accepted the appellant's claim of separation from her husband on the basis of his involvement and activism within the Uigher community, and also the evidence of the appellant's son-in-law, who was detained in China while visiting in 2002/2003. However, it did not find that this amounted to persecution of the appellant on a Convention ground, as it did not necessarily follow that she suffered discrimination by association. The Tribunal found that the fact that the appellant's son was granted a protection visa "does not support that the applicant is herself a person to whom Australia has protection obligations under the Refugees Convention". It was not satisfied that the appellant had suffered discrimination on the basis of her ethnicity. The Tribunal rejected the appellant's claim that she was discriminated against in her employment as a teacher, instead determining that her retirement in 1991 was on the grounds of ill-health and that she was granted a government pension. 12 The Tribunal accepted country information that the Chinese government had a policy of controlling and regulating religious groups and of crackdowns against Muslim Uighers. However, it held that there was no claim that the appellant suffered persecution or came to the attention of authorities on the basis of her religion. It held there was no evidence that she lost her teaching position because of her religion, or that she was effectively prevented from practising her religion in private, or that she was treated any differently from the population at large regarding her religion. In making this finding the Tribunal said the applicant had not made a claim that "she suffered persecution or came to the attention of the authorities on the basis of her religion". 13 The Tribunal also held that while the appellant had recently become a member of the East Turkestan Association in Australia and regularly attended mosque, she had not been engaged in activities in Australia that were likely to bring her to the attention of the authorities upon her return to China. 14 For all of these reasons, the Tribunal affirmed the decision of the Minister's delegate in not granting a Protection (Class XA) visa, stating in particular: The Tribunal is not satisfied that the applicant has been seriously harmed in the past. The Tribunal does not accept that the applicant faces a real chance of serious harm amounting to persecution in the reasonably foreseeable future. The Tribunal is not satisfied that the incidents that the appellant describes, taken individually or cumulatively, amount to persecution or discrimination within the meaning of the Convention. Application in the Federal Magistrates Court 15 On 8 October 2007 the appellant filed an application in the Federal Magistrates Court seeking to quash the Tribunal's decision. The application raised three grounds: 1. The Tribunal failed to consider, or make findings in relation to, the appellant's claims of a well-founded fear of being persecuted for reasons of her religion and/or asking the wrong question in relation to those claims by misunderstanding the meaning of "religion" in the Refugees Convention; 2. The Tribunal failed to consider, or make findings in relation to, the appellant's claims of a well-founded fear of being persecuted due to her association with her son, who was an active member of the East Turkestan Association and a person to whom Australia had recently granted a protection visa; 3. The Tribunal asked the wrong question in relation to whether the Applicant had a well-founded fear of persecution, in that it failed to consider whether there was a real chance of future persecution, even in the absence of past persecution. 16 The Federal Magistrate summarised the appellant's first ground as a complaint that the Tribunal failed to take into account the restrictions on the appellant's ability to practise her religion by way of public manifestation of her beliefs. The appellant argued, citing Wang v The Minister for Immigration and Multicultural Affairs (2000) 105 FCR 548, that two elements of the concept of religion as expressed in the Convention must be considered; the manifestation of personal faith and the practice of faith in a congregation or like-minded community. She contended that the failure to consider her claim that she was restricted in her public expression of faith constituted a jurisdictional error. 17 His Honour held that it was literally incorrect for the Tribunal to find that "she has made no claim that she suffered persecution … on the basis of her religion" because evidence provided by the appellant and her agent clearly demonstrated she was making such a claim. However, it also determined that the appellant's evidence and submissions did not amount to an "especially focused reference to the denial of public worship". His Honour found (at[14]): Moreover, the case the applicant put on religious persecution was one of general repression – including restrictions on dress, forced performance of tasks inconsistent with religious tenets, disadvantage in employment and invigilation of private prayer. It did not include a great deal of information about specific instances of persecution relating to the applicant personally. That does not mean that it did not have to be given proper consideration but it does have an impact on our (sic) evaluation of the way the Tribunal went about its task. The one very specific occasion referred to in the statutory declaration is identified in the Tribunal's findings (the visit by an official to her house during prayer). The reference to the fact that her employment has not been lost and as to the applicant not being the focus of specific attention by the authorities are unsurprising observations in a decision of this kind. It is a matter of the Tribunal putting the allegations in some perspective rather than an indication that the Tribunal was suggesting that such allegations were a necessary part of an allegation of religious persecution. 18 His Honour held that the appellant's claims did not identify specific instances of personal persecution and as such the Tribunal was principally engaged in evaluating the meaning of "serious harm" under s 91R of the Migration Act 1958 (Cth) (the Act) rather than trying to apply an "inappropriate test" as to what constitutes religious persecution. 19 His Honour held that while the Tribunal dealt somewhat summarily with matters of the specific and personal circumstances of the appellant, it nonetheless considered them and therefore did not fall into jurisdictional error in dealing with persecution on the basis of the appellant's religion. 20 In relation to the second ground, the Federal Magistrate noted first, that the Tribunal had little difficulty in accepting the appellant's account of her husband's activities and of the difficulties they experienced from the Chinese authorities. Secondly, his Honour noted the activities of the applicant's son, who had been asked to spy for the Chinese in the East Turkestan community in Australia, had been actively involved in the community's activities within Australia, and had recently been successful in his review from the Minister's refusal to grant him a protection visa. His Honour was prepared to draw the inference that the Tribunal had access to the file held by the Tribunal differently constituted in relation to the appellant's son. 21 It was accepted by counsel before the Federal Magistrate that the only relevance this information had was with respect to the appellant's claims of how a well-founded fear of persecution on account of political opinion could be imputed to her on account of her association with her husband and her son, and inferences that might be drawn from that by the Chinese authorities. 22 However, the Federal Magistrate determined that the Tribunal had given proper consideration to this material and thus had not fallen into jurisdictional error, stating (at [32]): ... I think that a fair reading of the Tribunal's decision indicates that such a consideration was properly evaluated. The Tribunal knew of, and noted, the experiences of both the applicant's husband and son (and son-in-law, less significantly). The husband had, after all, died in detention. What was significant for the Tribunal, and, I may say, understandably significant, was that, notwithstanding these issues, the applicant had not suffered convention-related harm herself. The Tribunal found (and it was not disputed) that she was not a political activist herself (CB 332). Her claim for refugee status on account of political activity (bound up with Uigher ethnicity) was always to be evaluated on family association criteria. Apart from the fact of her ethnicity, it did not otherwise arise on the facts of this case. I am satisfied the Tribunal did give proper consideration to the political opinion that might be imputed from her son's East-Turkistan activities, just as it did to that which might have been imputed from her deceased husband's activities. 23 The Federal Magistrate turned his mind to the third ground of appeal: that the Tribunal had applied an incorrect test in asking whether the appellant had suffered significant past persecution, and had not properly assessed the risk of future persecution. 24 Counsel relied on Appellant S395/2002 v Minister for Immigration and Multicultural Affairs (2003) 216 CLR 473 and argued that although the Tribunal might have been entitled to examine the appellant's living circumstances in China and reach the conclusion that no past persecution had in fact occurred, the absence of past persecution did not mean that there was not a real chance of persecution in the future. He argued that the Tribunal paid little to no attention to the risks of the appellant suffering persecution upon her return to China. 25 The Federal Magistrate agreed that the Tribunal had dismissed the question of future persecution quite summarily. However, His Honour pointed out that no evidence had been produced to indicate that the appellant would behave any differently in the future to how she had in the past, and concluded: It would in those circumstances be an otiose exercise, having reached conclusions about past activities not having led to persecution, for the Tribunal to expressly posit such activities happening in the future and then make findings – based on a prognostication of future events – when it was given no basis for considering that future activities would be any different or the response of the authorities any more persecutory. In these circumstances, the Tribunal can only find, as here, that no chance of serious harm on account of such activities will occur in the reasonably foreseeable future. 26 His Honour therefore dismissed the appellant's application for judicial review. On Appeal 27 The appellant's notice of appeal raises several grounds of appeal. The first three challenge the Federal Magistrate's conclusions on the Tribunal's findings in relation to the issue of future persecution, asserting that His Honour erred in holding that: a) The Tribunal's failure to assess a risk of future persecution did not amount to jurisdictional error, b) It was not required to examine the issue, despite the appellant not giving evidence as to any difference in future behaviour; and c) The Tribunal was not required to make findings relating to this question and that their absence did not amount to the Tribunal asking the wrong question by focusing on any persecution the appellant may have suffered in the past, rather than the future. 28 The notice of appeal also challenges the Federal Magistrate's conclusion in dismissing the claim of jurisdictional error in that the Tribunal's findings regarding the appellant's claimed fear of persecution for reasons of religion, and in particular its failure to consider whether restrictions on public worship amounted to persecution. 29 Finally, it is asserted in the notice of appeal that the Federal Magistrate erred in concluding that the Tribunal had properly considered the appellant's claim for fear of persecution on the basis of a political opinion imputed to her by reason of her son's political activities in Australia, and had properly taken into account the fact of the grant of a protection visa to the appellant's son in its consideration. 30 During argument the appellant's counsel applied for leave to amend a further ground of appeal directed to the passage in the Tribunal's reasons referred to in [8] of these reasons. Counsel asked for time to consider the precise wording of the amendment. I directed the appellant to formulate the amendment within 7 days and each party to provide me with written submissions in relation to the application for leave to amend and the substance of the amendment. The parties complied. 31 Whilst the first respondent argued that the ground should be dismissed, no separate argument was put that leave should not be given. The ground of appeal for which leave was sought is: 4. The learned Federal Magistrate erred in not holding that the Tribunal had: 4.1 upon finding that "the repression of the Uighers stems deeper than mere disadvantage, as they are being deliberately persecuted for practising and preserving their culture and religion"; 4.2 committed jurisdictional error by not considering whether, in light of that finding, the Appellant, as an Uigher person, would therefore also be persecuted if she were to return to China. 32 It would be appropriate in the circumstances of this appeal to grant leave to amend in the absence of any objection by the first respondent and because the ground is related to the first ground, and because in my opinion the ground should be upheld. Appellant's Submissions 33 The appellant submitted that the Tribunal fell into jurisdictional error by failing to ask the question itself whether the appellant, upon returning to China, would be restricted in the manner in which she could practise her religion and, if so, whether this would amount to persecution. 34 The appellant contended that whilst the Tribunal addressed the appellant's historical claims, the Tribunal did not address the ultimate question which was whether the appellant had a well-founded fear of persecution if the appellant were to return to China. 35 It was contended that the Tribunal did not apply its mind to what persecution the appellant might suffer by reason of her ethnicity, religion or imputed political opinion if she were to return to China. It merely concentrated on past events. 36 It was put that the appellant had given the Tribunal explicit material which showed that she would be restricted in the manner in which she could practise her religion. She tendered evidence in the form of a statutory declaration and country information which showed that the Chinese State restricted the practice of Islam by Uigher members. In particular, she claimed that the Tribunal failed to address the thrust of her claim, which was that she was restricted from practising her religion in public and required to practise her religion discreetly and privately. 37 The third ground of appeal relied upon by the appellant related to the grant of a protection visa to her son and any political opinions that might be imputed to the appellant by the Chinese authorities because of that fact. It was submitted that the appellant had already provided information to the Tribunal regarding her son's political profile. 38 It was argued that the Tribunal expressed too wide a principle in holding that the fact that the appellant's son had had his protection visa application remitted by the Tribunal "[did] not support that the applicant is herself a person to whom Australia has protection obligations under the Refugees Convention." The appellant submitted that the Tribunal again fell into jurisdictional error by dismissing the relevance of the appellant's son's claims and by failing to consider whether the appellant might be at risk of persecution because of her son being granted a protection visa in Australia. 39 As to the fourth ground the appellant contended that the passage quoted amounted to a finding of the Tribunal and was not merely a re-stating of Country Information, and that because it is implicit that the persecution was ongoing, the Tribunal should have considered whether the appellant may be persecuted as a person of Uigher ethnicity. Respondent's Submissions 40 The respondent submitted that the Federal Magistrate was correct in holding that the Tribunal had properly assessed and dismissed the appellant's claim for refugee status, and that its findings were within its jurisdiction. 41 It submitted that the Tribunal had given explicit reasons and findings in respect of five aspects arising from the appellant's claims which, coupled with the fact that the appellant had been able to obtain a passport in China; had taken no steps to go anywhere other than Australia; had neither been a victim of persecution nor been seriously harmed in the past; and had stated to the Tribunal that she was attracted to Australia because the situation was good and that she wanted to be with family and was assured by her daughter of better medical care, meant that her claim to the Tribunal was bound to fail. 42 The respondent also addressed each of the appellant's grounds of appeal. 43 In relation to ground 1 of the notice of appeal, the respondent submitted that the Federal Magistrate was correct in holding that the Tribunal acted properly in finding that despite numerous members of her family being imputed with separatist political beliefs and actually being persecuted by Chinese authorities, no harm had befallen the appellant in the past as a consequence. Furthermore, it submitted, the Tribunal was entitled to take this into account in determining if the appellant had a "well-founded fear" of future persecution and that the Federal Magistrate was right to rely upon Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559. The Minister submitted that the question as to whether the harm (or potential harm) feared by the appellant was capable of constituting "persecution" for Convention purposes was a matter for the Tribunal, and that the Tribunal correctly assessed the question without falling into jurisdictional error. 44 In relation to ground 2 of the appeal, dealing with the appellant's religious beliefs, the respondent submitted that the Federal Magistrate dealt with this issue in detail and properly assessed this aspect of the appellant's claim on the basis that the appellant was an adherent of Islam and if returned to China she may continue to practise her religion. 45 The respondent further submitted that no error of the type referred to in Appellant S395/2002 216 CLR 473 arose because the Tribunal focused on the appellant's particular circumstances. The first respondent argued that the Federal Magistrate correctly held that the Tribunal was properly engaged in the task of identifying whether a well-founded fear of "serious harm" had been established, rather than attempting to apply, it submitted, an inappropriate test as to what constitutes religious persecution. 46 The respondent submitted that the Federal Magistrate was correct in dealing with the Tribunal's decision regarding the appellant's son and that no error was apparent in His Honour's decision and ground 3 should be dismissed. 47 The first respondent contended that the appellant's late-raised fourth ground of appeal should be dismissed. The first respondent submitted that, properly read, the passage of the Tribunal's reasons did not mean that the Tribunal accepted as fact that all Uighers are being deliberately persecuted. Rather, it submitted, the Tribunal was reciting an assertion of information provided by Amnesty International. It therefore submitted that no jurisdictional error arose from this passage of the Tribunal's decision. Conclusion 48 There are four reasons why, in my opinion, this appeal should be allowed and the orders made by the Federal Magistrate set aside, and orders made for the issue of the constitutional writs. 49 First, in my opinion, contrary to the finding of the Federal Magistrate, the Tribunal did not address the appropriate question in considering the appellant's claims. The question that the Tribunal needed to consider was whether the appellant had a well-founded fear of persecution. This required the Tribunal to consider whether if the appellant were to return to her country of origin, in this case China, there would be a real chance she would be persecuted for a Convention reason. 50 It is, of course, relevant in determining whether there is a real chance that an event will occur for a particular reason in the future to consider whether similar events have or have not occurred in the past for the same or similar reasons. It was appropriate, therefore, for the Tribunal to determine whether or not the appellant herself had been subject to persecutory conduct for a Convention reason: Guo 191 CLR 559. 51 However, a finding that she has not previously been subject to persecution for a Convention reason does not necessarily answer the question as to whether there is a real chance that she will be subject to persecutory conduct in the future if she were to return to China for a Convention reason: Appellant S395/2002 216 CLR 473 per Gummow and Hayne JJ at 499. 52 In this case, the Tribunal addressed the question of past conduct but did not consider the question of future conduct. That specific question had to be addressed and answered. In that sense, it did not exercise the jurisdiction which is bestowed upon it under the Act. 53 The second reason why, in my opinion, the Tribunal fell into error is that the Tribunal did not address one integer of the appellant's claim. She claimed that, by reason of her husband's conduct, her son-in-law's conduct and, more relevantly, her son's conduct, their political opinions would be imputed to her which would give rise to persecutory conduct on the part of the authorities. The Tribunal did not consider whether her son's conduct and the granting of a protection visa to him as a result of the decision of the Tribunal would be likely to give rise to persecution for their political opinions. The Tribunal misunderstood the relevance of the appellant's son being granted a protection visa. 54 Thirdly, in my opinion, the Tribunal fell into error by failing to deal properly with the appellant's claims of feared persecution because of her religious beliefs. There was significant evidence put before the Tribunal as to the manner in which the appellant was restricted by the Chinese State in the practice of her religion, and also as to the manner in which she wished to practice her religion, namely in public with other members of the Muslim community. Despite this, the Tribunal held that "[t]he applicant has not claimed ... that she was effectively prevented from practising her religion in private. She made no claim that she suffered persecution or came to the attention of the authorities on the basis of her religion." 55 I agree with the appellant's submission that that finding fails to recognise the appellant's case that she feared persecution from the Chinese authorities by reason of her intention to practice her religion in public. In Wang 105 FCR 548, Merkel J said at 565: When regard is had to those matters it is clear that there are two elements to the concept of religion for the purposes of Art 1A(2): the first is as a manifestation or practice of personal faith or doctrine, and the second is the manifestation or practice of that faith or doctrine in a like-minded community. I would add that that interpretation is consistent with the commonly understood meaning of religion as including its practice in or with a like-minded community. 56 For the Tribunal to simply state that the appellant was not prevented from practising her religion in private in my opinion was an error. The Tribunal failed to properly address the appellant's claimed restrictions on her ability to practice her religion openly with others, and whether those restrictions amounted to persecution under the Convention. 57 Fourthly, the Tribunal's conclusion contradicted its own finding. The appellant is a Uigher from the Xinjiang province. At [8] of these reasons I have quoted what, in my opinion, was an unambiguous finding of the Tribunal that the Uigher population is being deliberately persecuted for practising and preserving its culture and religion. As I have said, the first respondent contended that the Tribunal did not make such a finding but was merely recounting the account given by Amnesty International. I reject that contention. 58 Earlier in its reasons, the Tribunal set out three different reports: United States Department of State Country Report on Human Rights Practices for 2005; Amnesty International Report of 11 October 2006; and DFAT Country Information Report China of 26 May 2006. 59 In relation to the Amnesty International Report of 2006, it recorded: It is clear that the Uighur population in China's Xinjiang province continues to be at an economic and social disadvantage largely due to China's Develop the West Program and her subsequent influx of Han Chinese to the region. However, the repression of the Uighers stems deeper than mere disadvantage, as they are being deliberately persecuted for practising and preserving their culture and religion. 60 At that part of its reasons the Tribunal made no findings. The next part of its reasons is headed "Findings and Reasons". It is within that part of the Tribunal's decision that the Tribunal said what I have quoted at [8] of these reasons. 61 There would be no point in reciting that information twice unless on the second occasion under the heading of "Findings and Reasons" the Tribunal was thereby accepting the evidence contained in the report. 62 In my opinion, the passage quoted at [8] of these reasons is a finding and conclusion of the Tribunal. My conclusion is reinforced by the last two sentences of the passage quoted. First, the Tribunal observes that the Amnesty International account is consistent with the appellant's account of her grandfather's and husband's experiences. There would be no point in making that observation unless the Tribunal was accepting the Amnesty International report. Secondly, the Tribunal has introduced the last sentence of that passage with the word "[h]owever" which, again, suggests that it has accepted the previous account in the Amnesty International report. 63 In my opinion, the Tribunal made a finding that people of Uigher ethnicity are deliberately persecuted for practising and preserving their culture and religion. 64 The Tribunal then fell into error by confining its examination to whether the appellant herself had been subject to persecutory conduct in the past and thereby overlooked the finding that she would be deliberately persecuted for practising and preserving her culture and religion. 65 In my opinion, for all three reasons, the appeal should be allowed and the orders made by the Federal Magistrate dismissing the application for judicial review and ordering the appellant to pay the first respondent's costs fixed in the sum of $5,000 set aside. 66 In lieu thereof, there should be an order: (1) that the application for judicial review be allowed; (2) the decision of the Tribunal handed down on 7 February 2007 be quashed; (3) the application for a review of the delegate's decision be remitted to the Tribunal for further consideration according to law; (4) the Minister for Immigration and Citizenship pay the applicant's costs in the Federal Magistrates Court; (5) the first respondent pay the appellant's costs of the appeal. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. Associate: Dated: 8 October 2008 Counsel for the Appellant: Mr S Ower Solicitor for the Appellant: McDonald Steed McGrath Counsel for the First Respondent: Mr K Tredrea Solicitor for the First Respondent: Sparke Helmore Lawyers Date of Hearing: 15 August 2008 Date of Judgment: 8 October 2008	7,530
federal_court_of_australia:fca/single/1995/1995fca0535	decision	commonwealth	federal_court_of_australia	text/html	1995-07-27 00:00:00	Re Beattie, T.L. v Ex parte Centurion Finance Ltd [1995] FCA 535	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1995/1995fca0535	2024-09-13T22:50:06.547977+10:00	CATCHWORDS BANKRUPTCY - Creditor's petition - bankruptcy notice founded on default judgment in Magistrates Court - whether in truth and reality a debt due - affidavit and documents inconsistent with debt as alleged - exercise of discretion to go behind the judgment. Re Frazer Ex parte Central Bank of London [1892] 2 QB 633 - Appl. Wren v. Mahony (1972) 126 CLR 212 - Appl. Simon v. O'Gormon Pty. Ltd. (1979) 619 - Appl. Re David Ex parte Lahood (1979) 26 ALR 306 - Appl. Corney v. Brien (1951) 84 CLR 343 - Appl. Petrie v. Redmond (1942) 13 ABC 44 - Appl. Re Vojnovski [1970] ALR 355 - Appl. Oliveri v. Stafford (1989) 24 FCR 413 - Appl. Trevor Lawrence Beattie; Ex parte Centurion Finance Limited No. QP61 of 1995 Cooper J., Brisbane, 27 July 1995 IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND Cred. Pet. No. 61 of 1995 RE: TREVOR LAWRENCE BEATTIE Debtor EX PARTE: CENTURION FINANCE LIMITED Creditor JUDGE MAKING ORDER: Cooper J. WHERE MADE: Brisbane DATE OF ORDER: 27 July 1995 MINUTES OF ORDER THE COURT ORDERS THAT: 1. Within twenty-eight (28) days of today the petitioning creditor file and serve all material upon which it relies to establish that it has a presently enforceable debt due against the debtor in an amount not less than the statutory minimum to support a bankruptcy petition and the legal basis of that entitlement. 2. Within fourteen (14) days thereafter the debtor file and serve any material upon which he intends to rely to contend that there is no presently enforceable debt due by him to the petitioning creditor of at least the statutory minimum amount and give written notice of any legal contention he wishes to advance in support of such contention. 3. The petition be adjourned to the list of contested bankruptcy matters to a date to be fixed by the District Registrar. 4. The costs of this application be reserved. Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF QUEENSLAND Cred. Pet. No. 61 of 1995 RE: TREVOR LAWRENCE BEATTIE Debtor EX PARTE: CENTURION FINANCE LIMITED Creditor CORAM: Cooper J. PLACE: Brisbane DATE: 27 July 1995 REASONS FOR JUDGMENT The petitioning creditor is Centurion Finance Ltd. On 8 April 1994 the petitioning creditor obtained default judgment against the debtor in the sum of A$13,552.03 being $6,914.26 for claim, $678.25 costs and $5,959.52 for interest. On 16 June 1994 the petitioning creditor obtained a bankruptcy notice based on the default judgment. On 8 July 1994 a sealed copy of the bankruptcy notice was served on the debtor. The debtor failed to comply with the terms of the bankruptcy notice. On 6 February 1995 the petitioning creditor filed the within petition which was served on the debtor on 11 May 1995. The act of bankruptcy relied upon was non-compliance with the terms of the bankruptcy notice. The debtor appears in person to resist the making of a sequestration order. He is 68 years old and claims to have no assets, being a pensioner. He advises that he applied for and was refused legal aid because the matter was a bankruptcy matter. Such a refusal by the Legal Aid Office, if based on other than a consideration of the merits of the application, is to be deplored. It places the debtor and the court in an invidious position in attempting to determine whether or not there is material which would justify the court going behind the judgment. The approach to be taken by the court is well established. The existence of a judgment is prima facie evidence of a debt (Re Frazer Ex parte Central Bank of London [1892] 2 QB 633 at 636). However a judgment is never conclusive in bankruptcy and the court has a discretion to go behind a judgment to determine whether there is in truth and reality a debt due (Wren v. Mahony (1972) 126 CLR 212 at 224-225). Before the court will exercise the discretion there must be established substantial reasons for questioning whether there is in truth and reality a debt owing to the creditor; the court will not inquire into the validity of a judgment debt as a matter of course (Simon v. O'Gormon Pty. Ltd. (1979) 619 at 633; Re David Ex parte Lahood (1979) 26 ALR 306 at 307). The requirement may more readily be met where there has been no adjudication on the merits, for example a default judgment and there exists a bona fide allegation that no real debt lies behind the judgment (Corney v. Brien (1951) 84 CLR 343 at 357-358; Petrie v. Redmond (1942) 13 ABC 44 at 49; Re Vojnovski [1970] ALR 355 at 359; Oliveri v. Stafford (1989) 24 FCR 413 at 422). The debtor has taken no steps to stay or set aside the Magistrates Court judgment. He says that at the time of the Magistrates Court proceedings he had health problems which were paramount in his mind at the time and that it was in those circumstances that the default judgment was entered. In an affidavit filed on 14 June 1995 he deposes :- "6. I do not consider that the Creditors had a right to obtain Judgment against me and that I had and have always had a Defence to the action by the Creditor on the following grounds: (a) the action instituted barred, the debt having been incurred more than six (6) years prior to the filing of the Plaint and Summons; (b) I never entered into any agreement with the Creditor. I made an application to Marac/American Express Gold Card which I signed by the application form does not show the name of the Creditor and the Plaint and Summons does not plead any reference between the two. (c) Any agreement made between myself and Marac/American Express gold Card was made in New Zealand and any action should have been commenced in that Country; (d) Any debt incurred by me was in New Zealand currency and the Plaint and Summons failes [sic] to refer to the debt in New Zealand dollars and the relevant exchange rate. (e) The Plaint and Summons fails to adequately and sufficiently plead details concerning the jurisdication [sic] how the debt is calculated, the creation of any agreement between the parties and any proper relevance to sundry documentation." In support of his contention that the debt was statute barred the debtor produced to the court a monthly statement dated 8 May 1987 which shows a debit balance due to Centurion Finance Limited of NZ$6,210.96 with an effective interest rate of 28.5% per annum and a new rate of 30.50% per annum effective from 15 May 1987. The statement has a handwritten notation that $310.55 was paid on 3 June 1987. The debtor was unable to say whether he had made any other payments on this account. He says he never agreed to pay interest rates of this magnitude. The New Zealand solicitor for the petitioning creditor deposed as to the creation of the debt :- "3. The debt the subject of this petition arose as a consequence of the judgment debtor's use of American Express card no. 3774-206282041007 to access the judgment debtor's drawn-down facility no. 2062824-00 with the judgment creditor. 4. Now produced and shown to me marked withe the letter "A" is a true copy of the application for the Marac/American Express Gold Card in the judgment debtors name and signed by him on or about 29 July 1987. 5. At about that time, Marac Financial Services Pty Ltd (`Marac') provided the line of credit which allowed American Express cardholders (such as the judgment debtor) to access funds contained in their respective drawn-down facility. 6. In about 1993 the judgment creditor purchased Marac's line of credit and thereby acquired all debts previously due and owing to Marac pursuant to the various American Express cards, including the debt due by the judgment debtor. 7. Subsequent notice of the acquisition was sent to all debtors (including the judgment debtor) and all future statements of indebtedness in respect of the judgment debtor's debt were issued by the judgment creditor/" The invoice produced to the court by the debtor is on the letterhead of Centurion Finance Ltd. for account 2062824 00 and states on its back :- "THIS Centurion Account Statement is your record of Deposits and Withdrawals made by you during the monthly billing period of your Centurion Account. Credit `in funds' balances on your Account are secured deposits in accordance with the Terms and Conditions of the Trust Deed issued by Centurion Finance Limited in favour of national Mutual Life Nominees Limited dated the 4th of April 1986." The debtor alleges from the bar table that he has been an American Express Gold Card holder from 1976 and that the application he made was in the 1970's and not in July 1987. Paragraphs 4 and 5 of Mr. Miller's affidavit cannot be correct. The petitioning creditor was rendering invoices on account 2062824 00 before the date of the alleged application in July 1987. Whatever the petitioning creditor acquired from Marac Financial Services in January 1993 prima facie it did not include any sum then payable on account number 2062824 00 maintained by the petitioning creditor and in respect of which it was invoicing and receiving payments in May/June 1987. In support of his statement as to the creation of the account and there being a debit amount of NZ$8,315.79 as at 9 April 1990, Mr. Miller exhibits fax copies of an application form and a statement of account. However the quality of the reproductions makes it impossible to read the writing on the documents. Unfortunately it is not possible to say when the monies first became due and payable and when the relevant statute of limitations first began to run in respect of these debts. Nor are the terms and conditions upon which account 2062824 00 was opened and operated discernible from the documents nor are such terms and conditions themselves before the court. The statement of account Exhibit "B" to his affidavit shows the account number as 3774 206282 42009 (?) which prima facie is an American Express card number but not the card number of the judgment debtor which was 3774 206282 41. It is not the drawn down facility account number in respect of which the debt is claimed. All of these matters may be capable of some rational explanation or when the whole basis and history of the transaction is set out there will be revealed a debt due in the statutory sum sufficient to support the making of a sequestration order. I am satisfied on the material before the court there are substantial reasons for questioning whether there is in truth and reality an enforceable debt due to the petitioning creditor in the amount and on the basis claimed by Mr. Miller in his affidavit filed in support of the petitioning creditor. Therefore I propose to exercise my discretion to go behind the judgment. Having determined to do so the petitioning creditor must have an opportunity to file material to satisfy the court that it has a presently enforceable debt against the debtor in not less than the statutory amount and the legal basis of such entitlement and the debtor be given an opportunity to challenge that claim. THE COURT ORDERS THAT: 1. Within twenty-eight (28) days of today the petitioning creditor file and serve all material upon which it relies to establish that it has a presently enforceable debt due against the debtor in an amount not less than the statutory minimum to support a bankruptcy petition and the legal basis of that entitlement. 2. Within fourteen (14) days thereafter the debtor file and serve any material upon which he intends to rely to contend that there is no presently enforceable debt due by him to the petitioning creditor of at least the statutory minimum amount and give written notice of any legal contention he wishes to advance in support of such contention. 3. The petition be adjourned to the list of contested bankruptcy matters to a date to be fixed by the District Registrar. 4. The costs of this application be reserved. I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment herein of his Honour Justice Cooper. Date: 27 July 1995 Associate Applicant in Person: Mr. T.L. Beattie Solicitor for the Respondent: Mr. D.J. Wing of Quinn and Scattini Date of Hearing: 27 July 1995 Place of Hearing: Brisbane Date of Judgment: 27 July 1995	2,862
federal_court_of_australia:fca/single/2023/2023fca0425	decision	commonwealth	federal_court_of_australia	text/html	2023-05-08 00:00:00	NGWS v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] FCA 425	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca0425	2024-09-13T22:50:07.494741+10:00	Federal Court of Australia NGWS v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] FCA 425 Appeal from: Application for Extension of time: NGWS v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Administrative Appeals Tribunal, No.2021/5692, 5 November 2021) File number: VID 33 of 2022 Judgment of: CHARLESWORTH J Date of judgment: 8 May 2023 Catchwords: MIGRATION – judicial review of a decision of the Administrative Appeals Tribunal – Tribunal concluding it was likely the applicant would be held in prolonged immigration detention if a decision to cancel his visa was not revoked because his home country would not accept involuntary returnees – whether Tribunal failed to resolve a claim by the applicant to fear harm and suffer impediments if removed to his home country because he would languish at the port of entry without being permitted to enter – asserted claim not arising on the materials before the Tribunal – no jurisdictional error Legislation: Migration Act 1958 (Cth) ss 5J, 13, 14, 36, 189, 196, 198, 198B, 474, 477A, 499, 500, 501, 501CA Cases cited: Al-Kateb v Godwin (2004) 219 CLR 562 Chen Shi Hai v Minister for Immigration and Multicultural Affairs (2000) 201 CLR 293 Craig v South Australia (1995) 184 CLR 163 Dranichnikov v Minister for Immigration and Multicultural and Indigenous Affairs [2003] HCA 26; 197 ALR 389 M38/2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 131 FCR 146 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Viane [2021] HCA 41; 395 ALR 403 NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2004) 144 FCR 1 NATB v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 133 FCR 506 NGWS v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Administrative Appeals Tribunal, No.2021/5692, 5 November 2021) Plaintiff M1/2021 v Minister for Home Affairs [2022] HCA 17; 400 ALR 417 Division: General Division Registry: Victoria National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 37 Date of hearing: 1 July 2022 Counsel for the Applicant: Mr C Henderson Solicitor for the Applicant: Lander and Rogers Counsel for the First Respondent: Mr B Kaplan Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: The Second Respondent filed a Submitting Notice ORDERS VID 33 of 2022 BETWEEN: NGWS Applicant AND: MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent order made by: CHARLESWORTH J DATE OF ORDER: 8 MAY 2023 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 CHARLESWORTH J 1 This is an application for judicial review of a decision of the Administrative Appeals Tribunal. 2 The applicant was born in Iran. He arrived in Australia by boat in 2013 after first taking a flight from Tehran to Indonesia. He was then, and remains, an "unauthorised maritime arrival" for the purposes of the Migration Act 1958 (Cth). The applicant was released into the community after serving a period in immigration detention and has until recently been the holder of a Bridging E (Class EW) (Subclass 050) visa issued under the Act. 3 In 2019, the applicant was convicted of an offence arising out of his participation in a conspiracy to import narcotics into Australia. He was sentenced to four and a half years imprisonment. By reason of that criminal history and the sentences imposed, the applicant is a person who cannot pass the character test prescribed in s 501(6) and (7) of the Act. 4 Section 501(3A) imposes a duty on the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs to cancel the visa of a person if the Minister is satisfied that the person does not pass the character test and the person is serving a term of imprisonment on a full time basis. On 25 February 2020, a delegate of the Minister cancelled the applicant's visa in the exercise of that power (the cancellation decision). 5 In accordance with s 501CA(3) of the Act, the applicant was notified of the cancellation decision and invited to make submissions and present evidence as to why the cancellation decision should be revoked. In response to that invitation, the applicant formally made a request for the revocation of the cancellation decision. 6 Section 501CA(4) of the Act provides the Minister with a broad discretionary power to revoke the cancellation decision if satisfied that the person passes the character test or there is "another reason" why that decision should be revoked. On 13 August 2021, a different delegate of the Minister refused to revoke the cancellation decision (the non-revocation decision) in the exercise of that power. 7 The applicant made an application for review of the non-revocation decision to the Tribunal under Pt 5 of the Act. The Tribunal affirmed the non-revocation decision: NGWS v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Administrative Appeals Tribunal, No.2021/5692, 5 November 2021). The applicant has been granted an extension of time under s 477A to commence this application for judicial review of the Tribunal's decision. 8 This Court's jurisdiction to review the decision is the same as that conferred upon the High Court under s 75(v) of the Constitution. To succeed on the application it is necessary for the applicant to demonstrate that the decision is affected by jurisdictional error: Act, s 474; Craig v South Australia (1995) 184 CLR 163, Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323. 9 The two grounds for judicial review are set out below. Neither has merit. 10 It follows that the originating application must be dismissed. The legal framework 11 The consequence of the cancellation of the applicant's visa was that he was an unlawful non-citizen within the meaning of s 13 and s 14 of the Act. As such, he was liable to be taken into immigration detention under s 189 of the Act and held there until he was (relevantly) removed from Australia: Act, s 196(1)(a). Section 198(2B) imposed a duty on immigration officers to remove an unlawful non-citizen "as soon as reasonably practicable" where conditions (present in this case) are met. 12 The Tribunal's power to review the non-revocation decision was conferred under s 500(1)(ba) of the Act. In conducting the review, the Tribunal exercised the same power under s 501CA(4) of the Act as that exercised by the Minister in making the non-revocation decision. Section 501CA(4) provided: (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. 13 Section 499(2A) of the Act required the Tribunal to comply with a direction made by the Minister under s 499(1) of the Act titled "Direction No 90 – Migration Act 1958 – Direction under section 499: Visa refusal and cancellation under section 501 and revocation of a mandatory cancellation of a visa under section 501CA" (Direction 90) in the exercise of that power. 14 Direction 90 set out matters that the Tribunal was to consider, where relevant, when assessing whether there was "another reason" why the cancellation decision should be revoked. They included "primary considerations" and "other considerations". The "other considerations" relevantly include "international non-refoulement obligations" and "extent of impediments if removed". Clause 9.1 required decision-makers to consider whether Australia owed non-refoulement obligations in relation to the individual. Clause 9.1 defined the expression "international non-refoulement obligations" as follows: 9.1 International non-refoulement obligations (1) A non-refoulement obligation is an obligation not to forcibly return, deport or expel a person to a place where they will be at risk of a specific type of harm. Australia has non-refoulement obligations under the 1951 Convention relating to the Status of Refugees as amended by the 1967 Protocol (together called the Refugees Convention), the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (the CAT), and the International Covenant on Civil and Political Rights and its Second Optional Protocol (the ICCPR). The Act, particularly the concept of 'protection obligations', reflects Australia's interpretation of non-refoulement obligations and the scope of the obligations that Australia is committed to implementing. Accordingly, in considering non-refoulement obligations where relevant, decision-makers should follow the tests enunciated in the Act. … (4) Claims which may give rise to international non-refoulement obligations can be raised by the non-citizen ... in a request to revoke under section 501CA the mandatory cancellation of their visa, or can be clear from the facts of the case. … 15 As the Kiefel CJ, Keane, Gordon and Steward JJ explained in Plaintiff M1/2021 v Minister for Home Affairs [2022] HCA 17; 400 ALR 417, that clause reflects the scheme of the Act in relation to Australia's non-refoulement obligations under international law. The obligations are enacted into domestic law to the extent provided for in the Act, specifically in provisions prescribing conditions for the grant of protection visas in s 36(2)(a), s 36(2)(aa) and elsewhere. To the extent that Australia's international non-refoulement obligations are not enacted into domestic law, they are not mandatory relevant considerations conditioning the exercise of the power under s 501CA(4), nor can they otherwise operate as a source of rights and obligations under domestic law: Plaintiff M1 (at [20]). 16 As cl 9.1(4) of Direction 90 makes plain, claims that Australia's international non-refoulement obligations are enlivened may be raised by a non-citizen in the material provided in response to an invitation given under s 501CA(3), or can otherwise be clear on the facts of the case. Whilst non-refoulement obligations are not to be characterised as a mandatory relevant consideration arising in all cases in the sense discussed in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, there remains an obligation on the decision-maker to consider and understand the submissions and material provided by the non-citizen. As to the scope of that obligation, in Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Viane [2021] HCA 41; 395 ALR 403, the High Court emphasised (at [13] – [14]) that the evaluation of what is "another reason" is a matter for the Minister, Parliament having made no prescription of the reasons that might justify revocation of a cancellation decision and (at [14]): No part of the statutory power conferred by s 501CA of the Act obliges the Minister to make actual findings of fact as an adjudication of all material claims made by an applicant … 17 And as the plurality said in Plaintiff M1: 23 It is, … improbable that Parliament intended for that broad discretionary power to be restricted or confined by requiring the decision-maker to treat every statement within representations made by a former visa holder as a mandatory relevant consideration. But the decision-maker cannot ignore the representations. The question remains how the representations are to be considered. 24 Consistently with well-established authority in different statutory contexts, there can be no doubt that a decision-maker must read, identify, understand and evaluate the representations. Adopting and adapting what Kiefel J (as her Honour then was) said in Tickner v Chapman, the decision-maker must have regard to what is said in the representations, bring their mind to bear upon the facts stated in them and the arguments or opinions put forward, and appreciate who is making them. From that point, the decision-maker might sift them, attributing whatever weight or persuasive quality is thought appropriate. The weight to be afforded to the representations is a matter for the decision-maker. And the decision-maker is not obliged 'to make actual findings of fact as an adjudication of all material claims' made by a former visa holder. 25 It is also well-established that the requisite level of engagement by the decision-maker with the representations must occur within the bounds of rationality and reasonableness. What is necessary to comply with the statutory requirement for a valid exercise of power will necessarily depend on the nature, form and content of the representations. The requisite level of engagement – the degree of effort needed by the decision-maker – will vary, among other things, according to the length, clarity and degree of relevance of the representations. The decision-maker is not required to consider claims that are not clearly articulated or which do not clearly arise on the materials before them. 18 Their Honours went on to emphasise (at [27]) that a decision-maker may commit jurisdictional error if he or she fails to address a "substantial, clearly articulated argument", citing Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 (at [13], [105]) and Dranichnikov v Minister for Immigration and Multicultural and Indigenous Affairs [2003] HCA 26; 197 ALR 389, Gummow and Callinan JJ (at [24] – [25]), Hayne J agreeing (at [95]). The principles were conveniently summarised by the Full Court of this Court in NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2004) 144 FCR 1 (Black CJ, French and Selway JJ): 58 The review process is inquisitorial rather than adversarial. The Tribunal is required to deal with the case raised by the material or evidence before it: Chen v Minister for Immigration and Multicultural Affairs (2000) 106 FCR 157 at [114] (Merkel J). There is authority for the proposition that the Tribunal is not to limit its determination to the 'case' articulated by an applicant if evidence and material which it accepts raise a case not articulated: Paramananthan v Minister for Immigration and Multicultural Affairs (1998) 94 FCR 28 at 63 (Merkel J); approved in Sellamuthu v Minister for Immigration and Multicultural Affairs (1999) 90 FCR 287 at 293-294 (Wilcox and Madgwick JJ). By way of example, if a claim of apprehended persecution is based upon membership of a particular social group the Tribunal may be required in its review function to consider a group definition open on the facts but not expressly advanced by the applicant: Minister for Immigration and Multicultural Affairs v Sarrazola (No 2) (2001) 107 FCR 184 at 196 per Merkel J, Heerey and Sundberg JJ agreeing. It has been suggested that the unarticulated claim must be raised 'squarely' on the material available to the Tribunal before it has a statutory duty to consider it: SDAQ v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 137 at [19] per Cooper J. The use of the adverb 'squarely' does not convey any precise standard but it indicates that a claim not expressly advanced will attract the review obligation of the Tribunal when it is apparent on the face of the material before the Tribunal. Such a claim will not depend for its exposure on constructive or creative activity by the Tribunal. … 63 It is plain enough, in the light of Dranichnikov, that a failure by the Tribunal to deal with a claim raised by the evidence and the contentions before it which, if resolved in one way, would or could be dispositive of the review, can constitute a failure of procedural fairness or a failure to conduct the review required by the Act and thereby a jurisdictional error. It follows that if the Tribunal makes an error of fact in misunderstanding or misconstruing a claim advanced by the applicant and bases its conclusion in whole or in part upon the claim so misunderstood or misconstrued its error is tantamount to a failure to consider the claim and on that basis can constitute jurisdictional error. The same may be true if a claim is raised by the evidence, albeit not expressly by the applicant, and is misunderstood or misconstrued by the Tribunal. … 19 Clause 9.2 of Direction 90 outlined matters to which the Tribunal was to have regard when assessing the impediments that might be faced by a review applicant if removed from Australia to his or her home country. It provided: 9.2 Extent of impediments if removed (1) Decision-makers must consider the extent of any impediments that the non-citizen may face if removed from Australia to their home country, in establishing themselves and maintaining basic living standards (in the context of what is generally available to other citizens of that country), taking into account: a) the non-citizen's age and health; b) whether there are substantial language or cultural barriers; and c) any social, medical and/or economic support available to them in that country. The Tribunal's reasons 20 In its written reasons for its decision, the Tribunal gave consideration to whether Australia's non-refoulement obligations were engaged and concluded that they were not. It identified (correctly) that the obligation is one to not forcibly return a person to a place where he or she will be at risk of specified types of harm, including harm that threated a person's life or freedom, on account of certain characteristics, including membership of a social group. In that part of its reasons, the Tribunal dealt with and rejected an express claim by the applicant to fear harm if returned to Iran as contained in his statutory declaration made in May 2017. The applicant's claims were to the effect that he would be subject to relevant harm because he was no longer a follower of Shia Islam, because of political opinions that would be imputed to him by reason of his participation in a singing competition held in Turkey, because of his status as a failed asylum seeker and because of his social media commentary. 21 The Tribunal went on to observe that the consequence of not revoking the cancellation decision would be that the applicant would be liable to be removed from Australia as soon as possible in accordance with s 198 of the Act. It concluded that the applicant's forced removal from Australia would nonetheless be unlikely because he did not have an Iranian passport and the Iranian authorities were unlikely to issue him one to facilitate his involuntary return. On that topic, the Tribunal referred to country information prepared by the Department of Foreign Affairs and Trade which confirmed Iran's "global and longstanding policy of not accepting involuntary returns" and that Iran had historically refused to issue temporary travel documents to facilitate the involuntary return of its citizens. The Tribunal observed that a Memorandum of Understanding between Australia and Iran to facilitate the return of Iranian citizens did not apply to Iranian citizens who arrived in Australia before March 2018 (as in the case of the applicant). The Tribunal said that, given that the applicant would not voluntarily return to Iran, it was likely that that he would remain subject to prolonged detention in Australia. 22 The Tribunal's assessment of the impediments that the applicant might face if returned to Iran proceeded from an assumption that he may be forcibly returned there. It considered his family connections, age, cultural experience, employability, and access to economic support and health services. It concluded that whilst there were some impediments, including emotional distress, they weighed in favour or revocation of the cancellation decision but "only to a minimal extent". The Tribunal's reasons concerning this topic must be understood as dealing with an alternative and somewhat hypothetical factual scenario, the Tribunal having already concluded that the applicant's return to Iran in the reasonably foreseeable future was unlikely. Grounds and submissions 23 The first ground of review is that the Tribunal "failed to make its decision according to law" in that it: 1. failed to consider whether Australia's non-refoulment [sic] obligations were enlivened by the Iranian authorities' refusal to permit his entry into Iran as an involuntary returnee, as a necessary and foreseeable consequence of the Applicant being removed from Australia to Iran; 24 Counsel submitted that the applicant was a member of a class of persons described as "involuntary returnees having departed Iran before March 2018". It was then submitted that the Tribunal had failed to consider a factual scenario that clearly arose on the materials before it, namely one in which the applicant would be removed from Australia but not accepted into Iran at the international receiving port. The scenario was one in which the applicant would be trapped in the liminal space, unable to leave the point of entry (assumed in oral submissions to be an airport) to integrate at all into Iranian society. It was submitted that the applicant would, in that scenario, be "confined at the point of arrival indefinitely and/or face arbitrary treatment by immigration authorities". It was submitted that those consequences would necessarily and foreseeably result in the applicant being denied his freedom by the actions of Iranian authorities such as to enliven Australia's non-refoulement obligations under international law. 25 The same factual scenario was employed in support of the second ground of review. It states that the Tribunal: 2. failed to consider the extent to which the Iranian authorities' refusal to permit his entry into Iran as an involuntary returnee was an impediment to the Applicant in establishing himself and maintaining basic living standards (in the context of what is generally available to other citizens of Iran). 26 It was submitted that the Tribunal's reasoning proceeded from an erroneous assumption that the applicant would be permitted entry into Iran, a factual outcome the Tribunal had already determined was unlikely to occur. 27 It was submitted that the Tribunal failed to have regard to the circumstance, specific to the applicant, that the applicant would be refused entry. His entrapment in the liminal space at the point of entry would, it was submitted, prevent him from enjoying basic living standards and that he would be unable to access and utilise social, medical and economic support. It was submitted that the Tribunal failed to have regard to the applicant's "likely refusal of entry" into Iran, and that failure amounted to a failure to comply with Direction 90 as it was required by law to do. Consideration 28 Both grounds must be rejected for the reasons given below. 29 I do not accept that the factual scenario upon which the grounds of review were based was one expressly claimed by the applicant to realistically arise. Nor do I accept that any real likelihood of the factual scenario clearly arose on the material upon which the applicant relied. 30 It was of course plain on the material that the Iranian authorities were unlikely to permit the applicant's involuntary entry into Iran. However, it does not follow from that circumstance that Australian authorities would remove the applicant from Australia to be left at a point of entry where he would languish, removed from Australia but unable to enter his home country. The Tribunal's conclusion that the applicant would likely be held in immigration detention in Australia for a prolonged period was not subject to challenge on this application. The finding is to the effect that it would not in all likelihood be "reasonably practicable" to return the applicant to Iran in the reasonably foreseeable future for the purposes of s 198(2B) of the Act and therefore he would likely remain in immigration detention pursuant to s 196(1) of the Act. Whether another country is willing to issue travel documents to facilitate the involuntary return of its citizens plainly bears on the assessment of that reasonable practicability. As the High Court said in Al-Kateb v Godwin (2004) 219 CLR 562: 218 ... Detention comes to an end upon removal or deportation or the granting of a visa. Removal or deportation may occur only when the non-citizen's attempts to obtain permission to remain in Australia have come to an end. To that extent the period of detention is under the control of the non-citizen. He or she will be available for removal or deportation as soon as he or she wishes to be available. But what more recent events, concerning some non-citizens who have asked to be removed, have revealed is that removal to a country requires the co-operation of the receiving country, and of any countries through which the person concerned must pass to arrive at that destination. That co-operation is not always freely made available. In such a case the period of detention will come to an end only upon the relevant authorities, in one or more countries other than Australia, agreeing to receive the person being removed, or, where it is necessary, agreeing to allow that person to travel through their territory. Australia can seek that cooperation; it cannot demand it. Detention will continue until that cooperation is provided. … 226 The period of detention is fixed by reference to the occurrence of any of three specified events. Detention must continue 'until' one of those events occurs. The event described as being 'removed from Australia under section 198' is an event the occurrence of which is affected by the imposition of a duty, by s 198, to bring about that event 'as soon as reasonably practicable'. That compound temporal expression recognises that the time by which the event is to occur is affected by considerations of what is '[c]apable of being put into practice, carried out in action, effected, accomplished, or done'. In particular, the expression recognises that the co-operation of persons, other than the non-citizen and the officer, will often (indeed usually) be necessary before the removal can occur. The duty to remove must be performed within that time. And so long as the time for performance of that duty has not expired, s 196 in terms provides that the non-citizen must be detained. (footnote omitted, original emphasis) 31 See also M38/2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 131 FCR 146 and NATB v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 133 FCR 506. 32 To the extent that the applicant's submissions proceeded from an assumption that s 198B(2B) obliged Australian authorities to deliver the applicant to the tarmac of an airport in Iran where he would languish in the manner contended for, the submission is wrong in law. 33 It has not otherwise been shown that there was anything in the material before the Tribunal to clearly indicate that Australian authorities would (or even might) remove the applicant from Australia in circumstances where it was known that he would not be permitted actual entry to his home country. The applicant's factual claims to fear harm and to suffer impediments were all premised on an assumption that he would be forcibly returned in fact to Iran and permitted entry there. 34 In addition, the applicant's submissions did not adequately address the question as to whether the precincts of an Iranian international airport could be regarded as the applicant's "home country" within the meaning of Direction 90 or the Act itself. The applicant has not discharged his onus with respect to that important aspect of the argument underpinning both grounds for review. The Minister submitted that Direction 90 should be construed so as to refer to scenarios in which the non-citizen claims to fear harm or to face impediments in his or her own country. I accept that submission. 35 Further in relation to Ground 1, for the purposes of the provisions of the Act enacting into domestic law Australia's international non-refoulement obligations, persecution "must involve systematic and discriminatory conduct": Act, s 5J(4)(c). Conduct will not meet that description if it is engaged in in pursuance of a law of general application: Chen Shi Hai v Minister for Immigration and Multicultural Affairs (2000) 201 CLR 293 (at [21]). The feared persecution alleged on this application would result from the application to the applicant of a policy under which Iran does not permit the involuntary return of its citizens. 36 Further in relation to Ground 2, the Tribunal grappled with claims that the applicant made as to the impediments he would face if returned to Iran. Those claims were themselves founded on an assumed factual scenario of the applicant's return into Iran proper. It could not constitute jurisdictional error for the Tribunal to consider that claim based on the very assumption upon which the claims themselves rested: return to Iran proper. The Tribunal had already concluded that in the reasonably foreseeable future the applicant could not be returned to Iran and so would likely be held in immigration detention for a prolonged period. 37 In summary, whilst it was obvious on the materials that Iran would not accept the applicant as an involuntary returnee, it did not obviously follow that the applicant would be removed from Australia and left to languish in an Iranian airport. It could not constitute jurisdictional error for the Tribunal to fail to consider a scenario that was not expressly raised and that did not otherwise clearly arise on the materials before it. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Charlesworth. Associate: Dated: 8 May 2023	6,427
federal_court_of_australia:fca/single/2021/2021fca0111	decision	commonwealth	federal_court_of_australia	text/html	2021-02-17 00:00:00	BJU17 v Minister for Immigration and Border Protection [2021] FCA 111	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca0111	2024-09-13T22:50:07.584221+10:00	Federal Court of Australia BJU17 v Minister for Immigration and Border Protection [2021] FCA 111 Appeal from: BJU17 v Minister for Immigration & Anor [2018] FCCA 816 File number(s): QUD 193 of 2018 Judgment of: GREENWOOD J Date of judgment: 17 February 2021 Catchwords: MIGRATION – consideration of an application for leave to adduce fresh evidence consisting of a transcript of an interview between a departmental officer and the appellant in relation to the appellant's application for a Safe Haven Enterprise (Subclass 790) visa – consideration of the relationship between the transcript and the grounds of appeal – consideration of whether the Immigration Assessment Authority ("IAA") failed to recognise a material element of the appellant's claim – consideration of the IAA's approach to characterising the harm to which the appellant was exposed Legislation: Migration Act 1958 (Cth), ss 36(2)(a), 36(2)(aa), 473CA, 473CC Cases cited: Abebe v The Commonwealth (1999) 197 CLR 510 ABT17 v Minister for Immigration and Border Protection (2020) 383 ALR 407 Minister for Immigration and Border Protection v Singh (2014) 231 FCR 437 Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1 Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 Minister for Immigration and Citizenship v SZMDS and Another (2010) 240 CLR 611 NASB v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 24 Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 Re Refugee Review Tribunal and Another; Ex parte AALA (2000) 204 CLR 82 Wickramasinghe v Minister for Immigration and Border Protection [2016] FCA 593 Division: General Division Registry: Queensland National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 133 Date of last submission/s: 29 August 2019 Date of hearing: 16 April 2019 Counsel for the Appellant: Mr L Boccabella Solicitor for the Appellant: A.J. Torbey & Associates Counsel for the First Respondent: Mr J Byrnes with Ms H Anderson Solicitor for the First Respondent: Clayton Utz ORDERS QUD 193 of 2018 BETWEEN: BJU17 Appellant AND: MINISTER FOR IMMIGRATION AND BORDER PROTECTION First Respondent IMMIGRATION ASSESSMENT AUTHORITY Second Respondent order made by: GREENWOOD J DATE OF ORDER: 17 FEBRUARY 2021 THE COURT ORDERS THAT: 1. The appellant is given leave to adduce fresh evidence in support of the appeal in the form of affidavit evidence exhibiting a transcript of an interview between a departmental officer of the Department of Immigration and Border Protection (as the Department was then known) and the appellant in relation to the appellant's application for a Safe Haven Enterprise (Subclass 790) visa. 2. Order 2 of the orders made by the Federal Circuit Court of Australia on 12 March 2018 is set aside. 3. In place of Order 2, the following orders are made: (a) The constitutional writs are to issue quashing the decision of the Immigration Assessment Authority (the "IAA") of 23 March 2017; (b) The matter of the conduct of the review of the decision referred to the IAA is remitted for further consideration by the IAA. 4. In further considering the matter referred to the IAA, the IAA is to have regard to the matters discussed in the reasons published today in support of the orders made today. 5. The first respondent pay the appellant's costs of and incidental to the appeal. 6. Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), rule 1.32 and rule 1.36 of the Federal Court Rules 2011, these orders and the reasons for judgment in support of these orders are made and published from Chambers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GREENWOOD J: 1 These proceedings are concerned with an appeal from orders of the Federal Circuit Court of Australia (constituted by Vasta J, the "primary judge") dismissing the appellant's application before that Court for the grant of the constitutional writs in relation to a decision of the Immigration Assessment Authority (the "IAA") affirming a decision of the Minister's delegate not to grant the appellant a protection visa under the provisions of the Migration Act 1958 (Cth) (the "Act"). 2 The appellant applied for a Safe Haven Enterprise (Subclass 790) visa (the "Safe Haven visa") on 5 December 2015 on the footing that he feared persecution should he return to Sri Lanka, by reason of his Tamil ethnicity; a perception on the part of former paramilitary groups that he is, or has been, associated with the "Tamil Tigers" (which was said to encompass one or more of the following: the Liberation Tigers of Tamil Eelam ("LTTE")), the Peoples' Liberation Organisation of Tamil Eelam ("PLOTE"), the Tamil Eelam Liberation Organisation ("TELO") and/or the Eelam Peoples Democratic Party ("EPDP"); the circumstance that he would be returning to Sri Lanka as a failed Tamil asylum seeker having left Sri Lanka illegally; that he would be subject to particular scrutiny due to his family history; and that he would be subject to harassment and extortion claims from persons associated with PLOTE or TELO or the EPDP or all three. 3 These claims were said to give rise to protection obligations owed to the appellant by Australia under s 36(2)(a) and s 36(2)(aa) of the Act. 4 The particular contextual circumstances giving rise to these claims are examined later in these reasons when examining the challenges to the reasoning of the IAA before the primary judge and before this Court on appeal, said to give rise to jurisdictional error on the part of the IAA. 5 The Minister's delegate decided not to grant the appellant's application for a visa on either of the alternative grounds. That decision, which was a "fast track reviewable decision" under the Act, was referred to the IAA under s 473CA of the Act for review. Under s 473CC of the Act, the IAA "must review" the decision. In ABT17 v Minister for Immigration and Border Protection (2020) 383 ALR 407 ("ABT17"), the plurality, Kiefel CJ, Bell, Gageler and Keane JJ observed at [5] that the nature of the jurisdiction exercised by the IAA in conducting a review of a fast track reviewable decision is well settled (particularly having regard to Plaintiff M174/2016 v Minister for Immigration and Border Protection (2018) 264 CLR 217 ("Plaintiff M174/2016") at 226) and observed that when conducting a review, the IAA is not concerned with the correction of error but is engaged in a "de novo consideration of the merits of the decision that has been referred to it", imposing an obligation on the IAA to consider the matter "afresh" and determine the application for the grant of the visa "for itself". It should be noted that in ABT17, Nettle J at [59] observed that for the purposes of assessing whether it was "legally unreasonable" for the IAA to depart from credibility findings made by the Minister's delegate pursuant to subdivs AB and AC of Div 3 of Part 2 of the Act, the task of the IAA is more "closely analogous" to an appeal by way of rehearing, engaging the correction of error principle. Their Honours, Gordon J and Edelman J, each in separate reasons in ABT17, emphasise that care needs to be taken with expressions like "hearing de novo" as the precise character of the review obligation by the relevant body is ultimately always a function of the statutory context. 6 For present purposes, having regard to the statutory context, Plaintiff M174/2016 and the observations of the plurality in ABT17, the IAA is obliged to bring fresh eyes to the review of the referred decision and decide the matter afresh unburdened by impressions, findings or expressions of opinion by the delegate on any aspect of the decision referred to it for review, although, of course, the IAA will have proper regard to the reasoning of the delegate. However, the statutory review obligation conferred on the IAA is not one of assessing where the delegate may have "gone wrong". 7 The decision of the primary judge engaged the resolution of two primary questions. 8 The first concerned an application by the appellant for an adjournment of the hearing. That application was refused. 9 The second concerned the resolution of the substantive application for the grant of the constitutional writs. That application was heard immediately after the dismissal of the adjournment application. 10 In the appeal, counsel for the Minister contends that the appellant is seeking, in effect, to re-agitate the merits of the adjournment application and is, in effect, seeking to run a de facto appeal from the dismissal of that application. 11 The matter that was central to the adjournment application and which has become relevant to the conduct of the appeal (as it is the subject of an application for the introduction of fresh evidence in support of the grounds of appeal), is the availability of, and access to, a transcript of an interview (otherwise described as the "SHEV interview") between the appellant and a departmental interviewing officer described as "PB" (with the appellant assisted by an interpreter) conducted on 15 February 2016. The appellant arrived in Australia as an "Unauthorised Maritime Arrival" and was interviewed by an officer of the Department with the assistance of an interpreter on 22 January 2013. This interview is otherwise described as the "arrival interview". A transcript of that interview was available to counsel for the appellant in the period leading up to the hearing of the proceeding before the primary judge on 12 March 2018. However, a transcript of the SHEV interview was not available to counsel. 12 The application for the adjournment of the substantive hearing arose in these circumstances. 13 On 31 March 2017, the appellant filed the application before the Federal Circuit Court of Australia seeking the grant of the constitutional writs in relation to the IAA's decision. The only ground identified was a (conclusionary) contention that "the decision of the [IAA] was affected by legal error". 14 That contention was devoid of any content. 15 On 3 October 2017, various procedural orders were made by Registrar Belcher which required the Minister to file and serve a bundle of documents relevant to the principal proceeding in electronic form by 23 October 2017. The appellant was required to file and serve any amended application identifying each ground of review by 27 November 2017. The proceeding was set down for hearing at 2.15pm on 12 March 2018. Written submissions from the appellant and the Minister were to be filed 14 days and seven days respectively before the hearing. No amended application nor any submissions were filed by the appellant, but for submissions in support of an adjournment sent to the primary judge about 40 minutes before the commencement of the hearing. 16 The short point agitated before the primary judge was this. 17 Mr Boccabella of counsel had been briefed to appear to seek an adjournment of the hearing, although Mr Boccabella immediately appeared on the hearing of the substantive application after the adjournment application was dismissed. Mr Boccabella made submissions that he had been retained informally on a pro bono basis to review the material and when he "went to review it in the last couple of weeks" (T p 3, lns 37-38) he found that he had the transcript of the arrival interview but not a transcript of the SHEV interview. Mr Boccabella assumed that there must have been another document relevant to the proceeding in the form of a transcript of the SHEV interview relied upon by the IAA which he did not have available to him. Mr Boccabella noted that the delegate and the IAA had referred to the SHEV interview. The primary judge drew Mr Boccabella's attention to references in the IAA's decision to the decision-maker having listened to the audio-recording of the SHEV interview: IAA at [27] (all references to the IAA's reasons are references to paragraphs of those reasons). 18 When Mr Boccabella realised that he did not have either a transcript or a copy of the audio-recording of the SHEV interview, he sought a copy of the audio-recording from the Minister's solicitors. That request occurred on either Wednesday, 7 March 2018 or Friday, 9 March 2018. Mr Boccabella received the audio-recording on the afternoon of 9 March 2018 as a "USB drive". However, the USB drive was encrypted or was otherwise unable to be opened. Nor could it be opened over the weekend prior to the hearing at 2.15pm on the following Monday. Nor could Mr Boccabella's assistants open or access the audio-recording over the weekend prior to the hearing. A request on the following Monday morning was made of the Minister's solicitors for another copy of the audio-recording, which was made available that morning, 12 March 2018. 19 At 13:39pm on the day of the hearing, Mr Boccabella sent submissions to the primary judge in support of an application for an adjournment. Mr Boccabella made oral submissions that the audio-recording is "nearly four hours long" and the "end result is I'm left with a situation where I don't have an important part of the record on which to conduct this matter": T, p 6, lns 17; 34-36. Mr Boccabella observed at T, p 8, lns 15-16 that he had only realised in the preceding week that he did not have the SHEV interview although he thought it was among the papers made available to him. Mr Boccabella observed that all he had received was the arrival interview: T, p 15, ln 20. Mr Boccabella contended that "human error" had probably caused the problem: T, p 18, ln 1-2. The human error was that counsel assumed that he had the relevant transcript "but it turns out I didn't": T, p 15, lns 37-38. 20 The point put to the primary judge concerning access to the transcript of the audio-recording of the SHEV interview, was that the IAA at [45] observed that the appellant had not claimed that he would be setting up his "own garage" or other business should he return to Sri Lanka. The circumstance that the appellant would, or was planning to, establish his own garage business upon return to Sri Lanka was the circumstance which was said to attract extortion claims made against the appellant by persons associated with PLOTE, TELO or the EPDP as one of the factual factors going to the appellant's protection claims. Mr Boccabella contended before the primary judge that the transcript of the SHEV interview may show that indeed the appellant did intend to establish his own garage business undertaking, a matter said to be "quite pivotal" to his claims for a protection visa: T, p 14, lns 18-19. 21 The primary judge was understandably very irritated by the last minute urging of a need for an adjournment. That irritation arose because the audio-recording of the SHEV interview had been provided to the appellant on 6 December 2016 as a result of a request made on 5 December 2016. 22 By Wednesday, 7 March 2018 or Friday, 9 March 2018, when Mr Boccabella asked the Minister's solicitors to provide another copy of the audio-recording, the appellant had been in possession of an earlier copy of the recording for approximately 14 months. As well, the primary judge noted that the Court Book had been available to the appellant's advisers since December 2017 which contained emails demonstrating that the audio file had been provided to the appellant. Also, no attempt had been made to amend the application before that Court to identify grounds upon which it could sensibly be contended that the IAA had engaged in jurisdictional error. The contended content of the "legal error" only emerged in oral submissions after the dismissal of the adjournment application. 23 Apart from these matters, the chronology as found by the primary judge ought to be noted. 24 The Minister's solicitors filed and served the relevant documents on 23 October 2017. Nothing was heard from the applicant (appellant) until 12 December 2017 when an electronic copy of the Court Book was sought. An electronic copy was provided by a "web-link" that day. On 15 February 2018, as nothing further had been heard from the appellant's advisers, the Minister's solicitors sought confirmation that Mr Boccabella was acting in the matter and would be appearing for the appellant at the hearing. There was no response. A further email was sent on 26 February 2018. There was no response. On 5 March 2018, the Minister's solicitors filed submissions in relation to the principal application. On 7 March 2018, Mr Boccabella sought a copy of the audio file and advised the Minister's solicitors that he was not sure if he would be acting for the appellant on the substantive application: primary judge at [22]-[27], BJU17 v Minister for Immigration and Anor [2018] FCCA 816. 25 The purpose of mentioning these matters in some detail is not to re-litigate the adjournment application (which is not the subject of an application for leave to appeal and cannot be: ss 24(1)(d), 24(1AA)(b)(ii), Federal Court of Australia Act 1976 (Cth); Wickramasinghe v Minister for Immigration and Border Protection [2016] FCA 593, Moshinsky J at [5]) but rather to put in context the circumstances that are relevant to the application made by the appellant to now rely upon a transcript of the audio-recording of the SHEV interview made by "BTS Transcript Services" in support of some of the grounds of appeal. 26 To do so, the appellant filed an application for leave to adduce fresh evidence in support of the grounds of appeal. The appellant seeks to rely on excerpts of the transcript which reveals, he contends, a misunderstanding on the part of the IAA decision-maker of one of the appellant's claims critical to his claim to hold a well-founded fear of persecution or in the alternative, his claim that he would face a real risk of suffering significant harm should he return to Sri Lanka. The critical factual claim said to have been misunderstood by the decision-maker was that the appellant claimed that he would be setting up his own garage business (and would need to do so to support his family) should he return to Sri Lanka, thus attracting the extortion conduct of the paramilitary groups giving rise to his fears as claimed. 27 There are two factors relevant to the question of whether leave is to be given to the appellant to adduce fresh evidence in support of the grounds of appeal by reliance upon an affidavit annexing a purported transcript of the SHEV interview. 28 First, the appellant must show that with reasonable diligence, he could not have put on an affidavit probative of a transcription of the audio-recording at the hearing of the primary proceeding. 29 Second, an examination of the fresh evidence must reveal that the result would very probably have been different: see the discussion of the different textual approaches to the test discussed in NASB v Minister for Immigration and Multicultural Affairs [2004] FCAFC 24 at [42], Beaumont, Lindgren and Tamberlin JJ. 30 Put simply, the Minister says that, first, as the appellant has had the audio-recording since 6 December 2016, he could, with reasonable diligence, have caused a transcript of the recording to be produced and put in evidence before the primary judge. He simply did not do so. 31 Second, the Minister says that the affidavit of Ms Laura Mandeville filed on 9 July 2018 supplemented by an affidavit of Ms Rebecca Woodrow filed on 13 November 2018 is deficient and does not "prove" that the annexed transcript is a transcription of the audio-recording of the SHEV interview. 32 Third, the Minister says that, in any event, reference to the transcript of the SHEV interview does not demonstrate that the decision appealed from would probably have been different even having regard to the grounds of appeal now sought to be agitated. 33 It will be necessary to determine whether the audio-recording was a "relevant document" for the purposes of Order 1 of the orders made by Registrar Belcher on 3 October 2017 and whether the Minister was obliged to make the decision-maker's notes of the audio-recording available to the appellant. 34 Before determining those preliminary matters and the question of whether leave is, or is not, to be given to adduce evidence of a transcript of the SHEV interview, it is necessary to examine the reasoning of the IAA and the role the audio-recording played in that reasoning. In that context, the Court can then examine the transcript and assess the role the transcript might play in understanding whether the challenge to the reasoning of the IAA reflects jurisdictional error, at least to the extent that any one of the grounds of appeal engages with contended jurisdictional error by reference to factors addressed by the transcript. 35 It is also important to note the following matters of principle. 36 It almost goes without saying that the source of federal jurisdiction exercised by the Federal Circuit Court arises as a statutory conferral by s 476 of the Act of what is expressed to be "the same original jurisdiction in relation to migration decisions as the High Court has under paragraph 75(v) of the Constitution", that is, a jurisdiction in migration decisions to grant the constitutional writs of mandamus or prohibition or both (and a jurisdiction to grant an injunction). Although s 75(v) does not expressly refer to the constitutional writ of certiorari, the conferral of jurisdiction on the High Court carries with it an "ancillary" or "incidental" authority to grant the writ of certiorari: Re Refugee Review Tribunal and Another; Ex parte AALA (2000) 204 CLR 82, Gaudron and Gummow JJ at [14]. The constitutional writs are the remedial mechanism by which, as an exercise of the judicial power of the Commonwealth, officers of the Commonwealth are subject to supervision so as to ensure that they stay within the limits of the jurisdiction conferred by the relevant Act as the source of the repository's power or authority. Thus, the primary judge was called upon to decide whether, according to the grounds of challenge, the Tribunal had engaged in jurisdictional error. 37 When the Federal Court of Australia exercises its appellate jurisdiction to determine whether the primary judge engaged in error, it does so by way of rehearing under s 24 of the Federal Court of Australia Act 1976 (Cth). 38 An appeal by way of rehearing requires the appellate court, unless it dismisses the appeal or remits the matter for further hearing, to give the judgment which, in its opinion, ought to have been given in the first instance having regard to the contended errors. An appeal by way of rehearing is a procedure for the "correction of error": Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541, Gageler J at [30] ("SZVFW"). The appellate court "must decide for itself", within the limits of the Grounds of Appeal, whether the primary judge's conclusion on the relevant matters is "right or wrong": SZVFW, Gageler J at [56]. In order to decide "for itself" whether the decision of the primary judge was "right or wrong" in relation to each of the matters now the subject of the Grounds of Appeal, "the appellate court must reach its own conclusion as to whether the administrative decision was [legally] unreasonable" (SZVFW, Gageler J at [20]) on the basis contended for by the appellant and whether the Tribunal's factual findings were irrational and not logically supported by the available evidence. 39 In doing so, it is, plainly enough, not the role of the Federal Court exercising its appellate jurisdiction (nor the role of the Federal Circuit Court in considering an application for the grant of the constitutional writs) to substitute its own view as to the merits of the decision reached by the administrative decision-maker. 40 Focusing upon the notion of "legal" unreasonableness in the IAA's decision in the exercise of the IAA's statutory review function and whether factual findings (or other material findings/conclusions) were irrational or not supported by the available evidence recognises that the legality of the exercise of the jurisdiction conferred upon the repository of the power is to be tested by reference to principled and demonstrated failings in the exercise of the power (that is, conduct going beyond the limits of decisional authority), not by reference to whether the Court takes its own particular view about the merits of the decision reached by the decision-maker. 41 In Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 ("Li"), their Honours affirmed earlier statements of principle in the High Court to the effect that one of the presumptions of statutory construction is that Parliament confers power on a repository on the condition (described by Gaudron J in Abebe v The Commonwealth (1999) 197 CLR 510 at 554 [116] as an "essential condition") that it be exercised reasonably: French CJ at [29]; Hayne, Kiefel and Bell JJ at [63] and Gageler J at [88]. 42 As to the standard of legal unreasonableness, Allsop CJ, Robertson and Mortimer JJ in Minister for Immigration and Border Protection v Singh (2014) 231 FCR 437 ("Singh") emphasised these matters: 44 In order to understand how the standard of legal unreasonableness is to be ascertained, it is important to see where the concept fits in terms of the Court's supervisory powers over executive or administrative decision-making. In Li, the judgments identify two different contexts in which the concept is employed. Legal unreasonableness can be a conclusion reached by a supervising court after the identification of an underlying jurisdictional error in the decision-making process: Li at [27]-[28] per French CJ, at [72] per Hayne, Kiefel and Bell JJ: cf Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at [39] per Gummow A-CJ and Kiefel J. However, legal unreasonableness can also be outcome focused, without necessarily identifying another underlying jurisdictional error. The latter occurs in what French CJ (in Li at [28]) calls "an area of decisional freedom": it has the character of a choice that is arbitrary, capricious or without "common sense". See also the plurality at [66] referring to an area within which a decision-maker has a genuinely free discretion. The plurality in Li described this as an inference to be drawn because the Court cannot identify how the decision was arrived at. In those circumstances, the exercise of power is seen by the supervising court as lacking "an evident and intelligible justification". [See the plurality in Li at [76]]. Gageler J also uses language suggestive of review for legal unreasonableness being concerned with an examination by the supervising court of the outcome of the exercise of power (in Li at [105]). … … 48 The standard of legal reasonableness will apply across a range of statutory powers, but the indicia of legal unreasonableness will need to be found in the scope, subject and purpose of the particular statutory provisions in issue in any given case. As we have said, unlike some other grounds for review of the exercise of power, the reasoning process in review for legal unreasonableness will inevitably be fact dependent. That is not to diminish the importance of the supervising court maintaining an approach which does not involve the substitution of its own judgment for that of the decision-maker. Rather, it is to recognise that any analysis which involves concepts such as "intelligible justification" must involve scrutiny of the factual circumstances in which the power comes to be exercised. [emphasis added] 43 The following observations of Gageler J in SZVFW at [59] ought to be noted (citations omitted): 59 References in Stretton to a conclusion that a decision is legally unreasonable being "evaluative" and to the task being "not definitional, but one of characterisation" were usefully directed to emphasising that determination of whether a purported exercise of a statutory power is so unreasonable that no reasonable repository of the power could have so exercised the power is informed not only by "the terms, scope and policy of the statute" but also by "fundamental values" anchored in the common law tradition. Reasonableness is itself a traditional conception of the common law – a translation of "the human into the legal". Reasonableness is not exhausted by rationality; it is inherently sensitive to context; it cannot be reduced to a formulary. In the discernment of unreasonableness, "[t]here are no talismanic words that can avoid the process of judgment". [emphasis added] 44 As to findings leading to a conclusion as to whether the decision-maker can reach a state of satisfaction (or not) for the purposes of s 36(2) and s 65(1) of the Act, impugned on grounds of illogicality and irrationality, the following principles identified by Crennan and Bell JJ in Minister for Immigration and Citizenship v SZMDS and Another (2010) 240 CLR 611 at [130]-[135] should be noted: 130 In the context of the Tribunal's decision here [which equally applies to the Tribunal's decision in this case], "illogicality" or "irrationality" sufficient to give rise to jurisdictional error must mean the decision to which the Tribunal came, in relation to the state of satisfaction required under s 65, is one at which no rational or logical decision maker could arrive on the same evidence. In other words, accepting, for the sake of argument, that an allegation of illogicality or irrationality provides some distinct basis for seeking judicial review of a decision as to a jurisdictional fact [the relevant state of satisfaction], it is nevertheless an allegation of the same order as a complaint that a decision is "clearly unjust" or "arbitrary" or "capricious" or "unreasonable" in the sense that the state of satisfaction mandated by the statute imports a requirement that the opinion as to the state of satisfaction must be one that could be formed by a reasonable person. 131 … [T]he test for illogicality and irrationality must be to ask whether logical or rational or reasonable minds might adopt different reasoning or might differ in any decision or finding to be made on evidence upon which the decision is based. If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion. 132 Because illogicality or irrationality may constitute a basis for judicial review in the context of jurisdictional fact finding as explained above, it becomes necessary to decide whether the Tribunal's conclusion about the state of satisfaction required by s 65 and its findings on the way to that conclusion revealed illogicality or irrationality amounting to jurisdictional error. … 133 … [T]he correct approach is to ask whether it was open to the Tribunal to engage in the process of reasoning in which it did engage and to make the findings it did make on the material before it. … … 135 On the probative evidence before the Tribunal, a logical or rational decision maker could have come to the same conclusion as the Tribunal. Whilst there may be varieties of illogicality and irrationality, a decision will not be illogical or irrational if there is room for a logical or rational person to reach the same decision on the material before the decision maker. A decision might be said to be illogical or irrational if only one conclusion is open on the evidence, and the decision maker does not come to that conclusion, or if the decision to which the decision maker came was simply not open on the evidence or if there is no logical connection between the evidence and the inferences or conclusions drawn. [emphasis added] 45 As to Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1, these observations of Allsop CJ at [8] ought to be kept in mind: The content of the concept of legal unreasonableness is derived in significant part from the necessarily limited task of judicial review. The concept does not provide a vehicle for the Court to remake the decision according to its view as to reasonableness (by implication thereby finding a contrary view unreasonable). Parliament has conferred the power on the decision-maker. The Court's function is a supervisory one as to legality: [see Li (2013) 249 CLR 332 at [30], French CJ; [66], Hayne, Kiefel and Bell JJ; [105], Gageler J]. 46 As to the IAA's decision and the reasoning reflected in the reasons for decision, these matters should be noted. 47 At [11], the IAA accepted that the appellant is a Tamil from the north of Sri Lanka born in Jaffna. He moved with his family several times due to fighting and shelling during the period of the civil war. From 2002 to 2007, he and his family lived in the Vavuniya District. The IAA at [14] notes that in 2006 a total of 14 of his relatives were shot and killed as a result of which the appellant claimed to be living in fear. The appellant claimed that six of his (named) relatives were shot and killed in their home. At [14], the IAA notes aspects of the appellant's evidence supporting these claims and, at [15], the IAA notes country information consistent with the events, as claimed, having occurred. At [16], the IAA observes that "after assessing the evidence", it accepts that members of the appellant's family were killed in 2006 as claimed. The IAA finds at [16] that they were "specifically targeted because of their Tamil ethnicity and their imputed support for the LTTE". 48 At [11], the Tribunal observes that "at the SHEV interview", the appellant had said that he and his family had attempted to flee to India twice in 2007 (no doubt because of the accepted events of 2006). However, they were unable to do so. This is the first mention in the IAA's reasons of any reference to the appellant's SHEV interview. 49 The Tribunal observes that, in 2007, the appellant travelled to Qatar lawfully for work and returned to Sri Lanka in August or September 2010 as the civil war had ended and he thought it safe to return: IAA at [12]. The appellant returned to Qatar from early 2011 to July 2012. 50 At [13], the IAA observes that: I note that the applicant's oral evidence at the SHEV interview was at times confused and disorganised. However I found the applicant to be generally consistent in recounting his and his family's experiences in Sri Lanka throughout the processing of his application. I note that he was born and grew up in a war zone and experienced significant dislocation and loss and I am satisfied that any confusion in the applicant's evidence can be attributed to this and I make no adverse finding regarding the applicant's overall credibility. 51 At [18], the IAA observes that, after assessing all the evidence, the IAA is satisfied that the appellant's sister and brother-in-law were members of the LTTE in 1999 and 2000, as claimed, and that, as civilians, they were injured in fighting that occurred in August 2006 between the LTTE and the Sri Lanka Army ("SLA") in Allaipiddy. The evidence assessed by the IAA included statements made by the appellant at the SHEV interview concerning his sister's and brother-in-law's membership of the LTTE: IAA at [17]. 52 At [19], the IAA accepted the appellant's claim that his brother-in-law was taken by the SLA in the particular circumstances as claimed by the appellant, and has not been "heard of since". The content of the analysis at [19] does not need to be repeated here. Reference is again made to the appellant's SHEV interview. 53 At [21], the IAA notes that country information indicates that paramilitary groups were used by the SLA to identify and kill civilians suspected of supporting the LTTE. 54 At [22], the IAA finds the appellant's oral evidence given at the SHEV interview concerning his brother-in-law's disappearance to be "coherent and plausible" and that "he did not exaggerate or embellish the claim". The IAA accepted that there was a real chance that the appellant's brother-in-law was targeted because of his membership of the LTTE and due to continued support for the LTTE at the time he was taken. 55 At [23], the IAA accepted the appellant's claims that a PLOTE member had harassed the appellant's family (his mother and sister) and had demanded money from them, in the circumstances described at [23] of the IAA's reasons. The IAA observes that those circumstances were not examined in the appellant's SHEV interview. Other claims of an uncle having been kidnapped and killed were accepted by the IAA at [24]. 56 At [25], the IAA refers to the appellant's claim in his entry interview of having been detained in 2006 concerning a "bomb blast". The IAA observes that at the SHEV interview, the appellant had said that someone had "bombed his garage when he was out to lunch". The garage was said to be close to a "checkpoint" (apparently operated by the SLA). All employees were taken and subjected to inquiries. They were later released. After two weeks, the garage was operational again. The IAA notes the appellant's claim that "his employees" would have been assaulted during the interrogation by the SLA and would have been frightened by that conduct. However, the IAA notes at [26] the appellant's view that, for the reasons there mentioned, the bomb blast would not have had "his name attached to it" by the authorities (the SLA). 57 This incident raised the question of the appellant's employment history more generally. 58 The IAA notes at [27] that in the application form for the visa the appellant stated that he was "self-employed" from June/July 2012 to August 2012 only and not at any other time. The IAA notes the appellant's claim that in 2006 he worked as an auto electrician in a garage for an employer in Vavuniya, and that the apparent inconsistency (between self-employment and employment of the appellant by others) was not clarified in the SHEV interview. The IAA at [27] said this: After listening to the recording of the SHEV interview I have formed the view that the applicant was confused as to which incident the delegate was referring to and that this may be attributed to translation issues. I note that the applicant did not exaggerate or embellish the consequences for him as a result of being detained in "round-ups" in 2006, or as a result of any incident that occurred at the garage in 2006. I have made no adverse credibility finding with regards to the applicant as a result of his claims regarding events in which he was involved in 2006 and I accept that he was detained in 2006 in "round-ups". I do not accept that the applicant had his own garage and his own employees in 2006 and I therefore do not accept that the applicant's garage was bombed in 2006 and that his employees were taken and questioned as claimed. [emphasis added] 59 At [30], the IAA accepted the appellant's claims made in his SHEV interview that his aunt and uncle had been killed in a bomb blast. 60 At [31], the IAA accepted the appellant's claim that between August/September 2010 to early 2011, he was detained four or five times by the SLA, but released and never physically harmed. However, the IAA notes at [31] that the appellant claimed that these incidents caused him to be afraid and, at [32], that he claimed that he left Sri Lanka in 2012 because there was no safety for him there. 61 At [33], the IAA notes that the appellant claimed that in 2012 he operated his own garage: see also IAA at [27]. It observes that, in that context, the appellant claimed that in June or July 2012 he was called to a customer to undertake work on a lorry which had broken down. Particular events occurred when 10 or 11 soldiers detained him on return to his workshop. The Tribunal notes the appellant's claim that those events caused him to realise he was not safe in Sri Lanka. He made arrangements to leave for Australia. The IAA accepted the truth of the claims and in doing so accepted at [33] the "general credibility" of the appellant. 62 As to the IAA's acceptance of the general credibility of the appellant, see also [13] and the last sentence of [23] of the IAA's reasons. 63 At [36], the IAA notes the "consistent" claim of the appellant that he is a mechanic that works in a garage and that paramilitary groups kept demanding money from him. Also, the SLA demanded once a month, that the appellant fix vehicles of SLA members for no payment. At [36], the IAA notes the appellant's claim that he was continually harassed in this way. Also at [36], the IAA notes the appellant's claim that the conduct (which must be taken to be the conduct of paramilitary groups and the SLA) "means that he has no income for himself and his family". 64 As to the pressure to accommodate the demands of these groups (or otherwise pay money as demanded), the IAA at [36] notes these claims: Everyone has to pay otherwise there is a big risk of being killed. He referred to many people being killed and dead bodies in the paddy fields. The applicant clarified at the SHEV interview that his father is a labourer and is not targeted in this way; it is people with business who are targeted and he is targeted because he had his own garage and is a business person. The applicant stated that working for another person rather than managing his own business would not bring enough income. The applicant clarified that the extortion he was subjected to was one of the reasons he left Sri Lanka and came to Australia. [emphasis added] 65 At [37], the IAA notes that the delegate had not accepted that the appellant had been subjected to extortion claims or that he would face extortion claims from paramilitary groups should he return to Sri Lanka. The Tribunal notes that the delegate adopted that position having noted that the appellant had operated his own business for approximately one month only between June/July and August 2012 and prior to that period his income in Sri Lanka was primarily derived from employment as a mechanic in garages owned by others. 66 At [38], the IAA again notes that the appellant's family had been subjected to extortion claims and at [39], the IAA notes country information that the conduct of extortion by paramilitary groups is widespread in the Northern Province, including in the period since the end of the war. The IAA notes that particular country information reports (as to which see [40] and [41] of the IAA's reasons) suggest that the EPDP, in collaboration with the army, exert control over Tamil cities such as Jaffna, Vavuniya, Batticaloa and Trincomalee and that the EPDP is effectively controlling the Jaffna Islands and is the de facto power on the ground. The IAA also notes at [39] that sources indicated that the EPDP "still had a paramilitary presence or an armed wing in the [Northern Province]". 67 Having considered all of those matters, the Tribunal made these observations at [42]: I find that the applicant was somewhat exaggerating his status as a business owner; however after assessing all the evidence I accept that he was subjected to extortion demands when he set up his own garage and that his family were subjected to extortion demands from the PLOTE member. I accept that the applicant's concerns about extortion contributed to his departure from Sri Lanka in 2012. … [emphasis added] 68 At [42], the IAA observed that in assessing the chance of the appellant being subjected to extortion from paramilitary groups in the future in Sri Lanka, the country information discussed at [43] and [44] of its reasons needed to be taken into account. 69 At [43], the IAA notes a report of the Australian Department of Foreign Affairs and Trade ("DFAT") of 2015 to the effect that while groups such as the EPDP and the Tamil Makkal Viduthalai Pulika ("TMVP") have reportedly renounced paramilitary activities, DFAT is aware of credible reports that these groups continue to be active in Sri Lanka including engaging in criminal activity. 70 At [44], the IAA notes that crime rates tend to be higher in the Northern Province and the Western Province, citing a DFAT Report of 2017. At [44], the IAA notes that whilst the DFAT Report of 2017 does not specifically mention extortion as a class of criminal conduct, the Report makes reference to "many other serious crimes" that DFAT assesses as having remained steady or having increased slightly and the IAA notes that extortion is a serious crime. 71 At [45], the IAA draws these observations together in a summary in these terms: In summary, the country information indicates that despite having renounced their paramilitary activities, there are credible reports that paramilitary groups continue to be active in Sri Lanka, including in criminal activity. I accept that these groups continue to operate in the applicant's home area. I note that the applicant does not claim that he will be setting up his own garage or other business if he returns to Sri Lanka. It was not clarified in the SHEV interview whether or not his family continue to be subjected to extortion demands by the PLOTE member. However, the applicant did clarify in the SHEV interview that his father, who works as a labourer, is not subject to extortion demands. Whilst extortion is a serious crime I note that neither the applicant nor any member of his family have been kidnapped by extortionists in the past, and while the applicant stated that his family had "tough times" as a result of the extortion by the PLOTE member the applicant does not elaborate on what this involved. He does not claim that he or any member of his family were harmed in any way other than financially and he does not claim that he or any member of his family suffered financial loss to the extent that they could not sustain themselves economically. After assessing the evidence I find that the chance of the applicant facing serious harm from extortionists in the future in Sri Lanka is remote. [emphasis added] 72 As the passages quoted at [64], [67] and [71] of these reasons reveal, the IAA: accepted that although the appellant had somewhat exaggerated his status as a business owner, the appellant was subjected to extortion demands "when he set up his own garage"; accepted that concerns about extortion demands contributed to the appellant's departure from Sri Lanka in 2012; accepted that paramilitary groups continue to be active in Sri Lanka and in the appellant's home area (the Northern Province of Sri Lanka; see [66] and [68]-[70] of these reasons); noted that the appellant had "not claimed" that he would be "setting up his own garage or other business" should he return to Sri Lanka; and concluded that the chance of the appellant facing serious harm from extortionists should he return to Sri Lanka, is remote. 73 Before turning the grounds of appeal and any relevance the transcript of the SHEV interview may have to any of those grounds, these matters arising out of an examination of the IAA's findings should be noted. 74 First, but for one matter at [42] of the IAA's reasons (quoted at [67] of these reasons), the IAA accepted the general credibility of the appellant and the claims he made in support of the visa application, noting the extensive loss of family members in the circumstances described above as accepted by the IAA. 75 Second, the only point of departure from the IAA's assessment of the appellant's creditworthiness and his various factual claims was that he had "somewhat exaggerated" his status as a business owner: IAA at [42]. 76 Third, the question of whether the appellant was or was not a business owner of a garage or would or would not be a business owner of a garage should he return to the Northern Province of Sri Lanka, was a debate taken up by the IAA as an essential element of its assessment of whether the appellant held a well-founded fear of persecution from paramilitary groups by reason of threats of extortion (s 36(2)(a)), or whether there were substantial grounds for believing that he faced a real risk of suffering significant harm by reason of such threats (s 36(2)(aa)). 77 Fourth, the IAA accepted that residual paramilitary groups continue to engage in extortion in the Northern Province of Sri Lanka. 78 Fifth, it seems clear enough by reason of point 3, that if the facts were to be that the appellant planned to open a business garage on return to Sri Lanka, he would be the subject of extortion demands by such paramilitary groups. 79 Sixth, should such demands not be met, the appellant would be at risk of losing his life. Although there is no specific finding to that effect, the IAA at [36] notes the appellant's claims that the demands for money by paramilitary groups meant that he was deprived of income for himself and his family; everyone has to pay "otherwise there is a big risk of being killed"; many people have been killed (as a result of non-payment); the appellant has seen dead bodies in the paddy fields; and, at IAA [42], the appellant was subject to extortion claims in the brief period when he owned his garage. The IAA does not reject the claim that persons who do not pay extortion demands made by the paramilitary groups fear for their lives, nor the appellant's claims, in that context, of people having been killed, nor the appellant's claim of having seen, in that context, dead bodies in the paddy fields. 80 Moreover, the IAA accepted the general creditworthiness of the appellant as to his claims and as mentioned, only engaged in the debate about whether the appellant would, or would not, open a business garage on return because it was that circumstance which was thought to attract the extortion conduct of the paramilitary groups (and the particular demands of the SLA for work to be done on vehicles of the SLA). 81 In the context of all of these factors, the IAA observed at [45] that the appellant "does not claim that he will be setting up his own garage or other business if he returns to Sri Lanka". 82 That observation is challenged by the appellant as a failure to properly understand the claims and evidence of the appellant given at the SHEV interview. Thus the SHEV interview is said to go to grounds 4 and 5 of the grounds of appeal. 83 There are essentially four grounds of appeal (grounds 3 to 6) although ground 6 is in similar terms to the ground relied upon by the appellant in the application before the primary judge and in that sense, ground 6 is merely conclusionary of grounds 3, 4 and 5. It is unnecessary to recite grounds 1 and 2 of the grounds of appeal. Grounds 3 to 6 are these: … 3. The learned Federal Circuit Court judge erred in not finding that the IAA failed to properly interpret and/or apply s 36 and/or ss 5H to 5LA of the Migration Act 1958; 4. The learned Federal Circuit Court judge erred in not finding that the IAA's decision was unreasonable in the sense of a decision which lacks an evident and intelligible justification, has erroneous reasoning or IAA reasoned illogically or irrationally; 5. The learned Federal Circuit Court judge erred in not finding that the IAA failed to properly interpret and/or apply Part 7AA of the Migration Act 1958 in the sense that the IAA failed to conduct a proper review; 6. The learned Federal Circuit Court judge erred in not finding that the IAA's decision was affected by legal error. 84 Before examining matters relating to grounds 3 to 6, it is convenient to deal with the two preliminary matters mentioned earlier. 85 The first is whether the audio-recording of the SHEV interview falls within the scope of the orders of Registrar Belcher made on 3 October 2017. The orders of 3 October 2017 were made by Registrar Belcher in the exercise of delegations conferred upon the Registrar to make orders in proceedings under the Federal Circuit Court of Australia Act 1999 (Cth) and the Federal Circuit Court Rules 2001. The question of whether the audio-recording of the SHEV interview falls within Order 1 of the orders made that day engages a question of construction of the terms of the order in the context of the proceedings. Order 1 is in these terms: 1. By 4:00pm on 23 October 2017 the First Respondent shall file and serve a bundle of relevant documents (green book) in an electronic form and for that purpose, the document shall: (a) be in portable document format (PDF); (b) be capable of being searchable for specified text; (c) have an index and shall be paginated; (d) have each entry in the index bookmarked; and (e) be set so that when opened: (i) it shall display at 100% zoom; and (ii) the bookmarks menu shall be displayed. 86 Seven other orders were made that day by Registrar Belcher. They were all programming orders directed to making the proceeding ready for hearing at 2.15pm on 12 March 2018. 87 The documents falling within the phrase "a bundle of relevant documents" which were to be filed and served by the Minister by 23 October 2017 comprehended those documents relevant to the appellant's claim as formulated in the application. The only ground said to support a claim of jurisdictional error giving rise to a claim for the grant of the constitutional writs was that "the decision of the [IAA] was affected by legal error". That ground was merely conclusionary. It was unparticularised and devoid of any content and did not raise any question going to the IAA having failed to properly understand a matter put to the departmental interviewing officer in the course of the SHEV interview. The audio-recording was not a document relevant to the proceeding as then constituted, for the purposes of procedural orders making the proceeding ready for hearing, as framed. 88 The second preliminary matter concerns the appellant's contention that the Minister was required to make the decision-maker's handwritten notes of the audio-recording available to the appellant. The appellant contends that in order to complete the record, the notes made by the decision-maker of the audio-recording of the SHEV interview ought to be regarded as a document falling within the phrase "a bundle of relevant documents" for the purposes of Order 1. The appellant contends that the Minister could have caused an affidavit to be filed by the decision-maker in the proceeding identifying any notes in relation to the audio-recording and setting out the precise content of the notes. The Minister was under no obligation to cause an affidavit of the decision-maker to be sworn or affirmed and filed and served in the proceeding before the primary judge going to a question concerning any notes the decision-maker may have made as a result of listening to the audio-recording. The statutory obligation of the decision-maker was to conduct a review of the decision referred to the IAA, reach a decision on the material and provide reasons for the decision identifying the relevant findings. The decision-maker was not obliged to expose notes made along the way to reaching a decision. Nor is the Minister obliged to expose the notes (if any) of the decision-maker. 89 There is no lack of procedural fairness in the Minister failing to disclose any notes the decision-maker may have made because the appellant has the decision and the reasons identifying the basis for the decision-maker's decision. Moreover, nothing in the proceeding as constituted before the primary judge called into controversy as a ground of jurisdictional error any question going to the decision-maker having failed to properly understand a matter put to the departmental interviewing officer in the course of the SHEV interview. 90 It should also be noted that the appellant had been provided with the audio-recording on 6 December 2016 and no question had been raised in the proceeding going to a contended failure on the part of the decision-maker in the terms earlier described. 91 How does the fresh evidence engage with the grounds of appeal? 92 The appellant contends that the observations of the IAA at [45] of its reasons (see [71] of these reasons) are the "operative [remarks] for the purpose of this appeal". The central contention is that the observation, otherwise described by the appellant as a "conclusion", that the appellant "does not claim that he will be setting up his own garage or other business if he returns to Sri Lanka" is "definitely … just not the case" having regard to a proper reading of the transcript of the SHEV interview. 93 The appellant contends that the IAA has misunderstood an essential element of the claim thus failing to discharge the statutory obligation to conduct a proper review (aspects of ground 5) and that the IAA reached the conclusion that no claim (as just described) had been made, without any "reasonable factual basis for a conclusion like that" (ground 4). Reaching that conclusion is said to be legally unreasonable in the sense described at [41] to [43] of these reasons and is said to reflect illogicality and irrationality in the reasoning process in the sense described at [44] of these reasons. 94 The appellant also says that in circumstances where the IAA seems to have accepted (as described at [79] of these reasons) that there is a serious risk of being killed if a person fails to comply with the demands of extortionists, the IAA has misapplied the statutory considerations governing whether the appellant holds a well-founded fear of persecution (ss 36(2)(a), 5H(1) and 5J(1)) and whether the appellant faces a real risk of suffering significant harm (ss 36(2)(aa), 36(2A) and 5J(5)), by concluding that by paying the extortionists the money demanded of him, the appellant was only harmed "financially" and not to the extent that "he or any member of his family suffered financial loss to the extent that they could not sustain themselves economically": IAA at [45]. 95 The appellant contends that the Act of paying the demands of the extortionists against the background of a serious risk of being killed if the demands are not met, is the act of persecution going to a well-founded fear and a real risk of suffering significant harm. 96 The appellant says that the notion that he and his family will not suffer harm (other than financial harm) by complying with the demands of the extortionists, fails to properly address the statutory integers relating to the potential serious and real risk of the individual being killed should the financial demands of the extortionists not be met. In this context, the appellant emphasises the general credibility findings favourable to him; the IAA observations about extortion demands previously made of the appellant quoted at [64] of these reasons and the "round-ups" to which the appellant was subject in 2006 quoted at [58] of these reasons. 97 The appellant contends that the matters at [94] to [96] are not dependent upon receiving into evidence the transcript of the SHEV interview. 98 As to the matters at [94] to [96], the contention is that, by concluding that the chance of the appellant facing serious harm from extortionists "is remote" (or that a fear of persecution is remote and thus not well-founded) because the harm to which the appellant had been exposed was financial harm representing something less than financial harm endangering the capacity of the appellant to sustain his family, the IAA failed to conduct a proper review by failing to recognise, for the purposes of the application of the statutory integers, that the life threatening consequences should the affected person not comply with the financial demands of the extortionists (as apparently accepted by the IAA) is the very source of the appellant's well-founded fear of persecution and the source of a real risk of suffering significant harm. 99 As to the transcript of the SHEV interview, extracts of the interview are set out below. 100 In those extracts the number identified below is the line number in the transcript. The reference to "PB" is a reference to the departmental interviewing officer, Mr Peter Blackford and "INT" is the appellant speaking through the interpreter. The interview explores the circumstances which would confront the appellant should he be compelled to return to Sri Lanka and then seek to sustain himself and his family using his skills as a motor mechanic as described by the IAA. The following exchange occurred: Transcript Participant Content 756 PB What if you went back and worked somebody then surely you wouldn't become a target for these people because they would target the business owners and not someone who was an employee. 758 INT Okay in Sri Lanka like yeah it's very difficult to work under like one person like for a long time. The money, the salary I get won't be enough to look after my family so I will have more expenses like yeah to look after my family so I have to do it by myself. 101 The appellant contends that the only reasonable interpretation of the statements of the appellant that it is difficult to work under one person for a long time; that the money or salary the appellant would get would not be enough to look after his family; that he would have more expenses in looking after his family; and that "so I have to do it by myself", is that on return to Sri Lanka the appellant would, and would need to, set up his own business, which in the context of the IAA's discussion otherwise, recognises that the appellant is a motor mechanic who has worked in (and for a short time owned and operated) a garage business. 102 The appellant contends that these statements made in the SHEV interview make it unequivocally clear that he claimed the need to and would, should he be returned to Sri Lanka, set up his own garage to sustain himself and his family. The appellant contends that the IAA's conclusion or observation that the appellant does not claim that he will be setting up his own garage or other business if he returns to Sri Lanka is simply "not justified on the evidence". 103 As to the contextual discussion (following the above exchange quoted at [100] of these reasons) concerning extortion of "Tamil business people" which the appellant contends was the position he would be in should he be returned to Sri Lanka, the following exchange occurred: Transcript Participant Content 1133 PB I just have one more question. Just going back to you telling me about people coming and asking you for money when you owned your business, okay. 1135 PB The targeting of people for money, so extortion essentially, is that done to all people? So are there Singhalese people in that area that have the same problem? 1137 INT Mainly these groups are Tamil members like yeah so they won't know, or won't do, normally they won't go to Singhalese places. Like yeah so they will target only the Tamil business people. 1138 PB So what's the reason why they wouldn't target Singhalese people do you think? 1140 INT So there is a reason for the government to keep these groups because otherwise they could have destroyed them, these groups as well like the way that they did to LTTE. So because they are still in those areas actively functioning for a reason and also because they are with the government, like they won't go to Singhalese. 104 The appellant explained in the transcript aspects of the harassment he had experienced as follows: Transcript Participant Content 579 PB When you say we can't live peacefully, what do you mean? 581 INT Say like yeah I'm a mechanic, yeah I work in the garage so like yeah from the para, like para … 583 INT Yeah TELO, EPDP like yeah I have got the harassment with them, like every month I have to pay 5,000 to one group … 585 INT Okay every month, every month TELO group will visit, visit my garage so I have to pay 5,000 rupees to them. And the other small group … 587 INT Okay so like yeah they are members of that group like yeah sometimes like if they need personal … 589 INT Okay they don't work, they don't work so when they need, as and when they need money like they come and threaten us like to me to the garage to demand for money. 590 PB So you mentioned one group. I mean you mentioned the EPDP to start with but then you also mentioned a different group. 105 After the above exchanges, the appellant and Mr Blackford exchanged a discussion about PLOTE, LTTE, TELO and EPDP. 106 The following further exchange occurred in relation to the scale of the threat and the consequences for the individual should the demands not be met. These references appear to be the source of a number of the observations of the IAA in its reasons as quoted earlier. 107 The further exchanges are these: Transcript Participant Content 606 PB Which, out of those groups, are they all doing the same thing or is there one particular group? 608 INT Okay all three yeah, all three and on top of that Sri Lankan army. So they all bring their vehicles so I have to repair everything and they won't pay any money like yeah. I can't even ask them like yeah they will say like don't you know who we are. 609 PB So aside from people coming once a month to ask for money, are there different groups coming at different times? 611 INT Say yeah like yeah the 5,000 they come and the others, they come like when they need personally, when they need money they just come and harass me. Like and if I say I don't have any money they will give me some time, like yeah within two days like you have to give that money. We will come to collect. 613 INT So I don't get any money like for our own expenses like yeah, so the income, there is no income for me. 614 PB Do they do this to other people? 616 INT Okay so everybody, when they demand for this type of threat, like yeah everybody has to oblige otherwise there is a big risk. 607 PB And what's the risk? 619 INT Okay so they will even kill, they won't hesitate to kill like yeah because they will do that for one person to show, show that to the others in the area like so that next time everybody will give. 620 PB So do you know of instances where that's happened to other people? 622 INT Okay say like yeah that happens all the time like yeah the people, their bodies are everywhere like in the paddy field or on the road like yeah those are the reasons why they kill. 623 PB And so why do you think that there doing, why do you think that they're specifically targeting people that live in that area? 625 INT Okay say for the members of the groups, they don't have any income for them personally. So because of that they have to collect it from other people, like from the business people, individuals like families. 626 PB Does your father have the same problem? 628 INT Okay my Dad he does like labourers job so but for me like my situation is different because I own this garage like yeah I am a business person. 629 PB So does your Dad not get targeted or ask[ed] for money? 631 INT Okay so like yeah they are no that exposed to the community yeah like because they just do their job and go home. Like yeah, and they, Dad does, he goes into homes and do their gardening work and that sort of work so. 632 PB So what other types of people have this problem with these groups? So tell me like which people do they target. 634 INT Okay if they know that people who are like getting money, like more money like businesses, and the rich people. 108 Throughout the transcript there are sections where the transcript simply notes that conversations took place between the appellant and the interpreter (in the appellant's national language) before the transcript records the answer given by the interpreter in English. The various notes throughout the transcript to those discussions between the interpreter and the appellant have not been inserted in the above sequence in the transcript. 109 As can be seen from the transcript and the contentions of the appellant described particularly at [92], [93] and the matters at [99] to [107] of these reasons, the transcript of the audio-recording of the SHEV interview provides the basis for the appellant's contention that the challenged observation at [45] of the IAA's reasons (that the appellant "does not claim that he will be setting up his own garage or other business if he returns to Sri Lanka"), is not a correct understanding of the position adopted by the appellant. The appellant describes that observation as a "conclusion" or "finding" of the IAA that lacks an evident and intelligible justification (Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, the plurality at [76]) or that the conclusion or finding suffers from illogicality or irrationality, in the sense described at [44] of these reasons. 110 Reading the reasons of the IAA as a whole taken together with the proffered transcript, I would not regard the challenged observation at [45] of the IAA's reasons as a "finding" or "conclusion". There is no deliberation of matters leading to a weighing of facts ultimately leading to a conclusion or finding. 111 The real point is that the IAA has not embarked upon a deliberative analysis of facts leading to a relevant finding as, so far as the IAA was concerned, the appellant was not making a claim of a matter of particular fact. The IAA was recording that no claim, as described, was being made. That matter was both incorrect and material to the conclusion that the chance of the appellant facing serious harm from extortionists in the future in Sri Lanka was "remote". 112 Accordingly, I admit the affidavit evidence of the transcript of the SHEV interview. 113 I do so having regard to these considerations. 114 I accept that the appellant has had possession of a copy of the audio-recording of the SHEV interview since 6 December 2016. 115 I also accept that, having regard to the hearing date of 12 March 2018, the appellant could reasonably have caused a transcript of the interview to be produced and put before the primary judge. 116 However, the appellant is a Tamil from the Northern Province of Sri Lanka who asserts that he is owed protection obligations by Australia on the grounds already identified. He is a person whose family has suffered the atrocities described and accepted by the IAA. He has suffered harassment as accepted. His claims are generally accepted. He was unrepresented at the time when the audio-recording was sent to him on 6 December 2016 and but for Mr Boccabella providing pro bono services to the appellant shortly before the 12 March 2018 hearing, I am willing to infer that the appellant would not have had the assistance of legal advice and representation at the Federal Circuit Court hearing (unless some other counsel or solicitor had been willing to provide it at the time). 117 The question of whether the transcript is to be admitted engages the exercise of a discretion. The exercise of the discretion takes into account the factors just mentioned but also weighs in the balance the important question of how the interests of justice are best served in the circumstances of the case. It seems to me that the affidavit evidence attaching a copy of the transcript ought to be admitted as the interests of justice are served by enabling the appellant to identify the factual foundation for the contention that the IAA misunderstood the claim he was making and the materiality of that matter to his protection claims. 118 I also recognise that the transcript has been produced by what is described by Ms Woodrow in her affidavit as "a professional transcription company". I accept that proof of the process for producing the transcript and proof of the standing of the "professional transcription company" has not been properly adduced in strict form. Nevertheless, where the question in issue is whether the administrative decision-maker has failed to discharge a statutory duty of reviewing the decision referred to the IAA by reference to claims made by the person asserting a protection obligation owed to him by Australia, any formal lack of strict proof as to the process of transcription and the authority and standing of the company ought not to outweigh, at the balance point, the best interests of justice. 119 It should be noted that there is no suggestion by the Minister that the transcript is not correct. However, that may well be because in order to advance such a submission, the transcript would need to be in evidence and contested by other evidence of an alternative version. Here, the contest is as to the admission of the transcript (as it is put forward) at all. 120 As to the substance of the grounds of appeal, a number of the important factual matters recited in the reasons of the IAA can be seen in the transcript of the audio-recording. As the IAA records in its reasons, the decision-maker has referred to the audio-recording in addressing the various factual matters earlier mentioned in detail. The question raised by the grounds of appeal is not really one of whether a "finding" or "conclusion" suffers from legal unreasonableness as having no evident and intelligible justification or whether a "finding" or "conclusion" is to be characterised as having been reached irrationally or by reason of illogicality in the sense earlier described. Rather, the question is whether the IAA simply failed to recognise that should the appellant return to Sri Lanka he would, and would need to, set up his own garage (undertaking) to support his family financially and so use the skills he has as a mechanic as found. The IAA recognised the relationship between the appellant operating such a garage business and the conduct of paramilitary groups (as earlier described) in seeking to extort payments from him and the risk of the consequences of the appellant failing to make the payments. However, the IAA rendered that risk as "remote" because it understood the position to be that the appellant did not claim that he would be setting up his own garage business (with the result that he would be of no interest to the extortionists). 121 However, he did make that claim and it can be seen directly at [100] and [101] of these reasons and contextually at [103] to [107] of these reasons. 122 It is well accepted that the IAA is only required to address claims that clearly arise on the material. Here, it can be seen that the IAA recognised that the topic (or subject matter) of whether the appellant would or would not be setting up his own garage business on return to Sri Lanka was relevant and material as that matter was expressly addressed. The IAA regarded it as important to expressly note what it regarded as the position on that topic. 123 However, the IAA did not appreciate that the appellant was making a claim that he would, and would need to, set up his own garage business on return to Sri Lanka. As already mentioned, that matter was material to the appellant's protection claims. 124 The appellant's claim in this regard was not obfuscated. It was raised expressly in the interview and the claim was placed in context as the transcript reveals. 125 These matters were not before the primary judge. The primary judge did not fall into error on this ground. The ground as now developed on appeal in the context of the transcript is meritorious. The orders of the primary judge are to be set aside and the matter of the review of the delegate's decision is to be remitted to the IAA for consideration of the appellant's claims of protection obligations owed to him by Australia in the context of the claim that upon his return to the Northern Province of Sri Lanka he would, and would need to, set up his own garage business to support his family. 126 That claim must be considered by the IAA and made the subject of findings. 127 As to the remaining ground emphasised by the appellant and described in summary form at [94] to [97] of these reasons, I accept that if the IAA has accepted, as it seems to me it has, that a failure to meet the demands of the extortionists gives rise to a real risk of life threatening consequences described by the IAA at [36] of its reasons (see [64] of these reasons and the discussion at [74] to [79] of these reasons and particularly at [79]), it is no answer to the question of whether Australia owes protection obligations to the appellant (in the context of the findings favourable to the appellant concerning the extortion conduct and threats of such conduct by paramilitary groups and the SLA) to conclude that the chance of the appellant facing serious harm from these groups is remote because by meeting the demands, paying the money and acting in accordance with the requirements of the extortionists, only financial harm or hardship arises (and not to a degree that the appellant or his family would be reduced to not being able to "sustain themselves economically"). The point is that the very demands are the expression of the persecution, or real chance of significant harm from which protection obligations (on the findings otherwise), arise. 128 The IAA accepts that extortion claims form part of the "criminal activity" of paramilitary groups and elements within the SLA in the Northern Province of Sri Lanka. The IAA must not only consider the appellant's claim as discussed at [120] to [124] of these reasons but also whether the appellant faces a real chance of serious harm should he refuse to comply with the demands of the extortionists rather than whether the harm is of only the character described by the IAA should he comply with those demands. 129 In deciding as it did on this issue, the IAA fell into jurisdictional error. 130 To the extent that the primary judge thought otherwise, the primary judge, in my respectful opinion, fell into error. 131 In effect, there are two central matters relevant to this appeal contained within [45] of the IAA's reasons. The first is the IAA's understanding that the appellant does not claim that he will be setting up his own garage business and second, that, in any event, he does not face a real chance of serious harm because compliance with the demands only brings about financial harm (and not at the level of a threat to being able to economically sustain his family), whereas the fear of harm arises out of the consequences for the appellant in not complying with the demands of the extortionists. It seems to me that there is a degree of inter-relationship between these two contentions. 132 That being so, it is important to recognise that the first limb of these contentions was not agitated before the primary judge with the result that the costs order of the primary judge ought not to be disturbed. 133 However, the Minister will be ordered to pay the appellant's costs of and incidental to the appeal. I certify that the preceding one hundred and thirty-three (133) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Greenwood. Associate: Dated: 17 February 2021	17,030
federal_court_of_australia:fca/single/2019/2019fca1526	decision	commonwealth	federal_court_of_australia	text/html	2019-09-13 00:00:00	Australian Building and Construction Commissioner v Windus [2019] FCA 1526	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca1526	2024-09-13T22:50:07.611120+10:00	FEDERAL COURT OF AUSTRALIA Australian Building and Construction Commissioner v Windus [2019] FCA 1526 File number: WAD 185 of 2019 Judge: JACKSON J Date of judgment: 13 September 2019 Catchwords: PRACTICE AND PROCEDURE - application for substituted service - personal service not practicable - reasonable possibility that proposed methods will place recipient on notice - application granted Legislation: Fair Work Act 2009 (Cth) s 562 Federal Court Rules 2011 (Cth) rr 10.24, 15.08 Cases cited: British American Tobacco Australasia Limited v Taleb (No 1) [2012] FCA 1065 Combis (Trustee) v Spottiswood [2011] FCA 1082; (2011) 123 ALD 40 Commissioner of Taxation v Caratti (No 2) [2018] FCA 1500 Statewide Secured Investments Pty Ltd v Tarrant [2011] FCA 1067 Date of hearing: 13 September 2019 Registry: Western Australia Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 9 Counsel for the Applicant: The applicant was excused from appearing Solicitor for the Applicant: Herbert Smith Freehills Counsel for the Cross-Claimants: Ms JR Moore Solicitor for the Cross-Claimants: Eureka Lawyers Counsel for the Cross-Respondents: The cross-respondents were excused from appearing Solicitor for the Cross-Respondents: King & Wood Mallesons ORDERS WAD 185 of 2019 BETWEEN: AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER Applicant AND: JOHN WINDUS First Respondent STEPHEN PARKER Second Respondent CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION Third Respondent AND BETWEEN: CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION First Cross-Claimant JOHN WINDUS Second Cross-Claimant STEPHEN PARKER Third Cross-Claimant AND: SKS GROUP PTY LTD (ACN 122 565 262) First Cross-Respondent THAYALAN KRISHAN Second Cross-Respondent BENJAMIN SIPKES Third Cross-Respondent NICHOLAS WARD Fourth Cross-Respondent JUDGE: JACKSON J DATE OF ORDER: 13 SEPTEMBER 2019 THE COURT ORDERS THAT: 1. The cross-claimants' interlocutory application dated 1 August 2019 is allowed. Substitution of the first cross-respondent 2. Pursuant to r 9.08 of the Federal Court Rules 2011 (Cth) (Rules), SKS Group Pty Ltd (ACN 122 565 262) is removed as the first cross-respondent. 3. Pursuant to r 9.05(1) of the Rules, SKS Builders Pty Ltd (ACN 163 340 181) is joined to the proceedings and substituted as the first cross-respondent. 4. The cross-claimants are granted leave to file and serve an amended notice of cross-claim and an amended statement of cross-claim substituting SKS Builders Pty Ltd (ACN 163 340 181) as the first cross-respondent by no later than 16 September 2019. Substituted service on the third cross-respondent 5. Pursuant to r 10.24(b) of the Rules: (a) each of the notice of cross-claim and statement of cross-claim filed in these proceedings (Cross-claim Documents) may be served and be brought to the attention of the third cross-respondent by: (i) sending a text message to the telephone number given in paragraph 6 of the affidavit of Nicola Iannetta affirmed 10 September 2019 in these proceedings stating as follows: Dear Mr Sipkes A cross-claim in proceeding WAD 185 of 2019 has been commenced against you in the Federal Court of Australia by the Construction, Forestry, Maritime, Mining and Energy Union, Stephen Parker and John Windus alleging breaches of the Fair Work Act 2009 (Cth). The court has ordered that you may be served with the documents commencing the cross-claim by emailing them to a gmail.com address believed to be yours, and by means of this text message. If you wish to defend the cross-claim, you must file a notice of address for service in the Federal Court of Australia. You must also file a defence to the cross-claim WITHIN 28 DAYS after the emailing of the documents or receipt of this text message (whichever is the last to occur). A copy of the notice of cross-claim and statement of cross-claim will be provided to you upon your request by calling (08) 9428 3333 or emailing [email protected]. IMPORTANT: if you fail to file a notice of address for service, or fail to file a defence in the required time, then judgment may be entered against you or other orders adverse to your interests may be made. (ii) emailing portable document format (pdf) copies of the Cross-claim Documents and these orders to the email address given at paragraph 16 of the affidavit of David Anthony Edward Scaife affirmed 11 September 2019 in these proceedings, which email address must state as follows: Dear Mr Sipkes A cross-claim in proceeding WAD 185 of 2019 has been commenced against you in the Federal Court of Australia by the Construction, Forestry, Maritime, Mining and Energy Union, Stephen Parker and John Windus alleging breaches of the Fair Work Act 2009 (Cth). The court has ordered that you may be served with the documents commencing the cross-claim by sending them by way of this email and by means of a text message to a telephone number believed to be yours. If you wish to defend the cross-claim, you must file a notice of address for service in the Federal Court of Australia. You must also file a defence to the cross-claim WITHIN 28 DAYS after receipt of this email or receipt of the text message (whichever is the last to occur). A copy of each of the notice of cross-claim and statement of cross-claim is attached to this email. IMPORTANT: if you fail to file a notice of address for service, or fail to file a defence in the required time, then judgment may be entered against you or other orders adverse to your interests may be made. (b) the Cross-claim Documents will be taken to have been served on the date of the last to occur of service as required by paragraph 1(a)(i) or 1(a)(ii) of these orders. Further directions 6. By no later than 21 October 2019, the cross-respondents shall file and serve any defence(s) to the cross-claim. 7. By no later than 4 November 2019, the cross-claimants shall file and serve any reply. 8. The cross-claim is listed for a mediation before a Registrar of this Court on a date to be fixed after 11 November 2019. 9. Liberty to apply on 48 hours' notice. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT JACKSON J: 1 In these proceedings, the Australian Building and Construction Commissioner seeks pecuniary penalties against the Construction, Forestry, Maritime, Mining and Energy Union and two of its officers in relation to alleged contraventions of the Fair Work Act 2009 (Cth). The contraventions are said to have occurred during certain incidents that took place on 15 February 2019 when the union officers entered the construction site at the proposed DoubleTree by Hilton hotel in Perth. The union and its officers have cross-claimed against the principal contractor for the project and three of its present or former employees who are said to have been involved in the incidents, alleging other contraventions of the Fair Work Act. This court has jurisdiction in relation to the matter by reason of s 562 of the Act. 2 It is not necessary to describe the claims or cross-claims in any detail in these reasons, which deal solely with an application by the cross-claimants (respondents) for an order under r 10.24 of the Federal Court Rules 2011 (Cth) for substituted service of the notice of cross-claim and statement of cross-claim on the third cross-respondent, Benjamin Sipkes. 3 The application is supported by an affidavit of David Scaife, a solicitor acting for the cross-claimants, an affidavit of Christopher Prast, an officer of the union, and an affidavit from each of two process servers. 4 The cross-claim was filed on 20 May 2019. A chronology of subsequent relevant events which emerges from the affidavits is as follows: (1) On 22 May 2019, Mr Scaife obtained an address for Mr Sipkes from an electoral roll search. (2) On 23 May 2019, a process server visited the project site to try to serve the notice of cross-claim on Mr Sipkes. The process server spoke to someone there who, it seems, was Thayalan Krishnan, another one of the cross-respondents. Mr Krishnan said that Mr Sipkes was not in that day. He gave the process server a telephone number for Mr Sipkes. The process server called it and spoke to Mr Sipkes. Mr Sipkes said he was on leave but that he would make himself available to be served at the site on 4 June 2019. (3) The same process server made another attempt to serve Mr Sipkes at the site on 31 May 2019. Someone there told her that he had not seen Mr Sipkes all day and he assumed that he was not working. (4) The process server went to the site again on 4 June 2019. Mr Krishnan told her that Mr Sipkes had resigned and no longer worked at the site. (5) On 1 August 2019, Mr Prast called the telephone number mentioned above. The call went through to message bank. Mr Prast did not leave a message. (6) On 6 August 2019, the second process server tried to serve Mr Sipkes with a copy of the notice of cross-claim and statement of cross-claim at the address shown on the electoral roll. The lights were on but no one came to the door when he knocked. A neighbour was not sure whether Mr Sipkes still lived there. (7) On 8 August 2019, the process server made another attempt to serve Mr Sipkes at the same property. Someone came to the door this time but said that Mr Sipkes did not live there and that he may have been a previous occupant of the property. (8) On 2 September 2019, as a result of a subpoena, Mr Scaife obtained a possible alternative residential address and telephone number and two possible email addresses for Mr Sipkes. (9) On 3 September 2019, Mr Scaife sent an email to each of the email addresses indicating that he had tried to serve Mr Sipkes with documents commencing the cross-claim, that an attempt would be made to serve him at the alternative residential address, and notifying him of the making of the present application and the date and time at which it would be heard. A notification came back that one of the emails was undeliverable because the mailbox had been disabled. A notification came back indicating successful delivery to the other address. Mr Scaife's affidavit does not mention any reply to the email from Mr Sipkes, so I infer that there was none. (10) On the same day, the second process server tried to serve Mr Sipkes at the possible alternative residential address. He spoke to someone there who said Mr Sipkes did not live there. A neighbour indicated to the process server that Mr Sipkes moved out about a year ago. The neighbour did not have any forwarding address. 5 Rule 10.24 of the Federal Court Rules provides: 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. 6 In Commissioner of Taxation v Caratti (No 2) [2018] FCA 1500 at [10], Colvin J said: The preponderance of authority is to the effect that the current rule requires the applicant for orders for substituted service to demonstrate that it is not sensible or realistic to effect personal service even though it may be possible or feasible to do so. This will usually be done by taking steps to effect personal service and providing evidence as to any difficulties that have arisen in doing so. It is not necessary to go so far as to demonstrate that there is an inability to effect personal service or that it would be extraordinarily difficult to do so. Further, there must be a proper evidential basis upon which to conclude that in all probability the mode of substituted service that is proposed will bring the relevant documents to the attention of the party to be served. 7 I am satisfied that in this case the cross-claimants have demonstrated that it is not practicable to serve the notice of cross-claim and statement of cross-claim on Mr Sipkes by personal service, that being the way required by r 15.08(2) of the Federal Court Rules. Numerous attempts have been made to serve him by that method at three different places. It appears he no longer works or lives at those places and the cross-claimants do not know his whereabouts. 8 An order for substituted service under r 10.24 must be based on a reasonable probability that the identified method of service will inform the intended recipient: Statewide Secured Investments Pty Ltd v Tarrant [2011] FCA 1067 at [10] (Flick J). Where experience has shown that a particular method of communication has resulted in material being brought to the attention of the person to be served, an order for substituted service according to that method will be likely to achieve the same result: British American Tobacco Australasia Limited v Taleb (No 1) [2012] FCA 1065 at [30] (Dodds-Streeton J) citing Combis (Trustee) v Spottiswood [2011] FCA 1082; (2011) 123 ALD 40 at [16] (Logan J). 9 The order that the cross-claimants seek here is to the effect that the documents may be served by sending a text message to Mr Sipkes at the telephone number which he answered when called by the first process server and by sending an email to the email address where Mr Scaife received notification that the email had been received. I am satisfied that the combination of those two measures will give rise to a reasonable probability that Mr Sipkes is informed of the fact of the commencement of the cross-claim against him, the contents of the documents commencing the cross-claim, and the potential consequences for him of the commencement of the proceedings. I will therefore order substituted service on Mr Sipkes on that basis. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jackson. Associate: Dated: 17 September 2019	3,471
federal_court_of_australia:irc/1996/1996irca0550	decision	commonwealth	federal_court_of_australia	text/html	1996-09-30 00:00:00	Howarth v Babin [1996] IRCA 550	https://www.judgments.fedcourt.gov.au/judgments/Judgments/irc/1996/1996irca0550	2024-09-13T22:50:08.973555+10:00	DECISION NO:550/96 TERMINATION OF EMPLOYMENT - Allegation of UNLAWFUL TERMINATION - Whether termination occurred at the initiative of the employer - Whether there was a valid reason for termination - Assessment of compensation. PAYMENTS IN LIEU OF LEAVE - Computation of payments - Cash payments made to employer from which tax was not deducted - Whether payments should be calculated by reference to actual outlay by employer or cost if tax was paid. Industrial Relations Act 1988, s 170DB, 170DE(1) RODNEY KENT HOWARTH v DANIEL BABIN NO. NI.95/4124R CORAM: WILCOX CJ PLACE: SYDNEY DATE: 30 SEPTEMBER 1996 IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI 95/4124R NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: RODNEY KENT HOWARTH Applicant AND: DANIEL BABIN/NU TRED PTY LIMITED Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 30 SEPTEMBER 1996 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The orders made by Judicial Registrar Tomlinson on 23 May, 1996 be set aside and in lieu thereof it be ordered that judgment be entered in favour of the applicant, Rodney Kent Howarth, against the respondent, Daniel Babin, in the sum of $12,003.92. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI 95/4124R NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: RODNEY KENT HOWARTH Applicant AND: DANIEL BABIN/NU TRED PTY LIMITED Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 30 SEPTEMBER 1996 EXTEMPORE REASONS FOR JUDGMENT WILCOX CJ: This is an application for review of a decision of a Judicial Registrar finding in favour of an applicant who claimed that his employment had been terminated by his employer without lawful cause. The Judicial Registrar also dealt with a claim, in the accrued jurisdiction of the Court, for moneys said to be owing as a result of the termination of the employment. I do not think it is necessary for me to deal with the facts in any detail. The whole of the material that was before the Judicial Registrar is before me. In addition I have heard oral evidence from the two principal protagonists in the dispute; the applicant, Rodney Kent Howarth, and the respondent, Daniel Babin. I will deal first with the accrued jurisdiction claim. There is no dispute as to the computation of annual leave and long service leave. There is a dispute as to whether the computation should be reflected in figures calculated on the basis of $827 per week or $640 per week. The reason for the difference is that, when the applicant was originally employed, it was at a rate of $43,000 per annum, which corresponds to $827 per week. However, fairly early in his employment, when his employer was a different person, it was agreed between that employer and himself that his wages should be shown in the wages records as being only $400 per week, from which tax would be deducted; and in addition there would be a cash payment, not revealed to the Taxation Commissioner, of $240 per week. From Mr Howarth's point of view, the end result was the same. His take-home pay remained unchanged, but this arrangement was cheaper from the employer's point of view. That situation continued for a period of almost five years until the business was sold to Mr Babin. He took over in mid-July 1995, and he said in evidence that he was not aware of the cash payments when he bought the business. It appears that the other two employees of the business were also receiving cash payments, although the amount was not as great as in the case of Mr Howarth. Mr Babin apparently immediately regularised the position of the other two employees, revealing the full extent of their earnings but without adversely affecting their take-home pay. This must have meant that the cost to him as employer increased to the extent of the tax now borne but previously avoided. In the case of Mr Howarth, Mr Babin did not take that course. The reason, obviously, was that he thought that Mr Howarth's wage was excessive having regard to the nature of his duties. Mr Howarth had originally been employed as operations manager of the business. Apparently, at that stage, it was somewhat larger than it was when Mr Babin purchased it. In more recent times he had spent four out of every five days in the week visiting customers - substantially, making deliveries. Mr Babin apparently took the view that he could obtain a driver at less cost than the cost of Mr Howarth. Far from wanting to regularise Mr Howarth's situation at a net cost to himself as employer, Mr Babin wanted to cut down the cost of Mr Howarth's services. This led to an impasse between the two men. There was a series of inconclusive discussions during August and September regarding the matter. Their content is not clear, but it is clear that Mr Babin was never content to pay $827 per week to Mr Howarth. The effective cost to Mr Babin of Mr Howarth's services during the period of his employment was $640. However, it appears that after Mr Howarth's employment ceased, Mr Babin decided that he ought to disclose the situation to the Taxation Commissioner. According to his evidence, he then paid the Taxation Commissioner the tax that had been avoided by the arrangement during the fairly limited period during which he had employed Mr Howarth. Because of this payment Mr De Meyrick, counsel for Mr Howarth, argues that I should calculate annual leave, long service leave and sick pay on the basis of $827 per week. It seems to me that this submission is unrealistic. I do not think that there was ever any chance that Mr Babin would accept continuing responsibility for a salary of $827 per week. If Mr Howarth had gone on annual leave no doubt he would have received exactly what he had received in the earlier period, namely a total of $640 per week. The same thing would have applied if he had gone on long service leave. Accordingly I propose to adopt a figure of $640 per week for the purpose of calculating annual leave and long service leave. Certain payments have been made in respect of each item. It is sufficient to say that, adopting $640 per week, it is agreed between counsel that the balance due for annual leave is $773 and the balance due for long service leave is $1230.92. That comes to a total of $2003.92. I propose to award that figure in respect of the accrued jurisdiction claim. It follows from what I have just said that I do not include in the accrued jurisdiction claim Mr Howarth's further claim for three days' sick pay for 2, 3 and 4 October 1995. The reason for that exclusion is that it seems to me that there was a mutual expectation that Mr Howarth's employment would come to an end on 29 September. There is a strange ambiguity in the evidence about how this expectation arose. As I have said, it is clear that Mr Babin was not prepared to continue to pay Mr Howarth at the rate even of $640 per week, let alone the greater amount payable if the tax position was regularised. He took the view that Mr Howarth was substantially spending his time doing driver's duties and it would be possible to employ a driver at a lesser cost. According to Mr Babin's evidence, subsequent events have vindicated that view. I can well understand that view being taken, whether or not it is correct to say that Mr Babin was unable to continue to bear wages at that rate. I think probably what has happened is that Mr Howarth was initially employed by a somewhat larger business to perform more responsible duties. As time passed, the business contracted and he gradually got himself into a position where he was doing work of lesser value. The previous employer was apparently prepared to tolerate this. As that employer apparently continued to trade profitably, and certainly continued to trade, one can only assume that the business was capable of bearing the expense. I note that the previous employer sold the business to Mr Babin for $150,000 which includes a sum of $90,000 for goodwill. So the business must have been thought to be of substantial value, and this despite the burden that the previous employer had been carrying. It is another matter again to say that a purchaser, looking at the matter afresh and having no particular loyalty to Mr Howarth, would wish to pay $640 a week to somebody who spent most of his time doing driving duties. I think that Mr Babin quickly realised he was paying more for Mr Howarth's services than they were worth on the market, and he wanted to cut down that cost. He went about his objective very badly. He had a series of inconclusive conversations with Mr Howarth but never put to him a proposition. According to his evidence, he spoke about regularising the tax position. He must have realised that to do this without increasing the gross pay would reduce Mr Howarth's take-home pay; but in addition he wished to reduce the gross pay. It seems to me that this was a situation that required a frank discussion, and indeed a disclosure by Mr Babin that he simply did not wish to continue to incur this degree of expenditure for a person who was carrying out duties that could be performed by someone else at lesser cost. Mr Babin did not do this. There were conversations in August. Mr Babin, in his evidence, was inclined to blame Mr Howarth for the inconclusive nature of the conversations, but this is hardly fair, given that Mr Babin put no proposition to Mr Howarth. It is difficult to see how Mr Howarth could have reacted, other than to maintain his insistence on his existing package. He had no proposition to which he could address his mind and make a considered response. Having said all this, it seems to be fairly clear that by early September there was a mutual acceptance that Mr Howarth's employment would come to an end fairly shortly. I say this, firstly, because the evidence is clear that, in the first few days of September, Mr Babin placed an advertisement for a driver and a person was recruited, Mr Gunston. Mr Howarth accompanied Mr Gunston on the route for one week, or perhaps longer. In effect, he taught Mr Gunston the route. Mr Howarth said in evidence that he did not regard this as inconsistent with his continued employment because he would be able to spend more time on promotional duties. I do not doubt that Mr Howarth entertained that hope, but there does not seem to be any basis in the evidence for inferring that this expectation was shared by Mr Babin. It is also a little difficult to reconcile that evidence with evidence that Mr Howarth spoke to a number of customers about his future when, not unnaturally, they asked questions arising out of Mr Gunston's presence on the run. Mr Howarth agreed, both today and in his evidence before the Judicial Registrar, that he may have assented to questions such as "Are you leaving?". If he firmly thought he was going to a more responsible position in the office as operations manager concerned with promotion this was a strange reply. The other strange aspect of the evidence is that, on Friday 22 September, Mr Babin produced a document on his computer which spoke about the employment coming to an end on 29 September. The document is not in evidence - it perhaps has been destroyed - so I do not know its precise content. But it was accepted by Mr Howarth in his evidence that this was the purport of the document. Mr Howarth was unhappy about the wording and he wrote a suggested version in his own hand which he gave to Mr Babin. Mr Babin apparently typed it up on his computer and gave it to Mr Howarth, but on the following Monday he asked for it back. The intention behind all this is not readily apparent to me. What is significant is that, in the document Mr Howarth wrote out in his own handwriting, he included a sentence: "His employment is to be terminated on Friday 29 September 1995". I do not agree with the submission of Mr Coleman, counsel for the respondent, that this indicates that Mr Howarth was resigning. I think however it does indicate an understanding by Mr Howarth that, one way or the other, his employment would come to an end on 29 September. On the following Tuesday, 26 September, Mr Howarth suffered an angina attack. He was admitted to hospital and remained there for several days. On Friday 29 September, Mr Babin visited him in hospital accompanied by the factory manager, a Mr Aboud. Evidence was given by Mrs Howarth that she was visiting her husband at the time and heard Mr Babin say to her husband that he should come and see him next week when he came out of hospital. It is common ground that Mr Babin brought some pay but that it was not the full week's pay; still less did it include termination pay. Mr Babin's explanation of the shortfall is that, because of Mr Howarth's illness, Mr Gunston had been called in to drive on the Thursday and Friday and Mr Babin had thought it necessary to accompany him; therefore he had not had the opportunity to make up the pay. This is a possible explanation of the situation. In any event, when Mr Howarth asked about the pay, according to Mrs Howarth, Mr Babin said that he would give him the rest of his pay and let him know what he would do about sick leave "and everything will be all right with your job, you have got nothing to worry about". This version of the conversation was challenged in cross examination of Mrs Howarth before the Judicial Registrar. Mrs Howarth was not recalled today. Mr Babin denied saying the words claimed by Mrs Howarth. This has caused me something of a difficulty; nonetheless it does not affect my view, based on the other evidence, that there was a mutual expectation that the employment would come to an end on 29 September. I think it is quite possible that Mr Babin, if he did use those words, was simply wanting to give some reassurance to Mr Howarth who, after all, was in intensive care in hospital as a result of an angina attack. Whatever the explanation, the other factors seem to me to point fairly strongly to an expectation that the employment would end on 29 September. Accordingly I think that the claim for sick pay should not be allowed. I turn to the unlawful termination claim. It is said by Mr Coleman that this was simply a case of an employee resigning. I do not think it is necessary to reach a final conclusion about whether Mr Howarth said he would resign or not. Mr Howarth said in evidence that he never resigned. Mr Babin said that he did. One thing is crystal clear: if Mr Howarth did say he proposed to resign, or was resigning, this was as a result of pressure put on him by Mr Babin. It is clear from his own evidence that Mr Babin did not wish to continue to pay a person as much as $640 per week, still less an amount increased by the avoided tax, for carrying out the duties that Mr Howarth was carrying out. There is no suggestion in the evidence of any desire by Mr Howarth to leave the job. It was a well paid job which he had occupied for several years. He claimed in his evidence that he enjoyed it and had great interest in the company and saw it as his future. There is no reason to doubt that evidence. Bearing in mind Mr Howarth's age at the time - he was 46 years old - and his family responsibilities, it is inconceivable that he would voluntarily leave the job without something else in prospect. He went because he was pushed and it does not really matter whether, on the way, he used words such as "resign". My own view is that he probably did not say he would resign. I think Mr Babin made clear to Mr Howarth that he had to go and he accepted this as an inevitability. He co-operated in training Mr Gunston as, in effect, his successor on the driving duties, but this does not mean he went voluntarily. In my opinion this is a case of a termination at the initiative of the employer. The question then arises whether there was a valid reason for the termination. Mr Coleman argues that there was, because Mr Babin was of the view that he could not afford to keep Mr Howarth. This claim rests in assertion. The only evidence of the finances of the business are, first, the sale price to Mr Babin, which I have already mentioned, and, secondly, a document which was tendered in evidence showing the turnover of the business for each week in the first six months of its operation by Mr Babin. The figures vary from week to week. I have not done any detailed calculation but they seem to support a view that the annual turnover was in the order of $180,000 to $200,000. It is not apparent to me that this turnover could not support Mr Howarth at the salary he was being paid when Mr Babin purchased the business. It may be so, it may not be so; I simply do not know. I do know that the previous employer had borne this cost for a number of years and remained in business. I do not think it is right to say that a claim from an employer that he could not afford to pay a particular salary is sufficient for the purposes of s 170DE(1) of the Industrial Relations Act. That section requires the Court to form its own opinion on an objective matter, namely whether there was a valid reason for termination of the employee's employment. I am not satisfied that there was a valid reason. The onus rests on the employer to satisfy the Court in this respect. In order that there be no misunderstanding of the position, I should add that, if Mr Babin had handled the matter in a different way, Mr Coleman might have been able to advance a better argument as to the existence of a valid reason for the termination of Mr Howarth's employment. Subject to any specific constraint imposed by the law, it is the right of all employers, at any time, to restructure their businesses in such manner as they might think desirable in order to increase their competitiveness or profitability. The entitlement is not limited to employers who must do this in order to survive. And the restructure of a business may involve the downgrading of a position. If an employee occupying a position that is to be downgraded is unsuitable for the new position, or unwilling to move to it, there may be a valid reason for the employer to terminate that employee's employment, on proper notice or with payment in lieu of notice. But if this course is taken on the ground of unwillingness, it can only be justified by evidence that an offer concerning the new position was put to the employee, fairly and squarely and with specific mention of the nature of the new position and the conditions, including remuneration, that would attach to it; that the employee did not accept the offer; and that it was possible to find someone else who would perform the duties of the new position at the proposed remuneration. In the present case, it is clear that Mr Babin failed to put the matter to Mr Howarth fairly and squarely. Although there was no doubt about Mr Howarth's suitability for the downgraded position, Mr Babin never put a proposition to him concerning a downgraded position or stated the remuneration he was prepared to pay. Mr Howarth was never given the opportunity to elect to accept the downgraded position and thereby continue in Mr Babin's employment. This should not be thought a pedantic point; it cannot be assumed that Mr Howarth would have rejected the downgraded position. In the absence of any other employment prospect, he may well have preferred the downgraded position to the prospect of lengthy unemployment. I find that the termination of Mr Howarth's employment was at the initiative of the employer and was unlawful because it contravened s 170DE(1). This brings me to the assessment of compensation. The assessment is complicated by several factors. First, it is fair to take into account not only the actual salary received by Mr Howarth but also the fact that he had the use of a motor car seven days a week at the employer's expense. This must have been a substantial benefit to him. Secondly, Mr Howarth became quite ill. He had to have a bypass operation and, according to his own evidence, he was not fit for work, or medically cleared for work, until 1 May 1996. That means there was a gap of some seven months during which he could not have worked in any event. Since that time, Mr Howarth has been looking for work, according to his evidence, but has not succeeded in finding anything. However, he did say that, as a result of some recent discussions, he has hopes of being offered employment within the fairly near future. He does not know the likely salary. I think Mr Howarth is being frank about this. Undoubtedly the loss of his job, at the particular time he lost it, has cost him dearly. It meant that he was in the unfortunate position of being unemployed, and therefore not entitled to sick pay, during his long illness. Against this, I have to bear in mind the fact that a situation had developed between Mr Howarth and Mr Babin that made it inevitable that Mr Howarth's employment would not long survive. Mr Babin had taken the view, I think quite justifiably, that he could find somebody else who would do the work that Mr Howarth was doing at less cost. Being a businessman, it was unlikely that he would resist the opportunity of cutting his costs when he could. Additionally, the discussions had caused tensions between the two men that I think would have caused Mr Babin to decide that he would prefer to make a change. This does not mean that no compensation should be awarded, but I have to bear all these matters in mind in determining the appropriate figure. A claim is made for five weeks pay in lieu of notice pursuant to s 170DB of the Act. Five weeks is the appropriate number of weeks if the section applies. Bearing in mind the parties' mutual expectation of termination, it is not clear that compensation should be specifically attributed to a breach of s 170DB. But I think it is reasonable to take into account the failure of Mr Babin to spell out exactly what he did desire in considering the appropriate compensation for breach of s 170DE(1) of the Act. I have come to the conclusion that the appropriate course is to award compensation under s 170DE(1) that reflects about 13 weeks at $640, but round it upwards to take account of the car benefits. Thirteen weeks at $640 comes to $8,320. I propose to round this up to $10,000 and award that sum in respect of the unlawful termination claim. If I add that figure to the sum of $2,003.92, it means that I should enter judgment in favour of the applicant in the total sum of $12,003.92. The orders that I make are that I set aside the orders made by the Judicial Registrar. In lieu thereof I enter judgment for the applicant, Rodney Kent Howarth, against the respondent, Daniel Babin, in the sum of $12,003.92. I certify that this and the preceding fifteen (15) pages are a true copy of the Reasons for Judgment of Chief Justice Wilcox. Associate: Dated: 30 September 1996 APPEARANCES Counsel for the Applicant: R De Meyrick Solicitors for the Applicant: Henry Davis York Counsel for the Respondent: P C Coleman Solicitors for the Respondent: Boskovitz & Associates Date of hearing: 30 September 1996	5,047
federal_court_of_australia:fca/single/2024/2024fca0683	decision	commonwealth	federal_court_of_australia	text/html	2024-06-18 00:00:00	Cooper (Receiver), in the matter of Green Grain Processing Technologies Pty Ltd (Receivers Appointed) (No 2) [2024] FCA 683	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2024/2024fca0683	2024-09-13T22:50:10.266091+10:00	Federal Court of Australia Cooper (Receiver), in the matter of Green Grain Processing Technologies Pty Ltd (Receivers Appointed) (No 2) [2024] FCA 683 File number(s): SAD 144 of 2023 Judgment of: O'SULLIVAN J Date of judgment: 18 June 2024 Catchwords: PRACTICE AND PROCEDURE — orders made for disclosure of documents evidencing the transfer of funds —orders not complied with — reference to ss 37P(5) and (6) and rr 5.23, 41.03 and 41.04 — order for compliance extended Legislation: Federal Court of Australia Act 1976 (Cth), s 37P(5), (6) Federal Court Rules 2011 (Cth), rr 5.23, 41.03, 41.04 Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 17 Date of hearing: 18 June 2024 Counsel for the First, Fourth and Fifth Interested Parties: Ms L Wood Solicitor for the First, Fourth and Fifth Interested Parties: DW Fox Tucker Lawyers Counsel for the Second Interested Party: The second interested party appeared in person ORDERS SAD 144 of 2023 IN THE MATTER OF GREEN GRAIN PROCESSING TECHNOLOGIES PTY LTD (RECEIVERS APPOINTED) ACN: 074 224 623 BETWEEN: NICHOLAS DAVID COOPER AS JOINT AND SEVERAL RECEIVER OF GREEN GRAIN PROCESSING TECHNOLOGIES PTY LTD (RECEIVERS APPOINTED) First Plaintiff DOMINIC CHARLES CANTONE AS JOINT AND SEVERAL RECEIVER OF GREEN GRAIN PROCESSING TECHNOLOGIES PTY LTD (RECEIVERS APPOINTED) Second Plaintiff AND: GREEN GRAIN PROCESSING TECHNOLOGIES PTY LTD (RECEIVERS APPOINTED) (IN LIQ) Defendant DAVID JOHN TUCKER First Interested Party IHAB ANTHONY ROCKWELL LUTFI (and another named in the Schedule) Second Interested Party order made by: O'SULLIVAN J DATE OF ORDER: 18 JUNE 2024 THE COURT ORDERS THAT: 1. The date by which the second and third interested parties are to comply with order 5 of the orders made on 4 June 2024 is extended to 5.00pm (ACST) on 21 June 2024. 2. The second interested party's interlocutory application filed 11 June 2024 is dismissed. 3. The second interested party's interlocutory application filed 18 June 2024 is dismissed. 4. Liberty to apply to the first, fourth and fifth interested parties. 5. The second interested party is to pay the first, fourth and fifth interested parties' costs of and incidental to today. 6. The matter is listed for case management hearing at 11.00am (ACST) on Tuesday 25 June 2024. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT O'SULLIVAN J: 1 On 11 April 2024, the Court ordered that by on or before the close of business on 19 April 2024, the second and third interested parties (Ihab Anthony Rockwell Lutfi and Lutfi-Proctor Holdings Pty Ltd, respectively) are to file and serve an affidavit explaining: (a) the current whereabouts of the sums of $34,013.46 and $250,000 referred to in the affidavit of Ihab Anthony Rockwell Lutfi, sworn and filed on 28 March 2024; (b) when those respective sums were transferred to their current whereabouts; and (c) annexing documents evidencing the transfers in question. 2 At a hearing in this matter on 4 June 2024, the solicitors for the first, and what became the fourth and fifth interested parties, submitted that the affidavit filed by Mr Lutfi on 19 April 2024 in accordance with the orders made on 11 April 2024 was not satisfactory. It is evident, at a cursory level, that although in his affidavit sworn 19 April 2024, at annexures TL18, TL19 and TL20, Mr Lutfi purports to identify the whereabouts of $250,000, in the sense that it was transferred from a National Australia Bank account to American Express, there are at least two payments in annexures TL19 and TL20 to that affidavit, being for the sum of $59,440.40 and $15,000, which are not accounted for. 3 On 4 June 2024, I also refused permission for Mr Lutfi to represent the third interested party, Lutfi-Proctor Holdings Pty Ltd. It is not represented today. 4 Order 5 of the orders made on 4 June 2024 required Mr Lutfi to file and serve an affidavit exhibiting the documents listed in Schedule A to the orders by 5.00pm (ACST) on 11 June 2024. I then listed those documents. I do not list them again because they have account numbers, and an order was made as to confidentiality. Mr Lutfi did not comply with order 5. 5 There are two applications brought by Mr Lutfi today. The first application, filed 11 June 2024, seeks a stay of orders 5 to 8 made on 4 June 2024, pursuant to r 41.03 of the Federal Court Rules 2011 (Cth) until either the Court takes into account the matter set out an affidavit of Mr Lutfi filed 3 June or otherwise orders. I considered the matters in Mr Lutfi's affidavit filed 3 June 2024 when it was filed and prior to the 4 June 2024 hearing. 6 In essence, Mr Lutfi seeks to re-argue matters which I had previously heard prior to making the orders. 7 As to each of the orders made 4 June 2014, order 5 was made because on previous occasions Mr Lutfi had represented, either by himself or through his solicitors, that the sum of approximately $284,000 was "available", and apparently now is not available. In effect, Mr Lutfi disagrees with the orders made by the Court on 4 June 2024. That is not a ground for a stay and the application for a stay of that order is dismissed. 8 Order 6 of the orders made on 4 June 2024 deals with costs. No basis is established for a stay and the application for a stay of that order is dismissed. 9 Order 7 of the orders made on 4 June 2024 also deals with costs, in the sense that it reserves costs of the first interested party's application filed 4 April 2024. No basis is established for a stay and the application for a stay of that order is dismissed. 10 Order 8 of the orders made on 4 June 2024 adjourns further consideration of the first interested party's interlocutory application, filed 4 April 2024, seeking payment of the sum of $284,013.46 into Court. It is adjourned to mention only at 9.30am on Tuesday 18 June 2024, being today. That time was subsequently changed to 2.15pm today. Self-evidently, no basis is established for a stay of that order and the application for a stay of that order is dismissed. 11 By a separate interlocutory application filed on 18 June 2024, Mr Lutfi also sought orders that order 5 of the orders made on 4 June 2024 be deleted and be replaced by what, in effect, is a referral of the dispute to a chartered accountant. Whether or not that step should be undertaken is a matter which warrants further consideration at a later time. 12 At the moment, the key point is compliance with order 5 of the orders made on 4 June 2024. The application for that order to be deleted is refused. 13 As a result of Mr Lutfi's failure to comply with the Court's orders, I drew Mr Lutfi's attention to the following provisions of the Federal Court of Australia Act 1976 (Cth) and the Federal Court Rules (FCR): (a) Section 37P(5) and (6); (b) FCR 41.04; and (c) FCR 5.23. 14 In my view, there has been wilful non-compliance by Mr Lutfi with the Court's orders based on what is, in effect, his disagreement with the orders made on 4 June 2024. That is an unacceptable position. 15 Mr Lutfi has been made aware of the consequences of non-compliance with the Court's orders. 16 Nonetheless, I will extend the time in order 5 of the orders made on 4 June 2024, by which the order is to be complied with, to the close of business at 5.00pm (ACST) on Friday 21 June 2024. 17 The orders will be: (1) The date by which the second and third interested parties are to comply with order 5 of the orders made on 4 June 2024 is extended to 5.00pm (ACST) on 21 June 2024. (2) The second interested party's interlocutory application filed 11 June 2024 is dismissed. (3) The second interested party's interlocutory application filed 18 June 2024 is dismissed. (4) Liberty to apply to the first, fourth and fifth interested parties. (5) The second interested party is to pay the first, fourth and fifth interested parties' costs of and incidental to today. (6) The matter is listed for case management hearing at 11.00am (ACST) on Tuesday 25 June 2024. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Sullivan. Associate: Dated: 25 June 2024 SCHEDULE OF PARTIES SAD 144 of 2023 Respondents Third Interested Party: LUTFI-PROCTOR HOLDINGS PTY LTD Fourth Interested Party: JT NOMINEES PTY LTD Fifth Interested Party: JT INVESTMENTS PTY LTD	2,289
federal_court_of_australia:fca/single/2020/2020fca0272	decision	commonwealth	federal_court_of_australia	text/html	2020-03-05 00:00:00	FUS17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 272	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2020/2020fca0272	2024-09-13T22:50:13.089160+10:00	FEDERAL COURT OF AUSTRALIA FUS17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 272 Appeal from: FUS17 v Minister for Immigration & Anor [2019] FCCA 1179 File number: NSD 842 of 2019 Judge: MARKOVIC J Date of judgment: 5 March 2020 Catchwords: MIGRATION – appeal from orders of Federal Circuit Court of Australia dismissing application for judicial review of decision – where Minister had refused to grant a Safe Haven Enterprise visa – where decision record of Minister's delegate did not state the time of the making of the decision – whether Minister satisfied the requirements of s 67 of the Migration Act 1958 (Cth) – whether Immigration Assessment Authority's findings based on country information were illogical or irrational – appeal dismissed Legislation: Migration Act 1958 (Cth) ss 36, 66, 67 Cases cited: AEW18 v Minister for Home Affairs [2019] FCA 208 DQX16 v Minister for Home Affairs [2019] FCA 1705 DQX16 v Minister for Home Affairs [2018] FCCA 1915 Minister for Immigration and Border Protection v SZUXN [2016] FCA 516 NAHI v Minister for Immigration & Multicultural and Indigenous Affairs [2004] FCAFC 10 VUAX v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 238 FCR 588 Date of hearing: 25 February 2020 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 39 Counsel for the Appellant: The Appellant appeared in person Counsel for the First Respondent: Mr H P T Bevan Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: The Second Respondent filed a submitting notice save as to costs ORDERS NSD 842 of 2019 BETWEEN: FUS17 Appellant AND: MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS First Respondent IMMIGRATION ASSESSMENT AUTHORITY Second Respondent JUDGE: MARKOVIC J DATE OF ORDER: 5 march 2020 THE COURT ORDERS THAT: 1. The name of the first respondent be amended to Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs. 2. The appeal be dismissed. 3. The appellant pay the first respondent's costs as agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MARKOVIC J: 1 This is an appeal from orders made by the Federal Circuit Court of Australia (Federal Circuit Court) on 8 May 2019 refusing leave to rely on a proposed further amended application and dismissing the amended application for judicial review of a decision of the second respondent (Authority) with costs: see FUS17 v Minister for Immigration & Anor [2019] FCCA 1179 (FUS17). The Authority had affirmed a decision of a delegate of the first respondent (Minister) not to grant the appellant a Safe Haven Enterprise (subclass) 790 visa (SHEV). Background 2 In light of the grounds raised before the primary judge and on appeal before me it is not necessary to set out the appellant's claims and the decision of the Authority in any detail. The summary that appears below is taken substantially from the reasons of the primary judge. 3 The appellant is a Hindu Tamil and a citizen of Sri Lanka. He arrived in Australia on 23 October 2012 as an unauthorised maritime arrival. 4 On 5 October 2016, after being invited by the Department of Immigration and Border Protection, as the Minister's department was known at that time (Department), to do so, the appellant lodged his application for a SHEV. 5 The appellant made the following claims for protection: (1) he is a Tamil male born in the Northern Province from an area which was formerly controlled by the Liberation Tigers of Tamil Eelam (LTTE); (2) in 2006 the LTTE forced the appellant to work for them on a full-time basis. He was ordered to dig bunkers and clean cemeteries where dead LTTE cadres were buried; (3) in 2008 the war intensified, his area was bombed and he was forced to move from one place to another; (4) when the Sri Lankan Army (SLA) advanced into his area he was forced to relocate to the Chettikulam refugee camp in Vavuniya. There the appellant was interrogated by the SLA and the Criminal Investigation Department (CID) about his involvement with the LTTE. He told them that he had never worked for the LTTE and was released; (5) SLA officers started to visit the appellant's home and ask whether he knew places where the LTTE hid their arms and ammunition. The SLA would enter the house and search for arms and LTTE material; (6) the appellant worked for the HALO Trust (HALO) clearing mines and drove the company truck to different areas, travelling with his co-workers S, D and P. They were stopped and asked whether they had worked for the LTTE in the past, beaten, accused of working for the LTTE and detained until HALO secured their release; (7) in about May 2011, S and D were arrested by the SLA and taken to Yogapuram camp. The appellant's father feared that he would be the next person to be taken away. The appellant does not know what happened to S and D; (8) in about November 2011 the SLA came to the appellant's home and asked whether he knew about his supervisor, T's, involvement in the LTTE in the past. He said he did not as he was a student and he had no contact with the LTTE or their supporters. The SLA informed the appellant that it had information on T and other Tamils working for HALO who had experience clearing mines for the LTTE; (9) in March 2012 T was taken for questioning by the SLA and released after two days when HALO intervened. T accused the appellant or his friends of telling the SLA about him and informed the appellant that he should leave Sri Lanka as the Tamil militants had given false information on all of them; (10) in July 2012 the SLA came to the site where the appellant was working with his co-workers and ordered him to report to the SLA camp immediately. The appellant contacted T and T said that he should flee the country or he would be taken to prison by the SLA and that the SLA was constantly contacting him to ask about the appellant and other co-workers; (11) after hearing this, with his father's help, the appellant fled to Colombo until his father made arrangements for him to leave Sri Lanka; (12) after arriving in Australia the appellant's father informed him that the SLA had found out that the appellant had fled Sri Lanka illegally by boat. The SLA questioned his father who told them that the appellant had fled to India; and (13) the appellant fears that if he returns to Sri Lanka he will be sent to secret camps or arrested at the airport by the authorities. 6 On 21 April 2017 a delegate of the Minister (Delegate) refused to grant a SHEV to the appellant. The Delegate prepared written reasons in a document titled "Protection Visa Decision Record" (Decision Record) which stated the day but did not state the time of the decision. The Decision Record was sent to the appellant in accordance with s 66 of the Migration Act 1958 (Cth) (Act). 7 On 27 April 2017 the Authority wrote to the appellant informing him that the Delegate's decision had been referred to it for review. 8 On 5 December 2017 the Authority affirmed the Delegate's decision not to grant a SHEV to the appellant. The Authority's decision 9 The Authority accepted the following claims made by the appellant: (1) those concerning his experiences during the time of the Sri Lankan conflict; (2) those concerning his dealings with the SLA after the conflict, that he was stopped and questioned by the SLA during his trips to areas to clear mines while he was working with HALO and that he was detained by the SLA until HALO secured his release; (3) that the SLA entered the appellant's home and searched for arms and LTTE material; and (4) that there was still some suspicion of the appellant because of his Tamil ethnicity and his work with HALO. 10 The Authority was not satisfied that the SLA would have suspected that the appellant had any involvement with the LTTE. It found that the appellant may have been wanted by the SLA or CID for routine questioning but that he would have been released, as had been the case when HALO intervened, without being harmed. The Authority was of the opinion that the appellant did not have a profile that would have attracted the attention of the Sri Lankan authorities including the SLA or the CID. 11 After considering country information and the appellant's claims, including that he and his family had only worked for the LTTE in small roles, the Authority concluded that the appellant does not face a real chance of harm from any Sri Lankan authorities on the basis of being a Tamil from the Northern Province or from an area formerly controlled by the LTTE, on the basis of any suspicion of involvement with the LTTE or because of his employment with HALO. 12 The Authority concluded that the appellant did not satisfy the requirements of s 36(2)(a) or s 36(2)(aa) of the Act and affirmed the Delegate's decision not to grant a SHEV. The Federal Circuit Court proceeding 13 The appellant filed an application for judicial review of the Authority's decision with the Federal Circuit Court. In his amended application filed on 23 April 2018 the appellant raised the following grounds: 1. The Authority did not have authority to review the delegate's decision under s 473CC Migration Act 1958 (the Act) as the Minister had not validly referred the decision to the Authority under s 473CA of the Act. Particulars a. Section 473CA requires the Minister to refer a fast track reviewable decision to the Authority as soon as practicable after the decision is made. b. Section 67 of the Act requires the Minister to make a record of a decision to refuse to grant a visa, and that the record must state the day and time of its making, and that the decision is deemed to have been made on the day and at the time the record is made, such that the Minister is functus officio only after the Minister has stated the day and time on the decision record. c. The delegate's decision did not comply with s 67(2) in that it did not state the time of its making. d. The valid exercise of the Minister's obligations under s 473CA to refer a fast track reviewable decision was conditional upon the Minister's compliance with s 67. Further or in the alternative: 2. As a result of the Minister's failure to comply with s 67(2), the Authority could not determine whether any material provided to it by the Secretary under s 473CB(l)(c) of the Act was 'new information', and as a result it was not in a position to comply with s 473DD of the Act not to consider any 'new information'; nor was it able properly to consider the exercise of the discretions Particulars a. Section 473DC(l) of the Act defines 'new information' to be documents or information that were not before the Minister when the Minister made the decision under s 65. b. Section 67(3) provides the Minister's decision is taken to have been made on the day and at the time the record is made. 14 In the amended application the appellant sought the following relief: 1. An order that the decision of the Immigration Assessment Authority be quashed. 2. An order the first respondent Minister pay the Applicant's costs. 3. Any further or other orders that the Court thinks fit. 15 On 23 May 2018, the day after the hearing in the Federal Circuit Court, the appellant filed a proposed further amended application in response to a submission made by the Minister that the relief sought in the amended application did not affect the Authority's decision and thus did not involve the court's jurisdiction. The only amendments made in the proposed further amended application were to the relief sought by adding two further prayers for relief as follows: 2. An injunction to issue restraining the Minister from acting upon the decision of the Immigration Assessment Authority. 3. A writ of mandamus to issue compelling the Minister to determine the applicant's application for a Safe Haven Enterprise (subclass) 790 visa according to law. 16 Before turning to the reasons of the primary judge it is convenient to set out s 66 and s 67 of the Act which relevantly provide: 66 Notification of decision (1) When the Minister grants or refuses to grant a visa, he or she is to notify the applicant of the decision in the prescribed way. (2) Notification of a decision to refuse an application for a visa must: (a) if the grant of the visa was refused because the applicant did not satisfy a criterion for the visa—specify that criterion; and (b) if the grant of the visa was refused because a provision of this Act or the regulations prevented the grant of the visa—specify that provision; and (c) unless subsection (3) applies to the application—give written reasons (other than non‑disclosable information) why the criterion was not satisfied or the provision prevented the grant of the visa; and (d) if the applicant has a right to have the decision reviewed under Part 5 or 7 or section 500—state: (i) that the decision can be reviewed; and (ii) the time in which the application for review may be made; and (iii) who can apply for the review; and (iv) where the application for review can be made; and (e) in the case of a fast track reviewable decision—state that the decision has been referred for review under Part 7AA and that it is not subject to review under Part 5 or Part 7; and (f) in the case of a fast track decision that is not a fast track reviewable decision—state that the decision is not subject to review under Part 5, 7 or 7AA. … 67 Grant and refusal of visa—how and when (1) The following decisions are taken to be made by the Minister causing a record to be made of the decision: (a) a decision to grant a visa; (b) a decision to refuse to grant a visa. (2) The record must state the day and time of its making. (3) The decision is taken to have been made on the day and at the time the record is made. (4) The Minister has no power to vary or revoke the decision after the day and time the record is made. (5) Failure to comply with subsection (2) does not affect the validity of the decision or the operation of subsection (4). 17 Because the issues raised by the appellant concerned an alleged failure to comply with s 67 of the Act, the Minister relied on evidence before the primary judge which described the databases maintained for the purpose of applications for certain visas and the steps taken by a delegate of the Minister when a decision is made to refuse the grant of a visa. That evidence established that the Department maintained two databases relevant to the making of decisions to grant or refuse visas: the Integrated Client Services Environment system (ICSE) and the Total Records Information Management system (TRIM). Having regard to the evidence relied on by the Minister, at [27] the primary judge made the following findings: The system followed by delegates when refusing a visa application is: 1. a delegate prepares written reasons for his or her decision in the format of a "Protection Visa Decision Record"; 2. the delegate records the refusal decision as an event in ICSE; 3. once a Protection Visa Decision Record is prepared, it may either be saved into TRIM and printed or attached in electronic form to the notification of refusal letter through the Department's Enterprise Correspondence System (ECS); 4. the delegate prepares the notification of refusal letter through the ECS; 5. the delegate collates the letter, the written reasons for decision and any other relevant documents to be sent to the visa applicant, and places them in a registered post envelope for dispatch, which displays the registered post tracking number; 6. the delegate records the registered post tracking number onto ICSE and/or saves a copy of the registered post envelope (which shows the registered post tracking number) onto TRIM. 18 At [28]-[29] her Honour made the following findings in relation to the decision of the Delegate to refuse the appellant's application for a SHEV: (1) a screenshot from the ICSE database showed that a notification of refusal letter was generated on 21 April 2017 at 11:09:36, a letter was sent to the appellant in Australia on that date and a registered post reference identifier was recorded; and (2) a second screenshot from the ICSE database showed the following: Event: Refused Qualifier: s36(2) Not Satisfied Effect Date: 21/04/2017 Effect Time: 11:01 19 The primary judge noted that the grounds and particulars included in the appellant's amended application were the same as those relied on in DQX16 v Minister for Home Affairs [2018] FCCA 1915 (DQX16). At [46]-[47] her Honour referred to the decision in DQX16 as follows: 46. As his Honour said of the applicant's arguments on the same grounds in DQX16 at [18]: 18. These arguments fail at the threshold. Whilst the statement of reasons prepared by the delegate pursuant to s.66 of the Act did not state the time when the decision was made, there was a record made of the decision which did. That record complied with s.67. The applicant has not established the matter critical to his arguments and so the application must be dismissed. 47. His Honour referred to the ICSE database screenshots stamped with effect time and date in evidence before him, which are, relevantly, the same kind of information and detail as is in evidence before me (but with the details specific to this Applicant) (see DQX16 at [27]−[28]). His Honour concluded at [29]: 29. ... I am satisfied that, upon making of the decision to refuse the applicant a protection visa, a record was made of that decision stating the date and time of the making of the decision. The error in the applicant's argument was to mistake the written reasons for the delegate's decision prepared under s.66 of the Act for the record made of the decision under s.67 of the Act. In those circumstances, s.67 of the Act was complied with and the issues raised by the applicant do not arise. On any view of the operation of ss.65 and 67, the decision was "made" within the meaning of s.473CA and s.473CB by 13:05 on 8 September 2016. A letter from the Authority to the applicant establishes that the matter was referred to the Authority on 14 September 2016, after the decision was made. 20 The primary judge concluded that the facts of the matter before her compelled the same conclusion as was reached in DQX16. Her Honour found that, upon the making of the ICSE database record, the Delegate's decision became final such that the Delegate could not vary or revoke that decision, that the record of time and day of the decision entered in the ICSE database satisfies the requirements of s 67(3) of the Act and that the decision was "made" within the meaning of s 473CA and s 473CB by 11.01 am on 21 April 2017: FUS17 at [48]-[49]. 21 The primary judge concluded that the proposed further amended application would be futile and refused leave to file it and dismissed the amended application: FUS17 at [50]-[51]. The appeal 22 On 29 May 2019 the appellant filed a notice of appeal in this Court which raises three grounds of appeal (as written): 1. That there is a jurisdictional error in the Federal Circuit Courts decision. 2. The reasons provided by the Second Respondent to the First Respondent in support of the Second Respondent's recommendation that the Appellant was not a person to whom Australia had protection obligations were neither logical nor rational. 3. Further grounds of appeal will be provided once I have legal representation and the review of the written reasons for the decision has been completed. 23 As is evident from the third ground of appeal, at the time of the commencement of the appeal, the appellant was not legally represented. That remained the case as at the date of the hearing. No further grounds of appeal were articulated by or on behalf of the appellant. Nor did the appellant file any written submissions in support of the grounds of appeal. At the hearing the appellant made the following oral submissions. 24 The appellant submitted that the Authority's reasons were neither logical nor rational. He referred to [24] of the Authority's reasons where the Authority said, when addressing the appellant's Tamil ethnicity, that "DFAT indicates that since the end of the conflict and the change in Government in Sri Lanka, the situation has improved markedly for Tamils". The appellant contended that the Authority had not considered what would happen if "the present prime minister Rajapaksa" comes into power to "people of my calibre". He said that since the new government has come to power the Tamil community has faced many problems and that by not "accepting [these] facts" the Authority made a "grave mistake". Consideration 25 By his first ground of appeal the appellant asserts "jurisdictional error" on the part of the Federal Circuit Court. As the Minister points out this characterisation is inapt in an appeal from that court under s 25 of the Federal Court of Australia Act 1976 (Cth). Putting that to one side, I will, in the circumstances, treat this ground as an assertion of error on the part of the primary judge in dismissing the grounds of review raised before her Honour. The ground framed in that way cannot succeed. There is no error in the decision of the primary judge. 26 The primary judge found, based on the facts before her, that the entry by the Delegate into the ICSE database of the details set out at [18(2)] above was the record for the purposes of, and satisfied the requirements of, s 67 of the Act. That is, a record was made of the Delegate's decision stating the day and time of the making of the decision. Based on that record, the decision was made at 11.01 am on 21 April 2017. 27 In coming to this conclusion and rejecting the grounds of review before her the primary judge followed the decision in DQX16. An appeal from DQX16 was dismissed: see DQX16 v Minister for Home Affairs [2019] FCA 1705 (DQX16 Appeal). In DQX16 Appeal, because the appellant was not legally represented before him, Moshinsky J considered the contentions relating to s 67 of the Act that were relied on before the primary judge in that case notwithstanding that the issue had not been raised on appeal. At [34]-[36] his Honour said: 34 As noted above, the appellant's case before the primary judge was that, in non-compliance with s 67, the delegate's decision failed to state the day and time of its making, with the result that no decision had been validly made by the delegate. It was contended that there was, therefore, no decision to refer to the Authority for review (under s 473CA) and the Authority was also unable to properly determine the operation of ss 473DD and 473DE. 35 A similar argument was considered, and rejected, by Burley J in AEW18 v Minister for Home Affairs [2019] FCA 208 (AEW18), handed down shortly after the appeal hearing in the present matter. Burley J's reasons for rejecting the argument are set out at [35]-[42]. In particular, his Honour reasoned at [37]-[39]: 37 Section 67(1) provides that a decision to grant or refuse a visa are taken to be made "by the Minister causing a record to be made of the decision". Sub-section 67(2) requires that the record must state the day and time of its making. By sub-section 67(3) the decision is taken to have been made on the time and date that the "record" was made. Subsection 67(4) gives the evident reason for precision in maintaining the record, by providing that after that day and time the Minister has no power to vary or revoke the decision. 38 It may be noted that there is a material linguistic distinction between the s 66(2)(c) requirement for the provision of "written reasons" and the s 67(1) requirement that the Minister cause a "record" to be made of the decision. It is the day and the time of the making of the record of the decision, not the written reasons, that s 66(2) requires. The Minister submits that the word "record" is to be given its ordinary English meaning of "a written or otherwise permanently recorded account of a fact or event" (citing the Shorter Oxford English Dictionary, 6th ed, 2007), the fact or event here being the decision to grant or refuse a visa. This is to be contrasted with the "written reasons" identified in s 66. The Minister relies on an affidavit given by an assistant director of the Protection Assessment NSW Section, Humanitarian Program Operations Branch of the Department of Home Affairs, which was admitted into evidence before the primary judge. The affidavit explains that the practice of the Department is to create a permanent record in a database of the fact of a decision having been made under s 65 in relation to a visa application together with the time and day of the decision. The evidence indicates that such a record was created in respect of the decision of the delegate. 39 I accept that the ordinary meaning of the word "record" proposed by the Minister accords with the statutory scheme and suitably defines the subject matter of s 67(1). By creating in the database an entry specifying the day and time of the decision to refuse to grant the appellant's visa, the Minister satisfied his obligations under s 67(2). In this context, the absence of a date and time on the written reasons provided by the delegate is irrelevant. 36 These reasons are equally applicable to the present case. In the present case, as in AEW18, there was evidence that a record was created in a database of the fact of the decision having been made. For the reasons set out by Burley J in AEW18, the primary judge was correct to reject the appellant's contentions regarding s 67. (Original emphasis.) 28 Those reasons also apply to this case. There was evidence before the primary judge that a record was created in the ICSE database of the fact of the decision having been made which recorded the time and day on which it was made. Thus the Minister satisfied his obligations under s 67(2) of the Act. The absence of a time on the Decision Record is not relevant to the operation of s 67. 29 In AEW18 v Minister for Home Affairs [2019] FCA 208 (AEW18) Burley J also considered and rejected an argument made by the appellant in that case that, by reason of a failure to create a record of a decision, the decision was invalid. At [40]-[41] of AEW18 his Honour relevantly said: 40 … Caution should be exercised in concluding that a referral of an administrative decision for review was invalid on the basis of a technical deficiency. In Plaintiff M174/2016 v Minister for Immigration and Border Protection [2018] HCA 16; (2018) 92 ALJR 481 the High Court considered the nature of a fast track reviewable decision under Part 7AA of the Act. It said at [39], [52] (per Gageler, Keane and Nettle JJ, emphasis added): 39 Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd has been aptly described as a "landmark decision" in the early history of the Administrative Appeals Tribunal. The Full Court of the Federal Court there construed the reference in s 25 of the Administrative Appeals Tribunal Act 1975 (Cth) to a "decision" in respect of which an enactment might provide for review by that Tribunal as a reference to nothing more than "a decision in fact made, regardless of whether or not it is a legally effective decision". The fundamental reason for adopting that construction was fulfilment of the evident legislative purpose of the conferral of jurisdiction on the Tribunal "to promote good government by those carrying out the actual practical task of administering Acts of Parliament and making decisions incidental to that task": "[i]f administrative decisions are to be subjected to review in the course of good government exclusion from review of decisions made without power would remove from review those decisions most in need of review" and "technicality would be introduced at the outset". In the context of the Administrative Appeals Tribunal, that construction has not since been doubted. … 52 The limitations on the form of review for which Pt 7AA provides are in the end insufficient to warrant departure from the Brian Lawlor construction. Applying that construction, a fast track reviewable decision triggering the operation of the Part and forming the subject of the Authority's review is a decision made in fact to refuse to grant a protection visa to a fast track applicant, regardless of whether or not that decision is legally effective. 41 Section 473CA requires the Minister to refer a fast track reviewable decision to the IAA as soon as reasonably practicable after the decision is made. Section 473BB relevantly defines a fast track reviewable decision to be a fast track decision in relation to a fast track review applicant. The contention advanced by the appellant in the present case is based on the premise that by reason of the failure of the delegate to record the time and date on the written reasons accompanying the notification of the decision outcome, no "fast track reviewable decision" has been made, and accordingly the IAA had no power to make its decision. However, as the High Court records in Plaintiff M174, it is the decision made in fact to refuse to grant a protection visa to a fast track applicant that is the trigger for the operation of Part 7AA. That decision is made pursuant to s 65 of the Act. This trigger operates regardless of whether or not that decision is legally effective. … (Original emphasis.) 30 Although the primary judge did not dispose of the matter before her on that basis because she did not need to, those observations would apply equally to this case and would provide an alternate basis for disposing of the grounds raised before her Honour. 31 The second ground of appeal is an assertion that the reasons of the Authority "were neither logical nor rational". This ground was not raised before the primary judge and leave is required to raise it for the first time on appeal. 32 In VUAX v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 238 FCR 588 (VUAX) a Full Court of this Court observed at [46] that leave to raise a new ground on appeal should only be granted if it is expedient in the interests of justice to do so. At [48] the Court said: The practice of raising arguments for the first time before the Full Court has been particularly prevalent in appeals relating to migration matters. The Court may grant leave if some point that was not taken below, but which clearly has merit, is advanced, and there is no real prejudice to the respondent in permitting it to be agitated. Where, however, there is no adequate explanation for the failure to take the point, and it seems to be of doubtful merit, leave should generally be refused. In our view, the proposed ground of appeal has no merit. There is no justification, therefore, for permitting it to be raised for the first time before this Court. 33 There has been no explanation by the appellant for the failure to raise the proposed ground below. The appellant was legally represented before the primary judge and no argument, beyond those relying on s 67 of the Act, was raised that there was otherwise any error in the decision of the Authority. 34 Putting that to one side, the proposed ground has no merit. As framed, it is a bare assertion, general in nature and not particularised. The appellant does not identify how it is that the decision of the Authority is said to be illogical or irrational. 35 In Minister for Immigration and Border Protection v SZUXN [2016] FCA 516 at [49] Wigney J recognised that there may be circumstances where illogicality or irrationality in a decision-making process may justify a finding for an underlying jurisdictional error and that a decision based on irrational or illogical reasoning or factual findings is likely to be legally unreasonable and beyond power. At [50], [52] and [54]-[56] his Honour said: 50 As was made clear by Crennan and Bell JJ in Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at 647-648 [130]-[132], however, not every lapse in logic in the decision-making process will result in jurisdictional error. If particular findings or reasoning on the way to the decision-maker's ultimate conclusion and decision are challenged on the basis of illogicality or irrationality, jurisdictional error will not be made out unless it is shown that the findings could not have been made, or the reasoning could not have been employed, by a reasonable or rational decision-maker. At 648 [131] their Honours said: What was involved here was an issue of jurisdictional fact upon which different minds might reach different conclusions. The complaint of illogicality or irrationality was said to lie in the process of reasoning. But, the test for illogicality or irrationality must be to ask whether logical or rational or reasonable minds might adopt different reasoning or might differ in any decision or finding to be made on evidence upon which the decision is based. If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion. … 52 As Robertson J put it in Minister for Immigration and Citizenship v SZRKT (2013) 212 FCR 99 at 137 [148], for a decision to be vitiated for jurisdictional error based on illogical or irrational findings of fact or reasoning, "extreme" illogicality or irrationality must be shown, "measured against the standard that it is not enough for the question of fact to be one on which reasonable minds may come to different conclusions". And as McKerracher J (with whom Reeves J agreed) emphasised in SZOOR v Minister for Immigration & Citizenship (2012) 202 FCR 1 (at 22-23 [84]), a decision cannot be said by a reviewing court to be illogical, irrational or unreasonable simply because one conclusion has been preferred to another possible conclusion. … 54 ... The judgment of Crennan and Bell JJ in SZMDS reveals that jurisdictional error may be able to be established on the basis of illogical reasoning or illogical or irrational findings "on the way" to the final conclusion (see 648 [132]): see also SZRKT at 137-138 [151]-[153]; SZWCO v Minister for Immigration and Border Protection [2016] FCA 51 at [61]-[62]. 55 Nevertheless, allegations of illogical or irrational reasoning or findings of fact must be considered against the framework of the inquiry being whether or not there has been jurisdictional error on the part of the Tribunal: SZRKT at 137 [148]. The overarching question is whether the Tribunal's decision was affected by jurisdictional error: SZRKT at 137-138 [151]. Even if an aspect of reasoning, or a particular factual finding, is shown to be irrational or illogical, jurisdictional error will generally not be established if that reasoning or finding of fact was immaterial, or not critical to, the ultimate conclusion or end result: Minister for Immigration and Citizenship v SZOCT (2010) 189 FCR 577 at 598-599 [83]-[84] (Nicholas J); SZNKO v Minister for Immigration and Citizenship [2013] FCA 123 at [113]. Where the impugned finding is but one of a number of findings that independently may have led to the Tribunal's ultimate conclusion, jurisdictional error will generally not be made out: SZRLQ v Minister for Immigration and Citizenship (2013) 135 ALD 276 at 291 [66]; SZWCO at [64]-[67]. 56 An irrational or illogical finding, or irrational or illogical reasoning leading to a finding, by the Tribunal that the review applicant was not a credible or honest witness may in some circumstances lead to a finding of jurisdictional error. That would particularly be the case where the adverse credibility finding was critical to the Tribunal's decision that it was not satisfied that the applicant met the criteria for the grant of a visa. Whilst it is frequently said that findings as to credit are entirely matters for the Tribunal, such findings do not shield the Tribunal's decision-making processes from scrutiny: SZSHV v Minister for Immigration and Border Protection [2014] FCA 253 at [31]. Considerable caution must, however, be exercised before too readily acceding to a proposition that adverse findings as to credit expose jurisdictional error: SZVAP v Minister for Immigration and Border Protection (2015) 233 FCR 451 at 455-456 [14]-[15]. That is because assertions of illogicality and irrationality can all too readily be used to conceal what is in truth simply an attack on the merits of the Tribunal's findings and decision. In SZMDS, Crennan and Bell JJ (at 636 [96]) made it plain that the deployment of illogicality or irrationality to achieve merits review should not be sanctioned. 36 In oral submissions, the appellant gave some meaning to the ground as pleaded by his contention that the Authority ignored the current situation in Sri Lanka when making the finding at [24] of its reasons that the situation for Tamils in Sri Lanka has improved. At [24] the Authority refers extensively to country information. It is well established that the choice of, and weight given to, country information is a matter for the tribunal itself as part of its fact finding: see NAHI v Minister for Immigration & Multicultural and Indigenous Affairs [2004] FCAFC 10 at [11]-[13]. It is apparent that the Authority based its findings about the situation for Tamils in Sri Lanka on country information which, as I have observed, it referred to in detail at [24] of its reasons. Its conclusion was open to it based on the materials to which it had regard. The Authority's findings at [24] were neither illogical nor irrational. 37 There is no merit in the proposed ground. As the Minister submitted the interests of the administration of justice do not require a grant of leave to raise the second ground. Conclusion 38 It follows from the matters set out above that the appeal should be dismissed. As the appellant has been unsuccessful he should pay the Minister's costs as agreed or taxed. I will make orders accordingly. 39 The Minister also seeks an order that his name be amended for the purpose of the proceeding to Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs. An order to that effect will also be made. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Markovic. Associate: Dated: 5 March 2020	8,656
federal_court_of_australia:fca/single/2003/2003fca0101	decision	commonwealth	federal_court_of_australia	text/html	2003-02-06 00:00:00	Microsoft Corporation v Jiang [2003] FCA 101	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2003/2003fca0101	2024-09-13T22:50:13.162863+10:00	FEDERAL COURT OF AUSTRALIA Microsoft Corporation v Jiang [2003] FCA 101 MICROSOFT CORPORATION AND MICROSOFT PTY LIMITED v KAI-YU JIANG (also known as BRUCE JIANG) trading as MULTIVERSE COMPUTER N789 OF 2002 TAMBERLIN J SYDNEY 6 FEBRUARY 2003 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 789 OF 2002 BETWEEN: MICROSOFT CORPORATION FIRST APPLICANT MICROSOFT PTY LIMITED (ABN 29 002 589 460) SECOND APPLICANT AND: KAI-YU JIANG (also known as BRUCE JIANG) trading as MULTIVERSE COMPUTER RESPONDENT JUDGE: TAMBERLIN J DATE OF ORDER: 6 FEBRUARY 2003 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The steps taken as at 6 February 2003 to bring the hearing of the Applicants' notices of motion dated 13 December 2002 and 21 January 2003 and the proceedings to the attention of the Respondent are deemed to be service of the motions and of the supporting affidavits in accordance with the Federal Court Rules. 2. The Applicants' notice of motion dated 21 January 2003 be heard in the absence of the Respondent. 3. The Respondent, whether by his employees, agents or otherwise, be permanently restrained from: (a) reproducing or authorising the reproduction of the whole or a substantial part of any of the Microsoft Programs without the licence of the First Applicant; (b) importing into Australia any copy of the whole or a substantial part of any of the Microsoft Programs without the licence of the First Applicant; (c) selling, offering for sale, supplying, offering to supply or distributing any Infringing Microsoft Program; and (d) authorising, directing or procuring any other company or person to engage in any of the conduct sought to be restrained by sub-paragraphs (a), (b) and (c) above. 4. The Respondent deliver up to the solicitors for the Applicants on oath within 7 days, each Infringing Microsoft Program and any equipment used to make any such infringing copy, in the possession, power, custody or control of the Respondents or any of them. 5. The Respondent, whether by his employees, agents or otherwise, be permanently restrained from infringing the Microsoft Trade Marks by: (a) manufacturing, procuring the manufacture of, importing, purchasing, selling, offering to sell, supplying, offering to supply or distributing any Infringing Microsoft Product; and (b) authorising, directing or procuring any other company or person to engage in any of the conduct sought to be restrained by sub-paragraph (a) above. 6. The Respondent deliver up to the solicitors of the Applicants on oath all Infringing Microsoft Products and any equipment used or intended to be used for making Infringing Microsoft Products, in the possession, custody or control of the Respondent. 7. The Respondent, whether by his employees, agents or otherwise, be permanently restrained from representing in trade or commerce to persons to whom the Respondent supplies or offers to supply any Infringing Microsoft Programs, or Infringing Microsoft Products that: (a) any such product has been made with the licence of the First Applicant; or (b) the Respondent is lawfully entitled to supply any such product; or (c) in the case of Infringing Microsoft Programs and Infringing Microsoft Products, that any such product has been made with the licence of the First Applicant. 8. The Respondent pays the Applicants' costs of the Proceedings in the sum of $40,000. 9. Service of these orders on the Respondent may be effected by the Applicants by forwarding a sealed copy of the orders to 155 Adderton Road, Carlingford, New South Wales. 10. The proceedings are otherwise dismissed. [In these orders: "Infringing Microsoft Products" means any Microsoft Class 9 Products and Microsoft Class 16 Products to which the mark "MICROSOFT" or a mark substantially identical with, or deceptively similar to, the mark "MICROSOFT" has been applied without the consent of the First Applicant; "Infringing Microsoft Program" means a copy of the whole of a substantial part of the any of the Microsoft Programs which has not been made by or with licence of the First Applicant or which has been imported in Australia without the licence of the First Applicant; "Microsoft Class 9 Products" means computer programs, magnetic disks and tapes containing computer programs, computer software, computer hardware, memory boards for use with computers, programmed chips, cartridges embodying computer programs and computer software and firmware embodied in computers or designed to be used therewith; "Microsoft Class 16 Products" means printed instructional and teaching material related to computers and computer software, books, paper and printed matter for use with computer equipment, computer hardware and software manuals, newsletters featuring information about computer hardware and software, paper, paper tape and cards for the recordal of computer programs; "Microsoft Programs" means the computer programs, associated documentation and works identified in the Schedule hereto; and "Microsoft Trade Marks" means any or all of the First Applicant's registered trade marks comprising the mark "MICROSOFT" and numbered 371528(9) and 377674(16) or comprising the mark "WINDOWS" and numbered 576996(9) and 576997(16)]. SCHEDULE MICROSOFT PROGRAMS All versions of the following computer programs and associated manuals and documentation (including versions created or released subsequent to the date hereof): Microsoft Access Microsoft Access Developers Toolkit for Windows Microsoft Access Distribution Kit Microsoft Access Solution Pack Microsoft Access Upsizing Tools Microsoft Age of Empires Microsoft Allegiance Microsoft Ancient Lands Microsoft Application Center Microsoft Arcade for Windows Microsoft Asheron's Call: Dark Majesty Microsoft Beethoven for Windows: The Ninth Symphony Microsoft Best of Entertainment Pack Microsoft Bicycle Card Games Microsoft Bicycle Casino Microsoft BizTalk Server Microsoft Bookshelf Microsoft Caribbean Scenery Microsoft CD-ROM Fun and Fact Pack for Windows Microsoft Cinemania 1995 Microsoft Class Server Microsoft Classic Board Games Microsoft Combat Flight Simulator Microsoft Commerce Server Standard Microsoft Complete Baseball 1995 for Windows Microsoft Complete NBA Basketball 1995 for Windows Microsoft Content Microsoft Content Management Server Enterprise Microsoft Creative Writer Microsoft Crimson Skies Microsoft Dangerous Creatures Microsoft Data Analyzer Microsoft Dinosaurs Microsoft Dogs Microsoft Dungeon Siege Microsoft Encarta Microsoft Encarta Reference Library Microsoft Entertainment Pak Microsoft Excel Microsoft Exchange Conferencing Server Microsoft Exchange Server Microsoft Explorapedia: World of Nature Microsoft Explorapedia: World of People Microsoft Fine Artist Microsoft Flight Simulator Microsoft FORTRAN Compiler Microsoft FORTRAN PowerStation Microsoft FoxPro Microsoft FrontPage Microsoft Games Action Adventure Pack Microsoft Golf Microsoft Greetings Microsoft Host Integration Server Microsoft Interix Microsoft Internet Explorer Microsoft ISA Server Microsoft Japan Scenery Microsoft LAN Manager Microsoft LAN Manager Resource Kit Microsoft Links Microsoft Macro Assembler Microsoft Magic School Bus 3-CD Packs Microsoft Magic School Bus Animals Microsoft Magic School Bus Bugs Microsoft Magic School Bus Concert Microsoft Magic School Bus Dinosours Microsoft Magic School Bus Earth Microsoft Magic School Bus Flight Microsoft Magic School Bus Human Body Microsoft Magic School Bus Mars Microsoft Magic School Bus Oceans Microsoft Magic School Bus Rainforest Microsoft Magic School Bus Volcanoes Microsoft Magic School Bus Whales & Dolphins Microsoft Mail Microsoft Mastering Enterprise Microsoft Mastering MFC Microsoft Mastering Visual Basic Microsoft Mastering Visual Studio Enterprise Microsoft Mastering Web Development Microsoft Mech Collection Microsoft MechCommander Microsoft MechWarrior Microsoft MechWarrier 4: Black Knight Microsoft Midtown Madness Microsoft Mobile Info Server Enterprise Microsoft MOM Operations Manager Base Microsoft Money Microsoft Motocross Madness Microsoft Mozart for Windows - The Dissonant Quartet Microsoft MS-DOS Microsoft MS Plus! Microsoft MSDN Microsoft Multimedia Composer Collection Microsoft Musical Instruments Microsoft My Personal Tutor Pre-K Microsoft New York Scenery Microsoft NT Workstation Microsoft NT Server Microsoft Office Microsoft Office XP Microsoft Outlook Microsoft Pandoras Box Microsoft Paris Scenery Microsoft Personal Collection Microsoft Picture It! Microsoft Pinball Microsoft Plus Entertainment Pack Microsoft PowerPoint Microsoft Project Microsoft Proofing Tools Microsoft Publisher Microsoft Puzzel Collection Microsoft Rabbit Ears for Windows: How The Leopard Got His Spots Microsoft Racing Madness Microsoft Return of Arcade Microsoft Scenes - Brain Twister Collection Microsoft Scenes - Flight Collection Microsoft Scenes - Hollywood Collection Microsoft Scenes - Impressionists Microsoft Scenes - Sierra Microsoft Scenes - Sierra Club Nature Collection Microsoft Scenes - Sierra Club Wildlife Collection Microsoft Scenes - Sports Extremes Collection Microsoft Scenes - Stereogram Collection Microsoft Scenes - Undersea Collection Microsoft Schubert for Windows: The "Trout" Quintet Microsoft Services for Netware Microsoft Services for Unix Microsoft SGML Author for Word Microsoft SharePoint Portal Server Microsoft SideWinder Force Feedback Microsoft SideWinder Game Voice Microsoft SideWinder Precision Microsoft Small Business Server Microsoft Small Business Server Client Add On Microsoft Smart Cards Microsoft SNA Server Microsoft SNA Workstation Microsoft SoundBits - Classic Cartoons from Hanna Barbera Microsoft SoundBits - Classic Hollywood Movies Microsoft SoundBits - Musical Sounds from Around the World Microsoft SourceSafe Microsoft Space Simulator Microsoft SQL Server Microsoft SQL Server Programmer's Toolkit Microsoft Strauss for Windows Microsoft Stravinsky for Windows: The Rite of Spring Microsoft Systems Management Server Microsoft Technet Microsoft Test for Windows Microsoft Trackball Explorer Microsoft Trackball Optical Microsoft TrueType Font Pack Microsoft Visual Basic Microsoft Visio Microsoft Visio Enterprise Network Tools Microsoft Visual Basic Microsoft Visual Basic.NET Microsoft Visual C++ Microsoft Visual C++.NET Microsoft Visual C#.NET Microsoft Visual FoxPro Microsoft Visual InterDev Microsoft Visual J++ Microsoft Visual SourceSafe Microsoft Visual Studio.NET Microsoft WinCE Tool Kit for Visual Basic Microsoft WinCE Tool Kit for Visual C++ Microsoft Windows Microsoft Windows XP Microsoft Windows 2000 Server Microsoft Windows for Workgroups Microsoft Wine Guide Microsoft Word Microsoft Works Microsoft Works Suite Microsoft Zoo Tycoon 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 789 OF 2002 BETWEEN: MICROSOFT CORPORATION FIRST APPLICANT MICROSOFT PTY LIMITED (ABN 29 002 589 460) SECOND APPLICANT AND: KAI-YU JIANG (also known as BRUCE JIANG) Trading as MULTIVERSE COMPUTER RESPONDENT JUDGE: TAMBERLIN J DATE: 6 FEBRUARY 2003 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this matter I am satisfied having regard to the affidavits which I have considered and submissions which have been advanced that orders ought be made in accordance with the Short Minutes of Order which had been filed with the Court by the applicants in this matter. In particular, I am satisfied that sufficient steps have been taken to serve the relevant material and to bring this application and supporting material to the attention of the respondent. 2 In relation to the question of costs I am not satisfied that this is an appropriate case in which indemnity costs should be granted. However, I consider that it is appropriate to award costs as a lump sum to avoid the necessity for taxation and the ensuing expense, delay and inconvenience, especially in circumstances where there has been difficulty, or impossibility, of effecting personal service on the respondent to the proceedings. 3 I propose to award an amount of $40,000 by way of costs to the applicants. The costs are awarded on a lump sum basis and on a party/party basis. Otherwise I make orders in accordance with the Short Minutes of Order. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. Associate: Dated: 26 February 2003 Counsel for the Applicants: R Cobden Solicitor for the Applicants: Mallesons Stephen Jaques No appearance for the Respondent. Date of Hearing: 6 February 2003 Date of Judgment: 6 February 2003	2,742
federal_court_of_australia:fca/single/2023/2023fca0606	decision	commonwealth	federal_court_of_australia	text/html	2023-06-09 00:00:00	Kayler-Thomson v Colonial First State Investments Limited (No 3) [2023] FCA 606	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca0606	2024-09-13T22:50:13.689877+10:00	Federal Court of Australia Kayler-Thomson v Colonial First State Investments Limited (No 3) [2023] FCA 606 File number: VID 1313 of 2018 Judgment of: COLVIN J Date of judgment: 9 June 2023 Catchwords: PRIVILEGE - application for production of documents for inspection - where respondent resists production on basis of claim to legal professional privilege - where proceedings concern conduct of first respondent as trustee of superannuation funds - where proceedings brought on behalf of members of superannuation funds - whether joint legal professional privilege exists between third applicant and first respondent as beneficiary and trustee - where disputed documents relate to time periods when the third respondent was not invested in the relevant option - where previous interlocutory application brought by the first applicant was dismissed - where first respondent maintains the previous decision is binding upon the third applicant - where first respondent alleges the doctrine of Anshun estoppel precludes new reasons being raised by the third applicant - consideration of structure of the Trust Deed - consideration of beneficiary's interest in the trust - questions for determination adjudicated on basis that joint privilege exists Legislation: Superannuation Industry (Supervision) Regulations 1994 (Cth) Cases cited: D A Christie Pty Ltd v Baker [1996] 2 VR 582 Dyczynski v Gibson [2020] FCAFC 120; (2020) 280 FCR 583 Harvard Nominees Pty Ltd v Tiller (No 4) [2022] FCA 105 Kayler-Thomson v Colonial First State Investments Limited (No 2) [2021] FCA 854 Schreuder v Murray (No 2) [2009] WASCA 145 Shimson v MLC Nominees Pty Ltd [2021] VSCA 363 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR Zhang v Minister of Immigration, Local Government and Ethnic Affairs [1993] FCA 715 Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 84 Date of hearing: 8 December 2022 Counsel for the First and Second Applicants: The First and Second Applicant did not appear Counsel for the Third Applicant: Dr KP Hanscombe QC with Ms AM Folie Solicitor for the Third Applicant: Slater & Gordon Counsel for the Respondents: Ms S Mirzabegian SC with Ms M Elliott and Ms M Caristo Solicitor for the Respondents: Herbert Smith Freehills ORDERS VID 1313 of 2018 BETWEEN: KEITH KAYLER-THOMSON First Applicant PETER CURRIE Second Applicant WENDY GIBSON Third Applicant AND: COLONIAL FIRST STATE INVESTMENTS LIMITED (ACN 002 348 352) First Respondent COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) Second Respondent AVANTEOS INVESTMENTS LIMITED (ACN 096 259 979) Third Respondent order made by: COLVIN J DATE OF ORDER: 9 June 2023 THE COURT ORDERS THAT: 1. The answer to each of questions 1 to 5 in Annexure A to the orders dated 12 August 2022 is determined in the affirmative. 2. The first respondent pay the third applicant's costs of and incidental to the determination of those questions in any event, such costs 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 COLVIN J: 1 Ms Wendy Gibson is the third representative applicant in proceedings brought against Colonial First State Investments Limited (Colonial). Colonial is the trustee of the Colonial First State FirstChoice Superannuation Trust (Fund). Ms Gibson was a member of the Fund at material times. 2 The claims made against Colonial in the representative proceedings are in respect of the arrangements made by Colonial as trustee concerning the interest rates to be paid on some of the funds invested in the Fund that were held in term deposits with the Commonwealth Bank of Australia (CBA). Colonial is alleged to be a subsidiary and close associate of CBA. It is alleged that the interest rates that were arranged by Colonial were lower than those which would have applied if Colonial had been dealing with CBA at arms' length in the same circumstances. 3 For present purposes, relevant allegations made against Colonial in the proceedings are to the effect that it breached its obligations to act in the best interests of the beneficiaries of the FirstChoice Fund, to act with care and skill, to avoid or manage conflicts of interest and to avoid obtaining a profit from the dealings. 4 Discovery has been given in the representative proceedings. Ms Gibson seeks orders requiring Colonial to produce for inspection a number of documents in respect of which Colonial claims legal professional privilege. It is common ground that legal professional privilege may not be invoked by a trustee against a beneficiary of a trust where the trustee and the beneficiary have a joint privilege. The issue between the parties is whether there is such a joint privilege in the relevant documents. 5 The parties have identified five documents from amongst the documents that Ms Gibson seeks to inspect on the basis that the resolution of the competing contentions as to those documents will resolve all relevant issues. On 12 August 2022, orders were made for determination of questions as to whether Ms Gibson shares a joint privilege with Colonial in each of the five documents. 6 I have previously considered a similar application by Mr Keith Kayler-Thomson who is another representative applicant in proceedings against Colonial concerning the interest paid on term deposits arranged by Colonial with CBA. One of the issues on that application was whether Mr Kayler-Thomson could rely upon his status as a representative applicant to claim joint privilege in circumstances where he could not establish that he personally held a joint privilege in the relevant documents. I determined that a representative applicant in a class action could not claim production of discoverable documents on the basis of a joint privilege that was held by members of the represented class but not held personally by the representative applicant: Kayler-Thomson v Colonial First State Investments Limited (No 2) [2021] FCA 854 at [72]-[87]. On the present application, the correctness of that proposition was not in issue because Ms Gibson relies upon her personal circumstances to support a claim to joint privilege in the relevant documents. For present purposes, they are materially different to those of Mr Kayler-Thomson. 7 Ms Gibson was added as a representative applicant after the determination of the previous application for production of privileged documents brought by Mr Kayler-Thomson. She was a member of the defined class of persons for the purposes of the representative proceedings at the time of that earlier application. However, the opt out procedure for the representative proceedings had not occurred at that time. The significance of that fact for present purposes is that a person who opts out will not be bound by the conduct of the common questions that are determined by the representative proceedings. Therefore, at the time of the previous application by Mr Kayler-Thomson it was not possible to say that Ms Gibson was a person who, by her own actions, had conferred authority upon Mr Kayler-Thomson as to the conduct of the common questions. 8 Only some of the documents that Ms Gibson claims to be the subject of joint privilege were the subject of the application by Mr Kayler-Thomson. 9 Before identifying the issues on the present application, I will first explain the relevant contextual circumstances. The circumstances of the application by Ms Gibson 10 The Fund was established by a trust deed dated 29 April 1998 which has been amended from time to time (Deed). 11 Colonial is, and at all material times has been, the trustee of the Fund. 12 Ms Gibson became a member of the Fund on 24 May 2005. At all material times thereafter, she was a contributor to the Fund and therefore a beneficiary. 13 The Deed provides for the Fund to be administered by providing benefits in respect of beneficiaries in any one or more 'Divisions' (cl 2.3). 14 At all material times, one of the Divisions of the Fund was FirstChoice Wholesale Personal Super and Ms Gibson was a contributor to that Division. The way in which that occurred was that Colonial marketed the FirstChoice Fund as comprising five different products. Each of the products corresponded with a Division as provided for by the Deed. One of the products was FirstChoice Wholesale Personal Super and Ms Gibson was an investor in that superannuation product (Product). 15 Members of the Fund who were investors in the Product were invited by Colonial to choose between various investment options for the investment of the funds they contributed to the Fund. Some of the options available to investors in the Product were also available to investors in other products (or Divisions). 16 From 17 November 2008, an option known as FirstRate Saver was made available to members of the Fund who were investors in the Product (and all other Divisions). Ms Gibson selected the FirstRate Saver investment option for some of her funds from 24 September 2012 to 4 October 2012 and from 31 October 2012 to 18 September 2019. 17 From 13 July 2009, an option known as FirstRate Term Deposits was made available to members of the Fund who were investors in the Product (and all other Divisions except FirstChoice Employer Super). Ms Gibson selected the FirstRate Term Deposits investment option for some of her funds from 23 September 2011 to 9 September 2019 (save for between 27 September 2012 and 3 October 2012 and from 18 May 2017 to 23 May 2017). 18 Where members selected the FirstRate Saver or the FirstRate Term Deposits option, Colonial invested the funds with CBA at interest rates agreed between Colonial and CBA. 19 The documents that Ms Gibson seeks to inspect fall into three relevant periods: (1) Documents created after she became a member of the Fund but before the establishment of the relevant option to which the document relates; (2) Documents created after she became a member of the Fund and after the option was available but before she selected the option to which the document relates; (3) Documents created after she became a member of the Fund and after the option was available and after she last invested in the option to which the document relates. 20 No issue arises concerning documents that were created during the time when Ms Gibson had selected the relevant option. The principal competing contentions 21 Colonial advances a number of contentions in opposition to the application for production of the documents. 22 It says that the application by Ms Gibson is based upon the proposition that a person who was a member of the Fund at the time that a document was brought into existence has a joint privilege in any document concerning the Fund to which legal professional privilege applies. As to that proposition, it says that membership alone is an insufficient interest to establish joint privilege. It says that, in the circumstances of the Fund (particularly the way in which the interests of beneficiaries are structured), the member must be invested in the option to which the document relates at the time that the document was brought into existence in order for there to be joint privilege in the document. Implicit in the submission is the proposition that members were 'invested' in the options that were selected and the interest of the member in the Fund was limited to that 'investment'. That is to say, the contributed funds of the member were applied to that investment such that the member's interest was confined to that particular investment. The submission relies upon a passage in the reasoning in Kayler-Thomson at [94]-[95] as having rejected the proposition it says is advanced by Ms Gibson to the effect that membership alone is sufficient. It maintains that the alleged finding in Kayler-Thomson is binding upon Ms Gibson. Finally, it says that Ms Gibson is precluded from advancing any other reason to support the present application that was not raised in the earlier application by Mr Kayler-Thomson. In that respect it relies upon what it alleges to be the application of the doctrine of Anshun estoppel. 23 Each of the above contentions is said to be a complete answer to the application. If none of them are found to be such an answer then the following claims are made as to each of the three categories of documents that have been described above. 24 As to documents in period (1), namely those brought into existence before the relevant option was made available to members of the Fund, Colonial contends that there was no joint privilege where the documents were brought into existence during the 'set up' phase for an investment option. It uses the term 'set up' to refer to the period before the option was added as an available option that could be selected for the Division in which the member was invested. It relies upon findings said to have been made in Kayler-Thomson. It also relies upon the reasoning of Buss JA (McLure JA agreeing) in Schreuder v Murray (No 2) [2009] WASCA 145; (2009) 41 WAR 169 at [94(d)] to the effect that there will be a joint privilege if the trustee and the beneficiary have a joint interest in the subject matter of the privileged communications, information or documents 'when they occur or come into existence'. 25 As to documents in period (2), Colonial claims that even after the option has been added, a member has no interest in documents relating to the option unless and until the member has selected the option for some of their funds. 26 As to documents in period (3), Colonial claims that a member has no interest in documents brought into existence after the member ceases to select the option for the member's funds, even though the member continues to be a member of the Fund. It also claims that the relevant document brought into existence after Ms Gibson ceased to be invested in the FirstRate Term Deposit option did not concern any aspect of prior conduct or arrangements concerning that option at a time when it had been selected by Ms Gibson. 27 In short, Colonial claims that Ms Gibson only has a joint privilege in those documents that were brought into existence at a time when her contributed funds were said to have been invested in the option to which the documents relate, relevantly FirstRate Saver or FirstRate Term Deposit. 28 Ms Gibson contends that her claim that the documents should be produced for inspection is not based upon the proposition that her membership of the Fund at the time the relevant documents were brought into existence is a sufficient basis upon which to claim that there is joint privilege. Rather, she submits that there is joint privilege because in addition to her membership of the Fund, the documents concerned the administration of an aspect of the Fund in which she had an interest at the time that the document was brought into existence because they concerned an option that would be made available to her as a member of the Fund who could choose the relevant option. By extension, once the option was established, any documents the subject of legal professional privilege that were thereafter brought into existence were the subject of a joint privilege because they concerned an option that Ms Gibson could select (even if she had not selected the option at the time the document was brought into existence). 29 Both parties rely upon provisions of the Deed to support their contentions. Relevantly for present purposes, at all material times, the Deed provided as follows: (1) In Clause 2.1: Each Beneficiary has a beneficial interest in the Assets of the Fund. A Beneficiary does not have any interest in a particular Asset but only has an interest in the Assets of the Fund as a whole; (2) The Fund was to include 'Investment Portfolios' as determined by the trustee (being the investment options to which reference has been made) (cl 2.9); (3) Colonial as trustee of the Fund was required to maintain the Investment Portfolios in such a way as to identify assets and liabilities of the Fund which are attributable to each Investment Portfolio (cl 2.10); (4) Each Investment Portfolio may be divided into units (cl 2.11); (5) Colonial as trustee of the Fund may establish new Investment Portfolios (cl 2.13); (6) In Clause 2.17: Despite any other provision of the Deed, the liability of the Trustee to pay benefits to a person relates to all Assets of the Fund to which the liability is attributable and is not attributable to any particular Investment Portfolio, or Division or Plan or Class; (7) A beneficiary of the Fund is entitled to the benefits applicable to the Division in which the beneficiary has invested (cl 6.1); (8) Contributions by a beneficiary are to be allocated units in the Investment Portfolio notified by the beneficiary and permitted by the Trustee (cl 11.1); (9) A beneficiary of the Fund may 'elect to switch amounts between Investment Portfolios' if permitted to do so by Colonial as trustee (cl 13.1); (10) Colonial is required to keep records for the account of each beneficiary which show, amongst other things, the contributions made, movements in the value of the units allotted to the account, taxes, fees and charges, 'amounts paid from the Fund (including benefits and transfers) in respect of the Beneficiary from the account' and 'any provisions for any payments from the account in respect of the Beneficiary' (cl 14); The issues for determination 30 The following issues arise on the application: (1) As a matter of principle, when will joint legal professional privilege exist as between a trustee and a beneficiary? (2) What was determined in Kayler-Thomson? (3) Is Ms Gibson bound in any way by the reasoning or decision in Kayler-Thomson or, if not, is Ms Gibson otherwise prevented from raising the contentions raised in support of the present application? (4) If no to (3), as to documents brought into existence in each of the three different periods, is the timing of the creation of the document a reason why joint privilege as between Colonial and Ms Gibson cannot arise in the document? (5) How should each of the five questions referred for determination be answered? Issue (1): As a matter of principle, when will joint legal professional privilege exist as between a trustee and a beneficiary? 31 The relevant principles concerning joint privilege as between trustee and beneficiary were summarised by Buss JA (McLure JA agreeing) in Schreuder. As to when there will be a joint privilege, his Honour said (at [94]): (d) There will be a joint privilege if: (i) the confidential communications, information or documents relate to legal services in connection with the management or administration of the trust; and (ii) the trustee (in his or her capacity as trustee) and the beneficiary (in his or her capacity as a beneficiary, and either alone or as a member of a class of beneficiaries) have a joint interest in the subject matter of those confidential communications, information or documents when they occur or come into existence. (e) The joint interest of the trustee will derive from his or her duties to the beneficiaries or in respect of the trust fund, and the joint interest of the beneficiary will derive from his or her vested interest in the trust fund, in combination with the nature and character of the relevant communications, information or documents. (f) The beneficiary will not be entitled to a joint privilege with the trustee if the confidential communications, information or documents relate to legal services obtained for the benefit of the trustee personally (for example, if the trustee seeks legal advice as to his or her personal rights or liabilities in connection with an alleged breach of trust or threatened legal proceedings against him or her personally). 32 The decision in Schreuder concerned a testamentary trust. Consequently, the Court was not concerned with a trust of the kind being administered by Colonial the subject of these representative proceedings. In particular, the trustee of the testamentary trust did not undertake the development of investment options to be presented to individual beneficiaries as the basis for selecting an 'Investment Portfolio' to be maintained by the trustee on a unitised basis. 33 Further, the distinction being addressed in Schreuder was between legal advice taken by the trustee in undertaking the task of administering the vested interest of the beneficiary and legal advice concerning the personal rights or liabilities of the trustee. A beneficiary with a vested interest is entitled to due administration of the trust. It is the fact that the trustee is undertaking that obligation on behalf of the beneficiaries with a vested interest that gives rise to the joint privilege. 34 Given that the documents have been discovered by Colonial it may be accepted that they relate to the investment options the subject of the representative proceedings. In that regard, no issue is taken with the following finding in Kayler-Thomson at [16]: In the present case, it was common ground that the administration of the trust involved presenting to members (beneficiaries) various investment options. The choices made by the member (perhaps with the assistance of an investment adviser) would then be implemented by Colonial in the management and administration of the Funds such that the requisite part of the funds being administered would be invested in that way and the interest of the member would be determined by the outcomes of those choices. Information would be made available by Colonial as trustee of the Funds to enable those choices to be made. Therefore, a significant part of the administration of the Funds involved the identification of the investment options and their appropriate presentation to members. 35 Further, the conclusion reached in Kayler-Thomson that the principles as to joint privilege apply to a trust with the characteristics of the Trust was not disputed by Colonial. 36 The issue here is whether Ms Gibson has a joint privilege in communications recording legal advice taken by Colonial in relation to an investment option which did not form part of the Investment Portfolio for Ms Gibson at the time the advice was taken either because (a) the option was still being developed and so was not yet available; or (b) all the funds contributed by Ms Gibson were allocated to an Investment Portfolio that did not include the investment option. 37 It was not suggested that there are any authorities that consider the issue of joint privilege in the context in which it arises in the present case. Therefore, in order to answer the questions reserved for consideration, resort is required to general principle and its proper application to the circumstances of the present case. Issue (2): What was determined in Kayler-Thomson? 38 The first point to note is that the basis upon which the application for production of the privileged documents was refused in Kayler-Thomson was that the status of Mr Kayler-Thomson as a representative applicant did not confer upon him an entitlement to the joint privilege of each of the members of the class of persons as described in the representative proceedings. As it was found that Mr Kayler-Thomson did not himself have a claim to joint privilege, the application was dismissed: at [90]. 39 The reason that Mr Kayler-Thomson was found not to have a personal claim to joint privilege was because (a) most of the documents were brought into existence before he was a member of the Fund (at [93]); and (b) as to the remaining documents, they were brought into existence before any funds of Mr Kayer-Thomson were invested in the FirstRate Saver or the FirstRate Term Deposits (being investment options that were described in the reasons in Kayler-Thomson as Deposit Options) (at [94]). 40 As to (b), the finding was expressed in the following terms at [94]: Of the remaining items…, they were brought into existence before any funds of Mr Kayler-Thomson were invested in any of the Deposit Options. As has been explained the complaints raised in these proceedings concern conduct in relation to the rates of interest applicable for the Deposit Options. No other aspect of the management or administration of the Funds is in issue. Therefore, even though Mr Kayler-Thomson was a member at the time of the documents…he had no interest in the management or administration of the Deposit Options at the time. 41 I went on to further explain that finding in the following way (at [95]): It was suggested for Mr Kayler-Thomson that his interest as a member was sufficient. In effect, he had a personal joint privilege in respect of all documents that related to the management and administration of the Funds when he was a member. The Court was not taken to any authority that considered a case where the nature of the member's interest in the trust meant that he was unaffected by the management and administration of a considerable part of the investment and returns earned by the trust. The point may be a significant one in different circumstances such as where the trustee seeks to resort to the assets of the trust by way of exoneration or where a trustee seeks to enforce a right to be indemnified out of the trust assets. However, where the basis upon which the documents are produced is the performance of a discovery obligation that relates to a complaint about a particular aspect of the administration of the trust being an aspect in which Mr Kayler-Thomson has no personal interest, it is difficult to see how there is a joint privilege. The joint privilege must be co-extensive with the right to due management and administration. There is no evidence to suggest that, in the circumstances, Mr Kayler-Thomson had such a personal right in respect of the management and administration of the affairs of the Funds to which the discovered documents relate. 42 It can be seen that the reasoning was based upon rejecting a contention advanced by Mr Kayler-Thomson that his interest as a member at the time that the documents were brought into existence was sufficient. However, the reasoning also involved the acceptance of the proposition that Mr Kayler-Thomson did not have a personal interest in the steps taken in the administration of the Fund in respect of investment options in which he was not invested at the time that the relevant steps were taken. 43 As has been observed, Ms Gibson disavows any claim that her interest as a member is a sufficient basis to be able to claim joint privilege. Rather, the contentions advanced by Ms Gibson on the present application seek to demonstrate how a person may have a personal interest in the administration of the Fund in respect of investment options which were not selected at the time that the relevant steps were taken. The contentions rest upon two propositions. First, a contention that a consideration of the terms of the Deed demonstrate that each beneficiary had an interest in the whole of the assets of the Fund and therefore each beneficiary had a personal interest in the whole of its administration. Second, a contention that the management and administration of the Trust ought not be viewed as a series of isolated events that occurred at an instant in time. Rather, administration occurs over a period in a way that means that conduct at one point will affect the way the trust is administered at a later point. Further, legal advice has ongoing effect. So, where the advice concerns the characteristics of investment options that are proposed to be made available to beneficiaries then the advice, if implemented and acted upon by the Trustee in a manner that affects the characteristics of those investment options, will have operative effect for the purposes of the management and administration of that option and will continue to have that operative effect unless and until those characteristics are changed by a decision made by Colonial as trustee. On that basis it is contended that a person who is a member at the time the advice is taken and who subsequently chooses an investment option (or is presented with that option as part of the way the Fund is managed and operated) has a joint interest in the subject matter of the legal advice. 44 These contentions were not addressed in Kayler-Thomson by reason of the way in which the claim was advanced on that occasion. As has been explained, Mr Kayler-Thomson sought to rely upon his status as a member of the Fund and the fact that he was a representative applicant for other members. 45 Nevertheless, it must be accepted that the reasoning in Kayler-Thomson at [94]-[95] states a conclusion that is contrary to the contentions advanced by Ms Gibson, albeit in circumstances where the contentions now presented were not there considered. In particular, there was no detailed focus upon the manner in which the funds of a member were 'invested'. Issue (3): Is Ms Gibson bound in any way by the reasoning or decision in Kayler-Thomson or, if not, is Ms Gibson otherwise prevented from raising the contentions raised in support of the present application? 46 The application brought by Mr Kayler-Thomson was interlocutory. It did not result in a final decision. Orders which are made to operate with finality so as to quell a controversy by extinguishing a cause of action operate in a different manner to interlocutory orders: Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363 at [25]. Interlocutory orders are made until further order and a Court remains in control of its interlocutory orders: Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 at [29]. 47 Therefore, the reliance by Colonial upon the reasoning in Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 at [22] was misplaced. It was concerned with the consequences of 'the rendering of a final judgment'. See also, D A Christie Pty Ltd v Baker [1996] 2 VR 582 at 602 (Hayne JA, Charles JA agreeing). 48 Further, the principles associated with what is described as 'Anshun estoppel' apply in circumstances where a matter which could and should have been raised in earlier proceedings are sought to be raised in later proceedings. They do not pertain where, as here, there are successive applications within the same proceedings: Harvard Nominees Pty Ltd v Tiller (No 4) [2022] FCA 105 at [178] (Jackson J). 49 Generally, the Court will refuse to entertain a second interlocutory application made by the same party to revisit the same interlocutory issue in the same proceedings unless there has been a material change in circumstances or there is reliance upon material that was not available upon reasonable inquiry at the time of the earlier application: Nominal Defendant v Manning (2000) 50 NSWLR 139 at [11]-[17] (Mason P). Neverthleless, it may be accepted that the concerns that inform the principles of issue estoppel and Anshun estoppel may be brought to bear by a Court in declining to entertain a second interlocutory application as to the same subject matter: See also, Castillon v P&O Ports Ltd [2007] QCA 364; [2008] 2 Qd R 219 at [67] (Holmes JA). Principles of abuse of process may also apply. 50 The present application by Ms Gibson is not an instance where there is a repeat application by the same party. The decision made in Kayler-Thomson was an interlocutory decision that addressed the particular basis upon which the application was advanced. It was an application that turned upon the personal circumstances of Mr Kayler-Thomson. It did not determine claims to joint privilege that may be made by other members of the Fund based upon their personal circumstances. Indeed, it was common ground that the position of the second representative applicant was not to be determined on the earlier interlocutory application: Kayler-Thomson at [134]. 51 In any event, it must be doubtful as to whether Ms Gibson could be constrained as to any application that she might make as a representative applicant by conduct of Mr Kayler-Thomson undertaken at a time when Ms Gibson was not a representative applicant and had not yet been given an opportunity to decide whether to opt out of the proceeding. This must be especially so in circumstances where, as has been explained, the decision in Kayler-Thomson rested on the finding that any claim to joint privilege could not be advanced by Mr Kayler-Thomson on the basis of his status as a representative applicant but rather depended upon his personal position. Class members are only privies in interest with respect to and to the extent of the common claims which are the subject of the proceeding: Dyczynski v Gibson [2020] FCAFC 120; (2020) 280 FCR 583 at [251] (Murphy and Colvin JJ). The finding that Mr Kayler-Thomson had not demonstrated a claim to joint privilege was not a claim in respect of which Ms Gibson was privy. 52 The observations of French J in Zhang v Minister of Immigration, Local Government and Ethnic Affairs [1993] FCA 715 at [41] (p 43) as to the possible application of Anshun estoppel principles in the context of representative proceedings were concerned with a circumstance in which all aspects of the proceedings which concerned an application for judicial review were dealt with on the basis that they were common questions. The question was whether those other applicants might be prevented from bringing judicial review claims that raised contentions that had not been advanced in the representative proceedings. Therefore, his Honour was dealing with a very different question to that which arises where there are successive interlocutory applications by different representative applicants in the same representative proceedings asserting a claim to joint privilege that depends upon the personal circumstances of the representative applicant (and not upon their representative status). 53 For those reasons, the contentions for Colonial to the effect that Ms Gibson was somehow prevented from bringing the present application by reason of the earlier interlocutory adjudication in Kayler-Thomson must be rejected. Issue (4): If no to (3), as to documents brought into existence in each of the three different periods, is the timing of the creation of the document a reason why joint privilege as between Colonial and Ms Gibson cannot arise in the document? 54 For reasons that have been given, the issue as to whether there is a joint privilege as between Colonial and Ms Gibson in respect of documents recording legal advice obtained by Colonial as to matters that are relevant to the issues raised by her claim (now brought as a representative applicant) depends upon the nature and extent of the duty owed by Colonial to Ms Gibson to duly administer the Trust. That is because the joint privilege derives from the performance of the Trustee of that duty. It is why privileged documents that concern the personal position of the trustee rather than the execution of the duties and responsibilities of that person as trustee do not give rise to a joint privilege with the beneficiaries of the trust. It is also why it is only a beneficiary who can demonstrate that the documents relate to the performance of the duty to administer the trust in respect of an interest of the beneficiary that give rise to a joint privilege with that beneficiary. 55 Therefore, the question whether the joint privilege is confined to documents that were brought into existence at a time when Ms Gibson had selected the investment option to which the documents relate must depend upon an understanding of the duty owed to Ms Gibson as to the administration of the Fund which in turn depends upon an understanding of the nature and extent of the interest of Ms Gibson in the Fund. 56 The duty owed by Colonial to Ms Gibson to duly administer the Fund arose upon Ms Gibson becoming a member of the Fund. The issue between the parties concerns whether the duty owed to Ms Gibson to duly administer those aspects of the Fund that concerned the FirstRate Saver and the FirstRate Term Deposits only came into existence when (a) Ms Gibson had chosen the relevant investment option; (b) the choice had been accepted by Colonial as trustee; and (c) in consequence of (a) and (b), the funds contributed by Ms Gibson were being administered on the basis of a unit allocation in that investment option. 57 As has been mentioned, Ms Gibson advanced two contentions as to why the duty was not so confined, namely: (1) the terms of the Deed demonstrate that each beneficiary had an interest in the whole of the assets of the Fund and therefore an interest in the whole of its administration while a member; and (2) advice taken as to the investment options that continued to have operative effect for the purposes of the management and administration of that option at a time when Ms Gibson was invested in the option (or could invest in the option) was a part of the administration of the Fund in which Ms Gibson had an interest. The contention that each member had an interest in the administration of the whole of the Fund 58 The Fund is required to be administered according to the terms of the Deed. The Deed provides that each beneficiary has an interest in the assets of the Fund as a whole. No beneficiary has an interest in a particular asset. Further, the liability of Colonial as trustee to pay benefits to a person 'relates to all Assets of the Fund to which the liability is attributable and is not attributable to any particular Investment Portfolio, or Division or Plan or Class'. The amounts to be recorded in respect of each beneficiary concern the units allocated in the Investment Portfolio notified by the beneficiary and permitted by the Trustee. 59 Therefore, regard to the terms of the Deed as a whole demonstrates that the interest of a beneficiary is not confined to the units allocated in the beneficiary's Investment Portfolio. Rather, the record maintained of those allocations determines the extent of the interest that the beneficiary has in the assets of the Fund as a whole. Significantly, the liability of Colonial to pay benefits from the Fund is not attributable to any particular Investment Portfolio or Division. Rather all of the Assets of the Fund that are held to pay benefits to beneficiaries are burdened with that liability irrespective of the particular investment choices made by an individual beneficiary as to the investments that make up that beneficiary's Investment Portfolio. Despite the establishment of the Investment Portfolio, the member remains invested in the assets of the Fund as a whole. 60 It follows that each beneficiary has an interest in the due administration of the Fund as a whole. The Assets of the Fund were not separated or allocated. The interest of a beneficiary is not confined to a unitised share in each of the investments in the beneficiary's Investment Portfolio. The choice by Ms Gibson as to an investment option did not result in the funds of the member being 'invested' in that option. Her interest was not even confined to all of the assets in the Division (that is, in the case of Ms Gibson, the part of the Fund comprising beneficiaries who had contributed to the Product). Rather, her choice of investment options resulted in Colonial arranging for her interest to be attributed to the nominated investment. It was on that basis that the share of each beneficiary in the assets of the Fund as a whole was determined by reference to the value of the attributed units for that beneficiary. That is, it was to be regarded as caused by that investment choice even though it remained an interest in the Fund as a whole. The choice of the investment option would result in Colonial arranging the investment to be made by the Fund (relevantly for present purposes in the FirstRate Saver or the FirstRate Term Deposits). However, the member's interest in the Fund was not confined to that investment. The investment itself was not held solely for the member who chose the investment. Rather it became an Asset of the Fund as a whole that was attributed to the member for the purpose of calculating the extent of the member's interest in the Fund. 61 Put another way, a default by Colonial as trustee in the due administration of any part of the Fund could affect the interest of all beneficiaries. For example, if Colonial did not arrange sufficient investments to match the selected investments and, in consequence, the returns generated by the Fund were less than those that would have been made if the investment had been undertaken, Colonial would still be obliged to record the interest of the beneficiary as if the investment had been undertaken. Further, the beneficiary would be entitled to insist upon resort to the whole of the assets of the Fund in order to recover the shortfall. Members contribute to the Fund and have an interest in the whole of the Fund. They are not confined to an interest in their selected investment. 62 However, that is not the end of the issue concerning joint privilege. Even where a beneficiary has a vested interest in the whole of the assets of a trust, issues arise as to whether the extent of any right to require the trustee to provide access to documents that concern the administration of the trust is coincident with the extent of the right of a beneficiary to due administration of the trust. 63 So, where a beneficiary seeks access to trust documents outside the context of litigation alleging breach of duty by the trustee of a trust, issues may arise as to whether a beneficiary with a right to the due administration of the whole of the trust has established a sufficient basis for the trustee to be required to produce any and all documents relating to the trust irrespective of their significance for the beneficiary. It may be that in such circumstances, the beneficiary must demonstrate a reasonable basis for the request. The extent to which that may be so could depend upon the legal understanding of the rationale for the right to seek the documents: as to which, see the authorities referred to in Kayler-Thomson at [62]. Therefore, it may be that the existence of the interest in the assets of the Fund as a whole is an insufficient basis for a beneficiary to have a right to inspect all of the documents relating to the administration of the Fund. Consequently, issues of joint privilege will not arise. Put another way, unless and until a beneficiary has established a reasonable basis upon which the trustee should be required to disclose documents in connection with the management and administration of the trust, the legal professional privilege is maintained by the trustee (either in the personal interest of the trustee or jointly for the trustee and the beneficiaries, as the case may be). 64 However, in the present case, no issue arises as to whether the documents must be disclosed. It is common ground that they are within the scope of the obligation upon Colonial to provide discovery. It is only because of the claim to legal professional privilege that they are not produced. Therefore, if they concern the management and administration of the Fund at a time when Ms Gibson was a beneficiary, there is a joint privilege. It is not necessary for Ms Gibson to demonstrate that the documents concern the management and administration of the FirstRate Saver or the FirstRate Term Deposits investment options. Nor is it necessary for Ms Gibson to demonstrate that she was a beneficiary who had chosen the relevant option as at the time that the document was brought into existence. The joint privilege is coincident with the extent of the activities undertaken in performance of the duty to duly administer the Fund and that duty relates to all of the assets of the Fund. 65 To be clear, simply being a member of the Fund is not enough. It is the combination of the fact that Ms Gibson is a beneficiary and the fact that all beneficiaries have an interest in the whole of the Fund and therefore in the due administration of the whole of the Fund that gives rise to the joint privilege. If the Fund had indeed been established on terms whereby the interest of each beneficiary was limited to the assets within a Division or to those nominated in the beneficiary's Investment Portfolio then the fact that the person was a beneficiary would not have been a sufficient basis to demonstrate joint privilege in documents that related to the due administration of parts of the Fund in which the beneficiary had no interest. 66 Colonial relied upon the terms of the Superannuation Industry (Supervision) Regulations 1994 (Cth) to support its submission to the effect that a member's interest in the Fund is to be characterised by reference to the benefits reflected in the member's account (which is based upon the unitised amounts attributed to the member for each of the investment options in the member's Investment Portfolio). However, the provisions in the Regulations relied upon by Colonial do no more than provide for the way in which a member's benefit must be paid. They ensure that the funds contributed by members to superannuation are the subject of individual accounts for each member so that the amount of the member's individual benefit can be determined at any point in time. None of those provisions are inconsistent with the member's benefit taking the form of an interest in the Fund as a whole in circumstances where the amount of the benefit is determined by the record in the accounts that are required to be maintained by Colonial as trustee for the member's Investment Portfolio. None of the provisions in the Regulations require the interest in the Fund to be confined to individual assets held by the trustee solely for the benefit of an individual member. 67 Further, contrary to the submission advanced by Colonial, no aspect of the reasoning of Sifris and Walker JJA in Shimson v MLC Nominees Pty Ltd [2021] VSCA 363 requires a conclusion that a member's interest in a fund like the Fund is confined to assets that correspond to the investment options selected by the member. 68 Finally, the example given by Colonial as to what would occur in relation to legal advice taken by Colonial as the holder of a group insurance policy for the benefit of members who have selected an option for such cover to be arranged by Colonial proceeds upon a false premise. It treats the interest that a member has as a beneficiary who has made such a selection as being coincident with the interest that a member has as a contributor of monies to the Fund. A member who has not selected the insurance cover would have no interest in the due administration of the group insurance policy by Colonial nor in the due application of the proceeds of any claim. Such insurance proceeds do not form part of the Fund to which a beneficiary has contributed and in which the beneficiary has an interest by reason of such contribution. They are received by Colonial pursuant to the terms of the group insurance for the benefit of an identified insured. The fact that all members of the Fund have a joint privilege as to legal advice concerning the management and administration of the Fund would not give a member a basis to claim joint privilege in legal advice obtained by Colonial as to the general administration of a group insurance policy under which the member is not an insured or in respect of legal advice obtained concerning a claim by an individual that there was coverage for that individual under the policy. The contention that legal advice continued to have operative effect 69 The further contention advanced by Ms Gibson proceeds on the basis that the first contention is not accepted. Therefore, given my conclusion as to the first contention it is not strictly necessary to consider the further contention. However, as it was the subject of significant argument, I will address the contention on the assumption (contrary to my conclusion) that the first contention has not been upheld. 70 Significantly, joint privilege arises where a beneficiary has a joint interest in the subject matter of the confidential communications, information or documents that relate to legal services when they occur or come into existence: Schreuder at [94](d)(ii). 71 In the present case, Ms Gibson was a beneficiary at the time that the documents were brought into existence, but she had not chosen the relevant investment options to which the documents relate. Assuming that the documents concerned whether, for those who had contributed funds for the Product, the FirstChoice Fund or the FirstRate Term Deposits should be introduced as an investment option or the form that such an investment option would take or the steps actually undertaken to establish the investment option then the contention is that for so long as the legal advice continued to be carried into effect it affected the characteristics of the investment option at the time it was subsequently chosen by Ms Gibson (or when it was subsequently available to be chosen by Ms Gibson). 72 Even if a beneficiary of the Fund did not have an interest in the Fund as whole, having regard to the particular characteristics of the Fund, each beneficiary in a Division would have an interest in the management and administration of the investment options that were being developed on the basis that they would be made available for selection by that beneficiary. Those steps, when undertaken, were part of the due management and administration of the aspects of the Fund in which such a beneficiary had an interest because they determined whether an investment option would be available and, if so, the form that it would take. 73 Assuming (contrary to my earlier finding) that the member did not have an interest in the Fund as a whole, the fact that individuals were invited to participate in a Division (in the case of Ms Gibson by investing in the Product) gave those individuals an interest in the decisions being made as to what investments to be made available to those members investing in the Division. The range of investments that Colonial decided to offer at any time confined the way in which the contributed funds would be managed and invested. The interest of a beneficiary like Ms Gibson was not confined to the selected invested options at any point in time. The beneficiary could choose an investment option and if that choice was accepted by Colonial as trustee then the beneficiary's interest in the Fund would reflect the unitised value of the selected option. 74 The submissions for Colonial treated the interest of Ms Gibson as if it were confined to the investments that were selected for her Investment Portfolio at any point in time. On that basis, Colonial sought to confine the duty of due administration of her interest to what was done in respect of the selected investments for so long as they were selected. The terms of the Deed do not support a conclusion that the interest of beneficiaries like Ms Gibson is so confined (even assuming the member's interest was confined to the Division in which the member was "invested"). They are entitled to due and proper consideration of the investment options to be made available and due and proper consideration of the structure of those options where they were formulated and established by Colonial or with the participation of Colonial. 75 It follows that if the first contention had not been upheld, I would have upheld the further contention at least to the extent that I have outlined. That is because the due and proper administration of the selections being presented to Ms Gibson was a significant part of the way her funds were being administered because of the mechanism by which members selected their Investment Portfolio. That mechanism identified the class of investments that could be chosen by a member. The management of the funds in each Division was not confined to implementing the selected investments, it included the decisions as to what to include in the menu of investments from which members could choose. 76 Therefore, even if the nature and extent of the interest of each member was confined to the investments in the Investment Portfolio from time to time, the way in which that portfolio was managed from time to time included all steps taken as to what would be made available to the member (not just the steps taken in relation to selected investments). Therefore, there was a joint privilege in all legal advice taken whilst the person was a member as to the investment options to be presented to members invested in the relevant Division (in the case of Ms Gibson being the documents in issue in the present case). 77 Finally, if indeed (contrary to the reasoning immediately above), the interest of a member like Ms Gibson was both confined to the investments that formed part of the Investment Portfolio from time to time and the management of those selected investments during the period when they were selected then it seems to me that documents brought into existence before or after the time when the investment was in the Investment Portfolio would not meet the requirement expressed in Schreuder. The reasoning in Schreuder links the joint privilege to the existence of an interest in the subject matter of the advice at the time that the privileged communication occurred. The contentions advanced by Ms Gibson sought to claim that the joint privilege arose if the advice was deployed or acted upon in some way (or otherwise influenced the characteristics of an investment option) at the time that the investment option the subject of the advice was chosen by the member. Therefore, applying Schreuder, it seems to me that aspect of the contentions advanced by Ms Gibson must be rejected. 78 I accept that upholding the first contention or the further contention (to the extent explained) means that my reasoning on the present application might be viewed as being inconsistent with my conclusion in Kayler-Thomson at [94]-[95]. However, as I have endeavoured to explain, in material respects the contentions advanced by Ms Gibson on the present application were not advanced by Mr Kayler-Thomson. The submissions on the present application depended upon a consideration of the terms of the Deed. Those terms were not addressed in the application by Mr Kayler-Thomson: see Kayler-Thomson at [51]. Further, my conclusion in Kayler-Thomson to the effect that Mr Kayler-Thomson had no interest in the management and administration of the 'Deposit Options' (that is, the FirstRate Saver and FirstRate Term Deposits) before he 'invested' in those options was reached without the benefit of submissions as to the nature of the interest of a beneficiary in the Fund. With the benefit of the submissions advanced on the present application, it is clear that a member of the Fund does not 'invest' in the investment options. Rather, the beneficiary contributes to the whole of the Fund. 79 The Product in which Ms Gibson invested determined the Division that applied to her contribution. Within the Division there were particular investment options from which selections could be made from time to time. Those selections when made resulted in the Investment Portfolio which comprised investments attributed to the member for the purpose of determining the extent of the benefit to which the member was entitled from the Fund. However, there was no sense in which the investment by the beneficiary was confined to the assets identified in the Investment Portfolio. Instead, the selected investment options determined the calculation of the extent of the interest of the beneficiary in the whole of the Fund and the beneficiary was entitled to resort to the whole of the Fund when seeking payment of the 'benefits' of the beneficiary (that is, the discharge of the trustee's liability in respect of the beneficial interest of the beneficiary). Issue (5): How should each of the five questions referred for determination be answered? 80 As to documents 1, 2 and 4, the submission for Colonial as to why those documents should not be required to be produced was that the documents were created before Ms Gibson was invested in the FirstRate Saver and FirstRate Term Deposit investment options. For reasons that have been given, that submission should not be accepted. It follows that Colonial and Ms Gibson share a joint privilege in each of those documents and the questions as to those documents should be answered in the affirmative. 81 As to document 3, Colonial again relies upon the fact that the document came into existence before Ms Gibson selected the FirstRate Saver as an investment option. For reasons already given, that is not a reason why there is no joint privilege. Colonial makes a further submission in the alternative to the effect that the document was 'no longer relevant after 19 November 2009' being nearly three years before Ms Gibson made her investment. However, that submission is advanced on the basis that the first contention for Ms Gibson is not upheld. That premise has been rejected. Therefore, it is not a reason why there is no joint privilege. The question as to document 3 should be answered in the affirmative. 82 As to document 5, Colonial describes the document as an email from a member of Colonial's 'Product team' to an internal lawyer. It says that the email contains a request for legal advice regarding changes that were being proposed to interest rates offered on the FirstRate Term Deposits investments option. Colonial relies upon the fact that the document came into existence after Ms Gibson chose to no longer select the FirstRate Term Deposits investment option as part of her Investment Portfolio. For reasons that have been given, the fact that Ms Gibson was a member who had contributed to the Fund and thereby had an interest in the whole of the Fund gave rise to a joint privilege in the document even though it was brought into existence after Ms Gibson ceased to select the FirstRate Term Deposits investment option. Colonial submits that as the email seeks advice about a proposal and does not concern matters about Colonial's prior conduct or arrangements that is a reason that supports its position that there was no joint privilege. However, for reasons that have been given, Ms Gibson had an interest in the due administration of the investments options that were to be available from time to time regardless of whether she was invested in them. Therefore, the question as to that document should be answered in the affirmative. Conclusion and orders 83 For reasons that have been given each of the questions posed by the order of 12 August 2022 (as set out in Annexure A to those orders) should be answered in the affirmative because Colonial and Ms Gibson share a joint privilege in each of those documents. 84 Each party submitted that costs should follow the event. As Ms Gibson has been entirely successful there should be an order that Colonial pay the costs of and incidental to the determination of the questions in any event. I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin. Associate: Dated: 9 June 2023	11,814
federal_court_of_australia:fca/single/2012/2012fca1442	decision	commonwealth	federal_court_of_australia	text/html	2012-12-17 00:00:00	DZACX v Minister for Immigration and Citizenship [2012] FCA 1442	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2012/2012fca1442	2024-09-13T22:50:14.966208+10:00	FEDERAL COURT OF AUSTRALIA DZACX v Minister for Immigration and Citizenship [2012] FCA 1442 Citation: DZACX v Minister for Immigration and Citizenship [2012] FCA 1442 Appeal from: DZACX v Minister for Immigration & Anor [2012] FMCA 690 Parties: DZACX v MINISTER FOR IMMIGRATION AND CITIZENSHIP and MICHAEL GRIFFIN IN HIS CAPACITY AS INDEPENDENT MERITS REVIEWER File number: NTD 26 of 2012 Judge: MANSFIELD J Date of judgment: 17 December 2012 Date of corrigendum: 9 January 2013 Date of hearing: 15 November 2012 Place: Adelaide Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 22 Counsel for the Appellant: A Burt Solicitor for the Appellant: Northern Territory Legal Aid Commission Counsel for the Respondents: B Ilkovski Solicitor for the Respondents: Clayton Utz FEDERAL COURT OF AUSTRALIA DZACX v Minister for Immigration and Citizenship [2012] FCA 1442 CORRIGENDUM 1. The name of the second respondent "CHRIS PACKER" has been deleted and replaced with "MICHAEL GRIFFIN" on the medium neutral citation page, the orders page and page 1 of the Reasons for Judgment. I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate: Dated: 9 January 2013 IN THE FEDERAL COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY GENERAL DIVISION NTD 26 of 2012 BETWEEN: DZACX Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent MICHAEL GRIFFIN IN HIS CAPACITY AS INDEPENDENT MERITS REVIEWER Second Respondent JUDGE: MANSFIELD J DATE OF ORDER: 17 DECEMBER 2012 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay to the first respondent the costs of the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY GENERAL DIVISION NTD 26 of 2012 BETWEEN: DZACX Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent MICHAEL GRIFFIN IN HIS CAPACITY AS INDEPENDENT MERITS REVIEWER Second Respondent JUDGE: MANSFIELD J DATE: 17 DECEMBER 2012 PLACE: ADELAIDE REASONS FOR JUDGMENT INTRODUCTION 1 The appellant is a 36 year old Iranian citizen, who arrived in Australia in October 2010. On 11 December 2010 the appellant made a request for a refugee status assessment. A delegate of the first respondent made a decision to refuse the application for a visa on 17 February 2011. The appellant requested an Independent Merits Review of this decision on 4 March 2011. The appellant was interviewed by the Independent Merits Reviewer (the Reviewer) and on 13 January 2012 the Reviewer affirmed the decision of the delegate of the Minister. 2 The appellant applied for judicial review of the Reviewer's decision in the Federal Magistrate's Court on 15 February 2012 (and as amended on 1 June 2012) based upon jurisdictional error. On 23 July 2012 that Court dismissed the application. The present appeal is an appeal from the decision of the Federal Magistrate. THE REVIEWER'S REASONS 3 The basis for the appellant's application for a protection visa is helpfully summarised in the Federal Magistrate's decision at [2]-[5]: 1. The grounds upon which the [appellant] claimed he was a person to whom Australia owed protection obligations arose, principally, from his involvement with his brother, who in May 2009 became a candidate in national elections. He also made a subsidiary claim on the basis of his Arab ethnicity. The [appellant] told that his brother was a Mousavi supporter and had been a candidate in the national elections, and had requested the [appellant] to assist him. The [appellant] did so. He told that he organised meetings at various mosques in support of the Mousavi campaign and his brother, in particular. 2. He told that he arranged for publicity in favour of his brother and his political party. When questioned about how that involvement caused him to be concerned for his safety he told that his brother had been arrested several times, and that he himself had lost his position in the communications department of ESS about five months after the end of the election campaign. He said that since he had lost his job, he had been unable to find a new one and he put this down to his association with his brother. He was also refused unemployment benefits. The [appellant] claimed that his brother had been arrested three times and shortly before the [appellant] had left Iran his brother told his brother-in-law, from the jail, that if he could leave the country, he should do so. 3. The [appellant] then claimed, at the IMR hearing, that after this he was taken away for interrogation and released only because his younger brother gave the deeds to his business to the authorities as a guarantee. The Reviewer questioned the [appellant] as to why this claim had never been previously made, and the [appellant] responded that he had only been asked whether he had been accused of doing anything wrong or had been in prison. The [appellant] said that he thought that being fired from his job and not getting unemployment benefits would be enough to convince the authorities that he had been persecuted. 4. The [appellant] also told that, in January 2010, he had gone to Dubai with some members of his family and had returned without incident. He had also left Iran under his own passport. 4 As to those claims, the Reviewer did not accept that the appellant was a credible witness, and found to the contrary that the appellant's claims of detention, questioning and the associated action against his family, were "recent inventions" designed to further his claim, and that his claims of being sacked from his employment and denied further employment because of his political activities were also false. The Reviewer states at [30]: Credibility is difficult to assess and should not be decided upon demeanour or reaction at interview alone. However, where there are clear inconsistencies or where some claimed history is fanciful, far-fetched or unrealistic it may be that those claims, after careful consideration, cannot be accepted as being true. There are significant inconsistencies in the history of the claims made by [the appellant]. For example, he has been interviewed several times by Department officials and made no mention of being taken in for questioning 9 days before he left Iran and said nothing of his brother lodging the deeds to his business to secure his release. It appears he also said nothing of those claims to his agents. However, one year after his arrival, he revealed those claims for the first time. His explanation for not stating them previously is that he wasn't asked and that the interviews were short. I accept that there can be problems in interpretation and that the stress of an interview situation may affect memory and/or communication. However, I do not accept that a claimant would fail to mention the principal incident that triggered his flight from the country simply because he wasn't asked or because the interviews were "short"… 5 Having formed that adverse view about the appellant's credibility, the Reviewer then considered the appellant's claim that he was at risk of harm as a result of his involvement in politics or merely his Arab ethnicity, or because he will be a returnee from a Western country. The Reviewer did not accept those claims, stating at [32]-[34]: I find it implausible that the Iranian authorities would wait until five months after the election to take action against the claimant for his claimed political activities. I find it implausible that their actions would then be limited to making him redundant in his employment and denying him unemployment benefits. I find it implausible that the authorities would somehow conspire with prospective employers to deny him employment but take no other action against him. I draw support for this conclusion from the independent country information that describes sweeping arrests of political activists for months after the election. [The appellant]'s description of his political campaigning in support of his brother was not credible. I am prepared to accept his brother's political involvement but not that claimed by [the appellant] himself. I find it implausible that the authorities would wait for 15 months after his claimed campaigning to detain and question him. I draw support for this conclusion from the fact that he was able to travel to Dubai on his own passport in January 2010 without attracting any adverse attention from the airport security system and then do that again 9 days after being detained. I am satisfied that he was and remains of no interest to the Iranian authorities. I have had regard to the documents that he has provided recently and over time. I find nothing in them that alters my assessment of his credibility or of his claim. It is beyond doubt that the government in Iran is authoritarian and repressive with an appalling record of human rights breaches (see US DOS Report). It is apparent that many minority groups in Iran experience discrimination and that political activists are dealt with severely. [The appellant] claims that Arabs like him are badly treated in Iran. However, he has not provided any evidence of being mistreated or subjected to serious harm in any form on the basis of his ethnicity. He went to school, did military service, has worked almost continuously and was able to raise a significant sum of money to fund his departure from Iran. I do not accept his claim that his family has subsequently suffered as a consequence. I do not accept that his brother's political activities have had or will in the future have any adverse effect on the claimant. I am satisfied that he has fabricated the claims. There is no credible evidence to suggest that he is of particular adverse interest to the Iranian authorities or actively sought by them. As to him being a risk of harm as a returnee, there is no credible evidence to support the claim that he will be persecuted because he left the country and will be considered to be a spy. I draw support for this conclusion from the fact he went to Dubai in 2010 and returned without any difficulty. The claim that he would be suspected of being a Western spy or collaborator is speculation and there is no objective evidence to support that claim. THE FEDERAL MAGISTRATE'S REASONS 6 There were three grounds of review advanced before the Federal Magistrates Court: (1) The Reviewer failed to consider whether the appellant would be at risk of future harm by reason of his imputed political opinion: Particulars (a) The Reviewer accepted the appellant's brother's political involvement. (b) There was country information before the Reviewer that suggested that the relatives of post-election protestors had been heavily targeted, including those who resided in Iran and those who had left and were seeking asylum. (c) The Reviewer failed to consider whether the appellant was at risk of serious harm on the basis of an imputed political opinion arising from his brother's political involvement and activism. (2) The Reviewer failed to consider whether the appellant faced a real chance of persecution in the future by reason of his ethnicity: Particulars (a) The Reviewer made reference to the appellant's claim that he was at risk of persecution by reason of his Arab ethnicity. (b) The Reviewer found that the appellant had not suffered harm in the past by reason of his ethnicity. (c) The Reviewer confined its inquiry to whether the appellant had suffered serious harm for reason of his ethnicity in the past and failed to consider whether the appellant was at risk of future harm by reason of his Arab ethnicity. (3) The Reviewer failed to consider the claim that the appellant would be imputed with a political opinion as a result of seeking asylum in Australia and/or failed to take into account relevant considerations. Particulars (a) The Reviewer found that there was no credible evidence to support the claim that the appellant would be persecuted for leaving his country and considered a spy. (b) The Reviewer dismissed as speculative the claim that the appellant would be suspected of being a Western spy or collaborator. (c) The claim advanced by the appellant was that he was at risk of persecution for reasons of an imputed political opinion as a result of seeking asylum. (d) The appellant also claimed that relatives of post-election protestors were heavily targeted, including those who had left and were seeking asylum. (e) The Reviewer failed to consider the claim advanced on behalf of the appellant, namely that he was at risk of persecution for reasons of an imputed political opinion as a result of seeking asylum in Australia and/or failed to take into account relevant considerations. 7 With respect to Ground (1), the Federal Magistrate found that the separate consideration of the imputed political opinion of the appellant on the basis of the appellant's political opinion is found in [33] of the Reviewer's decision, namely: I do not accept that his brother's political activities have had or will in the future have any adverse effect on the claimant. 8 The Federal Magistrate considered that this responded to the claim and so Ground (1) had no merit: at [16]. 9 With respect to Ground (2), the appellant submitted in essence that the Reviewer only considered the past and not the potential for the appellant to suffer serious harm in the reasonably foreseeable future. The Federal Magistrate rejected this Ground on the basis that the Reviewer had concluded that the appellant would not be vulnerable to persecution based on his ethnicity because he had not been exposed to any ill-treatment in the past for that reason. He stated at [20]: If you do not have a well-founded fear, there is no need for a Reviewer to consider whether or not you will be persecuted should you return to your home country now or in the reasonably foreseeable future; the one is dependent on the other… 10 With respect to Ground (3), the Federal Magistrate considered the appellant's submissions did not reflect what was put before the Reviewer for determination. The "new" submission was that the Reviewer should have considered whether or not any danger that the appellant might have feared as a returnee may have been enhanced or made more poignant or relevant because of the political opinion of his brother: at [23]. The Federal Magistrate considered that that claim was not put before the Reviewer, and that accordingly, the conclusion the Reviewer came to was open to it. The Federal Magistrate states relevantly at [24]: The Reviewer was, to my mind, entitled to come to that view and should not be found to have fallen into error because he did not consider a way of putting the [appellant]'s claim that was not put and which one would not really class as a "substantial, clearly articulated argument relying upon established facts": Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 at [24] per Gummow and Callinan JJ, Hayne J agreeing at [95]. 11 The Federal Magistrate considered the appellant's new characterisation of the claim as originally put was one of creativity, and therefore it was not a reviewable error of the Tribunal not to have not considered it in that way. CONSIDERATION 12 The Federal Magistrate's findings in respect of Grounds (1) and (2) have not been appealed against. The appellant appeals against the Federal Magistrate's findings on Ground (3) on the following basis: The learned Federal Magistrate erred in finding that the Reviewer had not failed to consider the appellant's claim that he would be imputed with a political opinion as a result of seeking asylum in Australia and/or had not failed to accord the appellant procedural fairness and/or had not failed to take into account relevant considerations in the assessment of the appellant's claim of risk as a failed asylum seeker. As the oral submissions indicated, the issues of lack of procedural fairness and failure to take account of relevant considerations were not in fact separate issues but simply different ways of saying that the Reviewer had failed to consider one of the appellant's claims. It is uncontentious that the Reviewer was obliged to consider each of the claims made by the appellant: NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2004) 144 FCR 1. Black CJ, French and Selway JJ in that case at [58] said that a claim need not be expressly advanced, provided it is apparent on the face of the material before [in that case] the Refugee Review Tribunal. However, the decision maker is not required to be creative in identifying the claims made on the material. In Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088, [2003] HCA 26, Gummow and Callinan JJ explained that the it was the failure to respond to "a substantial, clearly articulated argument relying upon established facts" that would result in a failure to accord the appellant natural justice: at [24]. 13 The appellant submits that the Federal Magistrate did not in his judgement consider the appellant's brother's political activities and/or profile and the impact this might have on the appellant as a returnee. This claim, the appellant submitted, was not contingent upon whether the Reviewer accepted the appellant's evidence about his own political activities or the claimed harm he had suffered in the past. The foundation for the claim was that the appellant would be a returned failed asylum seeker, who, according to available country information might be monitored by the authorities upon return in conjunction with his brother being well known to the authorities as a political opponent. 14 The appellant's claim of fearing persecution as a returnee or failed asylum seeker with that additional element of being associated with his brother was said to have been presented, as a cogent and separate claim, on the following basis: (1) In response to the question at the appellant's entry interview "do you have any reason for not wishing to return to your country of nationality" the appellant answered "because if I go back to Iran, I would end up like my brother. I would be arrested and be put in jail." (2) In his statutory declaration of 11 December 2010, the appellant referred to his brother having been arrested and to the appellant leaving Iran because he too feared arrest. He said he feared that fate if he returned. In a separate brief paragraph he added that "As a failed asylum seeker if I return to Iran I will be persecuted". (3) In the appellant's submissions to the Reviewer (through his migration agent) it was claimed that if the appellant returned to Iran "as a failed asylum seeker he faces a real chance of arrest due to his support to the political activities of the Iranian opposition leader, Mousavi." (4) It was also claimed in the same submissions that the appellant had a well-founded fear of persecution because his brother was "not an ordinary person who merely supported Mousavi's campaign, rather [the appellant's] brother was and still is an outspoken opponent to the Iranian regime and consequently the association and assistance [the appellant] personally provided to his brother and the Mousavi campaign, places him at a real chance of persecution if he is returned to Iran." (5) In the same submission, under the heading "Would [the appellant] be persecuted for reasons of an imputed political opinion as a result of him seeking asylum in Australia if he was returned to Iran" it was stated at [92]-[93]: The delegate further stated that given the lack of any political profile held by [the appellant] or adverse attention directed at [the appellant] prior to his departure, he did not accept that the relatively short period of time [the appellant] had spent in immigration detention, including [the appellant's] decision to seek asylum in Australia, would result in [the appellant] being imputed as corrupt or embracing western society. We submit the delegate has erred when making the decision and has not considered all relevant information when making this adverse finding, including that: [T]he relatives of post-election protestors have been heavily targeted, [including] those of persons residing inside Iran, those who have left and are seeking asylum, and those who were already abroad and engaged in protests outside Iran. [Emphasis in submission.] 15 In addition, the appellant submitted the following country information before the Reviewer was also relevant: If the [Iranian] regime is aware that an individual that has claimed political asylum overseas has returned to Iran, it is possible it will seek to at least monitor that individual. We are not/not aware of a widespread pattern of maltreatment by authorities of returning failed asylum seekers. However it is possible in isolated cases. If the regime was aware of a failed asylum bid, it could use this information to pressure individuals with regard to other issues. And separately, in the country information update: We would add that those who disagree with the regime, particularly post-election protestors, are now frequently labelled 'seditionists' and not 'political dissidents'. 16 The first respondent submitted that the Federal Magistrate was correct in his finding that the particular claim was not put before the Reviewer, and that the appellant's present contention did not constitute a substantial, clearly articulated argument or claim requiring separate consideration by the Reviewer. Further, the Reviewer addressed the potential future harm that the appellant claimed at [16] of the reasons, stating "I do not accept his claim that his family has subsequently suffered as a consequence. I do not accept that his brother's political activities have had or will in the future have any adverse effect on the claimant." 17 In my judgment, the Federal Magistrate is not shown to have erred in the conclusion that the particular claim, namely that the appellant was at risk of persecution as a failed asylum seeker who would be of particular interest to the authorities because of his brother's anti-regime activities need not have been considered by the Reviewer. 18 The Entry Interview is an extensive document. Part C comprises 22 questions. The first asks why the appellant left Iran. The answer concerned the appellant's active support for his brother's campaign for Mousavi, and including that since he had left Iran his brother had in fact been arrested. As noted, the Reviewer did not accept that the appellant had done what he claimed to have done to support his brother and concluded the appellant was of no interest to the Iranian authorities. It was specifically rejected that his brother's activities have had or will in the future have any adverse effect on the appellant. The final question concerned the appellant's reasons for not wishing to return to Iran. 19 The answer, referred to above, does not in context indicate a more extensive claim to fear persecution by reason of being a failed asylum seeker. In context, it is simply another way of the appellant saying what he had earlier said in answer to the first question. 20 Nor do I consider that his statutory declaration of 11 December 2012 signals the independent or additional claim of fearing persecution as a particular type of failed asylum seeker, that is, one whose family is associated with anti-regime activities. Again, the consistent theme of that relatively brief document is fearing persecution because of an imputed political opinion arising from conduct in support of his brother which the reviewer did not accept. The separate claim to fear persecution as a failed asylum seeker was not in any way said to be enhanced because of his brother's activities. 21 Finally, I do not consider that that refined claim as a failed asylum seeker was expressed or identified clearly in the submissions to the reviewer. Certain parts of that document are somewhat loosely expressed. Its primary focus, not surprisingly, is upon the political opinion that might be imputed to the appellant because of his support of his brother's activities. One section of that submission does contend that the relatives of post-election protesters have been heavily targeted, including those who have left and are seeking asylum. In context, despite the emphasis added in the submission (noted above) that does not amount to a claim that the appellant was at greater risk because he had left Iran and might return as a failed asylum seeker than if he had remained in Iran. There are simply three categories of relatives who have been identified, but the reviewer has expressly found that the appellant was not among them. In one sentence of that lengthy submission, referred to at [14(3)] above, reference is made to him facing arrest as a failed asylum seeker due to his support of the opposition leader's activities. That is the claim which the reviewer rejected. The reviewer did not accept that he had provided that support. It is not, in my view, a claim that he was more vulnerable to persecution as a failed asylum seeker because of his brother's profile. CONCLUSION 22 For those reasons, my view is that the Federal Magistrate did not err in the manner asserted. I am not persuaded that the appellant expressed a claim to be vulnerable to persecution as a failed asylum seeker whose brother had a particular anti-regime profile. It follows that the appeal must be dismissed. The appellant is to pay the costs of the first respondent on the appeal. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate: Dated: 17 December 2012	5,454

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