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UWA was ordered to pay the costs of Dr Gray and Sirtex. A cross-claim brought by Sirtex against UWA was dismissed and Sirtex ordered to pay UWA's costs of that cross-claim. Sirtex succeeded in its cross-claim against Dr Gray. Any party in respect of whom an order for costs has been made in the preceding orders is at liberty to file and serve written submissions on or before 8 May 2008 seeking a variation of the costs order. 15. Any party who wishes to respond to a written submission filed pursuant to the preceding order is to do so by filing and serving a written submission by 29 May 2008. 1.3 Any other order that the Court sees fit. That affidavit concerned settlement negotiations between UWA and Sirtex which had occurred in 2007 prior to the commencement of the hearing. 4 By way of background the solicitors for UWA had sent an open settlement offer to Sirtex on 5 September 2006. The letter of offer was exhibit 243A at trial. In substance the letter proposed that UWA would licence Sirtex, on a world-wide basis, to exploit the patents in contention, the licence to be retroactive to 29 April 1997. A discounted licence fee would be payable. UWA would be recorded as owner of the patents. A 4% royalty on the net price of products using or embodying any claim of any one or more of the patents was proposed. The UWA proceedings against Sirtex would be discontinued with no order as to costs. UWA required that Sirtex cooperate with it in the further conduct of the proceedings against Dr Gray. The offer was accompanied by contentions that the directors of Sirtex were aware at all material times of UWA's interest in the intellectual property. The offer was not accepted. 5 The trial was scheduled to begin in the week commencing Monday, 12 March 2007. On Saturday, 10 March 2007, the solicitors for UWA again wrote to the solicitors for Sirtex making an "Open Offer". The proceedings in WAD 292 of 2004 in so far as they subsist between the University and Sirtex to be discontinued with no order as to costs. 5. A Deed of Release to be executed by the University and Sirtex under which both parties will irrevocably release each other from all claims made against each other in the Proceedings. 6. It is a condition precedent to settlement in accordance with this offer that Sirtex withdraws its opposition to the implementation of the settlement between the University and the Cancer Research Institute Inc, which was approved by the Federal Court of Australia on 9 March 2007. 7. This offer is an open offer and may be withdrawn at any time prior to acceptance by notice in writing served by the University upon Sirtex or its legal representatives in the proceedings. 6 Sirtex responded to UWA's offer through its solicitors by a letter dated 14 March 2007, the day prior to the actual commencement of the trial. In that letter Sirtex responded to the allegations about the awareness of its directors which UWA had made in its letter of 10 March 2007. Sirtex said, in its letter, that it was inappropriate for UWA to make such allegations as there was no evidence to support them. Sirtex nevertheless indicated that it was prepared to resolve the dispute on the terms set out in an attached Deed of Settlement. It also stated that it was content to consider any reasonable amendments to the Deed proposed by UWA provided that they were designed to clarify or perfect its terms, but not otherwise impact on its substance. If the offer were accepted it would no longer be necessary for Sirtex to pursue its cross-claim against CRI. Sirtex notes UWA's interest in a Scholarship to be funded by Sirtex. We are instructed that Sirtex would be happy to consider such a proposal (or a proposal to sponsor research undertaken at UWA) following the resolution of these proceedings. Sirtex reserved all of its rights and stated it would rely upon the letter to claim indemnity costs from that date. 7 The Deed of Settlement attached to the letter provided for a mutual release by UWA and Sirtex of each other and their associated entities from all claims made against each other in the proceeding or arising from or in connection with its subject matter including all claims for transfer of ownership of the patents in contention. It also provided for UWA to acknowledge Sirtex's ownership of the patents and undertake not to challenge Sirtex's entitlement to remain their registered owner. UWA would undertake to take all reasonably necessary steps to ratify, perfect and/or defend Sirtex's registration and/or ownership of the patents as requested by Sirtex in writing. These provisions were stated to be without prejudice to UWA's right to claim against Dr Gray that it had a beneficial interest in the patents for the purposes of its claim to his shareholding in Sirtex. 3.2 Sirtex shall not be liable to provide UWA with the Share Allotment or the Settlement Amount in accordance with clause 3.1 of this Deed if UWA does not have Substantial Success against Gray in the Proceeding. The "Share Allotment" was defined as "an issue of shares in Sirtex to the value of $1.5m (rounded up)". The value of the shares was to be calculated by reference to the Volume Weighted Average Price for the five business days commencing two days after the Settlement Date. The Settlement Date was defined as "the date of exchange of the duly executed counterparts of this Deed". 11 Mr Price said in his initial affidavit that no response was received to the offer from UWA. That statement was erroneous as he acknowledged in a second affidavit. We refer to your letter dated 14 March 2007 with respect to an offer to settle by Sirtex Medical Limited. 2. The offer of settlement is unacceptable to our client. 3. The effect of your offer of 14 March 2007 is to reject our client's offer of 10 March 2007. That is, it is no longer open to your client to accept it. Makes the declarations sought in Order 7 of the second substituted application filed 1 March 2007 ("the Application"). 2. Subject to the undertaking by the applicant in paragraph 3 hereof, makes orders 8 to 10 sought in the application. 3. Notes the undertaking of the applicant to the Court that it will not seek to enforce the above order 2 upon the entry by Sirtex into a deed whereby the applicant will be entitled to royalties with respect to the intellectual property identified in the attached schedule in an amount as agreed between the parties within 14 days or as ordered by the Court upon the appointment and report of an expert pursuant to FCR Order 34 rule 2. 4. Order the second respondent to pay the applicant royalties in the amount set in accordance with order 3 above for the period 1 May 1997 to the date of judgment together with interest thereon. 5. Costs. 13 A proposed deed in accordance with the proposed order 3 was annexed to the submissions. The Deed provided for Sirtex to pay a royalty in respect of the exploitation of products using or incorporating a claim under any of the patents and patent applications specified in Schedule 1 to the Deed including any Confidential Information comprised in or relating to the inventions the subject of the patents. The Deed would have contained an acknowledgment by UWA that nothing in it transferred title to the patents to UWA. UWA would have ratified, with effect from the date of execution of the Deed, each of the assignments to Sirtex pleaded in its statement of claim. The Deed included an undertaking by UWA not to challenge or question Sirtex's title to or interest in each of the patents, the validity of any of the patents or any application by Sirtex to register a trade mark in connection with any of the patents. It is not necessary to go further into the details of the deed, the substance of it is clear enough from the preceding outline. 14 On 2 May 2008 the solicitors for Sirtex wrote to the solicitors for UWA seeking its consent to an order for indemnity costs. That case having failed, the claim against Sirtex cannot succeed and will be dismissed. I should add as I have already found that Sirtex was not at any time on notice of a potential claim by UWA through any of its directors other than Dr Gray. The application of any cause of action based on knowing involvement in his alleged breaches of fiduciary duty would have depended entirely upon his role as a director of Sirtex and whether his knowledge could be attributed to the company. 15 On 8 May 2008, the time for filing an appeal from the primary judgment of 17 April 2008 expired. UWA filed a notice of appeal in respect of the dismissal of its application against Dr Gray. It has not appealed against the dismissal of its application against Sirtex. Sirtex acknowledged that its success in the cross-claim against Dr Gray left it open to seek from him, by way of damages, the difference between the costs it would recover from UWA on a party and party basis and the costs it had actually incurred in these proceedings. It submitted that having regard to UWA's conduct in refusing its offer justice required that the difference in costs be borne by UWA. Dr Gray had no control over the conduct of UWA in responding to the Sirtex offer. 17 Counsel for Sirtex submitted that it was clear at the time that UWA refused the offer that it was seeking to maintain an untenable position under which it would have everything from everybody. 18 In its written outline of submissions, Sirtex acknowledged that the power to award indemnity costs is in the Court's discretion and would be exercised "when the justice of the case so requires": Federal Court of Australia Act 1976 (Cth) s 43(2). As Sirtex put it the question for determination was whether it was unreasonable for UWA to reject its offer. A conditional offer to settle was properly the subject of consideration by the Court. (b) UWA is in a significantly worse position as a result of running its trial against Sirtex than it would have been had it accepted the offer. (c) Assessed at the time of the offer, but with the benefit of hindsight (and even without the benefit of hindsight), UWA was highly unlikely to succeed in its claim. (d) It was entirely unnecessary for UWA to pursue a claim against Sirtex when it had two other respondents with very substantial assets available to them which would have satisfied the claims of UWA realistically put at their highest. (e) UWA initiated the "open offer" regime as a means of seeking to gain an advantage in relation to any award of costs. 20 Sirtex, after referring to the absence of merit in the UWA case, submitted that the condition contained in its offer that UWA achieve "Substantial Success" against Dr Gray was, for two reasons, reasonable and prudent on the part of the board of a publicly listed company protecting innocent shareholders. The case against Sirtex was contingent upon UWA's succeeding against Gray. That was self-evident on the pleadings. Secondly, UWA had maintained at all times that the conditions of Substantial Success would be satisfied. 21 Sirtex was a public company. There was no question of its solvency at the time the open offer was made nor any need for security to be provided to support its offer. Sirtex submitted that in substance it was offering UWA a very substantial sum to resolve the matter as between them on a condition that UWA have Substantial Success against the alleged primary wrong doer. This was in circumstances where UWA had secured the potential fruits of any judgment against Gray and CRI. 22 Sirtex referred to the dates at which affidavits of evidence were filed. UWA's affidavits in chief were filed on 5 December 2006. Dr Gray's affidavit in chief was filed on 31 January 2007 and Sirtex's affidavits on 20 and 21 December 2006. UWA, it said, had nearly three months to consider Sirtex's evidence and six weeks to consider Dr Gray's evidence before the Sirtex offer was made. The evidence referred to, it was said, should clearly have indicated to UWA that its case against Sirtex was hopeless. There was no implied contractual term conferring an interest on UWA in respect of intellectual property developed by Dr Gray. 2. Although Dr Gray was conducting research for the benefit of some entity other than UWA there was no claim against him for breach of fiduciary duty on that account. 3. UWA had no capacity to alienate or interfere with substantive property rights by regulation. 4. The Intellectual Property Regulations were not promulgated at the relevant time. 5. UWA had repeatedly failed to make a timely claim against Sirtex. 6. Professor Barber's reply to the Gorn letter was written in his capacity as Acting Vice Chancellor. 7. UWA adopted a deliberate strategy of withholding knowledge of a potential claim. 8. Sirtex was not put on notice of the claim until October 2004. 9. The claim, when finally made, was misleading. 10. UWA advanced for the first time in its closing submissions the contention that Sirtex was a volunteer but then decided not to press the submission. 11. UWA could not rely on Dr Gray's knowledge to claim against Sirtex. This factor depends upon submissions on which no finding was made. 12. There was no answer to Sirtex's defences based on estoppel, laches and delay. 13. The relief sought by UWA was untenable. 23 The preceding considerations were in part derived from findings made in the judgment. Some aspects involving UWA's reliance upon Dr Gray's knowledge to support its claim against Sirtex and the absence of any "answer" to defences based on estoppel, laches and delay reflect an assumption that Sirtex would have succeeded in relation to those matters. That is not to say they would not have succeeded. However there was no determination of those matters in the judgment. 24 Sirtex submitted that to the extent that it had incurred costs on and after the closure of its open offer on 19 March 2007 commensurately Dr Gray's exposure under the cross-claim had increased. If the Court were to accept its submissions that UWA's refusal to accept its offer was unreasonable, then it only seemed appropriate that the extra costs fall at the feet of UWA rather than Dr Gray. The sum offered was inclusive of costs and made shortly prior to the commencement of the trial at which time the parties had already incurred very substantial costs. It was difficult for UWA to ascertain what, if any, amount was attributed in the offer to the value of its claims and what amount, if any, attributed to costs. 2. There was a real difficulty in ascertaining the value of the offer so as to compare it to the value of the relief claimed against Sirtex. A calculation of the value of the offer required UWA to assign values to the amount offered and the likelihood of various contingencies. 3. The sum offered did not vary according to the extent of UWA's success. 4. The sum offered was contingent upon UWA succeeding in its claims against Dr Gray. In the circumstances that have arisen where UWA failed against Dr Gray and Sirtex failed in its cross-claim against UWA, UWA is only worse off than it would have been if it had accepted the offer in that it has now been ordered to pay Sirtex's costs of the trial except insofar as they are referable to the costs of Sirtex's cross-claim against Dr Gray. 5. Regardless of whether the offer was accepted by UWA, Sirtex would still have been an active participant in the trial by reason of its cross-claim against Dr Gray. 6. The time for payment did not arise until after the conclusion of any appeal or time for appeal. 7. The Court had not had occasion to consider the relief to which UWA would have been entitled if it had succeeded in establishing liability. 8. The offer was made on the eve of the trial and was expressed to be open for acceptance for a period of five days, representing in total three business days. 26 Sirtex's submissions in reply, filed on 1 July 2008, referred to various cases for the proposition that in assessing the reasonableness of an offer the Court should have regard to the ultimate analysis by the Court of uncontroversial facts. The finding that there was an implication of law in Dr Gray's employment was based on essentially uncontroversial facts. 27 In relation to the contingency attached to the offer, Sirtex observed that UWA's case against it was necessarily a contingent one. It would have been a major compromise for Sirtex to forego its right to costs to that date from UWA. (b) UWA was plainly materially worse off for having rejected Sirtex's offer. It is liable for Sirtex's costs. It has no chance of obtaining a payment of $1.5 million or an equivalent value of Sirtex shares. It has appealed against the dismissal of its application against Dr Gray and regards itself as entitled to succeed against him. In those circumstances, it was submitted UWA could not say it was not worse off. UWA had argued that it improved its position by running the trial because it succeeded against Sirtex in respect of Sirtex's cross-claims. But that cross-claim only arose if UWA succeeded in any of its claims. 28 Sirtex submitted there was no uncertainty as to the meaning of "Substantial Success" in the proposed Deed. The suggestion of uncertainty was only raised by UWA for the first time on 3 June 2008. It did not suggest in March 2007 that it had any difficulty understanding the offer that had been put. As to the date from which indemnity costs should be ordered, and in the light of Mr Price's correcting affidavit of 3 June 2008, that UWA rejected Sirtex's offer on 15 March 2007, it was submitted that UWA should pay indemnity costs from that date. Many of these cases turn on their own facts. The starting point for consideration of the motion is the discretion in relation to costs conferred upon the Court by s 43 of the Federal Court Act. 30 Ordinarily that discretion will be exercised so that costs follow the event and are awarded on a party and party basis. A departure from normal practice to award indemnity costs requires some special or unusual feature in the case: Alpine Hardwood (Aust) Pty Ltd v Hardys Pty Ltd (No 2) [2002] FCA 224 ; (2002) 190 ALR 121 at [11] (Weinberg J) citing Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233 (Sheppard J). 31 Order 23 provides for offers of compromise. In this case it was not suggested that the Sirtex offer complied with the requirements of O 23. In any event that Order is not a code. 32 The general principles governing the exercise of the discretion to award indemnity costs after rejection by an unsuccessful party of a so called Calderbank letter were set out in the judgment of the Full Court in Black v Lipovac [1998] FCA 699 ; (1998) 217 ALR 386. Mere refusal of a "Calderbank offer" does not itself warrant an order for indemnity costs. To obtain an order for indemnity costs the offeror must show that the refusal to accept it was unreasonable. 3. The reasonableness of the conduct of the offeree is to be viewed in the light of the circumstances that existed when the offer was rejected. 33 The preceding general principles inform the exercise of the discretion. That discretion is not to be fettered by transformation of approaches and practices developed through the cases into quasi statutory rules. It is not a necessary condition of the power to award costs that a collateral purpose be shown. 34 I accept that the making of a rolled up offer inclusive of costs and interest may detract from the weight to be given to its refusal in the exercise of the discretion. Finn J referred to authorities on the point in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 688 ; (2003) 201 ALR 55 at [34] . His Honour cited single judge decisions to the effect that such offers ought not to be a relevant consideration on the question of costs and would not be considered in the same way as a Calderbank letter. His Honour was invited to depart from that line of first instance authority. However he was not prepared to say it was clearly wrong. 35 While respecting the general approach to rolled up offers reflected in the cases to which Finn J referred, such approaches cannot be calcified into rules of law which fetter a general discretion. They simply reflect a common sense proposition that generally speaking such an offer is not unreasonably refused. There may, however, be circumstances where a rolled up offer, refused by an applicant who is unsuccessful, may support a claim for indemnity costs. 36 On the question of the level of unreasonableness necessary to attract the discretion, I respectfully agree with the comment of Sackville J in Seven Network Limited v News Limited (2007) 244 ALR 374 at [62] questioning the utility of substituting a requirement that rejection be "plainly unreasonable" for the requirement that it be "unreasonable". Given the evaluative character of the judgment involved the addition of the word "plainly" which is itself evaluative, has no useful function. UWA establishing its case against Dr Gray and, in particular, that he had breached his fiduciary duty. 2. UWA establishing that Sirtex was accessorially liable in relation to that breach, a position that depended upon establishing that Sirtex was aware of facts constituting (and which would have indicated to a reasonable person) the breach of fiduciary duties owed by Dr Gray to UWA. 38 It cannot be said that UWA acted unreasonably in proceeding on the basis that it had a reasonable cause of action against Dr Gray. True it is that the case as framed and presented depended upon an important proposition of law as to the existence of an implied term in the contract of Dr Gray's employment with UWA. But the correctness of that proposition had not previously been tested in Australia in circumstances of the kind which arose in this case. This is not a case, in my opinion, in which it is appropriate to take a hindsight test to the facts known to UWA at the time of Sirtex's offer and conclude that it ought to have known that the law was against it. 39 There were of course other hazards in the way of UWA's path to success against Dr Gray and therefore against Sirtex. The question whether the relevant inventions were made while Dr Gray was an employee of UWA was one issue upon which findings adverse to UWA were made on all but the DOX-Spheres technology. There was also a finding adverse to UWA that none of the Sirtex directors, apart from Dr Gray, were on notice of a potential claim. To establish any cause of action against Sirtex based on knowing involvement in his alleged breaches of fiduciary duty would have depended entirely upon his role as a director of Sirtex and whether his knowledge could be attributed to that company. In addition, UWA faced substantial defences by Sirtex based on UWA's delay in commencing proceedings after it first became aware of the facts relevant to its claimed causes of action. 40 The preceding factors may be seen as weighing to some degree in favour of the Sirtex motion. On the other hand the offer came as the trial commenced. That is a factor, given the focus on the trial process which would then have existed, that militates against a finding of unreasonableness on the part of UWA in refusing the offer. That conclusion is not affected by the fact that Sirtex was making a counter-offer. The counter-offer was not a variation on a theme opened by UWA's offers. It was quite different and could have been proposed earlier. 41 It is also relevant that the offer made no break-up between recovery and costs and interest. To that extent its refusal is less readily able to be characterised as unreasonable. 42 UWA was entering into a complex piece of commercial litigation. The initial letter of demand to Sirtex indicated a level of confidence which was unrealistic given those complexities. But that unrealistic level of confidence does not mean that it did not have an arguable case. 43 There is a mix of factors in this case which are related to the exercise of the discretion which Sirtex seeks to invoke. Some point one way, some another. In the end I am not persuaded that the refusal of the Sirtex offer by UWA was so unreasonable in the circumstances that I ought to award indemnity costs against it. The motion for indemnity costs will be dismissed. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

indemnity costs calderbank letter refusal of offer whether refusal unreasonable variety of factors relevant to assessment of unreasonableness indemnity costs refused costs

The decision in question is that of the respondent, an employee of the Australian Taxation Office (ATO). The applicant has issued four other sets of proceedings against individual officers of the ATO. The events with which each proceeding is concerned are related. The reasoning on determination of each proceeding is also similar. The respondent objects to the competency of the application on the basis that the decision the subject of the application was a decision making or forming part of the process of making assessments under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act) and is excluded by Sch 1 of the ADJR Act. Ivyside claimed GST input tax credits with respect to various purchases in relation to the company. On 22 May 2007, the respondent advised the applicant that the claims at 'label G11' on his activity statement for the period July to September 2006 would be disallowed because valid tax invoices were not produced to substantiate the amount of GST credits claimed. The ATO subsequently issued the applicant notices pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) and s 353- 10 of the Taxation Administration Act 1953 (Cth) (TAA). On or around 3 October 2007, the ATO issued the applicant an amended assessment and penalties for the July to September quarter of 2006. The applicant asserts that the decision of the respondent included 'purposeful mental and emotional pain and suffering the respondent is inflicting on the applicant; the applicant seeks relief from this harassment; oppression; and unlawful activities of the respondent'. However, in the affidavit in support of the application, the applicant clarifies that the decision of which he is seeking review was the decision by the respondent to deny and refuse him the right to an informal review of a GST issue relating to Ivyside. He stresses in his affidavit that it is not the original decision made by the respondent to disallow the GST entitlements but rather the decision to deny and refuse him an informal review. In support of that claim he annexes a document entitled 'Having your GST issue reviewed'. Generally, an informal review is conducted by an officer who is not involved in the original decision. We will advise you of the outcome of the review, which could include changing the decision or advice, or confirming it. If you'd like to request an informal review, you should contact the person handling your case or the office where the decision was made. This communication was apparently sent by email on 2 January 2008. The applicant also annexes a much earlier letter from the ATO (23 August 1999) in which an apology is extended for distress and inconvenience which had been caused to the applicant and his wife in previous dealings. Assuming that the basis on which review is sought in this matter is a refusal to grant an informal review, the respondent complains that there is no evidence of a request for an informal review and there had been no agreement to conduct an informal review. More importantly, even if there had been such an agreement, a failure to do so would not constitute a decision as defined in s 3(1) and s 3(2) of the ADJR Act as no substantive rights would be affected by such a decision. The annexure appears to relate to refusal to provide an informal review of 'the audit ... conducted', again of which there is no evidence. As observed in Mirvac Homes (NSW) Pty Limited v Airservices Australia (No 1) [2004] FCA 109 by Branson J, the provision in the Federal Court Rules for the filing and service of a notice of objection to competency is intended to encourage a respondent to inform the applicant promptly that the jurisdiction of the Court is in issue. The filing of a notice of objection to competency also places the Court on notice that its jurisdiction to make the orders sought by the applicant in the proceeding is challenged. The Court must then decide, before it makes the orders sought by the applicant or any substantive orders, whether it has jurisdiction to proceed ( R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 ; (1979) 143 CLR 190). In Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 , Finkelstein J at [239] expressed the view that, where an issue which is properly characterised as jurisdictional is raised, it should be dealt with at the outset although a different approach was taken in Khatri v Price [1999] FCA 1289 ; (1999) 95 FCR 287 per Katz J at [14]). Whether or not it is necessary to resolve the jurisdictional issue at the outset, it appears to me that the current jurisdictional argument is succinct and independent in the sense that it can be resolved without any other evidentiary enquiry. If the argument is correct, there seems no obvious reason in this case why consideration of the jurisdictional challenge should be further deferred. Deferral has not been sought by the applicant. (As distinct from raising opposition to the objection). The applicant complains that for a period of 9 years between 1990 and 1999 the Commissioner of Taxation (the Commissioner) caused distress to him and his wife by failing to meet the requirements of the ATO Taxpayer's Charter. The applicant relied upon a written apology from the Commissioner dated 23 August 1999. That communication thanks the applicant for taking the time to contact the 'Problem Resolution Service' about legal action being taken against the applicant and his wife. Details relating to specific ATO officers have been referred to their manager for appropriate action. In addition, I have recommended the ATO procedures that brought about the legal action in your case be reviewed to ensure this type of problem does not occur again in the future. Therefore, the decision by the Commissioner to disallow GST input credits claimed by Ivyside would be excluded pursuant to Sch 1(e) of the ADJR Act. Accordingly the substituted ground of the alleged refusal to conduct an informal review would not be a 'decision' at all. He contends that the respondent's decision or conduct is reviewable in this Court and it falls within the class of decisions to which the ADJR Act applies. Section 5 of the ADJR Act provides that a person aggrieved by a decision to which the Act applies may apply to the Court for an order of review on certain grounds. Section 6 of the ADJR Act provides for review of conduct, engaged in, being engaged in or proposed to be engaged in for the purpose of making a decision to which the ADJR Act applies. It is apparent from the definition of 'decision to which this Act applies' in s 3 of the ADJR Act that the Act only applies where there is a making of, proposal to make or requirement to make a decision, the decision is of an administrative character, and the decision is made under an enactment. It is clear that a "decision to which this Act applies" must be a decision of an administrative character, that it may be made in the exercise of a discretion, and that it must be made under an enactment. But these characteristics provide little guidance as to the meaning of the word "decision" upon which the definition in s.3(1) is based. First, the reference in the definition in s.3(1) to "a decision of an administrative character made ... under an enactment" indicates that a reviewable decision is a decision which a statute requires or authorizes rather than merely a step taken in the course of reasoning on the way to the making of the ultimate decision. Secondly, the examples of decision listed in the extended definition contained in s.3(2) are also indicative of a decision having the character or quality of finality, an outcome reflecting something in the nature of a determination of an application, inquiry or dispute or, in the words of Deane J., "a determination effectively resolving an actual substantive issue ". Thirdly, s.3(3), in extending the concept of "decision" to include "the making of a report or recommendation before a decision is made in the exercise of a power", to that extent qualifies the characteristic of finality. Such a provision would have been unnecessary had the Parliament intended that "decision" comprehend every decision, or every substantive decision, made in the course of reaching a conclusive determination. Finally, s.3(5) suggests that acts done preparatory to the making of a "decision" are not to be regarded as constituting "decisions" for, if they were, there would be little, if any, point in providing for judicial review of "conduct" as well as of a "decision ". On the one hand, the purposes of the A.D.(J.R.) Act are to allow persons aggrieved by the administrative decision-making processes of government a convenient and effective means of redress and to enhance those processes. On the other hand, in so far as the ambit of the concept of "decision" is extended, there is a greater risk that the efficient administration of government will be impaired. Although Bowen C.J. and Lockhart J. appeared to emphasize the first of these considerations in Australian National University v. Burns , there comes a point when the second must prevail, as their Honours implicitly acknowledged. To interpret "decision" in a way that would involve a departure from the quality of finality would lead to a fragmentation of the processes of administrative decision-making and set at risk the efficiency of the administrative process. With the exception of s.3(2)(g), the instances of decision mentioned in s.3(2) are all substantive in character. Moreover, the provisions in sub-ss. (1), (2), (3) and (5) of s.3 point to a substantive determination. In this context the reference in s.3(2)(g) to "doing or refusing to do any other act or thing " (emphasis added) should be read as referring to the exercise or refusal to exercise a substantive power. I do not perceive in s.16(1)(b) or in par. (e) of Sched.1 or par. (a) of Sched.2 to the A.D.(J.R.) Act any contrary implication. These exclusions from the A.D.(J.R.) Act or from s.13 appear to have been introduced for more abundant caution and it would be unwise to take too much from them. Views on whether or not particular decisions or conduct constitutes a reviewable decision have not always been unanimous (for example, Guss v Federal Commissioner of Taxation [2006] FCAFC 88 ; (2006) 152 FCR 88). Not only are there questions as to whether conduct constitutes a decision but also whether it is a decision taken under an enactment. For a decision to be reviewable it must be one 'for which provision is made by or under a statute', the provision should be more specific than general (for example, Hutchins v Commissioner of Taxationn (1996) 65 FCR 269 and Electricity Supply Assn of Australia Ltd v Australian Competition & Consumer Commission [2001] FCA 1296 ; (2001) 113 FCR 230). A general authorisation for a body to act in a certain way is not usually regarded as being sufficient to qualify a decision as being one made under an enactment: Salerno v National Crime Authority (1997) 75 FCR 133. 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. Nor does the alleged refusal to informally review. In the language of Fox ACJ in Evans v Friemann (1981) 35 ALR 428 at 431 the relevant decision or conduct did not constitute a decision which was final and conclusive for immediate purposes at least. It was not the ultimate or operative determination of an issue as distinct from the determination of issues arising in the course of making such an ultimate decision ( Social Services, Director-General of v Chaney [1980] FCA 87 ; (1980) 31 ALR 571). The best guidance for this is the clear language of Mason CJ in Bond [1990] HCA 33 ; 170 CLR 321 that the decision will generally but not always entail a decision which is final or operative and determinative, at least in a practical sense and a conclusion reached that is a step along the way in the course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision unless the statute provided for the making of a finding or ruling on that point so that the decision, though an indeterminate decision, might accurately be described as a decision under an enactment. When it comes to the consideration of policy, the competing policies on the one hand of permitting aggrieved persons to challenge administrative decisions and on the other, enabling efficient administration of government processes provides some guidance. If the legislation has provided other means of challenging decisions rather than judicial review under the ADJR Act, at least insofar as policy is concerned, availability of a right of challenge is not withheld. In Century Yuasa Batteries Pty Ltd v Commissioner of Taxation (1997) 73 FCR 528 it was held that the Commissioner's decision to seek to recover an amount equal to withholding tax and penalty for late payment due by the applicant and the demand for payment of those sums was not reviewable because it did not constitute a substantive determination. This was because it lacked the necessary element of finality as liability for payment of those sums arose from the operation of the ITAA 1936 and not in consequence of any reviewable decision of the Commissioner. The decision to seek to recover an amount equal to the withholding tax and penalty for late payment from the applicant, and the demand for payment of the same within 14 days, is not a substantive determination. It determines nothing. As such the decision lacks a necessary characteristic of a reviewable decision ( Bond at 337; Hutchins at 274, 277). If the demand is not met by the applicant because of an erroneous view that it is not liable to make the payment, any liability for additional tax for late payment arises from the operation of the ITAA and not in consequence of any reviewable decision of the Commissioner. It is not final or determinative because it does not remove a benefit or expose an applicant to detriment to which it is not already subject. Equally, Cooper J held in Golden City Car & Truck Centre Pty Ltd v Deputy Federal Commissioner of Taxation (1999) 56 ALD 177 , a decision to commence proceedings for recovery of tax due under the ITAA 1936 is not a reviewable decision. See also Madera v Commissioner of Taxation [2004] FCA 1616 ; (2004) 141 FCR 95 at [21] per Stone J (at [18]-[22]). In relation to the alternative ground advanced for the respondent, it is contended that what is sought is a review of the decision which formed part of the process of making or refusing to amend the calculation of tax under the GST Act and as such, it is a decision not capable of review under the ADJR Act being excluded by the provisions of Sch 1(e). The respondent contends that to the extent reliance is placed on the decision of the disallowance of claimed GST input credits, any decision taken in that regard (by the Commissioner rather than the respondent) would fall within the exclusion provisions due to the course of dealings between the parties) ( Bennett Honda Pty Ltd v Deputy Commissioner of Taxation [1984] FCA 414 ; (1984) 4 FCR 99 per Morling J). The respondent stresses that Ivyside (as distinct from the applicant) has appellate procedures available to it in respect of the decision made by or on behalf of the Commissioner to disallow GST input tax credits claimed. It is for that reason that all components of the decisions by the officers of the ATO charged with making that decision are not susceptible to review under the ADJR Act as they fall within the parameters of par e to Sch 1. The revised complaint is as to the refusal of the internal review to discuss the issue. In my view, the alleged actions or conduct of which complaint has been raised by the applicant did not constitute a decision of a reviewable nature within the meaning of the ADJR Act and the authorities. There was no substantive determination. There was no decision having the character or quality of finality and the actions taken, even accepting for purposes that they had the quality asserted by the applicant, simply formed part of a process of leading up to the making of a decision by the Commissioner to disallow the claimed GST input credits claimed by Ivyside. It was not a decision which affected in any way or in any direct sense the applicant's legal rights and obligations. Further and as a distinct ground, even if there were an appropriate basis for review, it could be advanced only by the company, Ivyside not by the applicant. However, if this were the only issue standing in the way of the competency of this application, I may have granted any application to amend the identity of the applicant, or for that matter, the respondent. The difficulty with the competency of the application however, in my view, is much more fundamental, going to jurisdiction. The respondent's jurisdictional objection to competency must be upheld and the claim dismissed. The applicant is to pay the costs of the respondent to be taxed if not agreed. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

judicial review application brought pursuant to administrative decisions (judicial review) act 1977 (adjr act) to review decision of respondent objection to competency of application whether decision open to review meaning of 'decision' under adjr act whether substantive determination whether applicant has standing to bring application administrative law

2 CSL carries on business developing, manufacturing, selling and supplying in Australia plasma products, antivenoms and human vaccines. GSKA markets throughout Australia a range of pharmaceutical products including vaccines. 3 The products at the centre of this dispute are vaccines used for the prevention of infection caused by Human Papillomavirus ("HPV"). More particularly, they are vaccines which are administered to prevent certain types of cancer. It is, at present, the only such vaccine approved in Australia. It prevents cervical cancer and other HPV related cancers and diseases caused by HPV types 6, 11, 16 and 18. It was developed following collaboration between CSL and Professor Ian Frazer, who is well-known for his groundbreaking research in this area, and was named Australian of the Year in 2006. The vaccine has achieved widespread recognition. 5 In 1995, CSL granted an exclusive worldwide licence of its proprietary technology to Merck & Co., Inc. which conducted substantial research leading to the development of GARDASIL. On 14 December 2005, Merck Sharp & Dohme (Australia) Pty Ltd lodged an application with the Therapeutic Goods Authority ("the TGA") for marketing approval for GARDASIL. On 16 June 2006, the TGA granted that approval. The TGA also granted CSL approval to use what is described as the "GARDASIL Product Information Sheet", a document containing technical information regarding the nature and effect of the vaccine. The L1 proteins are produced by separate fermentations in recombinant Saccharomyces cerevisiae CANADE 3C-5 (Strain 1895) and self-assembled into VLPs. The VLPs for each type are purified and adsorbed on aluminum-containing adjuvant (amorphous aluminum hydroxyphosphate sulfate). The quadrivalent HPV VLP vaccine is prepared by combining the adsorbed VLPs of each HPV type, the aluminum-containing adjuvant formulation, and a buffer. Each 0.5-mL dose contains approximately 20 mcg of HPV 6 L1 protein, 40 mcg of HPV 11 L1 protein, 40 mcg of HPV 16 L1 protein, and 20 mcg of HPV 18 L1 protein. The product does not contain a preservative or antibiotics. It is also indicated in males aged 9 to 15 years for the prevention of infection caused by HPV types 6, 11, 16 and 18. It is administered intramuscularly in three separate doses over a period of some months, and a subsequent booster is required some years later. 8 By an agreement effective on 1 May 2006, Merck & Co., Inc. appointed CSL as its exclusive distributor of GARDASIL in Australia. CSL launched GARDASIL officially on 28 August 2006. The launch was accompanied by substantial marketing activity which included advertising in medical journals, mail-outs to healthcare practitioners, media releases and conference presentations. The evidence is that the market in Australia for a vaccine of this nature is substantial. 9 In or about March 2006, GSKA applied to the TGA for approval to market its vaccine for the prevention of cervical cancer. However, to date that vaccine, CERVARIX, has not been approved by the TGA for any indication. It appears that marketing approval is not imminent, but GSKA's application is likely to be reviewed "within the first half of 2007". 10 It is necessary to say something briefly about HPV and cervical cancer. It is common ground between the parties that HPV is both a common and contagious virus which is usually transmitted by sexual contact and is a cause of, amongst other things, cervical cancer in women. Approximately 75 per cent of the adult population, male and female, will be infected by HPV at some stage during their lifetime. In most cases, the human immune system will eliminate the infection. However, if it persists over time, it has the potential to cause precancerous cervical lesions and ultimately cervical cancer. 11 Cervical cancer is the second most common cancer in women worldwide. In Australia it accounts for some 230 deaths and 800 new cases per year notwithstanding Papanicolaou (pap) smear screening programs. 12 HPV is also said to be responsible for less common cancers, including up to 50 per cent of cases of vulvar cancer and 60 to 65 per cent of vaginal cancer, as well as approximately 90 per cent of cases of genital warts. 13 There are more than 100 strains of HPV. Several of those cause cervical cancer or precancerous lesions. The strains of HPV principally implicated in cervical cancer are HPV types 16 and 18. These types are responsible for approximately 70 per cent of all cervical cancer in women worldwide. 14 HPV types 31 and 45 are also associated with cervical cancer. 15 HPV types 6 and 11 are responsible for 90 per cent of cases of genital warts. 16 Pharmaceutical products, including vaccines, may not be imported into, manufactured or supplied in Australia unless they have been entered in the Australian Register of Therapeutic Goods ("the ARTG"). An application for regulatory approval must include a dossier of chemical, pre-clinical and clinical data relating to the production, safety and efficacy of the product. This data is reviewed by the TGA and the Australian Drug Evaluation Committee ("the ADEC"). That review determines the proposed "indications" for use. 17 In order to gain marketing approval a product information sheet, which defines the indications for the pharmaceutical product, must also be approved. Section 21B(3) of the Therapeutic Goods Act 1989 (Cth) prohibits a person from representing that therapeutic goods that are not included in the ARTG are so included. Although CSL at one point alleged that GSKA had contravened this provision, it did not rely upon any such contention in support of its application for interlocutory relief. That activity, which was undertaken by a market research organisation known as Australian Fieldwork Solutions, consisted of contacting general practitioners by telephone to ascertain whether they were interested in participating, for a fee, in market research on cervical cancer vaccines, and if so sending by facsimile an information sheet containing comparative information on GARDASIL and CERVARIX ("the GSKA Information Sheet"). Subsequently the general practitioner would again be contacted by telephone, and interviewed. 19 The GSKA Information Sheet was a two page document containing some background information describing the impact and cause of cervical cancer, and particularly its links with HPV. It emphasised the importance of regular pap smears as early detection tools, and the need for regular screening. None of this was in any way contentious. 20 However, the GSKA Information Sheet went on to deal, in a comparative way, with GARDASIL and CERVARIX. It stated that there were two companies developing a vaccine that would offer protection against HPV types 16 and 18 -- the two key cervical cancer causing types. It said that women would be able to choose which of the two vaccines they preferred. It observed that it was anticipated that the government would fund a free vaccination program for girls at school while for other women there would be two vaccines available from their general practitioner to be paid for privately, each costing around $400 per course of three injections. It added that both vaccines were expected to give at least 10 years protection before any boosters were required. This adjuvant has been used in the formulation of many vaccines and has been proven to be effective and well tolerated. The most common reactions observed after vaccine administration were injection site reactions including pain, redness, swelling and fatigue. The most common reactions observed after vaccine administration were injection site reactions including pain, redness, swelling and fatigue. It also does not provide a full or final representation relating to these vaccines and their features. This is, however, all true and accurate information. CSL further claims that those general practitioners who received the GSKA Information Sheet would understand it to be saying that CERVARIX was a superior vaccine to GARDASIL because it offered greater benefits. 24 The evidence is that the GSKA Information Sheet was distributed to at least 300 general practitioners. There is also evidence that some time after these information sheets were provided, the general practitioners were interviewed by telephone. They were asked whether, on the basis of the GSKA Information Sheet provided, they would be prepared to prescribe one vaccine in preference to the other, and what price differential they would be prepared to pay in order to secure the benefits that one vaccine offered over the other. CSL claims that the questions were "loaded" in such a way as to suggest that CERVARIX offered clinical benefits that GARDASIL did not. 25 In particular, CSL contends that the information sheet in combination with the loaded interview would be likely to have left general practitioners with the impression that CERVARIX provided a longer period of protection than GARDASIL, and that it provided what CSL described as "cross-protection". CSL also complains that the general practitioners were not told that GARDASIL had been approved for the vaccination of males aged 9 to 15 years, a feature that CERVARIX did not share. 30 The effect of these undertakings is, as CSL acknowledged, to obviate the need to consider the representations pleaded in paragraphs 10(b), (c) and (e) of the Statement of Claim. However, there remains an issue as to whether there is a serious question to be tried with regard to the misleading or deceptive nature of the representations pleaded in paragraphs 10(a), (d), (f), (g), (h), (i), (j) and (k). CSL further contends that the information sheet failed to disclose GSKA's involvement in its preparation. To the extent that it asserted that it did "not represent an official statement by any company", but contained "all true and accurate information" it implied that it was not GSKA's document. That representation, CSL contends, was false. 32 GSKA contends that there is no serious question to be tried in relation to representation 10(a). It denies that any representation of the kind pleaded was made. 33 I am prepared to accept that there is a serious question to be tried in relation to this representation. However, I think it unlikely that any general practitioner, who read the GSKA Information Sheet with care, would conclude that it was independently prepared, rather than being prepared by or on behalf of GSKA. The GSKA Information Sheet must be read as a whole, and against the background of it having been provided in response to an approach by a market research organisation that was prepared to pay general practitioners a fee for reading it, and participating in an interview. This had all the hallmarks of an advertising exercise, and the comparison drawn in favour of CERVARIX made it likely that the information sheet was part of that exercise. It argues that the term "indicated" has a special meaning in relation to pharmaceutical products, suggesting that any product to which it applies has received TGA approval. It submits that general practitioners would understand the term in that way. 35 GSKA submits that the term "indicates" has a broader meaning, and is not to be understood as suggesting that a product has TGA approval. GSKA refers to the medical dictionary definition of the term which encompasses this broader meaning, and suggests simply that that product is apt for the particular use. 36 I am satisfied that there is a serious question to be tried as to whether the particular representation pleaded is contained in the GSKA Information Sheet. I am also satisfied that there is a serious question to be tried as to whether that representation is false. It notes that the GSKA Information Sheet states that CERVARIX is the only vaccine to have shown evidence of additional cervical cancer coverage due to protection against two other cancer-causing HPV type infections (HPV 31 and 45). The GSKA Information Sheet goes on to say that due to the protection against these two additional strains of HPV, CERVARIX could potentially increase protection against cervical cancer from 70 per cent to 80 per cent of all cervical cancers. The inclusion of the academic reference "Harper et al, 2006" is intended to reinforce that claim. 40 However, CSL contends that there is no proper scientific basis for these representations. It says that GSKA's methodology for measuring the efficacy of its vaccine overlooks the role that the human body's immune system plays in the self-elimination of the HPV infection. This is because 70 to 90 per cent of HPV infections are cleared spontaneously by the body's immune system within 36 months. HPV infection does not progress to cervical cancer unless the infection persists. Because most HPV infections are transient, a reduction in incident infection cannot be equated with additional cancer protection. Incident infection is therefore an inadequate endpoint against which to test HPV vaccine efficacy. 41 CSL further contends that the Harper paper does not support the claim made in the GSKA Information Sheet. The argument is somewhat technical, and need not be addressed at this stage. 42 Finally, CSL contends that GARDASIL has shown evidence of cross-protection against cervical cancers induced by HPV types 31 and 45. However, CSL, acting responsibly, has not made any claims in relation to these HPV strains because they require further assessment which must be based on disease endpoints. 43 GSKA submits that the representations in question were true, or at least based upon sound scientific opinion. It relied upon expert evidence of its own to support that contention. 44 In my view, there is a serious question to be tried as to whether representations 10(f), (g) and (h) are misleading or deceptive. The dispute between the scientists on this point cannot be resolved on an application for interlocutory relief in which no deponent was cross-examined, and no proper analysis of the scientific opinions expressed in the various affidavits filed was undertaken. That task must await the final hearing of this matter. CERVARIX, on the other hand, is described as having been formulated using "next generation vaccine technology (adjuvant AS04)" which "induces a stronger immune response than the same vaccine formulated in the traditional way with an aluminium way with an aluminium adjuvant". 46 CSL comments that it is unusual for adjuvants to be discussed with general practitioners or referred to in promotional materials. The use of terms such as "next generation" in contrast to "traditional way" was calculated to leave doctors in no doubt as to the greater strength and longer lasting immune response of CERVARIX in comparison to GARDASIL. In addition, the GSKA Information Sheet refers to a study by "Giannini, 2005" in support of its claim regarding the superiority of its adjuvant. The plain implication of all this is said to be that CERVARIX provides longer protection than GARDASIL. 47 CSL contends that the comparative statements regarding the adjuvants used in each product are misleading because the aluminium adjuvant used in GARDASIL is quite different to what is commonly regarded as the traditional aluminium adjuvant reported in the Giannini paper. Without going too deeply into scientific issues, CSL says that the adjuvant used in the Giannini study was aluminium hydroxide. GARDASIL, on the other hand, is said to use an amorphous aluminium hydroxyphosphate sulphate adjuvant. 48 It is impossible, on an interlocutory application, to resolve a scientific dispute of this nature. It is sufficient simply to say that there are conflicting views about the accuracy of the representation contained in paragraph 10(i) of the Statement of Claim. That means there is a serious question to be tried regarding this issue. However, without further evidence, the Court is not in a position to determine how strong that serious question might be. It refers to the GARDASIL Product Information Sheet, which contained TGA approval of the statement that GARDASIL was indicated in females aged 9 to 26 years for the prevention of vulvar and vaginal cancer caused by HPV types 6, 11, 16 and 18. The clinical studies on which that indication was based established that GARDASIL was 100 per cent effective against HPV types 16 and 18 infections, and therefore the word "may" ought not to have been used in the GSKA Information Sheet. 50 GSKA submits that CSL itself used the term "may" on its website in reference to the protection available against these infections. 51 There is a serious question to be tried regarding this issue. That fact is important both clinically and commercially because HPV infects both males and females. It is sexually transmitted and so vaccination protects males from infections and subsequent transmission to their sexual partners. Vaccination also protects males from genital warts, and some rarer cases of penile and anal cancers. In addition, there were no clinical trials published that could support CERVARIX being granted marketing approval for use to prevent HPV infection in boys. 53 In substance, CSL contends that the GSKA Information Sheet, and the interviews conducted with the general practitioners were designed to establish the comparative attractiveness of CERVARIX over GARDASIL, and the price differential that doctors would be prepared to pay to secure the benefits of one vaccine over another. In that comparative context, CSL contends that it was misleading for GSKA to omit any reference to the fact that GARDASIL was indicated for use in boys. 54 GSKA submits in reply that the evidence raises doubts as to whether vaccinating males would be as effective in preventing HPV infection as it is in females, and that it is not clear that male vaccination would reduce transmission of HPV infection from males to females. 55 There must be some doubt as to whether GSKA, in preparing a comparative analysis of the two vaccines, was required to espouse a particular attribute of GARDASIL that CERVARIX may not possess. Nonetheless, I am satisfied that there is a serious question to be tried as to the misleading or deceptive nature of GSKA's omission in the GSKA Information Sheet. In R Meagher, D Heydon and M Leeming, Meagher, Gummow & Lehane's Equity Doctrines & Remedies (2002, 4 th ed), the learned authors suggest (at [21-345]) that this requirement applies only where an interlocutory injunction is sought in the auxiliary jurisdiction of a court of equity, and not if the injunction is sought in the exclusive jurisdiction. It is further suggested that injunctions in the common law jurisdiction need not be saddled with this requirement. 57 There has been some debate among commentators as to whether an applicant for an interlocutory injunction is required to establish not merely that there is a serious question to be tried and that the balance of convenience favours the grant of such relief, the two conditions that are universally accepted, but also that, without an injunction, he or she will suffer injury for which damages will not be adequate compensation. In other words, the question is whether an applicant must overcome three separate hurdles rather than two. 58 The recent decision of the High Court in Australian Broadcasting Corporation v O'Neill [2006] HCA 46 clarifies this issue. Her Honour cited the well-known passage from the judgment of Mason ACJ in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58 ; (1986) 161 CLR 148 (at 153) as support for that proposition. 60 GSKA submitted that CSL had not shown that it would suffer injury for which damages would not be an adequate remedy if interlocutory relief were refused. It noted that the "market research project" for which the GSKA Information Sheet was prepared had been completed. 61 CSL responded by noting that, although GSKA had proffered an undertaking not to further distribute the GSKA Information Sheet, it had not undertaken to cease "market research" per se in relation to CERVARIX. This meant that CSL had no protection against the risk that the representations contained in the GSKA Information Sheet would not be repeated in circumstances that were outside the "market research project". It also meant that unless an interlocutory injunction were granted, CSL would not be protected against representations designed to convey to general practitioners and other health professionals that CERVARIX is a superior vaccine to GARDASIL. 62 CSL also relied upon evidence that GSKA was making damaging and, it was submitted, inaccurate comparisons regarding the two vaccines which did not form part of any "market research project". A number of medical practices around Australia had reported to CSL that GSKA was engaged in marketing CERVARIX by representing that it was more comprehensive in its coverage than GARDASIL, covering 80 per cent of cervical cancer while GARDASIL covered only 70 per cent, and that GARDASIL's indication for genital warts was "inconsequential". CSL claimed that GSKA representatives would, in all likelihood, approach tender coordinators for the respective State purchasing boards responsible for implementing any public immunisation scheme. It also claimed that GSKA had made it clear that it proposed to engage in a variety of pre-launch activities, as well as communications with the TGA. 63 According to CSL this meant that there was an unacceptable risk that GSKA would continue to engage in direct comparisons between GARDASIL and CERVARIX which involved representations which were wrong and not supported by scientific evidence. CSL had requested GSKA to desist from the conduct in relation to which CSL complained. GSKA had refused to do so. 64 GSKA, in its written submissions, did not deal directly with the issue of irreparable harm. It addressed that question more generally under the ambit of balance of convenience. On behalf of CSL, Dr John Anderson, its Director, Sales & Marketing of its Pharmaceuticals Division swore two affidavits dated 11 September 2006 and 18 September 2006 respectively. In an affidavit sworn on 21 September 2006, David Herd, GSKA's Director, Regulatory Affairs and Health Outcomes & Pricing responded to Dr Anderson's affidavits. 66 Put simply, Dr Anderson claimed that the GSKA Information Sheet, and follow-up interviews, represented CERVARIX was superior to GARDASIL, and did so in a manner that was misleading or deceptive. He said that, based upon his experience of the conduct of genuine market research, and the numerous errors in the information distributed by GSKA, he considered that GSKA had attempted to create "fear, uncertainty and doubt" about GARDASIL in order to reduce market confidence in that product. He said that this was a well-known marketing tactic known as "FUD". 67 Dr Anderson observed that as GARDASIL was the only vaccine currently approved by the TGA, it was the only vaccine that the Pharmaceutical Benefits Advisory Committee ("the PBAC") could presently assess for the proposed mass immunisation program for prevention of cervical cancer. He spoke of the potential size of the market for GARDASIL in Australia, and the maximum sales that might be realised if every eligible female and male received the full three course dosage at the full price. The figure equated to a staggering $1.2 billion. 68 Dr Anderson noted that the PBAC was currently considering CSL's proposal to conduct annual national vaccination of 12 year old girls, and a catch-up program for girls and women aged 13 to 26 years. He said that he was concerned that if the conduct complained of was not stopped immediately, and steps taken to correct the misinformation previously put out by GSKA, that misinformation could be conveyed to members of the PBAC and influence its decision. He said the misleading information could also influence federal cabinet to delay funding of GARDASIL until CERVARIX became available if they believed GSKA's claims that CERVARIX might be a better vaccine. He said that he was also concerned that State and Territory decision-makers, with inadequate scientific knowledge or experience, might be influenced in relation to the assessment of tenders by the dissemination of such information. 69 Dr Anderson said that it was highly likely that misinformation of this nature could spread rapidly within the medical community. He noted that the issue had also received substantial media coverage as a result of the GARDASIL launch activities and the high profile of Professor Frazer's work. He said that he believed that the only way the damage being suffered by CSL could be reduced is if GSKA were immediately restrained from repeating the representations that are the subject of this proceeding. 70 In his second affidavit, Dr Anderson elaborated upon the short-term damage to CSL from GSKA's conduct. He pointed out that CSL's sales representatives were encountering difficulty in their dealings with general practitioners because they were being diverted from speaking about GARDASIL, and compelled to respond to the misleading claims made about CERVARIX. He gave some examples of this. 71 Mr Herd replied by noting firstly that GSKA had, since March 2006, been engaged in dealing with the TGA in support of its application for registration of CERVARIX. He understood that that application would be reviewed at a meeting of the ADEC in the first half of 2007. 72 Mr Herd said that he was responsible for developing GSKA's reimbursement strategy for submission to the PBAC. He rejected Dr Anderson's claim that the PBAC would be influenced by representations of the kind contained in the GSKA Information Sheet. He noted the PBAC was an independent body set up by statute, and that its members included medical practitioners and pharmacists. He referred to the PBAC's guidelines on preparation of submissions and said that it was well understood that the PBAC made its decisions independently of any external influences, and on the basis of scientific and medical data presented to it by applicants. He noted that it was recognised within the pharmaceutical industry that it was improper for pharmaceutical companies to approach individual members of the PBAC and its various sub-committees to seek to influence its decision making process with regard to specific applications. He said that GSKA was careful to ensure that it complied strictly with these guidelines when making any application to the PBAC. 73 Mr Herd also challenged Dr Anderson's claims regarding the harm that CSL might suffer with regard to CSL's application for public funding of GARDASIL on the National Immunisation Program ("the NIP"). He noted that funding was allocated to States and Territories to manage the implementation of that program, and that each State ran separate tenders through a specially appointed tender board to determine which vaccine should be selected for provision through the NIP. He said that the GSKA Information Sheet, and the representations contained therein would have no impact or affect on CSL's application for such funding. 74 Mr Herd said that GSKA would itself suffer irreparable harm if interlocutory relief were granted to CSL. He emphasised the need for GSKA to be able to communicate with the TGA fully regarding CERVARIX while the review process was being conducted. He noted that if the TGA came to the view that there were significant clinical advantages offered by CERVARIX, compared to GARDASIL, GSKA would be inhibited in being able to communicate or otherwise discuss such matters. These would delay GSKA's ability to apply for public funding of CERVARIX through the NIP, and its ability to supply CERVARIX to that section of the Australian population for which the TGA might decide to indicate the product. In particular, if the data submitted by GSKA to the TGA were accepted, Australian women over 26 years of age would be denied the opportunity to obtain access to CERVARIX. GARDASIL would be unavailable to this section of the population as it was only indicated for women aged 9 to 26 years. 76 First, its marketing launch of GARDASIL is being, and would continue to be, substantially disrupted. GSKA's conduct was said to be diluting CSL's marketing advantage arising out of the "head start" it had achieved through being the first to market its unique vaccine. CSL claimed that it was being forced to divert its sales resources in order to correct the misinformation being disseminated by GSKA. 77 Second, CSL would lose sales of GARDASIL that would otherwise be made as general practitioners put off their decision to prescribe vaccine until CERVARIX came onto the market. In that context it was important to remember that these products were vaccines, and not treatments for existing illnesses. According to CSL it would be impossible to tell whether sales which had been lost or postponed were lost or postponed as a result of GSKA's representations, or for other reasons. 78 Third, there was a risk that tender coordinators, who would be responsible for very large orders if a public immunisation program were implemented, would be unfairly prejudiced against GARDASIL on the basis of inaccurate or incomplete information. CSL argued that the tender coordinators, their public servant assistants and the members of any purchasing boards would not be well placed to analyse detailed scientific submissions. Many of them may not even be medically qualified. 79 According to CSL the damage that it would suffer from each of these types of harm would not be calculable. Such irreparable harm would be suffered even if the time between the hearing of this interlocutory application and the final trial were truncated. CSL noted that apart from the 300 or so general practitioners who had participated in the "market research project" there were approximately 18,000 general practitioners in Australia of whom 12,000 or so actively worked in clinical practice. Misinformation of the kind sought to be enjoined was likely to spread quickly within the medical community. 80 CSL argued that there would be no harm to GSKA if it were restrained until trial from making any representation in Australia that CERVARIX offered or possessed cross-protection against cervical cancer, or that it was more effective and offered longer protection than GARDASIL. That was because until such time as the TGA approved the marketing of CERVARIX, GSKA could not sell or supply its product. In any event, GSKA was free to legitimately "market" CERVARIX in Australia. CSL sought only to restrain GSKA from unfairly and inaccurately comparing CERVARIX to GARDASIL. 81 CSL expressly disavowed any intention of restraining GSKA from communicating with the TGA about CERVARIX in relation to matters that might arise during the prosecution of GSKA's application for marketing approval. 82 GSKA noted that the undertakings sought by CSL, in place of those proffered by GSKA, were in far broader terms even than the interlocutory and final relief sought in CSL's application. GSKA noted that the "market research project" about which CSL complained had been completed by mid-July 2006. It submitted that it was highly unlikely that the GSKA Information Sheet had been retained, or disseminated by the general practitioners to whom it was provided. Moreover, GSKA had undertaken, until trial or further order, not to further distribute the GSKA Information Sheet. 83 GSKA submitted that interlocutory relief should be refused by reason of delay. It noted that a period of 10 weeks had elapsed from the time that CSL first learned of the GSKA conduct of which it now complained until it commenced this proceeding. 84 GSKA next submitted that it was an important factor when considering the balance of convenience that the trial of this matter could be heard within a very short time. In fact, the Court indicated that the application for final relief could be heard in mid-November 2006, a delay of less than two months. According to GSKA, the fact that a speedy trial could be held meant that there was less justification for the grant of interlocutory relief. 85 GSKA further submitted that CSL had grossly overstated the damage that it claimed it would suffer if no interlocutory relief were granted. CSL's assertion that its sales force was "not able to function optimally or effectively" in the absence of injunctive relief was not supported by the evidence. Only a handful of CSL sales representatives engaged in promoting GARDASIL had had any contact with doctors who had spoken to GSKA representatives about CERVARIX. There was nothing to suggest that any irreparable harm had been done by anything said to any doctor by a GSKA representative. 86 GSKA challenged CSL's contention that the members of the PBAC were likely to be swayed in their decision whether to recommend the inclusion of GARDASIL in the Pharmaceutical Benefits Scheme by a two page information sheet used in a telephone survey of general practitioners. The same was said to apply to members of the State tender bodies for the NIP. 87 GSKA also noted that CSL had engaged in a massive marketing campaign in relation to GARDASIL. This included two separate mail-outs to almost 20,000 general practitioners in Australia, advertisements in various journals, presentations at conferences and press releases. It submitted that it was inconceivable that a publicity exercise of this magnitude could be irreparably harmed in the few weeks prior to the trial of this matter given the cessation of the conduct complained of, and the negligible evidence of short-term harm that CSL had provided. 88 Finally, GSKA contended that it would suffer significant and irreparable harm if it were restrained from carrying out the preparatory work leading up to the marketing of CERVARIX pending the trial of this matter. It submitted that both CSL and GSKA engaged in extensive activities gearing up to the approval and launch of a new drug product. These included corresponding with various regulatory bodies, such as the TGA, the PBAC and various State tender bodies for immunisation programs, attending conferences and symposia, preparing for distribution post-approval educational material, and responding to inquiries from interested persons. 89 GSKA noted that its application for registration for CERVARIX was currently before the TGA. Following the extensive publicity that had been given to GARDASIL since its launch, GSKA had received a number of queries regarding CERVARIX. It had representatives attending three medical conferences in the period between mid-October and mid-November 2006. It submitted that CSL, by bringing this proceeding, was seeking to secure a monopoly in Australia for the supply and sale of GARDASIL to which it was not entitled by excluding GSKA from the relevant market for as long as possible. It submitted that in circumstances where it had proffered undertakings and agreed to a speedy trial and where there was no evidence of any real irreparable harm to CSL, the balance of convenience favoured the refusal of interlocutory relief. That is, what CSL seeks is an injunction to prevent or restrain an apprehended or threatened wrong which would result in substantial damage if committed. 93 In quia timet proceedings, the court will have regard to the degree of probability of the apprehended injury, the degree of the seriousness of the injury, and the requirements of justice between the parties. The fact that there is no breach presently occurring may make it more difficult, as a matter of evidence, to establish that there is a sufficient risk of a future injury to justify the immediate grant of an injunction. If, in all the circumstances, the likelihood that an injury will take place is not sufficiently high, quia timet relief will be refused. The applicant will be left either to avail him or herself of such other remedies as may be open, or else to renew his or her application should the likelihood of an injury subsequently increase sufficiently to render equitable intervention appropriate. 95 There is some debate as to whether a greater degree of proof is required in a case involving interlocutory quia timet relief than in a case involving a different kind of injunction. The issue is discussed in Meagher, Gummow & Lehane (at [21-395]), and need not be further canvassed here. It is sufficient to note that, in many cases, it may be more difficult to prove that an apprehended injury will occur than it is to prove that an existing injury will continue. 96 I have already indicated that I am satisfied that there is a serious question to be tried in relation to representations 10(a), (d), (f), (g), (h), (i), (j) and (k) as pleaded in CSL's Statement of Claim. The allegations relating to some of those representations appear to me to be stronger than those relating to others. However, nothing of any consequence turns upon this for the purposes of this interlocutory application. 97 I am prepared to proceed upon the basis that CSL will suffer some harm if these representations, assuming they are false, are repeated between now and mid-November, when the final hearing of this matter will take place. It may be, as CSL contends, that damages will not be an adequate remedy for such harm. That means that CSL has overcome the first two hurdles that it must meet in order to obtain the interlocutory relief that it seeks. 98 However, CSL must still overcome the third hurdle, and demonstrate that the balance of convenience favours the grant of the injunction sought. It is common ground that CSL carries the onus on this issue. 99 The real question in this proceeding, as in many similar cases, is where does the balance of convenience lie? In that regard, I am inclined to the view that each side has overstated its case in relation to this matter. 100 CSL's evidence that its sales representatives are being diverted from extolling the virtues of GARDASIL to general practitioners by being forced to defend that product from GSKA's claims regarding CERVARIX seems to me to have been extremely tenuous. The fact that CERVARIX may be available for sale in 2007 would be likely, of itself, to raise questions in the minds of general practitioners about the respective merits of the two products. That is so irrespective of the representations contained in the GSKA Information Sheet. 101 With regard to other impending harm, it seems to me to be improbable that GSKA's representations, as contained in its information sheet, would be likely to influence the deliberations of Federal Cabinet. The risk that the PBAC might be influenced by those representations is significantly reduced by the fact that CERVARIX will not be approved by the TGA this year. The PBAC is unlikely to make any final decisions regarding CERVARIX while TGA approval is still pending for that product. CSL's claims for final injunctive relief will have been determined long before the TGA has completed its review. 102 GSKA's evidence as to the harm that it would suffer if it were temporarily restrained from repeating the representations that were made in its information sheet seems to me also to have been overstated. For one thing, CSL made it plain at the hearing, if it was not already clear, that it was not seeking to prevent GSKA from making whatever claims it wished to the TGA about CERVARIX, as part of GSKA's ongoing application for approval. That made some of the evidence upon which GSKA relied redundant. 103 In addition, the fact that GSKA might be forced, for a relatively short period, to refrain from engaging in comparisons between GARDASIL and CERVARIX of the type contained in the GSKA Information Sheet hardly seems to me to have the serious consequences for GSKA, and its marketing plans, that Mr Herd foreshadowed. 104 Although, I accept that damages would not be an adequate remedy if CSL were to succeed in establishing the various breaches of s 52 of the Trade Practices Act that it alleges, the same is probably true for GSKA in relation to the utility of any undertaking as to damages given by CSL. 105 After weighing the evidence carefully, I am not persuaded that the balance of convenience favours the grant of interlocutory relief. I accept that the submissions on this issue are finely balanced. The fact that there will be a speedy trial and early resolution of CSL's claim for final relief seems to me to tilt the balance in favour of GSKA. If CSL's claim is accepted, GSKA will be enjoined from making representations of the kind impugned well before the TGA has completed its review of CERVARIX. That means that neither the PBAC, nor the State tender bodies are likely to be influenced by those representations. Any other harm that CSL might suffer between now and the trial is speculative, and not of sufficient gravity to warrant imposing restrictions upon GSKA's own marketing endeavours. That is particularly so given that any injunction would necessarily require GSKA, acting prudently, to adopt a conservative approach to what its many employees might say about its product, and effectively stymie legitimate competitive activity. 106 Had it not been for the fact that there will be a speedy trial of this matter, which Stone J regarded as a relevant consideration in Hexal v Roche (at [78]), I might have been inclined to grant some, at least, of the orders sought by CSL. 107 I will give the parties an opportunity to be heard in relation to the matter of costs. Caine SC and Dr W.A. Collinson SC and Ms H.M.J.

interlocutory injunction quia timet injunction whether serious question to be tried whether applicant likely to suffer injury for which damages will not be an adequate remedy whether balance of convenience favours the granting of injunction alleged contravention of s 52 of trade practices act 1974 (cth) practice and procedure

The issue is whether the Federal Magistrate erred in not being satisfied that that there was "other sufficient cause" so that a sequestration order ought not to be made within the meaning of s 52(2)(b) of the Bankruptcy Act 1966 (Cth). Mr Field does not challenge his indebtedness, nor an act of bankruptcy arising upon non-compliance with a bankruptcy notice which was served on 26 November 2007. He concedes that the Bank has established a prima facie entitlement to the making of a sequestration order. However, he invites the Court to exercise its discretion to decline to do this on the ground that it may be satisfied "that for other sufficient cause a sequestration order ought not to be made" within s.52(2)(b) of the Bankruptcy Act 1966 (Cth). This is because he has commenced Federal Court and Supreme Court proceedings claiming damages and other relief against the Bank and other parties, which, if successful, will enable him to pay the Bank or avoid his liability to it. He submits that, if the Court is not satisfied that the litigation has sufficient prospects of success, he at least has real claims which would justify a lengthy adjournment of the petition until their prospects become clearer. Nor does he contest certain primary facts on which the respondent, St George Bank Limited ( St George ), relied. Hence, it was common ground that Mr Field was the sole director of Jenolan Caves Resort Pty Ltd ( JCR ). JCR's main business related to the revival of the Jenolan Caves Guest House as a tourist location. JCR had the benefit of a lease from the Jenolan Caves Reserve Trust ( the Trust ), an instrumentality of the New South Wales government. On 8 May 1997 Mr Field gave a guarantee to St George for all moneys owing by JCR to St George including a one year facility of $5.88 million advanced by St George in May 2004. The terms of the guarantee describe it as unconditional and irrevocable, requiring payment on demand. Mr Field must not delay payment for any reason, with payment to be made in full without any deduction. The guarantee includes a waiver by Mr Field of "all rights of set off, combination or counterclaim in relation to payment" of the guaranteed moneys (cll 3.1 and 3.2). The guarantee also provides that Mr Field's obligations and liabilities are not affected by such matters as laches, acquiescence, delay, acts or omissions by St George or another person (cl 5.2.1). JCR's operations reached a financial crisis point in 2005. On 9 December 2005 St George appointed managers and receivers to JCR. The receivers purported to transfer the lease and assets of JCR to the Trust pursuant to a deed dated 30 June 2006 ( the Jenolan Deed ). In the interim, St George had made a demand under the guarantee on 8 June 2006, after it determined that recovery from JCR would be insufficient to satisfy the debt. These events culminated in a judgment of the Supreme Court against Mr Field on 8 August 2007 for the sum of $6,800,632.72 ( St George Bank Limited v Archer Phillip Field [2007] NSWSC 902). On 26 November 2007 a bankruptcy notice was served on Mr Field. On 13 December 2007, Mr Field filed an application in the Federal Magistrate's Court to set aside the bankruptcy notice. However, an acknowledged act of bankruptcy occurred on 13 May 2008, when Mr Field consented to orders in the Federal Magistrates Court dismissing his application to set aside a bankruptcy notice served on him on 26 November 2007. Mr Field remains indebted to St George under the guarantee in the sum of $6,800,632.72. On 5 November 2008 St George filed a creditor's petition in the Federal Magistrates Court seeking a sequestration order under s 43 of the Bankruptcy Act against Mr Field's estate. Mr Field filed a notice opposing the grant of the petition on 31 March 2009. The Federal Magistrates Court granted the creditor's petition and dismissed Mr Field's notice of opposition in its decision published on 10 June 2009. Mr Field filed a notice of an appeal in this Court against the decision of the Federal Magistrates Court on 17 June 2009. By his notice of appeal Mr Field contends that the Federal Magistrates Court erred in failing to dismiss or adjourn the creditor's petition until resolution of another proceeding, being proceeding no. NSD9/2009 in this Court ( the Federal Court proceeding ). The notice of appeal puts this contention of error in various ways. (2) Grounds 7, 12 and 13 relate to the way in which the Federal Magistrates Court dealt with aspects of proceedings no. 50053/2007 in the Supreme Court of New South Wales ( the Supreme Court proceedings ), that is the proceedings which resulted in the judgment against Mr Field of 8 August 2007, referred to at [6] above. (3) Ground 16 relates to the Federal Magistrates Court's conclusions about the immateriality of the Jenolan Deed. (4) Ground 6 alleges an error by the Federal Magistrates Court in refusing to admit into evidence the appellant's affidavit sworn 20 May 2009. (5) Ground 17 alleges an error by the Federal Magistrates Court in placing weight on evidence described as "self serving assertions and conclusions of the receivers and managers of [JCR]". In other words, Mr Field accepted (and continues to accept) that St George had proved each of the matters required by s 52(1) and thus established a prima facie entitlement to the sequestration order (being, the matters stated in the petition, service of the petition and the fact that the debt or debts on which the petitioning creditor relies is or are still owing). The Federal Magistrates Court summarised the background to the pending litigation in [2]-[20]. He cited judgments in which courts give such clauses their full effect, at least where there is no challenge to the making of the guarantee. He noted at [18] of his judgment that none of Mr Field's contentions asserted that "the taking of the guarantee was itself affected by some vitiating circumstances" , and that Mr Field only sought to attack the exercise of rights under it. He said: "In my view that is the kind of exercise prohibited by the terms of the guarantee which terms, as I have said, are to be enforced according to their wording" . He said that they also precluded claims for equitable waste in the exercise of mortgagee powers being relied upon by way of defence. However, he observed that "the giving of judgment in favour of St George would not create any estoppel preventing Mr Field from raising any cross-claim that might be maintainable". Relief is sought by way of declarations that the Jenolan Deed "was invalid, null and void " due to an invalid appointment of the person who executed it on behalf of the Trust. It seeks consequential orders for accounts and "re-transfer" to JCR of "the leasehold interest the subject" of the registered transfer. I note that it does not clearly address Mr Field's locus standi to seek this relief, and the effect of JCR being under liquidation. I also note that it does not attempt to litigate whether an agency of NSW was or is liable in damages to JCR or to Mr Field for the previously alleged defaults by the Trust in relation to the provision of services and amenities to the hotel. There is no evidence before me as to the defences which have been or are expected to be filed by the defendants, and the proceedings appear at present to be awaiting directions as to their future case management. The statement of claim requests an order for expedition of the hearing, but there is no evidence that this has been pressed by Mr Field, nor granted by the Supreme Court. The pleading recites the asserted invalid appointment of the Trust administrator in 2004, and some of the events of 2005 and 2006. It claims that the Bank is liable to Mr Field for relief under the Trade Practices Act and other legislation, for its failure to "use its influence and connections with the New South Wales government to facilitate a resolution of" a deadlock in JCR's negotiations with the government, and for the subsequent appointment of the receivers and their sale of JCR's assets at an undervalue. It seeks a declaration discharging Mr Field from his obligations under the guarantee, without clearly revealing an answer to the points made by McDougall J as to the effect of the waiver provisions in a context where no challenge is made to its making. It also seeks the same relief as is sought in the Supreme Court, setting aside the Jenolan Deed and the transfer, notwithstanding that it does not join any agency of NSW nor explain the duplication of claims, though this might appear oppressive to the Bank. It also seeks damages for Mr Field from the Bank and the Receivers, apparently for their conduct in relation to JCR during 2005 and 2006. However, the legal foundations of the pleading remain obscure in many respects, and its prospects of surviving interlocutory examination unscathed are, in my opinion, not good. Although it also seeks to stay enforcement on the Bank's judgment against Mr Field, there is no evidence that this has been pressed by Mr Field by any urgent interlocutory application. On the evidence before me, this proceeding is also awaiting case management, and there is no evidence as to what defences or interlocutory applications have been filed, or are expected to be filed, by the respondents. In those circumstances the petition should be dismissed or there should be a stay of proceedings until after the disposal of the other proceedings in the Federal Court of Australia and the Supreme Court of New South Wales. It should be examined to assess whether it can be said that there is sufficient evidence to show that it is a real claim which is likely to succeed. Also relevant is the stage of the litigation, the length of time for its vindication and any other relevant matters. It goes without saying that solvency is a relevant consideration. In some circumstances, it may be difficult to assess the likelihood of success of the debtor's claim. All the authorities show that central to the showing of "other sufficient cause" for the purposes of s 52(2)(b) is the question of the prospects of success. The case is not tried in the bankruptcy court, but the material is examined for the purpose alluded to by Gibbs J in [ Re Schmidt; Ex parte Anglewood Pty Ltd (1968) 13 FLC 111]. As Olney J identified in [ Re James; Ex parte Carter Holt Harvey Roofing (Australia) Pty Ltd (No 2) (1994) 51 FCR 14] , if a likelihood of success can be demonstrated, that may justify a refusal of a sequestration order. Alternatively, the circumstances may reveal a claim of a character and nature in which likelihood of success cannot be predicted with accuracy but in the circumstances the petition should be dismissed or an adjournment of the petition should granted: see the approach of Sundberg J in Ling v Commonwealth [1996] FCA 1646 ; (1996) 68 FCR 180 at 195---196, with which Wilcox J and Whitlam J agreed. If the claim is one in which credit of witnesses will be involved, and a debtor sets out the nature and detail of the case and all his or her evidence the debtor may only be able to persuade the bankruptcy court that, if relevant criteria are believed, he or she has good prospects of success. What should be proved, or what is sufficient to be proved, in any given case will depend upon the circumstances. The context in which the issue arises is also important. The discretion involved in s 52(2)(b) is a broad one, and, importantly, it is informed by public interest considerations concerned with the dealing with insolvents. (2) Both proceedings were "far from 'well advanced'". This caused the Federal Magistrate to comment that "[c]ertainly, there is little present prospect that either of these very complex claims could be litigated to a successful completion within the life of this petition, which is due to expire on 7 November 2009". Accordingly, his Honour could "see little prospect that additional merit in the claims will emerge before that date to justify further adjournment under an extension of the petition under s 52(5) ". Further, his Honour noted that "[t]he present pleadings present obvious deficiencies, and will need to be cleaned up and properly particularised, even if an opportunity to improve them survives interlocutory challenges. Mr Field's delay in bringing both sets of litigation until the brink of bankruptcy, and his failure to press for any stays, expedition or other interim orders which recognise the urgency of his predicament, leaves me doubtful of his capacity to achieve any improvement in his prospects of success within the lifetime of the petition, even if it is extended under s 52(5) " (at [25]). (3) His Honour also was "not persuaded that this could be achieved by Mr Field gaining a preliminary hearing in one of the courts on the issue of the validity of the execution of the Jenolan Deed on behalf of the Trust". His Honour observed that "there is no evidence that any application for a separate trial of this issue has been made, nor that it is likely to be granted. Moreover, even if such a ruling were achieved it would not, in my opinion, significantly advance Mr Field's prospects of achieving relief which off-sets his liability to the Bank. His claims for this relief face some major difficulties, and Mr Field's evidence and submissions have not explained to me reasonably arguable solutions" (at [26]). This is because they would appear to have expired by effluxion of time under cl 12.7. His Honour, in [30], explained that the material he had in mind was the report dated 14 August 2006 from PPB chartered accountants, in their capacity as administrators of JCR. It is clear that they closely considered the foundations of Mr Field's claims of very substantial loss arising from the making of the Jenolan Deed. In particular, they examined a valuation report of Messrs Magin and Roberts obtained in 2001 by JCR for financing purposes, upon which Mr Field largely pins his claim that the true value of the lease in 2006 exceeded $11m, rather than the total consideration of $2.350m which reached the receivers. The administrators pointed to substantial reasons for doubting the 2001 valuation, and its continuing weight. The relevant passages in their report are too lengthy for me to extract, but I find their analysis of the various valuations and the history of JCR and its receivership to be strongly persuasive. Moreover, bringing into consideration the other difficulties facing this litigation, I am not persuaded that Mr Field has been able to raise a public interest in allowing the litigation to continue, which outweighs the public interest in allowing Mr Field's creditor to take his estate into bankruptcy administration. I am conscious that he contends that his incurring of the debt to the Bank occurred as a result of its conduct towards JCR during 2005 and 2006 which he is seeking to characterise as unlawful or improper. However, his pending litigation presents such a cloud of uncertainty as to its merits, value, and future progress, that I am unable to characterise it in the terms required under the authorities cited above, both in relation to dismissing a petition or adjourning it. I am left with an impression that the relevant public interests support, rather than otherwise, the vesting in a trustee in bankruptcy of a power to decide, in the interests of all creditors, the future continuance of that litigation. His Honour dismissed Mr Field's Supreme Court Administrative Law List proceeding against the Bank, and also refused to grant Mr Field leave to proceed against JCR in that proceeding. The appropriate course is therefore the first for which St George contends, namely, that the Administrative Law List proceedings as a whole be dismissed as against St George. In my opinion, the orders and reasons of Barrett J support the opinions I have explained above as to the lack of prospects attending both the Supreme Court and Federal Court proceedings. It is important to bear in mind what these expressions connote. In the case of an appeal in the strict sense, the function of the appellate court is to determine whether the decision in question was right or wrong on the evidence and the law as it stood when the decision below was given. Where an appellate tribunal can receive further evidence and its powers are not restricted to making the decision that should have been made at first instance, the appeal is usually described as an appeal by way of re-hearing. An appeal by way of hearing de novo is one in which the matter is heard afresh, and the decision is given on the evidence presented at the appellate hearing: see Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 ; (2000) 203 CLR 194 at 203 [12] - [13] (" Coal and Allied Operations "). A similar observation was made by the Full Court of this Court in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833 ; (2001) 117 FCR 424 at [21] . Thus, it has been said that this Court's appellate powers are only exercisable if the appellant can demonstrate that the orders under appeal are the result of some legal, factual or discretionary error: see Abeyesinghe at [4]. It is for the debtor to establish the existence of 'sufficient cause': Cain v Whyte [1933] HCA 6 ; (1933) 48 CLR 639 at 645-646; Ling at 24. He must establish that he has a real claim against the creditor that is likely to succeed. If the Court is satisfied that there is such a claim, and that its quantum is likely to equal or exceed the creditor's claim, it will not make a sequestration order. If the claim is likely to be less than the creditor's claim, the Court will require the debtor, if he is to avoid a sequestration order, to pay the difference between the judgment debt and the amount he is likely to recover on his claim. See Re Player (1962) 19 ABC 277 at 282; Re Schmidt; Ex parte Anglewood Pty Ltd (1968) 13 FLR 111 at 115---116; Ling at 25---26; Commonwealth Bank v McDonald ; [1999] FCA 984. A debtor does not establish a real claim that is likely to succeed merely by producing a statement of claim in an action against the creditor: Re Rivett; Ex parte Edward Fay Ltd (1932) 5 ABC 182 ; Player at 282, or by pointing to the existence of current litigation against the creditor: cf Re Douglas Griggs Engineering Ltd [1963] 1 Ch 19 at 23. While the Court does not try the cross-claim in advance, the debtor must adduce sufficient evidence to show that it is a real claim which is likely to succeed: cf Vogwell v Vogwell (1939) 11 ABC 83 at 88; Player at 282. The Federal Court proceeding directly impugns and, if successful, would effect a discharge from and set aside the guarantee and, thereby, avoid the liability on which the creditor's petition is based. Further, if successful, the Federal Court proceeding would set up a case which would result in a very substantial award of damages to Mr Field. The claims in the Federal Court proceeding, Mr Field said, are based on issues of fact and law about "which there can be no real dispute". According to Mr Field, the Federal Magistrate both misconceived and gave no real or proper consideration to the Federal Court proceeding. The statement of claim is not "obscure" (at [16]). The conclusion that the statement of claim in the Federal Court proceeding did not have good prospects of "surviving interlocutory examination unscathed" (also at [16]) also is unfounded. Contrary to the Federal Magistrate's apparent assumption that Mr Field would have difficulties establishing standing, Mr Field did not need to be a party to a transaction to maintain a claim for damages for misleading and deceptive conduct under either the Trade Practices Act 1974 (Cth) or the Australian Securities and Investment Commission Act 2001 (Cth). Nor can waivers in a guarantee prevent such a claim from being maintained as a person cannot contract out of these statutory protections. In any event, difficulties that might arise in the resolution of a claim are an insufficient reason to prevent Mr Field from litigating the claim. First, the statement of claim does not identify any fact, matter or circumstance in existence at the time of entry into the guarantee which would support a claim that the guarantee is vitiated by reason of some legal, equitable or statutory source of invalidity. Instead, the statement of claim records various events which occurred about eight years after the giving of the guarantee said to give rise to various causes of action. Second, the relationship between the subsequent events about which complaint is made and Mr Field's liability under the guarantee is obscure. The statement of claim does not disclose how the subsequent events are capable of leading to the relief claimed given the waivers in the guarantee. Third, and as the Federal Magistrate observed at [28] and St George noted in its submissions, JCR is not a party to the Federal Court proceeding. But many, possibly most, of the matters about which complaint is made in the statement of claim are complaints which only JCR can make in circumstances where Mr Field has no right or standing to make a claim on JCR's behalf. Mr Field sought to make good this difficulty by pointing to s 82 of the Trade Practices Act and s 12GF of the Australian Securities and Investments Commission Act that a person who has suffered loss or damage by reason of misleading and deceptive conduct need not be a party to the transaction. But this is at best an answer only in part (if at all) to the problems confronting the Federal Court proceeding. The Federal Court proceeding seeks to set aside the Jenolan Deed and the transfer of the lease thereby affecting the rights of third parties. Mr Field's oral submissions tried to address this problem by indicating that these claims are unnecessary and could be deleted and, in any event, the issue of invalidity of the administrator's appointment and its consequences could be determined as facts along the way without joining all interested parties. However, the fact is that these claims were in the application as before the Federal Magistrate and remained in the application as at the hearing of this appeal. Moreover, these claims are relevant to the claims for damages for misleading and deceptive conduct. Alleged knowledge on the part of St George of the supposed invalidity of the administrator's appointment, or facts that should have alerted St George to that effect, is an essential part of the factual matrix of the claims for damages. Fourth, and consistent with St George's submissions, the facts of the present case do not readily appear to engage any principle about lack of capacity to contract out of statutory protections from misleading and deceptive conduct. In May 1997 Mr Field gave a guarantee the key terms of which have been identified at [5] above. Events many years later said to involve unconscionable and misleading or deceptive conduct are then relied upon to assert some right to escape liability under that guarantee and to found claims for damages. How claims to this effect are to be sustained is difficult to comprehend as the Federal Magistrate properly recognised. Fifth, and as should be apparent from the discussion above, the facts asserted in the statement of claim and the propositions of law on which it depends are far from being "beyond real dispute". The facts include alleged oral representations based on a meeting in November 2005 (para 22). Oral representations from many years ago are notorious for generating disputes. The propositions of law include the invalidity of the appointment of an administrator on the basis of an alleged procedural defect. As St George submitted, the allegation of invalidity of the appointment of the administrator depends on an argument that s 58ZE of the National Parks and Wildlife Act 1974 (NSW) only permitted appointment if there were members of the Trust at the time of appointment when, in this case, all memberships had expired. The legal arguments to which this claim might give rise are numerous, as St George observed. For example, s 58ZE would have to be construed purposively before the question of breach could be answered. Further, even if breach occurred, the consequence is only invalidity if that purpose may be inferred in accordance with the canons of construction ( Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [91] - [93] ). Finally, the Jenolan Deed has been carried into effect and, amongst other things, the transfer of the lease has been registered under the Real Property Act 1900 (NSW). Each of these matters involves a substantial hurdle to Mr Field's claims of invalidity of the appointment of the administrator to the Trust. For present purposes, it is sufficient to make the following points. In terms of a purposive construction, the effect of Mr Field's argument is that where the terms of appointment of each member of the Trust has expired, the Minister, if he or she wishes to appoint an administrator, must appoint members by a notice in the NSW Government Gazette, then remove those members by another (possibly even the same) notice in the NSW Government Gazette and finally appoint the administrator by notice in the NSW Government Gazette (again possibly by the same notice). This is not an attractive construction of s 58ZE(1) of the National Parks and Wildlife Act . Mr Field's answer, that the National Parks and Wildlife Act evinces an intention that the Trusts control the reserved land, cannot stand in the face of s 58W(2) which makes the Trust subject to the control and direction of the Minister. Even as a matter of language alone, and ignoring the wider context of the provision, there is little to support an argument that powers vested in the Minister to either "remove any or all members of the Trust board" or "remove all members of the Trust Board...and appoint a person as an administrator of the Trust" should be read as requiring the appointment and removal of Board members before the power of appointment of an administrator can be exercised. In terms of the consequences of breach, invalidity can only result from a conclusion that the "the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition" evinces a legislative intention "to invalidate any act that fails to comply with the condition" ( Project Blue Sky at [91]). Public inconvenience is a relevant factor in this process of construction. The invalidating of every act of the administrator of the Trust merely because the Minister did not go through a charade of appointing members only to remove them and thereby (on Mr Field's argument) enliven the Minister's power to appoint an administrator would result in an extraordinary level of public inconvenience. Even a finding of fact to that effect, without any consequential declarations, raises real issues of public inconvenience. This is a formidable hurdle which Mr Field's submissions sought to circumvent by asserting that the condition in question determined the availability of the power so that the principles identified in Project Blue Sky did not apply. But the principles in Project Blue Sky assume and look to the consequences of breach of statutory conditions of all classes. In terms of the registration of the transfer of the lease under the Real Property Act , the grant of relief to Mr Field may be affected by the indefeasibility of the title as registered either as a matter of law or discretion (see, by analogy, City of Canada Bay Council v F & D Bonaccorso Pty Ltd (2007) 71 NSWLR 424 ; [2007] NSWCA 351). For these reasons, I am satisfied that Mr Field's claim to the effect that the appointment of the administrator of the Trust was invalid with the consequence of invalidating the administrators subsequent transactions (including the giving of notices under the lease and the entry into the Jenolan Deed) has no real prospects of success. Sixth, these matters affect many of Mr Field's claims in the Federal Court proceeding. For example, in oral submissions Mr Field advanced an argument that the report of JCR's administrators, PPB chartered accountants, dated 14 August 2006 was inaccurate in many respects including by reason of a statement that the receivers and managers had a limited timeframe to achieve a sale of the lease. This was said to be incorrect because all notices issued by the Trust's administrator under the lease were invalid due to his invalid appointment. Similarly, Mr Field contended that the Federal Magistrate erred by assuming the validity of that appointment for the purpose of his Honour's observation in [27] that JCR's rights appear to have expired by effluxion of time under cl 12.7 of the lease with the consequence that JCR's rights may not return any value in any event. Given the observations above about the numerous difficulties confronting Mr Field's argument of invalidity of the appointment of the Trust's administrator it is difficult to accept that either the receivers and managers or the Federal Magistrate erred. Further, and as these submissions disclose, the invalidity of the appointment of the Trust's administrator (and all of its associated problems) is a fact embedded in many of Mr Field's claims. Finally, this is not a case of any mere difficulty in resolving Mr Field's claims. Mr Field had to establish "other sufficient cause" so that a sequestration order ought not to be made within the meaning of s 52(2)(b) of the Bankruptcy Act . The Federal Magistrate was entitled and indeed bound to examine the cogency of the claims in the Federal Court proceeding and their likely prospects of success. In so doing the Federal Magistrate was entitled also to take the proceeding as it stood at the time of the hearing. His Honour was not obliged to hypothesise possible ways in which the proceeding could be recast to make more sense or improve its prospects. In these circumstances the conclusions of the Federal Magistrate about the Federal Court proceeding were amply supported by the available evidence, namely, that: (i) the statement of claim is obscure, presents obvious difficulties, and is unlikely to survive interlocutory scrutiny, (ii) the proceeding could not be described as well advanced, and (iii) the proceeding could not be described as either likely to succeed or even as a real claim. The Federal Magistrate also cogently explained his reasons for so concluding. It follows that I do not accept any of the grounds of appeal relating to the Federal Court proceeding. I turn to each ground relevant to the Federal Court proceeding in the light of the conclusions above. Ground 1 is a general assertion of error which appears to depend on one or more of the other grounds being sustained. As none are sustainable ground 1 falls away. Ground 2, insofar as the reference to "other considerations" outweighing the making or deferral of a sequestration order should be understood as a reference to the Federal Court proceeding, is a mere assertion that the Federal Magistrate should have reached a different conclusion without the exposure of any error in his Honour's reasoning process. Ground 3 depends on the Federal Court proceeding having a sufficient likelihood of success so as to warrant a finding of a sufficient cause not to make or to defer making a sequestration order. For the reasons given I am satisfied that the Federal Magistrate's conclusions about the lack of prospects of success of the Federal Court proceeding as pleaded were correct. Ground 4 depends on a finding that, irrespective of the prospects of success, the character and nature of the Federal Court proceeding warranted a finding of a sufficient cause not to make or to defer making a sequestration order. I can see nothing in the evidence to support the making of such a finding. As noted, the statement of claim does not refer to any fact, matter or circumstance at the time of entry into the guarantee that would have had the effect of invalidating it. The claim appears to depend on events some eight years after entry into the guarantee to absolve Mr Field from liability. The statement of claim does not confront in any meaningful way the numerous difficulties identified above. Ground 5 cannot be sustained insofar as it alleges a failure by the Federal Magistrate to consider the prospects of success of the causes of action in the Federal Court proceeding. The Federal Magistrate's reasons disclose the contrary. The discharge from liability under the guarantee is based on events subsequent to its making by reason of alleged unconscionable conduct. Yet the claim does not confront the terms of the guarantee. (2) The complaint about the Federal Magistrate's description of the Federal Court proceeding as an attempt "to present the facts and claims which were raised in the amended response before McDougall J" (at [16]) is unfounded. In the Supreme Court proceedings Mr Field did make the same allegations about the invalidity of the appointment of the administrator, the same complaints about the Trust's actions and the actions of St George. It is true that the Supreme Court proceedings did not make the same express claims that, in consequence, St George had acted unconscionably in making its demands for payment. But the document filed by Mr Field in those proceedings did expressly claim that, by its actions, St George discharged the guarantee, breached s 52 of the Trade Practices Act 1974 (Cth) and that it would be unjust and inequitable for St George to rely on the guarantee. The Federal Magistrate's summary description of the Federal Court proceeding being equivalent to the Supreme Court proceeding in [16] was correct. (3) The complaint about the Federal Magistrate's reference to the obscurity of the statement of claim and the lack of a clear pleading, as reasoned at [21] above, is also unfounded. His Honour's description was accurate. Ground 8 alleges an error by the Federal Magistrate in concluding that the Federal Court proceeding had little prospect of successful completion by 7 November 2009. The Federal Magistrate, at [25], said that "there is little present prospect that either of these very complex claims could be litigated to a successful completion within the life of this petition, which is due to expire on 7 November 2009" and, at [26], that "I am not persuaded that this could be achieved by Mr Field gaining a preliminary hearing in one of the courts on the issue of the validity of the execution of the Jenolan Deed on behalf of the Trust. I note that there is no evidence that any application for a separate trial of this issue has been made, nor that it is likely to be granted. Moreover, even if such a ruling were achieved it would not, in my opinion, significantly advance Mr Field's prospects of achieving relief which off-sets his liability to the Bank. His claims for this relief face some major difficulties, and Mr Field's evidence and submissions have not explained to me reasonably arguable solutions". Mr Field's complaint appears to be based on a challenge to the latter proposition concerning a separate hearing about the validity of the Jenolan Deed. But, as the Federal Magistrate may be taken to have understood, a separate hearing has to have utility for the resolution of the real issues in the proceeding as a whole. Mr Field's claims about invalidity of the Jenolan Deed are confronted by numerous difficulties. The legal link between the invalidity of the Jenolan Deed and a right in Mr Field to obtain a discharge from liability under the guarantee remains obscure. Hence, the Federal Magistrate's characterisation of the position was justified on the evidence and, in my view, correct. Ground 9 is derivative and depends on one of the other grounds being upheld. As such, the ground must fail. Ground 10 alleges that the Federal Magistrate failed to give weight or sufficient weight to the fact that many of the allegations in the statement of claim in the Federal Court proceeding are either substantiated or unlikely to raise a substantial dispute. This ground seems to rise no higher than mere assertion. It simply ignores the numerous factual and legal difficulties to which the statement of claim gives rise. Ground 11 repeats the allegation that the Federal Magistrate failed to give weight or sufficient weight to the fact that the validity of the Jenolan Deed could be determined quickly as a discrete legal issue at a separate hearing. The Federal Magistrate dealt with this suggestion and rightly concluded that it was unlikely and of dubious utility given the essential issue of liability under a guarantee which contains waivers of the type in the guarantee in question. Ground 14 repeats the complaint about the Federal Magistrate's conclusion that the statement of claim in the Federal Court proceeding was obscure and unlikely to survive interlocutory scrutiny. I am satisfied that the Federal Magistrate's conclusion was justified given my observations above. Ground 15 alleges that the Federal Magistrate failed to properly take into account the delay in the Federal Court proceeding by reason of St George's notice of motion filed 17 April 2009 seeking orders that the statement of claim be struck out. Insofar as Mr Field said the Federal Magistrate erred by treating delays as relevant to the merits of the proceeding, I reject the submission. The Federal Magistrate did no such thing. His Honour referred to the lack of urgency apparent in Mr Field's actions (at [25]) as making it doubtful that Mr Field would have a capacity to improve his prospects of success within the lifetime of the petition. This conclusion was open and able to be drawn on the evidence. Insofar as Mr Field relied on St George's motion filed 17 April 2009, the fact is that the obvious problems with the statement of claim made such an application for strike out likely. Contrary to Mr Field's submissions, it appears that St George was not required to file and serve a defence in the Federal Court proceeding if it filed and served a notice of motion to strike out the proceeding, as it has done. Mr Field also submitted that the amended commercial list response which he filed was struck out not for any failure to disclose a proper case with adequate prospects of success but because of its inadequacy as a response for the purpose of the Supreme Court's commercial list. According to Mr Field, the facts pleaded and relief claimed in the Federal Court proceeding go far beyond anything that could have been raised in the Supreme Court proceedings. Further, in the Supreme Court proceedings McDougall J did consider Mr Field's prospects of success in respect of the various claims made for discharge of liability under the guarantee. I have set them out above. A number of those issues refer to conduct of St George, by its servants and agents, which has the effect of discharging the guarantee, or of relieving Mr Field of liability under it, or of making it unjust for St George to seek to enforce the guarantee. On the face of things, they are all rights that Mr Field has bargained away by the clauses of the guarantee to which I have referred. It is clear that the courts will give effect to such a bargain: see Mason CJ in The Commonwealth of Australia v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394 at 407. In the particular context of a guarantee, see the decision of Brennan J in Buckeridge v Mercantile Credits Limited [1981] HCA 62 ; (1981) 147 CLR 654 at 675. To the extent that Mr Field wishes to raise those issues, they are issues that are foreclosed by the terms to which I have referred. Nothing has been put, either supported by evidence or even based on submissions from the bar table, that would indicate a defence that can stand in the face of the contractual provisions to which I have referred, explained as they are by the authorities to which I have referred. Ground 7 alleges error in the Federal Magistrate failing to find or consider that Mr Field could not have raised the same matters in the Supreme Court proceedings as now raised in the Federal Court proceeding. In answer, I have already noted in [50] above that the essence of the two proceedings is largely the same. Further, apart from bare assertion, Mr Field's submissions provided no meaningful explanation of the reasons precluding the seeking of similar relief in the Supreme Court proceedings, other than the obvious difficulties presented by the terms of the guarantee itself, which is no more addressed in the Federal Court proceeding than it was in the Supreme Court proceedings. Ground 12 is bordering on the meaningless. Insofar as it alleges that the Federal Magistrate should not or could not have taken into account McDougall J's conclusions that the waiver provisions in the guarantee presented insuperable difficulties for Mr Field in the Supreme Court proceedings, I disagree. The Federal Magistrate was entitled to have regard to the fact that, in the Supreme Court proceedings, Mr Field also claimed a discharge from any liability under the guarantee but was unable to formulate an arguable defence in support of that claim. Ground 13 also seems to be repetitive of the substance of grounds 7 and 11 in that it alleges that Mr Field could not raise certain matters in the Supreme Court proceedings by reason of the waiver provisions in the guarantee but is not subject to the same constraint in the Federal court proceeding. But, as noted, the statement of claim in the Federal Court proceeding discloses no fact, matter or circumstance relevant to the validity of the guarantee at the time of its making. Mr Field relies on events years later as matters disentitling St George from enforcing the guarantee and discharging Mr Field from any liability under it. Yet the terms of the guarantee, including the waivers, remain. As noted, the fact that the Federal Court proceeding involves claims based on statutes for unconscionable and misleading and deceptive conduct, and consequential damages, does not undermine the Federal Magistrate's conclusions about the ultimate prospect of the proceeding or the difficulties that Mr Field would have to confront in the event of interlocutory challenge. The Federal Magistrate, at [27], said that "[o]ne of the difficulties is, as was pointed out by counsel for the Bank, that even if the Jenolan Deed was held to be void of legal effect, it is not apparent that this would allow the return to JCR of any valuable rights of a lessee under the 99 year lease. This is because they would appear to have expired by effluxion of time under cl 12.7". For the reasons given above I am unable to see how this observation involves an error given the numerous problems that Mr Field would have to confront in his claim that the Trust administrator's appointment was invalid and the consequential lack of prospects of that claim. His complaint was made by letter dated 16 June 2006 to the chairman of the Bank, and made numerous detailed criticisms of how officers of the Bank had responded to correspondence and events during 2005 and 2006. Although this letter was in a very large bundle of documents exhibited to his affidavit, it received no mention in the affidavit and had no apparent relevance to the grounds of opposition except as background of dubious relevance. The Bank's responses to the complaint were not in the bundle, nor, understandably, in its evidence in reply to the notice of opposition. The raising of the additional issues at a late stage, and outside the time-tables previously directed by the Court, was opposed by counsel for the Bank. He pointed to prejudice facing the Bank's legal representatives in attempting to take instructions on short notice about the issues raised by the 2006 complaint and the attack on its handling. Taking into account both that prejudice, and my difficulty in discerning how the matter materially advances Mr Field's opposition to the petition, I refused leave to rely upon these parts of the affidavit and upon the new contention. The material was rejected on a discretionary ground (delay and the late raising of additional issues). Nothing suggests any error of principle in the Federal Magistrate's rejection of this material. The fact that the material had potential relevance to para 45(f) of the statement of claim does not invalidate the Federal Magistrate's conclusion that it was difficult to discern how it advanced Mr Field's position. Paragraph 45(f) alleges as a particular of the claim for unconscionable conduct that St George failed to apply the Code of Banking Practice to various complaints Mr Field had made. The observations of the Federal Magistrate about the difficulties this evidence involved in terms of form and substance and its lateness justified the decision to reject it. The difficulty with this ground is that the evidence in question comprised a report to the creditors of JCR by the administrators, not the receivers and managers. It is clear that they closely considered the foundations of Mr Field's claims of very substantial loss arising from the making of the Jenolan Deed. In particular, they examined a valuation report of Messrs Magin and Roberts obtained in 2001 by JCR for financing purposes, upon which Mr Field largely pins his claim that the true value of the lease in 2006 exceeded $11m, rather than the total consideration of $2.350m which reached the receivers. The administrators pointed to substantial reasons for doubting the 2001 valuation, and its continuing weight. The relevant passages in their report are too lengthy for me to extract, but I find their analysis of the various valuations and the history of JCR and its receivership to be strongly persuasive. In my opinion, the administrator's opinions in this summary and elsewhere in their report to creditors, and the evidence to which they point, suggest that there is little prospect that Mr Field will be able to establish that the true value of JCR's business at the time of the Jenolan Deed exceeded the consideration provided in that Deed, whether it was validly or invalidly entered into, and whether or not it was attended by challengeable behaviour by the Bank. No error in so doing is disclosed. Mr Field has not demonstrated that the Federal Magistrate's conclusions and orders were the result of any legal, factual or discretionary error. Having reviewed the available material I am convinced that the Federal Magistrate's conclusions were not only justifiable but correct. Accordingly, the appeal must be dismissed with costs.

creditor's petition sequestration order whether "other sufficient cause" so that a sequestration order ought not to be made within the meaning of s 52(2)(b) of the bankruptcy act 1966 (cth) whether pending litigation against the creditor "other sufficient cause" bankruptcy

2 The Applicant, a Deputy Commissioner of Taxation (the Deputy Commissioner), has applied to the Court for the winding up of the Respondent Company, BK Ganter Holdings Pty Ltd ACN 088 472 066 (Ganter). 3 The proceeding commenced upon the filing of the application for the winding up of Ganter on 20 August 2008. Prior to that date, the Deputy Commissioner had served a statutory demand upon Ganter with which that company failed to comply. The application first came on for hearing before the Court in the Registrar's list on 18 September 2008. Since then, it has been twice adjourned by Registrars; firstly on 18 September 2008 when it was adjourned until 30 October 2008 and then, secondly, on that date when it was further adjourned until 13 November 2008. It suffices to note that the occasion for each of the adjournments appears to have been correspondence directed by or on behalf of Ganter to the Deputy Commissioner indicating that the company was in the process of obtaining finance to enable it to pay the debt due in full and a corresponding request to the Registrar by the Deputy Commissioner to adjourn the application. 4 Earlier this month and prior to 13 November 2008, like correspondence was directed to the Deputy Commissioner by the solicitors acting for Ganter. An adjournment of the proceeding for a further four weeks "so that finance can be secured" was proposed. On this occasion, the Deputy Commissioner signified that he would not agree to an adjournment. Instead, on 4 November 2008, the Deputy Commissioner advised the solicitors for Ganter that an order for the winding up of the company would be sought on 13 November 2008 "unless payment in full in cleared funds is received on or before 13 November 2008". The preceding day Ganter had made a payment of $150,000 to the Deputy Commissioner in reduction of the amount then due to the Commonwealth of Australia and payable to the Commissioner of Taxation in respect of a revenue debt. That left a balance of $149,762.09 outstanding. 5 On 5 November 2008, having confirmed that the amount owed as at that date was $149,762.09, the Deputy Commissioner advised the solicitors acting for Ganter that, if that sum was paid prior to the hearing of the application on 13 November 2008, the Deputy Commissioner would seek the adjournment of the proceedings "until all funds have been cleared and then dismiss the wind up application at the next return date". 6 Thereafter, an endeavour was made by Ganter to transfer the advised outstanding amount to the credit of an account maintained by the Deputy Commissioner on behalf of the Commonwealth. That endeavour failed, not through any fault on the part of the Ganter, but apparently because of an inability on the part of the banking system to annotate the transfer with all of the identification details specified by the Deputy Commissioner. If nothing else, the course of subsequent events in this case might be thought to highlight the desirability of the Commissioner's settling with the major trading banks a means by which such transfers might be facilitated in a mutually satisfactory way. That though is a matter for the Commissioner, not the judiciary, for it is the Commissioner who has the responsibility for the general administration of the taxation laws. 7 Upon ascertaining that it was not possible to effect payment by direct transfer, Ganter procured from the National Australia Bank Limited (NAB) a bank cheque in favour of the Australian Taxation Office (ATO) in the sum of $149,762.09. This cheque was delivered to the Brisbane Office of the ATO by Ganter's solicitors under cover of a letter from those solicitors which accurately recited the effect of a conversation which had occurred earlier that day between a solicitor in the employ of that firm and an officer in the Legal Services Branch of the ATO. The letter recited that "you [the Deputy Commissioner of Taxation] intend to adjourn the application, which is presently listed for Thursday 13 November 2008, for one week to allow for the cheque to clear, and that the matter will be dismissed at the next return date upon clearance of the bank cheque". 8 On 11 November 2008, the Deputy Commissioner agreed to this proposed course. Later that same day an alternative was proposed on behalf of Ganter by its solicitors. That was that the winding up application ought to be dismissed on its next return date, ie 13 November 2008. That course was not agreed to by the Deputy Commissioner. Instead, on 12 November 2008, the Deputy Commissioner signified a disposition to seek a one week adjournment the following day. Ganter's solicitors replied later on 12 November 2008, indicating that they intended to appear on 13 November 2008 so as to seek the dismissal of the winding up application. 9 When, on 13 November 2008, the application for winding up was called on in the Registrar's list, the solicitors for Ganter sought the dismissal of the application. This course was opposed on the part of the Deputy Commissioner who sought adjournment of the application for a further week. Apprehending, with respect correctly, that a point of general practical utility was raised by the circumstances of the case, the District Registrar then referred the hearing of the application to a Judge, adjourning accordingly for that purpose. 10 It appears from the evidence that the Deputy Commissioner's nomination of a period of one week for the proposed adjournment of the winding up application was not coincidental. It seems that the experience of the ATO in dealing with Australian banks is that, in the ordinary course of events, Australian banks take five working days following the electronic reporting by the ATO to the relevant bank of the receipt of a cheque. That electronic reporting seems to be the equivalent of the presentation of the cheque to the bank for payment. The inference necessarily arises that the Deputy Commissioner's nomination of one week as the length of the proposed adjournment was informed by a knowledge of this experience with the banks. 11 In this case, the electronic reporting by the ATO occurred on 11 November 2008 via the Penrith, NSW office of the ATO. In the course of his general administration of the taxation laws the Commissioner has determined that the ATO should centralise its processing of payments. That task has fallen to the Penrith office. It was to there that the Brisbane office forwarded the bank cheque received on 10 November 2008. 12 Investigations by the ATO of the NAB have disclosed that the bank's position in relation to bank cheques is informed by its membership of the Australian Bankers' Association. Bank cheques are generally treated by the law in the same manner as ordinary cheques. Although some people regard bank cheques as equivalent to cash, there are certain circumstances where a bank cheque may not be paid. To clarify the position, NAB, as a member of the Australian Bankers' Association, adopts the following policy in relation to NAB bank cheques. Forged or unauthorised If the signature of an officer of NAB is forged or placed on a bank cheque without NAB's authority, NAB is not legally liable for the cheque concerned. Materially altered NAB will dishonour a bank cheque that has been fraudulently and materially altered. NAB will co-operate with any holder of a cheque, or person who is about to receive it, who may want to verify that the cheque is a valid cheque. Reported stolen or lost If NAB is told that a bank cheque is stolen or lost and is satisfied that this is the case, NAB will not pay the cheque if it is presented for payment by a person who has no right to it. NAB may provide a replacement cheque for a fee. Court order restraining payment NAB must observe an order of a court restraining NAB from paying a bank cheque which is presented for payment while the order is in force. Failure of consideration for the issue of a bank cheque Where NAB has not received payment for issuing a bank cheque to a customer (e.g. your cheque to NAB in payment for the bank cheque is dishonoured), NAB may refuse to pay the bank cheque only if the person presenting the bank cheque for payment: has not given value for it (e.g. the bank cheque is stolen); or has given value for it but at the time of doing so he or she knew NAB had not been paid for the cheque (e.g. that the cheque in favour of NAB had been dishonoured). 13 It was not suggested in this proceeding that, so far as a Commonwealth revenue debt is concerned, there is any express statutory provision which alters the usual position which prevails as between creditor and debtor when a cheque is given in payment of a debt. The payment is subject to a condition that the cheque be paid on presentation. If it is dishonoured the debt revives. Although it is sometimes said that the remedy for the primary debt is suspended, the suspension is no more than a consequence of the conditional nature of the payment: Tilley v Official Receiver in Bankruptcy [1960] HCA 86 ; (1960) 103 CLR 529 , at pp 532-533, 535-536, 537. The condition is a condition subsequent so that, if the cheque is met, it ranks as an actual payment from the time it was given. Subject to non-fulfilment of the condition subsequent, the payment is complete at the time when the cheque is accepted by the creditor: Thomson v Moyse (1961) AC 967 , at p 1004. 14 It was submitted for the Deputy Commissioner that, in the events which had transpired in this case, that usual position had been altered by the signification by the Deputy Commissioner that he would agree to the dismissal of the winding up application once the proceeds of the cheque had been cleared. It seems to me though that the evidence is more consistent with the Deputy Commissioner's adopting a position which was in accordance with the general position when a cheque is given in payment of a debt. It has been accepted subject to a condition that the cheque would be paid on presentation. Subject to the fulfilment of that condition, payment of the then outstanding amount of the debt due to the Commonwealth and payable to the Commissioner was complete upon the acceptance by the Deputy Commissioner on 10 November 2008 of the cheque then proffered on behalf of Ganter. In this regard, the fact that the proffered cheque was a bank cheque may well have provided a degree of comfort to the Deputy Commissioner in deciding to accept it, but the position would have been the same in law so far as the relationship of debtor and creditor was concerned had the cheque concerned been one where the drawer was other than a bank. 15 Strictly speaking, a cheque, even a bank cheque, is not a form of legal tender. Subject to some particular contractual or statutory provision, the only forms of legal tender remain Australian notes or, subject to the limits specified, Australian coins --- see s 36 of the Reserve Bank Act 1959 and s 16 of the Currency Act 1965 respectively. However, in general trade and commerce, as Mason J observed in George v Cluning (1979) 53 ALJR 767 (note) by reference to Canadian authority, a payment by cheque can amount to sufficient payment if not objected to on that account. When the history of Ganter's endeavours to pay the debt after the filing of the winding up application is recalled and that the company was, by operation of s 459C(2)(a) the Corporations Act 2001 presumed to be insolvent the Deputy Commissioner would have been entitled not to accept the cheque. A refusal to accept the cheque would not have eliminated the debt in question: Australian Mid-Eastern Club Ltd v Yassim (1989) 1 ACSR 399 , at 403 (NSWCA); Deputy Commissioner of Taxation v Visidet Pty Ltd [2005] FCA 830 at [3] per Gyles J. 17 The accounts of the ATO in respect of Ganter record a credit to its account on 11 November 2008 in the amount of $149,762.09. That does no more than recognise what will be the effect of the acceptance of the cheque if the condition subsequent as to the clearance of the cheque is met. Were the cheque for some reason to be dishonoured the creation in the accounts of the ATO of an entry reversing the credit recorded on 11 November 2008 would be appropriate. I note that the account concerned is made accessible to the company's tax agent by the Commissioner in the ordinary course of his administration of the taxation laws. 18 As it happens, though the period within which, in accordance with the NAB's usual practice, a notice of dishonour might be given to the ATO has yet to elapse, other evidence from the NAB, which was not available at the time when the application came on before the District Registrar on 13 November 2008, suggests that the bank does now have cleared funds available to meet the cheque. As at 13 November 2008 the prevailing position, so far as advice to the ATO from the NAB was concerned, was that, even were a special clearance to be sought, it would not be possible to clear the cheque until after 11:00 am on 18 November 2008. I am not satisfied on present materials that the condition subsequent has been met. 20 Assuming that the Deputy Commissioner ought presently to be regarded as an applicant whose debt has been paid, it does not, with respect, seem to me to follow that the application must therefore necessarily be dismissed. That circumstance would not, in my opinion, put an end to the petition nor would it affect the jurisdiction of the court to hear and determine the petition although, of course, in such circumstances proceedings might not be continued and, if they were, the court could, in the exercise of its discretion, refuse to make a winding up order upon the petition of a person not then a creditor. In that same case, Barwick CJ (at 179) also seems to have been of the view that, under the then statutory regime for the winding up of a company, the date for the determination of whether a petitioner was a creditor was the date of presentation of the winding up petition. 21 In my opinion, the date for the determination of standing to apply for the winding up of a company is the date when the application is made. As it was when Motor Terms v Liberty Insurance (supra) was decided, the process for the winding up of a company remains today entirely statutory. By s 459A(1)(b) of the Corporations Act a creditor is one of the persons who may apply for the winding up of a company. The application for the winding up of Ganter was made by the Deputy Commissioner upon the filing of the application in this Court on 20 August 2008. At that time, the Deputy Commissioner was, on any view, a creditor. Like Gyles J in Deputy Commissioner of Taxation v Visidet Pty Ltd (at [5]), I am not persuaded that there is any requirement flowing from the Corporations Act that the applicant must continue to be a creditor at the time when the winding up application is heard. As his Honour there states (ibid), and though it is cited in a number of cases which he notes, the passage from the judgement of Menzies J in Motor Terms v Liberty Insurance (supra) does not support the existence of any such requirement. 22 The true position is that the applicant's status as a creditor at the time when the application was made and the presumption flowing from the company's failure to comply with the terms of a statutory demand are sufficient to give the Court jurisdiction to order the winding up of the company. That was the conclusion reached by Zeeman J in Deputy Commissioner of Taxation v Guy Holdings Pty Ltd (1994) 116 FLR 314 at 318. As did Gyles J in Deputy Commissioner of Taxation v Visidet Pty Ltd (at [6]), I agree with that conclusion. As Zeeman J observed in the Guy Holdings Case (at 320), "in the case of an application under s 459P where the debt the subject of the statutory demand has been paid after the filing of the application, the application ought to be dismissed unless there is established some positive reason that a winding up order ought to be made". His Honour is there referring to the way in which, in those circumstances, the discretion vested in the Court on the hearing of a winding up application by s 467 of the Corporations Act would ordinarily be exercised. 23 How should that discretion be exercised as matters presently stand in this case? There is no proof that the company owes any other amount either to the Commissioner or to any other creditor. Perhaps in testimony to the latter, no other creditor of the company has sought to be substituted as an applicant. 24 In their submissions the solicitors for the company pointed to the observation made by Gyles J in Deputy Commissioner of Taxation v Visidet Pty Ltd (at [8]), "With trading companies the existence of a winding up proceeding is a very serious inhibition and has very serious impacts". I respectfully agree. That is one reason why it behoves a company which wishes to keep trading to pay its debts as they fall due or at least later to comply with the terms of a statutory demand. It is also a reason why, all other things being equal, a Court would be disposed, as a matter of discretion, to dismiss a winding up application if satisfied that the debt owed to the applicant creditor had been paid. Another consideration not to be ignored is the protection of the revenue. Yet another consideration is that Ganter, by its solicitors, initially agreed with the Deputy Commissioner's proposal that on 13 November 2008 the adjournment of the application for one week ought to be sought. A further consideration is the public interest in whether a company which is presumed to be insolvent ought to be permitted to continue to trade or whether it ought to be wound up. 25 Ganter's change of heart as to the course which ought to be taken on 13 November 2008 seems to have been multi-factorial in origin. Inferentially from the submissions made to me and to the District Registrar it was founded upon what I regard as the misapprehension that the payment of an applicant creditor's debt obliged the Court to dismiss a winding up application, as opposed to that being a factor going to discretion. Likewise, it seems to have been grounded on the belief that the acceptance of the bank cheque by the Deputy Commissioner extinguished the debt then and there, as opposed to so doing upon the fulfilment of the condition subsequent of the cheque's being cleared. Further, it seems to have been grounded upon the belief that, the cheque payment having been recorded as a credit on 11 November 2008 in its accounts, the Deputy Commissioner was obliged, as a "model litigant" to agree to the dismissal of the winding up application on 13 November 2008. 26 This, with respect, misapprehends the obligation that falls on those representing the interests of the Crown in civil litigation. One of those interests, and it is a vital interest, is the protection of the revenue. The Deputy Commissioner would certainly have failed in his duty to the Court as a model litigant had the acceptance of the cheque and the terms upon which it had been accepted not been drawn to the Court's attention on 13 November 2008. It was. Especially as matters then stood as to the clearing of the bank cheque and the Deputy Commissioner's knowledge as to the practice of the NAB in relation to the circumstances in which it would not meet a bank cheque and the time within which any such disposition on the part of the bank would usually be signified, it was not unreasonable for the Deputy Commissioner to resist the dismissal of the application that day. The position then to take was a matter for the value judgement of the Deputy Commissioner in the circumstances in the administration of the taxation laws. The entry in the accounts of the ATO had no more than a provisional quality about it. 27 As at 13 November 2008 there was no obligation on the part of the Court then to dismiss the application. The disposal of the application then called for the exercise of a discretion. It still does. Though there is more confidence now that the condition subsequent will be met, it seems to me in the circumstances of this case that Ganter ought to be held to the terms upon which it asked and the Deputy Commissioner agreed to accept the cheque and to seek the adjournment of the winding up application. I therefore adjourn the hearing of the application until 19 November 2008 at 9:30 am, the date requested by the Deputy Commissioner. Even assuming that there is power so to do, I do not believe that it would be appropriate to make a conditional order of dismissal, which was an alternative suggested on behalf of the Deputy Commissioner. 28 I shall hear the parties as to costs. I certify that the preceding twenty-eight (28) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

winding up neglect to pay debt after statutory demand acceptance of bank cheque in payment of debt subject to condition that winding up application be adjourned for one week so as to confirm its clearance continuation of proceedings by creditor in the interim whether applicant continued to have standing whether court obliged to dismiss application applicant held to continue to have standing no obligation to dismiss application application adjourned as a matter of discretion corporations

After long and extensive litigation, the Refugee Review Tribunal (the Tribunal), on the third occasion it had to consider the claims of the appellants, found that the appellants had fabricated their claims, and that they were not truthful or credible witnesses. The Tribunal also found that the appellants' witness lacked credibility and did not accept his evidence. The Tribunal found that the appellants were not homosexual and that they had not lived in a homosexual relationship. The Tribunal therefore found that neither would face persecution should they be forced to return to Bangladesh. The Tribunal rejected all of the appellants' claims. This appeal by the appellants to this Court will be allowed. I am satisfied that the decision by the Tribunal on the third occasion the matter was before it was not made in good faith. Such a finding is one that is not reached lightly, and unsurprisingly is one that is very rare. I am satisfied that the finding of the third Tribunal that the two appellants are not, and were not, homosexuals was not made in the exercise of honest fact finding, but was deliberately calculated to "get around" difficulties in the factual circumstances of the appellants' case, thrown up by the judgment of the High Court in Appellant S395/2002 v Minister for Immigration and Multicultural Affairs; Appellant S396/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 71 ; (2003) 216 CLR 473 ( Appellant S395/2002 ). The appellants are Bangladeshi nationals. They came to Australia, arriving on 19 February 1999. They sought protection visas on 4 March 1999, claiming that they were homosexuals who had lived together as a couple since 1994, and that they had been subjected to persecution in Bangladesh because of their homosexuality. A delegate of the Minister for Immigration and Citizenship found, on 23 April 1999, that the applicant born on 1 July 1973 (NAOX, or the younger Bangladeshi), was a "citizen of Bangladesh", accepted "as plausible the applicant's claim that he is a homosexual", but was "unable to accept there is a real chance that he will be persecuted on that ground in Bangladesh". It found that they appellants were homosexuals; found that homosexuals cannot live openly in Bangladesh, and imposed the "discretion test". On 26 July 2001, Lindgren J rejected an application under s 476(1) of the Migration Act 1958 (Cth) (the Act). ... Apparently, therefore, they lived together in the way they wished to do. In sum, in living together in the way in which they did, they were naturally "discreet" and not "open", according to the meanings those words had for the [Tribunal]. (case references omitted). On 11 October 2002, the appellants were granted special leave to appeal to the High Court of Australia. On 9 December 2003, the High Court allowed the appeal, rejecting the "discretion" test, and remitted the matter to the Tribunal for re-determination. The matter had proceeded, from the decision of the delegate, to the Tribunal, the Federal Court, the Full Court of the Federal Court and to the High Court on the basis that the appellants were Bangladeshi homosexuals. The only live issue was whether they faced a real risk of persecution, a matter which involved considerations of whether there was a requirement for "discretion", and an enquiry as to why the appellants chose to live "discreetly" and not "openly". Confronted by this judgment in the High Court, the second Tribunal found the only way out to justify the refusal of the protection visas. It found that they were not homosexuals after all. The second Tribunal found that the appellants were "close relatives", who have been "married to women", which is "at odds with their being a homosexual couple who met by chance in 1994 ..." I interpolate to observe that the third Tribunal disagreed with the second Tribunal as to the basis of the crucial finding of homosexuality. However, the Tribunal rejected most of the claims made by the appellants as to the persecution they had suffered in Bangladesh, including claims that they had experienced threats and violence over many years. It found that they had not in the past suffered serious harm by reason of their homosexuality, observing that they had "clearly conducted themselves in a discreet manner and there is no reason to suppose that they would not continue to do so if they returned home now". The Tribunal rejected most of their individual claims, but accepted that it was not possible to live openly as a homosexual in Bangladesh. It found, however, that the applicants had "clearly conducted themselves in a discreet manner and there is no reason to suppose that they would not continue to do so if they returned home now". The applicants contended that the Tribunal had erred in law by imposing upon them a requirement that they live discreetly in order to avoid persecution. It had made a finding of fact that they would live discreetly. That finding did not itself involve error. The Tribunal must determine how an asylum seeker is likely to live on return to his or her country of origin and assess the chance of persecution on that basis. It is not relevant to consider whether the asylum seeker could live in the country of origin without attracting adverse consequences. ... If on the facts there is a real chance that a person's homosexuality may be discovered despite living discreetly, and if discovery would lead to serious harm, the person is a refugee. ... The Tribunal accepted that "homosexual men in Bangladesh constitute a particular social group under the Convention". To attempt to do so would mean to face problems ranging from being disowned by one's family and shunned by friends and neighbours to more serious forms of harm, for example the possibility of being bashed by the police. However, Bangladeshi men can have homosexual affairs or relationships, provided they are discreet. Bangladeshis generally prefer to deny the existence of homosexuality in their society and, if possible, will ignore rather than confront it. It is also clear that the mere fact that two young men held hands or hugged in the street would not cause them to be seen as homosexuals, and that being caught engaging in sexual activity on one occasion would be most unlikely to cause a young single man to be labelled a homosexual. It went on to say that: "To attempt to do so would mean to face problems ranging from being disowned by one's family and shunned by friends and neighbours to more serious forms of harm, for example the possibility of being bashed by the police. " (Emphasis added. ) The Tribunal further found that "Bangladeshi men can have homosexual affairs or relationships, provided they are discreet ". (Emphasis added). Nowhere in the reasons of the Tribunal is any consideration given explicitly to whether there was a real chance that the appellants would be subjected to any of the "more serious forms of harm" to which the Tribunal alluded. Nowhere in the reasons is any consideration given explicitly to whether the appellants would be subjected to ill-treatment by police. Nowhere is there consideration of whether subjection to any of these "more serious forms of harm" would amount to persecution. By order of the High Court, the matter was remitted to the Tribunal for re-determination. What occurred on the remitter by the High Court to the second Tribunal is recorded in the judgment of Federal Magistrate Smith of 13 April 2006, on the occasion of the appeal from the decision of the second Tribunal to the Federal Magistrates Court. I will share the job of considering that argument with other minds in the Tribunal. That is to say I will take legal advice from our legal section on that matter. Those grounds were particularised. The Tribunal's finding is based on evidence provided by them and by [SZFSG's] brother. The Tribunal does not rely on the evidence of the anonymous caller to DIMIA in relation to these or, in fact, any adverse factors in the Applicants' respective cases. However, the Tribunal is also of the view that the anonymous caller's evidence does not help their cases. The Tribunal considers that it is important to make this clear because the Applicants have made unsupported claims about the caller having acted on behalf of either a homophobic section of the Bangladeshi community or DIMIA or both. The Tribunal does not accept those suggestions. For the reasons stated, the Applicants' being close and married relatives is at odds with their being a homosexual couple who met by chance in 1994 and lived exclusively with each other in Bangladesh for four years until coming to Australia together. The fact that they are married knocks out their claims about their aversion to heterosexual marriage. It is perhaps understandable, in the light of the history of the proceedings from the decision of the delegate all the way to the High Court, but very unfortunate, that counsel for the appellants should have sought to argue issue estoppel. On 13 April 2006, Smith FM dismissed the application by the appellants for orders by way of judicial review of the decision of the second Tribunal handed down on 14 January 2005. That decision affirmed the decisions of the delegate of the Minister made on 23 April 1999, but on quite different factual findings. The first Tribunal found that the appellants were homosexual; the second Tribunal found "the Applicants are close relatives who are, or have been married to women", and "for the reasons stated, the Applicants' being close and married relatives is at odds with their being a homosexual couple who met by chance in 1994 and lived exclusively with each other in Bangladesh for four years until coming to Australia together. The fact that they are married knocks out their claims about their aversion to heterosexual marriage". An appeal from the judgment of Smith FM to the Federal Court (Emmett J) was allowed by consent, and the matter was remitted to the third Tribunal. The findings of the third Tribunal were the subject of an unsuccessful appeal to the Federal Magistrates Court, and are now before this Court. The appellants rely on four grounds before this Court. Grounds 5 and 6 were not pressed. Having regard to the legality/merits dichotomy of judicial review, this may, arguably, not be a sufficient basis for the Court to interfere. However, I find that the decision was perverse to such an extent as to exhibit a serious failure in the decision making process, with the consequences that the decision was so unreasonable that it was beyond power: see TCN Channel Nine Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 829 at 861. The decision of the third Tribunal manifests "an apprehension of predisposition, tendency or propensity towards a given result": NADH v Minister for Immigration & Multicultural and Indigenous Affairs [2004] FCAFC 328 ; (2004) 214 ALR 264 at [16] . That apprehension is, in my judgment, well founded. It was said that the approach to finding the facts, and the facts as found, demonstrated a lack of impartiality. No particular interest, affection, enmity or prejudice was identified which might have occasioned or contributed to the impugned conduct or approach. Thus formulated, the criticism of lack of impartiality is one which amounts to a complaint of an apprehension of predisposition, tendency or propensity towards a given result: cf Minister for Immigration and Multicultural Affairs v Jia (2001) 205 CLR 507 ; 178 ALR 421 ; [2001] HCA 17 at [183] per Hayne J. I am satisfied that this was done, not as a genuine exercise of administrative fact finding to which Courts, and in particular this Court, should, and must, defer, but in an attempt to insulate the finding from judicial examination, because it was expressed as being based on credibility. If the RRT had acted in such a manner it would have raised the perception that the findings made by the RRT in that regard had been moulded to support a particular conclusion: (see: Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5 ; (2000) 199 CLR 135 at 152, [42] . If the primary decision-maker has stated that he or she does not believe a particular witness, no detailed reasons need to be given as to why that particular witness was not believed. The tribunal must give the reasons for its decision, not the sub-set of reasons why it accepted or rejected individual pieces of evidence. Whether the decision of the third Tribunal be regarded as unreasonable in the Wednesbury corporation sense, or on the basis that the decision was not made in good faith, or on the basis that there was a lack of impartiality in the fact-finding process, the decision of the third Tribunal has to be set aside. Concerning Wednesbury unreasonableness, Weinberg J in Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707 ; (2005) 148 FCR 446 at [555] , referred to Aronson, Dyer and Groves', in Judicial Review of Administrative Decisions, 4 th Ed, view that the courts "regard this ground as representing a safety net, designed to catch the rare and totally absurd decision which has somehow managed to survive the application of all other grounds of review". It is now necessary to say with some particularity why, in my view, the judgment of the third Tribunal was not made bona fide. There are, in particular, two aspects of the evidence which were relied on by the Tribunal which lead me to conclude the Tribunal was concerned, not to find the facts truly, but to arrive at a predetermined conclusion, namely that the appellants were not homosexuals. The third Tribunal had before it the evidence before the three Tribunals. A very large volume of material had been sought from the appellants by way of letters written pursuant to s 424A of the Act. Much of the information sought has the flavour of interrogation directed at disproving the appellants' primary contention that they were homosexuals. There was a s 424A letter dated 5 November 2004 sent to the second appellant, the response of which was considered by the second Tribunal. Further letters of invitation were sent by fax on 17 October 2007. Further, in the Application for Migration to Australia, by [SZFSG's] sister, she also notes [the same named person] as her brother. Please provide proof that this person, who has exactly the same name as you, is not you. That is, that you [NAOX] are not [SZFSG's] brother. The DNA testing report from DNA Laboratories Sydney was carried out on each appellant. The DNA analysis taken at the initiative of the appellants was done in order to establish that they are not brothers. The Tribunal, however, dissected the DNA analysis and focuses on a statement that there was "inconclusive evidence of a cousins relationship". There were further invitations sent by fax on 14 December 2007, as well as further invitations on 16 January 2008. On 16 January 2008 there was a complaint of inadequate transmission of 22 pages of the 52 page fax dated 16 January 2008. There was a request for an extension of time. The Tribunal is acting in a partisan manner to bring about a particular result. (NB. (NB. (NB. Rather it has all the hallmarks of a decision maker attempting to find some justification for a decision it has already decided to make. The Tribunal is very concerned about claims relating to bias. These matters raised possible issues of truthfulness and credibility. The Tribunal also became aware at the hearing before the third Tribunal of possible inconsistencies and unreliability in the witness' evidence. The second discrete body of evidence, which in my judgment demonstrates the Tribunal did not approach its task bona fide, relates to the "first applicant's refusal to answer a question". This evidence in my view, indicates that the Tribunal was not concerned with genuine fact finding, but was seeking to give effect to a preordained result. It would be illogical were you to refuse such an offer and then go on to find, as did Member Hardy, that we are not homosexual. The Tribunal asked if they used a lubricant. The first applicant stated that he did not wish to answer. It is quite another thing when the Tribunal prefaces the question "Now you may not want to answer this question, but when you do have sex, do you use a lubricant" to which the first appellant replied, "I don't want to. " And the Tribunal noted "Don't want to answer", and to use the first appellant's refusal to answer that question as the basis for a finding that the first appellant was not a truthful or credible witness. In my judgment, the decision of the third Tribunal was not made in good faith, and was unreasonable in the Wednesbury Corporation sense. The Tribunal was guilty of bias, in the sense that it was predisposed to making its ultimate finding that the appellants were not in a homosexual relationship. The appeal must be allowed, and the matter remitted, yet again, to the Tribunal, differently constituted, for consideration. The first respondent must pay the costs of the appellants, to be taxed if not agreed. I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.

whether the decision of the refugee review tribunal was made in bad faith and breached procedural fairness appellants had been through lengthy litigation original tribunal had made a finding of fact that appellants were in a homosexual relationship relationship was not disputed in federal court and high court proceedings third tribunal found that appellants were not in a homosexual relationship tribunal made findings seeking to give effect to preordained result decision of the tribunal manifests "an apprehension of predisposition, tendency or propensity towards a given result" tribunal's decision was not made in good faith and was unreasonable appeal allowed. ss 424a , 476 (1) migration migration act 1958 (cth)

There are four issues outlined in the Amended Notice of Appeal. The first two concern the construction and effect of an undertaking given by consent and an order made by his Honour on 10 August 2005. The third issue is whether his Honour erred in law in failing to dismiss the creditor's petition on the basis that there was sufficient cause for so doing under s 52(2)(b) of the Bankruptcy Act 1966 (Cth) ("the Act "). Fourthly, the issue is whether the bankruptcy notice is a nullity because there was reasonable doubt as to the identity of the creditor. The bankruptcy notice was issued by Leonard Cohen & Co on 13 January 2005 in relation to the above judgment debt. The judgment debt was based on a judgment in the District Court of Western Australia in Matter No. 2520 of 2003. 3 On 30 June 2005, Registrar Tesoriero dismissed the appellant's application to set aside the bankruptcy notice. An application was then made to review that decision. On 10 August 2005, Federal Magistrate Raphael made orders by consent extending time for compliance with the bankruptcy notice until three working days after the decision was made on a strike out application then pending in the District Court brought by the respondent in respect of the appellant's cross-claim. 4 On 24 August 2005, the District Court Registrar made orders in Matter No. 2520 of 2003, dismissing the appellant's application to strike out the writ of summons and statement of claim. Time for compliance with the Bankruptcy Notice 22 of 2005 extended until 3 working days after the decision of the Registrar District court in the strike out application is handed down or the strike out application is otherwise dismissed whichever is the earlier. In the event the strike out proceedings are decided in favour of the applicant and the proceedings 2520 of 2003 are struck out with costs the bankruptcy notice is set aside upon the making of such orders. Costs of these proceedings will be reserved for decision and the parties are required to file with my associate and serve submissions thereon on or before 1 December 2005. This application, it is said, sought additional orders to the strike out, including an application that there be summary judgment against Leonard Cohen & Co and that the proceedings be dismissed. 10 Order 16 of the District Court Rules gives the power to grant summary judgment. The language of the Court Order is clear, and it refers specifically to the strike out application and not to the disposition of the application before the Deputy Registrar. Separate relief was sought based on two different orders. The strike out application was dismissed. The strike out application was therefore the subject of "a decision". There is no reference in the Chamber Summons to the disposition of all relief sought in the summons, including summary judgment and other prayers in the summons. On the contrary, the reference was, by consent, limited specifically to the application for a strike out. One must assume that when orders of this nature are consented to, careful thought has been given to the precise wording. Accordingly, for these reasons, the "three working days" as referred to in the Consent Orders, ran from the making of the Court Order dismissing the strike out application on 24 August 2005. The fact that there is a reference to the balance of the application being adjourned and costs reserved does not affect this conclusion. 11 Accordingly, I do not accept the appellant's submission on the first issue. The undertaking given in terms committed the appellant to forthwith pay the amount claimed in the bankruptcy action and to take no further proceedings seeking to set aside the notice. This undertaking was enlivened on and after dismissal of the strike out. 13 It must also be kept in mind that in the judgment under appeal, the learned Magistrate was construing the consent undertaking and not a statutory instrument. The undertaking is a consensual document and it is the common intent of the parties in giving and accepting the obligations therein, as reasonably construed in the light of the context, which determines its effect. The appellant submits that the undertaking does not cover an opposition to a creditor's petition on the ground that the bankruptcy notice should be set aside. It is said that opposition to a sequestration order under s 52 of the Act raises some different considerations to those relevant to an application to set aside a bankruptcy notice under s 40. This can be accepted. 14 However, in the context of this litigation, the Consent Orders were intended to and in terms require the appellant to refrain from any further challenges to the bankruptcy notice in whatever form and at whatever stage such challenge is made. The procedure to oppose the petition involves filing a Notice of Opposition and an Affidavit: see O 77 r 11 of the Federal Court (Bankruptcy) Rules . The purpose of the undertaking is that no steps will be taken to challenge the notice as a condition of the respondent's agreement to extend the time for compliance until a decision is made on the strike out application. There is an inconsistency between an undertaking not to take proceedings to set aside the bankruptcy notice yet to reserve a right to achieve the same result under the discretionary power given in s 52(2). The undertaking does not limit the expression 'proceedings' to one under s 40 of the Act . It commits the appellant not to take any proceedings which produce the result of effectively setting aside the notice for this reason. I do not accept the submission of the appellant on this second issue. This discretionary power is broad. 16 The onus is on the appellant to establish "sufficient cause". The appellant relies on outstanding costs orders against the respondent which have been made but which have not been taxed. The appellant relies on the evidence of a costs expert that the total amount will exceed the debt in the bankruptcy notice. 17 A similar argument was not successful on the application to set aside the bankruptcy notice before Registrar Tesoriero. The respondent refers to judgments and orders for costs untaxed in other proceedings, which are said to exceed the costs referred to by the appellant. The potential claim of the appellant for costs is said to be in the order of an amount less than $20,000.00, whereas there is an outstanding judgment in favour of the respondent for $240,512.51 exclusive of costs. 18 Having regard to the consent undertaking, the judgments referred to in submissions, and the relative costs awards together with the outstanding judgment sum of $240,512.51, the appellant has not satisfied me that there is "other sufficient cause" which would warrant dismissal of the petition. It is not necessary for me to consider, as a matter of law, whether the undertaking precludes the appellant from raising this issue, but it clearly is an important matter for consideration when contemplating the exercise of the statutory discretion. Counsel does not submit that there is any direct evidence from the appellant that he was misled as to the creditor. Nor is there any suggestion that the appellant made any attempt to pay the outstanding monies as required by the bankruptcy notice. Nevertheless, it is contended by the appellant that the judgment debtor must not be left in any reasonable doubt as to the identity of the judgment creditor. 20 Counsel for the appellant submits that there was reasonable doubt in this case having regard to the following circumstances. The respondent says that the agreements it sues on were on entered into on 21 September 1995 and 1 October 1995, at a time when Mr Leonard Cohen was a sole trader carrying on business under the name "Leonard Cohen & Co." On 1 November 2005, Messrs Georgiou and Vertannes joined the partnership. 21 The evidence of Mr Georgiou in an affidavit signed on 17 May 2005 is that it was a term of the partnership agreement that the partnership assumed all rights and obligations of Mr Cohen's existing practice as from 1 November 1995, excluding debtors to whom accounts had been rendered prior to 1 November 1995. Mr Georgiou notes that included in the rights and obligations were all the rights and obligations pursuant to the agreement entered into on 21 September 1995 between Leonard Cohen & Co and the appellant. He states that on 1 November 1995, the respondent further assumed all rights and obligations in relation to the written retainer agreement entered into on that day. On 8 December 1995, a Statement of Change in Registered Particulars was registered reflecting the change as to owners of the business name. 22 The work which is the subject of the relevant claim was carried out by the firm from September 1995 and ceased in February 1998, when instructions were withdrawn. When the first writ was issued on 17 March 2000, the three above named persons traded as "Leonard Cohen & Co." The writ in respect of which the relevant costs order was made was issued when Messrs Georgiou and Vertannes owned the company name. 23 On 30 June 2003, Mr Cohen ceased to be a co-proprietor of the business name, but there is evidence that the partnership with Messrs Georgiou and Vertannes was continued for limited purposes, presumably in order to wind up all the affairs of the partnership, including collection of all debts. 24 The appellant says that there was reasonable doubt in his mind as to the identity of the creditor, and that therefore the notice is a nullity. The question is whether a reasonable person in the position of the appellant would have been misled. 25 It is common ground that a firm can bring bankruptcy proceedings in the firm name under s 307 of the Act , and that a change in the composition of the firm does not invalidate the bankruptcy notice: Anderson Rice v Bride (1995) 61 FCR 529 and 542. The Full Court in Anderson Rice noted that it is the duty of the debtor to seek out and to pay the judgment creditor, if the creditor is in Australia: James v Federal Commissioner for Taxation [1955] HCA 75 ; (1955) 93 CLR 631 at 639. This reasoning is applicable in the present case. 26 I am not persuaded that there was any basis on which it could be established that the appellant had any reasonable ground to doubt that those parties constituting the firm under the name Leonard Cohen & Co obtained the rights to remuneration and obligations in respect of work during September 1995 through February 1998, or that they were the proprietors of the firm entitled to recover the fees. At all relevant times in this period, the partnership was constituted by Mr Cohen and as from 1 November 2005, with retrospective effect, the firm included Messrs Cohen, Georgiou and Vertannes. 27 I note that the bankruptcy notice of 13 January 2005 referred to "Leonard Cohen & Co" and gave the address of that firm. It also stated that payment could be made to Stewart Forbes, Barrister and Solicitor at 16 Irwin Street, Perth and the evidence indicates that no attempt was made to proffer any such payment. The Notice also specifies that Mr Forbes, who issued the notice, was the agent of the creditors. 28 The evidence does not establish that the appellant was misled as to the persons to whom he should pay the debt, nor that he had any reasonable doubt as to when the work was done or that such work included work up to February 1998. He could have made payment to Stewart Forbes and this would have satisfied the Notice. Accounting between the parties as to the allocation of the payment was a matter for them. 29 This case is in no way comparable the facts in McWilliam v Jackson [2000] FCA 175 ; (2000) 96 FCR 561 where the creditor was identified in the notice as "Anthony Jackson & Others. " The reference to "others" in that case was open-ended and uncertain on its face. 30 I do not accept this final ground. Furthermore, I consider that it is contrary to the undertaking given by the appellant. 31 For the above reasons this appeal is dismissed with costs. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

appeal from sequestration order of federal magistrate construction and effect of undertaking given by appellant in form of consent orders whether appellant's undertaking to not take proceedings to set aside bankruptcy notice covers opposition to creditor's petition whether "sufficient cause" exists under s 52(2)(b) of the bankruptcy act 1966 (cth) to warrant dismissal of creditor's petition whether there exists reasonable doubt as to the identity of creditor. bankruptcy

On 4 September 2008, the Administrative Appeals Tribunal (the AAT) affirmed a decision of the Social Security Appeals Tribunal (SSAT) of 23 November 2007. The SSAT found that the decision of the authorised review officer of Centrelink of 27 September 2007 to cancel Mr Zoia's Newstart allowance from 24 July 2007 was correct. The AAT affirmed that decision. In that hearing, Mr Zoia had sought an adjournment of his hearing on the basis that he did not want the AAT to make a decision in the matter but that he wanted the Minister for Centrelink to do so. The AAT declined that application for an adjournment on the basis that it had a duty to make a decision. The relevant issues before the AAT were: Section 605(2) and (3) of the Social Security Act 1991 (Cth) (the SS Act) provides that the Secretary can require a person who has entered into a Newstart Activity Agreement to enter a new agreement by giving a person notice of the requirement and the place and time the agreement is to be negotiated. Such notices were sent to Mr Zoia. Mr Zoia acknowledged that in response he had attended at Centrelink offices several times but that he did not sign the Agreement despite a number of requests to do so. He was also warned of the consequences of failing to sign the Agreement but declined to do so. The AAT concluded that Mr Zoia by his own admissions made at the AAT acknowledged that he had no reasonable excuse pursuant to s 626 of the SS Act for not entering into the Newstart Activity Agreement. At the heart of Mr Zoia's appeal as best one can discern it is the argument that his Newstart allowance should not have been cancelled as there was no power to compel him to sign the new Newstart Activity Agreement. On the occasion of that hearing (which was to be the hearing of the appeal) it had been necessary to adjourn the substantive hearing of the appeal in order to consider Mr Zoia's argument that the appeal was a nullity. While the discussion which ensued at that hearing could have no possible bearing on the substantive appeal, the starting time of the appeal was nevertheless deferred to permit Mr Zoia the opportunity to read the transcript. At the re-listed hearing of the appeal on 5 August 2009 Mr Zoia sought to re-agitate the issues dealt with in that interlocutory hearing. I did not permit that course. Mr Zoia sought a further adjournment of the hearing of the appeal on two grounds. The respondent opposed the application. The first ground was that he has sought access to a transcript of a directions hearing in which orders had been made pursuant to O 53 of the Federal Court Rules dealing with the procedural aspects of the appeal. In particular, he complained that he did not know what was involved in the settling of an appeal book index. To the extent that access to that transcript was required, it would inevitably have occasioned an adjournment because no transcript had been produced. I will assume that there is a recording in existence of that directions hearing which was conducted in October 2008. A further adjournment would not have been in the interests of justice. Mr Zoia apparently did not attend on the adjourned appointment for the settling of his appeal book index. I was informed by counsel for the respondent, and accept, that in light of his non-attendance, the respondent ensured that all of the material that had been before the AAT was made available in the appeal book for this hearing. In those circumstances, Mr Zoia was unable to identify and I was unable to discern any prejudice which would have been occasioned to him by proceeding with the hearing of the appeal. I also note, as submitted by counsel for the respondent, that Mr Zoia is no stranger to litigation and, in particular, has previously been involved in at least one appeal from the AAT and has some familiarity with the process. The second ground on which Mr Zoia sought an adjournment was in order to obtain legal advice. I accept Mr Zoia's argument that he is not well versed in the law. But I also concluded that the interests of justice did not support the granting of a further adjournment for the following grounds and I declined to permit it. Mr Zoia made a further application for legal assistance to the Attorney-General's Department which was rejected in March this year on the basis that the view was formed that his appeal did not appear to have sufficient prospects of success. As late as July this year following the adjournment of the first return date for the hearing of the appeal (too late in my opinion) he pursued a further application knowing, however, that the matter was listed for hearing on 5 August 2009. There is little reason to think that that late application would have met with success, that is to say, that the Attorney-General would have formed a contrary view to that expressed some months ago as to the prospects of success of the appeal. Steps were taken last year to endeavour to find a pro bono legal practitioner to advise Mr Zoia in relation to his appeal. Those steps were unsuccessful. As will be evident from the reasons which follow, the grounds of appeal on their face are barely intelligible and Mr Zoia's argument in support of them which has been raised at previous interlocutory hearings is equally lacking in clarity. On the other hand, Mr Zoia has raised similar points to those which he seemingly wishes to raise in this appeal in an appeal which is the subject of a decision by Siopis J in Zoia v Secretary, Department of Employment and Workplace Relations [2008] FCA 988. Mr Zoia was self-represented and argued that appeal himself apparently with sufficient ability to at least convey to his Honour part of the nature of his complaint. His Honour having ruled against him on that complaint already, it is not particularly surprising that Mr Zoia's attempts to obtain legal assistance have not met with success. On the basis therefore of delay in bringing the oral application, or the repetition of earlier argument which had been rejected and that a reasonable opportunity had been given already to attempt to obtain legal representation, the request for a further adjournment for that purpose was declined. The appeal therefore proceeded. On a number of occasions in the course of argument on the appeal, Mr Zoia indicated that he would like leave to appeal to the High Court to ventilate both the need for legal counsel and certain constitutional arguments. I made it clear to Mr Zoia that if his appeal before me was unsuccessful, he would have the opportunity to appeal to the Full Federal Court and a further opportunity from there if he was unsuccessful again, to seek leave to appeal to the High Court. It was made clear to Mr Zoia that it was not within my power to grant him leave to appeal to the High Court. In Platcher v Joseph [2004] FCAFC 68 , the Full Court (at [104]-[106]) addressed the several authorities on this topic. In a civil case, the balance between affording assistance to an unrepresented party and not conferring an advantage on that party is to be observed. The degree of assistance necessary will vary according to the circumstances (at [105]). Consistently with the approach suggested by these authorities, the notice and grounds of appeal needed a deal of interpretation to be understood. The pursuit of that course has been attempted. The Constitution of the Commonwealth of Australia. The High Court Judgment --- Huddart, Parker & Co Pty Ltd v Moorehead [1909] HCA 36 ; (1909) 8 CLR 330. Failed Justice. Failed Natural Justice. Failed Magna Carta, any charter guaranteeing liberty, any fundamental constitution or law guaranteeing rights. My Unemployment Benefits was cancel on Peter Langley information. I said to Peter, could you make the date after the hearing. Set the decision aside and substitute a new decision, that is despot justice, and also make them judge and jury. Set the decision aside, cancel, and substitute a new decision, that new decision can not be cancel. ARO, Brenda Parker can not correct a deception. Centrelink was trying to collect a debt from me. Constitution 64. can not be delegated. This month at Max Employment, I was told, a Lawyer can get it but I can't. About Peter Langley information or notes. Federal Court Rules --- Pro Bono Publico. The Hon Court to summon Peter Langley to give his information. Secretary, Department of Employment and Workplace Relations to be changed to Minister, for Centrelink, under Constitution 64. The Constitution of the Commonwealth of Australia. The High Court Judgment --- Huddart, Parker & Co Pty Ltd v Moorehead [1909] HCA 36 ; (1909) 8 CLR 330. Peter Langley information and notes. 5. Justice and Natural Justice. There is no obvious question of law disclosed in this notice of appeal filed. Although the notice and grounds of appeal together with the oral argument were difficult to comprehend, the main thrust of the complaint raised by Mr Zoia was that there was no power on the part of the respondent or anyone else to compel him to sign an agreement before paying him a Newstart allowance. This appears to be similar to one of the arguments that was advanced without success before Siopis J in Zoia [2008] FCA 988. There has been no appeal from that decision although Mr Zoia did contend before me that it was incorrect. The second aspect of the argument appears to be that, in fact, Mr Zoia had indicated that he was prepared to sign the agreement notwithstanding his primary position that he was not obliged to do so and that his willingness to sign the agreement was not taken into account. As to this argument, there was no evidence in support of this suggestion but, in any event, it could not constitute any reviewable error of law on the part of the AAT. There were subsidiary issues which I have also endeavoured to address. That is so in this instance. There is no freedom 'to do as one please(s)' to be found in the Constitution . Nor is there a charter guaranteeing a subject's liberty. Those who framed the Australian Constitution accepted the view that individual rights were on the whole best left to the protection of the common law and the supremacy of parliament. Thus the Constitution deals, almost without exception, with the structure and relationship of government rather than with individual rights. The fetters which are placed upon legislative action are, for the most part, for the purpose of distributing power between the federal government on the one hand and State governments on the other, rather than for the purpose of placing certain matters beyond the reach of any parliament. The Constitution does not contain a Bill of Rights . Indeed, the 1898 Constitutional Convention rejected a proposal to include an express guarantee of individual rights based largely upon the Fourteenth Amendment to the United States Constitution and including a right to due process of law and the equal protection of laws. The framers preferred to place their faith in the democratic process for the protection of individual rights and saw constitutional guarantees as restricting that process . In Higgins v Commonwealth (1998) 79 FCR 528 , Finn J considered the scope of the power of the Commonwealth to provide unemployment benefits. The "sufficiency of [s 634's] connection" with the head of power - cf Leask v Commonwealth [1996] HCA 29 ; (1996) 140 ALR 1 at 33 - is incontrovertible. The power to provide such benefits must, I consider, include at its "core" ... powers (a) to stipulate qualifications for entitlement to, and for continuing entitlement to, unemployment benefits; and (b) to impose disqualifications (temporary or permanent) on entitlement to ... or continuing entitlement to ... unemployment benefits. The requirements prescribed by the SS Act are to be satisfied before such support is given. As found in Higgins 79 FCR 528 , it is within the Parliament's legislative power to impose conditions for the qualification and payability of social security payments. There is no support for that contention on the evidence. The applicant was afforded the opportunity to put material before the decision-maker as part of the internal review processes, to present his case to the Social Security Appeals Tribunal and to present his case to the Administrative Appeals Tribunal (the AAT). The argument as to a lack of natural justice is rejected. Such officers shall hold office during the pleasure of the Governor-General. They shall be members of the Federal Executive Council, and shall be the Queen's Ministers of State for the Commonwealth. As best it can be understood, the applicant's argument appears to be that only the relevant Minister can make a valid decision to cancel a person's Newstart allowance under the SS Act. This argument is incorrect. One of the functions of a Minister of State of the Commonwealth as specified in s 64 of the Constitution is to administer such departments of the Commonwealth as the Governor-General in Council may establish. This is not correct. The broad power of delegation granted to the Secretary in s 234 of the Social Security (Administration) Act 1999 makes this clear. See also s 126(3) and s 149 of that Act and s 43(1) of the AAT Act which permits review of decisions made under the social security law and to affirm, vary, set aside, substitute a new decision or remit the matter to the Secretary for reconsideration. In my opinion the notice of appeal should be struck out without any further delay and the application dismissed. The time of the Court and of the respondent is not to be taken up by responding to matters which do not contain any intelligible basis upon which the dispute or matter in question can be identified. For the same additional reasons, this application will be dismissed. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

appeal from decision of administrative appeals tribunal affirming decision of social security appeals tribunal (ssat) ssat upheld decision of centrelink review officer to cancel the applicant's newstart allowance applicant was required to sign a newstart activity agreement but did not do so whether denial of natural justice whether delegation of decision-making powers valid whether matter should be adjourned further to enable the applicant to obtain legal assistance social security

The section does not, however, identify the instrument or authority that has prescribed the period which the court is able to extend or abridge. This has been left for the court to work out having regard to the purpose of the provision. In this case I held that s 1322(4)(d) permitted the court to extend the time for doing certain acts fixed by the Australian Securities and Investments Commission in a class order made under s 341. The times were then extended after I had satisfied myself, as required by s 1322(6)(c) , that no substantial injustice would be caused by the order. I indicated that in due course I would give reasons for my decision because the application of s 1322(4)(d) to a class order gave rise to nice questions of construction that had not previously been considered by a court. 2 The Corporations Act contains (and prior Company Acts contained) strict requirements for the preparation, content and auditing of a company's annual financial report, for the distribution of that report to members for their consideration at an annual general meeting and for the lodging of the report with the appropriate regulatory authority. The current provisions are to be found in Part 2M.3. 3 In the case of group companies the reporting obligations can be unduly burdensome. Accordingly ASIC has (and under former legislation its predecessors had) power to relieve a company from the requirement to comply with the provisions. Presently the power is found in s 341. Pursuant to that section ASIC may make an order relieving a wholly owned subsidiary of a body corporate from complying with the reporting obligations. ASIC has made an order under the section which provides that relief but only if certain conditions are satisfied. The most important condition is that the holding company prepare consolidated financial statements that cover the subsidiary. Other conditions are that (1) the holding company lodges its annual report as required by the legislation (s 319(3) provides that the report is to be lodged four months after the end of the financial year); (2) the notes to the financial statements include a short description of the deed of cross guarantee to which the members of the group are required to be a party, and also include a list of the parties to the guarantee; (3) within four months of the end of the financial year the subsidiary lodge a notice that the directors have resolved that the subsidiary remain party to the cross guarantee and take advantage of the order; (4) supplemental financial data be consolidated and filed that does not include data from group members that are not party to the deed of cross guarantee; (5) the holding company state that the members of the group will be able to meet any liabilities arising by virtue of the deed of cross guarantee; and (6) three years before and at all times after the subsidiary takes advantage of the relief given by the order, the subsidiary satisfies each of the obligations under Chapters 2M and 2N of the Corporations Act . 4 The plaintiffs are members of the Dana Australia group of companies. The first plaintiff is the holding company and the other plaintiffs are its wholly owned subsidiaries. The group assembles and distributes drive train products for the automotive industry. On any view it is a sizeable operation. The group's annual operating profit before tax is more than $40 million; its total net equity exceeds $150 million. 5 Since 1993 the subsidiaries have taken advantage of the class orders and have not prepared or lodged any financial reports. Following a recent internal review it has been discovered that the first plaintiff and its subsidiaries have not, however, complied fully with the conditions in the class orders. In particular, annual reports have been filed later than required; notices that the subsidiary has taken advantage of the class order were not filed at all; the directors have not filed resolutions of their intent to remain party to the deed of cross guarantee; there have been no statements ensuring the ability of members of the group to meet any obligations or liabilities arising under the deed of cross guarantee; separate filings have not been submitted which only include financial information from parties to the deed of cross guarantee; there have been no descriptions of the deed of cross guarantee nor lists of its parties that are members of the group. The conditions were not satisfied partly by reason of mistake, partly because of oversight and, to some extent, as a result of neglect. Nonetheless as soon as the problem was discovered the plaintiffs took steps to rectify the position. The appropriate documents were prepared and filed. But the filings were late. The question was whether the prescribed periods could be extended and so validate the filings. To this end the plaintiffs turned to s 1322(4)(d). They said that under this section the court can extend the times fixed by the class order. 6 In considering whether s 1322(4)(d) confers that power it is necessary to distinguish between a period that is fixed by ASIC directly in the class order (for example the obligation to lodge a notice within a set period) and a period that is fixed by the Corporations Act itself but which is picked up by the class order (such as the obligation to lodge an annual report within the time fixed by the legislation). In the latter case the view I take is that if the period fixed by the Corporations Act is extended by an order made under s 1322(4)(d) and the relevant act is then performed within the extended period, the condition of the class order will have been satisfied. Put another way, when a time fixed by the Corporations Act is incorporated into the class order then the incorporation is of that time as may be extended under s 1322(4)(d). That approach does no damage to the language of the existing class order and in any event is, I think, what was intended. On this aspect it must be remembered that ASIC does not have power to extend times prescribed by the class order. 7 The more difficult question is whether the section permits an extension of a period fixed directly by ASIC in the class order itself. Section 1322(4) derives from s 366(4) of the Uniform Companies Acts of 1961. The court did not have power to extend the time fixed by any other instrument, for example a class order. 8 Although it is derived from s 366(4), s 1322(4)(d) is cast in different terms. Relevantly it provides that: "the Court may ... make ... (d) an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation". No longer is there a reference to the period that may be extended or abridged as being a period that is fixed by the Act or by the rules or regulations made under the Act. The reason for the change is not clear. It is not discussed in the Explanatory Paper for the State legislation or the Explanatory Memorandum for the Commonwealth Bill. Nevertheless, one thing is certain: Parliament did not intend to narrow the operation of the section. On this basis it is easy to conclude that s 1322(4)(d) allows the court to extend or abridge periods prescribed not only by the Corporations Act and any rules or regulations made under the Act, but also periods prescribed by some other instrument or authority. 9 In Elderslie Finance Corporation Ltd v Australian Securities Commission (1993) 11 ACSR 157 a somewhat similar problem arose. A company had filed a prospectus for the purposes of a capital raising. Under the legislation then in force the company could not issue the securities following the expiration of six months from the date of issue of the prospectus. By s 1084(2) of the Corporations Law the Australian Securities Commission was permitted to "exempt a particular person or persons ... either unconditionally or subject to such conditions (if any) as are specified in the exemption" from compliance with provisions regulating securities offerings and from compliance with regulations made in furtherance of those provisions. ASC made a declaration under the section subject to certain conditions. One condition was that within a certain period the directors of the company should submit a report (the content of which is not particularly relevant) to the Commission. The report was not lodged within time and an application for an extension was sought under s 1322(4)(d). Owen J found that he had power to grant the extension. He reasoned (at 160) that the section "is a remedial remedy and should be given a liberal construction". He did not, however, state how the section should be read when given a "liberal construction". Thus, while the case stands as authority for the proposition that the periods fixed by an exemption granted under s 1084 are covered by s 1322(4)(d) , it is not clear what other instruments would be covered. 10 What, then, is the ambit of the section? The power which the court is relevantly given is to "make an order extending the period for doing any act ... in relation to a corporation. " Although poorly drafted I think it is clear that the power cannot be read literally. If read literally it would apply to every period within which a corporation is required to do an act whether that period is prescribed by a public authority (including Parliament) or by private treaty (for example, a contract of sale). That could hardly have been Parliament's intention. 11 Accordingly it is necessary to find some criteria by which to define the instrument or authority that has fixed a period for the doing of an act "in relation to a corporation" to which the section can have application. I have already indicated that the provision will operate in respect of periods fixed by the Corporations Act and by the rules or regulations made under the Corporations Act . It would not be going much further to read the provision as also having application to instruments made under the Corporations Act by a regulatory authority, such as a class order. This is only a small step to take. Whether the section has a wider operation may be left for another day.

extension of times fixed by class order whether permissible under s 1322(4)(d) corporations

In a related application concerning Australian Capital Reserve Limited (Administrators Appointed) (ACR), on 12 June 2007 orders were made extending the "decision period" provided for by s 441A(1)(b) of the Act to the last day of the convening period for a number of companies in the Group ( Australian Capital Reserve Limited (Administrators Appointed) v High Tower Investments Pty Limited (Administrators Appointed); in the matter of High Tower Investments Pty Limited (Administrators Appointed) [2007] FCA 1028). On 13 July 2007 the convening period for the second meeting of creditors of those companies was further extended to midnight on 31 August 2007 utilising the provisions of s 447A(1) of the Act to achieve that result and certain ancillary orders were made. I indicated then that I would give reasons for those orders in due course. These are those reasons. These reasons should be read with those in Hall, in the matter of Australian Capital Reserve Limited (Administrators Appointed) [2007] FCA 1328 to be delivered contemporaneously. The background to these reasons is set out in the various judgments to which I have referred and need not be repeated. 2 The Administrator of the Group with principal responsibility gave evidence as to what had occurred following the orders made on the last occasion and summarised the then current situation of the companies in the Group. He also dealt with the probable form of advice to creditors. I am satisfied that the task of investigating the position of each company and project, undertaking operational restructuring and taking advice as to the future, both generally and as to particular properties, was a major exercise that was approached diligently. 3 The Administrators have taken advice from a property agent on a property by property basis as to the current status of each property and the options available for realisation of them. Development of a strategy has involved negotiations with each of the first mortgagee lenders and the Administrators of ACR, who have taken their own property advice. A strategy has now been agreed on a property by property basis. Interim funding has been arranged in relation to major project construction work. There had been a confidential initial approach to the Administrators by a substantial company prior to the hearing that had the potential to affect the recommendation to creditors. 4 The Administrators have concentrated upon preparation of proposals in relation to the various companies which have been divided into three groups: Estate Constructions of Australia Pty Limited ACN 083 789 137 (Administrators Appointed), GC Condo Pty Limited (Administrators Appointed) ACN 123 133 013 --- which are the construction companies; secondly, Mayshine Pty Limited (Administrators Appointed) ACN 065 856 144, Sam Pogson Constructions Pty Limited (Administrators Appointed) ACN 050 288 394 and Seajazz Pty Limited (Administrators Appointed) ACN 069 288 204 --- known as the Mayshine companies; and thirdly, the remaining 21 companies within the Group known as the EPG subsidiaries. 5 Within the EPG subsidiaries there are 15 entities which have developments which are either completed, in the process of being developed or own properties which have not yet been developed. There are six entities which do not carry on business, have no external creditors and are classified as dormant. It was proposed that there would be a eeed of company arrangement put forward to cover the EPG subsidiaries, including both the active and dormant companies and it was envisaged that there would be a pooling arrangement. 6 The objective in relation to the construction companies is to formulate a proposal for a deed of company arrangement that would enable the construction companies to come out of voluntary administration and be sold to a third party and, thus, maintain a builder's licences. 7 The Mayshine companies are the ultimate holding companies for the EPG subsidiaries and the construction companies and are not borrowers from ACR. These companies are owned by the directors of the Group. At the time of the hearing the Administrators had not had an opportunity to properly investigate those companies to determine a recommendation to creditors. 8 The amount owed to external trade creditors of the Group is quite small compared with the amounts outstanding to secured lenders, including ACR. 9 The evidence of the Administrators in favour of the extension is entitled to considerable weight. However, an extension of the convening period of what, in total, amounts to approximately three months after appointment of the Administrators is considerable. The Parliamentary intention of maintaining tight time limits for this stage of voluntary administration has recently been reaffirmed. 10 The Parliamentary Joint Committee on Corporations and Financial Services Report, Corporate Insolvency Laws: a Stocktake, Canberra, June 2004, devoted attention to voluntary administration. In Ch 5 it considered, amongst other things, a comparison between voluntary administration and the United States Ch 11 procedure. It preferred voluntary administration and did not consider that wholesale amendments to the voluntary administration procedure were required (Ch 5.75). Under voluntary administration decisions are undertaken more quickly and under the supervision of a qualified independent administrator. 11 In Ch 6 the Joint Committee gave attention to the rights of creditors including the provisions concerning creditors' meetings. The Joint Committee considered submissions that the timeframe for the second meeting limited the ability of the administrator to carry out a proper investigation of the company's affairs, having noted the Court's power to extend the convening period under s 439A(6) and pursuant to s 447A. The adjournment period is to remain at 60 days. CAMAC then considered whether a business turnaround model, as proposed by some insolvency practitioners, should be adopted and recommended against it. That had been one of the variations also considered by the Joint Committee and rejected (5.50). CAMAC then considered a number of detailed matters, including the timing of first and major meetings (2.6). On the one hand it is beneficial for stakeholders that the process be conducted without delay. It avoids the delays, abuses and expense that may occur if a much longer or unrestricted time frame is allowed. 15 It needs to be borne in mind that administration of a company pursuant to Pt 5.3A is correctly headed as "Administration of a company's affairs with a view to executing a deed of company arrangement". A regime of the latter kind has clearly been rejected by the recent reviews of the topic as a form of external administration as such. 16 However, the flexibility provided by s 447A has been noted in those reviews. The factors that weighed in favour of the order for further extension that was made in the present case --- in addition to the opinion of the Administrators that more time was needed --- included the amount of work that had been done, the real possibility of deeds of company arrangement being proposed, the support of secured lenders including the administrators of ACR and the lack of opposition following wide dissemination of what was proposed. All in all, I was satisfied that this was a case for a further extension. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

second extension of convening period for second meeting of creditors of companies in administration parliamentary intention of maintaining tight time limits purpose of company administration corporations

Its sources of funds have included banks and institutions and smaller retail investors in a form of finance known as mezzanine finance. A large number of such investors has paid a very large amount of money to Mezzanine Companies set up within the Group for the specific purpose of raising capital for particular projects. The Westpoint Group is now in a state of collapse. Many of the companies making it up are under external administration of one kind or another. 2 The Australian Securities and Investment Commission (ASIC) commenced an investigation into the affairs of the Group in mid 2005. Its investigations have uncovered evidence suggestive of widespread and serious misconduct in the conduct of the affairs of the Group up until quite recently. As a result the position of investors and other creditors may be significantly prejudiced. 3 ASIC commenced proceedings in this Court on 29 March 2006 seeking the appointment of receivers to the property of certain officers and former officers of companies in the Group and against four named corporate defendants which are members of the Group. The application was brought under s 1323 of the Corporations Act 2001 (Cth). Interim freezing orders affecting the property of the various defendants were made by Siopis J on 5 April 2006 and extended until today when the substantive application, which was heard on 12 April 2006, falls to be determined. 4 The evidence placed before the Court in support of the application was extensive and detailed and was not the subject of any substantial challenge. It is indicative of serious misconduct in the affairs of the companies and the very real possibility that there have been a number of contraventions of the Corporations Act and other laws by persons involved in the Group. Indeed there are aspects of the evidence suggestive of a ruthless disregard by the Westpoint Group's controllers of the interests of investors and other creditors in the way in which funds invested and assets of companies within the Group have been dealt with. Other aspects of the evidence, particularly emerging from examination of the former directors of the Mezzanine Companies, are indicative of a degree of carelessness and indifference on their part to their duties as directors. 5 It is not a necessary part of the Court's function at this stage to make a finding of any particular contravention or liability on the part of any person or company named as a defendant to the application. It is sufficient to say, for the reasons that follow, that I regard it as necessary and desirable, to protect the interests of investors and creditors of companies in the Group, that receivers be appointed to the property of each of the defendants, other than seventh defendant which already has receivers and managers appointed under an existing security, and that ancillary orders be made in aid of those primary orders. A freezing order will be made in relation to the seventh defendant. The investigations covered the period from 1 July 2003. 7 The corporate entities in respect of which the determination were made fell into three groups referred to as 'the Companies', 'the Mezzanine Companies' and 'the Wider Westpoint Group'. A complete list of the entities and persons the subject of the determinations is set out in Schedule A to these reasons. 8 The Westpoint Property and Finance Group has until recently undertaken property development including the construction of apartment blocks in various parts of Australia. It raised finance for its undertakings from banks and other institutions subject to first ranking securities. It also raised, through so called 'Mezzanine Companies', finance from individual investors who were issued with promissory notes or debentures. To the extent that these investments were supported by securities held by companies in the Group, the securities ranked after those held by lending institutions, hence the reference to Mezzanine Companies. 9 Certain individuals have been closely associated with the activities of the Group. Norman Carey was its principal. He was the sole director and shareholder of the Westpoint Corporation Pty Ltd (Westpoint Corporation). He was also a director or sole director of many of the other companies in the Group. He was directly or indirectly the owner of many of the companies. The evidence suggests that he was effectively their controller. Graeme John Rundle was the Chief Financial Officer of the Group and the secretary of many of the companies in it. Cedric Richard Palmer Beck and John Norman Dixon were directors of the Mezzanine Companies. Another former director, Ms Lynette Rochelle Schiftan, resigned in October 2004. 10 The determination made by ASIC on 3 June 2005 was to conduct an investigation in relation to suspected contraventions by the directors of the Companies and the Mezzanine Companies of ss 184 and 588G of the Corporations Act , s 12DA of the ASIC Act and ss 373 and 409 of the Criminal Code (WA). Each of the determinations related to investigations into contraventions of those provisions. The later determinations widened the companies under investigation to cover the members of the Wider Westpoint Group as defined in the determination and additional members of the other groups of companies defined in the determinations as well as individual officers. 11 In aid of its investigations ASIC conducted examinations of a number of persons under s 19 of the ASIC Act. The direction was said to remain in force until 31 December 2006 or further order. 12 Many documents were produced to ASIC in the course of its investigations. Information Memoranda issued to prospective investors in various of the Mezzanine Companies. 2. A product disclosure statement entitled Westpoint Income Fund Product Disclosure Statement issued 19 November 2003. 3. Standard form letters to investors in various of the Mezzanine Companies. 4. Security documents and loan agreements. 5. A construction contract relating to a property development at Ann Street in Brisbane. 6. General ledger records and construction invoices. 7. Westpoint Corporation Access Database contained on a compact disc supplied to ASIC on 19 September 2005. 8. Reports from joint and several administrators of various of the Mezzanine Companies and from the liquidator of Westpoint Corporation. 9. Financial records and computerised databases for promissory notes issued by the Mezzanine Companies. 10. Computer records of various companies in the Westpoint Group. 11. Books and records in the possession of the defendants Carey, Rundle, Beck and Dixon and one Gregory John Nairn. 13 The investigations so far have placed in ASIC's hands a very large number of documents, substantial transcripts of the examinations of individuals associated with the Westpoint Group and reports from receivers and managers appointed to companies within the Group and from the liquidator of Westpoint Corporation. 14 On 29 March 2006 ASIC filed an application in this Court seeking orders under s 1323 of the Corporations Act against four officers and former officers of companies associated with the Westpoint Property and Finance Group and against four associated companies. The orders sought are for the appointment of receivers and managers of the property of the defendants. Associated asset preservation orders and orders requiring disclosure on affidavit of the assets of the defendants as well as orders requiring surrender of the individual's passports were also sought. 15 On 30 March 2006 Siopis J made interim orders restraining the defendants from removing any of their property from Australia or from otherwise dealing with it except to the extent set out in the order. He also directed the surrender of their passports. His Honour published his reasons for those orders on 5 April 2006 --- Australian Securities and Investments Commission, In the Matter of Richstar Enterprises Pty Ltd (ACN 099 071 968) v Carey [2006] FCA 366. 16 On 7 April 2006 I made orders extending the operation of the interim injunctions granted by Siopis J (subject to some undisputed variations) until 5pm on 12 April 2006 which was the date set down for the hearing of the substantive application. Following the hearing of the substantive application those orders were further extended to 5pm on Thursday 20 April 2006 subject to further agreed variations. Judgment on the substantive application was reserved to 2.15pm on Thursday 20 April 2006. 17 There was an application made on behalf of the second defendant for an order setting aside the ex parte orders made by Siopis J on the basis that there had not been full disclosure by ASIC of relevant evidence to the Court. The second defendant submitted that ASIC's evidence predominately related to transactions involving other defendants which were not relevant to the second. I am not satisfied that any material non disclosure is shown. In any event the interim freezing orders lapse today. An order, pursuant to section 1323(1)(h) of the Corporations Act , that until further order, Oren Zohar, Brian McMaster and Mark Korda of KordaMentha, chartered accountants, of Level 11, 37 St George's Terrace, Perth, be appointed as receivers and managers (" the Receivers ") without security, to all property (" the Property "), whether within Australia or overseas, of each of the Defendants. An order that the Receivers reasonable costs and expenses properly incurred in performance of their obligations, be payable from the collective assets of the Defendants. An order that any decision as to which of the Defendants is to ultimately bear the Receivers reasonable costs and expenses be reserved. As has already been noted, asset preservation orders and passport orders have already been made by Siopis J on an interim basis and renewed from time to time with some agreed variations pending judgment on the substantive application. Following the hearing of the application ASIC submitted minutes of proposed orders in respect of each of the defendants. (9) A person must not contravene an order by the Court under this section that is applicable to the person. (b) There is an application made by ASIC or an aggrieved person for one or more of the orders that may be made under that section. There is an investigation being carried out and the relevant application has been made by ASIC. (ii) The liability is to another person called 'the aggrieved person'. (iii) The court considers it necessary or desirable to make the orders 'for the purpose of protecting the interests of the aggrieved person'. The Court may have regard to known facts and circumstances in assessing their existence and potential existence --- Lone Star Exploration NL v Corporate Affairs Commission (1988) 6 ACLC 1108 at 1113. The nature of the protection can vary according to the nature of the risks assessed. In such a case, the interests of such persons are protected, within the contemplation of s 1323, by enabling ASIC to conduct an investigation for the purpose of identifying the wrongdoers and exposing them not only to penalties under the Corporations Act and other legislation, but also to claims for compensation from the victims themselves. The orders are made in circumstances where 'an investigation is being carried out', 'a prosecution has been begun' or 'a civil proceeding has been begun'. That is to say the orders can be made before liability is established and indeed before the evidence necessary to establish liability has been collected. While an application under the section is not interlocutory in an existing criminal or civil proceeding, it is interlocutory in a wider sense. It preserves the status quo and the assets of the relevant person pending the outcome of the investigation, prosecution or civil proceedings which are on foot --- CAC v Lone Star Exploration NL( No 2) (1988) 14 ACLR 499 at 504. At the stage an order is sought the Court may not be in a position to identify with precision any particular liability owed by the person the subject of the proposed order. This consideration applies to final orders made under the section as well as to interim orders for which it expressly provides in s 1323(3). The final orders made under the section are necessarily of a temporary or holding character rather than finally disposing of the rights and liabilities of the relevant persons affected by them. 26 The circumstances in which the Court may make orders under s 1323(1) are wide as indicated by the words 'necessary or desirable ... for the purpose of protecting the interests of a person ...'. There is an element of risk assessment and risk management in the judgment the Court is called on to make. It follows, and has been accepted, that there is no requirement on the part of ASIC to demonstrate a prima facie case of liability on the part of the relevant person or that the person's assets have been or are about to be dissipated --- Corporate Affairs Commission v ASC Timber Pty Ltd (1989) 7 ACLC 467 at 476 (Powell J); Australian Securities and Investment Commission v Adler (2001) 38 ACSR 266 at [7] (Santow J). 27 The nature and duration of orders made under s 1323(1) can be fashioned by the Court to reflect its assessment of any risk of dissipation of the assets of a person under investigation. But their legitimate purposes can go further. The interests of aggrieved persons may be protected not only by orders designed to protect dissipation of assets, but also by orders which create an opportunity for the assets of the person under investigation to be ascertained. 28 The appointment of a receiver may offer a more flexible response to the exigencies of the case presented to the Court than the imposition or continuation of a freezing order albeit they are not mutually exclusive remedies. The receiver can be equipped with the powers necessary to enable him or her to identify and locate a relevant person's assets and to prevent their dissipation or removal from the jurisdiction. The receiver can also ensure, without the necessity of specific applications to the Court to vary freezing orders, that bona fide dealings with assets which do not diminish the overall estate of the person under investigation and which allow that person to attend to their legitimate business affairs can be permitted. While ASIC has investigative powers which can be used to like effect, they do not necessarily give the capacity for short term responses and flexibility of action that a competent receiver armed with suitable powers may have. 29 It is not a necessary consequence of an order appointing a receiver that the receiver should deal with or liquidate the assets in question. The interlocutory and protective character of orders made under s 1323 must be borne in mind when defining the powers of the receiver. The appointment of a receiver has rightly been described as 'an extraordinary step' --- ASIC v Burke [2000] NSWSC 694 at [8] (Austin J). However depending upon the nature of the powers conferred on the receiver it may be less drastic than a freezing order which can only be varied by order of the Court. The interlocutory history of this case has already demonstrated that circumstances not contemplated when the original interim freezing orders were made have required their variation from time to time. Where these circumstances exist in combination, and especially where there are allegations of serious fraud involved, the Court may conclude ...that the Mareva Orders are not enough to ensure that the assets are preserved and protected, and indeed identified and brought in for the benefit of investors. Applications made under the section have an interlocutory character albeit there are no other specific proceedings to which they may relate. The section does not require concluded findings of fact about liability or whether assets have been dissipated. For the reasons already canvassed the Court, in making orders under s 1323 , engages in a risk assessment and management process. The logic of the section assumes that the Court will not always have before it evidence of the kind that would be necessary and admissible in proceedings to establish definitively the nature and extent of the assets of the persons under investigation and their liability to aggrieved persons. Nor will it necessarily have before it evidence of the kind that would establish definitively that dissipation of assets has occurred or is likely to occur or that flight is imminent. 31 The logic of s 1323 requires the Court to be able to act on evidence which might not be admissible in civil or criminal proceedings leading to a definitive determination of the rights and liabilities of the parties. Hearsay evidence may therefore be received and acted upon, not as proof of the truth of its content but as evidence of the existence of a risk or possibility that gives rise to the necessity for or desirability of a protective order. It is not necessary, in this context, to consider whether the proceedings are interlocutory for the purposes of the exception to the hearsay rule under s 75 of the Evidence Act 1995 (Cth) albeit that that exception is no doubt informed by similar considerations. Evidence may be received of the opinion of a suitably qualified person who has had the opportunity to review extensive documentation collected in the course of an investigation and to offer an overview of it for the benefit of the Court. In such a case the opinion or overview should be supported by reference to the relevant documentation and factual material. The opinion is received not for the determination of any ultimate issue of liability but as probative of the risk which the Court must assess in determining whether to make an order under the section. These considerations are relevant to the admissibility of some of the affidavit evidence which has been relied upon in this case. 32 Specific objection has been taken on behalf of the second defendant to the use of transcripts of examinations conducted under s 19 of the ASIC Act. It was submitted that pursuant to s 68(3) of the ASIC Act such transcripts are not admissible in evidence against the person who has signed the record in a proceeding for the imposition of a penalty. It was submitted that the present proceedings are, in truth, proceedings for the imposition of a penalty. This is on the basis that if interlocutory in nature, then they are interlocutory in respect of proceedings not yet commenced but which will inevitably be penalty proceedings. 33 Accepting that there is a possibility that penalty proceedings may be taken against one or more of the defendants in this case that does not, in my opinion, render the present application an application for the imposition of a penalty or an application incidental to such proceeding. As already noted, evidence may be relied upon of a hearsay or opinion character in these proceedings which might not be admissible in penalty proceedings. The same is true for s 19 transcripts. 34 It was submitted for the second defendant that because ASIC seeks an order that the reasonable costs of the receivers and managers whose appointment it seeks should be payable from the collective assets of the defendants, that fact itself gives the present application the character of a penalty proceeding. In my opinion however, the submission is misconceived. An order for the payment of costs out of the collective assets of the defendants would not of itself amount to the imposition of a penalty. Although it may effectively deprive defendants of some of their property that imposition is not by way of punishment for any contravention of the law. 35 Objection was also taken to the admissibility against the second defendant of transcripts of examinations of other parties conducted under s 19 of the ASIC Act. In this respect s 77 of the ASIC Act was relied upon. Counsel for ASIC on the other hand submitted that the second defendant had not required ASIC to call any absent witness as a witness in the proceeding and that therefore the condition of admissibility under s 77(b) of the Act was satisfied. Given the urgency with which the application has been made, it is perhaps a little unrealistic to require advance notice by the second defendant of the requirement that any absent witness whose s 19 transcript is relied upon be called as a witness in the proceeding. In my opinion, however, the transcripts of the examinations conducted under s 19 can be relied upon as tending to establish the possibility that circumstances exist which give rise to the necessity or desirability of a protective order. What is in evidence here is the fact that the statement was made in the course of a s 19 examination. The fact that the statement was made, rather like the hearsay evidence referred to earlier, may support an inference that circumstances exist that make a protective order necessary or desirable. It is not necessary to rely upon such evidence for the purpose of establishing the truth of the statement made. 36 For these reasons I reject the objections to the use of the s 19 transcript evidence which were raised on behalf of the second defendant. 37 Objections to the admissibility of other affidavit evidence were made on the basis that it involved statements of the deponent's belief about the purpose of transactions and argumentative opinions. So far as argumentative statements are concerned which are not able to be regarded as expert opinion or are unsupported by reference to factual material. I will disregard them. However, descriptions in the nature of syntheses or summaries, based on examination of the documentary and transcript evidence dealing with the operations of the Westpoint Property and Finance Group, its cashflows and specific transactions, will be received on the basis that they go to the existence of circumstances upon which the Court may determine that it is necessary or desirable to make orders of the kind sought in this application. The affidavit of Oren Zohar sworn 29 March 2006 . Mr Zohar is a partner of KordaMentha and one of the joint and several receivers of Westpoint Corporation with Mark Korda and David Winterbottom. Those three persons are also the receivers of another eight companies forming part of the Westpoint Property and Finance Group, having been appointed as such by Perpetual Nominees Ltd and Perpetual Trustees Company Ltd. Mr Zohar's affidavit covers the composition and structure of the Group, the role of Westpoint Corporation and the way in which projects undertaken by the Group have been conducted. His evidence also describes the way in which the flow of funds in Group developments would typically work and the interdependence of the affairs of different entities within the Group. His affidavit sets out what he describes as examples of 'irregular transactions' which he has identified based upon his investigations and upon discussions with Westpoint Corporation staff presently employed by the receivers. He describes transactions 'which appear to be designed to remove assets from Westpoint Corporation or other entities ...'. These transactions include assignments of loans to the fifth defendant, Richstar Enterprises Pty Ltd (Richstar Enterprises), and a transaction which he describes as a '$2 million runaround' by Bowesco Pty Ltd (Bowesco), the seventh defendant. His affidavit also refers to transactions which he describes as the 'Renaissance Mezzanine loan transfer', 'the Bowesco option' and attempts to avoid GST liability for Westpoint Realty Pty Ltd (Westpoint Realty), the sixth defendant. Other transactions involve the withdrawal of funds in connection with the Europa Development in North Perth, and the creation of security interests. 2. Supplementary affidavit of Oren Zohar sworn 6 April 2006. In this affidavit Mr Zohar deposes to the appointments of himself and Messrs. Korda and Winterbottom on 29 and 30 March 2006 as the Receivers and Managers of property of Silkchime Pty Ltd (Silkchime), Earlmist Pty Ltd (Earlmist), Westpoint Management and Forestview Nominees Pty Ltd (Forestview). On 3 April 2006 Suncorp Metway appointed McGrath Nichol as Receivers and Managers of the seventh defendant, Bowesco. An updated list of companies in the Westpoint Group subject to external administration is exhibited to the affidavit. 3. Further supplementary affidavit of Oren Zohar sworn 12 April 2006. In this affidavit Mr Zohar says that he has continued to assist ASIC in providing information and documents that may be relevant to any potential offences by any directors or employees of Westpoint Corporation. He also refers, in answering an affidavit sworn by Glenn Anthony Tully, to access arrangements for Level 7, 160 St George's Terrace, Perth used by Mr Carey and Redchime Pty Ltd (Redchime). This use was under an arrangement with Mr Zohar as one of the Receivers and Managers of Westpoint Corporation. 4. Second further supplementary affidavit of Oren Zohar sworn 12 April 2006. In this affidavit Mr Zohar sets out his professional qualifications and experience. 5. The first affidavit of Richard Warren Gomm sworn 29 March 2006 . In this affidavit Mr Gomm, who is an investigator in the Enforcement Directorate at ASIC's Western Australian regional office, describes the processes by which ASIC sought and obtained a large quantity of documents relating to the Westpoint Group. Based on a review of the documents produced to ASIC in compliance with its various notices and directions as well as a review of ASIC's own records, he expresses the opinion that the description in Oren Zohar's affidavit accords with ASIC's views in relation to the structure and composition of the Westpoint Group. I take this to be a reference to his own views. He describes the way in which the financing of each of the property developments undertaken by the Westpoint Group was effected with funds provided by retail mezzanine investors. He refers also to the Information Memoranda and Prospectuses issued in connection with the developments and describes what he calls 'the actual flow of funds raised by Mezzanine Companies'. He describes the accounting treatment of the funds and rollovers of the mezzanine investments. 6. The second affidavit of Richard Warren Gomm sworn 29 March 2006 . Mr Gomm's second affidavit annexes transcripts of examinations conducted by officers of ASIC under notices served pursuant to s 19 of the ASIC Act. He deposes to transactions which appear to have been effected by entities within the Westpoint Group at a time when it was reasonable to expect that Westpoint Corporation and other entities would go into some form of external administration. He expresses the opinion that the transactions have had the effect of reducing the assets of the Westpoint Group available to meet the claims of third party creditors and of benefiting persons formerly in control of the Group. He specifically refers to dealings in funds received by Mezzanine Companies from investors. He describes what he calls 'round robin transactions' and the results of various accounting entries made and cheques drawn on companies in the Group. 7. The first affidavit of Kevin Chin sworn on 30 March 2006 . Kevin Chin is also an investigator in the Enforcement Directorate at ASIC's Western Australian regional office. In his affidavit, which includes six volumes of annexures, he sets out the investigation determinations made under s 13 of the ASIC Act and company searches relating to the various companies in the Westpoint Group. He also exhibits transcripts of examinations conducted under s 19 of the ASIC Act. 8. The second affidavit of Kevin Chin sworn 6 April 2006 . In his second affidavit Mr Chin refers to a computer database maintained by ASIC and called 'the Litigation Support System' (LSS). The function of the LSS is to allow ASIC to record matters relating to documents which it obtains. Mr Chin, after reviewing the LSS, identifies 11 information memoranda exhibited to his earlier affidavit as memoranda issued by York Street Mezzanine Pty Ltd (York Street Mezzanine). He exhibits three additional information memoranda also issued by that company. He then describes various cheques drawn by Richstar and payable to Bowesco. An internal Westpoint Corporation document entitled 'Seven Day Plan of Action' evidently prepared by in-house counsel for the Westpoint Group Mr Wayne Innis, is also exhibited. There were some seven versions of this document ranging in their dates from 15 December 2005 to 6 February 2006. 9. The third affidavit of Kevin Chin was sworn on 11 April 2006 and referred to a letter addressed to Michael Lurie of Blake Dawson Waldron by the third defendant, Richard Beck, and dated 14 May 2003. 10. The affidavit of Marcus Essex Claridge sworn 30 March 2006. Mr Claridge is a Team Leader in ASIC's Enforcement Directorate. He deposes to having carried out, or caused to be carried out, searches of databases for property held in the names of Messrs Carey, Rundle, Beck and Dixon, the first to fourth defendants. He sets out in his affidavit the results of those searches. 11. The affidavit of Calogero Tindaro Triscari sworn 11 April 2006 is relied upon by the sixth and eighth defendants. Mr Triscari is their financial officer. He deposes to Westpoint Realty's ongoing property management activities and its selling activities and receipt of commissions. He deposes to services provided to Westpoint Realty by Redchime to ensure settlement of various purchases. His affidavit is directed to show the ongoing legitimate business activities of Westpoint Realty. 12. The affidavit of Glenn Anthony Tully sworn 11 April 2006. It is relied upon by the fifth, sixth and eighth defendants and concerns an allegedly unauthorised entry by Mr Zohar into Redchime's premises at Level 7, 160 St George's Terrace, Perth. Mr Zohar's further supplementary affidavit of 12 April 2006 was sworn in response to it. I do not propose to have regard to these affidavits on this issue as they do not appear to bear in any material way on the decision which I have to make in this application. 13. The affidavit of Cedric Richard Palmer Beck sworn 11 April 2006 . Mr Beck exhibits undertakings offered to the Court in lieu of the orders sought. In his affidavit he sets out what he described as his financial position. He states his preparedness to surrender his passport to the Court and to apply for its release if he wished to travel overseas. He denies the allegation made by ASIC in its submissions that, as a director of the Mezzanine Companies, he acted in accordance with instructions from Messrs Carey and Rundle. 14. The affidavit of John Norman Dixon sworn 11 April 2006. He denies the allegation that he acted in accordance with instructions from Messrs Carey and Rundle. He denies that he has taken any steps to hide or move any of his assets or those of any other person or entity out of reach of the creditors as a result of the collapse of the Westpoint Group. He proffers undertakings and is prepared to surrender his passport to the Court and to apply for its release in the event that he wished to travel overseas. He also gives details of his financial position. 15. The affidavit of Wayne John Carl Zappia sworn 11 April 2006 is relied upon by the second defendant, Mr Rundle. Mr Zappia is a legal practitioner employed by Lavan Legal. He deposes to details of facts stated to him in a telephone conversation with the second defendant, Mr Rundle. They go to Mr Rundle's personal circumstances and property owned by him. Mr Zohar has been a Chartered Accountant since 1995 and a Registered Liquidator since November 1999. He has been an Official Liquidator since August 2002. He has also been a Registered Trustee in Bankruptcy since February 2000. He has approximately 14 years experience as a corporate recovery specialist in all types of corporate and personal insolvency. He has acted as a voluntary administrator, receiver or liquidator of over 280 companies. I accept that he is appropriately qualified to identify and describe group corporate structures and operations based on an examination of public and company records. He is also qualified, in my opinion, to identify from company records financial transactions which may constitute or be indicative of contraventions of the Corporations Act or possible breaches of duty by directors or officers of the corporations worthy of further investigation. 40 Mr Zohar exhibited to his affidavit of 29 March 2006 a schedule of companies within the Westpoint Group including details of their current directors and shareholders. He also exhibited a Schedule of Controlled Entities being companies within the Westpoint Group which were subject to some form of external administration at the time of swearing his affidavit. The latter list of companies, as updated in the supplementary affidavit of 6 April 2006, is set out in Schedule B to these reasons. 41 Mr Zohar's affidavit exhibited a colour-coded Corporate Structure of the Westpoint Group also updated in his supplementary affidavit. It comprises approximately 157 corporate and trust entities. Thirty are under some form of external administration. Eleven are 'Mezzanine Companies', nine of which are under administration. Renaissance Mezzanine Pty Ltd (Renaissance Mezzanine) and Cinema City Mezzanine Pty Ltd (Cinema City Mezzanine) are not currently under the control of any external insolvency administrator. Mr Zohar's evidence, based on a search of the relevant company records, was that Mr Norman Carey, the first defendant, either directly or indirectly controls the four corporate defendants in the present proceedings, Richstar Enterprises, Westpoint Realty, Bowesco and Redchime. Bowesco, as noted earlier, has had a Receiver and Manager appointed to it on 3 April 2006. It is not in dispute on the material before the Court that the primary company within the Westpoint Group was Westpoint Corporation which is now in liquidation. Mr Norman Carey was its sole director and shareholder and Mr Graeme Rundle its secretary. The company was placed into administration on 24 January 2006 and a winding up order made on 16 February 2006. 42 Based on his examination of the Group records, Mr Zohar described Westpoint Corporation as a service provider to the majority of the members of the Westpoint Group. It provided staff, premises, a treasury function, accounting services, information technology services and management services. The registered office and primary place of business for most of the Group members, including each of the corporate defendants, is Level 9, 160 St George's Terrace, Perth. The receivers of Westpoint Corporation, including Mr Zohar, remain in possession of those offices. 43 Major projects undertaken by the Group were generally undertaken by special purpose development companies and funded by a combination of initial loans provided by Westpoint Corporation and funds provided by Mezzanine Companies or by a third party lender who would take security over the development company's assets. Ray Ellis, former head of treasury for Westpoint Corporation who continued to work for the corporation on behalf of the receivers until 7 February 2006 and now works for Redchime Pty Ltd with Mr Carey. 2. Brian Letts, the General Manager of Westpoint Realty, who continues to be employed by Westpoint Corporation to assist the receivers in realising and managing secured properties. 3. Brian O'Keefe, the General Manager of Finance at Westpoint Corporation who continued to work for the Corporation on behalf of the receivers until 15 February 2006. 4. Miss Tracey Fox, a chartered accountant employed by Westpoint Corporation who continues to be employed by it in order to assist the receivers in maintaining and understanding the books and records of the Group. Westpoint Corporation would keep the records of the loan accounts between those entities. (b) Funds would be transferred as required by Westpoint Corporation from the Mezzanine Company to Westpoint Corporation's account and be recorded as a loan by the Mezzanine Company to the Development Company and then a loan from the Development Company to Westpoint Corporation. (c) Westpoint Corporation would pay the majority of the expenses of any development and record those expenses against the development company loan account. These would include payments to Westpoint Realty and to Westpoint Construction to complete the development. It would also cover administrative and overhead expenses not necessarily related to the specific project. (d) Westpoint Corporation would pay money to the Mezzanine Company by way of monthly interest and would also pay commissions to financial planners who procured investments from members of the public. These would be reflected in a loan account between the Development Company and Westpoint Corporation. As between the Development Company and the Mezzanine Company, the Development Company would record the cost as work in progress and the Mezzanine Company would record the transaction as revenue. (e) As properties were sold the funds received on settlement would be paid to clear secured debts and pay commissions and selling expenses but any excess funds would be paid to Westpoint Corporation. It was signed by Messrs Carey, Rundle and Nairn. In the report 35 intercompany loans were identified as owing to Westpoint Corporation, totalling $148,761,510.09. Only $23,770,731.26 was estimated to be realisable. A further 20 related party loan accounts were disclosed under which Westpoint Corporation owed a total of $71,176,415.26. From his review of the Westpoint Corporation records, Mr Zohar found 62 related party loans which he had identified during the course of the receivership to and from Westpoint Corporation as requiring further investigation. These included 38 loans owing from related entities totalling $143,766,703.33. Only $22,389,786.64 was estimated by Mr Carey as realisable in the report as to affairs. There were 25 loans owing to related entities totalling $75,029,895.59 of which Mr Carey admitted $71,176,415.26 in the report. 47 Mr Zohar stated that no meaningful reconciliation could be undertaken in relation to the recoverability of related party loans until a full investigation could be carried out in relation to each of the entities within the Westpoint Group given the level of intercompany indebtedness and intercompany debt assignments. 48 In Mr Gomm's first affidavit he referred to Mr Zohar's affidavit and in particular his descriptions of the Westpoint Group and what he called the 'Central Role of Westpoint Corporation'. Mr Gomm said, that based on a review of the documents produced to ASIC under various notices and directions which it issued as well as a review of ASIC's records, he agreed with Mr Zohar's description of the structure and composition of the Westpoint Group. He gave an account in his affidavit of the structure of the Mezzanine Companies and the way in which they operated to raise funds for Westpoint Group projects. Initial equity from within the Westpoint Group to provide funding for land acquisition and preliminary expenses such as development approvals --- this equity was recouped when sufficient funds were raised from mezzanine investors. 2. Debt financing from special purpose Mezzanine Companies incorporated to raise funds from retail investors by the issue of promissory notes or debentures. 3. Senior financing from a bank or other financial institution granted a first ranking security over the property. This financing became available to be drawn down during the construction phase. In some cases, and in particular the Emu Brewery and Ann Street projects, senior financing was also obtained to assist in the purchase of the land. The purpose of the raising of the funds was said to be the development of specific projects. Mr Gomm exhibited copies of the Information Memoranda produced to ASIC in the course of its investigations. By way of example, the first of those Information Memoranda exhibited to his affidavit related to a $25 million promissory note issue by Bayshore Mezzanine Pty Ltd (Bayshore Mezzanine). This referred to a 292 apartment complex to be located at 45 Bay Street in Melbourne, directly opposite another Westpoint development known as the Bayview Development. Bank debt - $70 million. 2. It will then lend this amount to the Trust to assist in funding the project on the terms and conditions set out below. The Information Memoranda stated that Promissory Notes by nature are unsecured. The financier, namely a bank, would hold a first ranking mortgage over the property and a first ranking charge over the Trust, ie the assets of the Trust. Bayshore Mezzanine would have a second ranking fixed and floating charge over the Trust and a second ranking mortgage over the property. Westpoint Corporation and associated entities would provide a guarantee for Bayshore Mezzanine up until the redemption of all promissory notes and satisfaction of all interest payments due under those promissory notes. The Information Memorandum went on to say that the Westpoint Group would act as development manager of the project and its construction company would act as the senior contractor for the project. The Information Memorandum promised prudent financial management by the Westpoint Group, which would carefully control costs and measure profit impact. Risk would be minimised and managed by the Westpoint Group through the stringent application of a range of mechanisms which were set out. A number of risk factors were also identified. He exhibited to his affidavit copies of loan agreements entered into between the Mezzanine Companies and the Development Companies for a number of projects. The Mezzanine Companies would obtain a secondary security over the projects in exchange for the loans to the Development Companies. The moneys raised by the Mezzanine Companies were also guaranteed by entities related to the Westpoint Group. Each Development Company entered into a Lump Sum Design and Construction Contract with Westpoint Constructions for the construction of a specific project. Under a special condition inserted in some of the construction contracts, Westpoint Constructions was permitted to pre-invoice the Development Company an amount equal to or less than 65% of the value of the contract. 52 Mr Gomm described the actual flow of funds raised by Mezzanine Companies. Application moneys received from investors were banked into the respective Mezzanine Companies' bank accounts. He exhibited to his affidavit copies of application forms, general ledger printouts and bank statements in relation to Ann Street Mezzanine. From time to time, and sometimes daily, the money in Mezzanine Company bank accounts was paid directly to the bank account of Westpoint Corporation after deducting amounts for expenses such as commission. The funds were paid to Westpoint Corporation acting as 'treasury' for the Westpoint Group. There was no segregation, in Westpoint Corporation's bank account, of funds received from the various Mezzanine Companies. Mr Gomm exhibited copies of supporting documents including invoices, cheque requisitions, remittance advices and bank statements which gave examples of payments made from Westpoint Corporation's bank account that did not appear to relate to specific projects. His conclusion was that once moneys were received by Westpoint Corporation from the Mezzanine Companies they were used to make payments that did not necessarily relate to the specific projects for which the funds had been raised. 53 A matter of particular concern was the treatment of investor rollovers. Mr Gomm deposed that investors were regularly 'rolled over' into other projects being undertaken by the Westpoint Group when their promissory notes or debentures expired or were approaching expiry dates. Where investors were rolled over from one project to another they were issued with a new promissory note relating to the second project. There was no corresponding payment of money however from entities involved with project A to entities involved with project B. The rollovers were simply accounted for by a series of journal entries. A transfer of promissory note liability from Mezzanine Company A to Mezzanine Company B. 2. A decrease in the liability of Developer A to Mezzanine Company A and an increase in the amount owed by Developer A to Westpoint Corporation acting as group treasurer. This would reflect Westpoint Corporation initially assuming the liability to the investors. 3. Mezzanine Company B would record the liability to the investors as a result of them being rolled over from Mezzanine Company A and create a receivable from Developer B as if the rolled over amount had been lent to Developer B. 4. Developer B recorded a receivable from Westpoint Corporation for the amount of the promissory notes rolled over and a loan owing to Mezzanine Company B as if the amount had been borrowed from Mezzanine Company B. 5. Westpoint Corporation adjusted intercompany loan accounts by increasing the amount owing to Developer B and decreasing the amount owing to Developer A by the amount of the rollover. These transactions were said to be funded by payments to Westpoint Corporation from various companies within the Group that had issued promissory notes and debentures to the public. The transactions were said to have had the effect of reducing the assets of the Westpoint Group available to meet the claims of third party creditors and of benefiting persons formerly in control of the Westpoint Group. 55 Mr Gomm's affidavit then went into detail about the transactions to which he was referring. He described first the passing of cash from Mezzanine Companies through Westpoint Corporation to ongoing operational entities. On 24 November 2005 Westpoint Corporation paid $1 million to Renaissance Mezzanine and $1,150,000 to Bowesco. It paid $1,370,000 to Richstar Enterprises on 25 November 2005. These three payments appear to have had the direct effect of reducing the cash assets available to the unsecured creditors of Westpoint Corporation by $3,520,000. Cash was passed to entities undertaking the ongoing operations of persons formerly in control of the Westpoint Group. Through on-payment of the $1 million received by Renaissance Mezzanine on 24 November 2005 to Rold Corporation Pty Ltd (Rold Corporation) on 25 November 2005. 2. Through the passing of $1,150,000 of cash to Bowesco as trustee for the Dyson Family Trust. 3. By passing $1,370,000 of cash previously held by Westpoint Corporation to Richstar Enterprises as trustee for the Richstar Enterprises Trust. Voluntary administrators were appointed to that company on 23 November 2005. York Street Mezzanine's liabilities are guaranteed by Westpoint Corporation. Monthly interest payments for the month of November 2005, which were due for payment at the end of that month, were not made by various of the Westpoint Group Mezzanine Companies to the holders of promissory notes and debentures that they had issued. The three payments outlined above, according to Mr Gomm, appeared in large part to have been funded by payments to Westpoint Corporation from various of the Westpoint Group Mezzanine Companies. 57 Mr Gomm pointed to evidence indicating that the three payments referred to were funded from investor moneys. The opening balance of the Westpoint Corporation bank account on 21 November 2005 was $2,173,617.61. Immediately following its payment of $1,370,000 to the Richstar Enterprises Trust on 25 November, the balance of the bank account was $1,040,675.61. He referred to records of money movements supporting the conclusion that from 21 November 2005 to 25 November 2005 deposits totalling $3,675,000 were made into the Westpoint Corporation bank account by various of the Westpoint Group Mezzanine Companies which had issued promissory notes and debentures to the public. In addition he exhibited to his affidavit memoranda from a Group Finance Manager, Chris Fairman, to the first defendant, Norman Carey, on 21 and 24 November 2005 requesting authorisation for loan advances to be made by the Mezzanine Companies referred to above together with emails from Raymond Ellis requesting that those amounts be transferred to 'Corp'. ANZ bank statements for the relevant Mezzanine Companies at the time are also referred to. Mr Gomm noted that, of the deposits made into the Westpoint Corporation bank account between 21 November and 25 November 2005, only $381,187.37 came from bank accounts not operated by the Mezzanine Companies. 59 Mr Gomm described two sets of 'round robin' transactions of $1 million each entered into in January 2006. Under the first of those transactions, on 5 January 2006, $1 million was paid by Bowesco as trustee of the Dyson Family Trust to the Westpoint Income Fund, a managed investment scheme registered under the Corporations Act with Westpoint Management Ltd. That amount was onpaid on the same day by the Westpoint Income Fund to Goldtag Pty Ltd as trustee for Cinema City Property Trust. On 9 January 2006, $1 million was paid by the Cinema City Property Trust back to the Dyson Family Trust. 60 The second round robin transaction commenced on 13 January 2006 when another $1 million was paid by the Dyson Family Trust to the Westpoint Income Fund. On 17 January 2006 $1 million was paid by the Westpoint Income Fund to the Cinema City Property Trust and on 18 January 2006 that sum was paid in two tranches of $500,000 each by the Cinema City Property Trust back to the Dyson Family Trust. There was no net effect on the cash balances of any of the Dyson Family Trust, the Westpoint Income Fund or the Cinema City Property Trust. Mr Gomm exhibited copies of various documents including bank statements detailing these transactions. 61 Mr Gomm also referred to a two page document originating in the Westpoint Group setting out a number of accounting (journal) entries that were to be made in the accounting records of six entities being the Dyson Family Trust, the Westpoint Income Fund, the Cinema City Property Trust, Westpoint Corporation, Lanepoint Enterprises and Centreways Refurbishment Syndicate Trust (CRST). Lanepoint Enterprises is a development company whose principal asset is a development known as 'Regency Apartments'. Its sole director is Allan Carey, the brother of Norman Carey. Following that substitution the $2 million owing to the Westpoint Income Fund by the Cinema City Property Trust represented 17.7% of the total assets of the Westpoint Income Fund. 62 Mr Gomm referred to withdrawals from the Dyson Family Trust bank account (Bowesco) following the second round robin transactions. By 13 February 2006 the balance of that account had been reduced to $56,581.02. Total withdrawals from the account during the period from 19 January 2006 to 13 March 2006 amounted to $1,225,353.65. 63 Mr Gomm expressed his belief that on 18 January 2006 the Dyson Family Trust paid $200,000 to Keypoint Developments Pty Ltd (Keypoint Developments) for the purpose of that company making payments to a number of its creditors as well as creditors of Lanepoint Enterprises and Keyworld Investments Pty Ltd (Keyworld Investments). He referred to documentary evidence in support of that conclusion including various cheques drawn on the account of Keypoint Developments. 64 Further cheques evidencing withdrawals from the Dyson Family Trust bank account were referred to in Mr Gomm's affidavit. These cheques evidenced withdrawals from the account following the payment of the two tranches of $500,000 on 18 January 2006. One of those cheques was for an amount of $350,000 for payment to Westpoint Constructions on behalf of Lanepoint Enterprises. Another of the cheques, dated 8 February 2006, was for an amount of $10,000 paid to Redchime. There was detailed reference to other transactions involving payments by Keypoint Developments, Keyworld Investments and transfers of amounts owing to the Westpoint Income Fund by Lanepoint Enterprises to Kingdream Pty Ltd (Kingdream). 65 In the event, and as a result of revised draw down notices to which he referred in his evidence, and the first and second round robin transactions an amount owing to the Westpoint Income Fund by Lanepoint Enterprises was reduced from $6,606,736.75 as at 30 November 2005 to $2,309,819.88 as at 31 January 2006. That is a reduction of a debt which represented 48.2% of the total assets of the Westpoint Income Fund to a debt representing 20.5% of its total assets. 66 Mr Zohar gave evidence in his affidavit of 29 March 2006 of what he described as 'irregular transactions'. These were transactions which, in his opinion, appeared to be designed to remove assets from Westpoint Corporation and some of its associated entities. 67 Following his appointment as one of the Receivers and Managers to Westpoint Corporation, Mr Zohar instructed Tracey Fox to obtain books and records relating to assignments of loans between entities in the Westpoint Group. The spreadsheet was prepared by one of his employees, Ms Price, based on information provided by Ms Fox and extracted from Westpoint Corporation's books and records. In most instances it appeared to have had sufficient assets to repay the debt to Westpoint Corporation. (b) Entity B was a creditor of Westpoint Corporation. (c) Westpoint Corporation purported to assign the debt owing by Entity A to Entity B. (d) The purported consideration for the assignment was a reduction in the indebtedness of Westpoint Corporation to Entity B. Entity B had received the benefit of the assignment in consideration of the reduction of a debt owing to it by Westpoint Corporation that was essentially unrecoverable. 68 Mr Zohar set out the effect of each of these assignments in summary form based on the information provided to him by Ms Fox and the posting dates of each of the assignments. The dates of the majority of the Deeds of Assignment and journal entries were February, June and July 2005. However Ms Fox told Mr Zohar that she had been instructed by Greg Nairn of the Westpoint Group to post the transactions in December 2005 and January 2006. 69 By way of example the first transaction in Mr Zohar's table was an assignment of a debt owing by Richstar Enterprises to Westpoint Corporation, the debt being assigned to Dosius Pty Ltd (Dosius). The assignment was said to arise from a deed dated 28 February 2005. Ms Fox informed Mr Zohar that Mr Nairn had instructed her to post the transaction on 3 December 2005 recording the journal date as the alleged date of the deed, namely 28 February 2005. 70 As a result of the assignments Westpoint Corporation appears to have reduced its assets by assigning debts to a total value of $11,063,142.12, although according to the records of Westpoint Corporation their value was only $10,699,766.30. 71 According to Mr Zohar he was informed by Ms Fox that on or about 25 January 2006, the day after his appointment, she was instructed by Mr Nairn to process, in the Westpoint Group's books, a transfer to alter a debt owing by Westpoint Corporation to North Sydney Development Pty Ltd (North Sydney Development) in the sum of $6,570,026. The debt was to be shown as owing by Westpoint Construction to North Sydney Development. The stated reason for this transfer, according to Ms Fox, was that the debt was properly incurred by Westpoint Construction and not Westpoint Corporation. Mr Zohar, however, had been unable to verify this from his own investigation of the books and records in his possession. 72 By a Contract of Sale dated 31 January 2002, Richstar Enterprises had purchased property, being Units 1 and 2 in 44 Wolseley Road, Point Piper in New South Wales, for $4,100,000. At the time Mr Carey was the sole director of Richstar Enterprises. (b) From time to time Westpoint Corporation would provide funds to service the loan payments so that as at 30 June 2004 $1,891,268 was owing by Richstar Enterprises to Westpoint Corporation as an interest free loan with no fixed term for repayment. 73 Richstar Enterprises entered into a refinancing arrangement in early 2005 and was provided with a facility of $4,550,000 by Australian Unity. Of this amount $3,231,478 was used to repay the HSBC loan. $1,256,759 was paid into the Westpoint Corporation bank account. A loan of that amount was then recorded in the Westpoint Corporation general ledger from Richstar Enterprises to Lanepoint Enterprises. 74 Ms Fox informed Mr Zohar that although the funds were paid into the Westpoint Corporation bank account they were not directly advanced to Lanepoint Enterprises. Although some of its development expenses were paid from time to time by Westpoint Corporation on behalf of the development company, the funds sitting in the accounts were used to pay general administrative and other expenses of Westpoint Corporation. There is no written record of the receipt of $1,256,759 from Westpoint Corporation by Lanepoint Enterprises save for the posting of the journal entry and the recording of expenses to the general ledger of Lanepoint Enterprises of payments made by Westpoint Corporation on its behalf. 75 On 29 November 2005 it appears that Ms Fox was directed by Mr Ellis to process a general ledger journal entry to record repayment of the loan from Richstar Enterprises to Lanepoint Enterprises of $1,370,000. The cash for that transaction came from a Westpoint Corporation Westpac account and was transferred to an account held by Richstar Enterprises with HSBC Bank. 76 On or about 7 February 2006 Mr Zohar was informed by Mr O'Keefe that the Point Piper property had been sold by Richstar Enterprises for $7.5 million and that settlement was expected to occur on 31 March 2005. Australian Unity was owed approximately $4.5 million and about $3 million would be available for subsequent creditors. On or about 23 January 2006, however, Bowesco trading as the Dyson Family Trust, obtained a charge from Richstar Enterprises to secure alleged advances. From Mr Zohar's examination of Richstar Enterprise's records at 31 January 2006, there was no liability from Richstar Enterprises to Bowesco and therefore no apparent reason for the granting of the Richstar Enterprise's charge. Although Westpoint Corporation had serviced the loan repayments of the Point Piper property and had advanced funds of $2,114,966.46, Westpoint Corporation, as a result of the transactions referred to, would not receive any funds following the sale of the Point Piper property. 77 Other questionable transactions referred to by Mr Zohar in his affidavit included a series of intercompany loan transfers recorded in a document, located at Westpoint Corporation's offices, entitled 'The $2 million Run Around'. This referred to payments made by Westpoint Corporation to Bowesco between 11 July 2005 and 15 December 2005 totalling $2,106,932.99 which, according to Mr Zohar, were said to represent loan repayments for funds allegedly advanced by Bowesco to Westpoint Corporation. It was Mr Zohar's evidence, by reference to the records which he examined, that Mr Carey, Mr Rundle and Mr Nairn had processed a series of transactions designed to leave debts in entities which had provided guarantees for the debts of the Mezzanine Companies and would therefore be unable to pay those debts or were not intended to continue to trade. Debts owing from entitles of which they would retain control were removed to entities which might then become subject to external administration, such as Westpoint Corporation. 78 Mr Zohar described what he called 'the actual cash movement' in the series of transactions. $2 million was paid by Bowesco to Goldtag and the same amount repaid by Goldtag to Bowesco. The journal entries to support this cash transfer reflected a series of inter-entity transfers which he set out. The end result was that Bowesco received back the initial $2 million. Before the $2 million run around, Lanepoint Enterprises was indebted to the Westpoint Income Fund. At the end of the transactions it had reduced that indebtedness by $2 million and Goldtag had incurred a liability of $2 million to the Westpoint Income Fund. Lanepoint Enterprises held land assets which, after payment of secured debts, were expected to have a surplus value. Goldtag had provided guarantees for the Mezzanine Companies and had a potential liability far in excess of $200 million. There was no likelihood of Goldtag repaying the loan to the Westpoint Income Fund, whereas Lanepoint Enterprises would have had the capacity to repay. 79 Mr Zohar also referred to a liability for $530,975.88 owed by Lanepoint Enterprises to Renaissance Mezzanine, which was transferred to Vannin Pty Ltd as trustee for the Hay Family Trust (Vannin). He instructed Ms Fox to examine the records of the Westpoint Group and provide him with a summary of the relevant transactions. He exhibited a copy of a memorandum prepared by her summarising the transfers and attaching general ledger reports for the transfers which he then explained in summary. (b) On 29 December 2005 Mr Rundle and Mr Nairn instructed Ms Fox to transfer Lanepoint Enterprises's liability to Renaissance Mezzanine out of Lanepoint Enterprises to Vannin via Westpoint Corporation. The balance owing by Westpoint Corporation to Renaissance Mezzanine as at 31 December 2005 was $759,000. On 17 January 2006 under instructions from Mr Nairn and Mr Rundle, Ms Fox effected journal entries as a result of which the Westpoint Corporation liability was transferred to Vannin. (b) A deed of guarantee from Westpoint Corporation, Westpoint Consulting Group, Westpoint Realty, Forestview Nominees, Earlmist and Goldtag to Renaissance Mezzanine to secure an alleged loan of $2,500,000. (c) A charge from Vannin to Renaissance Mezzanine to secure an alleged loan of $2,500,000. Those assets would include surplus equity expected to be received by Vannin upon the sale of a Hale Road property which would either be payable to creditors of Vannin in general, or given that Vannin had provided a guarantee for the debts due by the Mezzanine Companies, available to be applied to that debt. 80 Further security documents were found by Mr Zohar at the State Revenue Department. These were allegedly executed on 23 January 2006, the day before the appointment of the administrators and receivers to Westpoint Corporation. They were lodged to be stamped on 25 January 2006. (b) A mortgage and loan agreement from Forestview Nominees to Bowesco to secure an alleged loan of $2 million. (c) A mortgage and loan agreement from Warwick Entertainment Centre Pty Ltd to Rompride Pty Ltd as Trustee for the Erley Unit Trust to secure an alleged loan of $7 million. (d) Three mortgages and loan agreements from Silkchime to Erley Pty Ltd as trustee for the Erley Unit Trust to secure an alleged loan of $250,000. It appears from the various company records that no money had been lent by Bowesco to Lanepoint Enterprises apart from $700,000 paid to Lanepoint Enterprises as part of the $2 million run around. There was no record in the management accounts of Forestview Nominees to show any funds were paid to it by Bowesco. The accounts of Warwick showed a loan owing to the Erley Unit Trust of $4,910,467.03. There was no record in the accounts of Silkchime to show any funds owing to Erley Pty Ltd or the Erley Unit Trust. 82 This review of the affidavit evidence, particularly of Mr Gomm and Mr Zohar, does not purport to be exhaustive. It is sufficient however, in my opinion, to indicate that those who had the control of the affairs of the Westpoint Group may have been involved in serious contravention of their statutory duties as directors and officers of various companies. They may also have incurred liabilities under the general law. The range and complexity of questionable transactions is great and the potential losses to investors in the Group and other creditors are substantial. In my opinion each of the defendants is potentially liable in respect of all or some of the matters to which reference has already been made in the evidence. In so saying I express no concluded view as to whether any particular contraventions have occurred or any particular liability has been incurred. 83 In addition to the matters referred to above, ASIC's submissions identified other areas of potential contraventions of statutory obligations which may give rise to liability on the part of the individual defendants. Numerous Information Memoranda were issued by the Mezzanine Companies in order to attract retail investors to the Westpoint Group. York Street Mezzanine distributed at least eleven of these between May 2000 and September 2002, as well as three others which were undated. 84 There are serious grounds for the argument developed by ASIC in its submissions that these and other Information Memoranda relied upon to attract mezzanine retail investors were misleading or deceptive in various important respects. The Information Memoranda arguably misrepresented the total funds to be used as mezzanine finance for the respective developments to which they related. For example, although Information Memoranda issued in relation to the Scots Church Development by York Street Mezzanine indicated a maximum of $40 million to be raised by that company, its database showed $118 million was received. It was submitted for ASIC that by allowing York Street Mezzanine to raise funds in excess of $40 million, the director of that company had arguably breached their duties under ss 180 and 181 of the Corporations Act to act in good faith and for proper purposes. 85 It was also said to be arguable, and I accept, that the Information Memoranda issued by York Street Mezzanine may have falsely represented that moneys raised would be applied specifically by way of a cash loan to the relevant Development Company which was Scots Church Development Pty Ltd. However no cash funds were ever lent to that company. The investors money was paid instead to Westpoint Corporation and mixed with other funds held by it. The closest that Scots Church Development seems to have got to the money was a book entry. 86 Many examples of express and implied representations in Information Memoranda and other documents such as Investor Updates issued by the Mezzanine Companies were identified by ASIC in its submissions. 87 ASIC also submitted that whether or not Mr Carey was a director of the Mezzanine Companies, he was an officer or director by virtue of his control and his conduct in relation to them and this too was detailed. The involvement of the Westpoint Corporation and Mr Carey personally in the promotion of mezzanine finance raisings was evidenced in the first affidavit of Kevin Chin. 88 ASIC also referred to evidence from transcript examinations of Messrs Beck and Dixon indicative at least of a lack of attention to the use to which money raised from investors was to be put within the Group and the content of Information Memoranda issued by the Group in the name of the Mezzanine Companies. Mr Beck himself was in a position of potential conflict as it appears he was paid commission by the Westpoint Group for fund raising including attracting retail mezzanine investors. There is evidence to suggest that the redemption of primary notes was a matter for decision by Messrs Rundle and Carey according to priorities which they determined. 89 In the event, ASIC submitted that, given the complexity of the Westpoint Group and the questionable nature of a large number of transactions between its companies, the most appropriate method of preserving its assets would be by granting the proposed orders. There is said to be at present considerable doubt that the existence and location of many of the assets and the number and identity of claimants and the nature of their claims. ASIC submits that this, coupled with the allegation of serious wrong doing in the context of assets being dealt with, justifies the making of the orders sought on the application. Mr Claridge searched Land Title Registers or databases in each of the Australian States and Territories, the Register of Boats in those States and Territories, the Register of Race Horses in New South Wales and the Register of Motor Vehicles in the State and Territories. 91 The only interest shown in the name of the first defendant, Norman Carey, was a 16.66% interest in a race horse 'Great Nation' registered in New South Wales. 92 Graeme Rundle was found to be the registered proprietor of two lots on strata plans in Perth and the registered proprietor as joint tenant with Jane Rundle of two lots at Mermaid Waters and Mermaid Beach, Queensland. He is also the registered owner of a Ford Territory passenger car registered in Queensland. 93 Mr Beck was shown to have an interest as joint tenant with Anna Harris in some 22 lots mainly in Western Australia. He was also shown as a trustee with Anna Harris of a lot situated on the Gold Coast in Queensland. In addition Mr Beck has an interest in a boat called the Sea Eagle registered in New South Wales. 94 John Dixon is a joint tenant with Helen Mary Dixon of a quarter share of a lot in Queensland and another lot in the Mornington Peninsula in Victoria. He also has an interest in an open boat and a 2000 Porsche motor vehicle registered in Victoria. Mr Carey has put on no affidavit evidence. Mr Rundle says, via his solicitor, that he is a person of limited means and that he has not travelled overseas since August 2001. He denies ownership of certain of the property attributed to him by Mr Claridge in his affidavit. 96 Mr Beck denies the allegation by ASIC that, as a director of the Mezzanine Companies, he acted in accordance with instructions from Messrs Carey and Rundle. He says that he has taken no steps to hide or move any of his assets or those of any other person or entity out of the reach of creditors as a result of the collapse of the Westpoint Group. He offers undertakings and also offers to surrender his passport to the Court. He sets out his financial position, which shows assets of $2.485 million and liabilities of $4.28 million. The properties disclosed by Mr Claridge's searches are said to be held by Mr Beck and his wife as trustees of the Beck Unit Trust. He is also a beneficiary of other discretionary trusts. 97 Mr Dixon, like Mr Beck, denies he acted under instructions from Messrs Carey and Rundle. He denies having taken any steps to hide or move his assets or those of any other person or entity. He, like Mr Beck, offers undertakings and offers to surrender his passport. 99 In my opinion, the misconduct indicated by the evidence is wideranging and serious. The precise locus of responsibility for that misconduct and the identification of any liabilities which may arise will require further careful investigation and in the meantime the protection of any assets that may be available to satisfy such liabilities. Although the appointment of receivers is a drastic step, I am satisfied that in the serious circumstances of this case, it is justified. I do not think that the necessary protection can be achieved by way of freezing orders or the acceptance of undertakings. 100 ASIC has submitted minutes of proposed orders in relation to the various defendants and for the most part I am content to make orders in terms of those minutes. The powers proposed for the receivers have been moderated and I have further qualified them in the orders I propose to make. One issue of concern is the proposed order that the receivers' reasonable costs and expenses should be payable from the collective assets of the defendants. ASIC has made some submissions in that regard and I will give the defendants the opportunity to respond to those submissions before making an order as to the costs of the receivers. I will make the travel restraint orders which are sought and the general orders authorising the plaintiff to give notice of the orders to relevant authorities, banks, building societies and financial institutions. The appointment of the receivers will be limited in time rather than open-ended. I will limit their appointment in the first instance to a term of six months which may be extended upon application. It will also, of course, be possible to apply to terminate their appointments. The power of the receivers in respect of the property of the defendants will extend, as requested by ASIC, to the identification, preservation and securing of individual property for the benefit of potential creditors. It will not however extend to the 'collecting' of property. Affidavits of assets will also be required to be filed by each of the defendants. There will, of course, be liberty to apply to vary the orders according to changed circumstances. I will direct that the defendants pay ASIC's costs of the application.

appointment of receivers to property of directors and officers of corporate group members of corporate group pending investigation by australian securities and investments commission possible contraventions of corporations act 2001 (cth) possible liabilities of defendants to third parties nature of application for freezing orders and appointment of receivers nature of evidence that may be received on such application evidence of wide spread and serious misconduct in operation of affairs of group orders necessary and desirable receivers appointed corporations

The proceeding seeks relief in respect of an unregistered managed investment scheme known as "FullTank" ("the Scheme"). 2 The Scheme was conducted by the second defendant, BTS Management Pty Ltd ("BTS"), under and by reference to the business name "Chargeitcards". The first defendant ("McDougall") is the sole director of BTS. The business name registration records that both BTS and McDougall carry on business under the name Chargeitcards. 3 The evidence establishes that there are no registered managed investment schemes conducted under the names "BTS Management", "Chargeitcards" or "FullTank". Further, neither BTS nor McDougall holds an Australian financial services licence covering the provision of financial services. 4 Merkel J granted interim and interlocutory relief on 18 October and 25 October 2005. From September 2005 until October 2005 the Defendants contravened section 601ED(5) of the Corporations Act 2001 by operating an unregistered managed investment scheme defined in the Schedule to the Order ('the Scheme') which required registration as a managed investment scheme but was not so registered. From September 2005 until October 2005 the Defendants contravened section 911A of the Corporations Act 2001 by carrying on a financial services business in this jurisdiction, by offering interests in the Scheme, without holding an Australian financial services licence. Pursuant to section 1324(1) of the Corporations Act 2001 the Defendants be and hereby are permanently restrained whether by themselves, their servants or agents or otherwise from further operating or promoting the Scheme. The Scheme be wound up pursuant to section 601EE(1) of the Corporations Act 2001 . Pursuant to section 601EE(2) of the Corporations Act 2001 Adrian Lawrence Brown and James Henry Stewart be appointed joint and several liquidators of the Scheme ('the Liquidators'). The Liquidators have power to do, in Australia and elsewhere, all things necessary or convenient to be done for or in connection with the winding up of the Scheme, or incidental to the attainment of the winding up of the Scheme including the powers identified in section 477 of the Corporations Act 2001 as if each reference there to a 'company' was a reference to the Scheme. The reasonable costs and expenses of the Receivers and winding up the Scheme including the professional costs and expenses of the Liquidators shall be paid out of the assets of the Scheme. Within 7 days of the making of this Order the Defendants pay to the Liquidators the sum of $80,000.00, such sum to be applied by the Liquidators (together with the Scheme's assets) in accordance with section 556 of the Corporations Act 2001 as if each reference there to a 'company' was a reference to the Scheme. To the extent that the sum paid to the Liquidators under Order 10 is not sufficient (together with the Scheme's cash assets) to discharge all the liabilities of the Scheme, as determined by the Liquidators, together with the remuneration, costs, fees and expenses of the Liquidators then the Defendants shall pay such shortfall to the Liquidators within 21 days of receiving a call for payment of such shortfall from the Liquidators. The Defendants pay the Plaintiff's costs of the proceeding. The proceeding otherwise be dismissed without adjudication. They do not oppose the making of the declarations referred to in paragraphs 1 and 2. This was to be achieved by issuing a debit card to each member investing in the Scheme. The debit card could be used to purchase fuel and other goods at fuel retailers through the EFTPOS system. The defendants promised a substantial discount on the cost of fuel, which varied from 80 per cent in September 2005 down to 50 per cent in October 2005. 7 The defendants launched the Scheme and began accepting membership applications on 12 September 2005. The Scheme became operational on 10 October 2005 when the first amounts were uploaded to debit cards issued to the investing members. Of those investors, approximately 107 had paid their full subscription. By 25 October 2005, total funds invested in the Scheme amounted to $93,193.30. The remaining cash balance of the Scheme as at 25 October 2005 was $33,150.22. The address of the website was http://chargeitcards.com/fulltank . The website represented to the general public that FullTank members could make very substantial savings on their fuel bill over a 20 week period by subscribing to one of FullTank's fuel plans. For a short time, the Scheme offered benefits over a 52 week period, but this was soon shortened to 20 weeks. As the table makes clear, the numeric component of the fuel plan description refers to the dollar amount which would be credited to an investor's debit card each week for the period of the plan. FullTank offers the worlds first and only fuel club that allows members to save 50% on all their fuel costs. Members are supplied with an easy to use FullTank Debit Card that is loaded each week with their nominated weekly fuel requirement. FullTank Cards can be used at all correctly coded (EFTPOS) fuel outlets across Australia, even if they have never heard of FullTank ! Only 5000 FullTank Cards available! So, if you or anyone you know is considering joining, best to join before we close membership and become a private Fuel Club. chargeitcards.com operates independently of other companies or banking institutions. The fees chargeitcards.com charge for it's services are available from a link on the main page. The company will transfer the weekly amount as chosen by the members plan level. The company will protect its customers' privacy and will only disclose any customer information if it is seized by the government authorities or requested by court under summons. chargeitcards.com may choose to contact it's customers at any time while processing and verifying the order information. Please read the follow information carefully as your questions and concerns should be covered here. It is a possible scenario that you may take everybody's money upfront, last say 2-3 months and then disappear with everyone's fees and not deliver on the fuel. As at 20 September 2005, the website claimed that members would save up to 80 per cent on all their fuel costs by subscribing to FullTank. 11 The website explicitly withholds any information about how members' funds would be invested and how the fuel savings would be achieved. In the course of his examination, he said that the defendants intended to invest money provided by subscribers to the Scheme in various high yield investments. In fact, the only investment made by the defendants was an investment in a foreign exchange trading account with Forex Capital Markets LLC ("Forex"). Forex is based in New York, USA, and provides an online internet currency trading facility. 13 McDougall apparently believed that he could make sufficient profits from online foreign exchange trading to fund the Scheme's obligations to its investors. In the course of his examination, he said he expected returns of approximately 30 per cent per month with minimal risk of loss as a result of foreign exchange trading. This implies a return of 360 per cent per annum. In fact, the evidence is that in the first two weeks of online currency trading, the defendants incurred a loss of $2649.87. 14 Foreign exchange trading involves a high level of risk. Some of these risks are referred to on the website maintained by Forex. During the course of his examination by ASIC, McDougall said that he did not have any experience in the foreign currency market. He also conceded that investors in the Scheme were totally unaware that their funds were being used to invest in foreign exchange trading. 15 It is clear that, unless McDougall and BTS made extraordinary profits from currency trading, the only way that the Scheme's obligations to its investors could be met would be through the use of membership fees paid by new investors. A Scheme which operates in this manner is commonly described as a "Ponzi" scheme. Part of the money deposited by early investors is then used to pay their first dividend cheques or interest. So long as the money keeps flowing into the scheme, payments can still come out. However, the burden of future payments also keeps growing. The scheme inevitably collapses once people stop joining. In their report to the Court, the receivers constructed a summary of cash receipts and payments into and out of the Scheme for the period from 12 September 2005 to 25 October 2005, and a table of the Scheme's available assets as at 25 October 2005. Of the $93,193 invested in the Scheme by investors, $30,000 was paid into a foreign currency trading account with Forex. After accumulated trading losses of $2649 and certain fees charged by Forex, the available balance of $27,303 was recovered from Forex by the receivers. The invested funds were also used to make various private payments on behalf of McDougall and BTS. For instance, McDougall caused $5044 to be paid to a company which provides horse racing software; a laptop computer was purchased for the private use of McDougall's sister at a cost of $1297; motor vehicle expenses of $2000 were paid in respect of McDougall's personal motor vehicles; school fees of $1000 were paid to the school attended by McDougall's children; and $4000 was paid into McDougall's personal Totaliser Agency Board account. BTS also issued five fuel cards to members of McDougall's family despite the fact that they had not paid any membership fees. Using the funds invested in the Scheme by other members, each of these cards was subsequently credited with $1000. Receivers' costs payable out of the assets under receivership are in the order of $40,000. In large measure, the deficiency in the Scheme is attributable to the fact that total liabilities outstanding to members are $83,370, whereas the total assets available to the Scheme are only $49,423. 18 The receivers concluded that if the Scheme were allowed to continue operating with the limited cash assets available to it, those assets would be dissipated in approximately 5 weeks. In their opinion, the Scheme was fundamentally flawed, particularly given that the implicit rate of return required to refund the outstanding payments to investors was completely unachievable. They recommended that the Scheme not be allowed to continue to operate. Their evidence was that BTS had an estimated deficiency of liabilities over assets of $118,561. McMillan is a member of the Scheme and an associate of McDougall. Having read previous emails and perhaps speaking with you over the phone this may come as no surprise to you. But before this can happen, FullTank is required by ASIC to fully dissolve the original membership, resulting in the closure of the original program. The second option required investors to return a letter to BTS which stated that the investor wished to forgive BTS of any debt owed to the investor concerning the FullTank program. 22 McDougall told the receivers that he had caused the email to be sent out because he did not want any of the investors in the FullTank Scheme to lose money. McDougall also said that he realised that the email may be a breach of the Court's interlocutory orders of 25 October 2005. 23 There is also evidence before me, which I accept, that members of the Scheme received telephone calls from an unknown person who said he was a fellow member who was making the call on behalf of McDougall. The caller told members that there would be new cards issued and not to be discouraged as the Scheme would reopen. 24 McDougall received a large number of letters from investors in the Scheme in response to the email by which those investors agreed to forgive any debts owed to them by BTS in relation to the FullTank program. 25 The evidence also shows that on 17 October 2005 BTS purported to assign the business name "Chargeitcards", the domain name www.chargeitcards.com , and the product name "FullTank" to Mr Timothy McDougall, who is McDougall's son. 26 Understandably, ASIC pointed to this material as indicating that there was a substantial risk that the defendants would repeat their contraventions of the Act , unless they were restrained from engaging in similar conduct in the future. 28 Section 601ED(1) provides, inter alia , that a managed investment scheme must be registered under s 601EB if it has more than 20 members. Neither the exemption in subs (2) nor subs (3) of s 601ED is applicable in this case. 29 Section 601ED(5) provides that a person must not operate in this jurisdiction a managed investment scheme that is required to be registered under s 601EB unless the scheme is so registered. 30 Section 601EE(1) provides that if a person operates a managed investment scheme in contravention of s 601ED(5) , ASIC may apply to the Court to have the scheme wound up. The Court may make any orders that it considers appropriate for the winding up of the scheme in the event that ASIC makes an application of the kind described in s 601EE(1). 31 On the evidence, the Scheme was a managed investment scheme that required registration, and it was not registered. By 25 October 2005, the Scheme had 134 members. It had approximately 127 members as at 17 October 2005. 32 Investors in the Scheme paid to receive a FullTank debit card and the rights and benefits which came with it. Their subscription monies were pooled in bank accounts held by BTS which were invested by BTS at McDougall's direction. The object was to produce financial returns which were promoted on the website as a saving on fuel costs. 33 The members of the Scheme had no control over its day to day operation. They had no knowledge that the pooled funds were being partly transferred to a foreign exchange trading account with Forex. Nor did they know that subscription monies were being used by McDougall to pay some of his own personal expenses or those of his family and associates. 34 In Australian Securities and Investments Commission v Pegasus Leveraged Options Group Pty Ltd (2002) 41 ACSR 561 at 574 (" Pegasus "), Davies AJ addressed the question whether the sole director of the company which promoted and operated a managed investment scheme should also be considered to be a person operating the scheme. The term is not used to refer to ownership or proprietorship but rather to the acts which constitute the management of or the carrying out of the activities which constitute the managed investment scheme. To effect or produce by action or the exertion of force or influence; to bring about, accomplish, work. To cause or actuate the working of; to work (a machine, etc). To direct the working of; to manage, conduct, work (a railway, business, etc); to carry out or through, direct to an end (a principle, an undertaking, etc) orig. He was the living person who formulated and directed the scheme and he was actively involved in its day to day operations. He supervised others in their performance. He did not 'merely' act as agent or employee of Pegasus. He was the directing mind and will of Pegasus and of the scheme. In that case, the individual in question was one of the directors of the company managing the scheme. His Honour found that the person in question formulated and directed the scheme, and was actively involved in its day to day operations as the directing mind and will of the company managing the scheme. Accordingly, he was operating the scheme in contravention of s 601EB(5). In making these findings, Mansfield J approved the passage in Pegasus to which I have referred. 36 There is no doubt that McDougall was the person who formulated and directed the Scheme, and he was the directing mind and will of BTS in its day to day operations in relation to the Scheme. Accordingly, I find that both McDougall and BTS operated the Scheme. 37 After these proceedings were commenced and after Merkel J had made interlocutory orders on 25 October 2005, McDougall attempted to resuscitate the Scheme in a different form. He procured McMillan to solicit members to forgive existing Scheme debts on the promise of equivalent interests in a new scheme. 38 The defendants were represented at the hearing of this proceeding by Mr Erlich of counsel. On their behalf, he submitted that the evidence before the Court was capable of establishing all of the elements necessary to establish that BTS and McDougall contravened s 601ED(5). I am satisfied that this is so. Mr Erlich did not consent to the making of declarations of contravention, but he did not oppose that course. In my opinion, both defendants contravened this provision. They carried on a financial services business without holding an Australian financial services licence covering the provision of the financial services under the Scheme. 40 Section 761A provides that a financial service business is a business of providing financial services. Investors intended that BTS would use their contributions to generate a financial return in the form of fuel discounts or savings. The members had no day-to-day control over the use of their contributions to the Scheme. It does not matter that the Scheme failed to generate returns or benefits of the kind, or to the extent, represented. It follows that, by investing in the Scheme, members made a financial investment within the meaning of s 763B. 44 Section 763A(1) provides that a financial product includes a facility through which, or through the acquisition of which, a person makes a financial investment. The FullTank Scheme satisfies this description; it offers or represents a facility through which investors make a financial investment. The Scheme is therefore a financial product within the meaning of s 763A(1). 45 The Scheme also constitutes a financial product within the meaning of s 764A(1)(ba). Under this provision an interest in a managed investment scheme that is not a registered scheme, but which is required to be registered by s 601ED(1) , constitutes a financial product for the purposes of ch 7 of the Act . BTS is a person responsible for the obligations owed under the Scheme. The website states that Chargeitcards is owned and operated by BTS and that Chargeitcards guarantees that if for any reason it was not able to maintain the weekly payments, then every member affected would receive a pro-rata refund of the first 10 weeks membership less any payment made to the members' card account. By promoting, offering and managing the Scheme, BTS was dealing in a financial product for the purposes of s 766C(1) of the Act . 48 Section 766A(1)(b) provides that a person provides a financial service if they deal in a financial product. Accordingly, by dealing in a financial product BTS was also providing a financial service for the purposes of ch 7. 49 For the foregoing reasons, I am satisfied that BTS was carrying on a financial services business. It required a licence to do so. As BTS did not hold a licence, it contravened s 911A(1). 50 I consider that McDougall, as the sole director and controller of BTS and as one of the registered owners of the business name Chargeitcards, was also carrying on an unlicensed financial services business in contravention of s 911A(1). Further and in any event, McDougall was acting as a representative of BTS in offering and promoting memberships in the Scheme. As such, McDougall was only exempt from the requirement that he hold an Australian financial services licence if BTS itself held such a licence, and it did not. 51 Numerous cases have held that s 911A of the Act extends to a company director who conducts or is involved in a company's carrying on of a financial services business without an Australian financial services licence: see Australian Securities and Investments Commission v Giann & Giann Pty Ltd [2005] FCA 81 ; (2005) 141 FCR 278; Australian Securities and Investments Commission v Manito Pty Ltd (2005) 53 ACSR 56; Australian Securities and Investments Commission v Drury Management Pty Ltd [2004] QSC 68. 52 In all the circumstances, I am satisfied that BTS and McDougall each contravened the provisions of s 911A by carrying on a financial services business without holding an Australian financial services licence covering the provision of financial services under or in connection with the Scheme. It is very clear that this Court has power pursuant to ss 21 , 22 and 23 of the Federal Court of Australia Act 1976 (Cth) to make the declarations that have been sought. 54 In Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564, at 581-582, Mason CJ, Dawson, Toohey and Gaudron JJ said that superior courts have inherent power to grant declaratory relief. Their Honours added that it is a discretionary power which it is neither possible nor desirable to fetter by laying down rules as to the manner of its exercise, although it must be recognised that it is a power confined by the considerations which mark out the boundaries of judicial power. In the same case, Brennan J emphasised that the making of a declaration, and the terms in which it is to be made, are in the court's discretion: at 596. 55 Since Australian Softwood Forest Pty Ltd v Attorney-General (NSW ) [1981] HCA 49 ; (1981) 148 CLR 121, esp at 125, the courts have recognised that the grant of declaratory relief on the application of a statutory body such as ASIC may serve important law enforcement purposes: see Corporate Affairs Commission (NSW) v Transphere Pty Ltd (1988) NSWLR 596 at 603; Australian Securities and Investments Commission v Sweeney [2001] NSWSC 114 at [30] - [31] ; and Pegasus at 571. ASIC is charged with the administration and enforcement of the Act , and there will be many cases where it is in the public interest for the courts to make a declaration on ASIC's application that the Act has been contravened in specified respects. The making of such a declaration does not simply record the outcome of enforcement proceedings; it may also be an appropriate way of marking the court's disapproval of the contravening conduct: see Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 80 at 97-99, 106 and 110. 56 The contraventions in this case were extremely serious. It is an understatement to say that the Scheme involved extremely high risks. The website promoting the Scheme misrepresented the nature of the investment and withheld vital information from investors. The nature and extent of the risks attending the Scheme were not disclosed in any way to investors. No proper books and records were kept concerning the Scheme. Moreover, the Scheme's assets were dissipated, in part, on the personal expenses of McDougall and his family. 57 McDougall also attempted to revive the Scheme in another form. In doing so, he was prepared to act in breach of the interlocutory orders made by Merkel J. There is a clear public interest in making declarations that will record the contraventions of the Act , and express the Court's strong disapproval of the contravening conduct. 58 The defendants do not oppose the making of declaratory orders in the form sought by ASIC, although they stop short of consenting to them. In my opinion, this is an appropriate case for the grant of declaratory relief in the form sought by ASIC. With one minor adjustment, I am satisfied that the terms of the declarations are clear and precise. The adjustment I have made is simply a revision of the definition of the Scheme set out in the schedule to the orders. These orders are sought pursuant to ss 1101B and 1324 (1) of the Act . In my opinion, these orders are entirely appropriate. 60 In addition, ASIC seeks injunctive orders in the somewhat wider form set out in par 5 of the draft orders: see par 5 above. This form of order extends beyond the conduct of the Scheme. In effect, it seeks to restrain the defendants from promoting, establishing or carrying on the business of any managed investment scheme that requires registration but which has not been registered. 61 Although the defendants have consented to injunctive orders in this wider form, I propose to address the question whether ss 1101B and 1324 (1) authorise the making of injunctive orders in this wider form. These words echo the concluding words of s 80(1) of the Trade Practices Act 1974 ("TPA") which state that the Court may grant an injunction in such terms as the Court determines to be appropriate. These words were introduced into s 80(1) by a 1983 amendment to the TPA, which, to adapt the language used by French J in OD Transport Pty Ltd v WA Government Railways Commission (1987) 13 FCR 500 at 508, freed the power conferred by s 80 from the previous constraint that the injunction granted under it must restrain a person from engaging in conduct that constitutes or would constitute a contravention of Part IV of Part V of the TPA or one of the species of accessorial participation there listed. 65 The operation of s 80(1) of the TPA was canvassed by the Full Court of this Court in ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 (" ICI "). Lockhart J described s 80(1) as a public interest provision which attracts special considerations; it represents a primary means of ensuring compliance with commercial regulation legislation: at 254-255. A statutory provision that enables an injunction to be granted to prevent the commission of conduct that has never been done before and is not likely to be done again is a statutory enlargement of traditional equitable principles. But this is because traditional doctrine surrounding the grant of injunctive relief was developed primarily for the protection of private proprietary rights. Public interest injunctions are different. Parts IV and V of the Act involve matters of high public policy. Parts IV and V relate to practices and conduct that legislatures throughout the world in different forms and to different degrees, have decided are contrary to the public interest (contracts, arrangements or understandings affecting competition adversely (s 45)), the misuse of market power (s 46) , the practice of exclusive dealing (s 47) , resale price maintenance (s 48) , price discrimination (s 49) , anti-competitive mergers (s 50) and unfair practices with respect to consumers (Pt V). These are legislative enactments of matters vital to the presence of free competition and enterprise and a just society. Lockhart J also agreed (at 261) with the reasoning of Barwick CJ in Mikasa (NSW) Pty Ltd v Festival Stores [1972] HCA 69 ; (1972) 127 CLR 617 at 632 that in an appropriate case the court may grant an injunction to restrain the respondent from engaging in the practice of resale price maintenance notwithstanding that only some of the acts falling within s 96(3) were found to have been so committed. The power of the court to grant an injunction is controlled by the words 'in such terms as the Court determines to be appropriate'. The injunction should not prohibit conduct falling outside the boundaries drawn by s 80: see Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48 ; (1981) 148 CLR 150 at 161. The same limitation applies to mandatory injunctive relief. It is, in my view, no support for the grant of an injunction which, from the outset, has an operation outside the boundaries of s 80 , to say that it is open for the party enjoined to apply under s 80(3) to vary the injunction so as to bring its operation wholly within proper limits. The party in question should not be placed under any such obligation in the first place. However, at first blush at least, it suggests a narrower approach to s 80 than that described by Lockhart J. That deterrence is effected by attaching to the repetition of the contravention the range of sanctions available for contempt of court. The possibility remains open, by virtue of s 80(3) , that after a suitable period unmarked by further contravention the party restrained may apply to the court to rescind the order. This was a proper case for the grant of that relief. However there are limitations on the Court's power under the section. Confinement of the power by reference to the scope and purpose of the TPA, and in particular s 80 , is one limitation on the power. However, there are at least two further limitations. The power to make orders under s 80 is only enlivened in a proceeding which alleges that there has been a contravention of a provision of Pt IV , IVA or V of the TPA. As was said by Gummow J in ICI at 267, the terms of an injunction granted under s 80 must, on their face, operate upon a range of conduct which has 'the relationship required by s 80 with contravention of the Act . Irrespective of whether the injunction is sought or granted under s 80(1) or 80 (1AA) there must be a nexus between the conduct alleged or found to constitute the relevant contraventions and the injunctions granted. There must, however, be a sufficient nexus or relationship between the conduct that is the subject of the restraint and the conduct that was alleged to constitute a contravention of the Act . As French J pointed out in ACCC v Real Estate Institute (WA) [1999] FCA 1387 ; (1999) 95 FCR 114 at 131, the question whether there is a sufficient nexus between the orders sought and the contraventions alleged involves an evaluative judgment by the Court which will depend heavily upon the circumstances of the particular case. 70 Most recently, in Foster v Australian Competition and Consumer Commission [2006] FCAFC 21 , a Full Court (comprising Ryan, Finn and Allsop JJ) noted the apparent tension between the view expressed by Lockhart and Gummow JJ in ICI . ' That paraphrase, we consider with respect, does not illuminate the amplitude which should be given, as a matter of construction, to the grant of power. 71 The issue in Foster was whether an injunction that restrained the fourth respondent from being directly or indirectly knowingly concerned in the promotion or conduct of a business of a specified kind for a period of five years went beyond the power conferred by s 80 of the TPA. It goes to the appropriateness of the relief contemplated by the concluding words of s 80(1) , not to the extent of the power to grant it. If the Court considers that a complete prohibition, whether permanently or for a specified period, on a respondent's engaging in a particular field of commercial activity or industry is required to protect the public from conduct of the kind which constituted the contravention, s 80 is wide enough to support such a prohibition as a matter of power. This analysis of s 80 conforms, we consider, with that recently undertaken by Goldberg J in Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482 at 504 [110]. In these circumstances, it was appropriate to cast the injunction more widely in order to catch conduct which was similar to the established contravention: at [34] and [38]. 72 In the present case, I consider that the wider form of injunctive relief is appropriate, especially given the evidence that McDougall attempted to resuscitate the Scheme in another form. The evidence demonstrates, in my view, that the defendants are susceptible to repeating their contraventions of the managed investment provisions of the Act . There is, in my opinion, a sufficient nexus between the wider form of injunctive order sought by ASIC in par 5 of the draft orders, and the contraventions of the Act which were established by the evidence in this case. The wider form of injunction is consented to by the defendants. In all the circumstances, I consider that the wider form of injunction is warranted, and that it will serve the public interest. A number of ancillary orders are sought, including an order appointing the existing Court appointed receivers as joint and several liquidators of the Scheme. The defendants consent to these orders being made. I have made two minor alterations to the form of the draft orders for the winding up of the Scheme. The first alteration, in par 7, identifies Adrian Lawrence Brown and James Henry Stewart as the receivers appointed by order of Merkel J on 25 October 2005. The second alteration clarifies that the receivers referred to in par 9 are the individuals identified in the above par 7 of the orders. 76 The defendants have also consented to orders which are designed to ensure that the liquidation does not result in any shortfall to investors in the Scheme. Specifically, the defendants have consented to orders that they will pay to the liquidators the sum of $80,000.00 to be applied by the liquidators in accordance with s 556 of the Act as if references to the company were a reference to the Scheme. To guard against the risk that the sum of $80,000.00 is not sufficient to ensure that there is no shortfall in discharging all of the liabilities of the Scheme, the defendants have consented to a further order that they will pay any such shortfall to the liquidators within 21 days of receiving a call for payment. 77 ASIC does not seek an order that BTS be wound up, even though there is some evidence that it might be insolvent. In many cases, it may be appropriate, and it may further investor protection, to make winding up orders in respect of both the unregistered managed investment scheme and the company which administered the scheme: see Pegasus at 579-580, at [95] --- [98]. Indeed, in Australian Securities and Investment Commission v Chase Capital Management Pty Ltd (2001) 36 ACSR 778 at 796, Owen J said at [93] that if an unregistered scheme is to be wound up, the case for a liquidation of the company that conducted it is compelling. 78 In the present case, I must bear in mind that the defendants have been prepared to consent to orders that will ensure that there is no shortfall in the winding up of the Scheme. I also recognise that the solvency of BTS depends, ultimately, on the availability of support from McDougall. In these circumstances, and given that ASIC has not sought a winding up order in respect of BTS, I have concluded that there it is not necessary to make a winding up order in respect of BTS. This is not a case in which ASIC has suggested that the recovery for investors will be maximised by ordering a winding up of both the Scheme and the company which administered the Scheme. The receivers have filed an affidavit which indicates that this figure was mistakenly calculated in that it did not make full allowance for all of the outstanding costs and expenses of the receivers at that time. Further receivership costs have been incurred since 6 December 2005. 80 The receivers' costs are addressed in par 9 of the orders I propose to make. Paragraph 9 provides that the reasonable costs and expenses of the receivers (referred to in par 7) and of the winding up of the Scheme, including the professional costs and expenses of the liquidators, shall be paid out of the assets of the Scheme. Paragraph 7 of the orders identifies the receivers as Adrian Lawrence Brown and James Henry Stewart and appoints them as joint and several liquidators of the Scheme. I am satisfied that this form of order is appropriate. I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young J.

unregistered managed investment scheme unlicensed financial services business whether declarations appropriate whether scope of injunctive relief appropriate whether winding up of company necessary corporations

As they raise similar principles of law based upon sufficiently common facts, it is convenient to deal with both applications in these reasons, although I will make separate orders in each proceeding. 4 To the extent that either applicant requires any extension of time under the Administrative Decisions (Judicial Review) Act 1977 (Cth) to bring their application, because of the view I finally reach on the merits in this matter, I refuse to grant an extension of time as sought. I should indicate that if I was persuaded by either applicant on the merits of their applications, I would have granted the extension of time. Ms Nicholson-Brown had her appointment renewed in 2003, which renewal appears to have been made for the period ending on 31 December 2008. In relation to Ms Anselmi it is unclear on the evidence as to whether there had been any formal renewal of her initial appointment, and whether her appointment had been made or renewed for any set period. • From 1991 both applicants held their appointments continuously until the removal decision on 23 June 2006. Their appointment conferred no entitlement to any remuneration or financial benefit. • On 6 April 2006 the Aboriginal Heritage Bill 2006 (Vic) ('the Victorian Bill') was introduced into Victorian Parliament, which in conjunction with amendments to the Act was to introduce significant change to the existing legislative scheme as established under the Act. The Victorian Bill later became the Aboriginal Heritage Act 2006 (Vic) ('the Victorian Act'). • On 10 April 2006, Ms Nicholson-Brown exercised her powers under s 21C of the Act to make an emergency declaration with respect to a site called 'Camp Sovereignty' at Kings Domain, Melbourne ('the declaration'). Ms Anselmi was not involved in the declaration. • By letter dated 21 April 2006, the respondent wrote to each applicant informing them of a review of their inspectorships. That repeal is linked to the passage and implementation for the Aboriginal Heritage Bill 2006, currently before the Victorian Parliament. I have written to all inspectors in the same terms. I request that you provide me with your input by 4 pm 5 May 2006. I have also suspended all other inspector appointments. During the suspension of your appointment, you will not be able to exercise any of the powers given to an inspector under the Commonwealth Act. A copy of the instrument of suspension is attached. • On 21 April 2006, the respondent suspended all 48 inspectors appointed under s 21R of the Act. Each of the inspectors was informed of the decision and sent a copy of the instrument of suspension by a letter in very similar terms as was sent to each of the applicants. Can you please, beyond asserting that such removal is necessary to achieve a smooth transition, advise how it is that you see that inspectors such as Ms Nicholson-Brown could interfere with the so called smooth transition. In our view, it is not really a question as to whether the community is losing faith in the ability of the inspectors is not really a question as to whether the community is losing faith in the ability of the inspectors to make emergency declarations. Rather, it is a question of whether or not Ms Nicholson-Brown, as opposed to other inspectors, has made declarations which are inconsistent with the terms of the Commonwealth Act. In this regards, are you saying that the emergency declaration made by Ms Nicholson-Brown on 10 April 2006 was not made in accordance with the Commonwealth Act? Further, assuming that you would say that the declaration was not made consistently with the terms of the Commonwealth Act (which we do not accept), do you say that this event alone should disentitle Ms Nicholson-Brown from holding the office of inspector or are there other matters concerning Ms Nicholson-Brown's conduct which you intend to take into account? However, I would be pleased to take your client's views into account. However, in my opinion it is quite relevant. I look forward to your client's input as to why I should not remove her from her appointment as an inspector under s 21R of [the Act] . That letter dealt in some detail with each of the matters raised in the letter of 21 April 2006, namely achieving a smooth transition, the manner and circumstances of the declaration and the community reaction. • On 2 May 2006, Ms Anselmi wrote to the respondent asking him not to permanently remove her as an inspector. • By separate letters dated 23 June 2006, the respondent informed each applicant of the removal decision. The one exception I have made is due to what I regard to be special circumstances arising from issues relating to the Convincing Ground. The community reaction to the making of the declaration in relation to Camp Sovereignty has reinforced the need for inspectors to have that framework of oversight, training and support as soon as possible. There are also practical reasons for putting in place mechanisms now to ensure an effective transition to the new heritage regime in Victoria. The new Act cannot commence until the Commonwealth Government repeals Part IIA of its Act, at which time inspector appointments under that Act will be defunct. It is therefore necessary to ensure that there are inspectors ready to enforce the new Act as soon as it commences, so there are no gaps in the protection of Aboriginal cultural heritage in the transition between regimes. In or around October 2006, the Government will advertise a number of new Heritage Officer positions located throughout Victoria, and it will be open to you to apply. These are intended to be Indigenous identified positions in the public service. Persons employed in those positions, along with other persons who are already public servants or authorised officers and are selected, will undergo extensive training in the lead up to the commencement of the new Act. It is intended that, subject to consultation with the Aboriginal Heritage Council, those persons will be considered for appointment as inspectors either in anticipation of, or on commencement of, the new Act. A copy of the instrument of removal is attached. [The Act] provides that a person who ceases to be an inspector must return his or her identity card. I ask that you do this as soon as possible as that Act imposes a penalty for non-compliance. If you become aware of a situation which may warrant the making of an emergency declaration, I suggest that you refer the issue to either me or one of those persons or bodies. A list of the inspectors whose suspensions have been lifted will be made available shortly. The respondent also decided to lift the suspension of 10 inspectors; nine because they were currently employed under Pt 3 of the Public Administration Act 2004 (Vic) as full-time public servants, or were currently appointed as inspectors, enforcement officers or authorised officers under Victorian legislation ('the new criteria') (and wished to continue as inspectors); and in the case of one because of special circumstances being that the inspector was involved in ongoing heritage protection issues and should be exempted from the policy implementation. On 23 June 2006, each of the inspectors was sent a letter explaining the decision (removal or lifting the suspension) which enclosed a copy of the relevant instrument giving effect to that decision. • In the case of Ms Nicholson-Brown, the respondent's letter dated 23 June 2006 was supplemented by a letter from the Victorian Government Solicitor dated 23 June 2006 to Ms Nicholson-Brown's solicitors. That letter responded to a number of matters raised in the letter from Ms Nicholson-Brown's solicitors dated 5 May 2006. The applicants also asserted that the suspension decision was not authorised by the Act because the Act, when properly construed, does not confer a power to suspend inspectors in the circumstances of this case. Part IIA of the Act specifically deals with Victorian Aboriginal cultural heritage. Of particular relevance to this case, Pt IIA allows for the making of an emergency declaration of preservation where there are reasonable grounds to believe that an Aboriginal place or an Aboriginal object is under threat of injury or desecration: s 21C. 9 An emergency declaration may be made by an inspector, the Minister or a magistrate in particular circumstances: s 21C(1). Once made, an emergency declaration can only be varied or revoked by the person who made such emergency declaration: s 21C(3). On 9 May 2006 the Victorian Act was given Royal Assent. The Victorian Act arose as a result of the Victorian Government's decision that there should be a Victorian statute dealing with Aboriginal heritage, rather than continued reliance on Pt IIA of the Act. 11 Under s 160(1) of the Victorian Act a person cannot be appointed as an inspector unless that person satisfies the new criteria. This is an important part of the new arrangements to be put into place in Victoria. 12 The Victorian Act is awaiting proclamation and, as such, is not in force as at the date of judgment. The coming into effect of the new Victorian scheme depends on the coordinated repeal by the Commonwealth Parliament of Pt IIA of the Act, which will be implemented when Sch 2 to the Aboriginal and Torres Strait Islander Heritage Protection Amendment Act 2006 (Cth) ('the Commonwealth Amendment Act') comes into effect. One of the purposes of the Commonwealth Amendment Act is to provide for the repeal of Pt IIA and other provisions in the Act that only apply to places in Victoria to enable the Victorian Government to administer Aboriginal heritage protection in Victoria directly through its own legislation. On 7 December 2006, the Commonwealth Amendment Act received Royal Assent but is still awaiting proclamation, and as such is not in force as at the date of judgment. I am informed by the parties that the respondent has approved 28 May 2007 as the date upon which the Victorian Act is due to commence, and that he has written to the Commonwealth Minister requesting Sch 2 of the Commonwealth Amendment Act be proclaimed to commence on that day. WERE THE SUSPENSION AND REMOVAL DECISIONS AUTHORISED BY THE ACT? The applicant contended that the respondent did not comply with the requirements of s 21R of the Act, as affected by s 33(4) of the Acts Interpretation Act . 14 One contention was based on the premise that it was implicit in s 21R of the Act that before the respondent may appoint an inspector under s 21R, he must obtain the recommendation, approval or consent of the local Aboriginal community. The applicant submitted, therefore, that the power to remove an inspector was similarly constrained, having regard to the purposes of the Act, s 33(4) of the Acts Interpretation Act , and as a matter of statutory interpretation of s 21R itself. 15 The first matter to be considered is whether the premise of the applicant's argument is correct; that is, whether the power to appoint is only exercisable upon the recommendation or subject to the approval or consent of a local Aboriginal community. The starting point is the terms of the power conferred by s 21R. Section 21R enables the respondent to appoint inspectors after consultation with a local Aboriginal community. If parliament had wanted to require the Minister to only act upon the recommendation approval or consent of a local Aboriginal community, it would have expressly so provided. 17 The second matter for determination is the effect of s 33(4) on the power conferred by s 21R. It was also suggested by the applicants that the operation of s 33(4) is confined to where a suspension is a temporary necessity and a replacement appointment is required. I see no reason to so limit s 33(4) in its use of the term "suspend", and in my view it can readily be employed here where the respondent exercised a power of suspension and then exercised a power of removal following the suspension. 19 In the absence of any contrary intention, s 33(4) of the Acts Interpretation Act makes the power to suspend or remove an inspector exercisable by the authority which has the power to appoint an inspector (here the respondent), subject to the proviso. However, the operation of the proviso in s 33(4) is contingent on the power to appoint being only exercisable upon the recommendation or subject to the approval or consent of some other person or authority. As stated above, the requirement to consult is not the same as a requirement to act only upon a recommendation, approval or consent, and therefore the proviso in s 33(4) does not apply to s 21R. Section 33(4) does no more here than expand the power to appoint to include the power to remove (or suspend) an inspector. 20 I do not need to consider whether there is any contrary intention so that the proviso does not apply, but there may well be a contrary intention in the case of consultation even if the power is included within the ambit of the proviso. 21 It was argued by the applicant that the requirement of consultation can be implied by reference to the purposes of the Act, or as a matter of statutory interpretation of s 21R itself. The stated purposes of the Act are contained in s 4 , which have been set out above. There is no basis upon which it can be said that the purposes of the Act will be frustrated if an inspector is removed without consultation with a local Aboriginal community. One of the practical benefits of requiring consultation before making an appointment is that the respondent will be assisted in making his determination as to whether the person is capable of fulfilling the role of an inspector. That benefit does not carry the same significance in relation to the task of suspending or removing an inspector. In fact, such a requirement could be burdensome, particularly if an inspector needed to be removed without delay for performance reasons or misconduct. 22 The applicants relied upon the decisions in Nguyen v Minister for Health and Ageing [2002] FCA 1241 and Registrar for Liquor Licences v Iliadis (1988) 19 FCR 311 in support of the proposition that an implied power to revoke or suspend an appointment should not be construed as capable of being exercised with less constraints than the express power to appoint. These cases do not assist in the interpretation of the power to suspend or remove as conferred by s 21R as affected by s 33(4) of the Acts Interpretation Act , and do not stand for the broad proposition contended for by the applicants. 23 A separate contention raised by the applicants was that s 33(3) of the Acts Interpretation Act makes the respondent's power to remove under s 21R of the Act exercisable only in a like manner and subject to like conditions as the power to appoint an inspector, including the requirement of consultation with a local Aboriginal community. In essence, the applicant's contention was that the application of s 33(3) and 33 (4) of the Acts Interpretation Act should be read in such a way that subs (3) adds a further limitation to subs (4), in addition to the one which the legislature expressly contemplated (i.e. the proviso in subs (4)). The first matter is whether an appointment made under s 21R of the Act is an "instrument" within the meaning of s 33(3). One stream would limit the class of instruments to which the term applies to instruments of a legislative character. The other would extend it to executive or administrative instruments. This conflict has recently been reviewed at length by Emmett J in Heslehurst v Government of New Zealand [2002] FCA 429 ; (2002) 117 FCR 104 at [12] ff (for the purposes of s 33(3)) and by the Victorian Court of Appeal in R v Ng (for the purposes of s 46). Both decisions rejected the limitation of these provisions to legislative instruments. Ng , I would note, has recently been applied by Ryan J in Glaxsmithkline Australia Pty Ltd v Anderson [2003] FCA 617 ; (2003) 130 FCR 222 at [28] . 26 The second matter is whether the Act confers a power to make, grant or issue such an instrument or merely confers a power on the Minister to make a decision which is to be evidenced in writing: see Laurence v Chief of Navy [2004] FCA 1535 ; (2004) 139 FCR 555. Section 21R does not talk in terms of the relevant act (the appointment) being made "by" or "pursuant to" any form of writing, but confers a power to make a decision to appoint, which incidentally to that decision, is to be in writing: see discussion in Re Brian Lawlor Automotive Pty Ltd and Collector of Customs (NSW) (1978) 1 ALD 167 at 172; affirmed by the Full Court in Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307; Barton v Croner Trading Pty Ltd (1984) 3 FCR 95 at 110; and Edenmead Pty Ltd v Commonwealth (1984) 4 FCR 348 at 352-353. 28 However, even if I am wrong about this matter and the focus of s 21R is upon the document being the operative act of appointment, in my view, s 33(3) does not operate to constrain the type of power referred to in s 33(4) of the Acts Interpretation Act . In Laurence 139 FCR at 558, Wilcox J briefly discussed the distinction between the type of power referred to in s 33(3) and the type of power referred to in s 33(1) of the Acts Interpretation Act . He concluded that the two subsections referred to different types of power, and therefore operated exclusively of each other. This distinction is similarly applicable as between s 33(3) and 33 (4), the former relating to the general making, granting or issuing of an instrument, the latter relating to the making of an appointment. 29 Section 33(3) is an enabling provision, which may or may not need to be relied upon in any given circumstance. However, the other enabling provision is s 33(4). I cannot see any reason to conclude that s 33(3) operates to constrain the effect of s 33(4) in interpreting s 21R. In my view, therefore, s 33(4) authorised the respondent to suspend or remove each applicant in the circumstances of this case. 30 I should indicate that even if I came to the conclusion that there was a failure to adhere to a requirement of consultation with a local Aboriginal community prior to suspension or removal, I would not consider that such failure would vitiate the decision to remove or suspend. I readily accept that the Act has given express and considerable prominence to the role of the local Aboriginal communities, and that the Act envisages that consultation with such communities be undertaken in defined circumstances. However, I must look at the power here being exercised, which is not one of appointment, but of suspension and removal. Such powers may need to be exercised in a variety of circumstances, without there necessarily being any relevance in seeking the views of local Aboriginal communities, such as for instance if a particular inspector was considered no longer to be a fit and proper person. I do not accept that the input of the local Aboriginal community is of the same significance in circumstances of suspension or removal, or that consultation would be regarded as an essential or mandatory requirement to effect a suspension or removal. If necessary to decide, I would take the view that if there was a requirement of consultation with a local Aboriginal community prior to suspension or removal, breach of that requirement would not lead to the invalidity of such a suspension or removal: see generally Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at 388-391; and Bond v WorkCover Corporation (SA) (2005) 93 SASR 315 at 331-336. The respondent sought to impose under the Act the new criteria which were to be introduced under the Victorian Act when the Commonwealth Amendment Act and the Victorian Act came into operation. The thrust of the applicant's submission was that these new criteria were factors outside the subject-matter, scope and purposes of the Act and were therefore matters to which the respondent was not entitled to have regard. 33 It is well established that, in the absence of any express limitation in a statute, a consideration will be considered irrelevant only where there is "in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard": Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 40 and the cases there cited. 34 I must focus upon the Act itself as a whole to determine whether there is some limitation on the power of the respondent. Whilst I am concerned with the interpretation of a Commonwealth Act, it must be recalled that I am concerned primarily with Pt IIA which deals with Victorian Aboriginal cultural heritage. The Act envisages that the Commonwealth Minister may delegate his powers to a state minister, which has occurred in this case. In my view, the Act envisages that a delegation could be made to the respondent in respect of the power to appoint inspectors in relation to Victorian Aboriginal cultural heritage, and envisages that the state minister be given the discretion to exercise the power in view of the specific needs in Victoria of Aboriginal cultural heritage. The question here is whether the Act imposes a limitation on the respondent so as to prevent him from adding the new criteria in considering the appointment suspension or removal of inspectors. If the new criteria are inconsistent with the scheme in respect of inspectors and s 21R, then putting aside any proposed legislation, taking into account the new criteria would necessarily be taking into account an irrelevant consideration. 35 The Act does not contain any express limitation on the exercise of the respondent's power to suspend and remove. As I have said, I accept that the Act gives prominence to the role of Aboriginal people in deciding what should occur in respect of areas and objects of importance to them. In appointing inspectors under s 21R, the respondent has an obligation to consult a local Aboriginal community, in an endeavour to appoint people with the appropriate expertise and knowledge, and to ascertain whether the person is able to perform the duties of an inspector. These criteria must be taken into account, but are not necessarily the only criteria to be applied. I do not regard these criteria as the exhaustive criteria to which the respondent may have regard. 36 Further, there is nothing which would defeat the purposes of the Act if no inspectors were appointed, or all inspectors were temporarily suspended, or even if they were all removed. Section 4 of the Act sets out its purposes, which purposes can obviously be fulfilled without the appointment of inspectors. The Act applies to areas and objects in Australia, not just to Victoria. Part IIA and the appointment of inspectors under the Act only applies to Victoria. Whilst the appointment of inspectors may further the purposes of the Act, they are not necessary for the implementation of such purposes generally. 37 The principal power given to an inspector is that conferred by s 21C; that is to make an emergency declaration. The Commonwealth Minister, the respondent, and any other delegates of the Commonwealth Minister or of the respondent may also exercise the power to make an emergency declaration, as may a magistrate (although only on application by a local Aboriginal community). 38 I observe that an inspector has a role in connection with the power given to police officers to enter, search and seize under s 21S. In fact, unless at least one inspector was appointed under s 21R, the power given under s 21S(2) in particular could not be effective in relation to seizure because it is premised on the basis of a belief of the inspector named in the warrant. However, the fact that at any given time s 21S is restricted in its operation because not one inspector is appointed cannot impose upon the respondent a mandatory duty to appoint an inspector under s 21R where the power is clearly stated to be discretionary. 39 It was argued by the applicants that imposing the new criteria would be contrary to the scheme of the Act and would be an anathema to the independent exercise of a power, like a power to make an emergency declaration. Undoubtedly, an inspector has a power separate to that of the respondent to make a declaration under s 21C, which if made can only be revoked or varied by the inspector. I do not agree, however, that, even if an inspector were a full-time public servant, this separate power could not be appropriately exercised or, perhaps more relevantly, is a power that the Act envisaged could not be exercised by an inspector whose appointment satisfied the new criteria. 40 There are many instances where important and significant decisions need to be made, and full-time public servants or servants of the Crown are regarded as capable of exercising independent judgements in making such decisions. Without statutory permission, it is not to be assumed that a public servant or servant of the Crown in whom a statutory power has been reposed will follow orders given by a superior. In fact, if a public servant or servant of the Crown did not exercise for himself or herself a discretion given to him or her to exercise, then the decision made would be invalid: see, for e.g. R v Anderson; Ex parte Ipec-Air Pty Ltd [1965] HCA 27 ; (1965) 113 CLR 177 at 201-202. There is nothing in the nature of the powers to be exercised, the context of their exercise, or the character of the office of inspector which leads to the conclusion that the new criteria could not be applied to the appointment of an inspector. In this case I do not see that the appointment of a public servant, who otherwise satisfies the criteria in s 21R, is an appointment that would be contrary to the scheme of the Act as a whole, or Pt IIA dealing with Victorian Aboriginal cultural heritage. 41 I observe that, to the extent it is relevant, at least nine of the inspectors must have been public servants who satisfied the new criteria before the suspension decision, having been appointed under the Act and having been presumably regarded as being able to fulfil the function of inspector. I make this observation in view of the fact that the suspension of nine inspectors was lifted because they already satisfied the new criteria to be applied by the respondent. 42 Therefore, in my view, putting aside any question of change of legislation, the new criteria could be applied under the Act in the appointment, suspension and removal of inspectors by the respondent. 43 Matters of policy and implementation of policy (including change in qualifications for appointment), and the views of the Victorian community or the respondent's perception about those views, are ones which the respondent, upon which a discretionary power has been conferred, may take into account. 44 The Act envisages that in relation to Pt IIA of the Act, and s 21R in particular, it could well be a Victorian minister that would have to exercise the discretion to appoint, suspend, or remove inspectors. The Act therefore envisages that the Victorian minister (here the respondent) could take into account his or her own policy and political considerations in respect of his or her decision to appoint, suspend or remove inspectors under s 21R. 45 It is significant to recall the respondent was concerned with the smooth transition to the introduction of the Victorian Act and with community reaction generally and specifically in response to the declaration. These are not matters which the court itself makes an assessment of in the context of these proceedings, in the sense of determining whether the course set by the respondent was justified or appropriate. It may be, for instance, that the community reaction was incorrectly gauged by the respondent. However, it seems to me that the respondent was perfectly entitled to act upon what his perceptions were concerning community reaction, this being an influence to which the respondent was legitimately subject. 46 If the respondent was entitled to apply the new criteria even before the proclamation of the Victorian Act (as in my view he was), then the remaining question is just one of timing and according natural justice to those adversely affected by the introduction of the new criteria. In my view the respondent was entitled to act in the way he did, effectively "speeding" reform to Aboriginal cultural heritage in accordance with the Victorian Bill before the Victorian Parliament. 47 Accordingly I do not accept that the matters raised by the applicant were irrelevant considerations. 50 Each decision was made because of the policy decision to accelerate the introduction of the new criteria, the need for a smooth transition to the proposed legislative regime and in view of community reaction to the declaration which in the respondent's view reinforced the need to ensure immediate change. Undoubtedly the making of the declaration by Ms Nicholson-Brown was the catalyst for the response of the respondent on 21 April 2006, but it is to be recalled that the new legislation was introduced into the Victorian Parliament on 6 April 2006, and a change to Aboriginal heritage laws was to be implemented as a matter of government policy in any event upon the proclamation of the Commonwealth Amendment Act and the Victorian Act. 51 The respondent did not need (as a matter of law) to consult with the local Aboriginal community before exercising his power to suspend or remove an inspector. The fact that each of the applicants met the criteria set out in s 21R, namely having the appropriate knowledge and expertise and being able to undertake the duties of an inspector, was accepted by the respondent. The issue became the introduction of the new criteria as an additional requirement and whether each of the inspectors (namely the applicants) satisfied such criteria, or were otherwise to be exempted. Further, the respondent considered the position that would arise upon the removal of most of the inspectors (noting that the suspensions of 10 inspectors were lifted), in that declarations could be made under s 21C by the respondent. 52 In my view, there has been no failure to take into account the relevant considerations relied upon by the applicants. 54 In essence, the applicants relied upon the matters contended for in relation to taking into account irrelevant considerations and failing to take into account relevant considerations. For the same reasons I do not accept the contentions of each applicant on these grounds, I also reject any contention that the respondent exercised the power to suspend and remove for purposes other than those for which the power was conferred. 57 I am prepared to assume for the purposes of this case that natural justice or procedural fairness needed to be accorded to each applicant. The real question to determine is the practical content of natural justice or procedural fairness in this case: see, e.g. Jarratt v Commissioner of Police (NSW) [2005] HCA 50 ; (2005) 224 CLR 44 at 51 per Gleeson CJ. 58 In looking at the practical content, I regard the suspension decision as forming part of the broader decision-making process that concluded upon the removal decision. I accept that preliminary decisions, particularly if made public, may damage reputations even if they have no other adverse effects. This can prevent a preliminary decision (here the suspension decision) from being treated as part of a broader decision-making process: see, e.g. Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 at 578. 59 However, whatever are the concerns or perceptions of the applicants, this is not a case of misconduct or breach of discipline, where the preliminary inquiry had the potential to directly and irreversibly affect reputation to the extent necessary to treat the suspension and removal decisions separately to determine whether natural justice or procedural fairness has been accorded. 60 In the case of Ms Nicholson-Brown, it was contended that she was subject of a direct slur by the respondent in both the suspension decision and removal decision. In the case of Ms Anselmi, who was not involved in the declaration, she asserted harm to her reputation through association. It was contended on her behalf that because of the actions of Ms Nicholson-Brown, the respondent effectively told the public that by suspending and removing Ms Anselmi he had no confidence in Ms Anselmi. 61 Both applicants filed affidavit material, but only to express that they were "concerned" about the impact of the actions of the respondent upon their reputation, and upon any future role that they may wish to undertake pursuant to the Victorian Act. The evidence relied upon only related to their own perceptions and concerns. No other evidence was introduced as to loss of, or impact on, reputation. In fact, from some other affidavit material relied upon by the applicants, it seems that their good standing in the community remains firmly intact. 62 Each of the suspension decision and removal decision of the respondent was to implement a policy decision already made prior to the introduction of the Victorian Act, which was accelerated, but which was by not directed to or intended to be directed to either of the applicants as individuals. I am not satisfied on the evidence that either decision was based upon, or intended to be based upon, any particular misconduct, inappropriate behaviour or incompetence of either applicant, or made to punish either applicant. The suspension decision was the first step in the process of accelerating change to implement government policy, not one to single out any particular person. 63 Whatever may be the perceptions of the applicants, or their concerns about reputation, I am not satisfied that their reputations have been sufficiently adversely affected by the suspension decision. The media release issued on 24 April 2006, whilst implicitly being critical of the existing process in speaking of the new arrangements ensuring a "proper process" will be in place, and being subject to appropriate "oversight and legal checks", merely recites the purpose of the new regime, which is to strengthen the protection of Aboriginal cultural heritage and add rigour to the way emergency declarations are made. 64 The primary basis for the suspension decision was in "order to smooth the transition to the new arrangements", and the power to issue emergency declarations was to rest with the respondent. 65 I observe that the respondent, as a further reason to suspend all appointments, stated in the letters to all inspectors on 21 April 2006 and in the media release that given "the manner and circumstances" in which the declaration was made, he was concerned the community may have lost faith in the ability of inspectors to make emergency declarations. There is no evidence as to "the manner and circumstances" referred to, and I do not assume it relates to any specific wrongful or inappropriate conduct which the respondent himself considered was undertaken by Ms Nicholson-Brown. I do assume that some members of the community would have been aware of the making of the declaration and the involvement of Ms Nicholson-Brown. However, the terms of the letter and media release refer to the respondent's concern of community reaction, and did not separate out Ms Nicholson-Brown for any different treatment from the other inspectors. The respondent wanted all inspectors to respond in relation to one particular matter, namely whether they would meet the new criteria. The terms of the letter to Ms Nicholson-Brown (in essentially the same terms as to all other inspectors) did not indicate that the respondent was casting any slur on Ms Nicholson-Brown as the person who made the declaration. The issue was not the question of the general appropriateness of a person to be an inspector, and whether any inappropriate conduct had occurred; the real issue was the introduction of the new criteria. This inquiry itself has nothing to do with the declaration, although the inquiry was accelerated because of the manner and circumstances of the making of the declaration. 66 There could be no complaint by the applicants if the current legislative regime had come to an end upon the proclamation of the Commonwealth Amendment Act and the Victorian Act and the new criteria were applied in the appointment, suspension or removal of inspectors. The complaint arises because before this occurred, a decision had been made to remove inspectors because of the declaration. Whilst a complaint could be justified if the reputation of the applicants was sufficiently adversely affected, I think one should view this matter more as an acceleration of the end of the current legislative regime, which applied to all inspectors, including the applicants. It did not involve an evaluation of the applicants themselves or their conduct, nor was it intended to involve such an evaluation. 67 After the suspension, the views of the applicants (and all the inspectors) were considered, and taken into account to the extent relevant to the implementation of the decision to remove. In this case, the applicants had the opportunity to show cause why they should not be removed, along with all the other inspectors, on the basis of the policy being implemented. In other words, they were not being asked to respond to whether the new criteria should be applied, but were to be heard on the application of the new criteria in the policy to each of them. Of course, the mere presence of policy considerations does not necessarily mean natural justice or procedural fairness does not need to be applied to individual interests affected. It may be necessary to consider the interests of the individual in the implementation of the policy and to determine its impact upon the individual. In my view, this is exactly the process entered into by the respondent in considering all the inspectors individual positions in light of the policy change. 68 On this basis, the response of the respondent to the letters of Ms Nicholson-Brown's solicitors was appropriate and adequate. The respondent replied to the complaints of Ms Nicholson-Brown by reference to the policy decision, and did not bring into consideration the specific conduct of Ms Nicholson-Brown as this was not a matter for consideration. It cannot be said, in these circumstances, that the response was inadequate, because on my analysis the matters raised that were not adequately responded to from Ms Nicholson-Brown's point of view, could not have affected the outcome of the decision; see generally Dennis Willcox Pty Ltd v Commissioner of Taxation (1988) 79 ALR 267 at 276-277. There was no material which was relevantly taken into account which was not made available to each applicant, as was the case in Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 ; (2005) 225 CLR 88. In view of the opportunity provided to and availed by each applicant to respond to the respondent after the suspension decision, the decision-making process, including the respondent's response to Ms Nicholson-Brown's solicitors letter, viewed in its entirety and in the circumstances of the implementation of a policy decision, did accord natural justice and procedural fairness. I do not need to consider this matter in view of my conclusions. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton.

review of decision of the minister to remove applicants from their position as inspectors under the aboriginal and torres strait islander heritage protection act 1984 (cth) ('the act') where change in governmental policy not yet implemented in legislation whether minister took into account irrelevant considerations whether new criteria in policy constituted an irrelevant consideration whether policy contrary to the subject-matter, scope or purposes of the act whether failure to take into account relevant considerations whether decision made for an improper purpose whether denial of procedural fairness whether suspension and subsequent removal decision can be considered one decision-making process whether applicants' reputation adversely affected whether applicants afforded an opportunity to respond whether decision to remove applicants was authorised by the act whether the power to remove can be implied where there is a power to appoint effect of s 33(3) and 33 (4) of the acts interpretation act 1901 (cth) on the exercise of the power discussion of whether removal decision constitutes an "instrument" whether power to appoint constitutes a power to make, grant or issue an instrument administrative law statutory interpretation

On that date, Senior Member Kelly affirmed a decision of a delegate of the respondent ("CRS") made on 16 April 2004 refusing the applicant's request for documents made pursuant to s 15 of the Freedom of Information Act 1982 (Cth) (" FOI Act "). 2 The applicant filed a notice of appeal from Senior Member Kelly's decision on 7 June 2005. She filed a supplementary notice of appeal on 16 March 2006. 3 Whilst not opposed to the filing of the supplementary notice, CRS points out that many of the seventeen questions stated in the original and supplementary notice do not state questions of law; see TNT Skypak International (Aust) Pty Limited v Federal Commissioner of Taxation (1988) 82 ALR 175 at 178; Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 at [11]; Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Limited [2003] FCAFC 244 ; (2003) 133 FCR 290 at [42] . 4 Most of the background facts, as well as the decision of Senior Member Kelly, have been set out in my judgment in matter NSD 55 of 2005, handed down contemporaneously with this judgment; see Lawrance v President, Administrative Appeal Tribunal [2006] FCA 342. 5 It is necessary to add only briefly to what I have already said about the background and the decision under appeal. 7 At a time which is not precisely clear, but certainly by early 2004, the applicant came to believe that she has been the subject of a Commonwealth program administered by CRS under a contract or other arrangement with her various employers. She believes that the program has been provided under the Disability Services Act 1986 (Cth) (" DSA "), and includes non-consensual treatment and covert surveillance. She also believes that former friends, in particular Ms Beverly Smith ("Ms Smith"), a former CRS employee, have been involved in the program and have contacted the applicant's family. 8 The essence of the applicant's complaint is set out in a letter which she wrote to the President of the AAT on 28 April 2004. I was told by a former friend Andrea Howard, in 1999 that 'Bev Smith was no friend to you', (she has never even met Bev Smith), a comment she refused to explain or elaborate on, and it has only been since that astonishing comment that I have had cause to reflect on exactly why that comment may have been made. I have never realized or imagined or known of any CRS activity in relation to my employment and it has been a great shock to wonder what on earth has been going on. Former friends who make that sort of comment, having had no connections with my employment or with Bev Smith, seem to indicate that there is much that Bev Smith has done which has been extremely devious, manipulative, dishonest and totally behind my back. This may also apply to Louise Perrottet, also a CRS employee and a social acquaintance known to me through Andrea Howard. They were friends at university but had not pursued a close friendship for years and had not been a part of any joint socialising since Andrea's wedding over fifteen or so years ago. Louise knew little other than what I told her (virtually nothing) of my employment and was certainly not a person to whom I would have discussed work related things with nor a person with whom I would ever have made a confidant of in that respect. I would never, ever have consented to her having any involvement whatsoever in my personal or employment affairs, being an independent, autonomous person who highly valued her privacy and who has no and had no disability or psychiatric disorder. Thus any involvement she may have had in my circumstances has been devious, behind my back, unethical and like Bev Smith, ultra vires the Disability Services Act (Cth) and in disregard of my rights to privacy and in breach of anti-discrimination legislation. Such conduct is not only the antithesis of friendship but is also unlawful and where it has occurred, has done so completely without my knowledge or consent. The records I am seeking access to thus include email records of the individuals concerned as well as all other records and documents. I requested information that might be held electronically, including email records and the like. 12 I have referred at some length to the evidence given by the witnesses at the oral hearing in my judgment in matter NSD 55 of 2005. 13 Briefly, the applicant gave evidence of her complaints, but Ms Smith and Ms Perrottet both denied having any dealings with the applicant in their official capacity as employees of CRS. They also denied any knowledge of, or any involvement by, CRS with the applicant. 14 Ms O'Neill was a Senior Member of the SSAT during the applicant's employment. She denied any knowledge of any arrangements in relation to the applicant under the DSA . 15 The evidence of Ms Wood and Ms Carmody deals with the services provided by CRS, that is to say that they are only provided consensually, and with the various efforts undertaken in attempting to find documents the subject of the applicant's request. They also dealt with the time it would take to manually review the electronic information held by CRS relating to Ms Smith. ● Vocational rehabilitation is a voluntary process and such programs are provided in consultation with the client. The service would not be provided with the consent of a third party only. ● CRS Australia does not conduct surveillance; it is not an investigative agency. ● CRS has conducted searches as detailed in the evidence given by their witnesses. No records have been found relating to the applicant. ● Searches were also conducted of CRS' electronic archives to relevant e-mails and other documentation in relation to Ms Smith and Ms Perrottet. No records were found relating to Ms Perrottet. ● Electronic holding in relation to Ms Smith were located, including e-mail and other documentation amounting to 400 megabytes of material. A manual search would be required to determine whether any of the material was relevant. It would take four days to recover the material from IT services and, on a conservative estimate, 100 hours to review it. ● The relationship between the applicant and Ms Smith was purely one of friendship. Ms Smith was not involved in any activity relating to CRS activities in respect of the applicant. ● Apart from the applicant's belief, arrived at in hindsight, there is no other evidence to suggest any connection between CRS and the applicant. ● If CRS did hold documents or information about a program or service relating to the applicant, it would have been found by the searches already conducted. 21 Senior Member Kelly was satisfied that all reasonable steps had been taken to find the documents the subject of the applicant's request. The learned Senior Member went on to conclude that the documents did not exist. Senior Member Kelly, an officer of the Commonwealth resumed the hearing of an adjourned case, and proceeded to publish a decision, in disregard of her status as a party to Federal Court proceedings NSD 55 of 2005 brought under s 39B of the Judiciary Act 1903 , in which proceedings her conduct in this part-heard matter, and her refusal on 1 November 2004 to make s 35(2) directions under the Administrative Appeals Tribunal Act 1975 , including non-publication are issues currently being dealt with: MIMA v Bhardwaj [2002] HCA 11 ; (2002) 209 CLR 597. In reaching her decision Senior Member Kelly failed to take into account relevant facts and relevant considerations: Sullivan v Department of Transport (1978) 1 ALD 383; Hart v Herron [1984] Australian Torts Reports 80-201 . Senior Member Kelly has dealt with the application and reached a decision that is erroneous at law because she acted on the basis that the applicant is impaired or has a disability. There is no evidence before the Tribunal to demonstrate or prove that the applicant has an impairment, or a disability: Lombardo v Federal Commissioner of Taxation (1979) 40 FLR 208. Senior Member Kelly has refused to provide the applicant with a reasonable opportunity to present her case, as is required under s 39 of the Administrative Appeals Tribunal Act , and under the common law: Sullivan v Department of Transport (1978) 1 ALD 383; Lombardo v Federal Commissioner of Taxation (1979) 40 FLR 208. The Tribunal refused to continue to adjourn the hearing, at the applicant's request, and resumed it without any notification or consultation made to the applicant: Sullivan v Department of Transport (1978) 1 ALD 383; New York Properties P/L v Commissioner of Taxation (1985) 7 FCR 401. The Tribunal refused, on 1 November 2004, to adjourn and deal with the non-attendance of witnesses who had been issued with a summons by the Tribunal to attend the hearing on 1 November 2004. Senior Member Kelly said that she did not know what to do in these circumstances: Sullivan v Department of Transport (1978) 1 ALD 383; New York Properties P/L v Commissioner of Taxation (1985) 7 FCR 401; Lombardo v Federal Commissioner of Taxation (1979) 40 FLR 208. The Tribunal made a decision erroneous in law because it was so unreasonable that no reasonable person could have made it: Minister for Aboriginal Affairs v Peko-Wallsend [1986] HCA 40 ; (1986) 162 CLR 24. The Tribunal refused to allow the applicant to determine the issues, and to present her case without interference: Sullivan v Department of Transport (1978) 1 ALD 383. The Tribunal made mistakes of fact in disregard of the evidence, or in the complete absence of rationally probative and credible evidence, or on no evidence: Lombardo v Federal Commissioner of Taxation (1979) 40 FLR 208. The Tribunal applied the wrong principles or did not apply any principles, in considering whether all reasonable steps had been made to locate documents under s 24A of the Freedom of Information Act 1982 : Lombardo v Federal Commissioner of Taxation (1979) 40 FLR 208; Re Anti-Fluoride Association (1985) 8 ALD 163; Langer v Telstra Corporation Ltd [2002] AATA 341 ; Beesley v Commissioner of Police [2000] NSW ADT 52 ; Secretary, Department of Treasury & Finance v Kelly [2001] VSCA 26 18 VAR 427; Beesley v Australian Federal Police [2001] FCA 836 ; Re SRB and SRG (1994) 33 ALD 171. The Tribunal has failed to make findings on all the material and relevant questions of fact as is required under s 43 of the Administrative Appeals Tribunal Act 1975 . The Tribunal has proceeded to deal with the application and to reach a decision on the erroneous assumption that the applicant has consented to participate in a Commonwealth programme, or a Commonwealth --- State arrangement under the Disability Services Act 1986 or some other Act. No such consent exists currently and no such consent has existed at any time in the past: Lombardo v Federal Commissioner for Taxation (1979). The AAT did not ask the correct question or correctly identify the issues in dealing with the FOI matter, leading to jurisdictional error. The AAT erred in its application of s 24A of the FOI Act , when it ignored the statement, undated, of Bev Smith, in the possession of Janine Woods, CRS. 25 The assumption is without foundation. I refused interlocutory relief on 10 February 2005; see [2005] FCA 79. Leave to appeal from my judgment was refused by Hely J on 3 May 2005; see [2005] FCA 541. 27 It may be accepted as a general statement of principle that if directions are given by a court or tribunal that have the effect of fettering cross-examination so that a witness's evidence on relevant issues cannot be properly tested, there is a denial of procedural fairness. But it must be emphasised that this proposition is subject to the discretion of the decision maker to control cross-examination so as to ensure relevance and to guard against repetition and prolixity; see R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13 ; (1980) 144 CLR 13 at 34-35; Australian Postal Commission v Hayes (1989) 87 ALR 283 at 289 per Wilcox J. 28 In Minh v Minister for Immigration and Multicultural Affairs (1998) 86 FCR 304 at 314, Weinberg J observed that the duty to act fairly may be breached if a party is not given a reasonable opportunity to make relevant submissions, to give evidence and to call witnesses. That subsection provides that the procedure of the AAT is, subject to the AAT Act and the Regulations and any other enactment, within the discretion of the AAT. 30 There were only two real issues in the proceeding before Senior Member Kelly. The first was whether there were documents in the possession of CRS which were the subject of the applicant's request. The second was whether CRS had taken all reasonable steps to search for such documents. The learned Senior Member was plainly entitled to control the hearing and to limit examination or cross-examination so as to ensure some semblance of relevance to the real issues. 31 I have carefully read the transcript of 1 November 2004. It is clear to me that the applicant was given every opportunity to provide relevant evidence in support of her case. Indeed, she was given some latitude to explore, within limits, some points of no real relevance such as the conversation with Ms Smith that brought about the termination of their friendship. Moreover, Senior Member Kelly assisted the applicant in some instances by asking questions herself of Ms Smith and other witnesses. 32 But the applicant was not entitled, as a matter of procedural fairness, to ask questions about the history of her personal relationships with various individuals. Nor was she entitled to bog down the hearing with questions about whether a disability had been wrongly imputed to her. These were matters which were not relevant to the review by the AAT. 33 Moreover, the transcript reveals that the applicant was endeavouring to harass and harangue witnesses, in particular Ms Smith. The applicant was not entitled to do so and it was within the proper exercise of Senior Member Kelly's discretion to prevent her from engaging in uncivil behaviour. 34 Furthermore, there was no denial of procedural fairness in failing to adjourn the proceedings to permit witnesses such as Ms Howard to be called. It has not been established that any of the witnesses could have given relevant evidence. 35 In particular, as to Ms Howard, the applicant wished to call her to deal with the statement "Bev Smith was no friend to you" and perhaps, how she came to make that statement since the applicant contends that Ms Howard did not know Ms Smith. 36 The applicant's assumption appears to be that the statement by Ms Howard leads to the inevitable conclusion that Ms Smith, as an employee of CRS, was engaged on behalf of CRS, in unlawful treatment programs and surveillance of the applicant, contrary to the DSA and other Commonwealth legislation. 37 However, even assuming the statement by Ms Howard to have been made, it is simply incapable of giving rise to the conclusion which the applicant draws from it. Thus, any evidence which Ms Howard might have been able to give was totally irrelevant to the issues in the proceedings. 38 As to one of the witnesses, Mr Kessels, the applicant was contacted by the AAT by letter dated 10 January 2005 and offered an opportunity to have a directions hearing to determine whether the hearing should be reopened so that the witness might give evidence. The applicant initially said yes but she later declined that opportunity. 39 Any suggestion of a denial of procedural fairness arising from a possible failure to provide copies to the applicant of letters from the witnesses seeking to be discharged from their summonses cannot be sustained. As I have already said, it was not established that any of the witnesses could have given relevant evidence. But the facts and circumstances which the applicant relied upon are the history of personal relationships and the statement that she is not suffering from a disability. These were not relevant considerations. In substance, what the applicant seeks to do is to cavil with Senior Member Kelly's findings of fact. First, there is nothing to suggest that the learned Senior Member did so. Second, the question of whether the applicant is impaired or has a disability was not before the AAT. It was not relevant to the question of whether searches had been made or whether documents exist. Nor was the statement which the applicant attributed to Dr Pickles, namely that "Canberra needs a diagnosis" relevant to the issues in the proceeding. There was no obligation on the AAT, as is contended by the applicant, to check the accuracy of the alleged remark. There is no basis in this suggestion. 44 The applicant contended that it was unreasonable not to require CRS to carry out manual searches of CRS electronic records relating to Ms Smith. The evidence was that this would have taken, on a conservative estimate, 100 hours. The records related to Ms Smith's work at CRS. There was nothing to demonstrate any connection between this and the applicant. Indeed, the learned Senior Member concluded that no such records existed. 45 The learned Senior Member's finding that all reasonable steps had been taken was plainly open and no other finding was available on an objective consideration of the facts. No suggestion of Wednesbury unreasonableness can be maintained. 46 The AAT's findings of fact as to the extent and nature of Ms Smith's material and, in light of the evidence of all the witnesses with actual knowledge of the objective facts, the potential likelihood of anything relevant being disclosed, dispel any possible suggestion of unreasonableness. At very least, to require further searches of Ms Smith's material, cogent reasons would have been required from the applicant as to why the material would contain relevant information. On all the evidence, no such reasons were disclosed. Ms Smith's evidence (and the evidence of the other witnesses) made it plain that there were no documents. Ms Smith gave evidence that her personal emails, about arranging with the applicant to provide occasional lifts to university, were deleted from the system. 47 The AAT's finding that no documents existed followed from its factual findings, all of which were supported by the evidence. The effect of the applicant's contention is to seek to challenge Senior Member Kelly's findings of fact. It is covered by what I have said under Question 8. It is covered by what I said under Question 8. Second, in view of the factual findings, no question of the scope or application of the DSA arose before the AAT. 53 The applicant contends that findings ought to have been made on the various matters of fact she sought to agitate. These included matters personal to the relationship with her former friends and her contention that she was not suffering from a disability. 54 None of the matters put forward by the applicant as findings which ought to have been made amounted to material or relevant questions of fact within s 43(2B). 56 No such assumption was made. Indeed, the finding that CRS has had no involvement with the applicant suggests that the opposite assumption was made. 58 That was not the question which the AAT was required to ask. But insofar as it asked itself whether CRS had ever had any involvement in the applicant's life, it did ask itself a question which bore upon the relevant issue of whether documents existed. ● The remark at [11] of Senior Member Kelly's reasons as to what lead the applicant to become aware of surveillance was not a finding. It was the applicant's contention. ● The finding that CRS does not conduct surveillance was supported by the evidence of Ms Wood and Ms Carmody that CRS only collects and holds information about individuals who are CRS clients, employees or contractors, and by the letter from CRS of 8 March 2004 to which I referred at [47] of my judgment in matter NSD 55 of 2005. ● The finding that there is no evidence, other than the applicant's belief, that there was any connection between CRS and the applicant is a finding drawn from the evidence of the applicant, Ms Wood, Ms Carmody, Ms Smith, Ms Perrottet and Ms O'Neill. ● The finding that CRS's searches were unable identify or make contact with any relatives of the applicant is supported by an email from Ms Wood of 8 March 2005 which is document 'T11' and appears at page 27 of the Appeal Papers. 61 For reasons stated at [115] --- [118] of my judgment in matter NSD 55 of 2005, I find that the statement was brought into existence between 10 May 2004 and 6 October 2004 for the purpose of the proceeding in the AAT. 62 Although Ms Wood was not called to give evidence before me, the plain inference from all the material is that the statement was not before Senior Member Kelly. It was an unsigned statement that was overtaken by Ms Smith's oral evidence. There is no suggestion that it was given an exhibit number in the AAT. 63 The statement was released to the applicant who annexed it to an affidavit in these proceedings. 64 Even if the statement had been in evidence it would merely have served to confirm the personal nature of any contacts between Ms Smith and the applicant or third parties. It does not show that CRS has documents in its possession. It shows the reverse. I see no reason why costs ought not to follow the event.

review of administrative appeals tribunal ("aat") decision application for documents under freedom of information act 1982 (cth) whether reasonable steps taken to locate documents whether documents exist whether findings of fact supported by evidence whether irrelevant considerations taken into account whether wednesbury unreasonable procedural fairness whether reasonable opportunity to cross examine witnesses and make submissions power of aat to control proceedings relevance to proceedings administrative law administrative law

This case raises another question --- whether approval can, or should, be given to an increase in the remuneration of the deed administrator post liquidation. 3 On 22 July 2005 Mr Purchas and Mr Dean-Willcocks were appointed as administrators of RSP Group Pty Limited pursuant to s 436A of the Corporations Act 2001 (Cth) (the Act). 4 On 9 September 2005, a Deed of Company Arrangement was executed pursuant to a resolution of the creditors in accordance with s 439C(a) of the Act at the meeting convened under s 439A of the Act (the DOCA). 5 The Deed Fund under the DOCA was constituted by cl 5 and cl 6 of the DOCA which provided, inter alia, for RSP to pay certain funds to the administrators at certain times. The Deed Fund also included the cash surplus from trading by the administrators. Pursuant to cl 6 of the DOCA, the Retained Cash in the administration account as at the date of execution of the DOCA formed part of the Deed Fund. 8 On 12 April 2006, the creditors passed a resolution at a meeting convened pursuant to s 445F of the Act that the DOCA be terminated and RSP be wound up. 9 The current balance of the Deed Fund is the sum of $331 477.00. The likely dividend to participating deed creditors, if the Deed Fund is distributed to them on the terms set out in the DOCA, is estimated at approximately 9.3 cents in the dollar. If the Deed Fund is included as an asset available for distribution to all creditors of RSP, the anticipated dividend to ordinary creditors is approximately 14 cents in the dollar. (3) Alternatively, a declaration, pursuant to s 447D(2) and/or s 511(2) of the Act, that the Deed Fund is available for distribution as part of the property of the defendant in the due course of the winding up of the defendant in accordance with the relevant provisions of Pt 5.6 of the Act. Directions will be given and an order for costs will be made for the same reasons as those appearing in the aforementioned cases. That the remuneration of the Deed Administrators from the date of execution of the deed of company arrangement to completion be approved. The remuneration is to be fixed in respect of the Deed Administrators, their employees and contractors at the hourly rates applicable and in accordance with the rates of charge issued from time to time by Star Dean-Willcocks, plus GST, and the Deed Administrators shall be authorised to draw such remuneration from time to time out of monies held by them to a limit of $20,000 (plus GST). Any further remuneration to be approved by creditors in general meeting. The Chairperson and the proxy for the Chief Commissioner of State Revenue abstained from voting. Otherwise, the resolution was passed unanimously. 14 It is claimed that the time costs incurred by the Deed Administrators in the course of the deed administration totalled the sum of $38 632. The details of that calculation are in evidence. 15 A resolution concerning approval of the Deed Administrators' additional remuneration was not put to the creditors at the meeting convened pursuant to s 445F of the Act, which led to the winding up. It is further submitted that an administrator can apply as such, notwithstanding that the administration has ended. 19 Whilst both propositions are of some novelty in circumstances such as the present, counsel is correct in submitting that there is some support to be derived from the decisions of Young CJ in Eq in Deputy Commissioner of Taxation v ACN 080 122 587 Pty Ltd [2005] NSWSC 1247 and Austin J in Re Currabubula Holdings Pty Ltd (in liq); Ex parte Lord (2004) 48 ACSR 734; (2004) 22 ACLC 858, at least so far as standing is concerned. 20 Even if the question of standing is solved, there is a clear conflict of interest. There is a direct contest between the interests of the former administrators, on the one hand, and those of the ordinary creditors of a company, on the other, so far as the increased remuneration is concerned. The natural representatives of creditors are the liquidators who are making the application. Even if the application is viewed as being made in their capacity as administrators, they are also the natural contradictors, namely the liquidators. 21 There are other issues to be faced. The first is whether the section contemplates that an administrator can or should seek an ex post facto increase in the fees approved. A second is whether it would be appropriate to exercise such a power, if it exists, where the administrators had neglected to obtain the appropriate authorisation of creditors pursuant to s 445F of the Act. A third is whether it is appropriate to regard time costing as the sole method of assessing proper remuneration. A fourth is whether 'remuneration' includes payment to employees and other outgoings of a firm of which the administrators are principals. A fifth is the method by which a court should assess the appropriateness of the detail of the particular claim for remuneration based upon time charging. 22 In my opinion, it is inappropriate that the orders sought should be considered in the absence of a contradictor representing the interests of unsecured creditors of the company. The matters to which I have adverted received scant, if any, attention in the authorities to which I was referred. 23 Orders will be made as to the first question. The proceeding will otherwise stand over to enable the plaintiffs to consider what they wish to do in relation to the second question.

whether funds held pursuant to terminated deed of company arrangement are held for the benefit of deed creditors or property of the company in liquidation direction that the funds be administered as the property of the company in liquidation practice and procedure application by liquidators/former administrators for increase in remuneration as administrators proper parties contradictor necessary corporations corporations

The Tribunal had determined that the respondent ('Isaac Jewellery') was not a business to which s 94(1)(b) of the Export Markets Development Grants Act 1997 (Cth) ('the EMDG Act') applied and was therefore entitled to receive grants pursuant to the EMDG Act. The EMDG Act provides for the grant of assistance to small and medium Australian enterprises to assist them in developing export markets. Pursuant to s 7 of such Act a business is not eligible for a grant if it has been a grantee in respect of eight or more previous grant years. Part 8 Division 2 of the EMDG Act applies where there is a change in the ownership of the business. Note: Decisions whether 2 businesses are similar are subject to guidelines determined by the Minister under section 101. Note: For eligible expenses , repealed Act and grants entry requirements see section 107. Its directors were Mr Isaac Atakliyan ('Mr Atakliyan') and his brother Aram. The business exported substantial quantities of manufactured jewellery and received grants under the EMDG Act. In 2004 following a disagreement each brother formed new companies and commenced separate businesses both engaged in the manufacture of jewellery. The equipment and the stock used in the business of ABJ were divided between the two brothers. In July 2005 Isaac Jewellery Pty Ltd ('Isaac Jewellery') was incorporated and Mr Atakliyan became its sole director and share holder. In around September 2005 Mr Atakliyan purchased a property in Market Street, Sydney and conducted the operations of Isaac Jewellery from that premises. The purchase price was partly met using a portion of the proceeds of the sale from the property which had been formerly owned by himself and Aram, and had been used by ABJ for the conduct of its business. On 6 July 2007 Isaac Jewellery lodged an application form with Austrade for a grant under the EMDG Act in respect of claimed expenditure incurred during 2006/2007 in the amount of $120,114. Section 101(1)(d) of the EDMG Act empowers the Minister for Trade ('the Minister') to determine, by legislative instrument, 'guidelines to be complied with by the CEO in determining, for the purposes of subparagraph 94(1)(b)(ii), whether a business or part of a business (the old business ) that was carried on by a person is similar to a business (the new business ) being carried on by another person to such an extent that the new business should be treated as a continuation of the old business' . The Export Market Development Grants (Change in Ownership of Business) Guidelines 2006 (Cth) ('the Guidelines') in respect of s 94 were made by the Minister on 19 July 2006. Section 4(2) of the Guidelines specifies eleven criteria which must be considered by Austrade in determining whether the new business is similar to the old business. Austrade, having applied the criteria, rejected the application for a grant by Notice of Determination of Grant dated 27 July 2007. Austrade considered Isaac Jewellery to be a continuation of the business previously conducted by ABJ. Since ABJ had exhausted its entitlement to grants, Isaac Jewellery's application for a further grant was refused. Isaac Jewellery thereafter sought a review by Austrade of the decision. We note that in your case the old business, ABJ Australia Pty Ltd, has been the recipient of the maximum entitlement of seven grants up until the 2003-04 grant year. Austrade has carefully examined and taken into account the criteria set out in the Ministerial Guideline EMDG (Change of Ownership Guideline) 2006 in deciding whether Isaac Jewellery P/L should be treated as a continuation of the old business. Accordingly, Austrade has concluded that there are too many similarities NOT to warrant the application of Section 94 and that Isaac Jewellery P/L therefore be treated, for EMDG purposes, as continuing the old business thus inheriting the grant history of ABJ Australia P/L. As ABJ Australia P/L has received 7 prior grants, I regret to advise that Isaac Jewellery P/L are [sic] no longer eligible for a grant. In applying section 94, I, as the decision-maker standing in Austrade's shoes, am required to take into account the Export Market Development Grants (Change in Ownership of Business) Guidelines 2006 (the "Guidelines"): s 101(1)(d). Firstly, Austrade submits that the Tribunal misconstrued and misapplied s 94(1)(b) of the EMDG Act by conflating the matters to be considered under ss 94(1)(b)(i) and 94(1)(b)(ii). Secondly Austrade submits that the Tribunal erred in applying the Guidelines to s 94(1)(b)(i) of the EMDG Act. The Guidelines only apply to s 94(1)(b)(ii) of the EMDG Act and require the decision-maker to have regard to the similarities (if any) and the differences (if any) between the eleven aspects of the old and new businesses specified in the Guidelines. Austrade submits that those similarities and differences are irrelevant to any consideration arising under s 94(1)(b)(i) of the EMDG Act. Austrade submits that by such errors, the Tribunal misdirected itself concerning the relevance of the Guidelines as evidenced by the Tribunal's finding that 'having regard to the factors identified in the Guidelines... Isaac Jewellery... neither carries on the same business or part of the same business, carried on by ABJ...' . Such reason was the only basis which the Tribunal gave for its decision under s 94(1)(b) and Austrade submits that the Tribunal accordingly failed to correctly apply s 94(1)(b). The facts which must be proved to the satisfaction of the decision-maker or which must be proved objectively in s 94(1) are jurisdictional facts which must exist before the operation of s 94(2) is enlivened. It is submitted that the determination under s 94(1) does not turn on the satisfaction of the CEO of Austrade or, on review, of the Tribunal. Accordingly, the criteria for the application of s 94(1)(b)(i) can be determined conclusively only by a court of competent jurisdiction. Isaac Jewellery submits that no question of law is involved in the appeal and accordingly the appeal is incompetent under s 44 of the AAT Act. Isaac Jewellery also submits that Austrade did not contend that any of the matters advanced by Isaac Jewellery under s 94(1)(b)(i) of the EMDG Act were irrelevant to the consideration of the matters in that subparagraph and refutes the submission of Austrade that the Tribunal conflated its task by considering ss 94(1)(b)(i) and 94(1)(b)(ii) together. The question of law raised by Austrade's Notice of Appeal requires the Court to determine whether the provisions of the EMDG Act have been properly applied. Generally the expression is used to identify a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question. If the criterion be not satisfied then the decision purportedly made in exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker. The fulfilment of the requirements in s 94(1)(b)(ii) is conditional upon the satisfaction of the CEO of Austrade, and such satisfaction is to be determined by the application of the Guidelines. Once a determination has been made that the requirements are met, s 94(2) then directs Austrade to treat the particulars of the previous owner as being those of the applicant. Such determination requires a judgment to be made by the CEO of Austrade. As was observed in Australian Postal Corporation v Forgie and Another [2003] FCAFC 223 ; (2003) 130 FCR 279 at [40] of a decision making process: ' [t] his intellectual process involves matters of judgment and degree' . That is, a decision is required. In the application of both s 94(1)(b)(i) and (ii) a value judgment must be made by the decision-maker. Under s 94(1)(b)(i) a decision is required to be made in respect of the question whether the new owner is carrying on the old business or a part thereof. It follows that there has been a decision made by Austrade in respect of which an appeal may lie to this Court pursuant to s 44 of the AAT Act. Accordingly, the Court rejects the submission that the requirements of s 94(1) constitute jurisdictional facts, and that s 94(1)(b)(i) is capable of determination by objective facts. DID THE TRIBUNAL ERR? So construed, the Tribunal's decision would be unremarkable. However, the challenged statement is also consistent with another interpretation, namely that the issues arising under both subparagraphs were to be determined against the same criteria. Such a construction would be erroneous since the issues to be determined under each subparagraph require the application of different criteria. The Court infers from the next statement of the Tribunal, namely ' [i] n applying s 94, I, as the decision-maker... am required to take into account the Export Market Development Grants (Change in Ownership of Business) Guidelines 2006' , that the Tribunal approached the interpretation of ss 94(1)(b)(i) and 94(1)(b)(ii) as if the Guidelines applied to both subparagraphs. By virtue of s 101(1)(d) of the EMDG Act the Guidelines are applicable to s 94(1)(b)(ii) but not to s 94(1)(b)(i). Such construction is reinforced when the Tribunal's findings are considered. Although the issues to be considered under ss 94(1)(b)(i) and 94(1)(b)(ii) are distinct, the Tribunal did not attempt to consider the requirements of the two subsections separately. The Tribunal, in stating that 'I have therefore come to the view, having regard to the factors identified in the Guidelines, that Isaac Jewellery is [sic] neither carries on the same business, or part of the same business, carried on by ABJ...' , indicated that it considered that the Guidelines were relevant in determining the question under s 94(1)(b)(i). Further, the Court considers that the Tribunal should not have considered s 94(1)(b)(i) of the EMDG Act in its review of Austrade's decision. The test under s 94(1)(b)(i) requires a factual consideration of whether the new owner is carrying on the business or part of the business. This does not require an investigation of the similarities between the old business and the new business, as subparagraph (i) does not anticipate a new business being in existence. The only question to be considered under such subparagraph is whether the business, previously conducted by its former owner, is being conducted by the new owner. Since there is no issue that the old business, namely ABJ, had ceased to operate, the Tribunal had no reason to consider s 94(1)(b)(i). The issue for determination was whether the new business was similar to the old business as provided for in s 94(1)(b)(ii). This distinction appears to have been overlooked by the Tribunal. The Court therefore concludes that the Tribunal misconstrued and misapplied s 94 of the EMDG Act by failing to perceive that the circumstances to which s 94(1)(b)(i) applied were not relevant to the review before the Tribunal, and further by considering that the Guidelines applied to both ss 94(1)(b)(i) and 94(1)(b)(ii). Isaac Jewellery referred to the fact that Austrade had not drawn such distinctions before the Tribunal. However, the conduct of Austrade before the Tribunal cannot operate as a constraint upon the consequences which flow from a misinterpretation of s 94 of the EMDG Act. The appeal is allowed. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.

appeal from administrative appeals tribunal appeal from administrative appeals tribunal limited to questions of law jurisdictional fact appeal from administrative appeals tribunal whether tribunal erred in its application of the export market development grants (change in ownership of business) guidelines 2006 (cth) whether tribunal erred in its consideration of s 94(1)(b)(i) of the export markets development grants act 1997 (cth) administrative law administrative law

5" (ARSN 103 920 190) ("Project 5" or the "Project"). The first applicant, Huntley Management Limited (ACN 089 240 513) ("HML"), is the current responsible entity of Project 5, being appointed on or about 18 March 2008. The other applicants in the proceeding are described in the Amended Statement of Claim (the "ASC") as "investor applicants", each being "an investor in [Project 5]". First, it seeks to strike out the claim brought by HML and to remove HML as an applicant. In the notice of motion filed on 18 June 2009 and the amended notice of motion filed 23 June 2009, the respondents relied upon s 31A of the Federal Court Act 1976 (Cth) and O 20 r 5 of the Federal Court Rules 1979 (Cth). The reference to O 6 r 9 of the Federal Court Rules 1979 (Cth) was added on 21 August 2009. The respondents' submissions on the hearing of the Motion focussed primarily on O 6 r 9 of the Federal Court Rules 1979 (Cth) and whether HML had been improperly or unnecessarily joined as a party to a proceeding. The respondents did not submit that the relief would be different if this part of the Motion had been considered as an application under O 20 r 5. The second part of the Motion seeks an order that the proceedings brought by the other applicants be dismissed on the basis that the applicants have not authorised solicitors to bring the proceedings on their behalf. That application is made under O 20 r 5 of the Federal Court Rules 1979 (Cth). At the conclusion of the hearing of the Motion, the applicants filed and served a proposed ASC. The respondents filed submissions in opposition to the proposed amendments and further submissions in relation to the Motion. These reasons for decision proceed on the basis that the applicants should be given leave to file and serve the ASC and that the orders sought in the Motion relate to that ASC. For the reasons that follow, I would dismiss the Motion. In relation to the costs of and incidental to the Motion, I will order that they be costs in the cause. The second to seventh respondents were the directors of AOL during the relevant period. AOL was replaced by HML as responsible entity for Project 5 as a result of a vote of investors in Project 5. After HML's appointment as responsible entity, it carried out certain investigations and commissioned reports from Australian Green and Gold Limited ("AGG") in relation to Project 5 and AOL's performance while AOL was responsible entity of Project 5. HML formed the view that there had been serious breaches by AOL of its obligations to the investors both in its disclosure in the Project 5 prospectus ("the Prospectus") and in its management of Project 5. HML negotiated and secured a litigation funding agreement with LCM Litigation Fund Pty Ltd, by its subsidiary ALF No 5 Pty Ltd. As a result of the events just described, these proceedings were issued. Consistent with authority, I proceed to determine the application on the basis that the assertions of fact in the ASC, taken at their highest, are to be accepted: Lotus Development Corporation v Mayne Nickless Ltd (1991) 100 ALR 167 at 168-169 citing Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129. The starting point is the Prospectus issued by AOL in relation to Project 5. In the Prospectus, Project 5 was described as involving the establishment of olive groves on a portion of land which had been dedicated to Project 5, known as the "Yallamundi land", located south west of Toowoomba in Queensland and owned by Collective Olive Groves Limited ("COGL"): para [6] and [9] of the ASC. The Project offered investors the opportunity to acquire "Grove Interests", being interests in one of 3,520 olive groves on the "Yallamundi land" with each grove having an area of 0.15 hectare (1,500m 2 ) and planted with 53 olive trees: paras [10] and [11(a) and (b)] of the ASC. Each investor was required to pay an initial investment sum of $4,433 for each Grove Interest and was required to enter into: a Grove Licence Agreement with COGL, giving the investor a licence to use and occupy a separate and identifiable 0.15 hectare olive grove on the "Yallamundi land"; and a Grove Agreement with AOL, under which AOL would establish and maintain the grove until 30 June 2023. (Under the Grove Agreement, AOL undertook to use reasonable endeavours to harvest and market the olive products produced from the investor's grove at the maximum available price. In addition to the initial investment of $4,433, each investor was to pay an annual licence fee to COGL of $33.00 (inclusive of GST) and an annual management fee to AOL of $935.00 (inclusive of GST) in the first year for the ongoing maintenance of the investor's grove: para [11(f)] of the ASC. In subsequent years, the annual licence fee to AOL was to be indexed annually in accordance with the consumer price index: para [11(f)] of the ASC. Although AOL undertook to harvest an investor's grove (see [9(2)] above), an investor could elect to conduct its own harvesting and marketing of olives from their allocated grove or groves: para [11(g)] of the ASC. The trees on the groves were to be "legally" owned by COGL but, for an additional $80, each investor would be entitled to acquire a parcel of 73 ordinary shares in COGL for every Grove Interest held by that investor. AOL offered 256,960 shares in COGL to investors in Project 5: paras [11(j) and (k)] of the ASC, para [11(k)] of the Defence and para [3] of the Reply. The representations are said to be contained in, or made because of omissions from, the Project 5 Prospectus. The representations are divided into two sub headings --- "the Water Representations" (para [15(c)] of the ASC) and "the Viability Representations" (para [15(d)] of the ASC). The ASC (paras [29]-[38]) alleges that the representations were materially false or misleading, misleading or deceptive and further or alternatively, likely to mislead or deceive in contravention of: ss 728 , 1022A (1), 1041E , 1041F of the Corporations Act 2001 (Cth) ("the Corporations Act "); further or alternatively, s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) ("the ASIC Act"). AOL and each investor were parties to a Grove Agreement under which AOL agreed to establish and maintain the olive groves, including by ensuring that they had adequate irrigation. The applicants allege that AOL was in breach of its contractual obligations from the outset because it had not put in place the necessary irrigation infrastructure; Claims that AOL breached its duties as a responsible entity under the Corporations Act . The applicants allege that AOL's duties are similar to fiduciary duties --- to act in the best interests of the members of Project 5, to avoid conflicts of interest, to exercise due diligence and so on. The applicants allege these duties were breached because AOL preferred it own interests, thereby depriving them of the opportunity to remedy the defaults and terminate Project 5 if it failed to do so. The ASC also contends that the director respondents were involved in AOL's contraventions of its responsible entity duties; Claims against the director respondents for breach of their duties under s 601FD of the Corporations Act ; and Claims that AOL was in breach of its contractual and statutory duties by continuing to charge the full amount of the annual management fee even though a good third of the olive trees died and had not been replaced. The applicants allege that certain of the director respondents were involved in this breach by AOL of its statutory duties and / or contravened their duties under the Corporations Act . The loss and damage claimed is quantified, in some cases, as the amount contributed by the investors initially and, in other cases, as the amounts paid as ongoing management fees under the Grove Agreement. It is however of the first importance to notice that no claim is made by or on behalf of an investor for relief which would bring their participation in Project 5 to an end. That is, all of the claims, whether made in relation to events before the Project got under way, or subsequent events, are claims made on the premise of their continued membership of the Project. Not only that, the claims that are made in relation to these events (both before the Project got under way and those concerning later events) take the form, in effect, of claims that the amounts contributed by the investors have been lost either to the investors or the Project. Once these features of the claims are understood, all of the complaints advanced by the respondents will be seen to fall away. They fall away because, reduced to their essentials, the claims can be seen as ones in which the current responsible entity (HML) and members of the Project claim damages against the former responsible entity (AOL) and its directors for contraventions of statutory prohibitions and contractual obligations which are alleged to have caused loss to either the Project as a whole or its members. The fact that the loss is sought to be measured by reference to the particular levels of contributions made by members at various stages in the life of the Project should not be permitted to obscure the essential nature of the claims that are sought to be advanced. Damages are sought on the footing that money was paid but has been lost to either the Project or to its members. Whether those claims are good or bad is of course not a matter I am in a position to, or asked to, make any judgment about. It is enough to say that I am not persuaded that the claims as framed in the ASC are unarguably bad and I am not persuaded that HML has been improperly and unnecessarily joined as a party to these proceedings or that these proceedings are brought in the names of the individual members without authority. As the responsible entity of Project 5, HML is obliged to exercise its statutory and other obligations. So, for example, HML must "operate the scheme and perform the functions conferred on it by the scheme's constitution and [the Corporations] Act": s 601FB of the Corporations Act . Section 601FC prescribes HML's statutory duties and powers and the manner in which they are to be exercised. Those powers and duties include, by way of example: to act in the best interests of the members: s 601FC(1)(c) ; to comply with the Project's compliance plan: s 601FC(1)(h) ; to ensure that all payments out of the Project Property are made in accordance with the Project's constitution and the Corporations Act : s 601FC(1)(k) ; to carry out or comply with any other duty, not inconsistent with the Corporations Act , that is conferred on the responsible entity by the scheme's Constitution: s 601FC(1)(m). Consistent with s 601FC of the Corporations Act , the Constitution of Project 5 dated 28 February 2003 (between, and binding on, the investors and the responsible entity) contains extensive provisions about the legal obligations of the parties and the rights and powers of each party: cl 1. A number of other provisions of the Constitution should be noted. In addition, the responsible entity covenants with the members to act in accordance with the Grove Licence Agreements and the Grove Agreements (cl 20.5). Secondly, consistent with s 601FC(2) of the Corporations Act , the Constitution provides "Project Property" is held by the responsible entity on trust for the members for the term of Project 5: cl 3.1. Further, cl 8.1 provides that the responsible entity has a right of indemnity out of the Funds and the Project Property in respect of any liability incurred by the responsible entity in the performance of its duties as the responsible entity and all fees payable to the responsible entity under the Constitution except where there has been negligence, deceit, breach of duty, fraud or breach of trust by the responsible entity. Moreover, cl 8.6 provides that nothing in the Constitution limits the liability of the responsible entity for negligence, deceit, breach of duty or breach of trust. An Interest includes a Member's participation in a Grove Licence Agreement and a Grove Agreement. They dealt with each group of claims separately. Thus, pleadings have now been introduced alleging that causes of action against director Respondents, and the former Responsible Entity [AOL], concerning breaches of the Grove Agreements and duties imposed under s 601FC of the [Corporations Act] are causes of action that can be brought by the new Responsible Entity [HML] against the former Responsible Entity and the director respondents. Yet claims remain that the investor applicants also bring such causes of action. In truth the losses claimed are those of individual investor applicants (or members) and not those of the scheme itself. The respondents make two complaints --- that the investor applicants bring the same claims as HML and HML is not a proper party, and secondly, that the applicants' particulars of loss and damage show that the loss allegedly suffered was loss by the investors, not the scheme itself. The respondents focus on the last sub-paragraph (para (b)(ii)) as providing the only basis for HML to institute proceedings. That is not accurate. It is not the only capacity in which HML can and does bring the second group of claims in these proceedings. As noted earlier, the Corporations Act and the Constitution , read together, provide that HML as the responsible entity has certain duties and powers: see [19]-[29] above. In the present context, those provisions of the Corporations Act and the Constitution expressly empower HML, amongst other things: to " operate the scheme and perform the functions conferred on it by the Scheme's Constitution and [the Corporations Act ] ": s 601FB of the Corporations Act ; in addition to all other powers conferred on HML by the Constitution and the Corporations Act , to do any act or thing , which, in HML's opinion, is necessary for the proper and efficient establishment, management and development of the Project : cl 20.2 of the Constitution ; and on its own behalf or on behalf of any applicant or member, to commence and prosecute legal proceedings of any kind in any court in respect of the Project or any Member's Interest: cl 20.4 of the Constitution . The definition of "Interest" is set out in [28] above. Project 5 remains registered as a managed investment scheme governed by the Corporations Act , the Constitution , the Grove Licence Agreement and the Grove Agreement: see [19]-[28] above. The entity which is obliged to operate it is HML. However, HML was appointed as the responsible entity in March 2008. From the time of their appointment, HML allegedly faced difficulties. HML reported to investors as early as 10 April 2008 that there were no project funds to operate Project 5. Notwithstanding that fact, HML gave approval for the harvesting of the olives and had its responsible manager inspect the Project's property. The report covers ... Project 5 ... and highlights the number of dead and commercially unviable trees on your Project. Clearly this situation is disgraceful. In this regard we have sought advice from our lawyers on grounds for a legal action for recovery from AOL of funds taken for dead trees that have not been replaced and for water that has not been supplied. We have advised AOL of our intention to proceed with a claim and have now met a leading specialist litigation lawyer to seek their advice on a class action. This has been crushed, processed and quality assessed and the result is a yield of 17% of extra virgin oil (36,000 litres). We are currently reviewing options for its sale. Despite our numerous requests we have received nothing to date from AOL. Despite the fact that we had received no payment from AOL, we completed the harvest incurring costs in excess of $100,000 and have incurred other substantial costs in managing the Project. As things stand, you are legally obliged to pay the current management fees for the term of the project and I believe investors have little hope of achieving any reasonable return on this basis. We could determine this as Responsible Entity on the grounds it cannot achieve its objectives. A copy was not provided to the Court. However, in another letter to investors dated 10 March 2009, the 17 December letter was described as "outlining [HML's] plans and timeframe for all projects up to the end of June 2009". As we have advised, you will receive our recommendations based on his reports along with a business plan for the future later this month. A meeting of growers will be arranged following the release of these recommendations. At that meeting, growers will be offered the choice of terminating their involvement and "walking away" from the project subject to their management fees being paid up to that time. The termination date is expected to be no later than 31 May 2009. For those who choose to continue their involvement under a new structure that option will be available. ... The farm manager has been active throughout 2008 and 2009 improving the groves in Project 5. Project 5 is now clear of lace bug and effective weed control has been undertaken. He has advised that his staff on the plantation, most of whom are ex AOL employees, have reported that all projects have never looked so good. While we have been fortunate with the amount of rain that has been received in recent months the efforts of the farm manager and his staff have been commendable and in the best interests of all Growers. Growers are welcome to visit Yallamundi at any time. This Statement of Claim for Project 5 will be lodged with the Federal Court next week. It will seek recovery of substantial amounts including the majority of payments made by investors. We have outlined our plan and will implement it --- Growers will have the opportunity to "walk away" from their investment subject to their fees being up to date, or, remain as an investor in a restructured business with the prospect of a commercial return. The Project is said to be short of funds and at least one of the sources being explored by HML to secure funds is action against AOL, as the former responsible entity. Whether that action is being commenced by HML under s 601FB of the Corporations Act (read in the context of the other provisions including s 601FC) or cl 20 of the Constitution or both is not an issue I need to resolve. It is sufficient for present purposes to conclude that HML had the power to commence the proceedings to seek to recover the loss and damage caused by the alleged breaches of contract and duty pleaded in the ASC. That then brings me to the question of loss and damage. The respondents submitted that the applicants' allegation that HML, as the new responsible entity, "brings action to recover loss" was "misconceived, and contrary to the whole thrust of the claim which is one brought to recover loss to individual investors, and not loss caused to the scheme as such". There are, in my view, two answers to these contentions. First, as set out above (see [29]), s 601MA of the Corporations Act provides that a member of a registered scheme who suffers loss or damage because of conduct of the scheme's responsible entity that contravenes a provision of Ch 5C of the Corporations Act may recover the amount of the loss or damage by action against the responsible entity. Section 601MA is to be understood in its context. Section 601MA was one of the core provisions inserted in Ch 5C to implement and "preserve the concept of a single responsible entity responsible to members for the operation of a scheme": Explanatory Memorandum, Managed Investments Bill 1997 (Cth), Ch 14. It ensures that the "liability for any loss of investors' funds, through negligent or illegal activity, rests entirely with the responsible entity": Second Reading Speech, Managed Investments Bill 1997 (Cth), House of Representatives (1997) Vol 218, p 11928. However, in a 2003 industry report entitled Managed Investment Schemes: an Industry Report, G Moodie and Prof I Ramsay from the Centre for Corporate Law and Securities Regulation at The University of Melbourne, considered the policy assumptions that had in their view been made in Ch 5C of the Corporations Act in dealing with "investor rights". Section 601MA was the prime example used by them. The primary flaw is that there is no means by which scheme members can become aware that the [responsible entity] has 'contravened a provision of this Chapter'. Neither the board nor the compliance committee of the [responsible entity] is under an obligation to report or disclose contraventions (material or otherwise) to scheme members. In relation to non-institutional scheme members, this is unrealistic given that in Australia civil proceedings, costs follow the event and thus the risk of an unsuccessful action is likely to be prohibitive to implementing proceedings. In that context, cl 20 of the Constitution for Project 5 is important. Clause 20.4 provided that HML could "on its own behalf or on behalf of any Applicant or Member commence and prosecute legal proceedings of any kind in any court in respect of the Project or any Member's Interest". Clause 20.4 provides that the proceedings commenced by HML "may be of any kind" and "in any court". There are, however, some limitations. The proceedings must be commenced on HML's own behalf or on behalf of any applicant or member . That limitation recognises that HML may institute proceedings on behalf of a group of people who have applied for interests but not yet been accepted. Next, the proceedings commenced on its own behalf or on behalf of any applicant or member must be "in respect of the Project or any Member's Interest". "Project" is defined in the Constitution (in Sch 1) as the managed investment scheme established by the Constitution (see [22] above). "Interest" is defined in Sch 1 of the Constitution as the interest in the Project a member acquires by applying under the Prospectus and having the application accepted by the responsible entity and also includes a member's participation in a Grove Licence Agreement and a Grove Agreement, the member's business in carrying on the primary production enterprise of planting, maintaining, harvesting and selling the produce from the grove and the net proceeds which result from the member carrying on its business (see [28] above). Such a broad provision is not surprising: see eg Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82 ; (1986) 161 CLR 500 at 511. Clause 20.4 enables a responsible entity in the position of HML to deal not only with the problems and issues identified by Moodie and Prof Ramsay (see [46] above) but also the fact that Ch 5C of the Corporations Act recognises that the statutory right of action under s 601MA against the responsible entity for loss and damage suffered as a result of a contravention of Ch 5C does not extend to actions against or facilitate accountability to scheme members for loss or damage suffered as a result of contraventions of Ch 5C by parties other than the responsible entity. The possibility of action against others depends on the general law and ss 1324 and 1325 of the Corporations Act . Clause 20 permits a responsible entity to address these kinds of claims thereby minimising, if not removing, the number, complexity and expense of multiple proceedings raising the same or similar issues. Of course, if members with at least 5% of the votes in a scheme are unhappy with the actions of HML, they have a statutory course open to them under s 601FM --- call a members' meeting to consider and vote on a resolution that HML be removed as the responsible entity. For those reasons, I consider that Ch 5C of the Corporations Act read with the Constitution (including cl 20), was intended to, and does, empower HML to institute proceedings alleging claims for breach of contract and duty by a former responsible entity. Put another way, there is nothing in the express words of cl 20.4 either alone or read in conjunction with the other provisions of the Constitution or the Corporations Act which support the respondents' contention that cl 20.4 only authorises certain kinds of action against certain kinds of defendants. For example, the respondents submitted that cl 20.4 only authorised the bringing of actions relating to the management of the Project. For the reasons stated at paras [45]-[47], I reject that contention. However, even if that was the correct or preferable construction of cl 20.4 (which I do not accept), in the circumstances which presently exist in relation to Project 5, it cannot be said that these proceedings do not relate to the management of the Project. As HML reported to investors, it is "operating" the Project but the course of management adopted by HML is dependent, at least in part, on the outcome of these proceedings. In my view, HML has not been improperly and unnecessarily joined as a party to these proceedings in relation to the second group of claims. The respondents contend that despite the provisions of the Corporations Act and the Project's Constitution (see [19]-[29] above), HML is improperly and unnecessarily joined as a party to the proceeding in relation to these claims: O 6 r 9 of the Federal Court Rules 1979 (Cth). I reject that contention. Part 5C.2 of the Corporations Act provides the legislative framework for the responsible entity of a managed investment scheme. But, as we have seen, the Corporations Act cannot be read in isolation. The responsible entity must operate the scheme and perform the functions conferred on it by the Project's Constitution and the Corporations Act : s 601FB. For that reason alone, HML is a proper party. It is, on any view, a person with sufficient connection to the controversy: see Edge; Re Eco Panels Australasia Pty Ltd (in liq) (2007) 61 ACSR 139 at [12]. It is responsible entity of a managed investment scheme in which the members of the scheme raise serious allegations about what was contained in, and omitted from, the Project's Prospectus. Moreover, the representations made by AOL which are the subject of complaint were made at a time when the Constitution existed and that Constitution and the Corporations Act bound AOL (as responsible entity) to exercise its powers and functions in particular ways. The allegation is that AOL did not do so. Thirdly, cl 20.2 permits HML to do any act or thing , which, in HML's opinion, is necessary for the proper and efficient establishment, management and development of the Project. As with the second group of claims, the substance of the unchallenged evidence from HML was that there were no project funds to operate the Project, HML had paid for the cost of the 2008 harvest itself and that the issue of proceedings was a way the members "would be able to get some of their investment money back". It is therefore unsurprising that at least one of the options explored, and then taken, by HML as the responsible entity was to seek to recover investment funds paid to AOL by the members in circumstances where the contents of the Prospectus were allegedly misleading and deceptive. It might provide a source of funds to enable the members to seek "to generate a commercial return" from the Project. Fourthly, cl 20.4 of the Constitution authorised HML, on its own behalf or on behalf of any applicant or member, to commence and prosecute this aspect of the proceedings. As noted earlier (see [45]-[50]), the language of the clause is broad. In light of the legislative scheme of Ch 5C of the Corporations Act and the definition of both "Project" and "Interest", it is not possible to conclude that the Prospectus and its contents is not a matter "in respect of the Project or any Member's Interest". In fact, without the Prospectus and its contents, there would be no Project and no Member's Interest. These matters are important. Perhaps, standing alone, they are decisive. However, the points made earlier (see [16]-[18]) are conclusive. HML has not been improperly and unnecessarily joined as a party to these proceedings in relation to this group of claims. However, if the matter should proceed further, it might be of assistance if I set out in summary form why this aspect of the Motion would in my view also fail. First, cl 20.4 of the Constitution was binding on all investors under s 601GB of the Corporations Act , a fact which was set out in the Project 5 Prospectus on at least 2 pages. Secondly, at the time of applying for an interest in the Project, each investor acknowledged in writing that he or she agreed to be bound by the Constitution . Thirdly, there is no suggestion that the authority conferred on HML by cl 20.4 has not been exercised in good faith or not in the interests of the members: cf Distillers Co Bio-Chemicals (Australia) Pty Ltd v Ajax Insurance Co Ltd [1974] HCA 3 ; (1974) 130 CLR 1 at 8, 9 (per Menzies J) and 23 (per Stephen J) and s 601FC of the Corporations Act . Fourthly, even if cl 20.4 of the Constitution did not authorise HML to commence the proceedings (a submission I reject), each investor was sent a pro forma letter and asked to select one of the following options: I support the Court action and confirm the authorisation given to Huntley Management Ltd (HML) in clause 20.4 of the Constitution for HML to bring the Court proceedings and to instruct DMAW Lawyers for and on behalf of me and in my name provided that this is at no cost to me except if there are any recoveries from the Court action and then only from those recoveries. I oppose the Court action and wish to be removed as a named Applicant in the Court proceedings. I confirm that I fully understand that if I select this option then in the event the Court action is successful and monies are recovered, I will not be entitled to any part of any monies recovered. I am unsure of my position in regard to the Court action and I would like further information. Option 1 was supported by 55.81% of investors and 67.73% of Grove Interests. Even if cl 20.4 of itself was insufficient authorisation (a view I do not hold), I accept that by selecting Option 1, that investor ratified HML's actions in commencing these proceedings on their behalf: Presentaciones Musicales SA v Secunda [1994] Ch 271 at 277 per Dillon LJ (Nolan LJ agreeing) and at 284-285 per Roch LJ; Walsh v Permanent Trustee Australia Ltd (1996) 21 ACSR 213 at 217. Eight investors (6.20% of total investors) sought to be removed as a party to the proceedings. HML has informed the Court that they will be removed. It is worth noting that one of the eight has already settled with AOL on a confidential basis and another is a company owned by the sixth respondent. The balance of the investors did not respond or had ticked option three. At the time of the hearing of the Motion, in relation to the third group, the applicants' solicitors were liaising with or following up each of those investors. I have no reason to doubt that the remaining 18 Project 5 investors will be dealt with in an appropriate manner and without delay and that the Court will be kept properly informed. If circumstances should change, I would expect HML to inform the Court of such matters. For those reasons, it is not demonstrated that the proceedings are an abuse of process within the meaning of O 20 r 5 of the Federal Court Rules 1979 (Cth). For the reasons set out above, I would dismiss the Motion and order that the costs of and incidental to the Motion be costs in the cause. I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.

managed investment scheme whether responsible entity should be removed as a party to proceeding powers and duties of the responsible entity corporations

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. 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. 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. 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] HCA 5 ; (1971) 123 CLR 614 , 640; Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co NL [1968] HCA 37 ; (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] HCA 11 ; (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. Also, can you please look at getting the proxy forms completed as well. 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. 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.

shares allotment powers of directors allotment for ulterior purpose corporations

The order, which I will call 'the divestiture order', was made by the Parliamentary Secretary to the Treasurer under s 21A(4) of the Foreign Acquisitions and Takeovers Act 1975 (Cth) ('the Act'). 2 Ms Wight has not complied with the divestiture order. She claims that it is invalid and in her application to this Court she seeks a declaration and orders in the nature of certiorari and mandamus. She also claims that a section in the Act is invalid because it is beyond the power of the Federal Parliament. She seeks to invoke the original jurisdiction of the Court under s 39B(1)(1A)(b) and (c) of the Judiciary Act 1903 (Cth) and ss 21 and 23 of the Federal Court of Australia Act 1976 (Cth). The Court's jurisdiction to hear and determine the applicant's claim is not in issue. 3 The respondent to the proceedings is the Honourable Chris Pearce MP, Parliamentary Secretary to the Treasurer. It is common ground that insofar as the Act refers to the Treasurer that includes a reference to the respondent because the respondent was acting for or on behalf of the Treasurer ( Acts Interpretation Act 1901 (Cth) s 19). In these reasons I will need to refer from time to time to correspondence written to and by officers in the Department of the Treasury. For convenience, I will refer to it as correspondence to and from the Treasurer. 4 The respondent has filed a defence and cross-claim. In the cross-claim the respondent seeks an order that the applicant dispose of her interest in the property to a person or persons who are Australian citizens and who are not associates of the applicant, as that term is defined in the Act. Neither party submitted that this Court did not have jurisdiction to make such an order. The applicant submitted that, assuming it was otherwise appropriate to make an order under s 35 , the particular order sought by the respondent is not appropriate having regard to the provisions of the Act. For reasons I will give, the order made by the respondent on 23 February 2005 is invalid. In those circumstances, the cross-claim must be dismissed. 5 The applicant is not an Australian citizen. She is a citizen of the Swiss Confederation. The applicant is a gynaecologist and obstetrician. In 1987 she married Dr Niels-Peter Buchholz and in 1994 she came to Australia and, in particular, South Australia, with Dr Buchholz. There are five children of the marriage between the applicant and Dr Buchholz, three of whom reside in Australia. In early 1995 the applicant and Dr Buchholz purchased the property as joint tenants. There is a substantial family home on the property and the applicant claims to have lived on the property for all or most of the period from 1995 to the present. 6 The marriage between the applicant and Dr Buchholz failed and in April 1997 Dr Buchholz left Australia. There were protracted proceedings in the Family Court of Australia between Dr Buchholz and the applicant. It is not necessary to set out all the details. On 27 April 2001 the Honourable Justice Murray made orders as to the distribution of property between the parties, including an order that Dr Buchholz transfer his interest in the property to the applicant. Dr Buchholz appealed against those orders and although he achieved a measure of success on the appeal, the order that he transfer his interest in the property to the applicant was not altered. On 30 July 2004 the applicant became the sole registered proprietor of the property. The applicant has since remarried. Her current husband is Mr Ronald Moster Wight and he is an Australian citizen. 7 The divestiture order made by the respondent was made on 23 February 2005. 8 Prior to making the divestiture order the respondent was given a minute dated 18 February 2005 from a Mr Chris Legg, who at that time was the general manager of the Foreign Investment Policy Division. The minute is a three-page document and it incorporated a further sheet entitled 'Additional Information'. I will refer to the four pages as 'the minute'. The minute is what the respondent had before him, and all he had before him, when making the divestiture order. 9 The applicant tendered an agreed book of documents, two affidavits and one other document. There was no cross-examination of the deponents. The respondent did not give or call evidence. 11 In this case, I am concerned with the acquisition of interests in Australian urban land, a term which is defined in s 5. The property is Australian urban land. That is achieved by expanding the definition of 'foreign person'. 14 The applicant is not within the definition of 'foreign person' within s 21A(1) of the Act . If s 21A applies to her it is by reason of the fact that she is a natural person not ordinarily resident in Australia within s 4(6)(a). 15 A natural person may be a citizen of Australia or a non-citizen. In the case of a natural person who is a citizen, there is no definition in the Act of 'resident' or 'ordinarily'. There are a large number of cases which have examined the meaning of those words in various statutory contexts. It seems that the words are not terms of art and the question is one of fact and degree and that a person may have two places of residence: Re Vassis; Ex parte Leung (1986) 9 FCR 518 at 524-525 per Burchett J; Re Taylor; Ex parte Natwest Australia Bank Limited (1992) 37 FCR 194 at 197 per Lockhart J. The particular problem of a person possibly being ordinarily resident in two places does not arise here because the criterion in s 4(6) is 'not ordinarily in Australia'. 16 In the case of a natural person who is a non-citizen, the position under the Act is quite different. In s 5A the Act defines the circumstances in which a non-citizen is taken to be ordinarily resident in Australia and therefore outside the extended operation of the Act . If he or she does not fall within the circumstances in s 5A then the non-citizens are taken to be ordinarily resident outside Australia and therefore within the extended operation of the Act . Section 25 gives the Treasurer the power in certain circumstances to decide that the Commonwealth Government has no objection to a proposed acquisition instead of making an order prohibiting the acquisition. Section 25(1C) was amended in 2001 (Act No 31 of 2001) by the deletion of the existing subsection and the addition of two new subsections (1C) and (1D). Both parties argued the application by reference to the section as amended and I will proceed on that basis. 19 Section 26A provides for compulsory notification of certain transactions which fall within s 21A. Section 27 is also important because it provides that a notice does not have effect for the purposes of ss 25 , 26 and 26A unless it is in accordance with the prescribed form and complies with the directions set out in the form. In my opinion, it displaces the rule that might otherwise apply by virtue of s 25C of the Acts Interpretation Act 1901 (Cth) that strict compliance with the form is not required and substantial compliance is sufficient. 21 It is common ground that the applicant is not an Australian citizen and that her continued presence in Australia is subject to a limitation as to time imposed by law. By reason of s 5A of the Act , she is a natural person not ordinarily resident in Australia within s 4(6) of the Act . If section 4(6) is valid, or valid to the extent that it applies to natural persons who are non-citizens, then she is a 'foreign person' for the purposes of s 21A of the Act . 22 A notice under s 26A of the Act was apparently given to the Treasurer by the applicant and her former husband shortly prior to the acquisition of the property in early 1995. I say apparently because, although the notice appears to bear the signatures of the applicant and her former husband respectively, it is common ground that the applicant did not place her signature on the notice. The circumstances under which somebody falsely placed on the notice what purported to be the applicant's signature were not the subject of evidence. In March 1995 the proposed acquisition of the property by the applicant and her former husband was apparently granted approval subject to conditions by the Treasurer under s 25(1A) of the Act . 23 If the notice given in early 1995 was effective or, if an effective notice is not a necessary precondition to the granting of an approval under s 25(1A) , the power under s 21A(4) is not engaged unless one of (c) or (d) of s 25(1D) has occurred. It is common ground that in this case neither has occurred. In other words, the applicant has not been convicted of an offence against s 25(1C) in relation to a condition attached to the decision, nor has an order been made under s 19B of the Crimes Act 1914 (Cth) in relation to the applicant in respect of such an offence. In the alternative the applicant contends that if it is a valid law, nevertheless, the power in s 21A(4) was not engaged in this case because the requirements of s 25(1D) were not met and therefore the divestiture order is invalid. The applicant further contends that even if these two contentions fail, the divestiture order made by the respondent is invalid because, before it was made, the applicant was not accorded procedural fairness. In the further alternative, the applicant contends that the order is invalid because the respondent was not in fact satisfied that the acquisition is contrary to the national interest within s 21A(4). In her application and statement of claim the applicant also contended that the divestiture order is invalid because the respondent applied a policy and did not genuinely consider the merits of the matter before him or because his decision was unreasonable in the Wednesbury sense ( Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1 ; [1948] 1 KB 223). At the hearing of the application, those two submissions were abandoned. 25 In relation to the applicant's first contention, the contention may be dealt with by reference to the facts stated to this point. In relation to the applicant's other contentions, I will need to set out the facts in more detail when considering the contentions. The Solicitor-General for the Commonwealth appeared for the respondent. 27 Section 21A of the Act is a law with respect to foreign corporations and is within the legislative competence of the Federal Parliament (s 51(xx)). The extended operation of the section effected by s 4(6)(a) to apply to natural persons not ordinarily resident in Australia is said by the respondent to be within the legislative competence of the Federal Parliament because it is a law with respect to external affairs (s 51(xxix)). That contention is contested by the applicant. In the alternative, the respondent submits that s 4(6)(a) , insofar as it applies to non-citizens, is within the legislative competence of the Federal Parliament because it is a law with respect to aliens (s 51(xix)). In other words, the respondent submits that even if s 4(6)(a) is partially invalid, it can be read down to apply to those natural persons who are aliens, that is to say, non-citizens, particularly when regard is had to the terms of s 5A. 28 The respondent's first argument requires a consideration of the scope of the external affairs power and whether s 4(6)(a) of the Act falls within that power. If that argument fails, the respondent's second argument requires a consideration of whether s 4(6)(a) can be read down to apply to non-citizens and therefore as a law with respect to aliens. 29 The scope of the external affairs power has been considered by the High Court in a number of recent decisions. Both parties referred extensively to the decisions in Polyukhovich v The Commonwealth [1991] HCA 32 ; (1991) 172 CLR 501 (' Polyukhovich ') and Victoria v The Commonwealth (Industrial Relations Case) [1995] HCA 45 ; (1995) 187 CLR 416 (' Victoria v The Commonwealth '). The word "affairs" is imprecise, but is wide enough to cover places, persons, matters or things. The word "external" is precise and is unqualified. If a place, person, matter or thing lies outside the geographical limits of the country, then it is external to it and falls within the meaning of the phrase "external affairs". The modern doctrine as to the scope of the power conferred by s 51(xxix) was adopted in Polyukhovich v The Commonwealth . The word 'affairs' is imprecise, but is wide enough to cover places, persons, matters or things. The word 'external' is precise and is unqualified. If a place, person, matter or thing lies outside the geographical limits of the country, then it is external to it and falls within the meaning of the phrase 'external affairs'. They must now be taken as representing the view of the Court. By a majority of five to two, the Court held that the legislation was valid under the external affairs power. Of the majority, Gleeson CJ and Kirby J each wrote separate judgments and Gummow, Hayne and Crennan JJ prepared joint reasons. Callinan and Heydon JJ dissented. 33 Gleeson CJ referred to the plaintiff's argument to the effect that the external affairs power was limited to a power to make laws with respect to relations between Australia and other countries. He said that to accept that argument would involve overruling the decision in Polyukhovich . In my view, the Court, upon reconsideration, should hold that Polyukhovich was correctly decided insofar as the decision bears upon the question of construction that arises in this case. Insofar as the decision goes beyond that, and bears, for example, upon Ch III of the Constitution , it is not presently relevant and it is unnecessary and inappropriate to say anything further about it. There was a difference between the view of s 51(xxix) taken by Mason CJ, Deane J, Dawson J, Gaudron J and McHugh J, on the one hand, and the views of Brennan J and Toohey J on the other. That difference does not affect the point presently in issue. Polyukhovich held that the external affairs power covers, but is not limited to, the matter of Australia's relations with other countries. It also includes a power to make laws with respect to places, persons, matters or things outside the geographical limits of, that is, external to, Australia. That conclusion represents the current doctrine of the Court on the external affairs power, and should be maintained because it is correct. 35 Kirby J identified what he considered to be a number of difficulties with the 'geographical externality principle' and therefore put it to one side. He decided the case by reference to whether the laws were laws with respect to a 'matter of international concern' [66]-[117]. 36 It is well established that the grant of legislative power with respect to external affairs, as with other heads of power, should be construed with all the generality that the words admit. 37 The issue before me is whether s 21A as extended by s 4(6)(a) is a law with respect to a person outside the geographical limits of Australia within the statement of principle referred to above. The respondent submitted that it clearly is because it operates with respect to a person not ordinarily resident in Australia. The applicant submits that it is not because the true character of the relevant sections is that they constitute a law with respect to the acquisition of property in Australia and they lack a sufficient element of 'externality' to bring them within the external affairs power. In fact, the applicant went further and submitted that the relevant sections did not constitute a law with respect to external affairs because they did not 'deal entirely with places, persons, matters or things which are external to Australia, but rather regulate conduct within Australia'. 38 There are two important aspects to s 21A(4) as extended by s 4(6)(a) and they are first, a natural person not ordinarily resident in Australia, and secondly, the acquisition of Australian urban land. The statutory definition of Australian urban land is land situated in Australia that is not used wholly and exclusively for carrying on a business of primary production. If those two matters are present then the Treasurer's power to make a divestiture order is enlivened if he or she is satisfied the acquisition is contrary to the national interest. 39 The statement by Dawson J in Polyukhovich refers, among other things, to persons outside the geographical limits of Australia. 40 Clearly, a person not ordinarily resident in Australia might come to Australia from time to time, but I do not think that that means the concept of not being ordinarily resident in Australia lacks an element of externality. To say that a person is not ordinarily resident in Australia means that ordinarily that person is outside the geographical limits of Australia. 41 It follows that one matter, namely, a person not ordinarily resident in Australia, is a matter geographically external to Australia and the other matter, namely, the acquisition of Australian urban land is a matter geographically internal to Australia. 42 The question which arises is whether s 21A(4) and s 4(6)(a) must relate only to matters external to the geographical limits of Australia in order to fall within the external affairs power. If so, this law would fail to meet that test because it only operates when conduct is carried out in Australia, namely, the acquisition of urban land in Australia. The applicant submitted that Polyukovich was authority for the proposition that to fall within the external affairs power a law must deal 'entirely' or 'wholly' with a place, person, matter or thing geographically external to Australia. She referred to the reasons for judgment of Dawson J (at 641) and Gaudron J (at 695). The law in Polyukovich did deal entirely or wholly with acts, matters and things geographically external to Australia and it was held to be within the external affairs power. Their Honours' observations are to be read in that context and they are not authority for the proposition that a law only falls within the external affairs power if it deals entirely or wholly with a place, person, matter or thing geographically external to Australia. 43 I do not think the mere fact that the law is only engaged if conduct occurs within Australia of itself disqualifies the law from being a law with respect to external affairs. There seems to be no reason to say that simply because the law also relates to conduct in Australia or produces a certain result or effect in Australia that it is not a law with respect to external affairs. I reject the applicant's submission that s 4(6)(a) is invalid because it does not deal entirely with places, persons, matters or things outside the geographical limits of Australia. 44 The applicant submits in the alternative that the relevant provisions are not a law with respect to external affairs because the element of geographical externality is insufficient and because the pith and substance of the relevant provisions is conduct in Australia. 45 The question raised by that submission is not an easy one. It requires a characterisation of the relevant provisions. In referring to " a law with respect to any matter ... occurring ... outside Australia" , I intend to include, among other things, what Jacobs J described (see above) as "any matter or thing done or to be done or prohibited to be done outside the boundaries of the Commonwealth". As has been mentioned, that broad view of the scope of the power conforms with settled principles of constitutional construction. I think this can be said even though the actual criterion is that the person is not ordinarily resident in Australia. They are the only persons affected by the relevant provisions. The location of the class of persons affected by the relevant provisions is an important characteristic of them, albeit that another feature of them is conduct within Australia, that is to say, the acquisition of Australian urban land. In my opinion, for the purposes of determining whether the relevant provisions are a law with respect to external affairs, it is sufficient that the relevant provisions apply only to a class of persons geographically external to Australia. 47 In my opinion, the relevant provisions are a valid exercise of the external affairs power. 48 Even if I am wrong, and the relevant provisions are not a valid exercise of the external affairs power, I am of the opinion that so much of s 4(6)(a) as applies to non-citizens is a valid exercise of the Federal Parliament's power to make laws with respect to aliens and that s 4(6)(a) can be read down accordingly. On the other hand, by a law with respect to naturalisation, the Parliament may remove that status, absolutely or upon conditions. In this way, citizenship may be seen as the obverse of the status of alienage. If, in its operation, a law affects a class of persons with respect to whom there is a power to make laws, the law may have the character of a law with respect to persons of that class. But it is neither necessary nor sufficient that the law should change, regulate or abolish the rights, duties, powers and privileges of the relevant class treated merely as members of the general public or of a substantially wider class than the class of persons who constitute the subject matter of the power. For example, a law which requires notification of symptoms of a disease after entry to Australia by aliens and citizens indifferently is not a law with respect to aliens --- though it may be a law with respect to quarantine. But if and to the extent that the law discriminates between the public at large and the relevant class of persons (whether textually or in its operation), there is an indicium that the law is a law with respect to persons of that class. That indicium may suffice to give the law the character of a law with respect to persons of that class and, if the discrimination is in a matter peculiarly significant to that class, the law will bear that character. In this respect, the aliens power is similar to the corporations power considered in Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd . In that case, s 45D(1)(b)(i) of the Trade Practices Act 1974 (Cth), which protected the businesses of trading corporations was held to be supported by s 51(xx) of the Constitution as a law with respect to trading corporations. The applicant argued the matter by reference to those principles. 52 In my opinion s 4(6)(a) applies to natural persons who are citizens of Australia and those who are not. The applicant asked me to draw that conclusion and, in that context she referred me to regulation 3(k) of the Foreign Acquisitions and Takeovers Regulations 1989 . That regulation was made under s 12A(8) of the Act and provides that the Act does not apply to an acquisition of Australian urban land by a foreign person who is an Australian citizen not ordinarily resident in Australia. The regulation cannot be used to construe the Act , but it is of no moment because, in my opinion, it is clear that s 4(6)(a) applies to both natural persons who are Australian citizens and those who are not. 53 I have no doubt that had s 4(6)(a) been expressed so as to apply only to natural persons who are not Australian citizens, or had it been drafted so as to deal separately with natural persons who are not Australian citizens, then the section insofar as it applied to non-citizens would be a valid exercise of the aliens power. The question is whether s 4(6)(a) can be read down so as to apply only to non-citizens not ordinarily resident in Australia. But for s 5A there might have been some difficulties in the way of reading down s 4(6)(a) so that it applied only to non-citizens not ordinarily resident in Australia. For example, there would be the difficulty of a law expressed in general terms and arguably no clear guide as to Parliament's intention as to an appropriate limitation. However, I do not think that those types of difficulties arise here, because by providing in s 5A what is in effect a statutory statement or definition of non-citizens who do and do not fall within the definition of natural persons caught by s 4(6)(a) the Federal Parliament has sufficiently revealed an intention that that subsection should operate in relation to non-citizens even if it is otherwise invalid. Section 4(6)(a) insofar as it applies to non-citizens is a valid exercise of the aliens power. 56 The applicant made reference to the Federal Parliament's power to make laws with respect to the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws (s 51(xxxi)). Initially, the applicant contended that ss 4(6) and 21A of the Act could not be justified by reference to this head of power because, first, the acquisition was not for any purpose in respect of which the Parliament had power to make laws, and secondly, the acquisition of property was not on just terms. At the hearing, counsel for the applicant said that he was prepared to concede for the purposes of the argument that if there was an acquisition of property it was on just terms. The respondent contends first that ss 4(6) and 21A stand outside the scope of s 51(xxxi) and, secondly, that in any event, there was no acquisition of property within the terms of s 51(xxxi). In my opinion, both of the respondent's submissions should be accepted. 57 Certain laws have been held to fall outside s 51(xxxi) and within another supporting head of power. Examples include laws which impose a fine or penalty or laws effecting or authorising seizure of the property of enemy aliens or the condemnation of prize. The test for determining if a law falls outside the scope of s 51(xxxi) has been variously stated. Therefore a law which selects and enacts means of achieving a legitimate objective is not necessarily invalid because the means involve an acquisition of property without just terms. What is critical to validity is whether the means selected, involving an acquisition of property without just terms, are appropriate and adapted to the achievement of the objective. The absence of just terms is relevant to that question, but not conclusive. Where the absence of just terms enhances the appropriateness of the means selected to the achievement of the legitimate objective, the law which prescribes those means is likely to fall outside s 51(xxxi) and within another supporting head of power. If it were otherwise, the guarantee of just terms would impair by implication the Parliament's capacity to enact laws effective to fulfil the purposes for which its several legislative powers are conferred. It would be erroneous so to construe grants of legislative power as to fetter their exercise by implying that s 51(xxxi) precluded the enactment of laws under other heads of power where the laws involved an acquisition of property without just terms, even though laws of that kind are appropriate and adapted to the execution of those powers in the public interest. However, it is necessary to elaborate a little on the phrase "acquisition of property on just terms". Because s 51(xxxi) operates as a constitutional guarantee, the words "acquisition" and "property" are to be construed liberally . However, the power conferred by s 51(xxxi) is one with respect to "acquisition of property on just terms". That phrase must be read in its entirety and, when so read, it indicates that s 51(xxxi) applies only to acquisitions of a kind that permit of just terms. It is not concerned with laws in connexion with which "just terms" is an inconsistent or incongruous notion. Thus, it is not concerned with a law imposing a fine or penalty, including by way of forfeiture, or a law effecting or authorizing seizure of the property of enemy aliens or the condemnation of prize. Laws of that kind do not involve acquisitions that permit of just terms and, thus, they are not laws with respect to "acquisition of property", as that expression is used in s 51(xxxi). It follows that a law which effects or authorizes forfeiture of property in consequence of its use in the commission of an offence against the laws of the Commonwealth stands outside s 51(xxxi). That control involves power to prohibit a proposed acquisition, to approve a proposed acquisition and, in relation to an acquisition which has taken place without approval, to require a person to dispose of the property acquired. It is difficult to see how the subject matter of the Act could be properly controlled or regulated without the power to make a divestiture order. 60 Having regard to the principles which I have identified, in my opinion ss 4(6) and 21A (4) stand outside the scope of s 51(xxxi). 61 I also agree with the respondent's second submission that in any event the degree of impairment of the applicant's rights with respect to the property is insufficient to attract the operation of s 51(xxxi). In Waterhouse v Minister for the Arts and Territories (1992) 43 FCR 175 the power of a Minister to grant or withhold a permit for an object to be exported to a purchaser under the Protection of Movable Cultural Heritage Act 1986 (Cth) was held to be an insufficient impairment of the rights of the owner of a valuable Australian painting to attract the operation of s 51(xxxi) (see the discussion of Black CJ and Gummow J at 180-185; Smith v ANL Ltd [2000] HCA 58 ; (2000) 204 CLR 493 per Gaudron and Gummow JJ at 505 [23]). In my opinion, similar reasoning can be applied here. The applicant is required to sell the property, but the class to whom she cannot sell the property is very limited (s 21A(7)). 62 In my opinion, s 4(6)(a) of the Act is a valid exercise of the Federal Parliament's power to make laws with respect to external affairs. If I am wrong, s 4(6)(a) insofar as it applies to non-citizens is a valid exercise of the Federal Parliament's power to make laws with respect to aliens and can be read down accordingly. Was the power in s 21A(4) engaged? She submits that an approval was granted by the Treasurer in 1995 and the proposal which was the subject of the approval was carried out. In those circumstances, the right to exercise the power in s 21A(4) had not arisen because (as was common ground) neither of the matters in s 25(1D) (c) or (d) had occurred. 64 The respondent submits that the notice preceding the 'approval' in 1995 was not effective and that an effective notice was an essential precondition to an approval for the purposes of s 25(1D). If there was no approval for the purposes of s 25(1D) then that section did not operate as a bar to the exercise of the power in s 21A(4) of the Act . In the alternative, the respondent submits that the acquisition by the applicant of her former husband's interest in July 2004 was sufficient to engage the power in s 21A(4). 65 Before considering the rival contentions it is necessary to say something more about the facts which are relevant to the contentions. 66 As I have said, the applicant admits that the signature which appears on the notice preceding the acquisition of the property in 1995, and which purports to be her signature, is not in fact her signature. How this came about was not the subject of evidence. For some time, the Treasurer corresponded with the applicant on the basis that a valid approval had been granted in 1995 and his concern was whether there had been compliance with the conditions attached to the approval. Then the applicant asserted to him that she had not signed the notice which preceded the approval. She went further and asserted that she was not aware of 'the agreement with FIRB'. As shown in the court transcript, my former husband forged my signature to documents provided to you and I had no knowledge of the agreement with FIRB. 67 The first question is whether the notice given before the acquisition of the property in 1995 was a valid notice within the provisions of the Act . The Foreign Acquisitions and Takeovers (Notices) Regulations prescribe the form of the notice for the purposes of s 26A, and, as I have said, s 27 provides that a notice does not have effect for the purposes of ss 25, 26 or 26A unless it is in accordance with the prescribed form and complies with the directions set out in the form. Regulation 4(3) provides that the prescribed form of notice under s 26A of the Act is Form 3 in the Schedule. The person submitting this Notice must annex to the Notice any documents required under regulation 6 of the Foreign Acquisitions and Takeovers (Notices) Regulations to be annexed to this Notice. 2. Where the space provided in this Notice is insufficient to insert the required particulars, show the particulars in a separate annexure to this Notice. 3. This Notice must be signed in the manner prescribed by regulation 8 of the Foreign Acquisitions and Takeovers (Notices) Regulations . The particulars specified in Part I and Part II of this Notice, being in accordance with the directions relating to those Parts, are, to the best of my knowledge, information and belief, true and correct. (4) To be signed by natural person giving notice or his or her Australian agent (if natural person not ordinarily resident in Australia) or person authorised in writing to sign this Notice on behalf of a corporation or trust estate. The applicant is one of the two natural persons required to give a notice by reason of the provisions of s 26A. She was proposing to acquire with her former husband Australian urban land. She did not complete the notice in accordance with the provisions of the Act . It seems to me that a notice has not been given for the purposes of s 25 of the Act and the notice did not have effect for the purposes of that section. Having regard to the terms of s 27 I do not think that conclusion can be avoided by reference to the notion of substantial compliance even if it was otherwise appropriate to find that there had been substantial compliance. 70 An effective notice not having been given, the second question is whether the operation of s 25(1D) is contingent upon the giving of an effective notice. The circumstances in which an act done in breach of a condition regulating the exercise of a statutory power will invalidate that exercise were considered by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at 388-390 per McHugh, Gummow, Kirby and Hayne JJ. Their Honours said that the relevant question is not whether the condition is mandatory or directory, but whether, by reference to the language of the relevant provision or provisions and the scope and object of the statute as a whole, it was a purpose of the legislation to invalidate an act done in breach of the condition. 71 In my opinion, by reason of the terms of s 25 , the operation of s 25(1D) is contingent upon the giving of an effective notice. Section 25(1) provides that the section has effect where the Treasurer receives a notice. Section 25(1D) refers to 'advice' given under s 25(1B). The 'advice' is of a decision under s 25(1A) , and a decision under s 25(1A) relates to 'the acquisition ... specified in the notice' and the decision which may be made is that there is 'no objection to the proposal specified in the notice'. Furthermore, the offence of contravening a condition referred to in s 25(1C) is linked to the advice of a decision under s 25(1B). In my opinion, there was no effective decision and therefore advice within the provisions of s 25 because there was no proposal specified in a notice and there was no proposal specified in a notice because the purported notice was not effective for the purposes of s 25(1A). 72 As far as the acquisition which took place in 1995 is concerned, s 25(1D) did not operate as a bar to the respondent exercising the power in s 21A(4). It was the acquisition which took place in 1995 which was relied on by the respondent for the purposes of his decision to make the divestiture order. 73 In those circumstances, it is not strictly necessary for me to consider the respondent's alternative submission that in 2004 there was an acquisition within s 21A(4) when the applicant's former husband transferred his interest in the property to the applicant, who then became the sole registered proprietor of the property. The submissions on this issue went no further than the question of whether or not there had been an 'acquisition' within s 21A(4) in 2004. The applicant submits that by reference to general concepts of real property law there was no acquisition in 2004 because the applicant, who was a joint tenant of the property, was already (ie, prior to becoming the sole registered proprietor) seised of the whole of the estate or interest: Bradbrook MacCallum and Moore, Australian Real Property Law (3 rd ed, 2002) 340 [10.02]. It has been said that a joint tenant cannot assign his or her interest but, rather, one of two joint tenants may enter into a transaction by way of release of the estate: Burton v Mayor etc of London Borough of Camden [2000] UKHL 8 ; [2000] 2 AC 399. In response to this submission of the applicant, the respondent referred to s 12A of the Act . 75 However, there are a number of further matters which arise once this conclusion is reached and these further matters were not the subject of detailed submissions. The respondent was aware of the proposed acquisition in 2004 and, in fact, agreed to it taking place, although he did so on the applicant agreeing to sell the property and without the formal approval procedures prescribed by the Act being followed. 2. A question may arise as to whether the power to make an order requiring the applicant to dispose of the whole of the property is engaged, having regard to the particular interest acquired by the applicant in 2004. 3. The minute containing the recommendations adopted by the respondent makes it clear that it was the acquisition in 1995 which formed the basis of the order made by the respondent under s 21A(4). A question may arise as to whether, in those circumstances, the respondent's decision can only be considered by reference to that acquisition. Nevertheless, had it been necessary, I would have invited the parties to make submissions on these matters before deciding if the divestiture order should be upheld by reference to the acquisition in 2004. As it happens, I do not need to do that because I have reached the conclusion that s 21A(4) was engaged by the acquisition in 1995. 77 My conclusions to this point are that the relevant provisions of the Act are valid and that it was open to the Treasurer to consider making a divestiture order under s 21A(4) of the Act . I turn now to consider the various judicial review grounds advanced by the applicant in support of her submission that the divestiture order is invalid. Was there a breach of the rules of procedural fairness in connection with the divestiture order? 79 In order to understand what follows it is important to bear in mind that for a time the Treasurer proceeded on the basis that there was a valid and effective approval for the acquisition of the property in 1995 and his concern was whether the conditions attached to the approval had been and were being complied with. Those conditions were that the applicant and her former husband use the property as their principal place of residence and not for rental purposes, and when they ceased to reside at the property it was to be sold to Australian or other eligible purchasers. 80 On 20 August 1999 the Treasurer wrote to the applicant and her former husband reminding them of the conditions of the approval given in March 1995 noting that their Australian visas were valid until 9 June 1996 and asking for advice as to the current position. The concern of the Treasurer at that point was whether there was compliance with the conditions. A solicitor acting for the applicant's former husband replied to the Treasurer's letter and advised him of the proceedings in the Family Court. She advised the Treasurer that the applicant's former husband had left Australia in 1997 and that the applicant was in Australia on a tourist visa which the solicitor said she understood expired in January 2000. On 13 December 1999 the Treasurer wrote to the solicitor acting for the applicant's former husband stating that the property should be sold within 3 months 'to an Australian or other eligible purchaser'. 81 It seems that little then occurred while the proceedings in the Family Court between the applicant and her former husband were heard and determined. After the determination of the appeal to the Full Court of the Family Court the Treasurer started corresponding with the applicant's solicitors and then with the applicant. By late 2003, the Treasurer was calling upon the applicant to sell the property by reason of the fact that neither she nor her former husband was using it as their principal place of residence. Furthermore, the applicant was advised that she was liable to prosecution under s 25(1C) of the Act for breach of the condition that the property be used as her principal place of residence. There is reference in the correspondence from the Treasurer at about this time to what were said to be 'serious visa violations' by the applicant, but no details of the alleged violations were provided. 82 The correspondence between the applicant and the Treasurer in or about April 2004 reveals that the Treasurer was asserting that the applicant and her former husband should sell the property to Australian citizens who were not associates and, that failing that being done within a certain period of time, the applicant would be prosecuted under s 25(1C) of the Act for breach of conditions that either or both the applicant and her former husband reside in Australia or use the property as their principal place of residence. As I have said, at this time the applicant asserted that her former husband had forged her signature on the original application and that she was not aware of the conditions. She said that she wished to keep the property. While you may dispute the interpretation placed on your absences overseas and residence in Broken Hill during this period, there is no doubt that your departure from Australia at the end of 2002, and your failure to inform this office of this and of your changed visa status, placed you in breach of your obligations. I therefore urge you to act on the proposals made in Mr Kitchen's letter to your solicitor of 13 April 2004, and provide advice by 30 May 2004 that you have entered into a marketing agreement to sell the property at 481 Esplanade, Grange, South Australia by 30 August 2004. Should such advice not be provided by that date, I will have no alternative but to refer the matter to the Director of Public Prosecutions for prosecution under the provisions of the FATA. I attach a copy of Mr Kitchen' s 13 April letter for ease of reference. To place the property at 481 The Esplanade, Grange in the State of South Australia on the market for sale immediately upon the transfer of the interest of my former husband NIELS PETER BUCHHOLZ in the said property to me is registered. To provide a copy of the Sales Agency Agreement for the sale of the said property to you immediately upon such agreement being signed by me. To sell the said property to Australian citizens who are not associates (as defined in Section 6 of the Foreign Acquisitions and Takeovers Act 1975 ) of either myself or my said former husband. To obtain your approval for any such sale. To effect the sale of the property, within 3 months of the execution of the Sales Agency Agreement, subject to my receiving reasonable and genuine offers for the purchase of the said property. The agreement was a sole agency agreement effective to 1 January 2005. 86 The Treasurer wrote to the applicant by letter dated 25 October 2004 advising her that he had advice that a valuation on the property of $1.5 million to $1.7 million 'is considerably higher than current market valuation' and that given that she had not yet sold the property she 'should now consider selling the property at auction by 30 November 2004 for a current market valuation'. By letter dated 8 November 2004, the applicant advised the Treasurer that she had decided not to auction the property. 87 The Treasurer made contact with the applicant's agent and on 15 November 2004 he was advised by the agent that the applicant had 'reassessed' her asking price to $1.1 million to $1.2 million. 88 On 14 December 2004 the Treasurer wrote to the applicant. We are concerned that, for whatever reason, you feel these obligations do not apply to you and have decided not to comply with our requests over the past several years to dispose of your interest in the property. For example, it is our view that the current marketing arrangement for the property does not represent a reasonable attempt to market the property as the asking price is way above any reasonable valuation. As such, the Government's powers to require divestment under section 21A(4) of the Foreign Acquisitions and Takeovers Act 1975 (FATA) for acquisitions that are contrary to the national interest remain intact. To give you reasonable opportunity to make further representations in this matter, I am informing you that, in mid-January 2005 we will be seeking from the Minister a formal order under the provisions of the FATA legally requiring you to dispose of your interest in the property in question by 30 April 2005. While we do not intend at this stage to prosecute you for your previous failures to observe our requests in this matter, failure to dispose of the property in line with this order will result in a recommendation to the Minister to begin prosecution under the appropriate provisions of the FATA as soon as practicable after 30 April 2005. There will be no scope to extend this sale deadline. 90 On 25 January 2005 Westside Realty Pty Ltd wrote to the Treasurer advising him that the applicant had withdrawn the property from sale in December 2004 'indicating she didn't want to sell', and that at that time there was an offer which the agent believed was reasonable and that the agent believed that the offeror was still interested. 91 I have already set out details of the order made by the respondent on 23 February 2005 as set out in the notice ([7] above). 92 I have also referred to the minute and the recommendations contained in the minute ([8] above). The case involved a long history of non-compliance with foreign investment policy requirements. This is a reference to the fact that there had been breaches of the conditions attached to the approval given in 1995. 2. The applicant was not making serious efforts to sell the property and 'had turned down several reasonable offers for the house'. 3. There was no reason to doubt the applicant's assertion that her signature was forged, but if that was so then she did not submit a valid legal notice prior to the joint purchase of the property. That meant that a formal divestment order could be issued. 4. Dr Wight has not resided in the property as her principal place of residence on several occasions as required by the governments [sic] foreign investment policy. These absences included a period of a year when she was required to leave Australia by DIMIA because of separate visa violations. It is understood that these visa violations have yet to be resolved and that she returned to Australia utilising a new passport in the name of Wight rather than Huber Buchholz. Moreover, subject to her obtaining an eligible visa in the future, she will be able to apply for approval to buy residential property and we would not propose preventing her from doing so, provided she complies with this Order. A number of the statements in that document are relevant. First, it is said that in addition to claiming that her signature was forged, the applicant claimed that 'the foreign investment guidelines do not apply to her as she personally did not provide a formal foreign investment application or undertaking', and a little later it is said that between 2001 and 2003 the applicant maintained her belief that she was not subject to the Act and the 'Government's foreign investment policy'. Secondly, it is said that the applicant married an Australian citizen in 2002 and sought a spousal visa allowing her to remain in Australia. This was refused because of 'separate visa violations'. Thirdly, it is said that despite her undertaking to sell the property the applicant had 'refused several reasonable offers for the property, currently valued in excess of $1 million'. 95 It was common ground between the parties that in making a decision under s 21A(4) of the Act, the respondent was bound to accord procedural fairness to the applicant. In the circumstances, she was not given sufficient notice of what was proposed and sufficient time to respond. 2. She was not advised of adverse information from third parties which was part of the information provided to the respondent and to which he is taken to have had regard. 3. In the information provided to the respondent, and to which he is taken to have had regard, adverse conclusions were drawn against the applicant which were not obvious on the known material. The applicant should have been given the opportunity to comment on those adverse conclusions before a decision was made. 97 In Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 (' Kioa '), Mason J (as he then was) (at 582) referred to the fundamental rule of the common law doctrine of natural justice that, generally speaking, a person is entitled to know the case against him and to be given an opportunity of replying to it. Brennan J (at 612-616) referred to the authorities to the effect that the content of the rules of natural justice will depend on the circumstances of the particular case, including the nature of the jurisdiction or power exercised and the statutory provisions governing its exercise. Brennan J considered whether there was an irreducible minimum required by the principles of natural justice, namely, that 'the person concerned should have a reasonable opportunity of presenting his case' ( Russell v Duke of Norfolk [1949] 1 All ER 109 per Lord Tucker at 118). If his Lordship's view be right, it would be necessary to hold that if, in some circumstances, perhaps unusual circumstances, a power may need to be exercised peremptorily, no exercise of that power is conditioned on observance of the principles of natural justice. But it would be wrong to attribute to a legislature such an intention. Rather, the intention to be implied when the statute is silent is that observance of the principles of natural justice conditions the exercise of the power although in some circumstances the content of those principles may be diminished (even to nothingness) to avoid frustrating the purpose for which the power was conferred. 99 In Kioa , it was also made clear that an applicant entitled to natural justice is entitled to be told of adverse information obtained by the decision-maker from third parties and which he or she proposes to take into account and to be given the opportunity to respond to that information. The person whose interests are likely to be affected does not have to be given an opportunity to comment on every adverse piece of information, irrespective of its credibility, relevance or significance. Administrative decision-making is not to be clogged by inquiries into allegations to which the repository of the power would not give credence, or which are not relevant to his decision or which are of little significance to the decision which is to be made. Administrative decisions are not necessarily to be held invalid because the procedures of adversary litigation are not fully observed. It is not sufficient for the repository of the power to endeavour to shut information of that kind out of his mind and to reach a decision without reference to it. Information of that kind creates a real risk of prejudice, albeit subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision an opportunity to deal with the information. He will be neither consoled nor assured to be told that the prejudicial information was left out of account. The allegation in par 22 was apparently credible, relevant and damaging. The failure to give Mr Kioa an opportunity to deal with it before making an order that Mr and Mrs. Kioa be deported left a risk of prejudice which ought to have been removed. There was nothing in the circumstances of the case - neither in the administrative framework created by the Act nor in any need for secrecy or speed in making the decision - which would have made it unreasonable to have given Mr and Mrs Kioa that opportunity. The failure to give Mr Kioa that opportunity amounts to a non-observance of the principles of natural justice. 100 The principles governing the applicant's third submission are relatively clear, although they can give rise to difficulties in terms of application. Ordinarily, a decision-maker is not required to invite comment from an applicant as to the decision-maker's provisional views or mental processes ( F Hoffman-La Roche and Co AG v Secretary for Trade and Industry [1975] AC 295 per Lord Diplock at 369). However, a decision-maker may be under an obligation to invite comment from an applicant on an adverse conclusion based on known material if that conclusion is not an obvious and natural conclusion from that material. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question. It may be accepted, as the prosecutor submitted, that his entitlement extended to the rebuttal of, and comment by way of submission upon, adverse material received by the decision-maker from other sources. That stops short of supporting a complaint of the nature essentially involved here of the "pitch" or "balance" in the statement of relevant considerations in the Submission. Further, as indicated above, there is no substance in any complaint of unfair or prejudicial "lack of balance". Nothing there said supports any different conclusion to that just expressed. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question. That case raised a question as to whether the Refugee Review Tribunal had advised, or sufficiently advised, an applicant for review of matters it relied on in dismissing the application. The case turned on the obligation of the Tribunal under s 425 of the Migration Act 1958 (Cth) and the facts of the case. The Court did make some observations about what was said to be a dichotomy between an obligation to advise of adverse conclusions which have been arrived at which would not obviously be open on the known material, and the lack of an obligation to advise of a decision-maker's mental processes or provisional views. Was that a conclusion "which would not obviously be open on the known material"? Or was it no more than a part of the "mental processes" by which the Tribunal arrived at its decision? There are two reasons to exercise considerable care in approaching the problem in that way. First, it is far from clear that the two categories that are identified (conclusions not obviously open on the known material, and mental processes of decision-making) encompass all possible kinds of case that may fall for consideration. Secondly, there is a very real risk that focusing upon these two categories will distract attention from the fundamental principles that are engaged. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material. The applicant is to be invited "to give evidence and present arguments relating to "the issues arising in relation to the decision under review". (emphasis added) The reference to "the issues arising in relation to the decision under review" is important. It would neither be necessary nor appropriate to now foreclose that possibility. Of course, it does not mean that a submission expressed in strong or forceful terms is in itself in breach of the rules of procedural fairness. 105 I turn now to apply these principles to the facts of this case. 106 The applicant's first submission must be rejected. The respondent's letter dated 14 December 2004 advised the applicant that the respondent considered that the applicant did not think that obligations under the Act applied to her and that she had not complied with requests made of her to dispose of the property. It also gave the applicant notice that the respondent considered that the then marketing arrangement for the property was not reasonable because the asking price was 'way above' any realistic valuation. It further advised the applicant that in view of her assertion that her former husband had forged her signature, the respondent considered that she had not given the required formal notice of her purchase of her legal interest in 1995. In those circumstances, the power to make a divestiture order in relation to acquisitions that are contrary to the national interest arose and such an order would be sought from the Treasurer in mid-January 2005. Finally, it advised the applicant that the respondent considered that her previous failures could be the subject of a prosecution but that would not take place if she disposed of the property in line with the order. She states that she did not understand the terms 'divestiture' or 'order'. She was not sent a copy of s 21A(4) of the Act, nor were its terms explained to her by the respondent. She states that she did not do anything in response to the letter because she did not think that there was anything else that she could do. 108 In my opinion, having regard to the long history of the matter, the letter was adequate to put the applicant on notice as to the order which was proposed and, in general terms, of the type of considerations that might be relevant to the respondent's decision. Furthermore, I think the applicant was given adequate time to respond. 109 In relation to her second submission the applicant identified five matters referred to in the minute which she said should have been put to her for her comment before a decision was made. The legal advice received from the Attorney-General's Department. 2. The information that offers for the property of over $1 million had been recently received by the applicant. 3. The information as to the 'separate visa violations' by the applicant said to have been the reason for the refusal of a spousal visa in 2002. 4. The information as to the further reference to 'visa violations' by the applicant said to be unresolved. 5. The advice received from the applicant's marketing agent that the applicant had refused 'several reasonable offers for the property valued in excess of $1 million'. The letter dated 14 December 2004 sufficiently advised the applicant of what it called the 'nub' of the legal advice and there was no obligation to provide the actual legal advice to the applicant. 111 As to the matters referred to in paragraphs 2 and 5, they are matters referred to in the minute which were not specifically put to the applicant. However, by reason of the Treasurer's letter dated 14 December 2004, the applicant was on notice that the respondent considered that the marketing arrangement for the property was unrealistic and the applicant was asking more for the property than was warranted. Furthermore, the topic itself goes to the timing of any order rather than whether the applicant should be required to dispose of the property. I do not think that I would grant relief based on the respondent's failure to advise the applicant of the matters referred to in paragraphs 2 and 5. 112 As to the matter referred to in paragraphs 3 and 4, the applicant was not advised by the respondent's letter dated 14 December 2005 that her alleged visa violations may be relevant to the question of whether an order would be made under s 21A(4) of the Act. The precise details of the alleged visa violations are not clear. The applicant put evidence before me of the different types of visa she has held since 1996 and she asserts that on 31 October 2001 her medical practitioner visa was cancelled by the Department of Immigration and Multicultural and Indigenous Affairs because she had failed to commence work and that she was subsequently granted a bridging visa. She states that this was the only time that a visa held by her had been cancelled. Whether that be the case or not, and whether or not that is what the minute was referring to when it referred to visa violations, the fact is that it is a matter the respondent may have taken into account in reaching his decision. By reason of the fact that it is unclear what is being referred to it is not possible for me to conclude that the applicant would not have been able to say anything on the topic that may have assisted her case. The failure by the respondent to give notice to the applicant that alleged visa violations may be taken into account and invite comment from her constituted a breach of the rules of procedural fairness and, in my opinion, that is sufficient to vitiate the decision to make the divestiture order. 113 In those circumstances it is not strictly necessary for me to consider the applicant's third submission to the effect that the minute contained adverse conclusions that were not obvious conclusions on the known material and that for that reason they should have been put to the applicant for her comments. However, I will consider the submission in case there is an appeal from my decision. 114 The applicant identified six features of the minute which she said supported her third submission. The assertion that the case had a long history of non-compliance with foreign investment policy requirements dating back several years. 2. The assertion that the applicant had not resided on the property as her principal place of residence on several occasions as required by the government's foreign investment policy. 3. The assertion that the applicant had maintained that the foreign investment guidelines do not apply to her as she personally did not provide a formal foreign investment application or undertaking. 4. The assertion that after July 2004 and for a period of six months or so the applicant was not making serious attempts to sell the property and had turned down several reasonable offers for the property. 5. The fact (as asserted by the applicant) that nothing is said in the minute about the national interest. 6. The fact (as asserted by the applicant) that there was nothing in the minute favourable to her case. However, the non-compliance referred to in the minute is the alleged non-compliance with the conditions attached to the 'approval' in 1995 of which the applicant was aware by no later than July 2001. From the material put before the Court, it is clear that the applicant left Australia on a number of occasions from June 1996 onwards. It is clear that the applicant was aware that her departures from Australia, her status in this country and her residence at the property were of concern to the respondent. The conclusion that there had been a long history of non-compliance dating back several years whether it be right or wrong does not fall outside the class of an obvious conclusion on the known material. The same can be said of the matter referred to in paragraph 2 which is linked to the first. 116 In my opinion, the same can also be said of the matter referred to in paragraph 3. When threatened with prosecution for breach of the conditions attached to the 1995 approval, the applicant did assert that her breach (without expressly accepting that she was in breach) should be excused because her husband forged her signature. She chose not to respond to the respondent's letter dated 14 December 2004 and I do not think the adverse conclusion in the minute falls outside the category of an obvious conclusion on the known material. 117 As to the matter referred to in paragraph 4, I do not think it is sufficient to justify the granting of relief for the same reasons I have given in relation to this topic in the context of the applicant's second submission (see [111] above). 118 As to the matters referred to in paragraphs 5 and 6, I do not think that these support the applicant's submission. Even if there was a failure to consider the national interest (a matter discussed below) that might support relief on other grounds but it does not support a submission that there was an adverse conclusion which should have been put to the applicant for comment on the basis that it is not an obvious conclusion on the known material. The same may be said of the assertion that there is nothing said in the minute in favour of the applicant's case. Was the Treasurer satisfied the acquisition is contrary to the national interest? In the notice of the order dated 23 February 2005 ([7] above) the respondent states that he is satisfied that the acquisition 'is contrary to the national interest'. The minute refers to the provisions of s 21A(4) and to that part of the subsection which refers to the national interest. It is clear that it was a matter which was brought to the respondent's attention. It is true that in terms of the minute the particular matters relevant to the national interest are not clearly identified. Furthermore, the respondent did not give reasons for his decision and he did not give evidence. However, care needs to be exercised in this area because of the broad nature of the concept of the national interest. A court will be slow to interfere with a Minister's decision as to what is in the national interest on the ground that a matter not taken into account was relevant to the national interest or a matter taken into account was irrelevant to the national interest: Leisure Entertainment Pty Ltd v Willis (1996) 64 FCR 205 at 220; Conwest Global Communications Corporation v Treasurer of the Commonwealth of Australia (1997) 147 ALR 509 at 525. A court will also be slow to interfere with a Minister's decision as to what is in the national interest under the guise of an argument that it should be inferred from the material before the decision-maker that he or she was not in fact satisfied that the acquisition was contrary to the national interest. 121 The applicant submits that the question whether the Treasurer is satisfied that an acquisition is contrary to the national interest is a jurisdictional fact and that it is not made out if the matters the Treasurer took into account do not support a reasonable and rational conclusion to that effect. She referred to the reasons for judgment of Kirby J in Re Patterson; Ex parte Taylor (2001) 207 CLR 291, in particular at 504-505 [338]. The reasons of Kirby J do seem to support the submission advanced by the applicant, but I would not apply them in this case. None of the other Justices in Re Patterson; Ex parte Taylor (supra) took a similar approach. For example, Gaudron J, who did discuss the concept of national interest, decided the case on the basis that the Minister asked herself the wrong question (at 417-420 [74]-[82]). If there is a jurisdictional fact in this case it is not whether the acquisition is contrary to the national interest but, rather, whether the Treasurer was satisfied that the acquisition is contrary to the national interest. A question of that nature would not turn, ordinarily at least, on the Court's conclusion as to whether the material before the Minister provided a reasonable or rational foundation for the conclusion reached by the Minister. 122 I reject the applicant's submission that the respondent was not in fact satisfied that the acquisition is contrary to the national interest. An order in the nature of certiorari quashing the order made by the respondent on 23 February 2005 under s 21A(4) of the Foreign Acquisitions and Takeovers Act 1975 (Cth) ('the Act') and relating to the land known as 481 Esplanade, Grange, in the State of South Australia, being the said land comprised in File Plan 42, Allotment 6, Hundred: Yatala; Subdivision: Grange ('the property'). 2. An order in the nature of mandamus, requiring the respondent to exercise his discretion pursuant to s 21A(4) of the Act and relating to the property according to law. The respondent's cross-claim is dismissed. 125 I will hear the parties as to whether any other orders should be made and as to costs. I certify that the preceding one hundred and twenty-five (125) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

external affairs power whether the foreign acquisitions and takeovers act 1975 (cth) is supported by s 51(xxix) insofar as it applies to persons not ordinarily resident in australia where law deals with acquisition of real property inside geographic limits of australia whether external affairs power supports laws with some operation inside australia whether application to persons not ordinarily resident in australia is a sufficient external element to constitute a valid law with respect to external affairs. aliens power whether foreign acquisitions and takeovers act 1975 (cth) supported by s 51(xix) insofar as it applies to non-citizens where act applies to both citizens and non-citizens not ordinarily resident in australia effect of s 5a of act. acquisition of land on just terms whether ss 4(6) and 21a of foreign acquisitions and takeovers act 1975 (cth) are subject to s 51(xxxi) whether there was any acquisition within the terms of s 51(xxxi). where property held jointly where one joint tenant becomes sole registered proprietor whether applicant acquired an interest in the property pursuant to s 12a of foreign acquisitions and takeovers act 1975 (cth). where applicant required to provide notice of proposal to acquire land where respondent granted approval on the basis of invalid notice whether valid notice required for a decision to be made under s 25 of foreign acquisitions and takeovers act 1975 (cth) whether open to respondent to consider making a divestiture order under s 21a(4) of act. procedural fairness where respondent alleged 'serious visa violations' against applicant in correspondence whether applicant given adequate opportunity to respond to adverse information whether respondent under obligation to invite comment from applicant regarding adverse information and conclusions not obviously open whether failure to invite comment invalidates decision to make divestiture order. administrative law whether respondent had regard to whether acquisition of property was contrary to national interest in making decision to make divestiture order relevant principles. constitutional law constitutional law constitutional law property administrative law administrative law

There was one matter left to determine, namely the question of costs as between the applicant and the second respondent. It was agreed between the parties that this issue should be determined on the papers. 2 The background to this proceeding can be summarised briefly. On 11 August 2004, the Australian Competition and Consumer Commission ("the ACCC") instituted legal proceedings in this Court against Contact Plus Group Pty Ltd ("Contact Plus"), and its sole director, Mr Arthur Spencer, alleging contraventions of the mandatory Franchising Code of Conduct ("the Code") (which is contained in the Schedule to the Trade Practices (Industry Codes --- Franchising) Regulations 1998 (Cth)), and false, misleading and/or deceptive conduct in breach of the Trade Practices Act 1974 (Cth) ("the Act "). 3 Contact Plus operated a business selling licences to use its software and licensed marketing database to licensees to operate recruitment/employment service businesses. The ACCC alleged that the licence agreements entered into by Contact Plus and various licensees between August 2000 and June 2001 were franchise agreements, and that Contact Plus had contravened the Code, and as a consequence, s 51AD of the Act , by failing to provide proper disclosure documents to prospective franchisees, terminating franchise agreements without following the procedures provided under the Code, and without providing other protection afforded by it. The ACCC also alleged that Contact Plus and Mr Spencer breached ss 52 , 53 (a), (aa), (c) and (g) of the Act by making false, misleading and/or deceptive representations. The representations included that a licence fee of $60,000 was only payable in certain circumstances, that Contact Plus had a right to payment of the lump sum licence fee of $60,000 when no such right existed, that licensed marketing databases were "fully qualified" when they were not, and representing on its website that Contact Plus would allocate a franchisee with an exclusive area when the terms of the agreement provided otherwise. 4 The ACCC made it clear from the outset that it would be seeking a declaration that the licence agreements were franchise agreements, and therefore subject to the Code. It also made it clear that it would be seeking remedies against both Contact Plus and Mr Spencer. These included injunctions restraining them for a period of three years from engaging in similar conduct in the future, and an injunction and orders requiring them to provide copies of the Code, and a disclosure document, to current and prospective franchisees, together with documents relating to these proceedings, for a period of three years. In addition, the ACCC sought an order that Contact Plus implement a trade practices compliance program. 5 Contact Plus and Mr Spencer filed defences on 14 October 2004, and various amended defences on 9 December 2004, 8 March 2005 and 12 May 2005. On 14 June 2005, Contact Plus was placed into liquidation. On 15 September 2005, leave was granted to the ACCC to file an amended application and statement of claim joining CPG Recruitment Pty Ltd ("CPG"), the third respondent, to this proceeding. 6 Following a mediation held on 24 November 2005, the ACCC, Mr Spencer, and CPG agreed to the making of certain declarations, findings of fact, and injunctions. The liquidators of Contact Plus did not oppose the making of those orders, and accordingly, as indicated, they were made. 7 The ACCC contends that it is entitled to an order that Mr Spencer pay its costs of the proceeding, including any reserved costs. It submits that Mr Spencer's consent to the orders made on 8 February 2006 represented a "capitulation" by him in relation to the overwhelming majority of the allegations made against him, allegations which he had previously denied, both before and during the litigation. 8 Mr Spencer contends that because there was no hearing on the merits, each party should bear its or his own costs. In addition, he submits that the ACCC acted in an unreasonable and high-handed manner, and therefore should not be entitled to recover any costs against him. 9 In broad terms, the Federal Court Rules provide that where a party discontinues proceedings without the leave of the Court, the discontinuing party is liable to pay costs, unless the Court orders otherwise: see O 22 r 2 and 3, and O 62 r 26(1). No such rule is provided for where a proceeding is discontinued with the leave of the Court, although the starting point in principle is that the discontinuing party should meet the costs of the respondent: see Smith v Airservices Australia [2005] FCA 997 ; (2005) 146 FCR 37 per Stone J at [44]. 10 However, the starting point in resolving the issue is this case, namely who should bear the costs when a proceeding has been resolved by the making of consent orders, must be to consider the extent to which the ACCC succeeded in obtaining the relief that was initially sought. In that regard, the position is clear. Mr Spencer consented to the making of declarations by the Court that a series of agreements entered into by Contact Plus constituted "franchise agreements" within the meaning of clause 4 of the Code. He also consented to the making of declarations that Contact Plus had contravened the Code and therefore s 51AD of the Act , by failing to provide disclosure documents, and by failing to receive written and signed statements by the franchisees, as required. In addition, he consented to the making of directions regarding the termination of these franchise agreements, and other breaches of the Code. 11 The Court also declared, by consent, that Contact Plus had engaged in conduct that contravened ss 52 and 53 (g) of the Act regarding the representations made concerning the licence fee of $60,000 and the right of a franchisee to an area that was exclusive to that franchisee. Mr Spencer was declared to have aided, abetted, counselled or procured these contraventions of the Act , and to have been directly or indirectly knowingly concerned in, or party to, those contraventions. 12 A statement of agreed facts was appended to the consent orders that were sought. That statement contains findings of fact for the purposes of s 83 of the Act . 13 Finally, Mr Spencer agreed to injunctions in the terms sought, which would run for a period of three years from the date of the order made. He accepted orders that required him to provide each person with whom Contact Plus had entered into an agreement similar in terms to those of the franchise agreements that were the subject of this proceeding with a disclosure document that complied with the requirements of the Code, and a copy of the orders of the Court. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs. Although in Smith v Airservices Australia Stone J made no mention of One.Tel Limited v Commissioner of Taxation , her Honour's discussion at [48]-[59], under the heading "Futility", deals helpfully with the second category of cases that his Honour identified. 16 In this case, no event had overtaken the proceeding, and rendered the relief sought redundant. Instead, this was simply a case where, after the filing of extensive sworn evidence by the ACCC, but before the filing of any evidence by Mr Spencer, he effectively surrendered to almost all of the ACCC's claims. That surrender was said to have followed a series of positive denials by Mr Spencer and Contact Plus in their pre-litigation correspondence and in their defences. 17 Mr Spencer submitted that he had sought on a number of occasions to suggest a reasonable basis upon which this proceeding could be settled, and that the ACCC had acted unreasonably in refusing to engage with him. He referred to Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194 at 201 where Hill J summarised the principles that would ordinarily apply with regard to costs when a proceeding has not gone to trial. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. 19 Mr Spencer argued that he had at all times acted reasonably in relation to the complaint brought against him by the ACCC. When the matter was first drawn to his attention, by a letter dated 14 April 2003 setting out the ACCC's concerns, he had caused his solicitors to reply to that letter, on 20 May 2003, responding in detail to the allegations. On 11 June 2003, the ACCC had written to his solicitors, thanking them for his response. However, it is apparent a number of issues remain, therefore as soon as this office has completed its assessment of your response I will contact you to arrange a mutually suitable time to meet with you and your client to discuss this matter further. Instead, on 11 August 2004, Deacons, acting on behalf of the ACCC, wrote to Mr Spencer's solicitors informing them that the matter had now been "fully investigated" and that the ACCC had determined to pursue it further. The letter went on to say that a proceeding had been instituted in the Federal Court that day, and enclosed a copy of the application and statement of claim. 21 Mr Spencer contends that since he considered that he had an answer to the allegations made by the ACCC, he instructed his solicitors to enter an appearance in the proceeding, and to prepare a detailed defence. He argues that the defence that was drawn did not simply join issue, but raised a series of arguable responses to the ACCC's claims. 22 Mr Spencer then submits that thereafter he repeatedly sought to engage the ACCC in discussions with a view to resolving the dispute. He exhibits to an affidavit sworn on 16 February 2006 various letters sent to the ACCC, some on a "without prejudice" basis, in which he repeatedly suggests avenues of compromise and negotiation. At no point did the ACCC give ground in relation to the relief that it sought. 23 Finally, Mr Spencer submits that he was effectively forced to agree to the ACCC's demands, and settle the proceeding, not out of any defeatist view of the merits of his case, but simply because the cost and burden of the litigation left him with little alternative. Indeed, he submitted that Contact Plus went into liquidation as a direct result of the cost of these proceedings. 24 Despite Mr Spencer's complaints, a number of which have been raised with the Ombudsman, the fact remains that at no stage prior to the mediation did he ever offer to settle this case on terms that were remotely similar to those ultimately agreed. At all times prior to the mediation, he resisted any declarations that would include a finding that the licence agreements constituted franchise agreements. He resisted any meaningful injunctions, essentially on the basis that he was no longer in the business of selling software licenses and licensed marketing databases for recruitment/employment service operations. It was only after the mediation that he capitulated in relation to these central matters. 25 In light of the very considerable difference between the position taken by Mr Spencer before the mediation, and his position after that process had been completed, it is difficult to accept his submission that the ACCC acted unreasonably in not accepting his earlier offers. There is no basis for concluding that, had the ACCC agreed to meet with Mr Spencer, prior to issuing proceedings on 11 August 2004, he would have agreed to most, if not all, of the relief that he ultimately consented to. Both in pre-litigation correspondence and in the defences filed by the respondents, the ACCC's contentions of fact and law were strongly denied. It was only after a lengthy interlocutory process, and the filing by the ACCC of affidavits, that Mr Spencer capitulated. His contention that he might have agreed to the relief subsequently ordered against him, had the ACCC engaged in meaningful negotiations with him at an earlier stage, seems to me, on the evidence, to border on the fanciful. 26 I note that Mr Spencer relies upon a statement made on 19 November 2004 by Mr John Martin, a Commissioner of the ACCC, in an address to a "Franchising Law Master Class" entitled "The ACCC & Franchising --- Recent Developments and Regulatory Directions". This approach has included holding separate discussions with franchisees and franchisors in an attempt to reach a workable solution. Some of the emails sent by Mr Spencer to the franchisees contained veiled threats, and did him little credit. Mr Martin's statements, in his speech, to the effect that informal discussions would be favoured as a method of resolving difficulties in a franchise relationship were prefaced by the qualification "where appropriate". In any event, and self-evidently, nothing that he said on this subject should be read as precluding the ACCC from instituting proceedings seeking declaratory and other relief in a case, such as the present, where the contraventions of the Act are serious. There is a public interest in having such conduct publicly exposed, and also in the imposition of appropriate sanctions. 30 There is one respect in which it might be thought that the ACCC's conduct perhaps warranted some criticism. It did imply, in its letter of 11 June 2003, that there would be an opportunity for Mr Spencer to meet with it before any proceedings were actually instituted. It did not say so in terms, but that seems to have been the clear tenor of the letter. It would have been fairer, in the circumstances, to have given Mr Spencer an opportunity to seek to dissuade the ACCC from taking that course. 31 However, I am in no doubt that even if such a meeting had been held, proceedings would have been instituted. The seriousness of the breaches, and the need to have the respondents' conduct publicly condemned, made that inevitable. I very much doubt that such a meeting could have produced a settlement of this matter that would have been acceptable to the ACCC, and thereby prevented additional costs from being incurred. 32 In my view, this case falls squarely within the first category of case articulated by Burchett J in One.Tel Limited v Commissioner of Taxation . The appropriate order is that the second respondent pay the applicant's costs, any such costs to be taxed in default of agreement. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg.

costs proceeding finalised by making of consent orders whether second respondent should be liable for applicant's costs extent to which applicant successful in obtaining relief sought at commencement of proceedings whether applicant acted reasonably before and during litigation practice and procedure

2 The priority date of both Patents is 18 December 1998 and that of the Design 9 November 1999. 3 The relevant claims of the Patents are for a power saw and the Design is for a blade to be used in such a saw. 4 The power saw of Black & Decker's alleged invention is a reciprocating (backwards and forwards) electrically powered tool. By changing the blade the saw may be used either as a panel saw or a jigsaw. Usually the blade decreases in depth towards the front of the saw, which has a blunt end. A panel saw is operated by moving the saw in a back and forth motion at about a 45 degree angle to the top of the workpiece. The saw cuts on the push stroke. 6 As at December 1998 portable panel saws powered by an electric motor were well known. 7 A jigsaw is a portable power tool. It is used for accurate or fine cutting both in straight lines and curves (including tight or intricate curves) in timber, metals or other materials. In order to be able to cut tight curves jigsaw blades are usually narrower than panel saw blades. A jigsaw blade operates in an up-and-down motion with the teeth of the blade pointing away from the user, both for safety and general ease of use. A jigsaw usually has a flat support surface, often in the form of a fixed plate or shoe, so that the jigsaw can be pushed firmly on to the top of the workpiece. Jigsaws as described were known at the priority date. 8 As well as disputes concerning validity and infringement in relation to the Patents and the Design, there is an issue as to the standing of the second applicant. This latter issue turns on the validity and effect of certain transactions between the two applicants. 10 It is noted that some power tools are capable of operating in more than one mode, such as a power drill which may also be used as a screwdriver. Conventionally such tools which operate in more than one mode are held by the user in the same position or orientation relative to the workpiece. It is said that a power tool capable of operating in one mode as a panel saw and in another mode as a jigsaw, yet being held and operated by a user differently dependent upon which of these two options is required, would be "a very flexible proposition". An object of the invention is said to be to provide a power tool with greater flexibility and utility. Because the handle is accessible from more than one side, then the tool may be used in a different attitude and orientation to a workpiece dependent upon the task to be undertaken. 11 It would seem that the last sentence of the passage just quoted encapsulates the inventive step. As put by senior counsel for Black & Decker, "(a)n important aspect of the power tool of the invention is the design and position of the handle so as to enable it to be gripped by the user comfortably and safely in either orientation whether the tool is acting as a panel saw or jigsaw". 12 There then follows a description of various drawings of parts of the preferred embodiment, including mountings of the saw blade. However, the invention is not said to lie in the internal mechanics by which different blades may be fitted to the device. 13 The specification describes in some detail the operation of preferred embodiments in Figures 12 and 13. They share the same body but are used for a different purpose and operate in different modes. As to Figure 12, it is said that it has been found desirable to offer the user the facility of using the panel saw "not only in its powered mode but also manually". To achieve this the saw needs to be lightweight but also it has been found that, when the saw is being driven by the motor (24), conventional reciprocating action will prevent manually using the tool with ease, because of the combination of the frequency of reciprocation of the saw blade (12) and the length of each reciprocal stroke. 14 There is some discussion of the preferable frequency of reciprocation which is said to be 6,500 strokes per minute and length of each reciprocal stroke of around 10 mm. This can be seen by reference to the difference in attitude between Figure 12 and 13. In Figure 13, the body (36) can be seen resting on a block (42) which represents a workpiece. In use of the jigsaw, the body (36) would be held on the block (42) in the attitude shown in Figure 13. It can be seen from Figure 13 that the handle (38) is now positioned relative to the workpiece (42) such that the body (36) may easily be used as a jigsaw. In use of the jigsaw, a user exerts a force via the handle (38) in the direction of the large arrow marked "A". This is so that the blade (12) is driven also in the direction of the arrow "A" to cut through the workpiece. It can be seen by comparing Figures 12 and 13, that the handle (38), although itself the same in both figures, it [sic] able to be used for exerting forces in a different direction depending on which mode of use (either the panel saw of Figure 12 or the jigsaw of Figure 13) the tools are put to. The handle (38) is positioned adjacent a trigger (44) which trigger (44) is operable by user when the handle (38) is gripped. It can be seen from both Figures 12 and 13, therefore, that the position of the handle (38) relative to the body (36) is such that the user may operate the saw in a plurality of positions relative to a workpiece. Thus, regardless of whether the tool is being used as a panel saw in Figure 12 or a jigsaw in Figure 13, the same handle is used for operating the saw. It will be appreciated by those skilled in the art, that this holds true whether the panel saw of Figure 12 is being used as a powered saw by powering the motor (24) via an electricity supply cable (46), or whether it is being used manually. ... From Figures 12 and 13, therefore, it can be seem that the handle (38) is accessible from one of two sides, depending on whether the tool is to be used as a panel saw or as a jigsaw. [1.1] A power tool having a linear reciprocating output, [1.2] including: a body housing a motor for driving the power tool, [1.3] the body including a fixed handle to allow a user to manually hold and operate the power tool; [1.4] a trigger positioned adjacent the handle [1.5] wherein the handle is positioned relative to the body such that a user may operate the power tool in a plurality of positions relative to a workpiece in order to perform a different power function in each of said plurality of positions; [1.6] characterized in that the handle is accessible from more than one side, [1.7] each accessible side corresponding to a given one of the plurality of different positions and wherein the trigger being operable by a user when gripping the handle in each of said plurality of positions [1.8] and wherein the handle is positioned such that a force applied thereto by the user in a first of said plurality of positions comprises a major vector transmitted along a line of action extending substantially parallel to the line of linear reciprocation, [1.9] and a force applied thereto by the user in a second of said plurality of positions comprises a major vector transmitted along a line of action extending substantially transverse to the line of linear reciprocation. 2. [2.1] A power tool as claimed in claim 1 [2.2] wherein the body includes a second handle to which the user may apply a force when the tool is in said first position to apply a secondary force having a major vector in a direction substantially transverse to the line of linear reciprocation. 3. [3.1] A power tool as claimed in any one of the preceding claims, [3.2] wherein the tool includes a saw. 4. [4.1] A power tool as claimed in claim 1 or claim 2 [4.2] wherein the reciprocating output includes an array of interchangeable saw blades. 5. [5.1] A power tool as claimed in claim 4 [5.2] wherein each of the interchangeable saw blades are secured to the power tool to present a longitudinally extending cutting edge extending parallel to the line of linear reciprocation in the same direction. 6. [6.1] A power tool as claimed in any one of claims 3 to 5 [6.2] having at least two different positions, [6.3] at least one position corresponding to the function of a panel saw [6.4] and at least one position corresponding to the function of a jigsaw. 7. [7.1] A power tool as claimed in any one of the preceding claims [7.2] wherein the handle includes a substantially D shaped handle formed integrally with the body. 8. [8.1] A power tool as claimed in claim 7 [8.2] wherein the trigger is disposed centrally of an inner surface of said D shaped handle so as to be readily operable by a user when gripping the handle in each of said plurality of positions. 18 GMCA's case on this issue was not so much to assert a particular meaning for the term but rather to argue that it lacked any fixed or certain meaning with the result that claim 1 was not clear, as required by s 40(3) of the Patents Act 1990 (Cth). In comparison with what other force or forces is the force which the user applies to the handle to be compared with to as 'a major vector'? How large is the force meant to be? 19 GMCA's expert witness Dr Hugh Stark said that the actual forces acting on the saw when used in panel mode were complex, varied over time and could not be described as to direction and magnitude without experiment or calculation. Also, Dr Stark said, given the cyclical nature of the sawing action both the direction and magnitude of the forces applied by the user to the handle would vary widely throughout the sawing cycle. 20 The relevant skilled addressee here is a person skilled in the design and manufacture of power tools. The invention is for a product, albeit a product whose inventive feature is said to lie on its ability to be used in particular ways. The skilled addressee is not a person whose connection with power tools is only in the capacity of a dealer or end user. 21 Claims must be construed in a practical, common sense manner, and are valid so long as they provide a workable standard suitable to the intended use: Minnesota Mining & Manufacturing Co v Beiersdorf (Aust) Ltd [1980] HCA 9 ; (1980) 144 CLR 253 at 273; Nesbit Evans Group Australia Pty Ltd v Impro Ltd (1997) 39 IPR 56 at 95. 22 It is accepted that "a major vector" is not a technical engineering term. According to the Shorter Oxford Dictionary, when used in mathematics "vector" is a "quantity having direction as well as magnitude, denoted by a line drawn from its original to its final position". The Macquarie Dictionary defines the term, as used in mathematics, as "a quantity which possesses both magnitude and direction". 23 Black & Decker's witness Mr Richard Frost read the expression "a major vector" as requiring that "one of the significant or substantial forces... applied by the user to the handle of the power tool of the invention must be transmitted along the line of action set out in the claims". The expression is a major vector, that is to say a vector which is substantial, or of significance, although not necessarily the most substantial. No comparative identification and quantification of possible other vectors is required to understand what the inventor is endeavouring to convey. The context here is relatively straightforward technology. Anybody using a power saw has to apply some directional force to the handle. It is a major force in the sense that it is substantial and necessary; were it not for that force the saw would not be presented to and held at the workpiece. That force operates parallel to the backwards-and-forwards motion of plane sawing and transversely to the up-and-down motion of jigsawing. Claim 1 is telling the reader that the saw of the invention is designed to be reoriented and gripped by the user when used to perform each of those different sawing operations. GMCA's case on this issue is not made out. 26 GMCA submitted that both patents were but an "attempt to re-design a known tool so as to achieve impermissibly, a patent monopoly over what is really a marketing idea". The alleged invention, so the argument went, citing Maugham J in Adelmann & Ham Boiler Corporation v Llanrwst Foundry Co (1928) 45 RPC 413 at 420, was simply the application of a well known and well understood piece of mechanism to achieve an obvious advantage. The mere "positioning" of the handle for a known tool in order to achieve a known result was not a manner of manufacture. 27 Much of this argument overlapped with GMCA's case on description, utility, novelty and obviousness. To the extent that it did not, it must be rejected. The alleged invention did not involve an abstract idea, like that considered in Grant v Commissioner of Patents (2006) 69 IPR 221. It concerned machines and their operation and thus "something of a corporeal and substantial nature": R v Wheeler (1819) 2 B & Ald 345 at 350, cited in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21 ; (2007) 72 IPR 447 at [66] ( Lockwood 2 ). 28 As the High Court said in Lockwood 2 at [65], "[i]ngenuity may lie in an idea for overcoming a practical difficulty in circumstances where a difficulty with a product consisting of a known set of integers is common general knowledge". 30 GMCA say that the specification "does not explain how [counsel's emphasis] the major vector element contributes to the achievement of the invention (which is said to be a useful tool)". Reliance was placed on a passage in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58 ; (2004) 217 CLR 274 at [99] ( Lockwood 1 ). However, that passage is not in point. It is in the context of a fair basing argument and says that a claim cast in the form of a consistory clause is not fairly based if other parts of the specification show that the invention is narrower than that consistory clause. The inquiry, their Honours stress, is into what the body of the specification read as a whole discloses as the invention. 31 In any case, the specification does not put forward the "major vector element" as something "contribut(ing) to the achievement of the invention". The invention is not for a method of holding a power saw; it is for a power saw capable of fulfilling different functions. As already explained, the (perhaps overly scientific) term "vector" is but a word used in describing these two functions. The specification contains quite detailed explanations and diagrams of the preferred embodiment. There is no obligation on a patentee to describe more than a single preferred form of the invention. The ground of insufficiency is not made out merely because it is said there are other ways of carrying out the invention as to which the specification is not sufficiently precise: No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231 at 248. The test is whether the disclosure in the specification will "enable the addressee to produce something within each claim without new inventions or additions or prolonged study of matters presenting initial difficulty": Kimberly-Clark Australia Pty Limited v Arico Trading International Pty Limited [2001] HCA 8 ; (2001) 207 CLR 1 at [25] . This requirement has been satisfied. The body of the specification must provide a "real and reasonably clear disclosure" of the invention claimed: F Hoffman-La Roche & Co v Commissioner of Patents [1971] HCA 3 ; (1971) 123 CLR 529 at 539; Lockwood 1 at [69]. 33 GMCA submits that the claims are not fairly based. It says that the claims, in particular claim 1, are not limited to power saws but extend to all manner of power tools. They do not include "essential features" in the specification, viz the reciprocation frequency and stroke length ranges. They also refer to a "plurality" of positions whereas in fact there are only two. 34 Whatever may be the position in relation to claim 1, the claims from claim 3 onwards, and in particular the critical claim 6, are clearly confined to power saws. 35 The reciprocation frequency and stroke length ranges are matters of guidance for the skilled addressee. They are not essential to the working of the claimed invention. 36 The preferred embodiment makes it clear that only two uses are disclosed. This means that the invention as claimed must produce the desired result. 38 GMCA's case on this ground was based on the supposed difficulty, or indeed impossibility, in identifying the "major vector". This, so it was said, meant that it was impossible to identify "what is required in terms of the [sic] locating the handle or operating the tool". 39 There is no substance in this ground. The alleged problems arising from the "major vector" term have already been discussed. Plane sawing and jigsawing are well known modes of operating a power saw. The preferred embodiment, and in particular Figures 12 and 13, make it clear how the device is to be constructed and how it would operate. 40 GMCA further relied on an experiment conducted by Dr Stark. He placed a piece of timber in a vice and then suspended a saw (successively the Black & Decker product and GMCA's two allegedly infringing products) by a flexible piece of nylon cord attached to the handle where a user would grip it. He turned on the power and applied adhesive tape to hold the trigger in the "ON" position. With the saw blade then reciprocating he applied the blade to the timber while supporting the handle using only the flexible cord. The saw in each case was able to cut through the timber purely by virtue of the downward force of the gravity on the body of the product. The cord retained a vertical or near vertical orientation during the cutting process. He concluded that "negligible horizontal force was being applied to the handle of the saw in the reciprocation direction during the cutting process". The force required to cause the reciprocating blade to cut (ie gravity) was substantially transverse to the line of linear reciprocation. 41 I do not see how this experiment shows that a product of the invention was not able to produce the desired result, ie using the same saw, with a change of blade, as either a plane saw or a jigsaw. In particular, normal use as a plane saw would not involve suspending the saw from a flexible nylon cord. As senior counsel for Black & Decker put it, what the claims require is that "the tool be designed so that it includes a fixed handle which is configured and positioned so that the user can apply a relevant force through the handle appropriate to the intended use", whether as a panel saw or a jigsaw. The question is whether the alleged anticipation contains each essential integer of the claim so as to amount to an infringement (the reverse infringement test). 43 In the case of an anticipation in documentary form, the document must contain "clear and unmistakable directions to do what the patentee claims to have invented": General Tire & Rubber Co v Firestone Tyre and Rubber Co Ltd [1972] RPC 457 at 486. 44 Although GMCA originally pleaded some 22 anticipations, by trial these had been reduced to 13. In final submissions only seven were relied on. The general comment can be made that although some of the devices could perhaps as a matter of physical possibility be used as a jigsaw there was no clear direction that this was their intended use. It is described as a "multisaw" and is pictured as being used in panel saw mode. There are photographs of various blade accessories such as a rasp, file and various brushes and also the statement: "In addition, the Bosch jigsaw accessory range is available for the multisaw". 46 However there is no separate, fixed handle. The user grasps the body of the tool itself, as one would a torch. Essential integers of the claimed invention are thus missing. I do not accept Dr Stark's argument that the body itself is a handle. One would not speak of the handle of a torch. The notion of a handle involves something separate jointed onto an object for ease of handling, as in the handle of a suitcase. It does have a handle. It is described as the same as the PFZ 550PE "but without orbital action". The latter, in the same catalogue is said to "cope effortlessly with straight cuts and offers you optimum curve cutting". Pictures show the PFZ 550E being used as a "handy all-purpose saw" (cutting plastic piping), as a file and as a brush. All these show the saw being used in similar orientation to panel saw mode. Another picture shows the saw being used as a rasp "to give wood the finishing touch". The last mentioned use, however, is not comparable to a jigsaw. The device is being moved towards the user. 48 There is no clear direction, or indeed any direction at all, for use of this device as a jigsaw. It appears with another saw JR3010 under the heading "Recipro Saws". It is a reciprocating saw. It is said also to have an "adjustable rocker shoe". It is not said that it can be used as a jigsaw. The list of accessories for Recipro Saws sets out blades suitable for various kinds of materials, but none are identified as being designed for jigsaw use. Immediately adjacent to the Recipro Saws in the catalogue appear conventional jigsaws. The blades can be turned to allow cutting in different directions. This solution of altering the blade position is something different from the Patent where the orientation of the body or handle of the tool is altered relative to the hand of the user. The tool is designed to be held by the body. There is a slide switch rather than a trigger. Dr Stark accepted that this patent was not saying that a user could hold the barrel vertically and cut away with their primary hand. There is no reference to a jigsaw blade or to jigsaw cutting. The attachment allows the user to perform a sawing operation with the teeth facing at any one of four different directions (at 90 degree intervals). The user is able to cut in the chosen direction without altering or reorienting the body or handle of the tool relative to the user. The patent discloses a blade with teeth facing downward. It also discloses that the blade may be turned so that the teeth face upwardly. However, the tool is designed with a handle and trigger positioned so that the device is intended to be used only in the panel saw orientation shown in Figure 1. While it would not be impossible to operate the saw upside down, it would be ergonomically inferior and there would be no reason to do so. Cutting in different directions is accommodated by the fact that the blade may be rotated. The present case is governed by the provisions which were in force before the operation of the Patents Amendment Act 2001 (Cth). That is the sense in which an idea can involve an inventive insight about a known product. A court cannot substitute its own deduction or proposition for that objective touchstone, except in the rarest of circumstances, such as where an expressly admitted matter of common general knowledge is the precise matter in respect of which a monopoly is claimed. Even if an idea of combining integers, which individually may be considered mere design choices, is simple, its simplicity does not necessarily make it obvious. Older cases concerning simple mechanical combinations illustrate this point, as does Haberman [v Jackel International Ltd [1999] FSR 683 at 697---8, 706 per Laddie J]. 58 As already noted ([20] above), the relevant skilled person is one skilled in the design and manufacture of power tools, as distinct from a dealer or end user. 59 Black & Decker point out, validly in my opinion, that GMCA's experts Dr Stark and Mr Stephen Bloom were not asked to and did not give evidence about the state of common general knowledge in Australia at the priority date. 60 Mr Bloom is the General Manager of a company which supplies hand and power tools to members of the building trades and home handymen. These orientations might require the little finger to be used to work the switch mechanism. He himself had used a reciprocating power saw in this manner before the priority date. 61 Mr Christopher Barrett is a carpenter and registered builder. He no longer possesses the saws in question and does not remember model numbers. His evidence is not sufficiently clear to establish that the saws he refers to were part of common general knowledge. 63 This is largely an attempt to revive prior art which has not succeeded in destroying novelty, for the reasons already explained. 64 It is a notorious fact that tradesmen, and not only tradesmen, often use tools for purposes for which they are not designed or sold. In my opinion that does not lead to the conclusion that the inventive step in the present case was obvious. The alleged invention here is a product, not a method. 65 There is also secondary evidence of commercial success. Confidential exhibits show substantial sales of Black & Decker's Scorpion product from its introduction in March 2001. The fact that the product was subsequently discontinued does not detract from the effect of this. I am not persuaded that the alleged invention does not comply with s 18(1)(b)(ii) of the Patents Act . 67 The application for the Innovation Patent was filed on 22 July 2002. 69 As a result, it was said, the Innovation Patent was not entitled to the priority date of the Standard Patent and was not entitled to claim divisional status. Accordingly the Innovation Patent had a later priority date and was anticipated by the Standard Patent. 70 But as Black & Decker correctly pointed out, correspondence between the claims of the two Patents is irrelevant. Section 79B speaks of an application for an invention which is disclosed in the specification filed in respect of the first (or "parent") application. The true comparison is between what is claimed in the Innovation Patent and what is a real and reasonably clear disclosure of the invention in the entirety of the specification of the Standard Patent, not just its claims, or any particular claim. Here what was claimed in the Innovation Patent was narrower than the invention of the Standard Patent, but it was the result of a valid divisional application. 71 The various grounds of invalidity alleged in respect of the Standard Patent were also raised in respect of the Innovation Patent. They must be rejected for the same reasons. Black & Decker has to show that the GMCA products take each and every essential integer of the claims relied on (claims 1 and 3 to 8 of the Standard Patent): Nicaro Holdings Pty ltd v Martin Engineering Co (1990) 16 IPR 545 at 559-560. Integer 1.9 is in the same terms save only that the word "parallel" is replaced by the word "transverse". These integers obviously relate to the operation of the device in its panel saw (integer 1.8) and jigsaw (integer 1.9) modes. 75 When Dr Stark was first approached by GMCA's solicitors he reported that all the integers of claim 1 were present in T1. 76 The solicitors wrote back asking whether it was possible for him to say, when T1 was used in a panel saw mode, in which direction the "major vector" required by the integer extends without carrying out experiments or calculations. A second question the solicitors asked was whether it was possible to say, without carrying out any experiments or calculations, that the major vector was transmitted "along a line of action extending substantially parallel to the line of linear reciprocation". 77 Dr Stark's response, to which he adhered at the trial, was that in order to determine whether T1 possessed a handle to which a user would apply a force which was a "major vector" transmitted in the relevant direction, it was necessary to make a relative assessment of all of the actual forces acting on the saw during the operation of the saw in the relevant mode. He contended that the expression "a major vector" required the force supplied by the user to the handle to be the greatest force acting on the tool. His evidence was that the actual forces acting on the saw when used as a panel saw were complex, variable over time, such that he could not describe either the direction or magnitude of those forces without experimental work or calculation and, given the cyclic nature of the saw in action, such that he would expect that both the direction and magnitude of the force as applied by the user to the handle would vary widely throughout the sawing cycle. Accordingly, he was "unable to comment on the presence or otherwise" of integer 1.8. 78 Claims must be determined in a practical and common sense manner: Nesbit v Impro at 95; Minnesota Mining at 274. In Cleveland Graphite Bronze Co v Glacier Metal Co Ltd (1950) 67 RPC 149 at 154 it was said that the claims must be as precise "as the subject admits of". The fact that Dr Stark had no problems on first reading is of significance. It is not the role of an independent expert to seek out difficulties or to read a patent with, to borrow an expression from administrative law, "an eye keenly attuned to the perception of error": Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 322 ; (1993) 43 FCR 280 at 287 quoted in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272. This episode reflects on Dr Stark's credibility as an independent expert. Generally I found Dr Stark lacked objectivity and detachment. He appeared keen to raise every conceivable argument in favour of the party which retained him. 79 As already mentioned, it is common ground that "vector" is not a technical engineering term. I agree with the opinion of Black & Decker's expert Professor Redmond that the integers 1.8 and 1.9 simply describe the forces which are to be transmitted by the user, via the hand, during the differing modes of operation. They are directed to the orientation of the body of the tool and the direction in which the user applies force to the handle. The term "a major vector" simply means a significant or substantial force, not the most substantial at any point in time. Integers 1.8 and 1.9 are telling the reader what is the essence of the invention, namely that the device is designed to be held with the saw operating in different directions for different tasks. 80 I find T1 infringes. T2 has a second handle and its trigger occupies much of the inner surface of the main handle, positioned around the middle of its inner surface. The safety catch is positioned at the end of the trigger which is closer to the electric cord. 83 Both Professor Redmond and Mr Frost concluded that T2 is designed to be operated in both panel saw mode and jigsaw mode and the trigger is readily operable in each position. 84 Dr Stark's evidence on the alleged infringement by T2, apart from the "major vector" point dealt with above, was that the handle was only "comfortably and practically suitable for holding" in the panel saw mode. 86 However, on the evidence of Mr Frost and Professor Redmond and my own observation, the presence of the safety switch on T2 does not impede, detract from or obstruct the operability of T2 in both panel and jigsaw modes. Disengaging the safety switch is a preliminary step which precedes the normal operation of the trigger. As Dr Stark accepted in cross-examination, once the safety switch is disengaged the user can hold the trigger with four fingers inside the grip and operate the saw quite normally. 87 T2 is sold with a jigsaw blade. The instruction manual includes directions for "curve cutting", in which the saw is pictured being used in jigsaw mode. The box in which the T2 is sold indicates that one of its uses is for "jigsaw cutting". 88 I find T2 infringes the Standard Patent. A power saw comprising a body housing a motor and a drive system linking the motor to a blade mount such that operation of the motor causes reciprocation of the blade mount, and a plurality of interchangeable saw blades for releasable connection to the blade mount, said interchangeable saw blades comprising a first, larger, saw blade and a second, smaller, blade such that when the selected saw blade is mounted on the blade mount in a operative condition the saw blade projects forwardly from a forward end of the body and is reciprocably driven by the mount in a fore aft direction, said body having at a rear end thereof a handle to allow a user to hold and operate the saw, and a trigger carried by the handle for actuating the motor, the handle being so configured in the body of the tool that when used with the first saw bade the body can be held in the hand of the user in a first orientation of the body relative to the hand, and when used with the second blade the handle can be held by the hand of the user with the body orientated through approximately 180º relative to the hand with respect to the first orientation such that the saw can be used in a jigsaw mode, and the trigger being so positioned that it can be operated with equal facility by the hand of the user in each of said orientations. 2. A power saw comprising a body housing a motor and a drive system linking the motor to a blade mount such that operation of the motor causes reciprocation of the blade mount, and a plurality of interchangeable saw blades for releasable connection to the blade mount, said interchangeable saw blades comprising a panel saw blade and a jigsaw blade such that when the selected saw blade is mounted on the blade mount in a operative condition the saw blade projects forwardly from a forward end of the body and is reciprocably driven by the mount in a fore aft direction, said body having at a rear end thereof a handle to allow a user to hold and operate the saw, and a trigger carried by the handle for actuating the motor, the handle being so configured in the body of the tool that when used with the panel saw blade the body can be held in the hand of the user in a first orientation of the body relative to the hand and in said orientation the saw can also be used in the manner of a handsaw by forwards and backwards motion of the body, and when used with the jigsaw blade the handle can be held by the hand of the user with the body orientated through approximately 180º relative to the hand with respect to the first orientation, and means for providing a forward support surface extending transversely to the line of action of the saw blade for supporting the body from a workpiece when acting as a jigsaw, wherein the trigger is positioned substantially midway along the length of the handle so as to be readily actuable in each of said two orientations. 3. A power saw comprising a body housing a motor and a drive system linking the motor to a blade mount such that operation of the motor causes reciprocation of the blade mount, and a plurality of interchangeable saw blades for releasable connection to the blade mount, said interchangeable saw blades comprising a panel saw blade and a jigsaw blade such that when the selected saw blade is mounted on the blade mount in a operative condition the saw blade projects forwardly from a forward end of the body and is reciprocably driven by the mount in a fore aft direction, said body having at a rear end thereof a handle to allow a user to hold and operate the saw, and a trigger carried by the handle for actuating the motor, the handle being so configured that when used with the panel saw blade the saw is held by the hand of the user accessing the handle from one side such that the saw projects generally forwardly from the hand of the user and when used with the jigsaw blade the body is reoriented relative to the hand of the user so that the hand accesses the handle from the opposite side whereby the saw can be used in jigsaw mode with the body projecting generally downwardly relative to the hand, and the trigger being so positioned that it is engaged by substantially the same part of the hand when gripping the handle in each of said orientations. 4. A power saw comprising a body housing a motor and a drive system linking the motor to a blade mount such that operation of the motor causes reciprocation of the blade mount, and a plurality of interchangeable saw blades for releasable connection to the blade mount, said interchangeable saw blades comprising a panel saw blade and a jigsaw blade such that when the selected saw blade is mounted on the blade mount in a operative condition the saw blade projects forwardly from a forward end of the body and is reciprocably driven by the mount in a fore aft direction, said body having at a rear end thereof a handle to allow a user to hold and operate the saw, and a trigger carried by the handle for actuating the motor, the handle being so configured that when used with the panel saw blade the saw is held by the hand of the user accessing the handle from one side such that the saw projects generally forwardly from the hand of the user and such that the saw can also be used in the manner of a handsaw by forwards and rearwards motion of body by means of the hand, and when used with the jigsaw blade the body is reoriented relative to the hand of the user so that the hand accesses the handle from the opposite side whereby the saw can be used in jigsaw mode with the body projecting generally downwardly relative to the hand, and the trigger is positioned substantially midway along the length of the handle so as to be readily actuable in each of said two orientations. 5. A power saw according to any one of claims 2 to 4 wherein the jigsaw blade is of substantially uniform depth along its length and the panel saw blade progressively increases in depth from its distal end to its proximate end portion so that at its proximate end portion the depth of the blade is significantly greater than that of the jigsaw blade at the proximate end portion thereof, and wherein the blade mount is within the interior of the body at the forward end thereof and is accessible via an opening of a size sufficient to accommodate the depth of the panel saw blade adjacent the proximate end portion thereof. Dr Stark did not change his opinion as he did in relation to infringement of the Standard Patent. 91 I find that T1 infringes the Innovation Patent. relative to the hand with respect to" the panel saw orientation. This was said to be difficult to understand because the meaning of the term depends on the starting axis of the hand and the specification offers no guide as to how this axis is to be identified. 93 Both Mr Frost and Professor Redmond had no difficulty understanding the Innovation Patent. In his initial report to GMCA's solicitors Dr Stark said that this integer was not present in T2, but did not express any difficulty in understanding it. The difficulties only emerged after GMCA's solicitors asked him a further question. He agreed that the specification "tells you that the tool is adapted to operate in both panel and jigsaw mode and that they are in different orientations when one does that". 94 The assertion that T2 cannot be used in jigsaw mode because of the position of the safety switch must be rejected for the reasons already given in relation to the Standard Patent. 95 I find that T2 infringes the Innovation Patent. When determining the extent of the monopoly claimed, the teeth of the blade are to be disregarded. The application claimed the priority of an earlier application which was filed on 9 November 1999 on the basis that the design application was made pursuant to s 22C of the Designs Act 1906 (Cth). The parent application is registered as No. 143550. It covers the design for the shank end of a saw blade. 99 GCMA contends that the design application was not made pursuant to a proper exclusion of material from the purported parent design application in accordance with s 22C and accordingly that the registration is not entitled to divisional status from the priority date of the former application. The area marked A is the shank. 101 On 11 May 2000 the examiner wrote to Black & Decker's patent attorneys pointing out that the application showed more than one design and that under the Act the applicant could only have one design for their application. You may make separate applications for each of the deleted designs under section 22C of the Designs Act. This section gives the later application/s the same lodgement date as your present application, so long as they are lodged before your present application is registered or refused. 102 On 30 March 2001 the attorneys replied forwarding an amended application which confined the statement of monopoly to the area marked A. Thus the parent application was amended so that it was narrowed to include only the shank. Consistently with s 22C the design in suit claimed the balance. 103 The Design is therefore properly entitled to the priority date claimed. 6.2 New and original? It must be "substantially novel or substantially original, having regard to the nature of the article to which the design is applied": Ullrich Aluminium Pty Ltd v Dias Aluminium Products Pty Ltd [2006] FCAFC 119 ; (2006) 153 FCR 437 at [3] . 636160; (ii) US Patent No. 3,802,079; (iii) US Patent No. 2,621,689; (iv) Extract from "Popular Mechanics Encyclopaedia of Tools and Techniques" by Oldham, 1994, page 132; (v) "Power Hand Tool Handbook", pages 40 --- 41, 1980 by Case; (vi) Bourke Patent US No. 5,755,293; (vii) Black & Decker European Patent No. 0949 032; (viii) pages 94, 95 and 106 from "The Complete Book of Tools" by Jackson and Day; (ix) Disston No. 12 and D23 lightweight saws. 105 With the exception of the Disston saw blades all of these references were provided to Mr Brown by GMCA's solicitors. None of the references contain a blade with a notch at the front or the same shape as the Design. The Disston blades lack the notch at the front of the Design and any shank at the rear and an angled front edge. 106 Black & Decker's expert Professor Redmond considered the references and was of the view that none were substantially similar visually to the Design. In my view none of the references showed blades which were substantially similar visually to the Design. 107 I am not satisfied that GMCA has established that the Design was not new and original. The one with which this case is primarily concerned has been referred to as product B. A comparison of product B with the blade of the Design appears at [97] above. A later product (confusingly referred to as product A) which was sold with the T2 saw is a modification of product B. Its only significance is that it lacks the notch at the end of product B. It seems to be accepted that if product B does not infringe then a fortiori product A does not. Mr Coates has worked for GMCA for ten years and before that for ten years for Black & Decker. He has had much experience travelling overseas assessing and purchasing power tools. 111 Mr Coates went to the factory in November 2001. He was shown a saw described by the Chinese as a "some functions saw". He was told by an engineer at the factory that Black & Decker had patented the internal mechanism and the shoe of a like saw. He was told that the factory had used their standard reciprocating saw which was in the "opposite direction" to the Black & Decker saw and "therefore there was no patents broken". Nothing was mentioned about the blades of the saw. I also did not think that there was anything special or striking about the mechanics (as I understood them) or the shape of the tool or blade. 112 Neither Mr Coates nor anyone else at GMCA made independent searches or enquiries about whether any features of the tool were patented. 113 In Polyaire Pty Ltd v K-Aire Pty Ltd [2005] HCA 32 ; (2005) 221 CLR 287 the High Court considered the concept of fraudulent imitation under the 1906 Act. Their Honours held (at [36]) that in order to find a fraudulent imitation it was not necessary to show that the differences between alleged infringement and design had been made to disguise the copying. In this respect their Honours at [28] qualified the statement in Malleys Limited v J W Tomlin Pty Ltd [1961] HCA 77 ; (1961) 180 CLR 120 at 127. This... is the knowledge, belief or intent which renders the conduct fraudulent. 114 As the submissions of Black & Decker appear to accept, the knowledge, belief or intent which does or does not render the conduct fraudulent is that of the Chinese manufacturer. It is the manufacturer who is said to have "applied" the Design outside Australia. I see no reason to disbelieve the evidence of Mr Coates. It seems inherently unlikely that the Chinese manufacturer had knowledge of the Australian Designs Act; still less that the Design was registered under it. There is no basis for finding that the manufacturer had reason to suspect such registration. The onus on Black & Decker to establish fraudulent imitation has not been discharged. 116 As the Full Court in Foggin noted, it is for the Court to rule on the meaning of the design and question of infringement as determined by reference to the eye of the consumer. 117 My first, and continuing, impression is that product B is significantly different in appearance from the Design. In particular the shank is quite different. What is in issue here is an everyday product. To the lay person this looks like a saw, obviously not a hand saw but one with some attachment in the shape of the shank. I regard this as more important than differences in angles and proportions. Put simply, the Design shows a saw blade with a shank; product B is a saw with a different sort of shank. 118 As might be expected experts on either side gave differing views. Professor Redmond thought that the dominant aspect of the Design was the blade and that product B was "closely similar, such that it has the same appeal to the eye as the design in the (Design)". He saw the shank as an "attachment device" but the saw blade was the "core or crucial visual element". The shank was "peripheral" or "of less significance". Nevertheless I think the ordinary consumer would see a panel saw blade as a piece of metal with teeth along the bottom and a sloping top. The shank is at one end, and thus is in a literal sense peripheral, but it is, and would be seen as, an integral and distinctive part of the article. 119 I am not satisfied product B is an obvious imitation of the Design. The Designs Act grants only the owner of a design the explicit right to bring infringement proceedings: Designs Act 1906 s 30(2), Designs Act 2003 (Cth) s 73(1). 121 The background to this issue includes a number of agreements and arrangements between BDI and BDA. 122 On 28 September 1987 BDI and BDA entered into an "Intellectual Property and Technical Assistance Agreement" (the 1987 Agreement). By cl 2.2 BDI granted to BDA "the sole right and license throughout Australia... to... use and/or sell Products in accordance with the Patents...". By cl 1.4 the term "Patents" was defined to include "all patents... design registrations or other similar industrial property rights...". By contrast to cl 2.2, under cl 2.3 BDI granted BDA a "non-exclusive right and license" to use trade marks. 123 On 13 September 2005 BDI and BDA entered into a deed (the 2005 Deed) whereby the parties "acknowledge(ed), confirm(ed) and agree(d)" that the licence granted to BDA under the 1987 Agreement "is and shall be an exclusive licence". 124 On 13 October 2005 BDI and BDA commenced the present proceeding. 125 By a letter dated 3 March 2006 (the March 2006 letter) BDI advised BDA that, "effective as of" 1 January 1997, the 1987 Agreement "is hereby terminated". BDA confirmed the letter. The letter was apparently provoked by concern within the Black & Decker Group as to potential United States tax liabilities. 126 On 13 December 2006 BDI and BDA entered into a deed (the December 2006 Deed). BDI and BDA agree that any termination of the 1987 agreement and the 2005 deed by letter dated 3 March 2006 shall be null and void ab initio, and of no effect. 2. BDI and BDA agree and confirm that the 2005 deed shall continue in effect insofar as it is necessary to confirm that the 1987 agreement is an exclusive licence to exploit the patents given by BDI to BDA. 3. BDI and BDA agree that the 1987 agreement remains in full force and is in effect as and from 28 September 1987, without any interruption, save that there shall not be any obligations on BDA to pay to BDI any licence fees nor any entitlement of BDI to demand such payment of licence fees by BDA pursuant to that agreement with effect from 1 January 1997 for any period after that date. The 2005 Deed only had prospective operation. Alternatively, if the December 2006 Deed was effective in law it could only affect non-parties prospectively. 8.1 Did the 1987 Agreement confer an exclusive licence? 129 The ordinary meaning of "sole right and licence", the expression in the 1987 Agreement, is that the licensor is granting a licence to the licensee, but to nobody else. It does not exclude the licensor itself from enjoyment of the right the subject of the licence. 130 Black & Decker point to three features which, construing the 1987 Agreement objectively, are said to lead to a conclusion that an exclusive licence has been granted. 131 First, the contrasting reference in cl 2.3 to a "non-exclusive" licence in respect of trade marks. I do not think this helps; in fact it supports giving the natural meaning to "sole licence". A non-exclusive licence is plainly something different from a sole licence. With the former, the licensor is free to grant licenses to others; with the latter the licensor cannot licence persons other than the sole licensee, but is not prevented from itself exploiting the property the subject of the licence. An exclusive licence is something different from both a sole licence and a non-exclusive licence. 132 Secondly, cl 12 provides that BDA "shall have the first right, but not the obligation to initiate litigation to abate the infringement". This expression follows words in the clause which oblige BDA to notify BDI of any apparent infringement of intellectual property rights by third parties. I do not see how conferring such rights on BDI, which after all is the owner of the rights and would be interested in protecting them, somehow indicates that the rights granted under the licence to BDA are exclusive. 133 Thirdly, the "relative position of the parties" at the time of the 1987 Agreement "so far as [sic] exploitation of devices the subject of patents covered by the licence". Reference is made to a recital which states that BDI is a holding company which holds patents and other intellectual property within the Black & Decker Group and does not make, use, sell or otherwise exploit those patents otherwise than by licensing. It is said that BDA was the only entity concerned with the exploitation in Australia of Black & Decker products. However, the division of functions as between BDA and BDI which happened to exist in 1987 does not override the rights and obligations created by the 1987 Agreement. By use of the term "sole... license" BDI was reserving for itself the right to exploit the patents if future circumstances should warrant such a course. 134 The 1987 Agreement did not confer an exclusive licence on BDA. 136 However, from 13 September 2005 (ie before and at the time of the commencement of the present proceeding) BDA was an exclusive licensee of BDI. The result is that the 1987 Agreement, as varied by the 2005 Deed, was terminated. The United States tax motive confirms that this was a deliberate act on behalf of both BDI and BDA. 138 The termination of the 1987 Agreement was stated to be "effective as of 1 January 1997". Nevertheless that cannot retrospectively change the state of affairs which in fact existed at the commencement of this proceeding on 13 October 2005. At that date, as GMCA appears to accept, at least implicitly, BDA was an exclusive licensee of BDI. 139 Black & Decker contend that the continued conduct of BDI in permitting BDA to exploit in Australia its patents and designs objectively suggests that it was not intended by the parties that the March 2006 letter effect a termination of all obligations under the 1987 Agreement, but rather "a variation of it to remove any entitlement of BDI to claim royalties", this being the matter which had provoked concern about US tax liabilities. Alternatively, it is said that the conduct of BDI and BDA from March 2006 amounted to an entry into a new agreement on the same terms as the 1987 Agreement, including the exclusive licence arrangement introduced by the 2005 Deed, save only that BDA was not required to pay royalties or fees to BDI. Despite the March 2006 letter, it was "business as usual". 140 The March 2006 letter, agreed on by BDI and BDA for reasons which no doubt seemed compelling at the time, is quite unequivocal. The 1987 Agreement is not varied; it is "hereby terminated". If a new contract is to be implied from conduct, it does not follow that BDA's position is to be that of exclusive licensee, as distinct from sole or non-exclusive licensee. If BDI and BDA continued to do business I do not see how that fact can give rise to an implied new contract which incorporates some features (the exclusive licence) but not others (payment of royalties) from the former contract. As far as the very limited evidence goes, the better view is that the course of conduct gave rise to a non-exclusive licence, terminable either at will or on reasonable notice, and subject to payment of a reasonable royalty. Alternatively, BDI would be entitled to payment on a quantum meruit. There were three directors at the time, Linda Bagioni (a US resident), Alison Armstrong and Christopher McKenna. Mr McKenna was disabled by a stroke. Ms Armstrong was in New Zealand. Mr Jordan, BDA's solicitor in Australia, contacted her and asked her to sign the Deed. She executed the document whilst in New Zealand and returned it to Mr Jordan. Execution of the document was not sanctioned or ratified at a Board meeting of BDA. It was not executed under BDA's common seal. In evidence Ms Armstrong said that the Board of BDA would not ordinarily meet for the purpose of granting power to her to sign agreements on behalf of the company. 142 As to BDI, its constitution states that its business "shall be managed by or under the direction of the Board of Directors" (Art I, sec 1). Mr Darren Pratt, a Vice President of the company, signed the December 2006 Deed on behalf of BDI. Article IV, sec 4 provides that Vice Presidents "shall have the power to sign and execute, unless otherwise provided by resolution of the Board of Directors, all authorized contracts or other obligations in the name of the corporation in the ordinary course of business". 143 GMCA argued that, in respect of BDA, the December 2006 Deed was not executed as required by s 127(1) of the Corporations Act 2001 (Cth). A common seal was not used and the document was not signed by two directors or a director and a company secretary. Also Ms Armstrong's execution was not authorised by the Board. 144 However, s 127(1) is not mandatory. Section 127(4) provides that the section does not limit the ways in which a company may execute a document (including a deed). As to authority to execute, persons dealing with BDA, including BDI, were entitled to assume that the company's constitution had been complied with and that a director had been duly appointed and had authority to exercise the powers customarily performed by a director of a similar company: s 129(1) , (3), the statutory equivalent of the Rule in Turquand's Case ( Royal British Bank v Turquand (1856) 6 E & B 327). Section 128(1) provides that a person is entitled to make the assumptions in s 129 and a person is not entitled to make an assumption under s 129 if they knew the assumption was incorrect. While there is no evidence in the present case as to the powers of a director of a similar company to BDA, the onus is on GMCA to establish the contrary. In any event, it seems inherently likely that a director of a company similar to BDA, a wholly owned subsidiary of an overseas company, would have authority to execute on the company's behalf a document of the kind executed by Ms Armstrong. A degree of informality is to be expected. The reality is that Ms Armstrong was not, in the time-honoured expression, engaged on a frolic of her own. 145 In relation to BDI, Mr Pratt was authorized, by virtue of his office, to execute the Deed. The Deed was clearly in the ordinary course of business of BDI in that it dealt with the licensing of intellectual property, which seems to have been BDI's only business. 8.5 Does the December 2006 Deed operate retrospectively? As a consequence, BDA is to be treated as having the status of exclusive licensee from at least the date of the 2005 Deed (its case that such status existed from the 1987 Agreement has been rejected for the reasons already given). 147 However, statutory rights to damages or an account of profits conferred on owners or exclusive licensees of intellectual property only have effect for the period that a plaintiff in fact has the relevant status. Thus in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50 ; (1968) 122 CLR 25 Windeyer J held (at 36) that an account of profits should be taken to terminate as at the date the plaintiff assigned the trade mark in question and (at 41) that the assignee, having been joined as a plaintiff, should be entitled to an account of profits from the date of assignment. Similarly in Stack v Brisbane City Council (1996) 35 IPR 296 at 302 Drummond J held that where an equitable title had been converted into legal title by assignment, the assignor would have the right to an account of profits made by the infringers in the period up to the assignment and that the assignee alone would have the right to any profits made by the infringers after that date. 148 Consistently with these authorities, it is not possible for BDI and BDA by internal arrangements to shift between themselves entitlements under the statute as against strangers. The December 2006 Deed does not operate retrospectively. It would not be entitled to an account of profits made from, or damages for any loss caused by, any infringement by GMCA before 13 September 2005 and between 3 March and 13 December 2006. The Design is valid but not infringed. BDA's rights to damages or an account of profits are limited to the extent explained above. 151 The parties are directed to bring in minutes of orders to give effect to these reasons. I certify that the preceding one hundred and fifty-one (151) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

infringement standard and innovation patents power saw able to be used as either panel saw or jigsaw invalidity whether invention novel whether invention useful standing of licensee whether exclusive licence whether retrospective operation of licence agreement whether divisional application valid whether new and original infringement by fraudulent or obvious imitation patents patents patents designs

The direction is opposed by the applicant ('the ACCC'). In support of the direction, there was filed in Court an affidavit of Mr Stephen Klotz, the solicitor for StoresOnline, affirmed on 23 June 2009 ('the supporting affidavit'). (2) StoresOnline, at para 20 of their second amended defence filed on 30 April 2009, deny the allegations made in para 17 of the fourth further amended statement of claim. (3) StoresOnline propose to adduce the evidence of the 12 witnesses, hereinafter referred to as the 'Cooling Off Witnesses', in support of para 20 of their second amended defence. (4) StoresOnline does not propose to adduce the evidence of the Cooling Off Witnesses for any other purpose. (5) A Mr Hoopes and a Mr Unfried were, at the time of the Workshops, employed by StoresOnline as Workshop managers. A Mr Hellbush was, at the time of the Workshops, an independent contractor engaged by StoresOnline as a Workshop manager. (7) The balance of the Cooling Off Witnesses were, at the time of the Workshops, employed by StoresOnline as Workshop sales staff ('Sales Staff'). (9) Apparently, Mr Hoopes and two of the Sales Staff are no longer employed by StoresOnline. (4) There are numerous videoconference facilities in the United States. The cost of hiring videoconference facilities for the estimated duration of the cross-examination of the Cooling Off Witnesses was less than 15% of the total cost of bringing them to Australia. (5) StoresOnline is prepared to make all necessary arrangements and bear the cost of making those arrangements for the effective taking of the evidence of the Cooling Off Witnesses via a videoconference facility or facilities. (2) That he had personal experience of cross-examining witnesses, not only in this Court but in other courts, for up to a couple of days over videolink and there had not been demonstrated in the experience of the courts any difficulty about following this method, even where large volumes of documents were involved; and here, three of the Cooling Off Witnesses are only required for three hours each and the other nine Sales Staff over a total period of three days (two hours each). (3) To require the Cooling Off Witnesses to travel so far for such short periods of time is an enormous imposition involving them in financial detriment as indicated in the supporting affidavit; and they have not been tested by StoresOnline up to this point as to whether they are willing to come here --- they are not compellable, any of them, even the ones who still work for StoresOnline. On the other hand, as senior counsel for the ACCC pointed out, it was significant that there was no evidence that any of the Cooling Off Witnesses are not prepared to come to Sydney for the time they are required during the hearing. (4) That for a full week, StoresOnline's business would be completely compromised in the United States by the loss of an entire sales team. Indeed, it was suggested that StoresOnline's business 'would be stopped for a week'; although senior counsel for StoresOnline subsequently resiled from this position in the face of senior counsel for the ACCC pointing out StoresOnline 'has literally dozens and dozens and dozens of employees who fly around the world conducting these Workshops'. (5) That the evidence of the Cooling Off Witnesses was not 'centrally important evidence' to the determination of the case although, as indicated below, this was also disputed by senior counsel for the ACCC. (6) That the anticipated cross-examination of the Cooling Off Witnesses did not fit into the category of being '... lengthy and complex ... in modern litigation'. The cross examination of the Cooling Off Witnesses will go to the first and third of those issues. (3) The ACCC has filed and served affidavits from 15 purchasers of StoresOnline packages in Australia who say that they made their purchase without any cooling off arrangements having been made known to them. StoresOnline has served affidavits from the Cooling Off Witnesses, on which StoresOnline proposes to rely, on the issue of whether the cooling off provision of the Undertaking was breached. If the evidence of StoresOnline on that question is accepted it would follow that the evidence of the ACCC's witnesses would not be believed. For example, Norman Scott Alger says that he was the Table Closer responsible for assisting sales consultants by verifying all sales processes had been completed according to guidelines at various Workshops. He refers to a list of Workshops and identifies the Workshops at which he was a sales closer. He identifies those Workshops by reference to a document which he was told by an in-house lawyer, was exhibited by another of StoresOnline's witnesses. The Workshops attended by Mr Alger include those attended by the ACCC's witnesses Antony Dean, Dominica Cecilia Smith, Jill Foster and Ali Haddad. He says that he was the sales representative who closed the sale with Dominica Smith. He annexes a copy of the business to business order form signed by Ms Smith and he says initialled by him. He describes a practice which he says was his practice in relation to all sales in March 2007, being the month in which the four witnesses of the ACCC identified above made their purchases. Also, if you want to cancel you must do so by the date stamped right here. The Court is unlikely to accept the evidence of Antony Dean, Jill Foster or Ali Haddad if it accepts the evidence of Scott Alger. Conversely, it is unlikely to accept the evidence of Scott Alger if it accepts the evidence of the ACCC's witnesses. Nine of StoresOnline's witnesses have sworn affidavits in substantially the same form and terms as that of Mr Alger. (4) Each of the remaining Cooling Off Witnesses is said to be a workshop manager responsible for managing the team of workshop Sales Staff and ensuring compliance by that team with all legal and ethical obligations. The affidavit of each is substantially in the same form and each is to the effect that they operated a compliance system such that their teams were unlikely to have failed to make known the cooling off periods. Each will be cross-examined at length on the StoresOnline compliance systems, including but not limited to the cooling off period. The cross-examination of each will involve putting to each of the three workshop managers a large number of documents. For example, each of those witnesses may be taken to each of the very many scripts produced by StoresOnline as being the scripts controlling the presentation of Workshops in Australia during the relevant periods; to the detailed evidence of other witnesses of StoresOnline as to the systems for ensuring that Workshop presentations occurred substantially in accordance with those scripts, the numerous transcripts of presentations in fact given by each of those presenters and the extensive evidence filed by StoresOnline on their compliance systems. There are currently 23 full thickness ring binders constituting what will become the Court Book. Each of these three witnesses could be taken to documents occupying at least half of that Court Book and certain documents not in the Court Book. In each case some of the documents to which the witness will be taken will be original documents. (5) Further, the nine other Cooling Off Witnesses will be cross-examined on each aspect of the compliance systems of which they were aware or which impacted on the performance of their roles. Each may be taken to documents occupying up to five volumes of the Court Book and certain documents not in the Court Book. In each case some of the documents to which the witness will be taken will be original documents. (4) It is to be exercised recognising 'that there are deficiencies when evidence is taken by videolink when compared with evidence given viva voce' per Spender J in Australian Competition and Consumer Commission v World Netsafe (No. 1) [2002] FCA 526 ; (2002) 119 FCR 303 at 305. And in many cases the court is assisted in fact by observance of what is misleadingly called the demeanour of the witnesses upon which the taking of video evidence may impact. Those observations of Spender J were cited with approval by a Full Court of this Court in Odhiambo v Minister for Immigration & Multicultural Affairs [2002] FCAFC 194 ; (2002) 122 FCR 29 at [97] . In those circumstances, it is apparent that even in determining the narrow question of breach of the cooling off provision of the Undertaking, the Court will be called on to determine a question of the credit of the nine Sales Staff. It is also apparent that in any cross-examination going to that credit it is likely that each of those witnesses will be taken to the various documents to which they refer in their affidavits, including to their physical form and the manner in which reference was made to them. (2) That cross-examination will involve very substantial documentation being put to witnesses, some of it being original documents. In those circumstances, cross-examination will require the attendance in each remote location of an agent of the ACCC who will need to have available the whole 23 volume Court Book and certain other documents. The cross-examination on documents through use of an agent will be substantially slower than if it were conducted viva voce . There will also be the obvious risk of confusion as to documents arising in the context of a remote agent being required to identify the documents to which cross-examining counsel are referring. (3) Mr Klotz, in the supporting affidavit at [12], refers to the ACCC's estimate that the Cooling Off Witnesses will be required for cross-examination totalling about a week. That estimate was an estimate of cross-examination viva voce . The time required for cross-examination will be greater if done by videoconference for the reasons outlined above. Further, Mr Klotz at [39] sets out the time differences to apply. For case management purposes the Court would need to proceed on the basis that if it were to take the evidence by videoconference it would do so for half a day each day. Mr Klotz makes clear that the witnesses would be spread around the United States and appearing at numerous videoconferencing facilities (at [38]). It is inevitable that delays will occur as examination at one facility finishes and switchovers occur to other facilities. The combination of taking longer in cross-examination and the difficulties of timetabling more than five full days of evidence across a series of half days to numerous videoconferencing facilities raises the obvious prospect of an increase in the length of the trial by at least a week. While the ACCC does not know the costs incurred by StoresOnline, the Court could readily conclude that the professional costs of the parties represented by four counsel and solicitors for a week will substantially exceed the cost difference estimated by Mr Klotz, being the costs of viva voce cross-examination as compared to videolink at $52,278 --- $7,472 = $44,806 (Klotz at [13] and [36]). (4) Further, StoresOnline assumes that the ACCC would be able to cross examine the Cooling Off Witnesses with them sitting in a videoconference facility accompanied only by a person with a Bible or alternative (Klotz at [38]). That assumption is wrong. In each case it will be necessary for the ACCC to have an agent in attendance with the 23 volume Court Book and certain other documents. The prospects of logistically achieving that at locations across the United States without interruption to the Court's program are very slight. If numerous agents are required, the costs, not considered by Mr Klotz in his calculations, would be substantial. In any event, the savings identified by StoresOnline fail to account for the potentially substantial costs of the ACCC's agents who will be required at each videoconference venue. So understood, what was done in other cases is only of limited assistance, if any. So much was recognised by the Supreme Court of New South Wales (Austin J) in Australian Securities & Investments Commissioner v Rich & Ors (2004) 49 ACSR 578 at [16], although his Honour went on to observe that there are broadly two approaches exhibited by the observations in the cases --- one generally in favour of the use of audiovisual absent any impediment telling against its use; and the other a more cautious approach requiring good reason to be shown before leave to give evidence by means of video-link was granted. There are also comments on the general approach to be taken by the court to a proposal for evidence to be adduced using audiovisual facilities. I shall refer briefly to each of these matters. The fact that the witness's evidence will be centrally important should not of itself persuade the court against using audiovisual facilities. But if the court can anticipate that the cross-examination of the witness will be lengthy and complex, and that the credit of the witness will be challenged, that combination of factors is likely to persuade the court against audiovisual evidence unless there is a good reason for choosing it (such as, for example, a large difference in costs or the illness of the overseas witness). I can see that on many occasions (depending on such matters as the nature of the evidence and the issues likely to be raised in cross-examination) it will be as easy to assess the credit of the witness in audiovisual as in viva voce evidence. The "subtle nuances" of which the Full Family Court [in K v S [2001] FamCA 243 ; (2001) 161 FLR 71] spoke will often not be there, and if they are, they will be captured by the video camera. But there will be exceptional cases where the audiovisual procedure will put the cross-examiner and the court at a real disadvantage in dealing with credit. They will include cases like the present one, where the witness's evidence is centrally important and the cross-examination is likely to be long and complex, and the issue of credit is likely to depend upon the witness's responses to questions based on documents shown to him by the cross-examiner. Where the court is given a choice between audiovisual and viva voce evidence in such a case, the court is likely to regard viva voce evidence as the safer course unless there is a good reason for preferring the audiovisual approach (such as a large cost differential or the illness of the witness). But I agree that the problem can be reduced to manageable proportions if the cross-examiner makes sure that copies of the documents are available to the witness overseas and there is someone with the witness who can assist the witness to identify and locate the documents. The extent of the problem will vary from case to case. First, the court should strongly encourage the use of current-generation electronic aids to its work, provided they are cost-effective and their reliability has been adequately established, recognising that a technological innovation which saves time and money may be acceptable even if it delivers a product not quite as good as the traditional alternative. Second, there will be exceptional cases where, presented with a choice between taking evidence by electronic means or using the tried and true viva voce method, the court will decide there are good grounds for proceeding by viva voce evidence. If these propositions are accepted, it is unnecessary and unhelpful to argue about whether audiovisual evidence is "for practical purposes, the same" as viva voce evidence. They illustrate the point that the choice in every case cannot be determined solely by reference to general principles because it is the application of those principles to the facts and circumstances of the particular case which must determine the choice; in the circumstances of a particular case, a matter may point one way and in another case it may point another way. At the end of the day, the exercise of the discretion as to what is appropriate in a particular case will involve a balancing exercise as to what will best serve the administration of justice consistently with maintaining justice between the parties: see Giles CJ in Sunstate Airlines at [4]. I accept that they are not compellable, but 9 of the 12 are still employees of StoresOnline and as StoresOnline will be bearing the cost of all travel and accommodation for all Cooling Off Witnesses, there is no financial disincentive for them in coming. References to their losing commission income while travelling and during their short stay here carries little weight, if any, particularly as it could no doubt be adjusted in their favour, by StoresOnline treating it as a 'one week off', in the 'two weeks on'/'one week off' arrangement for Sales Staff deposed to by Mr Klotz. (2) In my view, the overall savings in cost, by taking the evidence of the Cooling Off Witnesses by video-link rather than having them come here to give their evidence viva voce , will be at best marginal and at worst more expensive. The savings deposed to by Mr Klotz are, in the scheme of things, not significant and do not take into account all the costs associated with and all the costs which will arise as a result of, recourse to a video-link. It will, as submitted by the ACCC, require the ACCC to have an agent or agents at the remote location or locations to assist in the identification of documents during the course of cross-examination; it will undoubtedly lengthen the time it takes to complete the cross-examination of the Cooling Off Witnesses --- each day will at best be a half day due to time zone differences --- with attendant increase in the costs incurred for the additional time of counsel and instructing solicitors; and it would be common ground that these latter costs would quickly absorb and overtake any savings as between travel and accommodation costs on the one hand and the direct cost of utilising videoconference facilities on the other. (3) Clearly there are issues of credit involved as between the evidence in chief embodied in the affidavits of the Cooling Off Witnesses and the evidence in chief embodied in the affidavits of the ACCC's witnesses who purchased StoresOnline packages at the relevant Workshops in Australia going to the factual issue of whether or not the purchasers of such packages were told, at any time up to and including the point of sale, about the 'cooling off period'. In my view, it is in the interests of maintenance of justice between the parties that that evidence, from both sides, be given in person. (4) It is also clear that the cross-examination of the Cooling Off Witnesses will go beyond their evidence in relation to the 'cooling off period' issue. They will also be cross-examined in relation to other allegations of breaches contained in the statement of claim, as well as on the systems and procedures in place with a view to ensuring compliance with the Undertaking. So understood, their evidence is, contrary to the submission of StoresOnline, centrally important to the outcome of the case. (5) The anticipated size of the Court Book suggests that the Cooling Off Witnesses will be taken to a large number of documents in the course of their cross-examination. I accept that the management of such a task can be effectively handled whilst utilising videoconference facilities albeit, as mentioned above, at an additional significant cost. At one level then, this consideration is central. But where, as here, issues of credit are involved, it impels a conclusion in favour of the evidence being given in person. There are other matters which I have weighed into the balancing exercise in reaching the conclusion I have, in addition to the primary matters referred to in [15] above. On their own, they are not critical. However, as part of the balancing exercise they are, in my view, relevant; for example, the Cooling Off Witnesses are all people who regularly travel, both domestically and internationally, for or on behalf of StoresOnline. While having them travel from the United States to Australia and return will involve them in some 15 hours of travel each way within a relatively short timeframe, this is something to which they are accustomed in the course of their duties. It could not be seen as imposing on them an unusual personal or physical burden. The motion must be dismissed with costs. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds.

whether evidence of witnesses in the united states should be taken by use of audiovisual facilities or given in person the exercise of discretion as to what is appropriate in a particular case will involve a balancing exercise as to what will best serve the administration of justice consistently with maintaining justice between the parties. practice & procedure

That the first and third applicants provide by 4.00 pm on Friday 10 November 2006 security for the costs of the proceedings of the first and second respondents in the sum of $87 832, or such other sum as is ordered by the Court, to the satisfaction of the Registrar of the Court. 2. The first and third applicants pay the first and second respondents' costs of and incidental to the notice of motion, to be taxed. 3. Time for service of the notice of motion to be abridged to Friday 3 November 2006. 4. Any other orders that the Court deems appropriate. 2 Despite the fact that the respondents in the substantive case are the applicants in this notice of motion, for convenience I will continue to refer to the parties as 'applicants' or 'respondents' as per their description in the amended application and statement of claim filed Thursday 16 February 2006. 3 The notice of motion came on for mention last Monday 6 November 2006. Although the respondents sought an abridgment of the time for service of the notice on the applicants, the applicants indicated that they were not in a position to answer the notice last Monday. I ordered that the matter be listed for hearing at 9.30 am this morning. 4 Both parties have pressed the Court for an urgent ruling on the issue of security for costs. Because of the timing, and the proximity of the hearing date, it is necessary that a decision in respect of this notice of motion be delivered today. 5 The current position is that the Full Court on Thursday 1 June 2006 ordered that the first and third applicant provide security for the costs of the first and second respondent of the proceeding up to the end of the first day of the trial in the amount of $150 000 by way of unconditional bank guarantee in that sum or otherwise to the satisfaction of the District Registrar of the Queensland District Registry of the Court: Sunstate Orchards Pty Ltd v Citrus Queensland Pty Ltd [2006] FCAFC 93. I understand that security for costs was provided on Thursday 22 June 2006. 6 For the purposes of this judgment, I shall assume that the costs order of the Full Court was exhausted on Monday 17 July 2006 which was the first day of the trial, subsequently adjourned. The sum sought by way of security for costs is referrable to the estimate of Mr James McLellan in his affidavit sworn 23 March 2006 and filed 27 March 2006. 2. Otherwise, the respondents rely on submissions and material previously before this Court and the Full Court. 3. The financial position of the first and third applicants is unchanged from April 2006. 4. There is no evidence that security would frustrate litigation and no evidence that those who stand behind the companies and who stand to benefit from litigation are also without means. 5. The onus is on the first and second applicants to raise impecuniosity of those whom litigation would benefit and to prove the facts upon which a contention is founded. 6. The trial will take two weeks. The parties are proposing to call 15 witnesses. 7. The respondents have not adduced any evidence that would weigh against an order for security. 8. There is evidence that the second applicant had an expectation of obtaining further funds to provide by way of security for costs. 9. There has been no delay by the respondents as to the notice of motion for security for costs. It was filed the day following an unsuccessful mediation between the parties. 10. Even if there had been delay, the applicants have not demonstrated any prejudice from the delay. 11. No stay is sought if the first and third applicants fail to provide the security. Rather, if I were to order that security be provided, the applicants contend that the notice of motion should be adjourned to the day after the security is required to be provided, or later in the day upon which the security is required to allow the respondents to make further submissions regarding any further orders, which may be appropriate if that security is not provided. Neither the first nor the third applicant has sufficient assets to meet any potential costs order, nor are they able to satisfy any order for security for costs. Accordingly the threshold for the making of an order has been established consistently with the decision of the Full Court in these proceedings. 2. However the question before the Court is whether the Court should exercise its discretion in this matter, and the key issue in relation to the exercise of discretion is the delay in serving the notice of motion for the security for costs on the applicants. As pointed out by the Full Court in Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1 the discretion to make orders under s 56 must be exercised judicially, but that is the only relevant limitation (at 3). Although O 28 r 3 sets out matters the Court may take into account in considering an application for security for costs, this is not an exhaustive statement of the cases in which an order for security for costs can be made ( Bell Wholesale at 3). The fact that the Full Court on 1 June 2006 has previously ordered the applicants to pay security for costs in this matter, following broad agreement that the amount of $150 000 would be appropriate security for the costs of the respondent parties to the primary proceeding at the end of the first day of the trial ( Sunstate Orchards Pty Ltd v Citrus Queensland Pty Ltd [2006] FCAFC 93 at [5] ). 2. I note the submissions of Mr McQuade that there is no evidence that the security would frustrate the litigation or that those who stand behind the companies and who stand to benefit from litigation are also without means. In Bell Wholesale , the Full Court emphasised that it is for the party against whom security is sought to show the impecuniosity of those who stand behind the company or who will benefit from litigation. Although Mr Perry submitted that it would not be possible for the second applicant, who presumably will be funding the security for costs, to satisfy an order by tomorrow afternoon, there is no indication that the second applicant is impecunious or would be unable at all to satisfy an order by a later date. The amount sought by way of security is substantial, namely $87 832, which, if I make the orders sought by the respondents, would need to be paid by tomorrow afternoon. This is a substantial sum to be raised and paid on such short notice. 4. The notice of motion has been filed in extreme proximity to the commencement of the trial without explanation. Indeed, the notice of motion was filed last Friday, mentioned on Monday and heard today in respect of an application for security for costs to be paid by tomorrow before a trial commences on Monday next. The fact that I can make reference to these days without dates illustrates the extreme tightness of the timing in the case before me. I note a similar matter which came before Toohey J in James v Australia and New Zealand Banking Group Ltd (1985) 9 FCR 442 when an application for security for costs was made one month before the commencement of the trial. The matter is now so close to a hearing and so much time and costs have been expended that it would be a grave injustice to the applicants if they were ordered to provide security for costs when it is apparent that they cannot comply with such an order. The November trial date of this matter has been known by all parties since late July 2006. At the directions hearing of 28 July 2006 I indicated to the parties the importance of compliance with Court directions in this matter and the need to be prepared for trial in November. As pointed out recently by Jessup J in Acohs Pty L Ltd v Ucorp Pty Ltd & Ors [2006] FCA 1279 at [61] - [63] , citing authorities including Buckley v Bennell Design and Constructions Pty Ltd (1974) 1 ACLR 301 at 308, it is an accepted principle in the ordering of security for costs that such an application should be made promptly. Although I know that the respondents did not file an application for security for costs until after it was clear that a mediated settlement of this matter would not take place, the success or otherwise of the mediation would not have prevented the respondents applying at an earlier date for security for costs of the trial, particularly if payment was sought to be made after the date by which medication was ordered to take place. While I note that the respondents had earlier sought and obtained an order for security for pre-trial costs, no satisfactory explanation has been provided as to why an application for security for trial costs has been brought on what is, in effect, the eve of the trial. 6. There have already been other significant delays in this matter in such respects as the hearing of the trial itself (adjourned from July 2006 to November 2006) and mediation of the matter (orders for which were made on 9 August 2006 for the mediation to take place by no later than 20 October 2006, but which did not occur until 2 November 2006). Obviously, as pointed out by the High Court in State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146, issues of case management do not take precedence over issues of justice. However, the fact that this case has already been characterised by significant delays is undesirable from the perspective of the parties and the Court, and there is an obvious risk that an order for security for costs which proves unrealistic for the applicants to comply with would delay the trial even further. 7. The respondents have sought no consequences as part of an order --- such as a stay --- in the event that security for costs are not paid before the commencement of the trial. Although I said earlier in this judgment there is no evidence that the security would frustrate the litigation or that those who stand behind the companies and who stand to benefit from litigation are also without means, in cases where similar submissions have been successful (for example in Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd [2001] FCA 1475 at [26] ) there were also no clear issues of delay or proximity to the hearing date as there are in this case. The issue here is not that there is a suggestion of impecuniosity of the second applicant, it is whether the delay in bringing the application for security for costs and the proximity of this application to the trial date militate against the exercise of my discretion to grant an order for security for costs in this case. 11 In my view, notwithstanding that the applicants have been ordered at an earlier date to pay security for pre-trial costs, the delays and the proximity to the hearing date of this application for trial costs in my view weigh against the exercise of a discretion in favour of the respondents in relation to this notice of motion. 12 Accordingly, the notice of motion of the respondents filed 3 November 2006 is dismissed. The notice of motion filed Friday 3 November 2006 by the respondents be dismissed. 2. Costs be reserved.

application for security for costs application brought within 10 days of trial notice of motion heard 2 days before trial whether respondents delayed in bringing application for security for costs consequences of ordering security for costs costs

Ms McIver is an employee of the University and, in March 2006, she held a position described as School Executive Officer in the School of Management. In the proceeding the applicant makes a number of claims including a claim that he has been subjected to unlawful discrimination within the Disability Discrimination Act 1992 (Cth) ("DD Act") by the respondents. 2 On 23 November 2006, the proceeding was transferred to this Court by order of the Federal Magistrates Court made pursuant to r 8.02(1) of the Federal Magistrates Court Rules 2001 (Cth). 3 In the application now before me the respondents apply for an order that the proceeding be dismissed on the ground that it is frivolous or vexatious or an abuse of the process of the Court. The Court's power to make such an order is contained in O 20 r 5 of the Federal Court Rules . In addition, or in the alternative, the respondents apply for judgment against the applicant on the ground that the applicant has no reasonable prospect of successfully prosecuting the proceeding. The Court's power to make such an order is contained in s 31A of the Federal Court of Australia Act 1976 (Cth) ("Federal Court of Australia Act"). On that day, the first respondent held an event at the Adelaide Convention Centre. The second respondent was present at the event in her capacity as an employee of the first respondent. The event was called a "Hypothetical" and it involved a discussion by selected persons of the prospects of Australian businesses exporting wine to the Asian market. I will refer to the event as the Hypothetical. The Hypothetical was to be conducted from 6.30 pm to 8.30 pm, or thereabouts, and there were to be "drinks and nibbles" from 5.30 pm. Entry to the Hypothetical was by way of the purchase of a ticket. The Hypothetical was advertised in The Australian newspaper published on 27 March 2006. The applicant decided to attend the Hypothetical. He went to the Convention Centre at about 5.00 pm. He had a brief conversation with the second respondent. She refused to allow him to attend the Hypothetical. 5 The applicant claims he has a number of causes of action against the respondents arising out of the events of 27 March 2006. They are set out in an amended statement of claim dated 7 January 2008. The applicant represents himself, and the amended statement of claim was prepared by him. It has to be said that it is by no means easy to follow. Doing the best I can, I summarise the allegations made in the amended statement of claim in the following way. 1. There is a group of allegations directed to establishing a claim under s 46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) ("HREOC Act") based on unlawful discrimination under the DD Act . The unlawful discrimination is said to be constituted by conduct of the second respondent acting for the first respondent on 27 March 2006. The applicant claims that mental and physical conditions that he has were aggravated by the "incident" and he seeks damages of $1 million, an apology and an injunction. The group of allegations also contains allegations about what is said to be the manipulation of electronic messages by the respondents. Those allegations appear to be quite irrelevant to the claim based on unlawful discrimination. I will refer to this claim as the claim for unlawful discrimination, and the four claims described below as the other claims. 2. There is a group of allegations directed to establishing a claim based on breaches of various sections of the Fair Trading Act 1987 (SA). It is alleged that the second respondent, acting for the first respondent, engaged in deceptive conduct in trade and commerce. The conduct involved the second respondent giving false advice to a security officer and banning the applicant from the Hypothetical. The claims for loss and damage are similar to those made in relation to the claim for unlawful discrimination, and again the group of allegations contains what appear to be irrelevant allegations about a document allegedly prepared in 2002 and the manipulation of electronic messages by the respondents. 3. There is a group of allegations directed to establishing a claim based on a breach of a duty of care by the second respondent while acting, it is said, for and on behalf of the first respondent. It is not necessary to set out the details; they are broadly to the same effect as earlier allegations. 4. There is a group of allegations directed to establishing a claim based on breaches of a deed of settlement between the applicant and the first respondent, allegedly executed on 2 March 2006. Again, it is the conduct of the second respondent acting for the first respondent on 27 March 2006 which is alleged to have given rise to breaches of the deed of settlement. Again, it is not necessary to set out the details; they are broadly to similar effect as earlier allegations. 5. There is a group of allegations directed to establishing a claim in misrepresentation under the Misrepresentation Act 1972 (SA). It is alleged that the second respondent, acting for and on behalf of the first respondent, made false representations to a security officer on 27 March 2006. Again, it is unnecessary to set out any further details. 6 The respondents submit that none of these claims are maintainable at law, but, in any event, they submit that the proceeding is an abuse of process because the events of 27 March 2006 were the subject of an earlier unsuccessful claim by the applicant against the first respondent. In light of the respondents' submissions, it is necessary to set out some of the history of the earlier proceeding and of the present proceeding. The basis of the claims was conduct by the respondent through its servants and agents, including the second respondent to the present proceeding, in connection with the Hypothetical held on 27 March 2006. 8 The trial of the earlier proceeding was held on 5 and 6 October 2006. On 31 May 2007, I made an order that the proceeding be dismissed and I delivered reasons for judgment: Rana v University of South Australia [2007] FCA 816. I will refer to those reasons as the earlier judgment. 9 One point to note, and the relevance of this will become apparent, is that in the course of the earlier judgment I said (at [4]) that I found the applicant "a most unsatisfactory witness" and that I did not accept his evidence except where it accorded with other evidence which I accepted. I said that the applicant's evidence as to important events changed during the course of the proceeding, that some of his evidence was highly improbable and a good deal of his evidence was inconsistent with evidence which I accepted. 10 On 19 June 2007, I made an order that the applicant pay the respondent's costs of the proceeding on an indemnity basis: Rana v University of South Australia (No 2) [2007] FCA 941. Mr Rana made allegations about payment for the tickets and what occurred at the Convention Centre which were critical to his case and he must have known were untrue. Those allegations should not have been made. He claimed that he had suffered loss and damage of $1 million but he proved no loss or damage. He altered a document, namely, a receipt, so that his case would appear stronger. These circumstances alone justify an award of indemnity costs. A further and probably independent reason for awarding indemnity costs is that he refused an offer of $400 in relation to a claim which I dismissed. In all the circumstances, it is appropriate to order that costs be paid on an indemnity basis. 11 The applicant lodged an appeal against the order I made dismissing the proceeding but, on 4 December 2007, the Full Court of this Court dismissed the appeal and ordered that the appellant in the appeal pay the respondent's costs thereof: Rana v University of South Australia [2007] FCAFC 188. 12 The applicant then applied to the High Court for special leave to appeal against the orders made by the Full Court but, on 15 May 2008, that application was dismissed. 13 One other point to note about the earlier proceeding is this. Before the present proceeding was instituted, the applicant made a complaint about the respondent's conduct to the Human Rights and Equal Opportunity Commission ("the Commission") (as it then was). In the course of a directions hearing in the earlier proceeding held on 14 July 2006, I fixed 17 and 18 August 2006 for the trial of the earlier proceeding. Those dates were subsequently vacated and, as I have said, the proceeding was heard on 5 and 6 October 2006. The point to be made is that at the directions hearing held on 14 July 2006, the applicant said that he had a complaint of "disability discrimination on the same fact by the University". He said that the complaint had been lodged with the Commission. He said that the first respondent had asked for an extension of time to respond. The applicant raised the possibility of the proceeding then before the Court (that is, the earlier proceeding) being delayed so that it could be dealt with at the same time as any proceeding following the applicant's complaint to the Commission. Perhaps we ought more properly have explained to them that these proceedings were on foot because, as I understand it, that would forestall the progression of any complaint stage in the Commission, and that is their policy, that is my understanding of their policy. The matter is only at the complaint stage; no proceedings have been issued. ... ... as I understand it the complaint stage needs to be worked through the Commission and examined by the Commissioner before formal proceedings are able to be initiated. We have undertaken mediation unsuccessfully. I think that the parties are some great difference apart in terms of the legal basis of the claim, but the mediation did crystallise some of the issues and we would seek that the matter be brought to trial as expeditiously as possible because we see that the trial is the only way to resolve those matters. 14 The complaint was not put before me, and the submissions did not proceed beyond what I have set out. I decided to fix 17 and 18 August 2006 as the dates for the trial of the earlier proceeding. It is necessary to say something about the history of the present proceeding. 16 Approximately two weeks after I conducted the trial in the earlier proceeding, the applicant lodged his application in the Federal Magistrates Court of Australia, thereby commencing the present proceeding. As I have said, that proceeding was transferred to this Court by order of the Federal Magistrates Court made on 23 November 2006. In his application, he claimed "disability discrimination and the treatment less than favourably". The applicant lodged a complaint with the Commission on 20 April 2006 in which he complained about the respondents' conduct. He alleged that he had been discriminated against because he had a disability. I went to the Adelaide Convention Center [sic] and was banned by Helen McIver for being a troublemaker. The applicant claimed an apology and compensation. I was invited by the University's Student Association of Marketing. Also that it was advertised in The Australian for the benefit of the public in how to do business in China and I had a legitimate expectation to go there in to [sic] network with important people and meet my old school friend ... . I was forced to quit the place as security guards led me away and the security camera has captured the moments. I told them I have diabetes and that they should atleast [sic] let me go to the toilet. They called the police with a dog to scare me off. 2. On 16 October 2006, a delegate of the President issued a notice of termination of the complaint under s 46PH(2) of the HREOC Act . 17 Full reasons for the delegate's decision were said to be contained in a letter to the applicant also dated 16 October 2006. You claim that on 27 March 2006 you attended a public forum held at the Convention Centre called "hypothetical" which was organised by the University. You allege that you were refused entry by Ms Helen McIver for being a 'troublemaker" for example complaining to this Commission. You allege that Ms McIver would not allow you to go to the toilet and that she asked security guards to escort from the premises [sic]. You claim that the reason for the refusal was due to having lodged a previous complaint against the University with this Commission. Response: The University response does not address the substantive issues in the complaint. The University claims that the subject matter of your complaint is the subject of proceedings in the Federal Court. It claims that in relation to the same incident you are claiming damage for breach of conduct [sic], misleading and deceptive conduct pursuant to the Trade Practices Act and in tort. The University made submissions that the complaint be terminated under sections 46PH(d) and/or (e) [sic] of the HREOCA. My Decision I am not satisfied that the subject matter of this complaint is the same subject matter of the current proceedings in the Federal Court and given this I am do not think [sic] it is appropriate to terminate the complaint under sections 46PH(d) or (e) [sic] of the HREOCA. However, I have decided to terminate the complaint pursuant to s 46PH(1)(i) of the HREOCA as I am satisfied that there is no reasonable prospect of the matter being settled by conciliation. 18 During 2007 I held a number of directions hearings in the present proceeding but the proceeding was not progressed pending the outcome of the appeal to the Full Court of this Court against the order dismissing the earlier proceeding. 19 I held a directions hearing in the present proceeding on 23 January 2008 after the Full Court of this Court had handed down its decision dismissing the appeal in the earlier proceeding. I was told that the applicant had made an application to the High Court for special leave to appeal against the Full Court's orders. Although I ultimately adjourned the matter, I did raise with the parties at that time the question of whether either or both of them would be submitting that I was disqualified from hearing the present proceeding. The applicant said that I had not accepted him as a credible witness. He referred to the fact that the respondents were seeking summary dismissal of the present proceeding and that, if that involved a question of law, "you can sit in a question of law". 20 I held a directions hearing in the present proceeding on 5 August 2008. I was told that the applicant's application to the High Court for special leave to appeal had been dismissed. Counsel for the respondents outlined the basis upon which he would be putting his submission that there ought to be an order under O 20 r 5 of the Federal Court Rules or s 31A of the Federal Court of Australia Act , or both. I again raised with the parties the question of whether either or both of them would be submitting that I should disqualify myself from hearing the present proceeding. Initially the applicant said that he would leave it to me and he then said he would not object to me sitting. The respondents have never suggested that I should not sit. 21 I heard argument on the respondent's application on 14 August 2008. Before that date, each party filed an outline of argument and, in his outline of argument, the applicant raised the possibility of me disqualifying myself. That led me to raise the question again with the applicant on 14 August 2008. The applicant said that he would, in effect, leave it to me. 22 Also on 14 August 2008, I was told that a sequestration order against the estate of the applicant had been made by the Federal Magistrates Court on the previous day. The parties made submissions on the effect of s 60 of the Bankruptcy Act 1966 (Cth) ("Bankruptcy Act") on the present proceeding. 24 The first relates to my involvement in the earlier proceeding. In the earlier proceeding I made serious credit findings against the applicant. In those circumstances, a question arose as to whether I should disqualify myself from hearing the present application on the ground of apprehended bias. The short answer to that question is no, because the applicant did not object to me sitting or ask me to disqualify myself and, in the circumstances, that was the decisive consideration. The circumstances to which I refer are that, although unrepresented, the applicant had full knowledge of the facts, namely, my involvement in the earlier proceeding and the nature of the present application. In addition, he had time for mature reflection, or even to obtain legal advice, as I raised the matter with him on a number of occasions. 25 An alternative ground for the conclusion that I should not disqualify myself from hearing the present application on the ground of apparent bias is this. The test for apparent bias is well-known and it is "whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide": Johnson v Johnson (2000) 201 CLR 488 at 492 [11] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ. In this case, if there is apparent bias, it takes the form of prejudgment. That form of bias was considered by the High Court in Livesey v The New South Wales Bar Association [1983] HCA 17 ; (1983) 151 CLR 288. In assessing that form of apparent bias in this case, the nature of the respondents' application is important. The respondents' application is not one in which I was called upon to make findings as to credit or, indeed, to make any findings of fact. The applicant's allegations of fact may be accepted for the purposes of the respondents' application. The questions raised by the respondents' application are, in substance, questions of law, and, having regard to all the circumstances, I do not think it can be said that a fair-minded lay observer might reasonably apprehend that I might not bring an impartial and unprejudiced mind to the question I am required to decide: Sydney Refractive Surgery Centre Pty Ltd v Federal Commissioner of Taxation (2007) 68 ATR 19 ; Commonwealth Bank of Australia v Taylor [2008] VSC 3. 26 The second matter concerns the effect of the sequestration order made on 13 August 2008 on the present proceeding. (3) If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action. 27 The applicant submitted that the present proceeding was not stayed by operation of s 60(2) because the proceeding is an action "in respect of a personal injury or wrong done" to him within s 60(4). The applicant was not represented and he was not able to make detailed submissions in support of that contention. The respondents accepted the proceeding fell within s 60(4)(a) as far as it involved a claim for unlawful discrimination. They did not address the issue any further than that, although in the course of their submissions on the substantive application, they submitted that in so far as the proceeding involves other claims, the proceeding is stayed by operation of s 60(2) of the Bankruptcy Act . 28 In Cox v Journeaux (No 2) [1935] HCA 48 ; (1935) 52 CLR 713 , Dixon J (as his Honour then was) considered the meaning of personal injury or wrong done to the bankrupt within s 63(3) of the Bankruptcy Act 1924-1933 (Cth). 29 The applicant's claim for unlawful discrimination seeks damages for physical and mental injury to the applicant and appears to satisfy the relevant test and therefore come within s 60(4)(a). On the face of it, as the same damage is claimed in relation to the other claims they also would come within s 60(4), but I have to say that I have not had the benefit of the type of submissions which would enable me to feel confident in reaching that conclusion. Furthermore, there is another point; there seems to be a prior question in relation to the other claims which was not addressed in submissions, namely, whether it is reasonably arguable that the loss and damage claimed is the type of loss and damage which can be recovered in respect of those causes of action. 30 In the result, it seems to me that the claim based on unlawful discrimination is within s 60(4)(a); the other claims may or may not be but, in any event, for reasons I will give they must be dismissed because the pursuit of them constitutes an abuse of process. 31 I turn now to the respondents' application and I start with the other claims. 32 Save and except for the alleged breaches of the deed of settlement (see the earlier judgment at [15]), all the causes of action in the present proceeding are different from those advanced in the earlier proceeding. Nevertheless, all the causes of action are based on the conduct of the second respondent acting for the first respondent on 27 March 2006 and its aftermath. The doctrine of res judicata may apply in relation to the cause of action in the present proceeding based on breaches of the deed of settlement but it does not apply to the other causes of action in the present proceeding. The doctrine of issue estoppel in the strict sense may apply to those causes of action, although it is difficult to be at all certain because of the lack of coherence in the applicant's pleadings in the present proceeding. The extended doctrine of issue estoppel as articulated in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 ; (1981) 147 CLR 589 ("Anshun estoppel") certainly applies in relation to all of the other claims and there is no reason they could not have been brought in the earlier proceeding. In the circumstances, the pursuit of the other claims is an abuse of process. 33 I turn now to consider the claim for unlawful discrimination. 34 In his amended statement of claim, the applicant alleges breaches or contraventions by the respondents of ss 5 , 6 , 22 and 24 of the DD Act . Section 22(1) plainly does not apply because, on any view, the alleged discrimination is not of a type which falls within the terms of that subsection. The thrust of his allegations as set out in his amended statement of claim is that he was refused entry to the Hypothetical because he was considered to be a "troublemaker". There is no clear allegation in the amended statement of claim or in any of the affidavits filed by the applicant in the proceeding (and he has filed five affidavits) that he was refused access to either the venue or a toilet at the venue because of a 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. The right to make an application to the Federal Court or the Federal Magistrates Court alleging unlawful discrimination by one or more of the respondents to a complaint only arises when the complaint has been terminated by the President, and the President has given notice of the termination: HREOC Act s 46PO(1). Subsections (3) and (4) of s 46PO should also be noted; they provide respectively that there must be a correlation between the unlawful discrimination alleged in the application and the unlawful discrimination alleged in the complaint, and for the type of orders a court may make if satisfied there has been unlawful discrimination. 41 "Unlawful discrimination" is defined in s 3 of the HREOC Act to mean any "acts, omissions or practices" that are unlawful under certain pieces of legislation, including Pt 2 of the DD Act . 42 There are two independent grounds upon which I conclude that the pursuit of the claim for unlawful discrimination is an abuse of process. 43 First, in my opinion, to relitigate the events of 27 March 2006 is an abuse of process and the pursuit of the claim for unlawful discrimination would involve a relitigation of the events of 27 March 2006. The Court has a wide jurisdiction to protect a party from an abuse of process constituted by an attempt to relitigate a case already disposed of: Walton v Gardiner [1993] HCA 77 ; (1993) 177 CLR 378 at 392-393 per Mason CJ, Deane and Dawson JJ. It seems clear on the authorities that a proceeding may constitute an abuse of process because it involves an attempt to relitigate a dispute already judicially determined even though none of the doctrines of res judicata , issue estoppel in the strict sense or an Anshun estoppel are made out: Coffey v Secretary, Department of Social Security [1999] FCA 375 ; (1999) 86 FCR 434 at 443 [25] ; Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 at [58] - [70] per French J; SZAJB v Minister for Immigration and Citizenship (2008) 168 FCR 410 at 423 [37]-[39] per French J (with whom Tracey J agreed at 437 [114]); Brock v Minister for Home Affairs (2008) 170 FCR 434 at 447 [74] per Lindgren and Tracey JJ. The claim for unlawful discrimination represents an attempt to relitigate the events of 27 March 2006 and is an abuse of process. I am mindful of the fact that, as events transpired, the claim for unlawful discrimination could not have been brought in the earlier proceeding, but that does not dissuade me from reaching the conclusion that I have expressed. The fact is that it was the applicant who decided to institute the earlier proceeding the day after the relevant events, to lodge his complaint with the Commission about three weeks after the relevant events, and to wait until 14 July 2006 before advising the Court that he had lodged a complaint with the Commission. 44 The other independent ground for dismissing the claim for unlawful discrimination is that, in my opinion, the applicant has no reasonable prospect of successfully prosecuting the claim. There is no allegation of a disability in the statement of claim, nor is there an allegation that the applicant was treated less favourably than a person without a disability. The fact that the applicant was refused entry to the Hypothetical because he was considered to be a troublemaker does not give rise to unlawful discrimination within s 22 and s 24 of the DD Act . 45 This is not a case in which it would be appropriate to give the applicant leave to re-plead because in all the material filed by the applicant there is no suggestion that the applicant has a reasonably arguable case of unlawful discrimination. 46 In my opinion, the proceeding must be dismissed. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

stay of actions upon bankruptcy exception for "personal injury or wrong done to the bankrupt" whether disability discrimination claim within exception bankruptcy

The respondents did not appear at the hearing of this appeal and have filed no submissions. The Commissioner contends that the Tribunal applied the wrong test on penalties as a matter of substantive law and that had it applied the correct test a different conclusion would have resulted. It contends that there were procedural errors of sufficient seriousness to constitute errors of law and that the matter should be remitted to the Tribunal. 2 It is apparent on reading the record of the hearing that the question of penalties was not fully debated. Indeed the written submissions for the respondents were not produced until after the hearing such that the Commissioner, in effect, did not have the opportunity to respond to them. In the Tribunal, the respondents contended and the Tribunal appears to have accepted, that if the Tribunal found that there was no properly allowable deduction under s 51(1) of the Income Tax Assessment Act 1936 (Cth) (the Act), Pt IVA would not require consideration and therefore there could be no penalties imposed under s 224(2) of the Act which referred to a Pt IVA circumstance. In my view that submission misconstrues the effect of Pt VII of the Act. Secondly, it was contended that as Pt VII required consideration of the subjective purpose, in contrast to the objective evaluation for Pt IVA , that the evidence from the respondents as to their purpose, precluded the application of Pt VII. Again, that submission depended on whether the evidence as to purpose was to be accepted. The conclusions reached by the Tribunal in relation to s 51(1) strongly suggest otherwise. It is entirely possible that had there been a full debate in relation to this issue, the conclusion on penalties would have been different. In those circumstances and for the reasons expressed below it is desirable and necessary that the matter be remitted to the Tribunal. Section 222A. 6 The Commissioner informed the respondents by way of correspondence containing his Position Paper as to the view he took in relation to deductions claimed in connection with the Satcom Financial Services arrangements. 7 The respondents were informed by the Commissioner that there were no circumstances relating to the franchise arrangement that would justify a reduction in the penalty rates imposed by either ss 226 or 226L of the Act. It was indicated, however, that individual circumstances would be considered in determining whether it was appropriate to remit part of the penalty in particular cases. The respondents were given the opportunity to apply for concessional treatment of penalties by providing information voluntarily. 8 When the amended assessments were issued by the Commissioner to disallow the claimed deductions, as required by s 227 in Pt VII of the Act, the amended assessment issued to each respondent included the penalty imposed by s 226L, alternatively pursuant to s 224 (in the case of disallowance in part under s 82KZM) and s 226(1). 9 There was no penalty imposed or assessed pursuant to s 224(2) and penalty imposition is not authorised by that section alone. 10 The respondents objected to the Commissioner's decision to disallow the deductions and impose penalties. Each notice of objection asserted that the Commissioner was not authorised to impose a penalty pursuant to s 226L of the Act. The objection was also grounded on the basis that there was no tax avoidance scheme within the meaning of s 224 of the Act. 11 The Commissioner subsequently disallowed objections by the respondents having decided that the penalty had been properly imposed and no reduction was appropriate. The respondents sought review by the Tribunal of the objection decisions. However whether or not a penalty applied was not articulated as being an issue for the purpose of the Tribunal hearing. In relation to the each of the respondents, the Tribunal set aside the decision under review, affirmed it except in relation to the imposition of penalties and remitted the matter to the Commissioner for the issue of amended assessments in accordance with the Tribunal's decision. 13 The Tribunal took the view that having disallowed the claimed deductions under s 51(1) of the Act it was unnecessary also to review the Commissioner's determination under s 177F(1) of the Act which had been to the effect that each respondent had obtained in connection with the franchise arrangement a tax benefit within the meaning of s 177C(1) and s 177D of the Act in the form of the claimed deductions. 14 In order to reach its finding that the outgoings were not incurred for the 'purpose' of gaining or producing assessable income, the Tribunal concluded that the franchise arrangements entered into by the applicants 'lacked the necessary profit making purpose'. The Tribunal found that the claimed deductions were incurred for the purpose of obtaining the tax deductions which facilitated their investment. In making this finding, the Tribunal relied upon the principles enunciated by the High Court in Fletcher v Commissioner of Taxation [1991] HCA 42 ; (1991) 173 CLR 1 and by the Federal Court in Ure v Commissioner of Taxation (Cth) (1981) 34 ALR 237. The relationship between the outgoing and the assessable income must be such as to impart to the outgoing the character of an outgoing of the relevant kind. It has been pointed out on many occasions in the cases that an outgoing will not properly be characterized as having been incurred in gaining or producing assessable income unless it was "incidental and relevant to that end" See, eg, Ronpibon Tin (1949) 78 CLR, at 56; Charles Moore and Co (WA) Pty Ltd v Federal Commissioner of Taxation [1956] HCA 77 ; (1956) 95 CLR 344 , at 350; Lunney v Commissioner of Taxation [1958] HCA 5 ; (1958) 100 CLR 478 , at 497; John (1989) 166 CLR, at 426; Ure v Federal Commissioner of Taxation (1981) 50 FLR 219, at 223, 231; 34 ALR 237 , at 241, 248; Riverside Road (1990) 23 FCR, at 311 and 312. It has also been said that the test of deductibility under the first limb of s51(1) is that "it is both sufficient and necessary that the occasion of the loss or outgoing should be found in whatever is productive of the assessable income or, if none be produced, would be expected to produce assessable income" See, eg, Ronpibon Tin (1949) 78 CLR, at 57; John (1989) 166 CLR, at 426. So to say is not, however, to exclude the motive of the taxpayer in making the outgoing as a possibly relevant factor in characterization for the purposes of the first limb of s51(1). At least in a case where the outgoing has been voluntarily incurred, the end which the taxpayer subjectively had in view in incurring it may, depending upon the circumstances of the particular case, constitute an element, and possibly the decisive element, in characterization of either the whole or part of the outgoing for the purposes of the sub section See, eg, W Nevill and Co Ltd v Federal Commissioner of Taxation [1937] HCA 9 ; (1937) 56 CLR 290 , at 301, 308; Federal Commissioner of Taxation v South Australian Battery Makers Pty Ltd [1978] HCA 32 ; (1978) 140 CLR 645 , at 660; John (1989) 166 CLR, at 426; Magna Alloys and Research Pty Ltd v Federal Commissioner of Taxation (1980) 49 FLR 183, at 189; [1980] FCA 150 ; 33 ALR 213 , at 218 and 219; Ure (1981) 50 FLR, at 231 and 232; 34 ALR, at 248 and 249; Federal Commissioner of Taxation v Ilbery (1981) 58 FLR 191, at 199 to 201; [1981] FCA 188 ; 38 ALR 172 , at 179 and 180. In that regard and in the context of the sub section's clear contemplation of apportionment, statements in the cases to the effect that it is sufficient for the purposes of s51(1) that the production of assessable income is "the occasion" of the outgoing, ... or that the outgoing is a "cost of a step taken in the process of gaining or producing income", see John (1989) 166 CLR, at 427, are to be understood as referring to a genuine and not colourable relationship between the whole of the expenditure and the production of such income. Nonetheless, it is commonly possible to characterize an outgoing as being wholly of the kind referred to in the first limb of s51(1) without any need to refer to the taxpayer's subjective thought processes. That is ordinarily so in a case where the outgoing gives rise to the receipt of a larger amount of assessable income. In such a case, the characterization of the particular outgoing as wholly of a kind referred to in s51(1) will ordinarily not be affected by considerations of the taxpayer's subjective motivation. If, for example, a particular item of assessable income can be earned by making a lesser outgoing in one of two possible ways, one of which is a loss or outgoing of the kind described in s51(1) and the other of which is not, it will ordinarily be irrelevant that the taxpayer's choice of the method which was tax deductible was motivated by taxation considerations or that the non deductible outgoing would have been less than the deductible one. In such a case, the objective relationship between the outgoing actually made and the greater amount of assessable income actually earned suffices, without more, to characterize the whole outgoing as one which was incurred in gaining or producing assessable income. If the outgoing can properly be wholly so characterized, it "is not for the Court or the commissioner to say how much a taxpayer ought to spend in obtaining his income, but only how much he has spent". See, eg, Ronpibon Tin (1949) 78 CLR, at 60; Cecil Bros Pty Ltd v Federal Commissioner of Taxation [1964] HCA 82 ; (1964) 111 CLR 430 , at 434. The position may, however, well be different in a case where no relevant assessable income can be identified or where the relevant assessable income is less than the amount of the outgoing. Even in a case where some assessable income is derived as a result of the outgoing, the disproportion between the detriment of the outgoing and the benefit of the income may give rise to a need to resolve the problem of characterization of the outgoing for the purposes of the sub section by a weighing of the various aspects of the whole set of circumstances, including direct and indirect objects and advantages which the taxpayer sought in making the outgoing. See, eg, Robert G Nall Ltd v Federal Commissioner of Taxation [1937] HCA 88 ; (1937) 57 CLR 695 , at 699 and 700, 706, 708 and 709, 712 and 713. Where that is so, it is a "commonsense" or "practical" weighing of all the factors which must provide the ultimate answer. See, eg, BP Australia Ltd v Commissioner of Taxation of the Commonwealth of Australia [1966] AC 224 , at 264; Hallstroms Pty Ltd v Federal Commissioner of Taxation [1946] HCA 34 ; (1946) 72 CLR 634 , at 648; Federal Commissioner of Taxation v Foxwood (Tolga) Pty Ltd [1981] HCA 24 ; (1981) 147 CLR 278 , at 285, 293. If, upon consideration of all those factors, it appears that, notwithstanding the disproportion between outgoing and income, the whole outgoing is properly to be characterized as genuinely and not colourably incurred in gaining or producing assessable income, the entire outgoing will fall within the first limb of s51(1) unless it is either somehow excluded by the exception of "outgoings of capital, or of a capital, private or domestic nature" or "incurred in relation to the gaining or production of exempt income". If, however, that consideration reveals that the disproportion between outgoing and relevant assessable income is essentially to be explained by reference to the independent pursuit of some other objective and that part only of the outgoing can be characterized by reference to the actual or expected production of assessable income, apportionment of the outgoing between the pursuit of assessable income and the pursuit of that other objective will be necessary. The Tribunal did conclude that it accepted the contentions for the respondents that penalties ought not to be imposed. The submissions for the respondents on this point were very brief. In the event that the Tribunal is of the view that the expenditure claimed by the Applicants is not properly allowable under the general deduction provisions of section 51(1) of the 1936 Act and the consequential non application of Part IVA of the 1936 Act, the Applicant is not liable to pay any penalties pursuant to section 224(2) of the 1936 Act. 81. The clear effect of his Honour Justice French's judgment in Starr v Commissioner of Taxation of the Commonwealth of Australia [2007] FCA 23 and Hopkins v Commissioner of Taxation of the Commonwealth of Australia [2007] FCA 23 is that the Respondent must have regard to the Applicant's actual or subjective purpose in determining whether penalties under section 224(2) of the 1936 Act can be imposed. The Respondent cannot disregard the Applicants' actual purpose (as can be done under Part IVA of the 1936 Act). 82. Given the Applicants evidence that his actual purpose of investing in the Project was to derive assessable income there from, the Respondent is not entitled to impose any penalties under section 224(2) of the 1936 Act. We haven't addressed the question of penalties. It is our submission that that question ought to await the Tribunal's reasons, because there may be other sections than those upon which penalty was assessed, which could be relevant and it's not until the Tribunal has delivered reasons that the question of penalties can be really addressed for that reason. 18 There was neither objection to this course or any response from the Tribunal. As it happened, the Tribunal delivered its decision including its ruling on penalties without hearing further submissions from either party. 19 The Tribunal's ruling on penalties was brief. The Tribunal accepts the contentions of the applicants that no penalties should be imposed on the applicant. The Commissioner contends, had the opportunity been afforded to him, that contrary and arguably correct submissions would have been made resulting in a different ruling from that made. 22 The hearing of the Tribunal commenced a short time after French J delivered the decision in Starr v Commissioner of Taxation [2007] FCA 23. After delivery of this decision, his Honour's decision was unanimously upheld in the Full Federal Court in Commissioner of Taxation v Starr [2007] FCAFC 204 ; (2007) 164 FCR 436. 23 As observed by both French J and the Full Court in each of those decisions, the terms and effect of s 224(2) of the Act are to simply provide a definition. The definition of 'tax avoidance scheme' in s 224(2) is relevant in determining whether there is a 'scheme' for the purpose of imposition of a penalty under s 224 or s 226L of the Act where it is incorporated into s 226L(c) by reference. Section 224(2) does not of itself operate to impose any liability for additional tax. Its function is simply to provide a definition for the purpose test of s 226L(c). On the face of the reasons, it appears that the Tribunal did not go on to consider the application of s 226L or the application of Pt VII of the Act generally. 24 By its grounds of appeal, the Commissioner contends that s 226L is applicable following the Tribunal's findings in the application of s 51(1). Even though the Tribunal's finding on s 51(1) precluded any necessity for the Tribunal to go on to consider the tax avoidance provisions of Pt IVA for the purpose of s 177F(1) nevertheless, for the purpose of considering a penalty, it became necessary for the Tribunal to consider s 226L. The question for the Tribunal was whether in all the circumstances, the imposition of the penalty under Pt VII was properly assessed in the case of each respondent. On the face of the matter, a strong indication that s 226L was applicable may be found in the Tribunal's findings as to the purpose of each of the respondents in incurring the claimed deductions. But for this appeal, it is unnecessary to reach a firm conclusion on that point. It is sufficient to say that under s 226L(a) and (b), tax shortfalls arose from each respondent returning an income tax return for claimed deductions in relation to the franchise/s as allowable deductions under s 51(1) of the Act, which the Tribunal confirmed were not allowable as deductions under that subsection. Secondly, given the width of definition of a 'scheme' the franchise arrangements referred to in s 226L(b) and (c) of the franchise arrangements were likely to be a scheme for the purpose of Pt IVA and s 224(2). 25 In Starr [2007] FCAFC 204 ; 164 FCR 436 , the Full Court in confirming the decision of French J at first instance also held that the s 224(2) definition in s 226L(c) looks to the subjective purpose of the person/s who participated in a scheme (as defined in s 177A(1) of the Act). This subjective purpose test in the context of s 226L is to be contrasted with the well established objective test that must be undertaken in determining whether Pt IVA applies to a scheme (as defined in s 177A of the Act). 26 As the material finding of the Tribunal was that the claimed deductions had been incurred by the respondents for the purpose of obtaining tax deductions, it would seem a short step to conclude that the franchise arrangement was a 'scheme' and a 'tax avoidance scheme' within the meaning of s 224(2) and carried out for the sole or dominant purpose of enabling each respondent to pay less tax by the claimed deductions. Again, it is not necessary to reach a conclusion on that point but on its face it would appear to be arguable and because of the circumstances of the hearing as described above, was not considered by the Tribunal. 27 This argument would have been put by the Commissioner had the opportunity to do so arisen, yet it was unable to do so. As the argument on its face appears to have merit, on this ground alone, in my view, the matter should be remitted to the Tribunal for further consideration on this point. The Commissioner also contends that the inability to discern the precise reason for the Tribunal's reasons on penalty results in non-compliance with s 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). In simply adopting the submissions of the respondents, in this particular circumstance, it is argued that there has not been compliance with s 43(2B). 29 I reiterate that there were no oral submissions for the respondents on penalty at all and all that appears by way of submissions for the respondents on penalty is contained in the three short paragraphs cited above. It is clear that the Commissioner would have put the primary submissions referred to above in response had it had the opportunity to do so. On their face, those submissions appear to be of greater weight than the submissions pertaining to s 224(2) for the reasons already outlined. 30 Given my conclusion that the Commissioner must have the opportunity to put this argument to the Tribunal, it is unnecessary to rule on this ground of appeal. While the reasons given in relation to penalty are extremely brief, it must be recognised that it is in the context of an otherwise lengthy judgment of the Tribunal. The Court recognises the Tribunal's expertise and the importance of being able to deal with matters in a less formal manner. The Court would be slow to be overly critical and particularly slow to take one passage out of context without considering it in the entirety of the preceding 198 paragraphs of the judgment. However, it is unnecessary to decide this ground. I would only observe that there is no doubt that senior counsel for the Commissioner did request the opportunity to address on penalties after delivery of the decision. This request was made in the context of a complete absence of any submissions at all at that point from the respondents. In the circumstances of this case the request made was entirely reasonable. It seems unlikely that further evidence would be necessary but it is desirable that the Tribunal clarify the position on penalties. It is certainly arguable that s 226L of the Act applies. It is a matter for the Tribunal, after hearing argument, to express its reasons on whether or not liability for a penalty applies in the case of each of the respondents. That part of the decision of the Tribunal dated 31 July 2007 and given on 1 August 2007 at Perth by which the Tribunal concluded that no penalties should be imposed on the respondents will be set aside and the matter will be remitted to the Tribunal to reconsider that question according to law. 2. The respondents are to pay the applicant's costs to be agreed or taxed. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

imposition of penalty tax appropriate purpose for penalty considerations whether tribunal's reasons adequate income tax

I ordered the parties to submit a draft determination and related orders within 6 weeks. Both the applicants and the Northern Territory submitted final draft determinations, with the Pastoral respondents primarily in agreement with the draft submitted by the Northern Territory. The final draft determinations left a number of issues to be resolved. The following indicates, in a summary way, how these issues should be resolved. The final determination is Annexure 1 to these reasons. Unless I indicate otherwise, the reference to a clause is to the clause in the final determination. References to "the reasons" are to the reasons given on 26 June 2007. 2 First, there is an issue in relation to liberty to apply concerning structures (Order 5(c)). There is no evidence that structures were not constructed lawfully. Indeed, there is probably a legal presumption that they would have been constructed lawfully. The liberty to apply should be in the terms proposed by the Northern Territory. 3 The second issue concerns the garbage reserve (clauses 11 and 12 of the applicants' draft determination and consequential references). I did not intend, by my reasons, to indicate that only certain native title rights and interests were extinguished. The examples given in those reasons were illustrative only. My conclusion is reflected in the terms proposed by the Northern Territory. 4 It is not clear whether there is a residual issue about clause 8. At one point the applicants contended that the word "confer" should be included in that clause though the matter was not pursued in submissions. The inclusion of the word appears to me to be unnecessary and potentially misleading. The clause should be in the terms proposed by the Northern Territory. 5 It is not clear whether there is a residual issue about clause 11(e). At one point the applicants appeared to suggest there should not be reference to lot 1 of the Township. There should be. The clause should be in the terms proposed by the Northern Territory. 6 There is an issue at about how clause 12, the relationship clause, should be expressed. Clause 8 declares the native title rights and interests in exclusive areas. Clause 12, concerns the relationship between rights and interests in the non-exclusive areas and other rights and interests in those areas (being the other rights and interests identified in clause 11). The Northern Territory contends that clause 12 should make reference to clause 8 which concerns native title rights and interests in the exclusive areas. The applicants resist this. There is also an issue about whether the words "but did not extinguish" should be included in this clause. The Pastoralists oppose their inclusion but, if included, should be qualified by the words "except in accordance with law". 7 As to this second issue, it is a new issue of potentially some significance which should have been raised during the hearing. No relevant concession was made by the applicants. I accept the submission of the applicants that the vast preponderance of determinations included the contentious formulation ("but did not extinguish") which appears also to be conformable with s 44H(c) of the Native Title Act 1993 (Cth). I am not persuaded it is clearly inappropriate for the words to be included nor am I persuaded that the qualification proposed by the Pastoralists is plainly necessary. Had the Pastoralists sought to agitate this issue at the hearing, it could have first been addressed by the parties and then in a reasoned judgment. The exclusive areas to which clause 8 relates are identified in schedule C, item 1(a) which are certain areas in the Town of Newcastle Waters. The interests in clause 11 include interests arising from the various pastoral leases, interests in relation to stock routes and miscellaneous interests including "the right 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" (clause 11(j)). As a matter of fact, it is highly probable, at the least, that many of these rights and interests (for example those of the pastoral leaseholders) would not and probably could not be exercised in relation to the exclusive areas (the areas in the Township identified in schedule C, item 1(a)). However the applicants accept that the rights identified in clause 11(j) can be exercised in the face of the native title rights and interests in the exclusive areas. It appears to me that this concession warrants the inclusion of a reference to clause 8 in clause 12 without determining whether it is necessary as a matter of law and notwithstanding, as just mentioned, most of the rights and interests identified in clause 11 probably have no legal or practical relevance to the exercise of the native title rights and interests in the exclusive areas. 9 The remaining issues concern schedule D. There is an issue about the description of the lots in the Town of Newcastle Waters in that schedule. The Northern Territory proposes that the lots where native title rights and interests have been wholly extinguished simply be described by their lot numbers. The applicants suggests that in relation to certain lots the additional words "in respect of which there are being grants of freehold or leasehold estates" be added and, in relation to other lots, the words "in respect of which public works have been constructed or established". The applicants' suggestion appears to me to be unnecessary. Schedule D is simply a description of areas. They are sufficiently described by identifying the lots. My earlier reasons for judgment reveal why native title rights and interests have been wholly extinguished. 10 Also in relation to schedule D, there is an issue about how the homestead and related buildings and structures should be described. The applicants propose "a homestead house, shed and buildings". The competing formulation is "the homestead complex". In view of the inclusion of the expression "any adjacent land", the formulation of the applicants is to be preferred. 11 Again in relation to schedule D, there is an issue at about how the homestead and highway airstrips should be identified. For greater precision, it is appropriate to include the words "on NT portion 2093". 12 Again in relation to schedule D, there is an issue at about whether reference should be made to "any constructed yard airstrips" and "any constructed roads". As discussed in my reasons for judgment, the evidence did not establish the existence of improvements of this type. It would potentially be misleading to refer them in schedule D and they should not be included. 13 Again in relation to schedule D, it appears to be suggested that the expression "exclusive use of which is necessary" in item 4 is inapt. I dealt with this at [165] of the reasons. The applicants' formulation reflects those reasons and should be adopted. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. The determination area is the land and waters described in Schedule A hereto and depicted on the map comprising Schedule B ('the determination area'). 2. 5. (These persons are collectively referred to as 'the estate group members'. In relation to the exclusive areas, the native title rights and interests 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, possession, occupation, use and enjoyment to the exclusion of all others. 9. 10. 12. To the extent, if at all, that the exercise of the native title rights and interests referred to in clauses 8, 9 and 10 conflicts with the exercise of the rights and interests of the persons referred to in clause 11, the rights and interests of the persons referred to in clause 11 prevail over, but do not extinguish, the native title rights referred to in clauses 8, 9 and 10. 14. 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. 15. In relation to the non-exclusive areas, 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. 1791 which is reserved for the purposes of commonage. (ii) NT Portions 4273, 4274 and 5147. 4. ), (S 17.39873deg., E 133.45344deg. ), (S 17.39928deg., E 133.45452deg. ), (S 17.40010deg., E 133.45452deg. ), (S 17.21734deg., E 133.47155deg. ), (S 17.21809deg., E 133.47283deg. ), (S 17.21778deg., E 133.47155deg. ), (S 17.31580deg., E 133.43305deg. ), (S 17.31485deg., E 133.43338deg. ), (S 17.31542deg., E 133.43403deg. ), (S 17.59099deg., E 133.55384deg. ), (S 17.59003deg., E 133.55270deg. ), (S 17.58893deg., E 133.55344deg. 11 Bore) approximately 1.7km south of the Buchanan Highway, with the GPS co-ordinates of S 16.77074deg., E 132.56003deg., together with an access track of a width of approximately 5 metres from the Buchanan Highway to the bore.

determination of native title native title

The Tribunal had affirmed the decision of a delegate of the Minister for Immigration and Multicultural Affairs to refuse grant of a protection visa to the appellant, which decision was made on 31 January 2001. 2 The appellant is a 56-year-old woman who is a citizen of the Ukraine. Before the Tribunal the appellant testified that she was an unprotected woman who was advanced in years, relatively speaking, and whose only living family members comprise her adult married daughter and two teenage grandchildren who all reside in Australia together respectively with her husband. That daughter and son-in-law attended Court on the occasion of the present appeal. Their concern for the appellant, though tacitly expressed, evinced obvious anxiety. 3 The appellant claimed that women living alone in the Ukraine can be subjected to attacks and there was no protective assistance for her against those circumstances, in the event of her return to the Ukraine. Pre-eminent however to the appellant was her understandable desire to remain in Australia with her daughter, her daughter's husband and grandchildren, who comprise realistically her only living relatives. 4 After the murder of her brother in 1994, the appellant testified as to being frightened and insecure. The appellant's health began to deteriorate following this event. Her claims included the circumstance that she worked in the Office of Interior Security, in that she could be harmed because of her access to information relating to her workplace. 5 The appellant's claims related also to the circumstance that she had suffered a serious fall whilst in the Ukraine, a circumstance exacerbated by the inadequacy of medical services available in the Ukraine. Additionally, the appellant claimed that she might well be harmed by her community in the Ukraine because of a perception that she would have money upon her return from overseas. 6 The Tribunal observed that the appellant did not articulate how her fear of persecution fell into one or more of the five reasons enumerated in the Convention definition; namely, race, religion, nationality, membership of a particular social group or political opinion. The Tribunal further observed that the only Convention reason conceivably open to the appellant on the basis of the evidence which she provided was the ground of persecution based on membership of a particular social group. The Tribunal was not persuaded there existed a real chance that serious harm would befall the appellant for a Convention reason upon her return to the Ukraine in the reasonably foreseeable future. Although unable to grant the visa, the Tribunal recorded that there may well be humanitarian grounds why the application for the visa should succeed. 9 The appellant filed on 2 March 2004 an application in the Federal Magistrates Court for judicial review of the Tribunal's decision. The appellant filed an amended application on 19 October 2004 which raised various grounds of review. The appellant claimed that the Tribunal overlooked some critical points of her case and did not address all the relevant issues she had raised, including whether she was considered a 'traitor' because of the anti-governmental views of her family. The appellant also claimed the Tribunal: failed to ask relevant questions, failed to determine whether the appellant was subject to persecution because of her imputed political opinion, failed to determine the 'particular social group' the applicant belonged to, and failed to enquire as to whether the appellant's past or future conduct would amount to persecution. The appellant also referred the Court below to the decision of SZARH v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FMCA 615 , which was said by the appellant to raise similar issues to her proceedings currently before the Court. 10 The appellant's application below was heard on 22 May 2006, and a further submission was filed on 2 June 2006. Although the appellant did not seek leave to raise that further submission, the Federal Magistrate decided to consider the matters the subject thereof. That submission dealt in substance with the implications of the filing out of time of her application for review, and referred the Court below to judicial precedents purportedly supportive of the appellant's claims in that regard. 11 The Federal Magistrate was satisfied the appellant had established a reasonable excuse for the delay in bringing the application for review. In considering the appellant's substantive claims, the Federal Magistrate found that the Tribunal did consider the aspects of the appellant's claims and that there was no evidence that any claim to the effect that the appellant was a 'traitor' was ever made to the Tribunal. The Federal Magistrate considered the appellant's contention that the Tribunal did not properly consider her claim to be a member of a particular social group. In any event, the nature of the particular social group claimed by the applicant in the submission was not put to the Tribunal, on the evidence before me". In relation to the authorities cited by the appellant, his Honour distinguished the same on the facts. The Federal Magistrate found that no case for jurisdictional error was made out and dismissed the application. 13 The Federal Magistrate was also of the opinion that there existed strong compassionate reasons based upon and referrable to humanitarian grounds, which relate largely to the circumstances of the appellant's age, single status and family circumstances. 14 The notice of appeal filed in the Federal Court raised the following grounds: that the Tribunal failed to assess the appellant's 'claims against proper information' and that the Federal Magistrate and the Tribunal misunderstood the appellant's particular social group. 15 The appellant, by way of submissions dated 10 November 2006, submitted that the Tribunal assessed her claims against 'all women advanced in years and living alone in Ukraine'. The appellant contended that the Tribunal should have particularised her social group as 'aged, single women who had relatives overseas, who travelled overseas and who are considered as the ones who had money'. The appellant further submitted that had the Tribunal assessed her claims against that second particular social group, 'it would have no difficulty to accept that [her] claims are Convention-related because there would have been a great deal of independent information consistent with my claims'. 16 At the hearing of the appeal before me, the appellant was unrepresented and unable to articulate any case for refugee status beyond what was contained in her submissions. She was accompanied by her only relatives, whom I have foreshadowed to be her daughter, and her daughter's husband, both of whom permanently reside in Australia with their two children (being of course the appellant's grandchildren). This is my only daughter. I just want to die when somebody can look after me. I am so stressed out, it is so difficult for me that I don't even know what I am saying now. She is the only daughter I have. I used to work in the Ministry of Internal Affairs so I know what I was there. I am so scared that I will end my life tortured just because they want some money from me. My brother was killed because of the flat, the apartment issues. I read the newspapers, I'm watching the TV programs. I know, I understand what is happening over there. People disappear, nobody can trace them out, they come to find them. I am not scared just to die but I just don't want to be kidnapped and create all this problem, and they will demand money for my release, and I am an honest person. My daughter is a very capable member of Australian society and I wanted to be with her so I can help her a little bit so she can work. That would be really beneficial for me as well because she could look after me and she wouldn't worry and stress out, how am I going over there? My health is in a not very good state, but I am ready to die, just not be a problem. I was a single mother and I brought up my daughter on my own and she has got responsibilities towards me. That is her duty now, to look after me. That's our culture, this is in our culture. The children have to look after the parents. First, the group must be identifiable by a characteristic or attribute common to all members of the group. Secondly, the characteristic or attribute common to all members of the group cannot be the shared fear of persecution. Thirdly, the possession of that characteristic or attribute must distinguish the group from society at large. Borrowing the language of Dawson J in Applicant A (59), a group that fulfils the first two propositions, but not the third, is merely a "social group" and not a "particular social group". As this Court has repeatedly emphasised, identifying accurately the "particular social group" alleged is vital for the accurate application of the applicable law to the case in hand (60). The Minister referred to NABE v Minister for Immigration and Indigenous Affairs (No2) [2004] FCAFC 263 ; (2004) 144 FCR 1 in support of that contention. Your Honour, plainly there are humanitarian aspects in this case. They were referred to by the learned Magistrate. I'm sure your Honour is fully cognisant of them, but all we can do is draw the remarks of the Magistrate and if your Honour makes any similar remarks, your Honour's remarks to the attention of the Department. Ultimately there is nothing more we can do because it's a matter purely for the Minister. It is also my opinion that the observations made by counsel for the Minister were entirely apposite, and I would wholly endorse what he thus frankly and responsibly indicated. I would respectfully recommend to the Minister that there be a reconsideration of the evident plight of the appellant and the understandable concern and anxiety of her only close relatives, who now live in Australia as Australian citizens. The appellant's case is in my respectful view very strong on compassionate grounds, being an opinion in line with that of the Federal Magistrate below. 22 The appeal must be dismissed. I also make an order, nunc pro tunc, that the Refugee Review Tribunal, which was a party to the proceedings below, be joined as a respondent to the application. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

whether tribunal failed to ask relevant questions whether tribunal failed to determine the 'particular social group' the applicant belonged to migration

2 The background to that application is that the applicant had arrived in Australia as a visitor from China in November 2004, and had been taken into detention some weeks after her arrival for what were considered to be breaches of her visa. Whilst in detention, she engaged an experienced firm of solicitors to prepare and lodge a protection visa application, which duly occurred on 14 February 2005. Her claim was that she was a national of China who had left that country to seek protection in Australia because she was inhibited in China from practicing Falun Gong. Her visa application was refused by the Minister's delegate on 10 March 2005, and her application to the Refugee Review Tribunal for review of that decision was subsequently refused on 17 June 2005, pursuant to a decision bearing date 16 June 2005. 3 Thereafter the applicant sought judicial review of the Tribunal's decision from the Federal Magistrates Court, and upon the basis of comprehensive reasons for judgment, Federal Magistrate Smith dismissed the application upon the basis that the Tribunal's decision was not affected by any jurisdictional error, and was thus a ' privative clause decision' within s 474(1) of the Migration Act 1958 (Cth). In the course of those reasons extending over 47 paragraphs, his Honour undertook a thorough review of the background to the application and of the consequential findings which he thereupon made, and also of the legal consequences of those findings. In those proceedings, the applicant was legally represented. 4 The applicant filed a supporting affidavit in this Court, presumably handwritten by another person on her behalf, which sought to explain the reasons for her delay in making the present application, and in which she detailed her practice of the Falun Gong religion in China. In the present proceedings, the applicant was not legally represented. When the present proceedings were called on for hearing, the applicant was unable to articulate virtually anything by way of address to the Court, because of her emotional and tearful state and condition. I have no reason to believe, in that regard, that her condition of distress was otherwise than entirely genuine. Following upon my adjourning the Court to hear another matter and thus to allow the applicant some time for composure, the applicant was still unable to articulate orally anything approaching a viable basis for an appeal against the Federal Magistrate's decision, assuming that leave to appeal out of time might be granted. She was accompanied at the hearing by a female person who appeared to be an acquaintance. 5 The outcome was that the Court was left with no viable basis having been articulated as to why the reasons for decision of the Federal Magistrates Court were otherwise than soundly conceived. All in all, it was an emotional, if not also sad occasion for the Court to entertain, but I could not do otherwise than dismiss the application and make an adverse order as to costs. The reasons for judgment of Smith FM were soundly articulated and reasoned, and no error in that reasoning was, in my opinion, exposed. Orders of the Court were made accordingly. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti J.

no special or particular principle arising migration

The appeal is made pursuant to s 14ZZ(a) of the Taxation Administration Act 1953 (Cth). Mr Romanin seeks orders allowing his appeal against the Commissioner's Notice of Decision on Objection and accordingly seeks orders reducing his taxable income for the years in question. 3 The Macro claim arose in relation to the cessation of Mr Romanin's employment with the company around 1999. Mr Romanin entered into a deed of settlement with Macro. Mr Romanin claimed deductions for the legal expenses incurred and paid in relation to advice obtained in connection with this claim (these expenses are not in issue in the current appeal). 4 In June 1999 Mr Romanin was recruited by Drake Personnel Limited as acting General Manager and Company Secretary for the Co-op. He was paid $8,000 per week. This equated to an annual salary of $416,000 plus 9% superannuation. His appointment as acting General Manager followed the Co-op's suspension of its previous general manager. Mr Romanin explained that the environment at the Co-op was hostile as there were questions as to whether the predecessor's suspension was valid. 5 In July of that year, Mr Romanin started negotiating a permanent employment contract with the Co-op. He was offered a position as General Manager and Chief Executive Officer on a permanent fulltime basis, earning a salary of $4,692 per week plus superannuation. This meant that his salary would be almost halved. With this in mind, he sought reassurance from the Board of the Co-op that he would not be suspended in the same manner as his predecessor. He was not willing to accept the position until receipt of confirmation from the Chairman of the Co-op that he would be entitled to 12 months termination notice or payment in lieu if his appointment was terminated. 7 After discussing the offer by telephone with the Chairman, while Mr Romanin was in Singapore, Mr Romanin made it clear to the Chairman that he would only accept the position if he was guaranteed a 12 month termination notice period or payment in lieu. He was informed by the Chairman that he would be entitled to a termination notice period of 12 months plus one month for each year of service that had been completed, or alternatively payment in lieu. On this basis, Mr Romanin accepted the Co-op's offer. 8 He commenced employment with the Co-op and was paid in accordance with the provisions of the new contract but at the time of commencing he had not signed a written contract nor was one provided to him. 9 On 15 September 1999 he received a draft service agreement from the Co-op which provided for only a six month termination notice period and a probationary period. He complained that the draft service agreement was inconsistent with the terms and conditions of his employment contract that had been agreed with the Chairman. The Co-op denied the employment contract existed or that it had ever agreed to such terms and conditions. 10 In October 1999, the Co-op suddenly terminated Mr Romanin's employment and gave him seven days notice. The Co-op denies that the employment contract ever existed and denied that Mr Romanin was entitled to a 12 month termination notice period or payment in lieu. 11 Mr Romanin was forced to find alternative employment. He was unemployed for some time but commenced various consultancies and employment with other entities and earned $144,983.51 in the 12 month period following termination of his employment. He was advised that the employment contract did exist, that it was enforceable and that Mr Romanin was entitled to a 12 month termination notice period or payment in lieu. Counsel also advised Mr Romanin that if he were to commence legal proceedings against the Co-op, the claim would be for an order that the employment contract existed and a contractual payment under the employment contract. A conflict of interest arose which meant that the original solicitors withdrew and he appointed another firm of solicitors. That firm filed an amended summons for relief at the Commission and represented Mr Romanin together with counsel in the course of the proceedings. The proceedings were quite extensive and took place over five days. 14 Ultimately in November 2003, the Commission upheld Mr Romanin's claims. The Commission held that the employment contract and its terms and conditions existed and that Mr Romanin was entitled to the 12 months termination notice period or payment in lieu thereof. The Co-op was required to recognise the employment contract and pay him the total value of the employment package for the period of 12 months less any salary and other earnings that Mr Romanin had earned in alternative employment during the 12 months following the termination of his employment. 15 The Commission ordered the Co-op to pay to Mr Romanin the sum of $202,829.90. He completed an early termination prepayment statement together with payment instructions to the superannuation payer and requested that $40,000 be rolled over to his superannuation fund. Those instructions were provided to the Co-op's solicitors together with a request that those solicitors deduct the relevant tax. A payment was made from the Co-op to his solicitors in the amount of $202,829.90 made up of the original award of $142,476.49 and interest of $60,353.41 in about March 2004. 18 No tax was deducted with respect to that payment nor did the Co-op's solicitors comply with Mr Romanin's request to roll over part of the funds into his superannuation fund. Mr Romanin separately deposited $40,000 into his fund and treated the balance of $102,476.49 as income. Further, the interest component of the $60,353.41 was treated as assessable income. He was offered $210,000 in final satisfaction of the costs and accepted that offer in July 2004. He received the sum of $210,000 in the year ended 30 June 2005. As a result he was out of pocket $73,565.14 comprising $43,000 for the Co-op's costs of the motion to dismiss counsel and $30,565.14 being the difference of party and party costs and indemnity costs for the period up to the motion to dismiss. The Commissioner also contended that Mr Romanin lacked reasonable care under s 226G of the Income Tax Assessment Act 1936 (Cth) when claiming the outgoings and imposed additional tax by way of penalty in the amount of a 25% shortfall. The Commissioner issued notices of assessment to Mr Romanin in relation to the years ended June 2000-2004 disallowing the deductions for legal expenses. 22 On or about 30 July 2007, Mr Romanin lodged an objection to the notices of assessment and notices of penalty for the years ended June 2000 to June 2004. On 16 November 2007, the Commissioner issued Mr Romanin a Notice of Decision on Objection disallowing the deductions claimed in relation to the Co-op legal expenses. Note If you receive an amount as insurance, indemnity or other recoupment of a loss or outgoing that you can deduct under this section, the amount may be included in your assessable income: see Subdivision 20-A. ... How much is included in your assessable income? Note 2: Recoupment of a loss or outgoing for which you can deduct amounts over more than one income year is covered by section 20-40. Note 3: Recoupment of a loss or outgoing that is only partially deductible is covered by section 20-50. Total assessed not to exceed the loss or outgoing (2) The total of all amounts that subsection (1) includes in your assessable income for one or more income years in respect of a loss or outgoing cannot exceed the amount of the loss or outgoing. It was submitted that a wide interpretation should be given to the expression 'incurred in gaining or producing assessable income', and that the first limb of s 8-1 ITAA 1997 is satisfied if the outgoing 'has an effect in gaining or producing income': Amalgamated Zinc (De Bavay's) Ltd v Federal Commissioner of Taxation [1935] 54 CLR 295 at 303; Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation [1949] HCA 15 ; (1949) 78 CLR 47. For Mr Romanin it was contended that the legal expenses were incurred in enforcing a contractual payment of income arising from his employment under the employment contract with the Co-op and should therefore be deductible. 26 Mr Romanin also relies on the case of Commissioner of Taxation v Day [2007] 164 FCR 250 to support the proposition that legal expenses may be deductible under s 8-1 ITAA 1997 where they are incurred in respect of proceedings instituted to defend the income-earning ability of the taxpayer. 27 Mr Romanin further submits that the character of the legal expenses incurred is of revenue nature and not capital and should not be disallowed under s 8-1(2) of the ITAA 1997. 29 Further, the Commissioner says that even if the Court finds that Mr Romanin's expenses are deductible under s 8-1(1)(a) then they ought to be excluded pursuant to s 8-1(2)(a) as they are capital in nature. 30 Alternatively, the Commissioner submits that if the Court holds that Mr Romanin's legal expenses are deductible under s 8-1 then the amount of $210,000 received in satisfaction of the costs order ought to be classified as an 'assessable recoupment' under s 20-20 of the ITAA 1997 as it was received by way of indemnity. It says that this amount should be assessable to Mr Romanin in the income year of receipt (2005) pursuant to s 20- 35 of that Act. 31 Further and alternatively, the Commissioner contends that if the receipt of $210, 000 is not an assessable recoupment under s 20-20 of the ITAA 1997, then Mr Romanin is not entitled to a deduction for any part of the $192, 393 claimed in the 2004 income year as it exceeds his actual loss for the Co-op legal expenses. He says that the costs incurred in doing so are deductible under the first limb of s 8-1 of the ITAA 1997. 33 Section 8-1 of the ITAA 1997 provides for general deductions where losses or outgoings are incurred in gaining or producing assessable income (s 8-1(1)(a)) or are necessarily incurred in carrying on a business for the purpose of gaining or producing such income (s 8-1(1)(b)). In order to obtain a deduction under s 8-1(1), the item of expenditure must fall within one of the above positive limbs and must not be disallowed under s 8-1(2) which excludes losses or outgoings of capital or of a capital nature or of a private or domestic nature. The Courts have proffered a number of tests for determining whether there is a sufficient nexus between the loss or outgoing and the generation of assessable income. The words "incurred in [1949] HCA 15 ; (1949) 78 CLR 47 at 57 gaining or producing the assessable income" mean in the course of gaining or producing such income. Their operation has been explained in cases decided under the provisions of the previous enactments: see particularly Amalgamated Zinc (de Bavay's) Ltd. v. Federal Commissioner of Taxation , at pp. 303-304, 307, 309, 310 and W. Nevill & Co. Ltd. v. Federal Commissioner of Taxation. As a test, it cannot be so readily applied to expenses incurred in defending legal proceedings because the decision to defend those proceedings is divorced from the activities which are productive of that income; this is where the Ronpibon test is helpful --- the expenditure will be deductible where the occasion of its incurrence is productive of assessable income. In the present case, it is the employment of the taxpayer that is the occasion of its incurrence. It is submitted that the expression 'in the course of deriving an assessable income' extends to the enforcement of the contractual payment and the receipt of assessable income therefrom and that any necessary steps taken to achieve that outcome are necessarily deductible. 38 It is further submitted that the outcome that the taxpayer sought to achieve by incurring the expenditure is relevant: Fletcher v Commissioner of Taxation [1991] HCA 42 ; (1991) 173 CLR 1 at 17. 39 However, the Commissioner submits that deductibility under s 8-1(1)(a) is not governed by the purpose for incurring the expense or the existence of any causal connection with assessable income. The Commissioner says that what makes the outgoing deductible is the existence of a sufficient connection or relationship between the expense and the process of income derivation or the activity that produces the income. 40 The Commissioner submits that the characterisation of Mr Romanin's legal expenses under s 8-1(1)(a) involves identifying the advantage for which the expenditure was incurred and then determining whether that advantage relates to the process of undertaking the duties of the employment for which Mr Romanin was paid remuneration. 41 The Commissioner contends that the advantage sought in incurring the legal expenses was to secure a lump sum payment by way of relief for the summary termination of the employment contract and that it did not relate to the process of carrying out the duties which produced income under the former employment. I find this argument difficult to accept in circumstances where the payment constitutes an enforcement of an entitlement to income, not to compensation or damages. 42 Mr Romanin treated the payment as being an eligible termination payment and paid income tax on it accordingly. That was an appropriate treatment in my view. The Commissioner does not appear to suggest otherwise. 43 While the payment was made as a consequence of the intervention of the Commission's ruling, it was still a payment made in consequence of the termination of the taxpayer's employment, within the meaning expressed in Le Grand v Commissioner of Taxation [2002] FCA 1258 ; (2002) 124 FCR 53 at [38] , where Goldberg J stated that a settlement payment 'was made in consequence of the termination of the applicant's employment and is therefore an "eligible termination payment" for the purposes of s 7(2) of the TPT Act and s 27A(1) of the ITAA' (emphasis added). 44 On the face of the matter, Mr Romanin went to considerable trouble and expense to pursue recovery of the remuneration entitlements and has paid the requisite tax on receipt of them. Had he not incurred that expense, the payment and the tax on the payment would not have eventuated. There is a direct 'but for' causation applicable. 45 The Commissioner submits that the test espoused by the majority in Day 164 FCR 250 in relation to the first positive limb of s 8-1 is too wide. The Commissioner argues that the preferred test is that applied in Commissioner of Taxation v Payne [2001] HCA 3 ; (2001) 202 CLR 93. 46 Day 164 FCR 250 was a case that involved a taxpayer, against whom disciplinary proceedings were brought pursuant to the Public Service Act 1922 (Cth). Three sets of charges were brought against him; the first related to improper conduct; the second related to alleged failure to fulfil his duty as he failed to comply with provisions of a regulation; and the third alleged failure to fulfil his duty as an officer for contravening or failing to comply with regulations. His income as an officer was at risk of being reduced or lost. The taxpayer incurred legal expenses in defending the disciplinary proceedings and claimed these expenses as deductions under s 8-1 of the ITAA 1997. 47 At first instance, the learned primary judge disallowed the entitlement to deductibility in respect of the legal expenses associated with the first set of charges; allowed deductibility for expenses associated with the second set of charges; and held that the legal expenses associated with the third set of charges were not deductible, but found that the Commissioner was estopped from denying their deductibility by reason of a consent judgment entered into between the parties. The majority of the Full Court held that the expenses relating to the first and third sets of charges paid in 2002 were deductible under s 8-1(1) of the ITAA 1997. Deductibility of the respondent's legal expenses depends on satisfying the first limb of s 8-1(1), which applies if those outgoings were "incurred in gaining or producing [his] assessable income" and were not outgoings of capital or of a capital, private, or domestic nature. 25. The positive element is satisfied if the outgoing "has an effect in gaining or producing income" ( Amalgamated Zinc (De Bavay's) Ltd v Federal Commissioner of Taxation (1935) 54 CLR 295 at 303 per Latham CJ) and, in applying the test, "[a] very wide application should be given to the expression `incurred in gaining or producing the assessable income'" (at 309 per Dixon J). 26. The character of an outgoing in terms of this test "can be determined only in relation to the object which the person making the expenditure has in view": W Nevill & Company Ltd v Federal Commissioner of Taxation [1937] HCA 9 ; (1937) 56 CLR 290 at 301 per Latham CJ. In that case, the purpose was the conduct of a business on a profitable basis. 27. In my judgment, the objective purpose of defending the first charges before the Disciplinary Appeal Committee, and the related judicial review and appeal proceedings in the Federal Court, was to protect the respondent from the consequences specified under s 62(6) of the Public Service Act , or to diminish their severity. 28. The purpose was, therefore, to seek to protect the respondent's recurrent employment income from diminution or loss, or other adverse impact. 29. 30. Having regard to the purpose for which the liability to legal expenses was incurred, in my respectful opinion, the primary judge erred in his conclusion that if the conduct which resulted in the charges was not engaged in for the purposes of producing assessable income, then expenses in relation to defending those charges were not deductible. The deductibility of legal expenses in defending charges is not so limited. 31. In my opinion, expenses incurred in the defence of employment from that which threatens to destroy or diminish its income earning satisfies the positive test for deductibility. 32. We are, therefore, remitted to a consideration of the object in view when the legal proceedings were undertaken, or of the situation which impelled the taxpayer to undertake them. 33. The object in view in respect of the incurring of legal expenses in relation to the first charge, and the object in view in relation to the legal expenses incurred in respect of the third charges, were to resist direct threats to the diminishing of, or the destruction of, the income-earning ability of the taxpayer. 34. The situation which impelled the taxpayer to undertake the outlaying of those expenses was the fact that he had been charged under the Public Service Act and the consequence of those charges being successful would be that his income would be diminished or lost. It is quite irrelevant whether the content of the charges related to activities of his employment, or were extraneous to the proper discharge of his duties. This may occur where the expenses are incurred in defending the income of the taxpayer in his or her employment. In determining whether the requisite nexus exists, regard must be given to the character of the expenditure, the legal proceedings concerned and the objective purpose of those proceedings. 50 In Day 164 FCR 250 the taxpayer's legal expenses in relation to all of the charges were found to be deductible under s 8-1. Spender J held that the deductibility of legal expenses is not limited to the expenses incurred 'in defending the manner of his performance of his duties', nor is it contingent upon the success of the proceedings. The conduct of the taxpayer the subject of the two sets of charges, was conduct extraneous to and outside the activities by which he derived assessable income. However, the incurring of the legal expenses was to protect the income of the taxpayer of his employment from the threat constituted by those charges to destroy or diminish his income earning. (Rowe at 115-116). He obtained judgment in his favour and an order in just those terms plus interest and costs. When he received the award and the interest he included those amounts in his tax return. He then claimed his legal costs which were real costs of about $280,000 which he actually paid. 52 In my view, the requisite connection exists between the outgoing claimed (legal expenses) and the incurrence of assessable income. On this point, I accept Mr Romanin's submission that he pursued proceedings in the Commission to obtain income that was contractually owed to him and that the costs incurred in doing so are deductible under s 8-1(1) of the ITAA. As the majority of the Full Court has made clear in Day 164 FCR 250 , the legal proceedings in question need not relate to the activities of one's employment for the related legal expenses to be deductible under s 8-1(1). The deduction was allowed in Day when there was no immediate receipt of funds and payment of tax. There seems to be at least the same, if not greater, level of justification for the deduction in this instance. In saying that, I recognise that the Commissioner does not accept the correctness of Day , but it is certainly binding on me. 53 In my opinion, the legal expenses incurred by Mr Romanin fulfil the criteria for deductibility under s 8-1. For present purposes, it is unnecessary to consider whether the second limb of s 8-1(1) applies. Argument was not advanced on this point by either party. 56 On this point the Commissioner argues that Mr Romanin was not pursuing recovery of income but rather a lump sum payment by way of relief for termination of his employment contract. I am not persuaded that this analysis is correct. It is true that the payment was for a lump sum in lieu of 12 months income (less other income received) but the amount was described in the orders pursuant to the Commission's judgment as remuneration, was computed by reference to his entitlement to income, was set off against other income actually earned and is financial reward for exertion that would have been carried out had his employment not been (invalidly) terminated. Income is of course received by people and entities in a variety of ways. The payment in a lump sum of the sum which would otherwise be income received by way of regular payments, does not of itself, in my view change the character of the payment. There is no evidence that this amount was received during the relevant financial year. The Commissioner argues that because, at the very least, at the time he completed his return Mr Romanin knew that he had an order in his favour to recover that amount that he should have deducted that sum from the actual sum that he claimed as a deduction. I do accept that Mr Romanin cannot make the full claim for the deduction without also allowing for the receipt of the contribution to his costs. But as there is simply no evidence of actual receipt in the financial year concerned, the treatment of the actual contribution to costs, (assuming it will in fact, or has in fact been made at the same time), seems to me to be a matter to be addressed in the following year's return. It follows also that penalties should not be imposed. I would allow the appeal and will hear from the parties on any consequential orders. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

deductions legal expenses incurred in proceedings instituted to recover income contractually due whether outgoings allowable deductions under s 8-1 of the income tax assessment act 1997 (cth) whether outgoings incurred in gaining or producing assessable income whether outgoings capital in nature application of penalty tax income taxation

Separate questions will sometimes allow expense, that otherwise would be incurred in preparing extensive evidence on the quantification of damages, to be avoided. Sometimes the determination of a separate question will lead to a complete resolution of a matter. However, if the ordering of a separate question does not lead to such an outcome, the matter can often prove to be considerably more expensive and occupy much more court time than would otherwise be necessary. Having heard the arguments on the appeal, we have reason to have a somewhat less sanguine view. 9) [2009] FMCA 769) ('Pascoe v Boensch (No. 9)') in which his Honour dealt with an application filed 9 April 2009 to amend the then existing Points of Claim, which had been filed on 25 August 2006, by replacing them with revised Amended Points of Claim proposed on 27 May 2009, and also with an application filed 1 September 2008 by the first respondent for summary dismissal of the applicant's Application filed 19 July 2006, in accordance with s 17A of the Federal Magistrates Act 1999 (Cth) ('the FMC Act') (the Federal Magistrates Court's equivalent of s 31A of the Federal Court of Australia Act 1976 (Cth) ('the Federal Court Act'). In relation to applications for leave to appeal, the power of this Court to allow amendments late in proceedings and the powers of the Court in relation to summary dismissal it is convenient to note the observations of the Full Court, comprising Spender, Graham and Gilmour JJ, in Kowalski v MMAL Staff Superannuation Fund Pty Limited [2009] FCAFC 117 ; (2009) 259 ALR 319 ('Kowalski'). Important issues which arise in this case include: what is required by way of proof, in a summary dismissal application, to satisfy the court that the other party has no reasonable prospect of successfully prosecuting the proceeding or the relevant part thereof. was the application for leave to amend timely or not. Raphael FM held that the declaration of trust was not a sham and that the trust had been duly constituted (see Pascoe v Boensch (No. 3) [2007] FMCA 2038 ('Pascoe v Boensch (No. 3)'). This decision was upheld on appeal by a Full Court comprising Finn, Dowsett and Edmonds JJ in the separate question appeal on 18 August 2008. An application for special leave to appeal from the judgment of the Full Court was dismissed by the High Court on 12 March 2009. The evidence in chief has been filed on the part of the Trustee. Raphael FM stood the matter over for further mention on 17 October 2006 with the intention of fixing hearing dates in November 2006. In October 1997 Mr and Mrs Boensch separated. In proceedings in the Family Court of Australia orders were made on 18 May 1999, by consent, which provided for the transfer by Mrs Boensch to Mr Boensch of her interest in the Rydalmere property upon payment by Mr Boensch to Mrs Boensch of $50,000. At the time the Rydalmere property was subject to a mortgage for $95,000. Mr Boensch was required to indemnify and keep Mrs Boensch indemnified in relation to the joint liability under the mortgage. A memorandum of transfer was apparently executed by Mrs Boensch in favour of Mr Boensch on 9 June 1999 but this transfer was not registered at the time. On 14 July 1999 a decree nisi was made for the divorce of Mr and Mrs Boensch and on 15 August 1999 a decree absolute was made. As previously stated a sequestration order was made in respect of the estate of Mr Boensch on 23 August 2005. By the time that the learned Federal Magistrate heard the separate question which had been formulated, the applicant's Points of Claim had been on the file for some 15 months. In paragraph 15 of the Points of Claim the applicant contended that the declaration of trust did not constitute a valid trust in respect of the Rydalmere property. He further contended that the memorandum of trust was 'a sham'. In the alternative the applicant contended that the transfer of the equitable estate in the Rydalmere property effected by the declaration of trust constituted a transfer of property by Mr Boensch which was void against the trustee of his bankrupt estate by virtue of s 121 of the Bankruptcy Act . The applicant contends that Mr Boensch's main purpose in making the transfer of the equitable estate in the Rydalmere property upon the constitution of the trust on 23 August 1999 was to hinder or delay the process of making property available for division among his creditors within the meaning of s 121(1)(b)(ii) of the Bankruptcy Act . It will be apparent that s 121(2) of the Bankruptcy Act does not introduce any additional preconditions to the operation of s 121(1). Rather it is a subsection directed at facilitating proof of the relevant matter required by s 121(1)(b). Critically for present purposes, the issue as to Mr Boensch's 'main purpose in making the transfer' of the equitable estate in the Rydalmere property by the constitution of the trust on 23 August 1999 has already been determined. In Pascoe v Boensch (No. At around the time Mr Boensch received the transfer from his wife [9 June 1999] he heard a program on the radio about the rights of de facto partners. He says that he became concerned that if he took up with a partner she might have a claim upon the property which would deprive his children of their inheritance. He determined to protect the property for the benefit of his children. ... [A] n acquaintance, ... Mr Reeves introduced Mr Boensch to a friend of his who, he said, knew something about trusts and Mr Boensch had a meeting with the friend and told him of his concerns. The friend agreed to prepare a document that would protect Mr Boensch. He did so [see the memorandum of trust of 23 August 1999] . ... He suggested to Mr Boensch that his wife also sign the document, possibly because Mr Boensch had told him that Mrs Boensch had provided a transfer but that it was not registered. Raphael FM rejected the submission of the applicant's then counsel that the memorandum of trust was a sham. He held that the very reason for the creation of the memorandum of trust was to ensure that any potential de facto partner was not deceived as to the purpose of the memorandum of trust. At [19] the learned Federal Magistrate rejected the applicant's submission that Mr Boensch did not really intend to create a trust for the benefit of his children. Raphael FM accepted the evidence of Mr Boensch that his purpose in executing the memorandum of trust was to benefit his children. On the separate question appeal, the Full Court comprising Finn, Dowsett and Edmonds JJ, referred at [4] to Mr Boensch's evidence that he had had conversations with Mrs Boensch to the effect that they needed to be in a position to each be able to support the children independently and to give them something for a start in life. Their Honours referred to Mr Boensch's evidence that 'for his part he intended his contribution to the children's start was to be able to give them either the Rydalmere property or the proceeds of any sale of it'. Both Raphael FM at [8] and the Full Court at [8] observed that there was no evidence to suggest that Mr Boensch was in any financial difficulty at the time of the execution of the memorandum of trust. One question is whether Mr Boensch intended to constitute a trust for the benefit of his children in respect of the Rydalmere property? Another question is, what was his main purpose in so doing? Was it to benefit his children or was it to defeat his creditors, relevantly to hinder or delay the process of making his property available for division amongst his creditors following the making of a sequestration order in respect of his estate, some six years after the execution of the memorandum of trust? At [15] the Full Court observed that Raphael FM considered that by the memorandum of trust he constituted himself trustee of the entire beneficial interest in the property for his children. Their Honours proceeded to observe at [16] that Raphael FM 'accepted Mr Boensch's evidence when it was challenged in cross-examination'. As we will indicate below, context is of no little importance in this matter. Importantly, Mr Boensch's actual intention and the terms actually intended may properly be inferred from all the circumstances if they can properly be said to be nonetheless manifest on the proper construction of the memorandum itself: see Trident General Insurance Co above. They had two infant children, aged 9 and 7. Prior to the making of the property settlement consent orders, Mr Boensch had a number of conversations with Ms Boensch in which he spoke of the need to make provision for the support of their children and to give them a start for life . If such a claim was made he would not then be in a position to make his intended gift to his children to give them a start in life nor would he be able to finance his 50 per cent child support contribution. This led to his being led to a person who, as his Honour found, was not a solicitor but who prepared the memorandum. Mr Boensch located a Justice of the Peace who witnessed their signing of a copy of the memorandum. Putting to one side the third paragraph (which deals with Ms Boensch), the remaining three paragraphs considered together disclose an intention on Mr Boensch's part --- and his is the only relevant intention --- to create a fixed trust for his children of the Rydalmere property and we would infer, an actual intention that at some time in the future the property could be resettled by him as trustee on the children on terms more advantageous to them than those of the minimalist trust manifest in the memorandum. The matrimonial environment leading to the signing of the memorandum and the age of the children at the time occasioned, on the evidence, an immediate concern in Mr Boensch for the future of the children. Further, he became aware that if he retained his interest in the property, it could, in the context of his entering into a new relationship, become vulnerable to a claim by a new partner. That vulnerability, we would comment, would remain for as long as he retained an interest in the property but would not if he divested himself of it in favour of his children. Otherwise his having it witnessed by a Justice of the Peace seems inexplicable. The document speaks of something thereby being "created for the benefit of the Boensch family". Considered in context, this observation is properly to be interpreted as referring to a beneficial effect for all of the family, ie himself, Ms Boensch and the children from the creation of the trust for the children. The benefit to the parents was that flowing from provision being made for their infant children and, in Mr Boensch's case, the elimination of his "concern" as to a possible consequence that might ensue from any new relationship into which he might enter. In light of that concern we consider it unlikely in the circumstances that he intended to retain any interest in the property. The circumstances make it wholly improbable that he intended to confer some proprietary benefit on his wife. The benefit to the children was self evident. No other explanation for his declaring the trust was advanced. Such findings as to Mr Boensch's purpose in constituting the trust and thereby transferring the equitable estate in the Rydalmere property are quite inconsistent with any suggestion that the main purpose for doing so was to hinder or delay the process of making property available for division amongst his creditors, in the event of a future bankruptcy. Not only was there no suggestion advanced that Mr Boensch was in any financial difficulty prior to his dispute with a Mr Michael Costin, who obtained a judgment against him in the sum of $31,113.31 on 27 July 2003, but also, counsel then appearing for the applicant made it clear that Mr Boensch's solvency at the time of the execution of the memorandum of trust was not seen as being an issue. The appeal from Raphael FM on the separate question came before the Full Court following a grant of leave to appeal by Branson J. ... The problem that we have with this judgment [Pascoe v Boensch (No. 3)] ... is that it [,] to put it in the vernacular, nails much of our claim. There is no evidence available as to Mr Boensch being insolvent at the time of this document being entered into. ... from our viewpoint there is evidence at the time of the deed of confirmation being entered into. If this document [the memorandum of trust of 23 August 1999] remains upheld it's going to be virtually impossible for practical purposes --- I say this for the purposes of argument before your Honour [,] not to estop any submissions that might be made. It would be virtually impossible for us to attack the deed of confirmation because the underlying transaction would be valid as a result of this. 9) to allow an amendment to the Points of Claim in relation to the s 121 case and ordered that the applicant's application to amend filed 9 April 2009 be dismissed. His Honour ordered that the substantive application filed 19 July 2006 be summarily dismissed and ordered the applicant to pay the respondent's (Mr Boensch's) costs of the proceedings including any reserved costs, such costs to be taxed or assessed at 80 per cent of the Federal Court scale. It is his Honour's judgment in Pascoe v Boensch (No. 9) on those applications which is the subject of the present application for leave to appeal in accordance with s 24(1A) of the Federal Court Act. The applicant, Mr Pascoe, who is the trustee of the bankrupt estate of Mr Boensch, contended that Raphael FM failed to address what was necessary for him to be able to reach a conclusion that the applicant had no reasonable prospects of successfully prosecuting the remainder of his case. The first respondent, Mr Boensch, submitted that his Honour properly addressed the matter and that his Honour was entitled to draw an inference from what was said by counsel representing the applicant on the application before Branson J for leave to appeal in relation to the separate question matter, that the applicant accepted that he had no case which he could advance were the separate question to be decided unfavourably to him. The applicant submitted that his Honour misinterpreted what his then counsel had said. The applicant submitted in relation to the question of amendment that his Honour failed to have regard to the fact that much of the time delay was occasioned by the natural progression of the separate question, which he had suggested, through the courts including the High Court. The first respondent submitted that there were extensive delays and it had been open to the applicant to amend the remainder of his Points of Claim whilst the separate question remained unresolved, especially whilst awaiting the outcome of the application for special leave to appeal to the High Court. A question arises as to whether the character of the matter which the applicant, Mr Pascoe, sought to raise by his proposed amendment was anything other than a reformulation of the matter previously raised in the original Points of Claim rather than an attempt to raise a totally different case. The applicant submitted that it was open to him to prove that Mr Boensch's 'main purpose' in making the transfer of the equitable estate in the Rydalmere property by entering into the declaration of trust was to hinder the process of making it available for division among his creditors and that Raphael FM failed to consider whether, at the time, Mr Boensch was 'about to become' insolvent, a relevant issue in relation to proof of main purpose under s 121(2) of the Bankruptcy Act . The revised Amended Points of Claim upon which the applicant sought to rely (Exhibit NMC) included a proposed new paragraph 16A which was extensively particularised. The new allegation upon which the applicant sought to rely was an allegation that at the time of the Transfer [a reference to the memorandum of trust] on and from 23 August 1999, the first respondent was insolvent. In the original Points of Claim (Exhibit NMB) the allegation had been that as at 4 September 2003, some four years later, the first respondent was insolvent (see paragraph 20). It may be observed that the proposed new paragraph 16A did not include an allegation that at the time of the transfer [23 August 1999], the first respondent was 'about to become' insolvent (see s 121(2) of the Act). The attainment of justice will not be achieved by granting the leave to amend sought and further delaying the finalisation of this matter and increasing the already very considerable costs. I refuse to grant the amendment. Factors taken into account by the learned Federal Magistrate on the application to amend the Points of Claim included Mr Boensch's delayed recovery of costs ordered in his favour with the resultant strain on his financial resources, mental strain to which the protracted litigation exposed him and the 67 days that he had to take off work to attend hearings and/or engage in the provision of instructions for his lawyers. In relation to Mr Boensch's application for summary dismissal of the applicant's proceeding the learned Federal Magistrate found that there was no 'real issue of fact and law to be tried'. However, for the reasons which I give below I am not satisfied that on the unamended pleadings [Exhibit NMB] (which I believe is the proper test) or even on the unamended pleadings [Exhibit NMB] plus particulars as they appear in the proposed amendment [Exhibit NMC] there is a real issue about Mr Boensch's solvency. Whilst his Honour directed his attention to the correct test in respect of an application for summary dismissal he did not, strictly speaking, identify the correct source for that test. His Honour had regard to a paraphrase of s 17A(2) of the FMC Act, which is to found in r 13.10 of the Federal Magistrates Court Rules 2001 , rather than s 17A of the Act itself. Section 31A of the Federal Court Act came into force on 1 December 2005. Consequential upon the introduction of s 31A, O 20 was significantly altered to avoid a seeming duplication of s 31A in respect of summary dismissal (cf O 20 r 4(1) which applies to proceedings commenced before 1 December 2005 and O 20 r 5 which applies to proceedings commenced on or after 1 December 2005. ) Order 20 r 5 complements rather than duplicates s 31A of the Act. Be that as it may, the learned Federal Magistrate plainly applied the correct test. At [20] his Honour proceeded to deal with further submissions of counsel for Mr Boensch which he described as being 'not strictly necessary'. One such submission was that there had already been a determination of the main purpose of the trust constituted on 23 August 1999. His Honour proceeded to say that he could not accept a contention that a transferor could not have more than one intention when he proposed to transfer a property. That is undoubtedly correct, but the important consideration which he failed to address was whether there had already been a determination as to what Mr Boensch's main purpose was in making the transfer of the equitable estate in the Rydalmere property to his children when he executed the memorandum of trust on 23 August 1999. There is plainly a distinction to be drawn between various aspects of intention and 'main purpose'. In an affidavit of the applicant of 26 May 2009, he expressed the opinion that 'since' August 1999 Mr Boensch had been unable to pay his debts as they fell due. He further opined that Mr Boensch became insolvent at the time of entering into the memorandum of trust 'or shortly thereafter'. He later expressed a belief that at any final hearing he would be able to provide evidence to support his opinion. 9) . However, the cases provide general guidance which the Court should normally accept as to how the discretion is to be exercised (see Seven Network Ltd v News Ltd [2005] FCAFC 125 ; (2005) 144 FCR 379 at 380 per Branson J, Allsop and Edmonds JJ agreeing). The need for leave to appeal comes under consideration when an aggrieved party wishes to appeal from a judgment that is interlocutory. Under s 24(1A) of the Federal Court Act, an appeal from an interlocutory judgment shall not be brought unless the Court or a judge gives leave to appeal. The judgment of Raphael FM in Pascoe v Boensch (No. 9) was interlocutory in respect of both the application for leave to amend and also the application for summary dismissal (see Kowalski at [32]-[43]). The accepted approach to the grant of leave to appeal under s 24(1A) has been as summarised in Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655 ; (1991) 33 FCR 397 ('Decor'). Decor was a patent infringement case, but the question of whether there should be a grant of a leave to appeal arose under s 24(1A) of the Federal Court of Australia Act rather than s 158(2) of the Patents Act 1990 (Cth). The application for leave to appeal was granted and the appeal was allowed in part. The reason why leave to appeal under s 24(1A) was required was because Decor Corporation Pty Limited sought to appeal from certain answers given by King J in the Supreme Court of Victoria to two preliminary questions concerning the computation of profits where his Honour had, previously, made an order for delivery up by Decor Corporation Pty Limited of infringing articles in their possession, power, custody or control and an order directing that there be an inquiry as to damages or, at Dart Industries Inc's option, an account of profits. An appeal from those orders of King J had been dismissed in 1998 (see Decor Corporation Pty Ltd v Dart Industries Inc (1988) 13 IPR 385). In Decor the Full Court pointed out that no rigid rules had been laid down which might destroy the Court's unfettered discretion under s 24(1A) to grant leave to appeal. However, the Full Court considered that the tests stated in Niemann v Electronic Industries Ltd [1978] VR 431 provided general guidance when considering applications for leave to appeal. The first test was that leave to appeal should only be granted if the Court is of the opinion that the decision of the primary judge was attended with sufficient doubt to warrant its reconsideration by a Full Court and the second test was that leave to appeal should only be granted if substantial injustice would result if leave were refused, supposing the decision to be wrong (see Decor at 398-400). In Re Luck [2003] HCA 70 ; (2003) 78 ALJR 177 ; 203 ALR 1 McHugh ACJ, Gummow and Heydon JJ stated essentially the same tests in relation to applications for leave to appeal from interlocutory judgments of single justices of the High Court of Australia. Unlike this Court, the Federal Magistrates Court does have a rule which is equivalent to r 21 of the Court Procedures Rules 2006 (ACT) upon which the High Court focussed its attention in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 ; (2009) 258 ALR 14 ('Aon Risk Services'), along with rules 501 and 502 of those Rules. The requirement that the Federal Magistrates Court would apply the Federal Magistrates Court Rules in accordance with the object of assisting the 'just, efficient and economical resolution of proceedings' is an important matter for consideration when addressing an application for leave to amend a pleading. As the High Court said in Aon Risk Services at [111] an application to amend should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendments should be weighed. The fact of substantial delay and wasted costs along with the concerns of case management, assume importance. Justice has to be done to all litigants. Where a party has had a sufficient opportunity to plead his case, it may be necessary for the Court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to, in this case, Mr Boensch, and also to other litigants. It is appropriate to have regard to the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter his case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. Parties have choices as to what claims are to be made and how they are to be framed and advanced. But limits will be placed on their ability to effect changes to their pleadings, particularly if litigation is advanced (see [94], [102], [111] and [112] in Aon Risk Services ). The "right" spoken of in Cropper v Smith needs to be understood in the context of that case and the Rule, which required amendment to permit the determination of a matter already in issue. Cotton LJ at 708 opined that leave to amend ought not to be granted, even on terms of the parties seeking amendment paying all of the costs up to the time of the amendment. At 714-715 Fry LJ expressed a like opinion. Counsel for the appellant, Mr Aston QC, was 'almost invited to ask for leave', but remained silent as regards any such application. He took a course of argument totally inconsistent with asking for such leave. He argued 'with pertinacity and ability that the notice of objections was sufficient to raise the point [as to the validity of a patent], and therefore, so far from asking for leave, he insisted that the point was open to him without leave. I have very seldom, if ever, been unfortunate enough to come across an instance, where a person has made a mistake in his pleadings which has put the other side to such a disadvantage as that it cannot be cured by the application of that healing medicine. If a proposed amendment is directed at tidying up a pleading to ensure that the issues are clearly defined and well understood, a stronger case for allowing amendment will exist than one which seeks to raise a new case or a new defence. In Aon Risk Services the High Court refused to allow amendments directed at raising a substantially different claim to that which had been before the primary judge until the third day of the four week period allocated for the trial of the action (see Kowalski at [47]). In State of Queensland v J L Holdings Pty Limited [1997] HCA 1 ; (1997) 189 CLR 146 ('J L Holdings') the High Court had held that a proposed amendment to a defence should be allowed to raise a new point never previously relied upon. In that case there was a period of about six months between the date when the leave to amend was sought and the anticipated date of commencement of the hearing. I would observe that whilst the High Court revisited what had been said by Dawson, Gaudron and McHugh JJ in J L Holdings at 154, in relation to the relevance of proper principles of case management and their employment to shut a party out from litigating an issue which was fairly arguable 'except perhaps in extreme circumstances', Gummow, Hayne, Crennan, Kiefel and Bell JJ did not find, in Aon Risk Services , that, in the result, J L Holdings had itself been wrongly decided. Whilst the proposed new paragraph 9B in the revised Amended Points of Claim raised a new matter in relation to Mr Boensch's liability under the mortgage over the Rydalmere property, it seems to me that the particular paragraph was directed at providing support for the allegation of insolvency and the particulars thereof contained in the proposed new paragraph 16A of the revised Amended Points of Claim. In my opinion the judgment of the learned Federal Magistrate on the question of amendment is attended with some doubt, given that Mr Boensch's 'main purpose in making the transfer' was already an issue in the proceedings, by virtue of the facts and matters alleged in paragraph 17 of the original Points of Claim. Whilst in paragraph 16A of the proposed Amended Points of Claim an allegation was added to the effect that Mr Boensch was insolvent at the time of his entry into the memorandum of trust on 23 August 1999, it must be borne in mind, firstly, that insolvency was only relevant for the purposes of s 121 as a means of proving Mr Boensch's 'main purpose' under s 121(1)(b) at the relevant time and, secondly, that s 121(2) of the Act was directed at facilitating proof of such 'main purpose'. The fact that the learned Federal Magistrate's judgment on the question of amendment may have been attended with doubt does not necessarily mean that it was attended with sufficient doubt to warrant its reconsideration by a Full Court. Because of the findings which have already been made on the separate question by the Full Court in the separate question appeal, it does not seem to me that substantial injustice would result if leave to appeal were refused, supposing favourably to the applicant that the decision of the learned Federal Magistrate on the amendment application was wrong. It may have been infelicitous for the then counsel for the applicant to say to Branson J, as he did, that there was no evidence available as to Mr Boensch being insolvent at the time of the memorandum of trust of 23 August 1999 being entered into. For the relevant legal principles in relation to res judicata, issue estoppel and Anshun estoppel reference should be made to the judgment of the Full Court, comprising Emmett, Conti and Selway JJ, in Wong v Minister of Immigration and Multicultural and Indigenous Affairs (2004) 146 FCR 10 ('Wong') especially at [36]-[38]. A judicial determination concludes not merely the point actually decided but also a matter which it was necessary to decide and which was actually decided as the ground work for the decision itself, though not directly the point in issue. Matters cardinal to a later claim or contention cannot be raised if to raise them would necessarily involve an assertion that the judicial determination previously made was erroneous (per Dixon J, as his Honour then was, in Blair v Curran [1939] HCA 23 ; (1939) 62 CLR 464 at 532; see generally per Graham J in J F Keir Pty Limited v Sparks [2008] FCA 611 at [55] - [61] ). More importantly, for the purposes of the present case, it also provided for a judgment in the nature of summary dismissal of the whole or any part of a proceeding on the application of a respondent, in the event that it was satisfied that the applicant had no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. v. Foyster [1972] HCA 41 ; (1972) 126 CLR 507 ('Theseus Exploration') and also the test for a successful application for summary dismissal as stated by Dixon J, as his Honour then was, in Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 and by Barwick CJ in General Steel Industries Inc. v. Commissioner for Railways (N.S.W. ) [1964] HCA 69 ; (1964) 112 CLR 125 ('General Steel Industries'). See also Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60 ; (2008) 167 FCR 372 ('Jefferson Ford') at [45], [57], [63], [124]. The Explanatory Memorandum circulated by authority of the Attorney-General in relation to the Migration Litigation Reform Bill 2005 (Cth) revealed the purpose of the new s 31A of the Federal Court Act and, accordingly, s 17A of the FMC Act . ... Section 31A provides that the Court may give summary judgment in a matter where it is satisfied that a proceeding or part of a proceeding, or a defence to a proceeding or part of a proceeding, has no reasonable prospect of success. Subsection 31A(3) provides that for the purposes of giving summary judgment, a proceeding or part of a proceeding, or a defence to a proceeding or part of a proceeding, need not be hopeless or bound to fail for it to have no reasonable prospect of success. This moves away from the approach taken by the courts in construing the conditions for summary judgment by reference to the 'no reasonable cause of action' test, in Dey v Victorian Railways Commissioners ... and General Steel Industries Inc v Commissioner for Railways (NSW) ... [both of which were summary dismissal cases] . These cases demonstrate the great caution which the courts have exercised in regard to summary disposal, limiting this to cases which are manifestly groundless or clearly untenable. Section 31A will allow the Court greater flexibility in giving summary judgment and will therefore be a useful addition to the Court's powers in dealing with unmeritorious proceedings. It may be observed that the word 'may' in the expression 'may give judgment' in s 17A(1) and s 17A(2) is, in the context in which it is used, permissive, not mandatory. Furthermore the use of the word 'unmeritorious' in the Explanatory Memorandum and both of the second reading speeches, along with the use of the word 'unsustainable' in both of the second reading speeches, indicates that a generally cautious approach should still be adopted to the exercise of the Court's powers under s 17A. In relation to the use of the word 'may' it is instructive to note the observations of Gordon J in Jefferson Ford at [128]. However, in my respectful opinion, the preconditions for the exercise of the relevant power, which require value judgments to be made in the absence of a full and complete factual matrix and full argument thereon, lead me to the view that a discretion is reposed in the judge hearing the relevant application to grant summary judgment. The concept of 'no reasonable prospect of successfully prosecuting ' a proceeding, which is a relevant issue where summary dismissal is sought under s 17A(2) of the FMC Act, was addressed by Rares J in Boston Commercial Services Pty Ltd (ACN 114 658 070) v GE Capital Finance Australasia Pty Ltd (ACN 070 396 020) [2006] FCA 1352 ; (2006) 236 ALR 720. The concept of a party having "no reasonable prospect of successfully prosecuting a proceeding" has some similarity to the test at common law for determining whether a jury properly instructed could reach a verdict for the plaintiff. It remains a matter for a judge hearing a summary dismissal application to exercise some discretion as to whether questions of law that have been raised are so difficult that they ought not to be decided summarily. Counsel for the applicant submitted, and I agree, that for the Court to be satisfied that the other party has no reasonable prospect of successfully prosecuting a proceeding, the moving party, in this case Mr Boensch, bears an onus of proof. Each case for summary dismissal must be considered separately. No particular hard and fast rules can be set down, only general principles. One principle is that the moving party bears the onus of persuading the Court that the opponent has no reasonable prospect of success. However, as noted earlier, s 17A has lessened the standard that must be met. In that regard, it must be emphasised that once a moving party has established a prima facie case that the opponent has no reasonable prospect of success, the opposing party, in this case the applicant, must respond by pointing to specific factual or evidentiary disputes that make a trial necessary; general or non-particularised denials will be insufficient to defeat the motion (per Gordon J in Jefferson Ford at [127]). It is not enough for a party resisting a summary judgment application to seek merely to put the other side to proof. It is, as Wilcox J said, in Vans Inc v Offprice.Com.Au Pty Ltd [2006] FCA 137 ('Vans') at [12], at least arguable that the effect of s 31A (or s 17A) is that there can be summary judgment for an applicant, notwithstanding the possibility that his case will break down at trial. Vans was a case in which the applicant was seeking summary judgment rather than one in which the respondent was seeking summary dismissal. Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 ('Fortron'), on the other hand, was a case in which summary dismissal was sought. The application was heard by French J, as his Honour then was. He dismissed the application for summary dismissal of the applicant's claim against the sixth, seventh and eighth respondents, Versalife Pty Ltd, Peter Allen Matthews and Donna Lorraine Matthews. That question is not to be answered by a finding that a party's statement of claim or defence fails to disclose a reasonable cause of action or defence. A pleading may be rectified by amendment so as to raise a reasonable cause of action or defence. ... There may ... by amendment, be a reasonable prospect of successfully prosecuting or defending that proceeding. This judgment can be made, by reference to pleadings, where there is a defect in the pleadings which cannot be cured. Alternatively, it may be a judgment made by reference to evidence put on in support of an application under s 31A which reasonably excludes the possibility that facts essential to the success of the claim or defence will be able to be established. For example, if a cause of action depends critically for its success upon the presence of the defendant at a particular place, at a particular time and the defendant is able to show, on affidavit, that he or she was not at that place at the particular time and there is no evidence to contradict that "alibi" then the judgment may be made that the proceeding has no reasonable prospect of success. In such a case judgment [for summary dismissal] may be given for the defendant. Alternatively, if a defence is pleaded which depends critically for its success upon the defendant's denial that it was a party to a contract, then an affidavit by the applicant exhibiting the contract with the defendant's signature on it, supported by affidavits from witnesses to the execution of the contract by the defendant may be sufficient to support a judgment [for the applicant] under s 31A. Of course, if the defendant were to file an affidavit in reply indicating that the material in the applicant's affidavit evidence was disputed, then it is unlikely that a finding could be made that the defendant had no reasonable prospect of success. Section 31A allows for "judgment" or nothing. Alternative remedies with respect to deficient pleadings must be found in the rules of Court. I do not consider that affidavits at this level of generality and essentially seeking to refute a particular of relevant knowledge go far enough to establish that the applicant has no reasonable prospect of success in the proceedings against them. For that reason I will dismiss their motion insofar as it seeks dismissal of the application. To the extent to which the learned Federal Magistrate may have addressed the matter by reference to the Points of Claim or the revised Amended Points of Claim alone (see his reasons for judgment in Pascoe v Boensch (No. 9) at [17]), he may have fallen into error. However, he plainly proceeded to address the evidence in relation to the question of whether Mr Boensch was insolvent at the time that he entered into the declaration of trust (see at [19]). It seems to me that, viewed in the context of Mr Pascoe's belief that at a final hearing he would be able to provide evidence to support a relevant finding referrable to Mr Boensch's insolvency, it was open to the learned Federal Magistrate to highlight what he perceived to be the weakness of the relevant evidence and to express the belief that the applicant had no reasonable prospects of succeeding in establishing Mr Boensch's insolvency at the time that he entered into the declaration of trust. However, in my opinion, the more important consideration in the circumstances of this case was the fact that findings were made in the separate question proceedings as to Mr Boensch's 'main purpose' in making the transfer of the equitable interest in the Rydalmere property, as he did, on 23 August 1999, such that an inconsistent finding as to his main purpose and one which came within s 121(1)(b) of the Act could not now be made. In the circumstances it is apparent that substantial injustice would not result if leave to appeal from the judgment of Raphael FM in Pascoe v Boensch (No. 9) were refused, supposing the decision to be wrong. I certify that the preceding one hundred and nine (109) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

application for leave to appeal from an interlocutory judgment of the federal magistrates court relevant principles amendment of pleadings summary dismissal under s 17a of the federal magistrates act 1999 (cth) application dismissed practice and procedure

The first is whether the Tribunal's decision was vitiated by a reasonable apprehension of bias. The other, whether the Tribunal failed to accord procedural fairness to the applicant. The ground upon which the visa was refused was that, being found not to satisfy the character test for the purposes of s 501 of the Migration Act 1958 (Cth) on account of his "substantial criminal record" (s 501(6)(a)) , a decision adverse to his application was made under s 501(1). The Tribunal's review was conducted under s 500 of the Act. 2 The Tribunal's decision was not the first occasion upon which the Tribunal member took a decision affecting Mr Islam. The issues in this matter arise in consequence of (a) a prior decision of the Tribunal member authorising the issue of a warrant to install a listening device in relation to Mr Islam who was then in custody, having been charged with aggravated robbery; and (b) the member's subsequent decision upon Mr Islam's application for review of the s 501 decision refusing his visa. 3 I am satisfied that in the circumstances disclosed in this matter a fair minded lay observer might reasonably apprehend that the Tribunal member might not have brought an impartial mind to the resolution of the question the Tribunal was required to decide: Ebner v Official Trustee in Bankruptcy [2000] HCA 63 ; (2000) 205 CLR 337 at [6] . 5 The applicant is a citizen of Bangladesh who was born on 2 June 1986. He first entered Australia on 23 April 1991 when he was 5 years old as a dependent of his father, who was employed with the Bangladesh Embassy in Canberra. On 27 April 2006 he lodged an application for a subclass 457 Business (Long stay) visa, as a dependent of his mother. 6 Mr Islam has a history of criminal conduct dating from early 2004, apparently arising out of alcohol and cannabis abuse. On 22 August 2005 he was arrested and charged with the aggravated robbery of a service station in Kambah. He was taken into custody and held on remand, and on 2 June 2006 he appeared in the ACT Supreme Court and pleaded guilty to aggravated robbery and a breach of a recognisance, and was sentenced to 4 years imprisonment with a non-parole period of 18 months, with a release date of 21 February 2007. An appeal against the severity of his sentence was dismissed by the ACT Court of Appeal on 17 November 2006. 7 In response to a notice of intention to cancel his visa under s 501 of the Migration Act , the applicant's legal representative sent the Minister a detailed submission and statements. On 30 November 2007 the Minister for Immigration exercised his discretion not to cancel the applicant's visa. Disregard of this warning will weigh heavily against him if the Minister or his or her delegate considers his case again in the future. On 16 May 2008 he was arrested and charged with aggravated burglary. He was brought before the ACT Magistrates Court and refused bail and he was taken into custody. 9 On 30 May 2008 Senior Constable Sims of the AFP appeared in chambers before the Tribunal Member to seek a warrant under the Surveillance Devices Act 2004 (Cth). In an affidavit in support of the application for a warrant, Constable Sims described the burglary in detail, along with evidence that the applicant had been identified as the likely perpetrator, that his alibi for that evening was unreliable, and that while on remand he had made a telephone call to his co-accused to arrange a visit of one of the people referred to in his alibi. Constable Sims stated, "... I suspect that a serious offence involving a serious risk of serious personal injury, namely; aggravated robbery, has been committed by Mizan Ul Rahman Islam ..." . However the AFP Act regime was preserved for applications in relation to the use of listening devices in respect of offences against the law of the Australian Capital Territory: see SDA, Schedule 1, para 3. On 6 June 2008 he was released on bail by the ACT Supreme Court. 14 On 25 June 2008 the Minister sent a notice of intention to consider refusing his visa. The Notice set out the information that had been put to the applicant in the previous notice to refuse his visa, together with information relating to the charge of aggravated burglary on 1 May 2008. 15 On 6 July 2008 and 15 July 2008 Mr Islam was arrested and charged with being in breach of his bail conditions. 16 On 23 July 2008 the applicant's representative provided a response to the notice of intention to consider refusing visa. In relation to the pending charge of aggravated robbery it was contended that the applicant had pleaded not guilty and had good prospects of being found not guilty of the offence. 17 On 5 August 2008 the Minister provided Mr Islam's representative with the "brief statement of facts" prepared by AFP on 24 June 2008. On 22 August 2008 the representative wrote to the Minister requesting that a decision be delayed pending a determination of the charge of aggravated burglary, and requesting that this charge not be taken into account unless and until it had been proven. 18 On 18 September 2008 Mr Islam was for the third time charged with being in breach of his bail conditions and was taken back into custody at the Belconnen Remand Centre. 19 By a decision dated 10 October 2008 a delegate of the Minister refused the application for a subclass 457 visa. The decision documents consisted of an "issues paper" prepared by a case officer on 22 October 2008, a decision dated 10 October 2008, and a statement of reasons dated 10 October 2008. In his statement of reasons the delegate indicated that he had taken into account all of the information in the issues paper. His case, as I have noted was heard by the same Senior Member who had previously heard Senior Constable Sims' application for a surveillance warrant on 30 May 2008. 21 The hearing on 28 November 2008 was relatively short. Mr Islam was briefly questioned by the Senior Member, then cross-examined by the legal representative for the Minister. A number of areas were covered in cross-examination, including his recent breaches of bail (to which he admitted), convictions in 2004 and 2005, and his claimed rehabilitation. He was re-examined by the Senior Member and asked about his most recent breach of bail, and some supporting material was taken into account without objection. 22 In relation to the alleged aggravated burglary on 1 May 2008, both the Senior member and the Minister's solicitor were at pains to indicate that, as there had been no conviction, the incident would not be taken into account. It is necessary to draw attention to four brief extracts in the transcript of the hearing where reference was made to the offence. And if --- if I wasn't charged with these offences, I don't think my visa would have been refusable. I don't see --- if I was doing all the right things, the reason to cancel my visa because I was meaning to better my life. The Minister in fact wishes to place no weight and does not --- place any reliance on those charges. These matters, and you may be able to help this, Mr Islam, the matters that you presently have before the court, I don't want to know any details about them, could they end up in --- on trial --- could you end up on trial in the Supreme Court? Well, that in itself seems to be a reason that it would be better not to publish it. Moreover, the Tribunal was obliged to comply with such a direction: s 499(2A). The operative Direction for present purposes was Direction No 21. When a visa applicant or visa holder does not pass the Character Test, decision-makers will decide whether to refuse the application or to cancel a visa. Exercise of this discretion will take into account a wide range of factors including the expectations of the community, the nature of crimes committed, the non-citizen's links to Australia and any relevant international law obligations. In light of his "substantial criminal record" (cf s 501(6)(a) and (7)), this was an inevitable concession. The matter of concern before the Tribunal was the exercise of its discretion to refuse the applicant's visa application. 26 Before turning to that matter, I should note that there is a variety of grounds which, if established, could lead to failure of the character test. Mr Islam failed it under s 501(6)(a). The applicant contends that, while he was not found to have failed the character test of the s 501(6)(c) "general conduct" ground, the burden of that ground was made relevant at the second stage of the Tribunal's inquiry by reason of the requirements of the Directive. Insofar as presently relevant, the "Primary Considerations" to which the Tribunal had to have regard, that of particular significance was "the Protection of the Australian community": para 2.3(a). (Emphasis added. I record that I do not take it into account in any way the allegations of an offence committed at that time as the matter has not been finalised. In considering the likelihood that the conduct may be repeated it is of very considerable concern that at the age of now 22 Mr Islam has a criminal record in Australia of the seriousness of the one that he has acquired and that despite his protestations of feelings of guilt and of asking for further chances, that so shortly after conviction of one serious offence, he committed a second offence. I further take into account that even as recently as this year, he has disregarded Australian law in committing breaches of bail, again having, it seems, not taken the advantages of chances that he has been given. It is submitted that in a situation where threats of violence are made against innocent members of the public, any risk of recidivism must be considered unacceptable. I agree with this argument and accept it. The Minister also contends that Mr Islam has made repeated claims that he is repentant and will reform, but has failed to do so. Again, on the facts before me, I accept this contention. (Emphasis added. ... I also note that Mr Islam has been previously administered with a warning about the risk of deportation or Visa cancellation or refusal should his conduct continue. Unfortunately this warning appears to have not been taken seriously. The test to be applied is whether a fair-minded lay observer might reasonably apprehend that the Tribunal member might not have brought an impartial mind to the resolution of the question to be decided: Ebner , at [6]. It objectifies what otherwise would be a wholly subjective inquiry and it poses the relevant question in a way that avoids having to predict what probably will be done, or to identify what probably was done, by the decision-maker in reaching the decision in question. To say this is not to accord the hypothetical observer licence to indulge in implausible or improbable interpretations of reasons for decision. The lay observer is expected first and foremost to be "fair minded". First, there is the contention that the decision-maker has an opinion on a relevant aspect of the matter in issue in the particular case. Secondly, there is the contention that the decision-maker will apply that opinion to that matter in issue. Thirdly, there is the contention that the decision-maker will do so without giving the matter fresh consideration in the light of whatever may be the facts and arguments relevant to the particular case. Most importantly, there is the assumption that the question which is said to have been prejudged is one which should be considered afresh in relation to the particular case. Neither did the Tribunal member disclose that fact --- if he was then actually aware of it. In consequence, and counsel for the Minister accepted, there was no issue of waiver of bias in this matter: see Vakauta v Kelly [1989] HCA 44 ; (1989) 167 CLR 568 at 572-573; see also Shingles v Defence Force Retirement and Death Benefits Authority [2009] FCA 1211. 37 The authorities most immediately relevant in a factual setting such as the present on the applicant's contentions are R v Eastman (1994) 121 FLR 150 and R v George (1987) 9 NSWLR 527. In each case, at some time prior to the criminal proceedings in question, the judge who respectively became the trial judge authorised the use of a listening device in relation to the person who was ( Eastman ), or subsequently became ( George ), the accused in the proceedings. In George the particular matter before the judge under the Listening Devices Act did not involve anything to do with the subject of the later charges. In Eastman the contrary was the case and, when the matter was drawn to his attention, the trial judge disqualified himself on the ground of reasonable apprehension of bias. In two instances the exercises were successful, because the Crown proposes to lead evidence of having installed listening devices under the authority of two warrants and the evidence thereby obtained. The ground for disqualifying myself is much stronger than that confronted by the trial judge in R v George . As such, the Tribunal was required, as a matter of procedural fairness, to give the applicant an opportunity to respond to information regarding the allegation that he had committed an offence on 1 May 2008. This will become apparent in what follows. Put in terms of those elements, it was contended that, first the Senior Member had on 30 May 2009 formed an opinion on a relevant aspect of the matter in issue in the Tribunal; ie that the applicant had committed, or was suspected on reasonable grounds of having committed, a criminal offence on 1 May 2008. This was relevant to the issue of whether the applicant did not pass the character test. It was also relevant in addition by reason of para 1.10 of Direction No 21, as unresolved criminal charges as "general conduct", which the Tribunal was required to take into account under para 2.10 when considering whether it was likely to be repeated. Secondly , despite his protestations to the contrary, it is inconceivable that the Tribunal did not take such credible, relevant and significant material into account when it found that there was an unacceptable risk that the applicant would reoffend: cf Applicant VEAL of 2002 at [17]. Thirdly , it is apparent from the way in which the case was conducted that the Tribunal did not give this issue any fresh consideration in the light of whatever may have been the facts and arguments relevant to the particular case. To the contrary, the Tribunal member resisted receiving any further evidence from the applicant relating to the matter, thereby leaving the state of the evidence at the time of its decision being that presented to it by the AFP on 30 May 2008. Finally , it is contended that the Tribunal was required to consider the unresolved criminal charges as part of its overall consideration of whether his so-called general conduct was likely to be repeated. This much is apparent from Direction 21. 42 These circumstances, it is said, were sufficient to raise a reasonable apprehension in the mind of a fair-minded lay observer that, having formed a view in May 2008 that the applicant had committed, or was suspected on reasonable grounds of having committed, a criminal offence, the Tribunal might not, seven months later, bring an impartial mind to the issue of whether or not the applicant was likely to re-offend. 43 In light of what was said by Gallop J in Eastman , the applicant contends as well that, having made a decision to issue a warrant which required him to form a view of the applicant's recent charge, the Tribunal member ought to have disqualified himself from hearing the subsequent application which required him to form a view of the applicant's conduct and whether he was likely to re-offend. 44 For my own part, I again emphasise that the test to be applied does not require analysis of the likely or actual thought processes of the Tribunal. There is no evidence as to whether, if at all prior to his decision the member recalled issuing the warrant involving Mr Islam. Such view as the lay observer might take on that matter, provided it is reasonable, may well be mistaken. That is not to the point. 45 The Tribunal did not disclose at the hearing its participation in the issue of the warrant. The member may well have had no memory of that. The member, equally, may have known or have become aware of that participation but have considered he could or should neutralise the significance of it by determining the matter without taking into account "in any way" the 1 May 2008 allegations. Alternatively and despite the significance to be attributed to "general conduct" at the stage of exercising the s 501(1) discretion (which could include "unresolved charges pending a hearing": Direction No 21, the member may have been of the view that account ought not be taken of the 1 May charge in any event as the applicant had not been convicted as charged. I express no view on any of these speculations other than to say that they would be contingencies which a fair minded lay observer could reasonably canvas in forming his or her judgment of the matter. 46 Before turning to the Tribunal's reasons for decision, I would note that Mr Islam's two most recent convictions prior to the 1 May 2008 charge involved assaults/threats and the use of knives and, in the latter of the two, robbery. These offences notwithstanding, the then Minister, as I earlier noted, decided in November 2007 in the exercise of his discretion not to refuse to grant the applicant a bridging visa albeit a formal warning was given that "any further conduct bringing him within the provisions of section 501 will lead to the question of ... refusing any future visa applications". When the issue was again agitated by the Minister on 25 June 2008 as to whether the applicant's visa application should be refused under s 501(1) the only subsequent conduct notified to Mr Islam for comment was the 1 May 2008 alleged offence. 47 When the delegate's decision was made on 10 October 2008 to refuse the applicant's visa application, the pending charges were accepted to be one of the matters of which account could be taken when considering the likelihood of his reoffending. 48 At the Tribunal hearing a different view was put by the Minister as to the significance of the charges. They were not to be given any weight. Nonetheless, the risk of recidivism remained a critical issue before the Tribunal and the Minister submitted, and the Tribunal accepted, that (i) "in a situation where threats of violence are made against innocent members of the public [as with his two prior convictions], any risk of recidivism must be considered unacceptable"; and (ii) "Mr Islam has made repeated claims that he is repentant and will reform, but has failed to do so. While the significance of "subconscious effect" is to be treated with circumspection in procedural fairness cases given the relevant inquiry in such cases: cf Applicant VEAL at [19]; the issues of appearance and judgment in apprehended bias cases are, in my view, differently appointed. They do involve an appeal to the good sense and experience of the reasonably informed and fair minded lay (not judicial ) observer. While they may be able to be pigeon holed within the four "elements" referred to by Hayne J in Jia Legeng as the applicant first contended, that process does not sufficiently accentuate what in my view are the essential concerns which the unusual course of conduct followed in this matter exposes. These are to maintain the integrity of the Tribunal's processes and procedures and to provide public reassurance of that integrity. 52 As Eastman illustrates, the potential is there for apparent compromise of an official's decision making whenever a close relationship or association exists between the subject matter of an administrative or judicial decision to be taken by that official, and adverse information obtained (or an adverse opinion formed) relating to that subject matter in the course of, or as a result of, a separate earlier decision taken by the same official for other purposes. Where it might reasonably be said that the having of (or having had) that information or opinion by virtue of a prior official decision might compromise the proper and impartial taking of the later decision, the same official ought not participate in the later decision. To do so would involve the member in the discharge, in the circumstances, of incompatible functions. Such was the case here. 53 It was inappropriate for the Tribunal member, having determined to authorise the issue of the warrant in relation to Mr Islam, to have then made the s 501(1) refusal determination given the association in subject matter of the two determinations --- or at least to have done so without the informed waiver of objection by Mr Islam to his so doing. Absent such waiver, I am satisfied that the "double might" test of the fair minded lay observer would inevitably be satisfied. 54 I have emphasised the complex of competing possible views, that the conduct of the Tribunal member, the course of the hearing and the Tribunal's decision, could reasonably engender in the lay observer. In my view, despite the Tribunal's and, for that matter, the Minister's disclaimers, such an observer could reasonably entertain an apprehension that the Tribunal's decision might have suffered from prejudgment. The closely associated decision-making that occurred here ought not be countenanced. The Tribunal should have procedures to guard against such a possibility. 55 I am in consequence satisfied that the case of apparent bias has been made out and that the Tribunal's decision should be set aside. In this state of affairs, in my view, the procedural fairness case practically falls away. 57 In light of the delegate's decision adverse to Mr Islam which, seemingly, relied upon the 1 May 2008 charge in relation to the likelihood of re-offending. Mr Islam ought have expected that that charge would be an issue arising in the Tribunal that was potentially prejudicial to him: cf SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 228 CLR 152 at [35] (a Refugee Review Tribunal review under Part 7 of the Migration Act ). Accordingly he would have been entitled, if such was an issue against him, "to be given an opportunity of replying to it": Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 582. The existence of the charge was raised by the applicant and he asserted his innocence. The Tribunal member, first told him "we don't want to go into too much detail about that", but then later told Mr Islam that as he had not been convicted of it "I will not be taking that into account". Whether or not the Tribunal erred by so excluding this information (given the requirements of Direction No 21) is not in issue before me and I express no view on it. 58 Whatever may have been the Tribunal's obligation to Mr Islam in relation to the charge prior to the second of the above comments, the charge thereafter was not itself an issue potentially prejudicial to Mr Islam on the review. He could suffer no "practical injustice": Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam [2003] HCA 6 ; (2003) 214 CLR 1 at [38] ; "[he] lost no opportunity to advance his case": ibid. The marginalisation of the charge did not in any way impede Mr Islam from advancing positive reasons for why the Tribunal's discretion should be exercised in his favour. He was not denied procedural fairness. 59 Unlike in Applicant VEAL both the Tribunal and the applicant were aware of the charge and of its being disregarded. As Mr Islam indicated when told it would be so treated --- "I appreciate it" --- it was to his advantage. What Mr Islam did not know and was not told, was of the member's participation in the issue of the warrant. The non-disclosure of that participation did not of itself raise a procedural fairness issue. It did set the scene, though, for the applicant's apprehended bias challenge. The application be allowed. 2. The decision of the Tribunal be set aside. 3. The matter be remitted to the Tribunal to be determined according to law. 4. The first respondent pay the applicant's costs of the application. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

reasonable apprehension of bias tribunal member issued listening device warrant directed at applicant seven months prior to appeal hearing before same tribunal member regarding refusal of visa applicant unaware at hearing that tribunal member had issued warrant no issue of waiver of bias decision to issue warrant required forming a view about a possible criminal offence by applicant applicant refused visa under s 501 of the migration act 1958 (cth) substantial criminal record incompatible functions performed in the circumstances need to preserve integrity of tribunal's procedures fair minded lay observer could reasonably entertain an apprehension of bias tribunal's decision to be set aside denial of procedural fairness issue of prior offence raised by applicant at hearing applicant lost no opportunity to advance his case no practical injustice suffered administrative law administrative law

There has not, as yet, been any native title determination by this Court in respect of the claim they make concerning that land. That issue is the subject of separate proceedings (matter QUD 52 of 2008) instituted in the Court by the Applicants. The Applicants do not, in the present proceeding, either seek to establish the native title which they claim or seek any interlocutory relief pending the hearing and determination of that claim. The First Respondent, Santos Limited (Santos) and the Third Respondent, Delhi Petroleum Pty Ltd (Delhi Petroleum) are the holders of an authority to prospect (ATP), ATP 259P, issued under the Petroleum Act 1923 ( Qld) (Petroleum Act). ATP 259P covers land falling within the claimed land. One of the functions of officers of the Second Respondent, the State of Queensland (the State), is the issuing of petroleum leases under the Petroleum Act in respect of land covered by an ATP. ATP 259P was originally issued under the Petroleum Act on 31 January 1979 for a term of four years commencing on 1 January 1979. That ATP has, since then, at least purportedly been renewed for further successive terms with the latest being a term of 4 years commencing on 1 January 2007. It is alleged in the amended statement of claim that either or each of renewals of ATP 259P purportedly effected in 1983 and 1987 were of no effect because there was then no power in the Petroleum Act to extend the term of an ATP. It is further alleged that, as a consequence, all subsequent purported renewals of the ATP were void and of no effect. I set out the material allegations of fact in the statement of claim later in these reasons for judgment. The institution of the present proceeding, evident from the statement of claim, has its origin in a difference of opinion as between the Applicants, representing the Wongkumara People, and Santos and Delhi Petroleum, in the course of negotiations between them concerning the making of an Indigenous Land Use Agreement, as to whether the granting of petroleum leases to them by officers of the State would constitute pre-existing rights based acts for the purposes of Pt 2 , Div 3, Subdiv 1 of the NTA. A related controversy is whether any such petroleum leases would then not be subject to the "right to negotiate" provisions of the NTA. The reaction of Santos and Delhi Petroleum to the institution of this proceeding has been to seek its summary dismissal or, at the least, the striking out of the statement of claim. With respect to the alternative summary relief of striking out of the statement of claim, but for like reasons to those advanced in support of the dismissal of the application itself, they contend that the amended statement of claim fails to disclose a reasonable cause of action and is embarrassing. Thus, they submit that the amended statement of claim should be struck out pursuant to O 11 r 16 of the Federal Court Rules . Yet further, they submit that the present proceeding is embarrassing in the sense that, if it is to have any prospect of success, it would necessitate the determination of the existence or otherwise of the native title rights of the Wongkumara People, in respect of the claimed land. The embarrassment is said to arise because that question is already at large in matter QUD 52 of 2008 and of the potential therefore for inconsistent findings. They also raise an interrogative note concerning the standing of the Applicants to bring this proceeding. For its part, the State also seeks the summary dismissal of the application but confines the basis upon which it seeks that relief to an absence of reasonable prospects of success. In advancing its case for a dismissal on that basis, the State does not concede that jurisdiction exists. Rather, it submits that it is unnecessary to decide the question of jurisdiction because, even if there were, the application has no reasonable prospects of success. It is convenient first to consider whether the application has any reasonable prospects of success. Reasonable prospects of success? In Kowalski v MMAL Staff Superannuation Fund Pty Ltd (2009) 178 FCR 401 the Full Court examined the origins, meaning and effect of s 31A of the FCA Act. The Full Court particularly endorsed an observation concerning s 31A made by Lindgren J in White Australia Industries Ltd v Commissioner of Taxation [2007] FCA 511 ; (2007) 160 FCR 298 at 310, [50] that the section is concerned with "the bringing and defending of proceedings, not just with pleadings, with substance, not just with form". Section 31A consigns to the Court a discretion as to whether the questions of law raised in a case are of such difficulty as to make it preferable not to resolve them summarily. It was not submitted that this was such a case in relation to issues related to the NTA. Rather, each of the parties invited the determination of them insofar as pertinent to the respondents' summary judgment application. In the event that I concluded that there was jurisdiction and standing, I was not asked to determine either summarily or as a separate question of law the merits of the State law issue as to the ability now of officers of the State under the Petroleum Act to grant petroleum leases on the strength of ATP 259P. For the purpose of the summary judgment application, the parties assumed that the factual foundation of the Applicants' case was as alleged in the amended statement of claim. I have done likewise. The latter submission entails some exploration of the ability of this Court to make any pronouncement in relation to the validity of an administrative actions arising only under State law. That is best considered in conjunction with the separate, jurisdictional challenge which Santos and Delhi Petroleum make. Lardil is not distinguishable. To the contrary, that case confirms, in a binding way, what a reading of the definition of "future act" in s 233 of the NTA would in any event suggest. That is, materially, that a future act is one which "affects" native title, not an act which, if native title existed, "might" affect it. To construe the definition in the latter way would, as French J (as the Chief Justice then was) observed in Lardil (at 473, [59]), "require a re-writing of the statutory definition in s 233 which would significantly alter the operation of the act. Such a course is not justified by the language of a statute". Similar sentiments are evident in the judgments of the other members of the Full Court in Lardil --- see p 476, [70] per Merkel J and p 486, [114] per Dowsett J. The "right to negotiate" claimed by the Applicants forms part (Subdiv P) of Div 3 of Pt 2 of the NTA. Regard to the overview of Div 3 of Pt 2 of the NTA, offered by s 24AA, also exposes the flaw in the Applicants' position. Thus, s 24AA(1) accurately informs the reader that Div 3 "deals mainly with future acts, which are defined in s 233" and that, " Acts that do not affect native title are not future acts; therefore this Division does not deal with them " (emphasis added). In turn, s 24AA(2) of the NTA offers the accurate general observation that, "to the extent that a future act affects native title, it will be valid if covered by certain provisions of the Division, and invalid if not". The existence of the flaw thus exposed is reinforced by a more detailed consideration of provisions within Subdiv P of Div 3 of Pt 2 upon which the Applicants must necessarily rely. Within Subdiv P of Div 3 of Pt 2 , the overview of the Subdiv found in s 25 and the express provision found in s 26 as to the application of the Subdivision each make plain that the application of the Subdivision is conditioned on the existence of a "future act". In respect of the future acts to which Subdiv P of Div 3 of Pt 2 applies, s 25(4) informs that, if the procedures in the Subdivision are not complied with, the act will be invalid to the extent that it affects native title. To the extent that acts which affect native title are undertaken before negotiations under Subdiv P of Div 3 of Pt 2 are conducted or without one of the paragraphs of s 28(1) being satisfied, those acts will be invalid: per force of that subsection. Section 26 of the NTA describes the types of future acts to which the "right to negotiate" relates. Of the future acts there described, of particular concern to the Applicants, having regard to the relief which they seek, is an act to which applies s 24IC, which is located within Subdiv I of Div 3 of Pt 2. The future acts which constitute a "pre-existing right-based act" are those specified in s 24IB of the NTA. One of the constituent elements of a "permissible lease etc, renewal" is that the grant of an original authority (part of the term "original lease etc. as defined by s 24IC(a)) was a "pre-existing right-based act". Another element of a "permissible lease etc, renewal" is that the authority concerned is valid. If Subdiv I of Div 3 of Pt 2 of the NTA applies to a future act then, materially, and subject to the operation of operation of the "right to negotiate provisions found in Subdiv P, the act is valid: s 24ID(1)(a). What this more detailed consideration demonstrates is that the Applicants' claim for declaratory and injunctive relief is necessarily premised on the proposition that the grant of a petroleum lease by an officer of the State to Santos or to Delhi Petroleum is a "future act," as defined. If the grant is not a future act then it is unnecessary to consider any of the provisions of Div 3 of Pt 2 of the NTA to which the Applicants refer in that claim. Further, the NTA does not, pending the hearing and determination of the Applicants' native title claim, oblige Santos, Delhi Petroleum or the State to engage in negotiations with the Applicants. Nor does the NTA prevent the issuing of a petroleum lease by an officer of the State on the strength of an ATP. What it does is to hold invalidity in prospect should it transpire that there is a determination that native title assists and the title so determined has been "affected". As in Lardil , the relief sought by the Applicants is final relief in a proceeding where no claim for native title is advanced. They rely on their status as the "registered native title claimant". Yet the advancing and successful vindication of a native title claim, not status as the "registered native title claimant", is, given the definition of "future act", just as central to the application of provisions upon which the Applicants rely as it was to those under consideration in Lardil . To seek to distinguish Lardil on the basis that the rights within Div 3 of Pt 2 with which that case was concerned were "procedural rights" ignores this centrality. For the purposes of s 31A of the FCA Act the Respondents have established that the Applicants have no reasonable prospect of securing any of the declaratory and injunctive relief which they seek, insofar as they rely on other than State law for any part of that relief. Read in isolation and as a matter of first impression and language, the jurisdiction conferred by this section appears to require nothing more or less than a relevant connection between the subject matter of an application and native title. In Lardil though (108 FCR at [156] and [68]), the conclusion was reached, after a consideration of the context in which s 81 appears in the NTA, that the section confers jurisdiction only in respect of applications under Pt 3 of that Act. This is not such an application. Perhaps recognising this, the Applicants did not point to s 81 as a source of jurisdiction to entertain their application. Instead, they adverted to s 213(2) of the NTA, to s 39B(1A)(c) of the Judiciary Act 1903 (Cth) (Judiciary Act) and to s 21 of the FCA Act. Subject to the operation and effect of the other provisions of the NTA, s 213(2) confers jurisdiction on the Court "in relation to matters arising under the Act". For its part, s 39B(1A)(c) of the Judiciary Act confers jurisdiction with respect to "matters arising under any laws made by the Parliament". The reference to s 21 of the FCA Act as a source of jurisdiction is misconceived. That section operates where some other provision has conferred original jurisdiction on the Court and, in such circumstances, empowers the Court to "make binding declarations of right, whether or not any consequential relief is or could be claimed". In other words, s 21 is a source of power, not jurisdiction. Common to each of s 39B(1A)(c) of the Judiciary Act and s 213(2) of the NTA is that the jurisdiction they confer is confined to the "matters" which those sections respectively specify. No point was taken in Lardil as to the absence in that case of a "matter". The root authority in respect of what constitutes a "matter" for the purposes of a law conferring Federal jurisdiction is Re Judiciary and Navigation Acts [1921] HCA 20 ; (1921) 29 CLR 257. We do not accept this contention; we do not think that the word "matter" in sec. 76 means a legal proceeding, but rather the subject matter for determination in a legal proceeding. In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court. If the matter exists, the Legislature may no doubt prescribe the means by which the determination of the Court is to be obtained, and for that purpose may, we think, adopt any existing method of legal procedure or invent a new one. But it cannot authorize this Court to make a declaration of the law divorced from any attempt to administer that law. The Applicants do not (and could not) contest that the relevant test reposes in this pronouncement. Rather, they submit that, in terms of the course of authority with respect to that pronouncement, a "matter" does exist. Santos and Delhi Petroleum contend that there is an absence of any pleading in this case of material facts giving rise to a specific dispute. In that absence, they submit, is to be found a crucial difference between a "matter", albeit one arising in respect of conduct yet to take place, in which declaratory relief may permissibly be sought in the exercise of Federal jurisdiction and the seeking of such relief on a purely hypothetical basis. An example of the presence of such a difference telling against the existence of jurisdiction is, they submit, to be found in Australian Institute of Private Detectives Ltd v Privacy Commissioner [2004] FCA 1440 ; (2004) 139 FCR 394 ( Private Detectives Case ). The Private Detectives Case is but a particular example of the application of the principles expounded in the joint judgment in Bass v Permanent Trustee Co Ltd [1999] HCA 9 ; (1999) 198 CLR 334 as to the means of differentiating between a permissible invocation of judicial power and the impermissible posing of an academic or hypothetical question. That exposition is of particular importance because of the way in which "matter" has come to be understood for the purposes of Federal jurisdiction. The main reason for this is that there may be no certainty that such a general declaration will settle the dispute finally. Subsequent to that declaration a person (the defendant himself or someone else) may be adversely affected by a particular act of the plaintiff. It may then be doubtful whether this act is covered by the declaration. In such a case the affected person will probably be entitled to raise the issue again on its special facts. Indeed, such a declaration will in effect be a mere advisory opinion. The pleading does not allege that the Institute or its members have sought specific information from an identified organisation for a particular purpose. Nor is it alleged that the organisation denied the request by reason of a particular provision of the Privacy Act or determination of the Commissioner. As I have noted, the Institute seeks no relief in respect of any refusal by the Commissioner to make a determination under s 72 of the Privacy Act. It is then said that the Privacy Act proscribes the disclosure by organisations of personal information to the Institute and its members unless the disclosure is 'required or authorised by or under law'. The Statement of Claim does not identify the circumstances in which particular investigations have taken place, the organisations requested for information or the particular use to which the information was intended to be put. The difficulty is not that declarations sought by the Institute go merely to future events or circumstances. The difficulty is that they cannot quell any existing controversy between the Institute and the Commissioner. The first declaration, before it can be meaningful, requires a number of factual and legal issues to be determined. It must be established that the disclosing entity is an 'organisation' within the meaning of the Privacy Act and that the organisation is subject to the National Privacy Principles. The disclosure must be of 'personal information', as defined in the Privacy Act . It also must be for the purpose of enabling the Institute or a member to investigate on behalf of citizens in corporations 'matters concerning litigation, or potential litigation' (whose purpose is not made clear). The second declaration creates the same difficulties. That conclusion was fatal for the Applicant Institute in that case. Applying the propositions evident in Bass v Permanent Trustee Co Ltd , Sackville J held that the proceeding did not involve a "matter" and hence that the Court lacked jurisdiction under s 39B(1A)(c) of the Judiciary Act to entertain the Institute's claim for declaratory relief. In the present case the amended statement of claim contains the following allegations: The applicants on behalf of the Wongkumara People are the registered native title claimant within the meaning of s 253 of the Native Title Act 1993 (Cth) (the NTA) in respect of land in south-west Queensland and north-west New South Wales, which land ("the Claimed Land") is more particularly described in attachment B to Native Title Determination Application QUD52 of 2008 (as amended by leave granted by Dowsett J on 12 April 2008). The first respondent and third respondent are recorded in the register kept under s 80A of the Petroleum Act 1923 (Qld) (the Petroleum Act ) as the holder of an Authority to Prospect (ATP) 259P dated 31 January 1979 pursuant to the Petroleum Act in respect of land in south-west Queensland (the ATP Land), which land lies wholly within the boundaries of the Claimed Land. The second respondent is a Government party within the meaning of s 26(1) of the NTA for lands and water within the state of Queensland. Since the grant of ATP 259P the first and third respondents have prospected and continue to prospect for petroleum on the ATP Land including the Claimed Land. The proposed ILUA is to replace an Indigenous Land Use Agreement ("the former ILUA") that was part of an Implementation Agreement dated 16 January 2001 and which was in force for a term of five years. The former ILUA was never registered under the NTA. From time to time thereafter, the term of ATP 259P has purportedly been varied, extended or renewed. (b) 18 December 1986: variation by which the term was extended for four years commencing on 1 January 1987. (c) 7 May 1991: renewal by which the ATP was renewed for a term of four years commencing on 1 January 1991. (d) 20 September 1995: renewal by which the ATP was renewed for a term of four years commencing on 1 January 1995. (e) 24 June 1999: renewal by which the ATP was renewed for a term of four years commencing on 1 January 1999. (f) 12 December 2003: variation by which the term of the ATP was extended for four years commencing on 1 January 2003. (g) 3 January 2008: renewal by which the term of the ATP was renewed for a term of four years commencing January 2007. What is revealed is nothing more than a difference in contractual negotiating positions between the Applicants, who claim in other proceedings, but have not yet been determined to hold, native title in respect of the claimed land and Santos and Delhi Petroleum who may one day seek to obtain from the State a petroleum lease in respect over part of the claimed land on the strength of ATP259P. It is not pleaded that any such lease has been granted or is even imminently to be granted. In effect, what the Applicants seek is advice as to whether, were it to be determined that they hold native title and were a petroleum lease to be sought by and granted to Santos or to Delhi Petroleum by the State, that lease, if otherwise valid, would be an invalid future act if the negotiation requirements found in Subdiv P of Div 3 of Pt 2 of the NTA were not complied with? The hypothetical nature of the application is self evident. To adapt the language employed by Zamir I and Lord Woolf in the passage quoted, the question would only be whether the Applicants, Santos and Delhi Petroleum were generally obliged to act in a certain way? Before anything more meaningful than an answer to that question could be given, the legal and factual issues just mentioned would have to be determined and occur. Further, the making in the Applicants' favour of the declarations sought would not have the effect that the NTA obliged any of the respondents to negotiate with them. Rather, if the Applicants were later to have the benefit of a native title determination, a failure to comply with the negotiation provisions in the NTA would see that Act attend with invalidity an otherwise valid future act to the extent to which it affected that native title. The claim for injunctive relief is bedevilled by like problems. There is no pleading of any imminent or even threatened grant of any lease by the State. In Lardil (at 490, [136]), Dowsett J expressly adverted to the question of whether the Applicants in that case had standing to pursue the claim for relief insofar as it sought a declaration of invalidity under State law. His Honour doubted that they had standing. Nonetheless, he went on to consider the State law question, ultimately concluding that the decision sought to be impugned was valid. Of the other judges, French J, in the minority as to this aspect of the case, was of the view that there was no jurisdiction to determine the State law question. Though Merkel J expressed his agreement with the conclusion reached by Dowsett J as to the validity of the decision under State law, his Honour did not, in terms, expressly extend that agreement to the doubt as to standing which had been expressed by Dowsett J. Standing has an importance beyond just whether the Applicants are entitled to seek any of the relief claimed insofar as they seek to challenge the validity of the renewals of the ATP under State law. Whether they have standing is an inherent aspect of whether the Court is seized with a "matter". The State admitted that the plaintiff has standing because he had engaged in the proscribed conduct and proposed to continue doing so in the future. But it was argued that there was no "matter" within the meaning of Chapter III of the Constitution because the Government had not acted to enforce the law. The argument was rejected on the ground that it was a misunderstanding of In re Judiciary and Navigation Acts . The judges had difficulty in severing the concepts of standing and matter. While the position would be different if they had the benefit of a native title determination in their favour or even if the relief were sought in the context of an application for a determination of native title, the Applicants are strangers to any dealings between the State and Santos and Delhi Petroleum with respect to the granting of a particular petroleum lease. Their mere status as a registered native title claimant does not, in my opinion, give them standing to claim any of the relief sought, including any part which relies only on State law. In Lardil , the majority concluded that the Court had jurisdiction to decide the State law question of the validity of an act under that law because deciding that question was an essential step in any determination of whether there was a "future act" under the NTA. Here, the Applicants have commenced an application not materially distinguishable from Lardil which, in light of that case, is doomed to fail with respect to its Federal aspects. The essential connection with the Federal question provides the only jurisdiction which the Court could have to decide the State law question. In those circumstances, if there were jurisdiction to entertain the Federal question, the deciding of the State law question would be a matter of accrued jurisdiction in respect of which s 23 of the FCA Act would operate so as to confer jurisdiction. However, the mere assertion of a cause of action under the NTA would not sufficient to bring the State law causes of action sought to be raised in the amended statement of claim within the "accrued jurisdiction" of the Court if the NTA claim were "colourable" and "not genuine": Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd [1981] HCA 7 ; (1981) 148 CLR 457 at 498-499; Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 at 219; Fitzroy Motors Pty Ltd v Hyundai Automotive Distributors Australia Pty Ltd (1995) 133 ALR 445 at 450; WG & B Manufacturing Pty Ltd v Tesla Farad Pty Ltd [1999] FCA 1776 ; (1999) 48 IPR 111 at [11] ; Cook v Pasminco Ltd [2000] FCA 677 ; (2000) 99 FCR 548 at 550; and see Lane's Commentary on the Australian Constitution (1997), pp 516-517. Claims purporting to give the Court jurisdiction are "colourable" and "not genuine" if they are obviously doomed to fail: Cook v Pasminco Ltd [2000] FCA 677 ; (2000) 99 FCR 548 at 550. To invoke the Court's jurisdiction, claims must be "real and not mere pleading allegations" Hopper v Egg and Egg Pulp Marketing Board of Victoria [1939] HCA 24 ; (1939) 61 CLR 665 at 677 (Starke J). In light of Lardil and the fact that the present case is not materially distinguishable from that authority, the present case was doomed to fail. The Federal law aspect of the application was therefore, in the sense the term is used in the cases "colourable". That has the consequence that there is no jurisdiction to entertain the State law aspect of the claim, even if the Applicants had standing. That would turn on a question as to whether on the particular dates pleaded there was a power of renewal in the Petroleum Act or otherwise under State law. Lardil indicates that jurisdiction would, in these contingent circumstances, exist to determine such a question in the accrued jurisdiction. Jurisdiction is one thing; whether or not it is appropriate to exercise it is another. There is no right to declaratory relief. In Platypus Leasing Inc v Commissioner of Taxation (No 2) (2005) 189 FLR 411 Gzell J of the New South Wales Supreme Court referred (at [81]) to the undesirability of the use of declaratory relief as a "staging post" in litigation. I do not believe that such a declaration should be made. Declarations should not be made as a staging post in litigation, and in a case where some executive orders have to be made, it is usually best to proceed to consider those executive orders rather than making declarations. On behalf of Santos and Delhi Petroleum it was submitted that the declarations sought by the Applicants in paragraphs 1 and 2 of the Amended Application were staging posts to the end of an assertion in the future of a right to negotiate. I agree that this is, in any event, the true way of conceiving the declarations sought. Therefore, even if for that reason alone, I should not be disposed, as a matter of discretion, to grant that relief. The alternative suggested, striking out of the amended statement of claim, is not appropriate. The only way to address the fundamental jurisdictional difficulty presently attending the application would be to plead a claim for native title. That would be pregnant with a potential for embarrassment derived from different findings given that the Applicants already claim a native title determination in respect of the claim land in other proceedings in the Court. Further, I have in any event concluded that it is not appropriate, as a matter of discretion, to grant the declaratory relief sought. For these reasons, I should not be disposed to allow any such amendment. I shall hear from the parties as to costs, including whether costs should merely follow the event or whether s 85A of the NTA operates so as to require each party to bear their own costs. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

application declarations injunction whether grant of a petroleum lease under the petroleum act 1923 (qld) in respect of land claimed by "registered native title claimants" under the native title act 1993 (cth) is not a pre-existing rights based act within the meaning of the native title act applicant the registered native title claimant whether court has jurisdiction to entertain the application whether the application should be dismissed for want of reasonable prospects of success whether present proceeding would necessitate the determination of the existence or otherwise of native title rights of the applicant in respect of the claimed land in the proceeding no application for determination of native title in the proceeding whether the applicants had standing to seek any of the relief claimed held no reasonable cause of action held application doomed to fail held proceeding did not relate to a "matter" held application merely a colourable attempt to invoke federal jurisdiction held applicants lacked standing held in any event, declaratory relief sought merely a "staging post" such that it was inappropriate to grant relief as a matter of discretion application dismissed jurisdiction whether there is a "matter" before the court declarations sought no immediate legal or practical consequences judiciary act 1903 (cth), s 39b(1a)(c) aborigines federal court

A declaration that claims 1, 2, 3 and 5 of Australian Innovation Patent No 200310063, ('the patent') has been infringed by the respondent. 2. A permanent injunction restraining the respondent whether by itself, its directors, officers, servants, agents or otherwise howsoever during the term of the patent or any extension thereof from infringing the patent, including by the making, offering to make, selling, offering for sale, disposing of, offering to dispose of, importing, using or keeping for the purpose of doing any of those things, in relation to the product known as Super Bubble, or authorising the doing of any of those acts. 3. Damages, or at the election of the applicant, an account of profits made by the respondent in respect of its infringements of the patent. 4. All necessary accounts and inquiries, including so far as may be necessary, inquiries as to damages, and an order for payment of any sum found due on such count or inquiry by the respondent to the applicant. 5. Delivery upon oath to the applicant by the respondent of all infringing articles in the possession, custody, power or control of the respondent. 6. Delivery upon oath to the respondent of all documentation or any other material whatsoever (whether held in hard copy, electronic or any other form) in the possession, custody, power or control of the respondent depicting in any manner or advertising the Super Bubble product or any other infringing article. 7. Pursuant to s 122(2) of the Act and rules of this court, an order for inspection of the alleged infringing articles upon such terms and directions as the Court sees fit. 8. Pursuant to s 51A of the Federal Court Act 1976 upon such sum or sums as the respondent shall be adjudged to pay to the applicant at such time and at such rate as the Court may see appropriate. 9. Such further or other orders, directions or relief as the Court may see appropriate. 10. Costs. The applicant claims, until the trial of this proceeding, or further order, an interlocutory injunction restraining the respondent whether by itself, its directors, officers, servants, agents or otherwise howsoever during the term of the patent or any extension thereof from infringing the patent, including by the importing, making, offering to make, selling, offering for sale, disposing of, offering to dispose of, using, or keeping for the purpose of doing any of those things, in relation to the product known as Super Bubble or authorising the doing of any of those acts. 2. Costs. 3. Such further or other order, direction or relief as the Court may seem appropriate. I understand that the registered office of the respondent is in Castle Hill in New South Wales, and its legal representatives, Champion Legal Pty Ltd, are in Sydney. I asked the court officer to call the name of the respondent outside the Court this morning, however there was no response. Mr Logan, counsel for the applicant, tendered three affidavits sworn by Mr Paul McCowan, a member of the legal firm, Gilshenan & Luton, which acts on behalf of the applicant. To one of those affidavits, a copy of the letter dated 5 July 2006 from Gilshenan & Luton to The Company Secretary, Tanwing International Pty Ltd (ACN 106 121 868) was annexed, which stated that enclosed with the letter by way of service was an application and statement of claim by the applicant against the respondent in the Federal Court in respect of an alleged breach of patent. Mr McCowan deposed that he had caused that letter, and, by way of service, the application and statement of claim, to be forwarded to the respondent at its registered office by prepaid post. 3 I note also acknowledgment of pending legal action in the Federal Court in correspondence from Champion Legal Pty Ltd to Gilshenan & Luton dated 11 August 2006; correspondence from Gilshenan & Luton to Champion Legal Pty Ltd dated 11 August 2006 referring to the listed hearing before the Federal Court on 21 August 2006; correspondence from Champion Legal Pty Ltd dated 14 August 2006 responding to the 11 August 2006 letter from Gilshenan & Luton, and a copy of an email from Mr McCowan of Gilshenan & Luton to Jason Sprag of Champion Legal Pty Ltd dated 14 August 2006 referring to matters in the lead up to the hearing today. All these correspondences were annexed to an affidavit of Mr McCowan sworn and filed in Court today. 4 I am satisfied that the respondent was properly served with the application and the statement of claim, and was aware, at least through its current legal representatives, that the application for interlocutory relief would be heard today. Accordingly, and in view of the nature of the applicant's claims and the evidence before the Court, I ordered that the hearing proceed in accordance with O 32 r 2(1)(d), Federal Court Rules . 5 I note however that it appears that the respondent has retained at least two firms of solicitors. From documentation annexed to the affidavit of Mr McCowan, sworn and filed 28 June 2006, it appears that the respondent was represented by KW Fegebank & Associates, Solicitors and Attorneys, in relation to this matter in early April 2006. However, as of early August 2006 it appears that the respondent was represented by Champion Legal Pty Ltd. Although in my view this is not relevant to service, it is an issue which may be of relevance in relation to other matters. I shall return to this issue later in the judgment. The patent is in respect of an invention entitled 'Insulation Sheeting'. The term of the patent is for eight years commencing on 30 April 2001. The patent has been certified, a certificate of examination being issued by the Commissioner of Patents on 21 November 2003. 7 Five claims define the invention, and the applicant claims that the actions of the respondent infringe claims 1, 2 ,3 and 5. Insulation sheeting comprising a single layer cell structure interposed between two outer layers at least one of which comprises a reflection foil, the cell structure comprising a plurality of cells of generally cylindrical construction each of a diameter between about 15 and 25 mm and a depth of between about 6 to 10 mm, the exposed surface of said one layer being coloured for reduction of glare. Insulation sheeting according to claim 1 wherein said reflective foil comprises high density polyethylene weave laminated aluminium foil. Insulation sheeting substantially as herein described with reference to the accompanying drawings. The applicant does not sell its products directly to the public, but sells through four core segments of resellers, namely shed companies, hardware stores, roofing material/plumbing retailers and insulation contractors (note the affidavit of Nicholas Joseph Martinovich filed 28 June 2006). 13 The applicant claims that around 13 March 2006, the respondent imported into Australia a quantity of an insulation product known as 'Super Bubble', which was subsequently installed in a building then under construction for the Manly City Council. 14 Further, the applicant claims that the respondent had sold quantities of Super Bubble to at least two entities which are clients of the applicant, namely Burmess Enterprises Pty Ltd (ACN 105 474 093) trading as Action Garages ('Action Garages') and Designer Sheds Pty Ltd. 15 The applicant also claims that the respondent has offered Super Bubble for sale by distribution of letters to a number of potential purchasers. Letters apparently from the respondent to two separate entities, offering to sell Super Bubble, were annexed to the affidavit of Fernando Quiroga filed 18 August 2006. The applicant's statement of claim details a number of entities contacted by the respondent as potential purchasers of the product. 16 The applicant claims that: • the conduct of the respondent in selling, or offering to sell, Super Bubble was done without the licence, consent or authority of the applicant • Super Bubble embodies all of the features or integers of claims 1, 2, 3 and 5 of the patent • by the acts of infringement by the respondent, the applicant has suffered and will continue to suffer loss and damage, and the respondent has made a profit. 17 Expert evidence has been tendered by the applicant in the form of an affidavit by Dr John Scheirs filed 28 June 2006. I note Dr Scheirs' qualifications and curriculum vitae. For the purpose of today's hearing, I accept that Dr Scheirs is in a position to provide expert evidence in relation to the analysis of insulation products, including those containing polymer compositions. 18 In his affidavit, Dr Scheirs deposed that he had been asked to examine the Super Bubble insulation product, and that in his opinion Super Bubble embodied all of the integers of claims 1, 2, 3 and 5 of the patent as described earlier in this judgment. There must be a serious question to be tried or a prima facie such that if the evidence remains the same there is a probability that at a final hearing it will be entitled to relief. 2. The applicant will suffer irreparable harm for which damages will not be an adequate compensation, unless an injunction is granted. 3. The balance of convenience favours the granting of an injunction. In order to establish infringement of the patent, the applicant must show that the respondent has taken each and every one of the essential integers of the relevant claims. Their Honours [in Populin] stated, as a fundamental rule, the test for infringement as set out in Rodi & Wienenbirger AG v Henry Showell Ltd [1969] RPC 367 that there will be no infringement unless the alleged infringer has taken all of the essential features or integers of the patentee's claim. This principle was reaffirmed by Gummow J in Nicaro Holdings v Martin Engineering (1990) 91 ALR 513 at 527 (par 49). 22 A patent gives a patentee the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention: s 13 Patent Act 1990 (Cth). 24 Prima facie , it appears that the respondent has infringed the applicant's patent. In my view, there is a serious question to be tried. The applicant commercially exploits the patent by producing an insulation product known as 'Glareshield'. According to the affidavit of Mr Nicholas Martinovich, the National Sales Manager for the applicant, filed 28 June 2006, Glareshield is by far the single biggest selling product of the applicant, accounting for approximately 85 per cent of the total insulation product sales of the applicant in Australia. 2. Already two of its shed customers, Action Garages and another entity identified as Coastal Garages, are no longer purchasing Glareshield from the applicant's New South Wales distributor, however these customers continue in business. The applicant believes that at least one of these former customers is purchasing Super Bubble from the respondent. 3. The applicant's New South Wales licensee has suffered losses in excess of $30 000 for the period March to May 2006, which losses are also affecting the business of the applicant. 4. The threat to the loss of sales of Glareshield may result in a diminished ability of the applicant to undertake research and development which would place the ongoing viability of the applicant at risk. Alleged 'poaching' of customers by the respondent, the importance of the Glareshield product to the applicant's business, and goodwill associated with the product indicate that irreparable harm is a possible consequence of continuation of the respondent's activities. I also note the submission of the applicant that the respondent appears to have a paid-up capital of $10, rendering a damages award potentially worthless. In view of this undertaking, in addition to the harm the applicant says that it is experiencing from the respondent's conduct and the fact that there is a serious question to be tried, the relief sought by the applicant is appropriate. In essence the applicant seeks costs on an indemnity basis, or, alternatively, an order under Federal Court Rules O 62 r 3, that costs be taxed and paid forthwith. 30 First, the applicant relied on what it describes as a pattern of deliberate and calculated conduct in cynical and flagrant disregard of the applicant's intellectual property rights which has resulted in the need to appear before me today. Counsel cited Masha Nominees v Mobil Oil Australia Pty Ltd [2006] VSC 56 as authority that pre-litigation conduct may be considered in the context of determining whether the circumstances as a whole warrant the making of an indemnity costs order. 31 Second, citing Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, the applicant states that where an applicant has commenced a proceeding in circumstances where, properly advised, it should have known that there was no chance of success then that is a circumstance which would justify an indemnity costs order. Counsel for the applicant submits that, by analogy to a respondent , such order would be justified where there is no defence asserted, but the respondent continues its conduct so as to put the applicant in a position where it can do nothing other than commence proceedings and incur substantial expense in mounting an interlocutory relief application, where, in effect, properly advised it ought always to have known that there was no answer to the application. 32 Whilst I note the applicant's submissions in relation to indemnity costs I am not persuaded at this stage that this is a case in which there are special or unusual features such as to justify the Court departing from the ordinary practice. Whilst I accept that there is a serious question to be tried and that an interlocutory injunction should be granted I am not of the view that, in the absence of submissions from the respondent, I can be certain that the respondent has no defence and is acting in such a way as having its only purpose ensuring the applicant incurs substantial expense. I note that the respondent currently has different legal representatives to those which were retained when the applicant first commenced raising concerns with the respondent over the patent, and apparently the parties have been engaged in discussions over the past few weeks. I am unaware of how long its current legal representatives have been acting on the respondent's behalf. In these circumstances I am not of the view that an order for costs on an indemnity basis would be just and appropriate. The applicant submits that due to the conduct of the respondent significant additional costs in preparation for the interlocutory hearing have been incurred. The general principle appears to be that costs ought to be resolved when the proceeding has been concluded, and the rights of the parties have been finally determined. As discussed earlier in this judgment I am not persuaded that this is a case where the applicant has incurred significant additional costs by reason of the respondent's conduct in respect of this litigation. While the respondent has failed to appear today and has not entered a notice of appearance I am not persuaded that the applicant would have incurred less costs if the respondent had appeared before me today. While the applicant has incurred considerable costs in this matter in relation to its intellectual property rights the situation is not one of special circumstances such as to divert from the general principles. 37 The future course of this litigation may shed more light on the conduct of the respondent such as to justify special orders as to costs however, in my view, having not had the benefit of submissions from the respondent today, the appropriate order is that the issue of costs be reserved. However in view of the evidence presented by the applicant, I am persuaded that it would be appropriate to grant the applicant the interlocutory relief it seeks. In oral submissions, the applicant pressed for permanent relief to be granted by the Court today. However I am not persuaded on the facts that it would be an appropriate order. Notwithstanding the failure of the respondent to appear today, I note that the matter has been treated by all parties and indeed conducted by the applicant in the lead up to the hearing this morning as an application for interlocutory relief. On that basis, it is reasonable to presume that the respondent was expecting to have its day in court when the application for permanent relief was heard. Until the trial of this proceeding, or further order, an interlocutory injunction to restrain the respondent whether by itself, its directors, officers, servants, agents or otherwise howsoever during the term of Australian Innovation Patent No 200310063 ('the patent') or any extension thereof from infringing the patent, including by the importing, making, offering to make, selling, offering for sale, disposing of, offering to dispose of, using, or keeping for the purpose of doing any of those things, the insulation product known as Super Bubble, or authorising the doing of any of those acts. 3. Costs be reserved.

australian innovation patent no appearance by the respondent whether satisfied that the respondent had been properly served with application and statement of claim and was aware of the hearing whether serious question to be tried test for establishing infringement of patent whether infringing product embodies the essential integers of the claim whether damages are an adequate remedy whether balance of convenience favours granting the injunction whether special reasons such as to award indemnity costs whether costs should be taxed and paid forthwith in accordance with federal court rules o 62 r 3 interlocutory injunction costs

The register is a public document which is open for inspection by a member without charge and by any other person upon payment of a fee. When copies are requested they must be provided in exchange for a fee. The provisions dealing with the maintenance of and access to registers are currently found in Chapter 2C of the Corporations Act 2001 (Cth). According to the Attorney-General these provisions were intended to facilitate "rapid and easy access" by the public to a company's register and to do so "at reasonable cost": Second Reading Speech, First Corporate Law Simplification Bill 1994 (Cth) (House of Representatives, Parliamentary Debates (1995) vol HR 199), pp 709, 712. The issue in this case is about the quantum of the fee that can be charged for a copy of the register. Each side engaged senior counsel to put its case. Experts have been called to give their views. Witnesses have been examined and cross-examined. The cost to each party is in the tens of thousands of dollars. So much for easy access at a reasonable cost. 2 The facts, so far as they are relevant, are these. The defendant, AXA Asia Pacific Holdings Ltd, is a public company whose shares are quoted on the ASX. The plaintiff, Direct Share Purchasing Corporation Ltd, makes unsolicited offers to purchase shares in listed companies, usually at below market price or on terms that are unfavourable to the selling shareholder. Only the very vulnerable or unsophisticated would ever accept these offers. The offers are in writing and posted to shareholders. To discover the identity and addresses of the shareholders the plaintiff needs access to the register. 3 On 7 January 2008, the plaintiff's agent wrote to AXA requesting a copy of its register. Enclosed with the letter was a cheque for $20,000 to cover the fee. The letter stated that the amount would significantly exceed the maximum prescribed amount under the Act and requested a refund of the difference. 4 AXA does not maintain its own register. It has retained Computershare Investor Services Pty Ltd to keep the register on its behalf. The propriety of a company arranging for some other person to keep its register has been recognised at least since the Uniform Companies Acts 1961 : see ss 152 and 154 . AXA notified Computershare of the plaintiff's request. It told Computershare: "At this stage, we are trying to work out how we can legally refuse to provide the register. " In the meantime it obtained from ASIC an extension of the time within which to comply with the request. Section 173(3) of the Act provides that a copy of the register must be provided within seven days unless ASIC extends the time. The reason for ASIC's intervention is not known. I guess it was because for good reason ASIC does not look with favour upon Mr Tweed, who is behind the plaintiff. 5 As events turned out, the plaintiff withdrew its request and made another request on 16 January 2008. This time it requested that the copy of the register be provided "on floppy disk (or CD Rom), in Microsoft [E]xcel format, comma delineated". AXA instructed its lawyers to respond. They advised the plaintiff that their client was "mindful of its obligations under Part 2C.1 of the Act and is entirely supportive of the proper use of the information contained in the company's register of members". Nonetheless they sought from the plaintiff an undertaking not to use the register except as "is relevant to the holding of the interests recorded in the register or the exercise of the rights attaching to them". No doubt the solicitors had in mind s 177(1) which limits the use of information contained in the register. It is interesting to compare this section with rules laid down in R v Wilts and Berks Canal Navigation (1874) 29 LT 922; compare R v Liverpool, Manchester and Newcastle-Upon-Tyne Railway Company (1852) 21 LJQB 284. 6 In due course the plaintiff gave the undertaking. Then, on 23 January 2008, AXA provided the plaintiff with a CD Rom containing the register. The CD Rom was not in comma delineated format. Instead, the CD Rom was in PDF format. AXA charged a fee of $17,195.39 for providing the CD Rom. It received payment by deducting that amount from the money in hand and returning the difference to the plaintiff. The question in issue is whether AXA was entitled to charge this amount. 7 No question arises regarding the permissibility of AXA providing the CD Rom in PDF format. I observe that s 1306(1) permits a company to maintain all registers on a computer and that s 1306(4) provides that where a copy must be provided it must be in "a document containing a clear reproduction in writing" of the register. However, s 173(3) states that "[i]f the register is kept on a computer and the person asks for the data on floppy disk, the company ... must give the data to the person on floppy disk. The data must be readable but the floppy disk need not be formatted for the person's preferred operating system". 8 A floppy disk is a portable computer storage device. It stores data magnetically. These discs are flexible, low in cost and easy to use. But they have been rapidly replaced by newer and better technology. Since the late 1990s the CD Rom has become the standard means of storing and transferring data. USB flash drives and DVD Roms are also gaining popularity. If it is not yet entirely obsolete soon the floppy disk will be a thing of the past. Fortunately, the parties here have proceeded on the basis that the statutory obligation to provide a copy of a register that is kept on a computer can be satisfied by the provision of the register on a CD Rom. 9 Access to a register which is stored on a computer has obvious advantages. One is the ease with which the information can be used and manipulated, especially if it is in a comma delineated format. On the other hand, if the information is reproduced in a different format, such as PDF, it is not capable of being used and manipulated as easily. It requires specialist software for that purpose which may be quite expensive to acquire and time consuming to use. 10 There are many circumstances in which a company may not want a person to have easy use of its register. Some may be morally defensible and some may not be. Several examples follow. Shareholders may be the target of an unwelcome off-market bid. A director in dispute with the board may wish to write to shareholders to advance his or her position or to attack an opposing view. If a company refuses to convene a meeting of members following a requisition for that purpose, a shareholder may wish to convene the meeting. In each of these examples (and many others can be thought of) the company may wish to make it difficult for the person wanting to contact members and so may supply the register in a difficult to use format. It is, I think, quite unsatisfactory that the legislation allows a company to do so. On one view it is inconsistent with the purpose of having a public register of members that a company can decide when and to whom it will provide a useful copy of its register. I appreciate that the original object of access to a register was to enable creditors to discover the identity of shareholders and the extent to which they were liable to contribute to the company's capital: Oakes v Turquand (1867) LR 2 HL 325, 366. Things have moved on since then and the legitimate reasons for access are now much wider. 11 The problem with the legislation that is in issue in this case is of a different order. The fee that a company is permitted to charge for a copy of its register is regulated. Section 173(3) provides the company must give a person a copy of the register (or a part of the register) if a person asks for a copy and "pays any fee (up to the prescribed amount) required by the company". The Corporations Regulations 2001 (Cth) (the Regulations) specify that in the case of a register kept on a computer the fee that can be charged is "a reasonable amount that does not exceed the marginal cost to the company of providing a copy": reg 1.1.01 and sch 4, item 3(b). In other words, the fee must satisfy two conditions: (1) it must be a reasonable amount; and (2) the amount must not exceed the marginal cost to the company of providing a copy of the register. 12 I propose to deal first with the second condition. On this topic, I have had the assistance of Dr Williams, formerly Professor of Law and Economics in the Melbourne Business School and now chairman of Frontier Economics Pty Ltd. He was called by AXA. That it was necessary to call Dr Williams, one of Australia's leading economists, for purposes of deciding what is an appropriate fee to charge for a copy of a register is the fault of the legislation, not the parties. 13 According to Dr Williams, and it could hardly be challenged, the term "marginal cost" is a technical term of economics. He explained that its meaning has been settled for over 100 years and is not the subject of any debate. I would go so far as to say almost every student of elementary economics (and many judges who know only a little of economics) understands what the concept means. Marginal cost is the cost of producing or supplying one more unit of output, whether the output is a good or a service. While it seems to be a simple enough concept, its application is not. First of all it is necessary to know something about cost. The cost of production or supply can be divided into two categories: fixed costs and variable costs. Fixed costs are those that do not vary with output; they would continue even if there was no output. The cost of plant and equipment, tax, interest on loans, depreciation and fixed overheads are common examples of fixed costs. Variable costs, by contrast, change with output. Typically they include raw materials, wages, transportation costs and the like. Marginal cost, then, is a function of variable costs alone. 14 Marginal cost may be easy to define in theory. But it is notoriously difficult and exceedingly expensive to calculate in practice. Two of the problems, among many, are these. First, it is necessary to decide which costs are to be classified as fixed and which are variable. This is a topic about which views will differ. The second problem is how one should account for joint or common costs when multiple products or services are supplied. Moreover, for analytical purposes marginal cost has its shortcomings. The problem is that marginal cost will vary from one moment to the next and between wide extremes. One reason is that the cost of production constantly changes. Another is that the circumstances of production may differ from time to time. 15 All competition lawyers are familiar with the concept of marginal cost. At one time predatory pricing was defined as charging a price below that of marginal cost. That approach did not survive for long. According to Professor Hovenkamp the reason was that "[m]arginal cost generally cannot be computed in litigation". He explained that "[t]he primary value of marginal cost ... is conceptual": H Hovenkamp, Federal Antitrust Policy: The Law of Competition and its Practice (2 nd ed, 1999) at 337. See also William Inglis & Sons Baking Co v ITT Continental Baking Company Inc 668 F 2 d 1014 (1982). When Dr Williams was giving his evidence I suggested that "marginal cost" found its way into the Regulations because its difficulty of application was not appreciated. Prompted by my comment, Dr Williams said: "It is astonishing [that marginal cost] is in the statute at all". 16 The facts of this case put in stark relief the problem of having marginal cost stand as a cap to a reasonable fee. As I have mentioned, AXA's register is kept by Computershare. This imposes upon Computershare both the obligation to make the register available for inspection and to provide a copy to any person entitled to receive a copy: s 174. It is, I think, implicit in the legislation that the satisfaction by Computershare of its obligations is the means by which the company itself satisfies its duty to do those things. 17 As the evidence shows the marginal cost to Computershare of providing a company register is not great, but the marginal cost to AXA is substantial. It is necessary to explain why. For Computershare the work involved in producing a CD Rom containing the register consists of keying instructions into a computer, waiting for the report to run, downloading the information onto a CD Rom and sending the CD Rom to AXA. The variable costs incurred are the cost of an administrative staff member operating the computer, the cost of purchasing a CD Rom and the cost of delivering the CD Rom to the client. The evidence of Ms Guyer, Computershare's State Manager for Victoria, suggests that the cost is likely to be no more than $100 --- $150. 18 On the other hand, the cost to AXA is much higher. Dr Williams explained that the marginal cost to AXA of providing a copy of the CD Rom is the cost of acquiring the copy of the register on the CD Rom plus the cost of making the arrangements to obtain the copy and send it to the plaintiff. The cost of the CD Rom is regulated by the Registry Services Agreement pursuant to which Computershare provides share registry and other services to AXA. According to that agreement Computershare was entitled to charge $17,195.39 for supplying the CD Rom. Why is the fee so high? I do not think there is a sinister explanation. AXA has online access to the register as part of the services provided by Computershare. If it needs to send information to shareholders Computershare undertakes the task. Thus AXA has no need for a copy of its register, save in exceptional circumstances. Indeed, in the last four or five years it has only requested four copies, one for its major shareholder and the other three for the plaintiff. In the first example the fee charged by AXA was passed on. In these circumstances AXA has little incentive to bargain down the rate. 19 By the same token I am sure Computershare would have agreed to take less for providing a copy of the register. Under its contract, Computershare receives around $1.3 million per annum for its services. Ms Guyer suggested that charging a high fee for one service was an example of cross-subsidisation. It is true that on the demand side, multiple products or services are often used to subsidise one another. I do not, however, accept that there was any expectation for cross-subsidisation from a service so rarely used. 20 We can now see the problem of applying the concept of marginal cost to the facts at hand. The marginal cost to Computershare of producing a copy of the register on a CD Rom is less than $100 (my own calculation based on the evidence of Ms Guyer is that it is around $50). The marginal cost to AXA is in excess of $17,195.39; the price paid to Computershare is only part of the marginal cost, the balance has not been worked out either because the amount is so small or because the task is too difficult. This is in circumstances where AXA does nothing more than receive the CD Rom from Computershare and send it to the plaintiff, the cost of which cannot be more than a dollar or two. 21 I can now deal with the principal issue in dispute which is whether the fee charged by AXA is a reasonable amount. Ordinarily one would begin by examining the market price for CD Roms containing a register. There is no evidence, however, of any market for the supply of such a product. 22 In the absence of a market price, the price paid by the supplier of the product can sometimes be a useful guide to what is a reasonable fee. That price would, however, only be useful if it were arrived at in negotiations where the supplier was attempting to purchase the product at the lowest possible price. Self-evidently that is not true of the price paid by AXA, at least as regards the provision under its agreement with Computershare of a copy of the register. 23 Another method of determining what is a reasonable fee to charge is the cost of production plus (if it were not otherwise included) a reasonable return on capital. That is how price is set in a competitive market to give the producer enough profit to maintain his or her investment. It would, of course, be necessary to specify what costs are to be taken into account. The costs might be limited to variable costs or, as I would prefer, include fixed costs. There is simply no evidence in this case upon which such a calculation can be based. 24 What I do have is the evidence of Mr Farrelly, an information technology expert called by the plaintiff. Mr Farrelly has considerable experience in managing document databases for clients which are of similar size to AXA's register of members. A typical fee charged to supply a CD Rom copy of the data is between $50 and $300. Mr Farrelly also undertook a rough assessment of what it would cost Computershare to produce a copy of the register (if the work was performed by an employee). His estimate was a rather generous $480. He also made an assessment of how much an external consultant would charge Computershare for producing a copy. He assumed the external consultant would charge a one day fee regardless of how long the task took. He said the fee would be between $1500 and $2200. 25 In my view a reasonable (if somewhat generous) fee to charge for the CD Rom supplied to the plaintiff is $250. I accept that this amount is something of judicial guesswork but the evidence does not permit me to be any more precise. In arriving at a fee of $250 I have had regard to the fact that the CD Rom was in PDF format and difficult to use. 26 In the circumstances there will be orders that AXA refund the plaintiff the sum of $16,945.39 and pay the costs of the action. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

register of members request for a copy of the register electronic copy of register provided in pdf format company entitled to reasonable fee fee not to exceed marginal cost whether amount charged reasonable corporations

The motion filed 24 November 2006 is dismissed. 2. The First and Second Applicants pay the costs of the motion. The trial of this action is set down for five days commencing 4 December 2006. The application for the adjournment arises in part by reason of external difficulties related to the timing of the production of certain documents, said to be relevant to the application, pursuant to the issue of a subpoena directed to the applicant's former solicitors. It is, however, also undoubtedly the case that the recent engagement of new solicitors has had a role to play in generating those difficulties. 2 These proceedings have been on foot for a very long time and the trial dates have been fixed since June of this year. It was always going to be difficult because for a part of that time at least Mr Spalla was representing himself in Court and obviously taking a part of the burden of the preparation, if not the entire preparation, on his own shoulders. 3 While I sympathise with the position in which he and his advisers find themselves, I am also of the view that whilst their position is, as stated in the affidavit evidence of the solicitor, Mr Still, difficult it is not impossible. The prejudice to the individual respondents by the further deferral of this long awaited trial is apparent from the affidavits which they have filed and which refer to the strain and the ongoing difficulty it creates in their current employment. Whilst it might be possible to schedule a date in February that is not a straightforward exercise having regard to my present commitments and I begin a six to eight week trial in the second week of March. 4 In the circumstances, I regret that whilst it is an unsatisfactory balance of interests judgement from some points of view, I feel obliged to refuse the adjournment, that is to say, to refuse the motion to vacate the trial date. The motion filed 24 November 2006 will be dismissed with costs. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French .

adjournment trial late production of documents by third party under subpoena late engagement of new representation by applicant prejudice to respondents adjournment refused practice and procedure

Both in the course of submissions and after delivering judgement on 26 March 2009, I raised with the parties the question of what further material, if any, beyond that referred to in O 46 r 6(2) of the Federal Court Rules , ought to be the subject of a grant of leave to a non-party to inspect on the Court's file. I did that of my own motion because of the wider interest in the case which was evident from the large attendance in the public gallery in the course of the hearing and because, from the evidence led, I apprehended that there was a yet wider interest in the proceeding. Given that, it seemed to me desirable, while the issues and evidence in the case were freshly in my and the parties' minds, to give the Registrar the benefit of a direction in a general and pre-emptive way in relation to which further documents might be inspected by a non-party. That was so even though a non-party had not yet made a request for access. To that end, I made directions for the filing of submissions by the parties on the subject. The now former administrators of Storm Financial, who became the liquidators of that company by virtue of the orders I made, immediately indicated by an oral submission by their solicitor that they had no objection to a general grant of leave. Each other party has taken advantage of that opportunity to make a written submission. I have considered each of the submissions, oral and written. For its part, ASIC has no specific objection to a grant of leave. Nor does it seek an order that any particular affidavit or exhibit ought to be the subject of a confidentiality order. It does though submit that, in considering the subject of leave, "the Court should be mindful that certain affidavit material filed and/or read into evidence may not have been relevant or relied upon by the Court in reaching a final determination and/or the contents may have remained 'untested' in the sense that their deponents were not subject to cross-examination". The receivers and managers of Storm Financial in their written submission took a like position to that which had been voiced orally on behalf of the now former administrators. For their part, Mr and Mrs Cassimatis submitted that there was "no identified basis for the proceedings to be better understood by members of the public by the release of [material beyond that referred to in O 46 r 6(2)] .... Respectfully, in the circumstances of the case, it would be prone, at least in the minds of some reasonable observers, to the unappealing implication that the departure from O 46 r 6(3) may be engaged by the extent of interest by the popular press rather than the inherent likelihood of wider dissemination of the material making the court process better understood". They drew particular attention to Exhibits MRR1 and MRR 2 to the affidavit of Mr Ryan, an officer of ASIC, whose affidavit had been filed in Court by leave on 18 March 2009 when the originating application was likewise filed. It was submitted that there exhibits had been the subject of objection and did not feature in the reasons which I published in respect of the substantive application. Mr and Mrs Cassimatis submitted that there was no present occasion for the granting of leave and that it was better to await such application for leave as might be made and then to consider the same on its particular merits. It is a given under our system of justice that, save in exceptional circumstances, the ideal that justice should not only be done but be seen to be done dictates that hearings are conducted in public. That notion is taken up by the requirement, flowing from s 17 of the Federal Court of Australia Act 1976 (Cth), that, unless the interests of justice otherwise dictate in a particular case, hearings of substantive applications occur in public. That section envisages that what one might term pre-trial procedural applications need not be conducted in public. Such public administration of justice and the consequent ability for the public freely to observe it and for the media readily to report it is a safeguard against the abuse of the very considerable authority entailed in the exercise of the judicial power of the Commonwealth: R v Davis [1995] FCA 1321 ; (1995) 57 FCR 512 at 514. Observation of the administration of justice is one thing; the ability freely to inspect every document on the Court's file is another. So much is evident from the structure of O 46 r 6. Rule 6(2) lists out those types of document which may be inspected as of right with r 6(3) then providing that the ability to inspect other types of document requires a grant of leave. As to the latter, while there may be a general disposition to permit a non-party to have access to such non-confidential affidavits and exhibits as are admitted into evidence: Seven Network Ltd v News Ltd (No 9) [2005] FCA 1394 ; (2005) 148 FCR 1 , at [26], the extent of further access must in each case be considered on its merits. That is so even in relation to material read in open court or referred to by a judge: Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 3) (2002) ATPR 41-873 at [7]. One factor which can be relevant to the withholding of access is the approach adopted by the parties to objections to evidence. In this case objection was taken on behalf of Mr and Mrs Cassimatis to the admission of Exhibits MRR1 and MRR2 to Mr Ryan's affidavit. Those exhibits respectively comprised a bundle of responses by investors, rendered anonymous by obliteration of name and other identifying particulars, to a standard form questionnaire directed to them by ASIC and a summary of those responses prepared by ASIC's investigator. Contrary to the submission made on behalf of Mr and Mrs Cassimatis, it is not correct to state that neither Exhibit MRR1 nor Exhibit MRR2 feature in the reasons for judgement in respect of ASIC's substantive application. The fact that ASIC had already received numerous investor complaints is expressly mentioned: see para 70. What I further there observe is, "Whether there is any merit in them is not able to be determined in the present proceedings. The very fact that such complaints are being made is but another factor which is indicative of a need in the context of a corporate collapse like this, for a winding up now, not consigning that choice to creditors and potentially delaying a winding up for up to 120 days". In the result, I did not understand ASIC to press the tender of Exhibits MRR1 and MRR2 beyond evidencing the fact of numerous investor complaints and their nature. In any event, the only use made of them by me is recorded in my reasons for judgement with the result that it became unnecessary to consider, given the objection, whether they had any other relevance to the proceeding. The limited use made of Exhibits MRR1 and MRR2 to the affidavit of Mr Ryan does mean, in my opinion, that it would not be appropriate to grant leave for them to be inspected, at least in a pre-emptive way. Save for those exhibits, it seems to me that Mr Ryan's affidavit ought to be the subject of a general grant of leave to any non-party to inspect its contents. The body of the affidavit consists of a narrative of the circumstances leading up to the making of ASIC's winding up application. The other exhibits to it consist of the administrators' report to creditors, the Information Memorandum and of correspondence between Russell & Co on behalf of Mr and Mrs Cassimatis and ASIC. I referred to or extracted some of this material in my reasons for judgement. It would assist the understanding of a non-party of the proceedings to be able freely to inspect this material. Beyond this, it seems to me that there should be no general, pre-emptive grant of leave to inspect material on the court file or the transcript. Rather, that is a subject best considered in the circumstances of a particular application and in light of the submissions offered by the parties to date. Particularly that is so given that there remains a controversy pending in the Supreme Court of Queensland in relation to the payment of $2 million made in December 2008 and that, in this Court, it was conceded that there existed a serious question to be tried in those Supreme Court proceedings. Another consideration which persuades me that this is the better course to take at present is that the disposition of ASIC's substantive application rendered unnecessary the determination of the separate application made by Mr and Mrs Cassimatis for remedial relief and related orders in respect of alleged shortcomings in the administrators' report to creditors. It is to be remembered that the affidavit material read on their behalf and the oral evidence of Mr Russell and Mrs Cassimatis was tendered in respect of that application as well as that of ASIC. I have made some reference to this evidence in my reasons for judgement in respect of ASIC's application. The use that I have made of it is evident in those reasons. At least as presently advised, the extent of that reference and use is not such as would persuade me that the interests of open justice require unfettered access by a non-party to all of that other material. There was much in it which principally related to an application which was heard but which became unnecessary to determine. Perhaps in the context of a particular access application the position so far as greater access is concerned may appear different, but that is to anticipate. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

documents inspection and access to documents by non-parties whether access should be granted in interests of open administration of justice access should be granted subject to limitations (cth) federal court rules 1979 o 46 r 6 practice and procedure

His Honour dismissed an application for judicial review of a decision of the Refugee Review Tribunal (Tribunal) handed down on 19 February 2009 which affirmed a decision of a delegate of the first respondent (Minister) to refuse to grant the appellant a protection visa. The appellant claimed that he was the District Secretary of the Pattali Makkal Katchi (PMK) party and a Muslim association known as Himayathul Islam Association (HIA) which association was responsible for fund raising and maintenance of a new mosque in his home town of Adirampattinam in the state of Tamil Nadu. The appellant claimed to fear harm from an individual, who may simply be referred to here as G, and his colleagues because they were opposed to the construction of the mosque, because of the appellant's charity work with the poor and because the appellant opposed G's illegal liquor business. The appellant further claimed that he was severely beaten by members of the BNP (also referred to as BHP), Hindu Front and RSS and on another occasion members of the BNP attempted to kill him. He claimed that he was denied protection from the police. In a decision dated 24 October 2008, a delegate of the Minister refused the appellant's application for a protection visa. The delegate was not satisfied that the appellant was a member of either PMK or HIA or that he had the public profile he claimed so as to make him of interest to members of other political parties. The delegate considered that the appellant would not be at risk of persecution for his claimed political activities and associations with either the PMK or HIA. Additionally, the delegate considered that the appellant could reasonably relocate within India. The delegate therefore concluded that the appellant did not have a well-founded fear of persecution for a Convention reason. On 12 December 2008, the Tribunal wrote to the appellant inviting him to attend a hearing before the Tribunal to give evidence and present arguments in relation to his claim. The appellant provided a response to the hearing invitation and attended the scheduled hearing during which he gave oral evidence and provided documents to the Tribunal. In its decision dated 18 February 2009, the Tribunal found that the appellant was not a credible witness. The Tribunal found that the appellant's evidence was 'lacking in detail', 'vague,' 'implausible', 'disjointed' and 'irrational'. The Tribunal made the following findings in respect of the appellant: He is a citizen of India: [70]; He is a Muslim and lived with his family in Adirampattinam in Tamil Nadu: [71]; He had some involvement in HIA, but his role was minor and did not attract any adverse attention from G or religious or political groups by reason of his involvement in HIA: [72]-[73]; He was not threatened by G and his colleagues in 2007 as claimed: [74]-[75]; He was not an office bearer of the PMK and does not face any chance of persecution for reason of his membership or support of the PMK: [78]-[79]; He had a dispute with G in 2008 about business and civil matters, which may have led to threats by men associated to G, but this was not for reasons of his religion, his political opinion or his charitable work: [80]; and He would not face any chance of mistreatment if he returned to India now or in the foreseeable future: [76]. Accordingly, the Tribunal was not satisfied that the appellant had a well-founded fear of persecution for a Convention-related reason: [81]. The Federal Magistrate considered each of three grounds raised by the appellant and rejected the appellant's application on all bases: SZNHS v Minister for Immigration and Citizenship [2009] FMCA 873. The first ground alleged that the Tribunal did not comply with s 424A of the Migration Act 1958 (Cth) (Act) by failing to invite the appellant to comment on independent country information to which it referred. The Federal Magistrate rejected this ground because of the operation of s 424A(3)(a) of the Act: [14]. The second ground alleged that the Tribunal failed to give proper (if any) weight to the documents upon which the appellant relied. The Federal Magistrate rejected this ground as an impermissible invitation to the Court to undertake merits review: [15]. The third ground challenged the Tribunal's finding that it did not consider that the appellant faces a real chance of persecution for a Convention based reason. The Federal Magistrate rejected this ground, again, on the basis that it sought an impermissible merits review of the appellant's claim: [16]. The Federal Magistrate concluded that the matters raised by the appellant did not disclose jurisdictional error on the Tribunal's part ([17]) and dismissed the application for judicial review. The Tribunal did not give me notice under section 424A of the Migration Act 1958 about the independent information. The applicant may have been involved in an incident in May 2008 in which he was injured however, I do not accept that it was Convention related. I infer, however, that the appellant wishes to contend that the Federal Magistrate erred in law by not making such findings in the proceeding below. (2A) The Tribunal is not obliged under this section to give particulars of information to an applicant, nor invite the applicant to comment on or respond to the information, if the Tribunal gives clear particulars of the information to the applicant, and invites the applicant to comment on or respond to the information, under section 424AA. In QAAC of 2004 the Full Court of the Federal Court held that the Tribunal was not under an obligation to provide country information to the applicant which was not specifically about them or another person by reason of s 424A(3)(a). I am bound by those decisions unless the High Court rules otherwise. The country information relied on by the Tribunal and referred to by the appellant was of this character. It was about the availability of false documentation in India. As a result, the Federal Magistrate correctly found at [14] the Tribunal did not commit any jurisdictional error. No error in the Federal Magistrate's decision is discernible. Accordingly, this ground fails. The appellant's documents were in fact considered by the Tribunal (see [27], [50], [53], [78] of the Tribunal's decision record). The weight to be attached to them was a matter for the Tribunal as the sole arbiter of the facts. This allegation amounts to an impermissible invitation to this Court to undertake merits review: see generally NAHI v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 10 at [10] . In its reasons for decision, the Tribunal carefully considered each of the appellant's supporting documents ([27]), attributed weight to that material and made factual findings as it was required to do. The Tribunal made specific findings about the purported letter from the President of the HIA ([72]), the letter from the PMK and the membership card ([78]). The Tribunal identified inconsistencies in the appellant's evidence at hearing and the contents of the supporting documents. On this basis, the Tribunal made findings regarding his membership in the HIA and PMK and had regard to independent country information about the ease with which false documents can be obtained in India ([78]). The Tribunal considered the medical certificate submitted by the appellant and, whilst satisfied that the appellant may have been attacked and injured in 2008, the Tribunal did not accept that the reasons for the attack were Convention related ([80]). The Tribunal's finding that the appellant's claims were unrelated to the Refugees Convention was a finding of fact that correctly emphasises that the reason for feared harm must be found in the 'singling out' of one or more of the five attributes expressed in the Convention definition. See Minister for Immigration and Multicultural Affairs v Khawar [2002] HCA 14 ; (2002) 210 CLR 1 , McHugh and Gummow J at 28; Minister for Immigration and Multicultural and Indigenous Affairs v VFAY [2003] FCAFC 191 at [49] --- [56]. No error is revealed in the Tribunal's approach. The Federal Magistrate dismissed this ground on the basis that it is the task of the Tribunal, and not the Court, to make findings as to the weight given to documents ([15]). No error of law is revealed in the Federal Magistrate's approach. Accordingly, this ground fails. A fair reading of the Tribunal's decision record shows that the Tribunal understood the nature of, and set out a reasoned analysis of, the appellant's claims; explored those claims with the appellant at the hearing; identified the determinative issues and gave him sufficient opportunity to give evidence, present documents and make submissions at the hearing. The Tribunal then made factual findings as it was required to do. The Tribunal rejected the appellant's claims because it doubted the veracity of the appellant's evidence. As it is for the appellant to enable the Tribunal to achieve a state of positive satisfaction about his claims, the fact that this did not occur in this case does not establish any error on the part of the Tribunal: see Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389 , Kirby J at 405, [78] and the authorities there referred to. The Federal Magistrate rejected this ground on the basis that it is an allegation seeking merits review of the Tribunal's decision ([16]). No error is revealed in the Federal Magistrate's approach. Accordingly, this ground fails. The Court therefore orders: The appeal be dismissed. The appellant pay the first respondent's costs to be taxed if not agreed. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.

appeal from federal magistrate no appellable error appeal dismissed migration

The case involved the interpretation of an enterprise agreement known as the Star City Pty Limited Enterprise Agreement 1998 which has been amended and replaced by subsequent Agreements made in 2000, 2002 and 2004. 2 The background of the matter is that the appellant, Star City Pty Limited ('Star City') operates the well-known casino at Pyrmont in Sydney. Mr Hau, the employee concerned, was employed by Star City at all relevant times as a security officer. At relevant times his employment was governed by the Agreements to which I have referred. The rosters prepared for staff typically showed (and also on days other than when he worked 'short shifts' --- see below) that Mr Hau was rostered for duty from '0700' to '1915' hours, that is 12.25 hours, in a 24 hour period. 4 In 1995 Star City, the Union and employees had introduced what was known as a 12 hour shift system to a number of employees including the security staff. It was always contemplated that the ordinary hours which would entitle employees to payment (other than at penalty rates) for excessive hours worked would be 76 hours per fortnight. It was always contemplated that there would be '12 hour shifts' as well as what were known as 'short shifts' of something less than 12 hours. 5 Originally, the ordinary rosters would provide for 76 hours ordinary time worked in a fortnight. Apparently Star City desired some further flexibility, to which the employees and the Union were not opposed, and it was agreed in the 1998 Agreement that the 76 hours per fortnight might be achieved by averaging over two successive fortnights. 6 As a practical matter the security staff were required to attend the employer's premises a few minutes before the commencement of the notified roster period, in order to be issued with the two-way radios that they would need to have during their work, and to ensure that they were clad in the appropriate uniform, so that they could be fully operational at the commencement of the roster at the notified time. 7 The 15 minute period at the end of what would otherwise be a 12 hour rostered period acknowledged that the employer required employees finishing a shift to remain for up to another 15 minutes, in order to accomplish a hand-over of the radio equipment and to cope with any brief period of lateness or unreadiness of the employees to succeed them. The intention was that, as far as possible, at all times there would be an adequate and appropriate level of security staff for Star City. In their nature, Star City's operations would be likely from time to time to give rise to security problems. 8 At all relevant times the Agreements provided for unpaid meal breaks during the 12 hour roster of not less than half an hour during each work day (see for example, cl 20 of the 1998 Agreement). 9 The employee's claim arose out of the provisions of cl 19 and cl 27 of the 1998 Agreement and their successors which, so far as material, were unchanged. The employees must genuinely agree to the introduction and method of working such shifts. Where agreement is reached the Company will provide the Union a written memorandum detailing the agreement. The parties agree to review the operation of this sub clause every six (6) months. Where an employee is rostered to work permanent night shift, such employee shall be granted a loading of 30% on the base rates of pay in clause 26.1. Such penalty payment is designed to compensate the employee for all penalties except as otherwise provided for in this agreement. Where an employee is rostered to work permanent afternoon shift such employee shall be granted a loading of 17% on the base rates of pay in clause 26.1. Such penalty payment is designed to compensate the employee for all penalties except as otherwise provided for in this agreement. Where an employee is rostered to work permanent day shift such employee shall be granted a loading of 10% on the base rates of pay in clause 26.1. Such penalty payment is designed to compensate the employee for all penalties except as otherwise provided for in this agreement. Where an employee is rostered to work permanent evening shift such employee shall be granted a loading of 25% on the base rates of pay in clause 26.1. Such penalty payment is designed to compensate the employee for all penalties except as otherwise provided for in this agreement. 11 The contention of the Union and Mr Hau was that in subcl 19.1.4 the concept of the 'maximum engagement' should be taken to fill that gap and that what was apparently contemplated was that there would be a spread of hours not exceeding 12 hours. Counsel for the Union pointed out that in the same subclause the notion of the minimum engagement referred to a minimum reservation of the employee's time during which he or she would be liable to be paid, even if less than four hours were worked. Unless 'maximum engagement' were similarly regarded as referring to the maximum period of reservation of employees' time, that is to say, the spread of hours during which paid work and requisite unpaid meal breaks should occur, there would be no obstacle to the employer requiring an employee to reserve, say, 14 hours' continuous time during which only 12 hours of paid working time might be achieved. That, given the Agreement as a whole, would appear both unjust and not in accordance with the probable intention of the parties. 12 The employer, until this challenge, paid the employees (including Mr Hau) 12 hours' pay, but Mr Hau did not work in any of those notified rostered periods more than 11 and a half hours and quite frequently worked 11 hours and 15 minutes on what I might call 'actual on-floor, fully operational security work'. Given the practical requirement that employees be present and spend some time at the employer's business before the commencement of that work, together with the notified requirement that they be there for 12 hours and 15 minutes, and the practical requirements of what might occur in the last 15 minutes of that time, it is by no means surprising that a practical arrangement for the payment of 12 hours' pay might have been made and adhered to without complaint. 13 Against the background of that unchanged practice, it seems to me that, if the Agreement can be interpreted, having regard to its language, in a way that recognises the propriety of what was done and a lack of requirement in the employer to do more or to pay more than was paid, then such an interpretation should be adopted. Counsel for the employer suggests that this may be done by regarding the word 'engagement' as referring to a choice by an employer of the number of hours during which it might require the employee to perform actual work with the consequent obligation on it to pay for those hours. 14 The Union, as indicated, argued that the context of the term 'engagement' as used in cl 19 should be seen as referring to a spread of hours to include the time necessarily taken for requisite unpaid meal breaks. Counsel for the appellant points out that the term 'engagement' which normally does mean reserving an employee's time for a certain period and undertaking to pay for it, differs from the notion of 'notified roster times' in cl 27 which is used in a context suggesting that it is the notified roster times which, as a practical matter, would constitute the spread of hours for ordinary time payment purposes. 15 Further, there are limits on the extent of such possible notified roster times beyond which something more than ordinary time payment would have to be made. In the first place, cl 19.1.2 requires at least a ten hour break between shifts, except at changeover of a shift cycle or on a roster swap. In the ordinary case that could not be accomplished if the notified roster times exceeded standard hours numbering 14. Secondly, in later Agreements, the concept of a broken shift, which carries its own penalty rate, was clarified to mean that, if there is a break between periods of work exceeding 90 minutes during a period in which an employee is rostered for duty, then that rostered period would be a broken shift. The consequence would be that originally there was a practical ordinary time spread of hours of 14 hours and there is now a practical spread of hours of 13 and a half hours for ordinary time payment purposes. 16 I agree that the Agreement can be so interpreted. It has to be acknowledged that, as a matter of the language used in the Agreement, that is not a wholly satisfactory outcome. However, we live in an imperfect world, and busy people were drawing up the Agreements to deal with situations that they well understood, rather than to provide perfection for lawyers who might later mull over their language. Any imperfections or difficulties of that interpretation are, to my mind, considerably less than the imperfections and difficulties which would be involved in overturning what was a perfectly satisfactory, uncomplained of, industrial practice between parties not lacking sufficient resources to be regarded as having contracted at arm's length. 17 For these reasons I consider, with respect, that his Honour fell into error and his orders cannot stand. 18 The appeal will be allowed and the orders of the learned Chief Industrial Magistrate vacated. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

the commonwealth minimum entitlements of employees overtime interpretation of enterprise agreement. industrial law

I invited the parties to make additional submissions in relation to costs and whether or not there should be injunctive relief. The applicant has advised that it does not now press for injunctive relief although that had been part of its original claim. 3 The applicant pursues a costs order on this basis on three grounds. The first is that an offer of compromise was made on 10 April 2007. It was clarified on 20 April 2007. The offer was that the applicant would pay the sum of $300,000 for the future use of the DR Site as defined in the main judgment. There were additional features of this offer to which I will refer below. The offer was rejected. The second ground relied upon is the 'exaggerated nature of the respondent's cross-claim'. Reliance is placed on [20], [23]-[28], [137]-[148] and [253]-[267] of the main judgment. Thirdly, the applicant relies upon the non-discovery by the respondent of a critical DAF (as defined in the main judgment). This document reflected the actual fee which the respondent proposed to seek from the applicant for the DR Site. It was a sum far less than that pursued in the primary claim at trial. At trial, no sum at all was awarded to the respondent. As to the late discovery, see [137]-[138] of the main judgment. The chronology of those exchanges is as follows. The proceedings were initiated on 26 October 2006. On 12 September 2006, prior to the commencement of the proceedings, the respondent quantified its claim in respect of a DR licence fee (as defined in the main judgment) at a figure of $932,690 plus DR maintenance fees (as defined in the main judgment) of $139,903 per annum exclusive of GST. 5 On 16 October 2006, the respondent offered to discount the claimed DR fee (as defined in the main judgment) by 30% to a figure of $652,883 and to seek DR maintenance fees for three years at $441,044. It offered to waive any back maintenance DR fees offering, therefore, to accept in total $1,093,927 in relation to the DR Site. 6 On 15 December 2006, the respondent made a further offer to accept $847,417 which it expressed to be a final offer. It withdrew that offer and reverted to the original claim of $932,609 plus $139,903 per annum as claimed on 12 September 2006. 7 The 10 April 2007 offer in respect of which the applicant's claim is based was set out in a letter of that date to the respondent's solicitors. 8 There has been some suggestion that there may have been confusion about the substance or effect of the offer. That suggestion was raised in correspondence from the respondent's solicitors on 18 April 2007. That the offer was in the terms outlined above was clarified by a letter in response from the applicant's solicitors dated 20 April 2007 and it is from that date that the applicant seeks indemnity costs. 9 At that stage the respondent had neither filed a defence or given discovery so, at least insofar as the litigation component itself was concerned, had not incurred significant party and party costs. The defence was filed on 11 September 2007. Discovery was given on 15 November 2007. 10 The applicant contends that the 18 April 2007 reply from the respondent to the 10 April 2007 offer reflected the respondent's practice of substantially exaggerating the amount of its claim. In the 18 April 2007 letter, the respondent's solicitors purported to seek a DR fee 'based on alleged new information' showing that the applicant's DR Site greatly differed to the information the respondent had when it suggested pricing to the applicant in its letter of 16 October 2006. From the 18 April 2007 response date, the claim from the respondent was for sums totalling almost $3.2 million plus GST or a total of more than $3.5 million. In the main judgment I rejected any such argument of new information, at least in the terms it was expressed at trial (main judgment at [139]-[140]). 11 No further offers were made from the respondent for a period of time. Then about a year later on 5 May 2008, the respondent offered to accept a DR fee of $2,150,209 plus GST plus ongoing maintenance fees for the DR Site of $322,538 plus GST per annum. It offered to waive backdated DR maintenance fees and said that the fees which were due to it at that date totalled approximately $1,048,250 plus GST. The applicant declined to accept that offer. 12 There was a further final offer on 5 June 2008 which was made very shortly prior to the trial (which commenced on Monday, 9 June 2008). In that offer, the respondent made a further offer of $932,690 which was the amount of the original DR licence fee claimed on 12 September 2006. The offer was open for acceptance only until 9.00 am on Monday, 9 June 2008. It follows that the original offer of $300,000 made on 10 April 2007 and clarified on 20 April 2007, had it been accepted, would have been more advantageous to the respondent than the outcome after trial. 15 It does not necessarily follow that because an applicant made an offer of compromise and then achieved a better result at trial, that an award of indemnity costs is justified. That said, I note that in a very recent decision of the High Court in Imbree v McNeilly [2008] HCA 47 in a joint judgment, the High Court awarded indemnity costs solely, it seems on the basis of an award of damages substantially exceeding the amount for which an offer had been made. (It must be said that the disparity between the offers and the outcome was substantial). 16 The approach taken in Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) [2002] FCA 224 ; (2002) 190 ALR 121 at [27] - [28] , in following the Full Federal Court in Black v Lipovac [1998] FCA 699 ; (1998) 217 ALR 386 was that is necessary to focus on the reasonableness of the conduct of the offeree in rejecting the offer. Insofar as the applicant relies upon a rejection of the offer of compromise, the applicant must demonstrate that the conduct of the respondent was imprudent or unreasonable. However, the cases have also stressed that there is no super added requirement that it show a higher standard of unreasonableness such as 'plainly unreasonable': see Black v Lipovac at [218], Seven Network Ltd v News Ltd (2007) 244 ALR 374 at [59]-[62] and University of Western Australia v Gray (No 21) [2008] FCA 1056 at [36] . 17 The view has also been expressed recently in Digga Australia Pty Ltd v Norm Engineering Pty Ltd (No 2) [2008] FCAFC 76 at [25] - [26] that the preparedness or otherwise of the unsuccessful party to contemplate a careful consideration of its legal position and to engage in sensible settlement discussions is a relevant consideration. 18 I accept the respondent's submission that the Court's discretion to order indemnity costs should be exercised carefully. In the earlier decision of Sanko Steamship Co Ltd v Sumitomo Australia Ltd [1996] FCA 22 , Sheppard J cautioned against too readily imposing an indemnity costs order. His Honour agreed with judicial statements that the fact that the law does not normally provide a full indemnity for costs may be an important spur to settlement and that the 'Calderbank approach may place a weapon in the hands of parties to the litigation which ought not be allowed to be abused'. His Honour said that the ordinary rule 'should only be departed from where the conduct of the party against whom the order is sought is plainly unreasonable' (emphasis added). 19 The addition of 'plainly' before 'unreasonable' was rejected by the Full Court of this Court on appeal in Black v Lipovac [1998] FCA 699 ; 217 ALR 386 at [218] . There is a line of authority in the Federal Court supporting the proposition that the mere refusal of a Calderbank offer does not of itself warrant an order for indemnity costs and the offeror needs to show the conduct of the offeree was unreasonable. The cases are WCW Pty Ltd v Charthill Ltd (Olney J, 7 July 1992, unreported), John S Hayes & Associates Pty Ltd v Kimberley-Clark Australia Pty Ltd (1994) 52 FCR 201 (Hill J), Sanko Steamship Co Ltd v Sumitomo Australia Ltd (Sheppard J, 7 February 1996, unreported), MGICA v Kenny (1996) 140 ALR 707 (Lindgren J), Fasold v Roberts (Sackville J, 11 September 1997, unreported). To the contrary is the decision of Rolfe J in the Supreme Court of New South Wales in Multicon Engineering Pty Ltd v Federal Airports Corporation (20 June 1996, unreported). His Honour considered that the non-acceptance of an offer more favourable to the offeree than the judgment ultimately awarded prima facie demonstrated unreasonable conduct and the offeree bore the onus of showing why indemnity costs should not be ordered. 218. In reality there is not a substantial difference between the two views; both accept that the reasonableness of the conduct of the offeree, viewed in the light of the circumstances which existed when the offer was rejected, is relevant to the exercise of the discretion to award indemnifying costs. To the extent there is a difference, we would prefer the by now well established line of authority in decisions of single judges of this Court. However, we would not, with respect, necessarily endorse the view of Sheppard J in Sanko that the conduct of the offeree has to be "plainly unreasonable". To adopt an especially high standard of unreasonableness would operate as a fetter on the discretion to award indemnity costs and diminish the effectiveness of the Calderbank offer as an incentive to settlement. The response of a litigant in receipt of an offer of settlement will always be affected by the prospect that the sum which the Court might order including party and party costs may be less advantageous than the terms of the offer. Experience, however, shows that this prospect alone is not always sufficient to compel a litigant to face up to the offer. The further prospect of a super-added costs penalty if a reasonable offer be not accepted is a salutary inducement to an offeree to undertake this often painful task. 21 The arguments for the applicant, however, expressly accept for purposes of their claim for indemnity costs, the reasonableness of the respondent's legal argument. The applicant's submissions focus squarely on the unreasonableness of the behaviour in advancing an excessive claim in response to a reasonable offer of a commercial compromise. As to that, however, the respondent says that the amount of the claim is based on the respondent's interpretation of the provisions of both the licence agreement and the Copyright Act . 22 The respondent argues that the 10 April 2007 letter offer merely set out a proposed commercial arrangement. It did not set out in any manner at all why the contentions by the respondent would inevitably fail. Equally, the letter of 20 April 2007 clarifying the offer, once again, contained no particularity as to the predicted outcome at trial. It was complained that the first offer was left open for acceptance for a period of 30 days only. 23 As to this, while it may be a matter of impression or judgment, it seems to me that from the several exchanges which had occurred between the parties prior to the making of this offer, that it was the respondent which was advancing an argument as to construction of the licence agreement and the Copyright Act . It was in reality the respondent which was the initiator of the adversarial dispute between the parties as it was the respondent contending that the applicant was in breach of both the licence agreement and the Copyright Act even though it was at all times the applicant's view that this was not even arguably so. That view prevailed. If anyone at the time of making the offers had an onus of demonstrating the strength of the argument being raised, that onus rested on the respondent. 24 While the offer in the 10 and 20 April 2007 correspondence was for substantially less than that sought by the respondent, it was, self-evidently, advanced as a commercial compromise to avoid the risks as to irrecoverable costs (and to the commercial relationship) that would be involved in conducting a full trial. A prudent course would have been to accept the offer or make a counter-offer for reasonable yet still more advantageous terms. The applicant argues that the respondent's radical revision of the quantum of its claim on 18 April 2007 in response to the offer of 10 April 2007 for reasons which could not possibly be sustained (as found in the main judgment), meant that the conduct was unreasonable. 26 The applicant argues that the true value of the respondent's cross-claim allowing for a discount of 30% on the claimed DR licence fee as allowed on 16 October 2006 was at its absolute highest, $1,093,927. But as the applicant points out, even the claimed discount at only 30% was revealed to be incorrect and without foundation as the documents revealed at trial. 27 Moreover, the DAF actually prepared in 2006 which was very belatedly discovered on the second last day of the trial demonstrated that in fact the true value of the respondent's cross-claim in terms of the sum it was actually hoping to receive from the applicant at the actual time of negotiations was only ever in the order of $640,300 (main judgment [138] and [146]). 28 Further, that figure was a gross amount without taking into account expenses such as commission fees payable to the head licensor and other overheads. None of these items was proven. 29 The respondent argues that in response to the applicant's contention as to the exaggerated nature of the cross-claim, first, that such an allegation does not provide a basis for an award of indemnity costs. Secondly, it says the respondent's 'primary claim' was for a negotiated licence fee based on a discount that matched the average level of discount evidenced by all of the new contracts entered into by the respondent and its customers over a two year period. That was the position ultimately taken at trial (the amendment as to the primary claim being made at the beginning of the trial). The respondent argues that the fact that there was a shift of approach does not afford a basis for an award of indemnity costs. That is so, according to the respondent, because the applicant is entitled to recover the cost of work carried out in dealing with the respondent's claim in the course of getting the matter up for trial. 30 It is correct that the claim advanced by further amendment at trial necessarily appeared to be a claim for a lesser amount than was claimed immediately up to the trial. The argument for the applicant though is that the manner in which the trial evolved showed in itself how exaggerated the respondent's claim had been up to the very eve of the trial (including the offer made by the respondent very close to the commencement of the trial). If I were to award indemnity costs only until the date of the amendment, made shortly after the commencement of the trial and party and party costs thereafter, this would signal encouragement to hold out for a far higher sum than really sought until the actual trial. But more importantly, the respondent did not abandon its original or primary cross-claim (which the applicant had to defend) but amended by adding a new cross-claim as an alternative). It would not be accurate to describe that alternative cross-claim as its primary claim. 31 Whichever way the matter is viewed, the offer by the applicant of $300,000 made at the very early stage of the proceedings before the respondent had incurred substantial costs, was reasonable. In my view, to not only reject the offer but to counterclaim in sums which were, on the findings in the main judgment, plainly exaggerated was imprudent. The inadequacy of the initial discovery in relation to such a key document and the failure to correct it until so late in the trial was not adequately explained. 33 The respondent contends that this late discovery does not afford a basis for an award of indemnity costs. It argues that the late discovery should not be taken into account on the applicant's claim for indemnity costs in the absence of any finding as to any deliberate attempt to withhold the DAF. It was submitted by the respondent that there was no prejudice to the applicant as the applicant was able to deal with the DAF in cross-examination and submissions. 34 It is also argued that even if there were adverse findings in relation to a failure to promptly discover the DAF, such a failure would only have potential costs implications if, for example, the failure gave rise to an adjournment or if the applicant lost at trial but sought an order in relation to costs associated with the time taken in relation to the issue of non-discovery. 35 Giving the respondent the benefit of the doubt on the late discovery, it is still, as a practical matter, entirely conceivable that if that document had been properly discovered at the appropriate time, there may not have been a trial at all. The explanation given as to the reason why the sum publicly claimed was so different from the sum which would in truth be sought as indicated in the internal DAF was, in my view, unconvincing. 36 Nevertheless, as I propose making an order for indemnity costs on the basis of the imprudent rejection of the offer taken with the exaggerated claims pursued by the respondent, I do not propose to rely on the late discovery for supporting the order. Taken alone, in my view, it would not support the order sought for indemnity costs although I accept that there is a plausible argument that it ought to be taken into account in considering whether or not such an order should be made. 37 It is appropriate however to award indemnity costs from 21 days from the date of the clarified offer of 20 April 2007. In light of the content of the 10 April offer, that is a reasonably sufficient time for consideration of the offer. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

indemnity costs was rejection of offer reasonable or prudent was exaggerated counter offer and cross-claim relevant to a claim for indemnity costs costs

That question turns on whether the Etheridge Shire Council is a trading or financial corporation within the meaning of s 51 (xx) of the Constitution . 2 For the reasons which follow, in each proceeding I have concluded that the Etheridge Shire Council is not a trading or financial corporation within the meaning of s 51(xx) of the Constitution . The consequences of this conclusion are that: the Etheridge Shire Council is not an "employer" under the provisions of the WRA; the Etheridge Shire Council was not entitled lawfully to lodge the "Etheridge Agreement" with the Employment Advocate, the second respondent, on 21 October 2006 or any time thereafter, under Pt 8 of the WRA; the "Etheridge Agreement" did not come into operation as a Workplace Agreement in accordance with s 347(1) of the WRA, on 21 October 2006 or at any time thereafter; and the "Etheridge Agreement" has no force or effect as a Workplace Agreement under the WRA. 3 The reasons for those conclusions are as follows. The Work Choices Act changed the constitutional basis for the WRA. As a consequence of the Work Choices Act, the WRA is now substantially an exercise of the corporations power under s 51(xx) of the Constitution , rather than an exercise of the conciliation and arbitration power under s 51(xxxv). 5 The WRA, as amended, defines "employee" in s 5(1) as an individual so far as he or she is employed, or usually employed, by an employer as defined in s 6(1). The majority concluded that the understanding of the power conferred by s 51(xx) as explained by Mason CJ, Deane and Gaudron JJ in Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 ; 128 ALR 81 ; [1995] HCA 16 ( Re Dingjan) and amplified by Gaudron J in Re Pacific Coal Pty Ltd; Ex parte Construction, Forestry, Mining and Energy Union (2000) 203 CLR 346 ; 172 ALR 257 ; [2000] HCA 34 ( Pacific Coal ) should be adopted. 10 The High Court held that the legislative power conferred by s 51(xx) extends to laws prescribing the industrial rights and obligations of the employees of constitutional corporations, and the means by which such corporations are to conduct their industrial relations. 11 The majority further held that the contention by some of the plaintiffs, that the inclusion of s 51 (xxxv) in the Constitution requires s 51(xx) to be given a narrow construction so as to deny its use to provide for industrial relations, should be rejected. The Engineers' Case did not establish that no implications are to be drawn from the Constitution . So much is evident from Melbourne Corporation [1947] HCA 26 ; [(1947) 74 CLR 31] and from R v Kirby; Ex parte Boilermakers' Society of Australia [1956] HCA 10 ; [(1956) 94 CLR 254] (the Boilermakers' Case). Nor did the Engineers' Case establish that no regard may be had to the general nature and structure of the constitutional framework which the Constitution erects. The Constitution predicates their continued existence as independent entities. But this last observation does not identify the content of any of those functions. It does not say what those legislative functions are to be. 13 There are further observations in the judgment of the majority which have a relevance to the present controversy. In particular, in R v Trade Practices Tribunal; Ex parte St George County Council [1974] HCA 7 ; [(1974) 130 CLR 533 ; 2 ALR 371] , the court had held that a county council, established under the Local Government Act 1919 (NSW) for "local government purposes", empowered to sell electricity and sell and install electrical fittings and appliances, and pursuing only those activities, was not a trading corporation. In his dissenting opinion, Barwick CJ had said [1974] HCA 7 ; [(1974) 130 CLR 533 at 543] that "a corporation whose predominant and characteristic activity is trading whether in goods or services" was a trading corporation. But this view did not then command the assent of a majority of the court. Associations incorporated under associations incorporation legislation, whose principal objects were the promotion, control and management of Australian Rules football matches, were held to be trading corporations. Nor, as the Chief Justice pointed out [in St George County Council ], was there a generally accepted definition of the expression in the nineteenth century. Essentially it is a description or label given to a corporation when its trading activities form a sufficiently significant proportion of its overall activities as to merit its description as a trading corporation. In other words, in the case of trading and financial corporations, laws which relate to their trading and financial activities will be within the power. They are not to be read as attempting an exhaustive statement of the ambit of the power. Gibbs CJ explicitly denied [1982] HCA 23 ; [(1982) 150 CLR 169 at 182; [1982] HCA 23 ; 40 ALR 609 at 616] any intention of doing that. That said, it must be recognised that Gibbs CJ emphasised the importance of giving due weight to the words "foreign", "trading", and "financial" in considering the application of s 51(xx). 17 The majority in the Work Choices Case , in seeking to determine the ambit of laws which apply to constitutional corporations, referred to the dissenting members of the Court in Re Dingjan [1995] HCA 16 ; (1995) 183 CLR 323. Particular reference need now be made only to the reasons of Gaudron J (with which Deane J agreed). Her Honour's reasoning proceeded by the following steps. [1995] HCA 16 ; [(1995) 183 CLR 323 at 365; [1995] HCA 16 ; 128 ALR 81 at 111]. First, the business activities of corporations formed within Australia signify whether they are trading or financial corporations, and the main purpose of the power to legislate with respect to foreign corporations must be directed to their business activities in Australia. Second, it follows that the power conferred by s 51(xx) extends "at the very least" [1995] HCA 16 ; [(1995) 183 CLR 323 at 365; [1995] HCA 16 ; 128 ALR 81 at 111] to the business functions and activities of constitutional corporations and to their business relationships. Third, once the second step is accepted, it follows that the power "also extends to the persons by and through whom they carry out those functions and activities and with whom they enter into those relationships". [1995] HCA 16 ; [(1995) 183 CLR 323 at 365; [1995] HCA 16 ; 128 ALR 81 at 111]. It follows, as Gaudron J said, [2000] HCA 34 ; [(2000) 203 CLR 346 at 375 [83] ; [2000] HCA 34 ; 172 ALR 257 at 275; [2000] HCA 34] that the legislative power conferred by s 51(xx) "extends to laws prescribing the industrial rights and obligations of corporations and their employees and the means by which they are to conduct their industrial relations". 20 In essence, the High Court, by a majority, concluded that the Work Choices Act was valid in its application to constitutional corporations. The central question in these two proceedings is whether the Etheridge Shire Council is such a corporation. 21 If it is, the acceptance by the majority in the Work Choices Case of the ambit of the power of the Commonwealth under s 51(xx) as described by Gaudron J in Pacific Coal , would mean that the Commonwealth has power to regulate the activities, functions, relationships and the business of the Etheridge Shire Council; the creation of rights and privileges belonging to the Etheridge Shire Council; the imposition of obligations on it; and, in respect of those matters, the regulation of the conduct of those through whom it acts, its employees, and also the regulation of those whose conduct is or is capable of affecting its activities, functions, relationships or business. 22 In my opinion, it is inconceivable that the framers of the Constitution and the parliament which enacted it intended that the Commonwealth should have the powers described in para [21] above in respect of a local government, which is a body politic of a State government, having legislative and executive functions. 23 The constitutional framework erected by the Constitution referred to in the majority judgment in the Work Choices Case set out at para [12] above, including the observation from the Melbourne Corporation case, emphatically denies that possibility. That paragraph refers to foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth. No doubt there may be room for dispute, in relation to some corporations, about whether they are constitutional corporations within the meaning of the new Act. However, in the application of para (a) of the basic definition of employer, and the corresponding definition of employee, to a given corporation, the hypothesis is that it is a constitutional corporation. It does not call directly for an examination of what is a trading or financial corporation formed within the limits of the Commonwealth. (Plainly, a foreign corporation is a corporation formed outside the limits of the Commonwealth. ) No party or intervener called in question what was said about trading and financial corporations in R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 ; [(1979) 143 CLR 190 ; 23 ALR 439] , Actors and Announcers Equity Association v Fontana Films Pty Ltd [1982] HCA 23 ; [(1982) 150 CLR 169 ; 40 ALR 609] , State Superannuation Board v Trade Practices Commission [(1982) [1982] HCA 72 ; 150 CLR 282 ; 44 ALR 1] or Fencott v Muller [1983] HCA 12 ; [(1983) 152 CLR 570 ; 46 ALR 41]. There was, therefore, no occasion to debate in argument, and there is no occasion now to consider, what kinds of corporation fall within the constitutional expression "trading or financial corporations formed within the limits of the Commonwealth". Any debate about those questions must await a case in which they properly arise. 27 This is such a case. 28 Subsequent to the judgment of the High Court in the Work Choices Case , the Australian Workers Union of Employees, Queensland (the applicant), filed an application in this Court on 6 December 2006. Subsequently, an amended application, which included the Queensland Services, Industrial Union of Employees as the second applicant, was filed on 22 December 2006. 32 In proceedings QUD 39 of 2007, the Statement of Claim of the State of Queensland was filed on 5 February 2007. The defence of the Etheridge Shire Council was filed on 21 February 2007, as was the defence of the Employment Advocate. 33 However, in proceedings QUD 481 of 2006, an Amended Statement of Claim was filed on 22 December 2006. An amended defence of the Etheridge Shire Council to a "Further Amended Statement of Claim" was filed on 12 February 2007, but the "Further Amended Statement of Claim" (which was amended pursuant to my order of 20 December 2006) was not filed until 6 November 2007. The Second Respondent is the Employment Advocate appointed pursuant to Part 5, Division 1 of the WRA. 8. (Section 151(1)(1)). In its capacity as an organization registered for the purposes of the Industrial Relations Act 1999 (Qld), the Applicant has the right, and has exercised the right, to enrol and represent a substantial number of employees of the First Respondent, and has for many years prior to 27 March 2006 been a party to Industrial Awards and Certified Agreements made under that Act, which Awards and Agreements regulated the employment of those employees of the First Respondent who are, and are eligible to be, members of the Applicant. 37 The parties accept that by those actions the Etheridge Shire Council asserted that it was subject to the provisions of the WRA, and it was entitled to enter into and to lodge the Etheridge Agreement. 38 In order lawfully to be entitled to make and lodge an agreement under Pt 8 of the WRA, it is necessary that the Etheridge Shire Council be an "employer" as defined in s 6 of the WRA. The applicant parties in both matters assert that the Etheridge Shire Council is not an "employer" within the meaning of that term, as defined in s 6 of the WRA, and assert that the Etheridge Shire Council does not come within the power granted the Commonwealth under para 51(xx) of the Commonwealth Constitution . In particular, the applicants say that the Etheridge Shire Council is not a trading corporation or a financial corporation within para 51 (xx) of the Constitution . 39 Accordingly, the applicant parties submit that the Etheridge Shire Council was not lawfully entitled to lodge the Etheridge Agreement with the Employer Advocate under Pt 8 of the WRA, and that lodgement was not lawfully capable of causing the Etheridge Agreement to come into effect as a Workplace Agreement under, and for the purposes of, the WRA. 40 In each proceeding, no orders were sought against the second respondent. Pursuant to Item 33 of Part 3 of Schedule 2 of the Workplace Relations Amendment (A Stronger Safety Net) Act 2007 (Cth) the Workplace Authority Director was substituted for the Employment Advocate as a party in each proceeding. Mr Baden Powell, for the Workplace Authority Director, indicated that she did not wish to be heard in the proceedings, save on the question of costs. Such local laws, upon commencement, have the force of law of the State of Queensland: s 896 of the LGA. 43 The High Court, in Widgee Shire Council v Bonney [1907] HCA 11 ; (1907) 4 CLR 977 , upheld the validity of a power granted to the Widgee Shire Council, which was a local authority in a country district, to make by-laws made for the protection of roads under their control. 44 The Etheridge Shire Council has numerous other powers and responsibilities under the LGA, including making a local law which creates an offence constituted by contravening a local law and fixing a penalty for an offence against a local law: s 26 of the LGA. 45 Having regard to the submissions of counsel for all the parties, it is plain that if the Etheridge Shire Council is not a constitutional corporation, then each of the applicants is entitled to the relief which it seeks. IS THE ETHERIDGE SHIRE COUNCIL A CONSTITUTIONAL CORPORATION? This concern involved some delay in the progress of the hearing of these applications, but as events have happened, there was no change to the Etheridge Shire Council, by amalgamation, dissolution or otherwise. 47 The question of whether the Etheridge Shire Council, established under the LGA, and which is a fully functioning elected local authority, or, as counsel for the first and second respondents in QUD 481 of 2006 asserts, a "municipal corporation", is or can be a financial or trading corporation within the meaning of the Constitution , is a question on which there is no High Court, and very little superior court authority directly relevant. 48 The High Court decision of The Queen v Trade Practices Tribunal; Ex Parte St George County Council [1974] HCA 7 ; (1974) 130 CLR 533 ( St George County Council ) is not directly on point, but, in my opinion, is of assistance on the question of characterisation, when one contrasts the powers and activities the subject of consideration in that case, with the powers and activities of the Etheridge Shire Council in the present case. 49 In that case, the St George County Council was established under the Local Government Act 1919 (NSW) for "local government purposes". It was empowered within its district to supply electricity and to supply and install electrical fitting and appliances, and these were its only activities . The Act provided that the county council should "endeavour so to conduct each trading undertaking that without any loss being incurred the service, product, or commodity of the undertaking may be supplied to the consumer as cheaply as possible". 50 The High Court, by a majority (McTiernan, Menzies and Gibbs JJ, with Barwick CJ and Stephen J dissenting) held that the St George County Council was not a "trading corporation" within s 5 of the Restrictive Trade Practices Act 1971-1972 (Cth). The majority accepted that the St George County Council was not a "trading corporation", notwithstanding that it carried on trading activities. 51 It was submitted on behalf of the State of New South Wales, intervening, that a "trading corporation" connotes more than a corporation which trades. It was submitted that "trading" describes the nature or quality of the corporation itself rather than its actual activities. For the Commonwealth of Australia, it was submitted that the St George County Council was set up to sell electrical fittings and appliances, and that to do that was to trade. It was therefore a "trading corporation". It was submitted that "[I]ts actual activities characterize it. Because of identity of language and the fact that the statutory formula is designed to keep the Act within constitutional power, that construction would be applicable to the words of the Constitution , a circumstance which must influence the construction placed on the statutory formula. I ought to point out at the outset that the ultimate question in the case is to be answered in relation to the applicant and not as to all county councils. The powers and functions which under the Act may be transferred to a county council are diverse (cf., e.g. s. 564(1) and (2)). Consequently, considerations which, in my opinion, are definitive in this case may not be so in the case of other county councils with different powers and activities. (Emphasis added). So far then the applicant is evidently a corporation which has been formed within the Commonwealth. It trades in the supply of electricity, of electrical appliances and of electrical services. It has no other purpose or activity. 54 Barwick CJ suggested that there did not appear to have been any generally accepted definition of a trading corporation. If its nature was being sought, it was to be found in what it did. It is evident that the legislative power given by s. 51(xx. ) is not a power to legislate with respect to trading. It is a legislative power with respect to some corporations. But a corporation whose predominant and characteristic activity is trading whether in goods or services will, in my opinion, satisfy the description : and a corporation which does nothing but trade and, if it matters, was incorporated so that it could trade, i.e. exercise the trading powers of the constituent local government councils, is, in my opinion, properly described as a trading corporation within the constitutional power. It seems to me that the reason why a corporation trades as its sole or predominant and characteristic activity is irrelevant to the description of the corporation for present purposes, that is to say, the ends which such a corporation seeks to serve by trading are irrelevant to its description. As I have indicated, the purpose of the grant of legislative power includes the control of the corporate activities of the corporation : it is not so concerned with the motives which prompt those activities, nor the ultimate ends which those activities hope to achieve. If, upon that consideration, the corporation can fairly be described by reason of those activities, their extent and relative significance in the affairs of the corporation as a "trading corporation" it will, in my opinion, be nothing to the point that it is also a government or State or municipal corporation. The effect of the trading activities of such a corporation upon and in the community will not be lessened or necessarily affected by the fact that it is a State or municipal instrumentality. (Emphasis added). 56 The first and fourth sentences of this passage identify the basis for his conclusion that, in that case, St George County Council was a trading corporation. It is easily demonstrated that the purpose of the applicant's incorporation and of its activities is the performance of what has come to be regarded as a local government function, its charter being to provide electricity at low cost to the ratepayer. But it is to achieve and satisfy this purpose by trading, both in electricity and in electrical goods and services. It buys and sells --- an activity recognized by the Act itself as "a trading undertaking" (s.418(1) and (2)). To say that it is a "municipal" corporation is, in my opinion, to say no more than that it is a government, or local government, agency; or, put another way, that it is a municipal trading corporation. He relied exclusively upon the contention that this Council had been established for no purpose other than to trade and he refrained from submitting, in these proceedings, that a local government corporation which has local government purposes other than trading purposes is a "trading corporation" within the meaning of s. 5. (Emphasis added). It is this subordination of trading to community purposes that is, to my mind, the real importance of s. 419 in this case. It reveals the very nature of a council to which it applies. Ltd. v. Moorehead when Isaacs J., in considering the language of s. 51(xx. ) of the Constitution , said [1909] HCA 36 ; [(1908) 8 C.L.R. . . it is always a preliminary question whether a given company is a trading or financial corporation or a foreign corporation. This leaves entirely outside the range of federal power, as being in themselves objects of the power, all those domestic corporations, for instance, which are constituted for municipal, mining, manufacturing, religious, scholastic, charitable, scientific, and literary purposes, and possibly others more nearly approximating a character of trading; a strong circumstance to show how and to what extent the autonomy of the States was intended to be safe-guarded. The federal power was sufficiently limited by specific enumeration, and there is no need to place further limits on the words of the legislature. In my opinion, the words "trading corporation" in s. 51(xx. ) do not mean "a corporation which is trading". The word "trading" forms part of a composite expression and indicates the essential attribute of the kind of corporation to which it refers. It is common to describe corporations according to their nature, and to speak, for example, of ecclesiastical, eleemosynary or municipal corporations. There can be no doubt that the words "foreign corporations" and "financial corporations" in pl. (xx. ) describe corporations of a particular kind rather than corporations of any kind which happen to act in a particular way. The same is true of the words "trading corporations" which, in their natural meaning, as well as in the context of the placitum, refer to corporations of a particular kind. However, as I have indicated, the mere fact that a corporation is trading does not mean that it is a trading corporation. It is necessary to determine the true character of the corporation, upon a consideration of all the circumstances that throw light on the purpose for which it was formed. Thus there is no difficulty in holding that the fact that a corporation carries on some trade which is merely incidental or ancillary to the fulfilment of its main purpose does not give it the character of a trading corporation. It is properly described as a municipal corporation. The description to the corporations to which the powers of s. 51 (xx. ) extend does not include municipal corporations. ) was to exclude from the scope of the power at least those corporations which could properly be characterized as municipal and charitable corporations. ... The purpose of its [the County Council's] formation is more properly described as that of fulfilling a function of local government. 67 The High Court in Adamson , which was differently constituted from the High Court in St George County Council, departed from the purposive reasoning of the majority in St George County Council and favoured the reasoning of Barwick CJ in that case. 69 The submissions on behalf of the applicants in QUD 481 of 2006 refer to cases decided by the High Court that have considered the question of whether particular entities are trading or financial corporations: a football club in Adamson's case ; a statutory corporation generating and selling electricity in Commonwealth v State of Tasmania [1983] HCA 21 ; (1983) 158 CLR 1 ( Tasmanian Dams case); a State Corporation conducting financial trading activities in order to finance and operate a superannuation scheme in State Superannuation Board v Trade Practices Commission [1982] HCA 72 ; (1982) 150 CLR 282 ; and a dormant shelf company which had not yet commenced to trade in any capacity in Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570. 70 Those submissions also referred to decisions in the Federal Court and other superior courts. Those cases were concerned with entities such as charities: E v Australian Red Cross Society [1991] FCA 20 ; (1991) 27 FCR 310 ; statutory corporations set up under State legislation which conduct various business activities: United Firefighters' Union of Australia v Metropolitan Fire and Emergency Services Board (1998) 83 FCR 346 ; corporations that conduct universities: Quickenden v O'Connor [2001] FCA 303 ; (2001) 109 FCR 243 ; and schools: Educang Limited v Queensland Industrial Relations Commission (2006) 154 IR 436; yachting organisations: Forbes & Anor v Australian Yachting Federation Inc. (1996) 131 FLR 241; legal aid bodies: Aboriginal Legal Service of Western Australia Inc. v Lawrence [2007] WAIRC 435 ; and animal welfare organisations: Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals [2002] FCA 860 ; (2002) 120 FCR 191. 71 Reference should also be made to the judgment of Toohey J in Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10 ( Hughes ). It is not my intention to refer to those decisions in great detail but rather to state the principles that appear to emerge from them and then to apply those principles to the facts of the present case. 1. The mere fact that a corporation trades does not mean that it is a trading corporation: R v Trade Practices Tribunal; Ex parte St George County Council [1974] HCA 7 ; (1974) 130 CLR 533 at 543, 562 (St George County Council); R v Federal Court of Australia; Ex parte Western Australian National Football League [1979] HCA 6 ; (1979) 143 CLR 190 at 219, 234 (Adamson). 2. The purpose of incorporation, propounded in St George County Council, is no longer a valid test. The test is one of the current activities of the corporation: Adamson; State Superannuation Board v Trade Practices Commission [1982] HCA 72 ; (1982) 150 CLR 282 at 304; (1982) ATPR 40-326 at 43,976-43,977 (State Superannuation Board). 3. But the current activities test is not the sole criterion for determining whether a corporation is a trading corporation. Thus where a corporation has not begun to trade, its character may be found in its constitution. Even when there are current activities, the corporation's constitution is not completely irrelevant: Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570 at 602; (1983) ATPR 40-350 at 44,218. 4. Views as to the necessary extent of trading activity have varied. It must be a substantial corporate activity (Barwick CJ in Adamson at 208); the trading activities must form a sufficiently significant proportion of the corporation's overall activities (Mason J in Adamson at 233, with Jacobs J concurring at 237); the trading activities should not be insubstantial (Murphy J in Adamson at 239); the corporation must carry on trading activities on a significant scale: (Mason, Murphy and Deane JJ in State Superannuation Board at 304; 43,976-43,977; Deane J in Commonwealth v Tasmania [1983] HCA 21 ; (1983) 57 ALJR 450 at 559-560. 5. An incorporated sporting body can be a trading corporation if its activities meet the required test: Adamson. 6. In particular, incorporation under a statute such as the Associations Incorporation Act does not prevent a corporate body from being a trading corporation if its activities warrant that description: Adamson at 232. 7. Trading denotes the activity of providing, for reward, goods or services: Re Ku-ring-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR 134 at 139; St George County Council at 569-570; Bevanere Pty Ltd v Lubidineuse [1985] FCA 134 ; (1985) 7 FCR 325 at 330-331; (1985) ATPR 40-565 at 46,568. 8. The Trade Practices Act itself draws a distinction between trading corporations and financial corporations; nevertheless the two classes are not mutually exclusive: State Superannuation Board at 303. 73 What his Honour referred to in paragraph 3. above may have an important relevance to a "fully fledged" municipal corporation, like the Etheridge Shire Council, as opposed to what might be described as an ersatz municipal corporation that was the subject of consideration in the St George County Council case. 74 As a practical matter, his Honour concluded that the WACA was a trading corporation, but reached a different conclusion in relation to the Cricket Clubs. But where some activities are income producing and others are not, the exercise is not so straightforward ... A trading activity may represent a significant part of a club's income but be relatively insignificant in an overall consideration of the club's activities. 75 This observation has a particular resonance in the present case, as will appear later. Such trading activity of the Etheridge Shire Council is quite insignificant in relation to the overall consideration of the activities of the Etheridge Shire Council, which, as a local government, exercises extensive legislative and executive functions in the local government area, and is its raison d'être. The Federal Court rejected that claim, at 585, largely by application of the activities test: Davies J at 584. The judgment of Davies J was overturned on appeal to the Full Court of the Federal Court, but on other grounds. The Full Court did not consider the question of whether the Council was a trading corporation: Mid Density Developments v Rockdale Municipal Council [1993] FCA 408 ; (1993) 44 FCR 290 , per the Court, at 302. 77 The applicants submitted that there was no case in any superior Court in which it had been accepted that a local government corporation with the powers and responsibilities of the Etheridge Shire Council was a constitutional corporation. WHAT IS THE PROPER TEST? 79 The comment by the majority in the Work Choices Case that the view of Barwick CJ "did not then command the assent of the majority of the Court" is to be understood as indicating that the "activities test" propounded by Barwick CJ was later accepted by the High Court in Adamson as the applicable test, and is the proper test to apply. 81 With respect, there is an element of circularity in this observation, but it is not consistent with the view of Barwick CJ in the St George County Council case, set out in [55] above. 84 Both Barwick CJ, at 543, and Gibbs J, at 561, thoroughly rejected the contention that a corporation which to any extent engages in trade is a trading corporation. 85 I therefore proceed to enquire whether the Etheridge Shire Council is a trading corporation or a financial corporation, by considering whether, on the evidence, "the predominant and characteristic activity of the Etheridge Shire Council is trading, whether in goods or services", or whether "the predominant and characteristic activity of the Etheridge Shire Council is in finance. 88 The Etheridge Shire Council was established as a body corporate (in the name Einasleigh Shire Council) in accordance with the Local Government (Divisional Boards) Act 1879 (Qld) by proclamation notice of which was published in the Queensland Government Gazette dated 11 November 1879. 89 The Local Government (Divisional Boards) Act 1879 was repealed and replaced by the Valuation Act 1887 (Qld), 52 Vic No 4, and the Divisional Boards Act 1887 (Qld), 51 Vic No 7. The Local Authorities Act 1902 (Qld) Act provided (in s 5) for the continuation of all existing divisions as if they had been constituted shires under that Act. 90 The name of the Einasleigh Shire Council was changed to Etheridge Shire Council by a notice published in the Queensland Government Gazette on 15 March 1919. 91 The Etheridge Shire Council has remained in existence as an incorporated local government body continuously from September 1882 until the present date in accordance with the successive Acts of the Queensland Parliament relating to local government. Upon enactment of the 1902 Act, it became known as a Shire. Section 5 of the 1902 Act contained definition of a "local authority" as being the council of a town or of a Shire. Accordingly, the Etheridge Shire Council has been designated as a "local authority" under successive legislation from 1902 to the present date. 94 At all times since 1882 to the present date, the Etheridge Shire Council has been possessed of the power to make by-laws, now known as local laws, which have the force of law in the State of Queensland. (Section 78 of the 1879 Act, the effect of which was continued through successive legislation to s 896 of the LGA. 95 The Etheridge Shire Council was organised as a shire council in 1982 during the gold rush. The shire covers part of Queensland's outback Gulf Savannah region. It lies over a vast formation of ancient pre-Cambrian rock that is rich in minerals and semi-precious stones. The eastern part of the shire sits on the edge of the immense Undara lava field caused by ancient volcanic eruptions in the McBride Plateau some 190,000 years ago. The surrounding country is flat wooded savannah grasslands with isolated hills. The main industries of the shire are pastoralism, mining, and tourism, and the shire contains the townships of Georgetown, Forsayth, Einasleigh, Mt Surprise, and Oak Park. 96 The office of the Shire Council is located in Georgetown on a sealed Gulf Development Road, about 412 kms west-south-west of Cairns, and 301 kms east of Normanton. 97 The LGA is described in the preliminary to the Act as, "An Act to provide for local government, and for related purposes. local government Act means an Act under which a local government may exercise the jurisdiction of local government, and includes, for example --- (a) this Act; and (b) the Integrated Planning Act 1997 ; and (c) the Plumbing and Drainage Act 2002 ; and (d) the Water Act 2000 , chapter 2A or 3; and (e) an interim development control provision; and (f) a local law; and (g) a planning scheme. local government area means a part of the State that is established as a local government area under this Act. ... minimum general rate levy means an amount fixed as the minimum amount payable as a general rate or differential general rate for all or any rateable land in a local government area. ... regulatory fee see section 1071A(1). 102 There are definitions of Sanitary Drainage, Sewage Treatment Plant, Sewerage System, and Special Rate. 103 Chapter 12 of the LGA deals with local laws and subordinate local laws. Section 32 provides that "A local government consists of a mayor and other councillors" and s 33 provides that "A local government consists of the number of councillors, at least 5, prescribed by regulation. Their powers are such as the legislature may confer, and these may be enlarged, abridged or entirely withdrawn at its pleasure. 113 The legal power of the state, in that respect, is reinforced in Chapter 3, Part 2, Division 1 of the LGA, which provides for executive intervention of the state in respect of local government affairs. Section 164 provides for the dissolution of a local government in certain circumstances, including that it has acted in a way that puts at risk its capacity to exercise properly its jurisdiction of local government: Section 164(1)(b). 114 In Chapter 3, Part 2, Divisions 4 and 5 provide respectively for the appointment of administrators and financial controllers. 115 The activities of local governments are funded in part by grants from a number of sources. Currently, the State of Queensland is entitled to receive amounts from time to time from the Commonwealth under the Local Government Financial Assistance Act 1986 (Cth) for financial assistance for local government purposes. Chapter 3, Part 3 of the LGA provides for the establishment and operation of a Local Government Grants Commission to make recommendations to the Minister about the allocation of the amounts to and among local governments. 116 The LGA makes extensive provision for the qualifications and disqualifications for membership of local government; for the entitlements and obligations of councillors, including a code of conduct for councillors and how that code is to be enforced; and how membership of local governments are to be elected, with elaborate provisions for the conduct of quadrennial elections. Part 3 of that Chapter regulates a local government's powers to enter into contracts and related activities. There are principles to which the local government must have regard, including open and effective competition, encouragement of the development of competitive local business, and environmental protection. (s 481(1)). Carrying out of work and the supply of goods or services to the local government comprise procurement activities (s 481A) and disposal of some non-current assets other than land comprise designated disposal activities (s 481B). 119 Chapter 7 of the LGA deals with the financial operation and accountability of local governments, including the preparation and adoption of the corporate plan, and of a revenue policy; the adoption of a budget and a revenue statement; as well as making provision for the borrowing and investment of moneys. 123 Chapter 8 of the LGA imposes obligations upon local governments which apply to their significant business activities. 124 Of the activities in that definition described as "trading in goods and services to clients", water, sewerage, cleansing, and waste collection, and other facilities mentioned can be identified as part of a bracket of core services and facilities traditionally provided by municipal corporations in Australia, not necessarily charged on a fee-for-service basis, although there may be arrangements made for their provision by other entities, whether governmental or non-governmental. 125 Chapter 9 of the LGA provides for the adoption of "competitive neutrality" principles in the conduct of competitive business activities. The code of competitive conduct has to be applied to roads business activities, and to building certification business activities, and the LGA defines when the code must be applied to other business activities. The LGA also deals with the provision of certain water and sewerage services. 126 Chapter 13 of the LGA deals with local government infrastructure, including control of roads. It also deals with local government control over levee banks and stormwater drainage. Chapter 14 deals with rates and charges, and for their making. Chapter 15 deals with provisions aiding local government, including the power to fix regulatory fees earlier set out. That Chapter includes provisions relating to the enforcement of local government acts, including investigations about offences, and including special provision for local laws about dogs. 128 Chapter 16 deals with local government staff. Chapter 17 deals with superannuation. Finally, Chapter 19 deals with transitional, validation and savings provisions, repeals, and amendments. 129 I have set out a review of the powers and activities of a local government at some length to indicate that a local government, including the Etheridge Shire Council, has extensive legislative and executive functions of a governmental kind in relation to the Etheridge Shire. That, however, is a specialized meaning of the word. The present primary meaning is much wider, covering as it does the pursuit of a calling or handicraft, and its history emphasizes rather use, regularity and course of conduct, than concern with commodities. It is operated as a tourist attraction in the shire. [It may be recalled that Section 36 of the LGA provides that local governments in Queensland may enter into contracts and charge for services at facilities it supplies, and s 29 of the Transport Infrastructure Act 1994 provides that the Chief Executive of Main Roads may enter into contracts for the State of Queensland with other persons, including local governments, for the carrying out of road works on a state controlled road. 134 Each of these activities was the subject of detailed analysis by Counsel for the State of Queensland. There is no distinction in the records of revenue designated as "terrestrial sales and admission charges" between the sales from the souvenir shop at the Terrestrial Centre and admission fees. Notwithstanding evidence that the Terrestrial Centre was "intended to operate as a profit making exercise" the operation of the centre is not profitable. The total revenue for the year ended 20 June 2006 was $62,674.96. Of this, $26,195.08 was from admission fees. A "CLS Library Equipment Grant" contributed $500 and trainee subsidies, $11,500. Sales totalled $29,997.45 and internet fees contributed $3,482.43. The total expenditure for the centre was $212,080.52. The centre therefore made an overall loss of $149,405.56. [The contention of behalf of the Etheridge Shire Council is that the operation of the Terrestrial Centre will be cash flow positive "at some point in the future". While a fee for services is charged for this accommodation, the shire council considers it an important service to primary school students within the community development and human services provided by the council. The fees paid for the service are insufficient to cover the costs of providing the service, as the council applies money obtained under the State and Federal Government programs for non-governmental schools to the provision of this community service. The evidence indicates the financial results of the operation of the hostel: in each of the years 2003/2004; 2004/2005 and 2005/2006 the fees received of $73,148.46; $102,299.65 and $100,531.80, respectively, represented 1.09%; 1.37% and 1.36% of the total revenues of the Council. Total income for those years was $89,243.46; $126,624.15 and $191,164.30. The total expenditure in each year was, respectively, $151,684.97; $167,697.99 and $176,211.86. In the 2004 and 2005 financial years, it made losses of $62,411.51 and $41,073.84. The fees are insufficient to allow the centre to operate on a break-even basis, and the revenue is supplemented by grants provided by the Department of Communities on behalf of the State of Queensland. In the 2006 financial year, childcare fees contributed $6,260.80 to overall revenues of $33,741.80, and the balance of the revenues having been contributed by an operational subsidy. The overall expenditure was $32,913.18, a surplus over the revenues from fees and grants being $828.62. The revenues associated with the leasing of these premises were said to be for the relevant years, $8,096.00 (0.12% of total revenues); $0.00 (0%); $4,231.16 (0.06%); and $3,926.56 (0.04%). There is no evidence as to the costs associated with this activity. In the relevant years, the rents earned were $38,182.52 (0.57% of total revenues); $55,887.94 (0.75%); $58,741.11 (0.79%); and $65,419.66 (0.74%). It is said that the provision of accommodation to council employees free of charge or at subsidised rentals is a means of attracting and retaining employees. There is no evidence as to the costs of the land to the council, either for its initial acquisition, or for the maintenance over whatever period it was owned, and it is thus not able to be determined whether this "trading activity" was profitable. Fees are charged for the hire of the hall, depending on the time and duration of the hiring and the activity for which it is hired. How the hiring rates are set does not clearly appear from the evidence, but the revenue generated from the hall hire fees in each of the years was $3,967.25 (0.06% of total revenues); $3,753.75 (0.05%); $4,920.57 (0.07%); and $2,902.80 (0.03%). It is apparent that full cost recovery is not achieved by the council. The cost to the council for the production of the water for the two towns exceeds the charges for the provision of the service. While there is no evidence as to the total cost of the provision of such services, the overall level of loss, when compared with revenues charged, is unknown. The revenues for Forsayth over the four years varied from 0.11% of total revenue to 0.16% of total revenue. For Georgetown, the figures varied from 0.42% of total revenue to 0.63% of total revenue. The council does not actually perform the assessments which they are said to "contract out" to the Atherton Shire Council for a set monthly fee of $898.33. It is apparent from the examples of such works that they include activities which have their source in the regulatory powers of the council, such as the mowing and clearing of allotments and the clearing of rubbish and debris for which a regulatory fee may be charged pursuant to s 1071A of the LGA. 135 The revenue policy of the Etheridge Shire Council for the 2005-2006 year, which is contained in the annual report for that year, makes it plain that the council may decide to subsidise the cost of providing water base access charges, television and radio re-broadcasting services, cleansing and waste management special charges, because of the undue financial hardship that might result from some or all of the factors of high cost of service provision, poor economies of scale, expected availability of grants at the time infrastructure requires replacement, and difficulties in identifying "users" of a service. 136 The borrowing policy, also set out in the Annual Report, reflects the position of the council as the provider of governmental services. The borrowing strategies include the utilisation of services of the Queensland Treasury Corporation for managing existing debt and financing any new borrowing, so as to minimise the ongoing cost of debt. 137 The Annual Report of the Etheridge Shire Council for the year 2005-2006 contains a "Note 3b: Analysis of Results by Function Components", illustrating the components of the council's activities. Note 3a in the Annual Report is "Analysis of Results by Function", and shows a detailed account of the financial operations of the functional components of the Etheridge Shire Council. 138 Schedule A to these reasons is Note 3b to the 2005-2006 Annual Report of the Etheridge Shire Council; Schedule B to these reasons is Note 3a. Quickenden v O'Connor [2001] FCA 303 ; (2001) 109 FCR 243 at 261. A corporation may trade even though it enjoys a monopoly. St George County Council's case at 539 or is not motivated by the decision to make a profit. Ku-ring-gai Co-operative Building Society (No. 12) Ltd (1978) 36 FLR 134 at 167. 140 The written submissions on behalf of the Etheridge Shire Council ask the question " How is the significance or substantiality of the trading activities to be assessed? It may also be observed that in 1850 James Grant in his Treatise on the Law of Corporations classified "Municipal Corporation" separately from trading bodies and devoted 150 pages of his book to the consideration of municipal corporations. Rather, I am concerned to indicate that the classification has limits and those limits are not to be ascertained simply by asking the question "Does the corporation trade? " As I have indicated, many corporations which do trade are clearly outside the limits of the classification and one group of corporations that is not comprehended is, in my view, corporations of an essentially different character, namely corporations for local government purposes. Why this difference? There are a great number of different corporations. For instance, there are municipal, trading, and charitable corporations, and these are all incorporated in different ways according to the law pertaining in different states. ... It is sometimes difficult to say what is a trading corporation. What is important, however, is that there should be uniform law for the recognition of corporations. 146 In the light of the observations by the High Court in Adamson and the later cases, in the characterisation of a corporation as a trading corporation, or a financial corporation, the primary focus has to be on the activities of the corporation. First, the majority of the Court (Barwick CJ, Mason, Jacobs and Murphy JJ), rejecting the argument that the purpose for which a corporation is formed is the sole or principal criterion of its character as a trading corporation. 148 This passage indicates that the purpose for which a corporation is formed is not the "sole" or "principal" criterion for the purposes of characterisation. The passage suggests, however, that the purpose of the formation of a corporation is not irrelevant in that process. 149 The contention for the applicant in both proceedings in this case is that when one looks at the totality of the evidence, including the historical evidence concerning the function of the Etheridge Shire Council, in particular, the fundamental functions of the shire council, being the legislative and administrative responsibility as a local government for the local government area, it is impossible to conclude that the Etheridge Shire Council is a trading corporation. 150 I have set out in detail the evidence in relation to what is said to be the trading activities of the council. 151 All of them, in my opinion, including even the road works aspect of the activity of the council, after close analysis, entirely lack the essential quality of trade. Almost all of them run at a loss. They are all directed, in my view, to public benefit objectives within the shire. Their scale, even in monetary terms (putting to one side the non-monetary significance of the legislative and executive activity of the shire council), are so inconsequential and incidental to the primary activity and function of the Council as to the deny to the Council the characterisation of a "trading corporation" or a "financial corporation". 152 The way in which road building functions are discharged in the local government area of the Etheridge Shire involve a contribution by way of funding by the State to the local government to perform road works, both for the shire, and also to give it some State government work in order to maintain a viable local workforce and to maintain the social infrastructure in those remote areas. The Council's contracts were always on a sole invitee basis, and the State of Queensland had the specific object of retaining or maintaining employment in the Etheridge Shire Council. 153 If, contrary to my view, the Etheridge Shire Council was a trading corporation, the Commonwealth government would have the power that I have set out in para [21] above. Such powers would annihilate any concept in the Constitution of a federal balance, and in a very significant way, permit the Commonwealth to nullify the right of the State to govern in its local government areas. 154 I am of the view that all five judges in the St George County Council case would have determined that the Etheridge Shire Council is not a trading corporation. 155 Accepting that the "activities test" is the appropriate test to apply in determining whether local governments are trading corporations, the application of that test points overwhelmingly to the conclusion that the Etheridge Shire Council is not a trading corporation. 156 Equally, it is not a financial corporation. The only financial activities which, on the evidence, it engages, is maintaining interest-bearing deposits of funds prior to their utilisation for the purposes of the shire council. 157 For these reasons, I will make the declarations sought by the applicants. 158 I will hear the parties on costs. I certify that the preceding one hundred and fifty-eight (158) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender.

workplace agreement purported to be lodged by the etheridge shire council under the workplace relations act 1996 whether the etheridge shire council is an "employer" pursuant to section 6 of the workplace relations act answering that question dependant upon whether the council is a corporation to which section 51(xx) of the constitution applies council held not to be such a corporation council therefore held not to be an "employer" council therefore held ineligible to lodge the relevant workplace agreement. corporations power "trading or financial corporations" whether the etheridge shire council is a "trading corporation" or a "financial corporation" within section 51(xx) of the constitution held that the test for characterising the nature of a corporation in the context of s 51(xx) is a consideration of the predominant or characteristic activity of the body, the extent of that activity and the relative significance of that activity in the affairs of the corporation where the activities of the council were not limited to trading where the predominant and characteristic activity of the council was that of a local government council held not to be a "trading corporation" or a "financial corporation" workplace relations constitutional law

My attention has been drawn to the fact that I did not explicitly deal with the form of order for compensation to be made in respect of Loncaric and Carlon Pty Limited insofar as there was a claim for contingent loss. 2 Loncaric negotiated the appointment of two sub-distributors by Carlon Pty Limited by passing on to those potential sub-distributors the misrepresentations made to him by the relevant respondents. The consideration received from those sub-distributors has been included in the calculation of the actual loss claimed by Loncaric and Carlon Pty Limited. Each sub-distributor has demanded compensation from Loncaric and Carlon Pty Limited --- $55,000 in one case and $85,000 in another. That led to deeds being entered into between Carlon Pty limited, on the one hand, and each of the sub-distributors, on the other. The gist of the deed is that sub-distributors would refrain from suing and would release Carlon Pty Limited from liability on the basis that Carlon Pty Limited would include the claim from the sub-distributors in the claim made against the respondents. 3 I am satisfied that the terms of s 87 are wide enough to authorise the inclusion of orders which have the effect of indemnifying Carlon Pty Limited from claims by the sub-distributors. Burchett J made a similar order in Oraka Pty Ltd v Leda Holdings Pty Ltd (1997) ATPR 41-558. That judgment was set aside on appeal but not because of any fault in the relief granted ( Leda Holdings Pty Ltd v Oraka Pty Ltd (1998) ATPR 41-601). Beaumont J, who dissented in the Full Court, expressly approved that order (at 40,509). It was supported by the authorities referred to by Burchett J. (See also State of Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 at 261 and Wardley Australia Ltd v State of Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 545). Whether such an order should be made is for the discretion of the Court in each case. 4 In my opinion, the claims made by the sub-distributors mean that Carlon Pty Limited is likely to suffer loss or damage by the conduct of the relevant respondents. It seems to me that an order based upon the quantified claims is appropriate. Whilst there may be some debate about the legal effect of the deed between the parties, the overall intent is clear enough. There is no reason to limit the liability of the respondents on that account. The order will be framed to ensure that the amount in question will be passed on to the sub-distributors if and when received. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

form of relief indemnity for likely loss and damage pursuant to s 87 trade practices

2 It is not disputed by the plaintiff that the plaintiff owes that sum to the defendant. It follows that s 459H(1)(a) of the Act does not apply, there being no " genuine dispute between the (plaintiff) and the (defendant) about the existence or amount of debt to which the demand relates ". 7 The plaintiff asserts that the demand should be set aside, because it has offsetting claims which exceed the amount of the demand. 8 The question for decision on this application is whether the plaintiff has an " offsetting claim " in excess of the " admitted amount ". The admitted amount is the amount of a judgment debt for taxed costs in the High Court of $33,264.80. 9 It is urged by the defendant that there is also a question of whether any conditional order concerning at least the applicant's reliance on any untaxed costs order(s) should be imposed. Second, the statute contemplates a summary procedure, the only outcome of which will be an order affecting the statutory demand, not an order or judgment declaring a debt to be owing or not to be owing or ordering payment of any money sum. Third, the only significance that the statutory demand has is that if there is a failure to comply with it then the company is deemed to be insolvent. Thus the demand is no more than a precursor to an application for winding up in insolvency. Fourth, an application to wind up in insolvency must be determined within 6 months (unless the court is satisfied that special circumstances justify an extension of that time): s 459R. Firth, on the hearing of the application to wind up, the company may not oppose the application on grounds that it might have taken in any application to set aside the demand, unless those grounds are material to proving that the company is solvent. All that the legislation requires is that the court conclude that there is a dispute and that it is a genuine dispute. That is not to say that the Court will examine the merits or settle the dispute. The specified limits of the Court's examination are the ascertainment of whether there is a "genuine dispute" and whether there is a "genuine claim". The notion of a "genuine dispute" in this context suggests to me that the court must be satisfied that there is a dispute that is not plainly vexatious or frivolous. It must be satisfied that there is a claim that may have some substance. On the other hand the court must be careful, because if all an applicant has to do is to assert both a claim and some basis for it, without more, it would mean in almost every case that the court would set aside statutory demands where application is made to that effect. Plainly that is not what the legislature intended by introducing this new regime. 'Good faith' means arguable on the basis of facts asserted with sufficient particularity to enable the Court to determine that the claim is not fanciful. In a claim for unliquidated damages for economic loss, the Court will not be able to determine whether the amount claimed is claimed in good faith unless the plaintiff adduces some evidence to show the basis upon which the loss is said to arise and how that loss is calculated. If such evidence is entirely lacking, the Court cannot find that there is a genuine offsetting claim for the purposes of s 459H. The most effective cited description of the standard for establishing a genuine dispute is a passage in the judgment of McLelland CJ in Eq in Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787. There, his Honour said that the expression "genuine dispute" connotes a plausible contention requiring investigation, and raises much the same sort of considerations as the "serious question to be tried" criterion which arises in an application for an interlocutory injunction or for the extension or removal of a caveat. The court merely satisfies itself, to the standard described by McLelland CJ in Eq, that the dispute, or the assertion of an offsetting claim, is "genuine". If it is, then the statutory demand procedure is out of place. The whole purpose of the reforms introduced to corporate insolvency law, when the present Pt 5.4 was introduced, was to remove litigation about disputed claims from the winding up process. That is why courts have said, time and again, that if a creditor is aware that there is a dispute, asserted on behalf of the alleged debtor with sufficient plausibility to meet that relatively low threshold described by his Honour, issuing a statutory demand is wholly inappropriate. The correct course is to have the dispute resolved by proceedings asserting the debt. However, it needs to be kept in mind that the issue is not whether his version of events is more plausible than Andi-Co's, but whether the alleged debts are the subject of genuine disputes and whether the alleged offsetting claims are genuine, that is to say, real and authentic as opposed to false, illegitimate, phoney, counterfeit and false. Accordingly, I shall not engage in an assessment of the rival merits. The first of the offsetting claims relates to what is said to be a genuine claim of the plaintiff against the defendant for the infringement of three patents, arising out of the defendant's manufacture and sale of water meter assemblies. 19 The second offsetting claim relates to an order for costs made in favour of the plaintiff against the defendant by me on 9 August 2004 in action Q69 of 2003. 20 The claim in respect of damages for patent infringements is in the context of assertions that the defendant and others have infringed one or more of the applicant's water meter invention patents. 21 Mr Stack, a director of the plaintiff, says in his supporting affidavit that on 30 August 1990 he filed a patent application in respect of a water meter assembly device, which was invented by Mr Alan Grieves and himself. He says that subsequent to the filing of a patent application in respect of that invention, a Petty Patent No 645740 was issued in Mr Stack's name. 22 Mr Stack says that in approximately 1994, the defendant won a Brisbane City Council tender for the supply and installation of approximately 60,000 water meters. 23 It is asserted by Mr Stack that the design of those meters, the subject of the tender to the Brisbane City Council, infringed Petty Patent No 645740. 780782 (Appln. 781173 (Appln. No: 43779/01 --- Divisional of 780782 85236/91). 26 Mr Daniel Patrick Fox, a registered Patent Attorney since January 1997, deposes in his affidavit filed 14 September 2007 that the water meter assemblies, purchased by the Brisbane City Council from the defendant and Davies Shephard, embodied the invention of Stack and Grieves in Petty Patent No.645740 and Petty Patent No. 662284, " both of these petty patents deriving from application No 85236/91 as divisionals . GST [the plaintiff] is also the Patentee of three more recent patents ("the three new patents") which also derive from application No. 85236/91 as divisional either directly or indirectly, those patents being No. 780782 (32815/95), No. 781173 (46033/01), and No. 781174 (43779/01) and all three new patents relate to the same "invention" as the two petty patents previously mentioned. In fact, the claims of patent No: 781174 are identical to the claims of one of the petty patents, namely, No: 645740. The claims of patent No: 781173 are identical to the claims of the other petty patent, namely, No: 662284. 30 The defendant puts in issue the issues of patent validity and infringement and relies on the affidavit of Mr Terrence John Collins, a registered patent attorney since 1966. 31 Mr Collins says in his affidavit filed 8 October 2007 that the validity of the three patents relied on should not be assumed because, unlike the plaintiff's earlier petty patents, they are to be tested by reference to world wide prior art. Mr Collins says that because Patent No 781173 and Patent No 781174 are " stand alone " applications, (that is, without the priority dates of earlier divisionals) they are invalid because of prior disclosure of the invention in earlier patents. 32 Further, for reasons which he elaborates, he expresses the view that the defendant's meter does not infringe the relevant patents. 33 Mr Collins expresses the view that the plaintiff has no reasonable prospects of success in a patent infringement claim against the defendant. 34 The defendant also relies on evidence to suggest that there was a loss on sales of 1095 units of the defendant sold through commercial outlets during the relevant period of $8.79 per unit, contrasted with the estimate by Mr Stack of $70.00 per unit. 35 Clearly there is a dispute as to the quantum of damages if infringement is established. The contention of the plaintiff is that damages for infringement are not calculated upon profit made by the infringing party, but upon the loss to the party whose patent has been infringed, noting also that there is also power for the award of exemplary damages. 36 The contention is that at a minimum, applying the estimate of profit of $70 per unit, (an amount referred to by counsel for the defendant as simply a " guesstimate ") to the admitted sales of 1095 units, the quantum of damages for infringement greatly exceeds the defendant's claim in the statutory demand. 37 There are clearly serious issues in dispute as to the validity of the plaintiff's patents, as to the infringement of them, and as to the quantification of any damages claim. In particular, Mr Collins has gone into detail in support of his contention that the patents are invalid. 38 Mr Fox, for the plaintiff, asserts that the three new patents derive from Application No 85236/91 as divisionals " either directly or indirectly" and all three new patents relate to the " invention " as did the two earlier petty patents. 39 Having regard to the authorities earlier referred to, it is not appropriate that there be a resolution of these factual disputes. While there is much force in the criticisms of the generality of the assertions made by the plaintiff, I am satisfied in the words of Lockhart J that the claim in respect of damages for infringement is one " that may have some substance . The claims are seriously disputed, as the expert evidence of Mr Collins demonstrates. Without looking too deeply at the issues of validity and infringement, the claims of the plaintiff in respect of damages for infringement are such that they have " some real chance of success ", to use the words of Young J in Intag Microelectronics Pty Ltd v AWA Ltd (1995) 18 ACSR 284 at 289. 41 In my opinion, the conclusion that there is an offsetting claim in respect of the costs orders made by the Court on 9 August 2004 are even stronger. 42 On that day, the Court ordered that the decision of the AAT to affirm the decision of the Commissioner of Patents to decline an extension of time was set aside, and the matter was remitted to the AAT for consideration according to law. The Court ordered that the second respondent pay the costs of the applicant to be taxed if not agreed. Those costs have been assessed by cost assessors except for photocopying fees. The firm of Hickey & Garrett has made an assessment in the sum of $97,825.58. Exhibited hereto and marked with the letters "GS-6" is a copy of a letter from Hickey & Garrett addressed to my solicitor. The total costs relating to the solicitor's professional fees and outlays, excluding the photocopying costs relating to the Law Reports for the Court, have been delivered in the sum of $14,775.58. The Bills, including the anticipated costs of the assessment, totals $97,825.58. 46 On 12 October 2004, solicitors for the defendant filed a notice of discontinuance in that application. The letter says " The total costs for solicitor's professional fees and outlays "have been delivered" in the sum of $14,775.58. I think the figure of $97,825.58 is simply the addition of the solicitor's professional fees and outlays, and the fees for Senior and Junior Counsel, together with the costs of the assessment described as " anticipated " of the assessment, being a rounded figure of $3,000.00. 52 Notwithstanding the significant evidentiary difficulties and uncertainties concerning a cross claim for costs by the plaintiff against the defendant, I am satisfied that there is a claim for costs in respect of 69 of 2003. I am further satisfied that in respect of both proceeding 69 of 2003, and proceedings 174 of 2004, there is a cross claim by the plaintiff against the defendant that exceeds the amount of the debt in the statutory demand. 53 On this cross demand also, I would set aside the statutory demand. 54 I set aside the statutory demand on each of the bases referred to above. While acknowledging the paucity and lack of precision in the evidence concerning the quantum of the cross demand in respect of costs in proceeding 69 of 2003 and 174 of 2004, it is not appropriate in this case to set aside the demand on condition that the applicant make application for an assessment of costs. 55 Such an order was made by Hely J in Fleur De Lys Pty Ltd v Jarrett (2004) 51 ACSR 238. 56 The application by the plaintiff seeks an order for costs on an indemnity basis, relying on the fact that its solicitor had corresponded with the solicitor for the defendant indicating that the plaintiff claimed that it had a cross demand for damages for infringement of patents. The defendant nonetheless persisted in resisting the setting aside of the statutory demand. 57 In my opinion, it is not appropriate that there be an order for costs on an indemnity basis. 58 My present view is that it is appropriate to make the usual order, that the defendant pay the plaintiff's costs of and incidental to the application to set aside the statutory demand, to be taxed if not agreed. 59 I will, however, hear the parties as to the costs order I should make.

application to set aside statutory demand under s 459g corporations act 2001 (cth) where amount of demand not disputed whether plaintiff has genuine claims against the defendant to offset the admitted amount pursuant to s 459h(1)(b) where plaintiff found to have arguable genuine claims for offset in excess of admitted amount corporations law

The applicant was given leave by Heerey J on 12 July 2007 to issue a subpoena directed to ASIC to produce specified documents in its possession. ASIC has produced the documents to the Court. The first respondent, Multiplex Limited, is a company whose shares are listed on the Australian Stock Exchange Limited ("ASX"). The second respondent, Multiplex Funds Management Limited, is the responsible entity for the Multiplex Property Trust within the meaning of Ch 5C of the Corporations Act 2001 (Cth). Both respondents are subject to and bound by the provisions of the ASX Listing Rules. Each ordinary share in Multiplex Limited is stapled to an ordinary unit in the Multiplex Property Trust ("Multiplex Group Stapled Securities"). In these reasons I use the expression "Multiplex" primarily as a reference to Multiplex Limited but also from time to time, where the context allows, as a reference to each of the respondents and also Multiplex Constructions (UK) Ltd ("Multiplex (UK)"), a wholly-owned subsidiary within the Multiplex Group. 3 In or about September 2002, Multiplex (UK) entered into a contract for the design and construction of the Wembley National Stadium ("the stadium") at Wembley in the United Kingdom. Multiplex (UK) entered into a subcontract with Cleveland Bridge UK Ltd for the design, manufacture and erection of the structural steel work required for the stadium. Difficulties and issues arose in relation to the carrying out of the steel work subcontract. Delays occurred in the design, fabrication and construction of the steel work. Substantial cost increases and delays occurred in relation to the erection of the steel work and the carrying out of the construction of the stadium. The completion of the project was delayed. In the course of that investigation ASIC reviewed over 3,000 documents, either examined or took statements from 23 witnesses, and obtained information from the United Kingdom. The investigation was finalised in September 2006. As a result of its investigation ASIC made certain findings in relation to Multiplex's conduct. 5 The examination of the witnesses, whose evidence was transcribed, occurred between 22 March 2005 and 11 August 2006. At the commencement of each examination an ASIC officer gave a direction to the witness to the effect that the witness was not to disclose to any person the questions asked or the information or documents provided to them or by them during the examination except to their legal adviser for the sole purpose of obtaining legal advice. From time to time, ASIC officers wrote to the witnesses extending this period of confidentiality and the last date for the extended period of confidentiality was 5 March 2007. Since that date all the persons examined have been free to disclose the contents of the transcripts of their evidence to anyone. 6 Each person examined was sent a copy of the transcript of their examination under cover of a letter requiring them pursuant to s 24(2) of the Australian Securities and Investments Commission Act 2001 (Cth) to read the transcript, make any changes to ensure it was accurate and to sign each page of it and return it to ASIC by a specified date. Some of the transcripts have been signed and returned to ASIC, but a number of them have not been signed and returned. ASIC has proceeded on the basis that it is obliged by s 127 of the ASIC Act to prevent unauthorised use or disclosure of confidential material obtained by it using its compulsory powers. ASIC also applies common law principles of confidentiality to material provided to it on a voluntary basis. 7 On 20 December 2006, Multiplex entered into an enforceable undertaking, which was accepted by ASIC, pursuant to the provisions of s 93AA of the ASIC Act. The undertaking recorded that Multiplex did not admit that there had been any contravention on its part of either ASX Listing Rule 3.1, the Corporations Act or any law but offered an enforceable undertaking in the terms set out in the undertaking. The applicant alleges that during that period the costs of the stadium project exceeded budgeted costs, construction fell behind schedule, the project made a forecast budgeted loss and the project substantially reduced profit earnings for the Multiplex Group. 9 The applicant further alleges that by 2 August 2004 Multiplex was aware, or ought reasonably to have been aware, of these matters. It alleges that information about these matters was material information that a reasonable person would expect to have a material effect on the price or value of Multiplex's shares, that Multiplex was obliged pursuant to the ASX Listing Rules to tell the ASX about these matters and that in contravention of its obligation of continuous disclosure under s 674 of the Corporations Act Multiplex failed to do so. The damage alleged by the applicant is primarily the difference between the price paid during the relevant period for Multiplex shares and what is said to be the true value of those shares. ASIC communicated with each person whose evidence had been transcribed to ascertain whether they consented to their transcripts being given to Multiplex to enable it to consider whether it objected to the transcript being made available to the solicitors for the applicant. Several examinees objected to the release of their transcripts to Multiplex. On 28 February 2007, ASIC wrote to the solicitors for Multiplex and granted them access to the transcripts of those examinees who had not objected for the purpose of allowing Multiplex to make a written submission as to how ASIC should exercise its discretion in relation to the request from the applicant's solicitors. Access was limited to Multiplex's legal advisers, company secretary and in-house counsel. ASIC has not made a determination on the applicant's s 25 application. 11 The applicant applied for leave to issue a subpoena duces tecum against ASIC and the respondents were given notice of that application. It came on for hearing before Heerey J on 5 July 2007. ASIC did not object to the granting of leave, but leave was opposed by the respondents. 12 On 12 July 2007 Heerey J ordered that the applicant have leave to issue a subpoena directed to ASIC to produce specified documents. That order was varied by Finkelstein J on 7 August 2007. No claim for restricted access was made by ASIC in relation to the majority of those documents and the production for inspection of those documents is not in issue. They were produced to the Court on 20 August 2007. Multiplex submitted that these documents should only be inspected by the applicant's counsel and solicitors who had signed confidentiality undertakings. The applicant contended that the documents should be available for inspection without the need for confidentiality undertakings being signed by persons undertaking the inspection. In order to expedite the inspection I put in place an interim arrangement on 11 September 2007 whereby I ordered that access be given to those documents to the applicant's counsel and solicitors who had signed confidentiality undertakings on the basis that such order was without prejudice to the applicant's right to contend that no confidentiality regime was appropriate and that execution of confidentiality undertakings did not constitute an admission as to the appropriateness of confidentiality orders. 14 ASIC's application to restrict inspection of documents produced pursuant to the subpoena was fixed for hearing on 11 September 2007. Prior to that date ASIC informed the parties and the Court that it was objecting to the production for inspection of thirty-six specified documents and copies of the transcripts of examination of all persons examined by ASIC during the course of its investigation on the ground of public interest immunity privilege. The transcripts of examination and the documents the subject of the applicant's subpoena were obtained by ASIC using its coercive powers under s 19 and Pt 3 , Div 3 of the ASIC Act. 15 In the material it filed in the Court and served on the parties ASIC did not elaborate on the matters of public interest it had identified for resisting the production of the documents and transcripts. It contended that to do so would, or could, disclose, or tend to disclose, certain confidential information contained in, or revealed by, the documents and the transcripts. ASIC contended that such disclosure would, or could, tend to defeat the public interest which ASIC sought to protect in relation to those documents and transcripts. Accordingly ASIC sought to have its claim for public interest immunity privilege heard in camera in the absence of all the parties to the proceeding. 16 ASIC filed with the Court and served on the parties written submissions as to the procedure which should be adopted by the Court on the hearing of its public interest immunity privilege claim. In support of its submissions ASIC relied upon confidential affidavits, to which were exhibited a number of documents, and confidential submissions filed in the Court but which were not served on the applicant or the respondents. These confidential affidavits and submissions were relied on by ASIC in support of its public interest immunity privilege claim. 18 I was extremely unhappy about adopting the procedure proposed by ASIC but, after giving the applicant and the respondents the opportunity to make submissions in relation to ASIC's proposal for the procedure for the hearing of its public interest immunity privilege claim, I reluctantly acceded to ASIC's submissions. My reasons for making orders pursuant to ss 17(4) and 50 of the Federal Court of Australia Act follow. 19 The power given to the Court under s 50 of the Federal Court of Australia Act to forbid or restrict the publication of evidence should only be exercised in exceptional circumstances. Section 50 makes it clear that the power should only be exercised in order to prevent "prejudice to the administration of justice or the security of the Commonwealth". In the present case ASIC's concerns relate to prejudice to the administration of justice. It is a fundamental principle of the administration of justice in Australia that the administration of justice be open justice. When considering whether to exercise the power given by s 50 a Court must bear in mind the need to do justice between all relevant parties, taking as its initial position the principle of open justice. The manner in which a Court should approach an application under s 50 of the Federal Court of Australia Act to restrict the publication of evidence was considered by a Full Court of the Federal Court in Applicant Y v Australian Prudential Regulation Authority [2005] FCAFC 222. That is the function that the Court is appointed to discharge. The importance of the principle of open justice is not in doubt. On the other hand, the possibility of prejudice to the administration of justice must be weighed against the public interest in maintaining open justice. Although the principle of open justice is of great importance in exercising the discretion under s 50, it is not necessarily the whole weight of that principle that must be placed on the scales. The derogation from the principle that might be involved in making an order under s 50 may be very great, or it might be very small. The power to order the exclusion of persons from a hearing should only be exercised in exceptional cases. It is clear from s 17(4) that that power should only be exercised in circumstances where not to exercise it would be "contrary to the interests of justice". The primary principle is that the principle of open justice is to be observed in that Court hearings should be open to the public and only closed where the interests of justice require that closure. As Earl Loreburn said in Scott v Scott [1913] AC 417 at 445: "The inveterate rule is that justice shall be administered in open Court. " His Lordship accepted that it was appropriate in the interests of justice that the doors of the Court be closed when the subject-matter of the action would be destroyed by a hearing in open court. Running through these decisions is a common theme. It is that, by our tradition, the open administration of justice is the rule. Statutory derogation from openness is the exception. In the defence of the rule, such statutes will usually be strictly and narrowly construed. It submitted that it should, to the extent possible, identify the reasons why the information was being withheld without disclosing the information. The difficulty with acceding to that submission is that exposing the reasoning process would inevitably disclose the information sought to be protected. There were also a number of matters in respect of the claim for public interest immunity privilege raised in the confidential material which I wanted to discuss with counsel for ASIC but it was not possible to do this in open session without exposing the information that ASIC sought to protect. 23 The difficulty with which I was faced in this application by ASIC was that in order to determine whether orders should be made under ss 17(4) and 50 of the Federal Court of Australia Act I must have regard to the confidential affidavits (not served on the parties) filed by ASIC and its confidential submissions (not served on the parties) in order to understand the basis for the application. I reached the conclusion that in order to preserve the subject-matter of ASIC's claim for public interest immunity privilege I was compelled to make orders under ss 17(4) and 50 of the Federal Court Act in order to avoid prejudice to the administration of justice. If I had not made such orders I would have destroyed the basis for ASIC's claim. The hearing of ASIC's claim in the presence of the parties to the proceeding would have disclosed the very subject-matter and issues which ASIC claimed were protected from disclosure by the public interest immunity privilege. I therefore heard ASIC's application in camera in the absence of the parties to the proceeding. 24 ASIC raised two threshold submissions which I can resolve in published reasons. The first submission was that the subpoena was being used for an inappropriate purpose. It submitted that the forensic objective which was sought to be achieved by the applicant through the subpoena was one of helping the applicant in a discovery process so as to confine the quantum of any security for costs which might be ordered which would cover the costs of obtaining discovery. It was submitted that that was a different purpose from the usual purpose of issuing the subpoena which was to obtain documents for use as evidence. I consider that the use of the subpoena in this case serves both purposes and that the purpose of seeking to confine the quantum of any security for costs which might be ordered which would cover the costs of obtaining discovery is legitimate. That purpose has as its ultimate objective the obtaining of discovery of relevant documents. If the scope and costs of discovery in a proceeding as complex as this proceeding can be limited and minimised by the use of Court processes such as the issue of a subpoena duces tecum to a third party, then such use is for a legitimate purpose and for a proper forensic objective. 25 In any event this submission made by ASIC is foreclosed by the reasons for judgment and orders of Heerey J on 12 July 2007. What was before his Honour on that occasion was an application by the applicant for leave to issue a subpoena duces tecum to be served on ASIC. Such an application is normally made ex parte but ASIC was given notice of the application and, as Heerey J observed, the application was argued on the implicit basis that considerations which might warrant the setting aside of the subpoena were appropriate to the anterior question of whether leave to issue the subpoena should be granted (at par [1]). Heerey J also noted that ASIC did not object to the issue of the subpoena. He did not see the applicant's purposes in seeking to issue the subpoena as illegitimate. If ASIC wished to challenge the forensic objective which was sought to be achieved by the applicant in issuing and serving the subpoena, that challenge should have been made by way of seeking leave to appeal from the decision of Heerey J. 27 ASIC's second threshold submission was that until the applicant inspected those documents produced under the subpoena, in respect of which there was no challenge to their inspection, the applicant did not know whether the forensic objective that it sought to achieve from the production of the documents under the subpoena was satisfied by inspecting those documents. ASIC contended that the applicant would not be able to say whether in order to advance its claims against Multiplex it was necessary to inspect the documents in respect of which the claim for public interest immunity privilege was made until it had inspected the unchallenged documents. Put another way, ASIC submitted that in order for the applicant to overcome a claim for public interest immunity privilege it had to show that the documents, produced under the subpoena, which it had not inspected were necessary for the administration of justice and then have the Court weigh the impact on the administration of justice of those documents being withheld against the interest sought to be protected by the claim for public interest immunity privilege. ASIC contended that it was premature for the Court to undertake this weighing process until the applicant had inspected the non-contentious documents. ASIC also contended that the volume of material to be disclosed to the applicant pursuant to the subpoena would be more than adequate for the administration of justice. 28 I reject this submission. The documents produced under the subpoena which the applicant is presently able to inspect may well be supportive of the claims made by the applicant against the respondents. But it does not follow that there is no need for it to obtain access to further documents which are the subject for the claim for public interest immunity privilege, which might equally, or more so, support its claims against Multiplex. Nor does it follow that I can, or can attempt to, be satisfied that the documents presently available for inspection by the applicant, enable it to establish its claims against Multiplex. If I were to accept this submission I would need to form, at the least, a preliminary view as to whether the documents presently able to be inspected enable the applicant to prove the case it wishes to make against Multiplex. That is not an appropriate task for me to undertake. It is not for ASIC to say in substance to the applicant, either before or after inspection of the documents which are not in issue, that it has enough documents to prove its case or that it should limit the extent of the documents to be produced under the subpoena or that it does not need the documents which are the subject of the claim for public interest immunity privilege. 29 I have reached the conclusion that I should reject ASIC's claim that the relevant documents and transcripts are protected from production for inspection on the ground of public interest immunity privilege. My reasons for rejection of that claim are contained in a confidential appendix to these reasons published for the moment only to ASIC. I will hear from the parties and ASIC as to if, when and how those reasons should be published to the parties and made available publicly. 30 Separate applications have been made by counsel on behalf of a number of persons who were examined by ASIC, whose transcripts of their examination fall within the applicant's subpoena. A confidential affidavit and confidential submissions have been filed on behalf of one of those persons, for whom Mr Climpson appears, and that affidavit and submissions have not been made available to the applicant's solicitors and counsel or to the respondents. Mr Climpson said in open hearing that his client was seeking to have access refused to anyone to two or three pages of the transcript of his examination. Mr Climpson said that the matters contained in those pages were essentially of a private nature, had no apparent relevance to the proceeding and were essentially potentially embarrassing if other parties were allowed access to those pages. His application was that his client's solicitors be allowed to redact about two or three pages of the transcript. 31 Having regard to my conclusion that the transcripts are not protected from production for inspection on the ground of public interest immunity privilege, those persons should be given the opportunity to make submissions as to whether there are any other grounds on which production of their transcripts for inspection by the applicant and its solicitors should be refused. 32 I am not disposed to consider Mr Climpson's client's application without the applicant's solicitors and counsel being given access, on a confidential basis, to Mr Climpson's client's confidential affidavit and submissions. I will hear Mr Climpson further on his client's application. 33 I now commence the reasons which consider and determine ASIC's claim for public interest immunity privilege. These reasons are contained in the confidential appendix to these reasons. 34 I will hear the parties as to what further or consequential orders and directions should be made and given as a result of my reasons. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg.

representative proceeding claiming breach of continuous disclosure obligations investigation by australian securities and investments commission where applicant served subpoena duces tecum on asic to produce certain documents and transcripts in its possession following investigation objection to production by asic on grounds of public interest immunity privilege where application heard ex parte to preserve subject-matter of asic claim for public interest immunity privilege public interest immunity privilege claim rejected confidential reasons. privilege

From about February 1996 he was on either sick leave or compensation leave from that employment. On 23 May 1996 the second defendant Comcare accepted liability on his claim for compensation for generalised anxiety disorder under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act). 2 APS arranged with the Hydro Electric Commission (the Hydro), the predecessor of the plaintiff Aurora Energy Pty Ltd (Aurora), that, for the purposes of his rehabilitation, Mr Fowle should carry out some duties for the Hydro. 3 Mr Fowle worked under this arrangement for three successive periods. At all times Comcare paid him weekly compensation and other payments to which he was entitled under the SRC Act. 4 On 14 October 1997 Mr Fowle was injured as a result of a fall during a practical exercise in the course of his training with the Hydro. He has not returned to work with the Hydro, or APS. 5 In 2000 Mr Fowle commenced an action in the Supreme Court of Tasmania claiming damages for personal injuries sustained in his fall. In his amended statement of claim he alleged that he was at all material times contracted by the Hydro as a B grade Electrical Linesman. Aurora has denied this allegation. 6 The present proceeding was commenced in the High Court and remitted by that court to the Federal Court. Aurora seeks declarations that (i) the Commonwealth is required to indemnify it in respect of any damages awarded to Mr Fowle against it for injuries suffered by him in October 1997 and that (ii) it is not liable to repay the Commonwealth or Comcare any monies paid by them in respect of workers compensation to Mr Fowle arising from the injuries suffered by him in October 1997. Before joining APS Mr Fowle had worked for the Hydro as a B Grade lineworker. On 8 July 1996 Mr Keith McVilly of VRS wrote to the Hydro concerning "the possibility of a work placement for Tony Fowle". While I understand that there is no full time position available, we are seeking to develop a voluntary placement for a period of 3-4 months. During this time Tony will be able to decide if a return to the HEC is to be a long-term goal. It will also provide a good opportunity for Tony to regain some confidence and self esteem in relation to his vocational prospects. Please confirm this in writing. If this meets with your approval, I understand Tony can commence on Monday 29 July. The "Host Employer" was said to be the Hydro and the employment status "supernumerary --- all wage costs met by Comcare". This document was subsequently signed by Mr Fowle and an officer of the Hydro. 10 On 27 July 1996 Mr Tony Mihelcic of the Commonwealth Department of Administrative Services (DAS) faxed to Mr McVilly two documents, one of which was entitled "Work Trial Proposal" and the other "Work Trial Agreement". The former contained details of tasks to be undertaken by the worker. 11 The latter was expressed to be an agreement between Mr Fowle, his case manager Mr Mihelic, Comcare, APS and the Hydro "in relation to placing Shane Fowle into a realistic work environment as outlined in the Work Trial proposal and to accommodate the work restrictions and Return to Work Plan associated with his compensable condition". In his covering fax of 27 July Mr Mihelcic asked Mr McVilly to get Mr Fowle and "the new employer" to sign it. However Mr McVilly on 30 July 1996 faxed back some suggested further amendments to which Mr Mihelcic faxed agreement on the same day. 13 It is agreed between the parties that (i) there is no evidence that a copy of the Work Trial Agreement was signed by any party and that (ii) an unsigned copy was sent to the Hydro for consideration but there is no evidence that the Hydro approved or signed it or forwarded it to any party. In a subsequent fax dated 4 October 1996 to Mr Mihelcic, Mr McVilly states that the original Work Trial Agreement "was lost by Hydro & officer concerned has himself been on WC leave! He received no salary or wage from the Hydro but Comcare paid him his entitlements under the SRC Act. 15 On 21 October 1996 Mr McVilly sent a fax to Mr Mihelcic confirming an earlier telephone conversation to the effect that the Hydro were willing "to extend Tony's placement for a further three months (to 31 January 1997)" and that the Hydro "would be willing to discuss a salary sharing agreement with Comcare, possibly up to 50% of the Line Worker Salary". contacted me today regarding the payment of Tony Fowle's salary during his work trial from 12 November. He stated the H.E.C. are concerned about the type of arrangements Tony will be under during the trial and the consequences should he sustained [sic] a work related injury. Peter stated that the H.E.C. have recently had a bad experience with a person who worked for a contractor and was working at H.E.C. I agreed to fax Peter a copy of the last contract. A similar one will be prepared for his next three months. As you will see item 3 [sic --- item 4 appears to be the relevant one] under the heading Current Employer makes reference to which organisation is responsible for ongoing liability. The covering fax requested Mr Sutzcak to advise if the new wording was suitable for the Hydro's needs. the Australian Protective Service, accepts liability for any injury sustained during the period of the Work Trial. The Australian Protective Service is insured under the SRC Act against liability for death of or injury to Shane Fowle. In the event that an injury has occurred the matter will be handled by the Australian Protective Service and Comcare Australia. There is no evidence that the Hydro approved it or forwarded it to any other party. (The foregoing language comes from the parties' statement of agreed facts. It was accepted by counsel for the defendants that this statement is to be taken to mean that there is no evidence that the Work trial Agreement was "approved" in any formal sense. The possibility of adoption implied from a course of conduct is not excluded by the statement of agreed facts. The Hydro and Comcare shared the cost of his wage on a 50:50 basis. Comcare continued to pay him his entitlements under the SRC Act. 21 In late January 1997 the Hydro agreed to an extension of the then current work trial for a further 12 weeks on the same basis, including the equal sharing of his wage. This continued to 4 May 1997. 22 On 17 April 1997 the Hydro advised Mr Mihelcic that it would be difficult for it to employ Mr Fowle in a permanent position as a lineworker because he only possessed a B Grade Lineworker certificate. By a letter dated 22 April 1997 to Mr Mihelcic the Hydro offered to place Mr Fowle for a period of up to six months "to facilitate him achieving the qualification of A Grade lineworker". A training program was outlined. It was proposed that the Hydro would meet costs for training, clothing, protective equipment and materials and APS would meet his salary/wage. 23 An initial placement for the period 12 May to 10 October 1997 was arranged. A return to Work Program was prepared. The "Host Employer" was said to be the Hydro. The Program also stated: "Position Title: Linesman (Trainee)" and "Employment Status: Supernumerary, salary costs met by Comcare (100%)". The Program does not appear to have been signed. 24 The evidence does not disclose any fresh Work Trial Agreement being produced for the May-October 1997 period. 25 In the period 12 May to 14 October 1997 Mr Fowle carried out various duties and tasks for the Hydro by way of on the job training to upgrade his lineworker certificate. The Hydro paid his training costs but did not pay him any salary or wage. Comcare continued to pay him his entitlements under the SRC Act. 26 As already mentioned, Mr Fowle was injured at his work on 14 October 1997. Plainly Mr Fowle's move to the Hydro called for the parties to provide for the respective rights and obligations which would arise in this new setting. As has been seen, this is what they attempted to do. 28 The formulation of the content of that contract however requires some attention. People do not always conduct their business dealings in classic text book terms of offer and acceptance. Agreements concerning terms and conditions which might be too uncertain or too illusory to enforce at a particular time in the relationship may by reason of the parties' subsequent conduct become sufficiently specific to give rise to legal rights and duties. In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed. Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words. The question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract. 29 Applying those principles, in my opinion the Work Trial Agreement in the form sent by Mr Mihelcic to Mr Sutczak on 30 December 1996, including cl 4 set out in [18] above, formed part of the contract which was in force at the time Mr Fowle suffered his injury. The Commonwealth and Comcare by their subsequent conduct, and in particular by meeting all Mr Fowle's wages notwithstanding that he was doing work for the Hydro, impliedly accepted the terms in the Work Trial Agreement. Pre-contractual conduct can cast light on the genesis of the contract and its objective aim: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24 ; (1982) 149 CLR 337 at 347-352 , Brambles at [24]. Here the essence of the term appeared in the original Work Trial Agreement ([11] above), which had been prepared by the Commonwealth. Subsequently the Hydro, through Mr Sutczak, emphasised the importance of indemnity ([17] above). The potential for workplace injury, and liability there for, was an obvious matter of concern for a substantial industrial employer like the Hydro. "Liability" means any legal liability of the Hydro. Obviously "any injury" does not mean literally any injury suffered by Mr Fowle. An injury which he suffered at home and unconnected with his work would not involve any liability of the Hydro. 31 The expression "liability for any injury" cannot be limited, as the defendants argued, to exclude common law liability. The words are not qualified in any way. It would have been open to Comcare and/or APS, as the preparer of the document, to limit it to accord with their particular circumstances. It is not to the point that entitlement of a Commonwealth employee to sue the Commonwealth for damages at common law is limited in scope and amount by s 45 of the SRC Act. At all relevant times the potential liability of the Hydro included liability at common law for negligence. The Hydro enjoyed no statutory protection comparable to that in s 45 of the Commonwealth Act. 32 Moreover, the context and commercial purpose of the agreement tells against any such limitation. The reality was that the Hydro was doing Comcare and/or APS a favour by taking on Mr Fowle to assist with his rehabilitation, something which would be a benefit to them. 33 Counsel for the defendants submitted that the term in question, being an indemnity, should be construed strictly against the Hydro. However, this principle of construction is bound up with another rule, that documents should be construed contra proferentem (against the interest of the party which prepared or drafted the document): Coghlan v S H Lock (Australia) Ltd (1987) 8 NSWLR 88 at 92, Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28 ; (2004) 217 CLR 424 at [19] , Halford v Price [1960] HCA 38 ; (1960) 105 CLR 23 at 30, 34, 40, 41. However, in the present case it is the Commonwealth which was the drafter or presenter of the document. One can infer that seeking to have a Commonwealth employee placed with an outside employer for the purposes of rehabilitation is a common occurrence. Since this is a benefit to Comcare and the Commonwealth (successful rehabilitation will lessen their financial burden), it is hardly surprising that the Commonwealth and/or Comcare would adopt a standard form of contract in which the outside employer is indemnified against the obvious possibility of liability for workplace injury. The present case is the reverse of the stereotypical situation where the party in the stronger bargaining position imposes a standard term on the weaker party: see Andar at [69] per Kirby J. There have been consent orders as between the plaintiff and Comcare. There will be an order that the Commonwealth pay the plaintiff's costs, including reserved costs. I certify that the preceding thirty- four (34) numbered paragraphs are a true copy of the Reasons for Judgement herein of the Honourable Justice Heerey.

workplace injury rehabilitation program with host employer wages paid by original employer work trial agreement prepared by original employer and forwarded to host employer but not signed by the latter second injury while worker working for host employer common law action brought by worker against host employer whether unsigned work trial agreements formed part of contract whether construction of term in contract required original employer liable to indemnify host employer contract

Under s 44(1) of the AAT Act the right of appeal is a right to appeal from a decision of the Tribunal on a question of law. The respondent to the purported appeal is Mr Artan Hassani. 5 In order to protect its position the applicant has filed an application seeking relief in relation to the Tribunal's orders under s 5 or s 6 of the Administrative Decisions (Judicial Review) Act 1977 ('ADJR Act') or s 39B of the Judiciary Act 1903 (Cth). 6 The respondent has filed a notice of objection to competency wherein he objects to the jurisdiction of this Court to try the application for an order under the AAT Act or the ADJR Act or both. Before considering the matters raised by the notice of objection to competency it is appropriate to set out the facts and the issues raised by the applicant. A delegate of the Minister for Immigration and Citizenship refused the application and on 27 January 2004 the respondent was advised that his application for a grant of Australian citizenship had not been approved. The delegate referred to s 13(1)(f) of the Australian Citizenship Act 1948 (Cth) ('the Act') which requires an applicant for a certificate of Australian citizenship to satisfy the Minister that he is a person of good character. The delegate advised the respondent that his application had been given careful consideration but, that because of his criminal history, the delegate was not satisfied that the respondent met the requirement in s 13(1)(f). 8 On 11 February 2004 the respondent made an application to the Tribunal for the review of the delegate's decision. 9 At this point, it is necessary to identify a number of events which took place between late 2003 and the date upon which the Tribunal made its orders. 10 It seems that the respondent was alleged to have committed the offence of having taken part in the production of a controlled substance on 31 December 2003. The Tribunal held preliminary conferences of the respondent's application for review on 1 April 2004 and 3 June 2004 respectively. Various procedural orders were made on the second occasion. 11 It is alleged that the respondent committed various traffic offences on 25 June 2004. 14 On 18 July 2005 the Tribunal made various directions with a view to the application for review proceeding to hearing. On 4 November 2005 further directions were made for the same purpose. On the evidence before me it is not entirely clear when the order was made but at some stage an order was made that the respondent's application for review be heard on 23 and 24 January 2006. 15 It is alleged that between 8 November 2005 and 8 December 2005 the respondent committed the offence of producing a controlled substance contrary to s 32(1)(a) of the Controlled Substances Act 1984 (SA). At a telephone directions hearing of the Tribunal held on 18 January 2006 the Tribunal was advised by the respondent's solicitor that charges in relation to the offences had been laid on or around 6 January 2006. Whether s 13(11) of the Australian Citizenship Act 1948 is a bar to a decision of the Tribunal being given effect to. Whether the application before the Tribunal should be withdrawn. As I have said, on 28 March 2006 the Tribunal made the orders which are under challenge. Section 14 is not relevant in the present case. The notice may be served personally, by post or by an electronic communication. The Tribunal's power to review certain decisions is set out in s 25 and its powers with respect to matters of procedure are set out in s 40. Before the Tribunal, the applicant submitted that the power to defer in s 14A of the Act was not a power available to the Tribunal. He submitted that the power was not available to the Tribunal unless and until the decision made by him was set aside. In addition to that matter, it appears that before the Tribunal the applicant accepted that the Tribunal's general power to adjourn in s 40(1) of the AAT Act was available to it, although he did submit that it should not be exercised in the circumstances of the case. 23 Before this Court, the applicant accepted that the power to defer in s 14A was available to the Tribunal, and his principal submission was that the power to defer consideration of the application was spent because it had already been deferred for a period that exceeded, or for periods that in total exceeded 12 months (s 14A(2)). He also submitted that the presence of the power to defer in s 14A of the Act, irrespective of whether it could be exercised in the particular circumstances, meant that the Tribunal's general power to adjourn in s 40(1) of the AAT Act was not available to it or, in the alternative, was not available to be exercised when the ground advanced for the application was the fact that charges were pending against the applicant for review. 24 For his part, the respondent submitted that the Tribunal had available to it the power to defer in s 14A of the Act and, at the same time, it also had its general power to adjourn. He submitted that the circumstances were such that the power to defer could be exercised. He submitted that the Tribunal's general power to adjourn was not in any way restricted or curtailed by the provisions of s 14A of the Act. On the assumption that that proposition was correct, the respondent submitted that there was no error in the exercise of the discretion of the Tribunal to adjourn the proceeding and he referred to the limits on this Court's power to interfere with the exercise of a discretion of this nature. 25 The Tribunal member rejected the submission that the power in s 14A of the Act was a power which was not available to the Tribunal and he held that the power in s 14A was available to the Tribunal. The Tribunal member referred to the provisions of s 13(11)(a) of the Act as a limitation on the exercise of jurisdiction by the Tribunal on review. A little later, the Tribunal member said that those provisions were a prohibition on the exercise of jurisdiction by the Tribunal on review and that the Tribunal 'is not presently at liberty to proceed to hear the application for review'. He referred to the power in s 14(a)(1)(b)(ii) as 'complementary' to s 13(11)(a) and that the power could be used in a case where the circumstances of the alleged offending were relevant to the application before the Tribunal. The Tribunal member said that the twelve month period referred to in s 14A(2) of the Act must be taken as the period commencing at the time the alleged offending occurred, and not at the time the application for review was made. He said that that was the appropriate conclusion in order to make 'practical sense in the present case'. 26 The Tribunal member referred to the Tribunal's general power to adjourn in s 40(1) of the Act and he referred to the rival contentions of the parties as to whether that power should be exercised. He said that to proceed to hear and determine the application for review would involve an inquiry by the Tribunal into the very issues raised in the criminal proceedings and that that would place the respondent in the invidious position of having to make his case before the Tribunal and, in doing so, having to compromise his right of silence in the criminal proceedings. He said that, for the respondent to proceed with his application in those circumstances, would not be consistent with 'the principle inherent in s 14A(1)(b)(ii) of the Act'. The Tribunal member also considered whether it would be a contempt of Court for the Tribunal to proceed to hear and determine the application for review before the determination of the criminal proceedings. After referring to various authorities, the Tribunal member concluded that there would be a real risk that there would be actual interference with the administration of justice if the Tribunal was to proceed, and, if it did, it may well be a contempt of Court. He seems to have taken the view that it was open to him to refrain from proceeding to a hearing of the application for review under either provision. The substantive application before the Tribunal was an application for review of the delegate's decision under s 13 of the Act not to grant a certificate of Australian citizenship to the respondent. The right to bring the application for review is contained in s 52A of the Act. The orders of the Tribunal defer or adjourn consideration of the application for review. The orders do not amount to a final decision or determination. In accordance with well-established authority the orders therefore do not constitute a decision within s 44(1) of the AAT Act: Director-General of Social Services v Chaney (1980) 3 ALD 161 per Deane J, with whom Fisher J agreed, at 178, 180; Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 (' Bond ') per Mason CJ at 335; Geographical Indications Committee v The Honourable Justice O'Connor (2000) 64 ALD 325 at 332-333. In my opinion, there is no right of appeal from the Tribunal's orders under s 44(1) of the AAT Act. 30 I do not think the orders made by the Tribunal constitute a decision under s 5 of the ADJR Act. The meaning of 'decision' in s 5 of the ADJR Act was considered by Mason CJ in Bond . His Honour said that a reviewable decision under s 5 of the ADJR Act had a number of characteristics, including the fact that it must be a substantive determination. With the exception of s 3(2)(g), the instances of decision mentioned in s 3(2) are all substantive in character. Moreover, the provisions in sub-ss (1), (2), (3) and (5) of s 3 point to a substantive determination. In this context the reference in s 3(2)(g) to "doing or refusing to do any other act or thing " (emphasis added) should be read as referring to the exercise or refusal to exercise a substantive power. I do not perceive in s 16(1)(b) or in par (e) of Sched 1 or par (a) of Sched 2 to the AD(JR) Act any contrary implication. These exclusions from the AD(JR) Act or from s 13 appear to have been introduced for more abundant caution and it would be unwise to take too much from them. To take an example, the refusal by a decision-maker of an application for an adjournment in the course of an administrative hearing would not constitute a reviewable decision, being a procedural matter not resolving a substantive issue and lacking the quality of finality. Then it is the "conduct" of the hearing in refusing an adjournment that is the subject of review. To treat the refusal of the adjournment in this way is more consistent with the concept of "conduct" than with the notion of "decision under an enactment". It seems to me that that is probably the case, but the question which then arises is whether any of the grounds in s 6 of the ADJR Act are relevant to the grounds upon which the applicant challenges the orders. A number of the grounds, although not all of them, relate to the proposed decision which in this case is the decision to be made on the application for review either to affirm the decision of the delegate or to grant a certificate of Australian citizenship to the applicant. If necessary, I will give the parties the opportunity to make further submissions with respect to this issue. 32 It may not be necessary for the parties to make further submissions because I have also reached the conclusion that this is an appropriate case for relief under s 39B of the Judiciary Act 1903 (Cth). The respondent did not argue that relief under s 39B was not, in theory, available. He submitted that it was not available in this case because there was no jurisdictional error by the Tribunal. For the reasons set out below I reject that submission and hold that the Tribunal erred in a manner going to its jurisdiction. The respondent submitted that the Court would rarely exercise its discretion to issue constitutional writs in relation to a decision by the Tribunal to defer or adjourn an application for review. I agree with that as a general statement, but I think that this is an appropriate case. The Tribunal has erred in concluding that it could exercise the power in s 14A of the Act and it has erred in its consideration of its general power to adjourn in light of the provisions of the Act and, in particular, s 13(11)(a). 33 As I have said, before me both parties submitted that the power to defer in s 14A(1) was a power available to the Tribunal. The section in the AAT Act which confers various powers and discretions of the primary decision-maker on the Tribunal is s 43. It seems appropriate to interpret s 43(1) broadly and proceed on the basis that for the purpose of the subsection the Tribunal would be exercising the power to defer 'for the purpose of reviewing [the] application'. The power to defer is a power available to the Tribunal. It is a power which is subject to a limitation and any exercise of the power by the Tribunal is subject to the same limitation. What is the meaning of the limitation? First, I think the twelve-month period commences from the time the decision to defer is taken. With respect, I reject the view of the Tribunal member that it commences when the offence which is the subject of the charge was allegedly committed. There is no warrant in the section for identifying that as the commencement point. Secondly, I think that it is only possible to defer for a maximum period of twelve months and it is not possible to defer for twelve months on the basis of one charge or set of charges and then later for a further period of up to twelve months on the basis of a second and later charge or set of charges. The terms of the section are such that a deferral or deferrals of consideration of the application for review for longer than twelve months is not permitted. In my opinion, the words of the section are such that if the power to defer is exercised, consideration of the application for review must at least commence within a period of twelve months thereafter. 34 The Tribunal's general power to adjourn is not excluded by the fact that the power to defer is a power available to the Tribunal. The Tribunal is not bound to exercise the power to defer in s 14A. In any event, there is a clear difference between a statutory power to defer an application for review and a power to adjourn an application for review and there may be many reasons for adjourning an application which are unrelated to the matters referred to in s 14(1)(b) of the Act. The Tribunal might adjourn because of the unavailability of a party or witness or for any of the reasons that routinely lead to adjournments of a proceeding before a court or tribunal. 35 However, the general power to adjourn is affected by the provisions of the Act. First, if an application is made to adjourn or defer an application for review on the ground that a charge is pending, it would be appropriate that the decision-maker proceed under s 14A rather than the general power to adjourn in s 40(1). Secondly, and in any event, I doubt that there would be grounds to adjourn because of a pending charge. I say that because the alternative to the granting of an adjournment would not be that the applicant for review would be required to compromise his or her right to silence before the hearing of the criminal charge. The effect of s 13(11)(a) of the Act is quite clear. The decision-maker must not grant a certificate of Australian citizenship to a person while proceedings for a relevant offence are pending in relation to that person. It is not clear what the Tribunal member meant when he said that s 13(11)(a) operated as a prohibition on the exercise of jurisdiction by the Tribunal on review. Certainly the Tribunal could not grant a certificate of Australian citizenship, but it could list the matter for hearing and find that the facts fall within s 13(11)(a) and that it cannot or should not exercise the power in s 14A and, having reached those conclusions, dismiss the application for review and affirm the decision of the delegate. I turn now to apply these principles to the facts of this case. 36 The Tribunal member erred in concluding that the power in s 14A could, in the circumstances, be exercised by him. It is not entirely clear from the direction (see [12] above) what power the Tribunal member considered he was exercising on 8 September 2004 when he directed that the matter not be listed for hearing until after the resolution of the criminal charges. I think it is appropriate to view it as an exercise of the power to defer in s 14A because, for the reasons I have given, it would not have been a proper exercise of the discretion to adjourn the application on the ground referred to in the direction. What that means is that the power in s 14A was spent because consideration of the application did not at least commence within twelve months of 8 September 2004. 37 The exercise by the Tribunal of its general power to adjourn miscarried because it was not entitled to take into account the pending charge in considering whether to adjourn and, in any event, the Tribunal member misunderstood what would occur if the application was not adjourned. If not adjourned, then the application should have been listed and if the facts fell within s 13(11)(a) it should have been dismissed and the delegate's decision affirmed. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

purported appeal from decision of administrative appeals tribunal where respondent applied for australian citizenship where applicant minister's delegate refused to grant citizenship on the basis of criminal record and consequent failure to satisfy good character requirements of australian citizenship act 1948 (cth) where respondent applied to tribunal for review of minister's decision where respondent charged with a criminal offences prior to hearing before tribunal where tribunal made orders deferring hearing pending outcome of criminal charges where tribunal had already deferred hearing for periods which cumulatively exceeded 12 months whether tribunal's power to defer hearing under australian citizenship act was spent whether power to defer hearing under s 14a of australian citizenship act supplanted tribunal's general power to adjourn or power to adjourn under administrative appeals tribunal act 1975 (cth) whether tribunal's orders a 'decision' within the meaning of the administrative appeals tribunal act notice of objection to competency whether federal court of australia has jurisdiction to entertain application under administrative appeals tribunal act or administrative decisions (judicial review) act 1977 whether tribunal committed jurisdictional error whether relief available under s 39b of the judiciary act 1903 (cth). administrative law

Section 31A empowers the Court to award summary judgment in relation to a proceeding if satisfied that the applicant has no reasonable prospect of prosecuting it. The basis of the respondent Secretary's resort to s 31A is the contention that the applicant has not identified any question of law such as would enliven the Court's jurisdiction under s 44 of the AAT Act. Given that an appeal lies "on a question of law" only --- and not on a question of fact or of mixed law and fact: see Comcare v Etheridge [2006] FCAFC 27 at [11] - [17] --- the issues before me are whether such a question has been raised by Mr Kronen and whether his argument thereon is sufficiently strong to warrant the matter going to trial: Vranic v Secretary, Department of Education, Employment and Workplace Relations [2009] FCA 672. Mr Kronen was the recipient of a Newstart Allowance under the provisions of the Social Security Act 1991 (Cth). A number of adverse decisions having been made against him, the decision was made to cancel the Allowance. Those various decisions were affirmed ultimately by the Tribunal in the decision the subject of this s 44 appeal. Given the complexity of the legislative scheme relating to this species of Allowance, I will for ease in exposition, refer to it before referring to the factual setting and the decisions in question. It has specified qualification criteria. A claimant for, or a person in receipt of, the allowance must enter into an activity agreement with the Secretary and on terms which are approved by the Secretary. The Act prescribes circumstances in which the allowance is not payable or can be suspended or cancelled. The following refers to some number of provisions in this scheme insofar as they are relevant to this proceeding. I would note that the legislative scheme was amended significantly after the Tribunal's decision. The basic qualifications are set out in Subdivision A of Division 1 of Part 2.12 of the Act. The agreement is between the person and the Secretary . (Emphasis added. The matters it prescribes to be taken into account in determining if a person had a reasonable excuse are not ones which could have availed Mr Kronen in this matter. Section 629(1) allows the imposition of an eight week non-payment period where a person commits a participation failure and has committed earlier failures on two or more occasions in the 12 months preceding the latest failure. One provision of the Social Security (Administration) Act 1999 (Cth) requires note. The following draws from the Tribunal's reasons which conveniently lay bare the factual bases of the complaints made in this appeal. Mr Kronen was a recipient of Newstart Allowance from March 2005. On 2 April 2007 he was referred to Maxima Joblink (Maxima), an employment service provider, for intensive support with looking for work and training opportunities. Maxima was at all relevant times a delegate of the Secretary for the purposes of Mr Kronen's entry into a Newstart Activity Agreement. At the time, Mr Kronen was 53 years of age with a history of significant periods of unemployment. Mr Kronen signed an activity agreement with Maxima on 10 May 2007. That agreement expired on 26 September 2007. He then fell into a dispute with Maxima about signing another agreement as he insisted that certain terms be included in the new agreement, which he considered would "protect him" from Maxima's conduct. He also objected to some terms that Maxima wanted to include in the agreement. Over the following months Mr Kronen failed to attend a number of pre-arranged interviews with Maxima despite having notice of them and that they had been arranged for the purpose of negotiating an activity agreement. He chose not to attend. It outlines the activities you agree to do (eg. Looking for work, job search training) in return for receiving your Newstart Allowance. What will happen if I don't attend the appointment or enter an Activity Agreement? A decision was also made to cancel his Newstart Allowance altogether on the basis that he did not satisfy the eligibility requirements for the allowance. After internal review processes, there were three decisions of the Social Security Appeals Tribunal which founded his review application to the Tribunal. In that same decision they set aside a decision by the ARO that a third participation failure had occurred on 7 March 2008. That period was to run from 11 April 2008 until 5 June 2008. It affirmed the decision of an ARO made on 21 July 2008 that Mr Kronen had committed another NSA participation failure without reasonable excuse on 6 June 2008 and as a result, an eight week non-payment period was applied. He told the Tribunal of his perceived difficulties in his dealings with maxima. He referred to correspondence that he had sent to Maxima in July 2007 ... that contained a litany of complaints about his dealings with Maxima that went back to early 2007. He told the Tribunal that he had become suspicious of his dealings with them prior to the events of October 2007 onwards. He became particularly aggrieved at the assertion by one of the Maxima employment consultants in August and September 2007 that he was exhibiting a pattern of work avoidance. He considered that there was no evidence to support such a contention and complained that they would not provide him with the evidence upon which they had based this assessment. He was also unable to accept as reasonable that he be subject to a "work-for-the-dole" clause in an activity agreement as he believed that, because of his age, he was exempt from such a requirement. When his prior activity agreement was due to expire in September 2007, discussions commenced with a view to him entering into a new agreement. It was at this point that relations between Mr Kronen and Maxima worsened. At a meeting on 9 October 2007, he presented an activity agreement for signing by Maxima which included some specific clauses that he insisted must be included before he would sign it. Maxima Joblink will make every reasonable effort to assist Horst Kronen with the search for suitable employment. To this end, Maxima Joblink will supply support services as required, will supply good, well considered advice and guidance as required, and will refrain from attempting to cause Horst Kronen any unnecessary aggravation, frustration, monetary loss and/or other form of unnecessary inconvenience in its (and its employees' and/or representatives') interactions with him. Failure to provide satisfactory reasons for any such meeting, or failure to provide advance notice of its full agenda, will allow for the cancellation of the proposed meeting. This included referral to an independent panel if any terms could not be agreed. The agreement as presented by Mr Kronen was not counter-signed by Maxima as it was not acceptable to them. It did not contain the job search requirement they considered appropriate for Mr Kronen, nor would they accept his contractual terms and, in particular, his liquidated damages clause. On 25 October 2007, Mr Kronen presented another written complaint to Centrelink which include complaints of Maxima "mishandling" his personal information. Mr Kronen then commenced a pattern of deliberate non-attendance at some of the meetings that he was required to attend. In December 2007 he presented an amended list of contractual obligations that he required in any activity agreement, which included a similar liquidated damages clause (T15). Maxima declined to sign it. He signed his preferred agreement on 14 December 2007. He did not attend meetings that were for the purposes of negotiating a NSA activity agreement. Mr Kronen acknowledges that he was sent an appointment letter before each meeting at which he was required to attend to enter into an activity agreement. He chose not to attend the meetings. Despite his failure to attend these meetings, which were set up specifically for the purpose of negotiating the NSA activity agreement, Mr Kronen would attend his brief Rapid Connect meetings at Maxima. Mr Kronen told the Tribunal that there was no point in him attending any of the meetings which were for the purpose of negotiating an activity agreement as he did not consider that Maxima were prepared to reasonably negotiate with him. He had formed the view that there was no prospect of his requirements being fulfilled, namely that his specific clauses would be included in the activity agreement, and therefore there was no point in his attending. He also expressed the view that Maxima refused to engage with him in a courteous and professional manner. He referred the Tribunal to the "Employment and Related Services Code of Practice". He considered that Maxima had breached that code in the way that they dealt with him. He alleged that Maxima engaged in conduct that he considered did not comply with appropriate standards. Mr Kronen was of the view that, because of his age, he should not be subject to mutual obligation requirements. He had been very put out when he was told that with a pattern of work avoidance he could be required to submit to mutual obligation requirements, despite his age. During this period of repeated refusals to attend interviews, Mr Kronen made complaints to the Department and to the Ombudsman. In a letter received by Mr Kronen on 10 April 2008 from the Deputy State Manager of the Department of Education, Employment and Workplace Relations (DEEWR), it was suggested that he contact the DEEWR line to arrange a new job network member because of the breakdown in his relations with Maxima. Mr Kronen chose not to do so. In a telephone discussion with the ARO, it was noted that he did not wish to change job network member providers, despite this option being available to him. On 10 April 2008, Mr Kronen entered into an activity agreement with Centrelink (as distinct from his employment service provider) in which he agreed that he would do certain things from 10 April 2008 until 28 August 2008. He signed this activity agreement without insisting on the inclusion of his own clauses. Mr Kronen then failed to attend his next appointment set by Maxima, which was for 1 May 2008. He was provided with written notice of the appointment. He was advised on 13 May 2008 that a NSA participation failure would be applied to his payment and, as this was the third NSA participation failure in 12 months, an eight week non-payment period was applied for the period 9 May 2008 to 3 July 2008. He submits that he did sign agreements that included his preferred clauses and that Maxima refused to sign those agreements. He considered his actions reasonable and Maxima's actions unreasonable. The Tribunal found as facts that, (a) Mr Kronen's activity agreement having expired in September 2007, he thereafter refused to enter into an activity agreement in the terms required by Maxima; (b) Maxima's terms were reasonable in all the circumstances; (c) the terms Mr Kronen insisted be inserted were not reasonable in all the circumstances; (d) Centrelink provided him with all required notices of meetings and warnings in respect of participation failures; and (e) there appeared to be no factual basis for such of his complaints against Maxima as were investigated by the Ombudsman and by DEEWR and no evidence that Maxima breached the Code of Practice for providers of employment related services. He had an unrealistic view of his own bargaining power in his relationship with his employment service provider. Having found that the participation failures occurred, the Tribunal then considered the issue of whether there was any reasonable excuse that would exculpate his actions. Given Mr Kronen's concern with "negotiating" his activity agreement, the Tribunal indicated that his ability to negotiate the terms of such an agreement was not judged according to ordinary notions of freedom of contract but "must be viewed in the context of the statutory provisions of the Act". It referred to an earlier decision which in this regard noted that under the Act the Secretary could require that agreements be entered into and it provided for possible adverse consequences in the event of a person in his position failing to agree to the contractual terms proposed. It considered there were not only no reasonable bases for his behaving the way he did; his issues with Maxima did not constitute a reasonable excuse for his participation failures; and his clauses were not reasonable in the circumstances. The Tribunal went on to confirm that the non-payment periods were correctly imposed for the periods found by the SSAT. As to the decision to cancel the Allowance from 6 June 2008, the Tribunal observed: Mr Kronen persistently refused to co-operate with Maxima for six months. His attendance at Rapid Connect meetings was not sufficient to satisfy the activity test. He refused to enter into a NSA activity agreement in the terms proposed. He declined the invitation to move to a new employment service provider. Sections 593(1)(d) and (3) [sic] of the Act provide that to qualify for NSA, a person must be willing to enter into an activity agreement if required to do so. It was apparent by June 2008 that Mr Kronen was determined not to enter into a NSA activity agreement. He had been given more than adequate time to consider the terms of the activity agreement and to co-operate. He had been warned that his failure to enter into an activity agreement would disqualify him from receiving payment. In affirming the cancellation decision the Tribunal appears to have acted under s 80(1) of the Administration Act. The Tribunal affirmed the decisions of the SSAT. His notice of appeal did not state any questions of law. It generally challenged the correctness of the Tribunal's conclusions. I provided him with the opportunity to formulate, with such precision as he was able, the questions of law he wished to agitate on the appeal. Mr Kronen then filed a "Statement of Questions of Law" which, under five general rubrics, listed one or more questions. These in turn were enlarged upon in Mr Kronen's written submissions. These revealed that much of his complaint was with matters of fact involving merits-review. He is now aware that a wrong fact finding is not sufficient to establish an error of law: Waterford v The Commonwealth [1987] HCA 25 ; (1987) 163 CLR 54 at 77. Nonetheless, the submissions also exposed that he was taking issue with the manner in which the Tribunal purported to apply the statute to the circumstances. In this one can discern that in several respects he was contending that the Tribunal fell into an error of law which caused it to identify a wrong issue, to ask itself a wrong question, and to ignore relevant material, so exceeding its authority or powers: Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179. The essence of his complaints are both that the Tribunal failed to apply the correct sections of the Act (eg s 615), and misconstrued or misapplied the terms of the Act (eg "to be negotiated" or "reasonable excuse"). To this extent, as I will indicate, I am satisfied that Mr Kronen's application to this Court has in some degree enlivened its jurisdiction under the AAT Act. Nonetheless, I am satisfied that the proceeding has no reasonable prospects of success and for the reason that in ascribing error to the Tribunal he misapprehends the scheme of the Act and of the decision-making processes it mandates. Rather than deal with his many subgrounds of appeal individually, I will indicate why, in my view, the course taken by the Tribunal is not susceptible to challenge on the basis he proposed. By way of background I should again note that Mr Kronen entered into a Newstart Activity agreement with Maxima which expired on 26 September 2007. From that date until 10 April 2008 (when he entered into an activity agreement with the Secretary via Centrelink), he had no such agreement though he had received three notices to attend meetings with Maxima for the purpose of entering into such an agreement. I have noted the terms of those notices and his knowing failure to attend the meetings. On 22 April he received a further notice from Maxima to attend a meeting on 1 May 2008 for the purpose of entering into another activity agreement. He again failed to attend. What is to be emphasised is that his entry into the agreement with the Secretary on 10 April 2008 did not relieve him of the obligation to enter into a further agreement with the Secretary as required in the 22 April notice: see s 605(2) which permits the Secretary to require this. I refer to this matter for this reason. To satisfy the qualifying criteria for a Newstart Allowance, for the period 27 September 2007 --- 10 April 2008 Mr Kronen had to be prepared to enter into an activity agreement: s 593(1)(c). For the period from 1 May 2008, he had to be prepared to enter into another such agreement instead of the then existing one: s 593(1)(d). In respect of both periods, because of the terms of the notices sent him requiring him to enter into an agreement, he was also required to satisfy s 593(1)(e) which obliged him to enter into the agreement required by the Secretary. It is clear from the terms of the notices sent to Mr Kronen by Maxima (as the delegate of the Secretary), that he was being required first to enter into an activity agreement and, later, a further agreement: s 605(1) and (2). It was in the circumstances open to the Tribunal to approach the question of whether there had been participation failures by reference to his failure "to comply with a requirement to enter into" such an agreement: cf s 624(1)(c). Though the Secretary now seeks to rely upon this ground, it is clear from the Tribunal's reasons that it approached the matter differently, ie through s 624(1)(a) (failure to comply with a requirement which satisfied the criteria for the sub-clause). It clearly was open to the Tribunal to take this course in relation to Mr Kronen's failures to comply with the notices in question. Irrespective of the provisions of s 615 of the Act (which appears to deal in any event with first time claimants for a Newstart Allowance: cf s 615(6)), the question whether Mr Kronen had committed a newstart participation failure and the possible consequences of any such failure were in the circumstances to be dealt with pursuant to s 624 and s 629. As s 624(1)(c) makes plain on its face a recipient of a newstart allowance does not have to have entered an activity agreement to be guilty of a participation failure. Mr Kronen's reliance upon s 615 as the appropriate provision to deal with his failure to attend an interview or to enter into an activity agreement is misconceived. Turning to s 624(1)(a), the Tribunal, while not dealing seriatim with each of its three requirements, readily found that Mr Kronen's failures to attend the four meetings in issue constituted participation failures and, furthermore, that there were no reasonable excuses for those failures. Mr Kronen's challenges to these conclusions are multipronged but in substance relate to three contentions. First, the requirement that he attend the meetings was not "reasonable" as required by s 624(1)(a)(ii); secondly, the terms of the proposed agreement were not "negotiated" as stipulated by s 605(3); and, thirdly, in consequence, he had a reasonable excuse, for not attending. Central to this trio is Mr Kronen's conception of what is signified by the words "to be negotiated" in s 605(3). What is clear is that the level of permissible compromise and of required mutual agreement that this formula might otherwise suggest when used in other contexts, is radically curtailed in this statutory setting. Whether one can say that the ordinary meaning of "negotiate" is what is intended here (albeit what can be negotiated is limited by the Act and its purposes), hence the meaning is a question of fact: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287 (proposition 2); or that its meaning and hence proper construction is contrived by its legislative settings, hence are questions of law: Pozzolanic , 287 (propositions 1 and 4), what is clear is that Mr Kronen misapprehends the latitude the Act gives him. Elblematic of this was his presenting Maxima with negotiation procedures which included referral to an independent panel if any terms could not be agreed. If Mr Kronen is to qualify for a newstart allowance, he was required, in the circumstances, enter into an activity agreement: s 593(1)(e); he was required to undertake one or more activities that the Secretary regarded as suitable for the person: s 606(1); the terms of the agreement were to be approved by the Secretary. In this scheme, the "right to negotiate" could be illusory in quite some degree for some purposes and especially when the Secretary (or a delegate) takes decisions or actions in effectuation of the purposes of the Act itself. This is not to say that there was no room for discussion, accommodation and compromise. Rather, it is to recognise that the actual terms of the negotiation itself were something in relation to which the Secretary, acting reasonably and in good faith, could ultimately dictate, approve or disapprove, if there was to be an agreement. The Tribunal clearly understood this was the case: see Reasons [106]-[108]. It committed no error of law in construing and hence giving legal effect to the "negotiation expectation" of s 605(3) as it did. Further, the Tribunal satisfied itself on the evidence before it that the requirements Maxima sought to impose were reasonable and that those upon which Mr Kronen insisted were unreasonable in the circumstances. These fact findings were open to it and were unimpeachable in this proceeding. This brings me to what I consider to be the central element in Mr Kronen's challenge to the participation failures. That is that the requirement to attend the meetings to negotiate the activity agreement was itself not "reasonable": s 624(1)(a)(ii). I will accept for present purposes (without concluding that such was the case) that this requirement related to an objective fact which had to be satisfied before a failure to comply with "the meeting notices" could constitute a participation failure. The two general matters informing his "unreasonableness" contention were (a) the delegate's alleged refusal to negotiate with him notwithstanding he was prepared to negotiate "rationally and in good faith"; and (b) the requirement that he deal with the delegate given his complaints about its conduct. I simply note in passing that aspects of Mr Kronen's contentions here relate to decisions and actions of the Secretary which are not in issue in this proceedings. I express no view upon whether it was desirable for Maxima to have been retained as Mr Kronen's employment service provider after his relationship with it became the subject of complaint, though I do accept the force of the Tribunal's characterisation of Mr Kronen. It was suggested to him by a senior officer of the Department that he contact DEEWR to arrange a new job network member because his relationship with Maxima had broken down. He chose not to. Maxima thus remained the delegate of the Secretary exercising lawful authority in relation to him. As I have already indicated, the context and purpose of the negotiations and the evidence supporting the Tribunal's findings as to the reasonableness of the respective terms being sought by Maxima and Mr Kronen, satisfy me that there was nothing in the conduct of the negotiations that would render unreasonable the requirement to attend the meetings. The clauses he sought to impose were, I venture, ones not likely to be agreed and for understandable reasons. Maxima made plain it would not agree to them. It is in my view more probable than not that the stalemate reached in the negotiations was ascribable to his own idiosyncratic conception of "meaningful negotiations" and to his intransigence. By 9 January 2008 he indicated that unless Maxima assured him that future meetings would be conducted "quite differently", he would not be attending any future meeting. I am satisfied that, in the face of Mr Kronen's refusal to participate further in a process in which he was required to engage, the requirements that he do so for the purposes of the Act were reasonable. In the circumstances, the remaining issue was not whether Mr Kronen had a reasonable excuse, but rather whether he satisfied the Secretary that he had such an excuse for his participation failures: s 624(2). The "questions" and contentions raised by Mr Kronen, while addressing what as a fact might constitute a reasonable excuse, do not challenge the satisfaction of the Secretary (hence the Tribunal) as such. The Tribunal was satisfied that Mr Kronen had no such excuse for the participation failures. Consistent with what I have said above in relation both to the reasonableness of the notices to attend the meetings and the "right to negotiate", I cannot discern any proper basis upon which it could be said there was an error of law in the Tribunal's decision in this regard. The last of the matters relating to the participation failures with which the Tribunal dealt was with whether the three non-payment periods were correctly imposed. The Tribunal held that they were. In relation to the participation failures of 8 February, 29 February and 14 March, the start of the next instalment period after the day on which the Secretary first became aware that the last of these had been committed: s 630(1)(c), was 11 April 2008. On 28 April Mr Kronen's newstart allowance payments were recommenced under s 131 of the Administration Act pending review of Centrelink's actual decision on 23 April 2008 that because of his participation failures the eight week period of non-payment applied from 11 April 2008. When Centrelink was notified of Mr Kronen's next potential participation failure of 1 May 2008 the next instalment period for s 630(1)(c) purposes began on 9 May 2008 and ran to 3 July. The third non-payment period occurred as a result of a participation failure on 6 June 2008 during the second non-payment period and was notified to Centrelink on the same day. 6 June was the commencement date for Mr Kronen's next instalment period and the non-payment period was applied immediately under s 630(1)(c) from 6 June 2008 for eight weeks. Though the Tribunal's reasons are slight when dealing with the non-payment period, they disclose no error. This said, for practical purposes, the only significant period in the event was the first. It ran until 6 June 2008, ie the day the allowance was cancelled by the Secretary. The Tribunal finally considered the cancellation decision which, in the circumstances, was made under s 80(1)(a) of the Administration Act apparently on the basis that under s 593(1)(d) of the Act he was required to, but was unprepared to, enter into another activity agreement: see Reasons [113]. The Tribunal's reasons, though would seem to encompass his conduct over a wider period than from when Mr Kronen entered into an activity agreement with Centrelink on 10 April 2008. The reasons tend to suggest that s 593(1)(d) and (e) were being relied upon collectively for the conclusion that Mr Kronen was not willing to enter into an activity agreement, having been required to do so. I simply note there is an obvious error in citation of the subsection of s 593 in Reasons [113]. I preface what I have to say on this matter by noting that certain provisions of the Act by their own force render allowances etc "not payable" if stipulated criteria are, or are not, met: see eg s 615 and s 629 of the Act and s 64 of the Administration Act. These are to be contrasted with those provisions in which a discretion is given to the Secretary to cancel or suspend payment to a person on specified grounds: see eg s 80 --- s 82 of the Administration Act. Given Mr Kronen's submissions fail to differentiate between these two types of provision, I simply emphasise that the cancellation decision was taken under a provision of the latter variety. Much in Mr Kronen's submissions on cancellation turn on his assertion that he was prepared to enter into an activity agreement but that he was denied by the delegate the process prescribed by the Act. I have dealt with this. Suffice it to say for present purposes that I cannot discern any error of law infecting the cancellation decision or any sufficiently arguable question of law relating to it. Mr Kronen took a deliberate, but quite misconceived, course. He was the author of his own harm. I do not intend to refer to the many fact findings with which Mr Kronen has taken issue. I have explained to him the straightened nature of appeals under s 44 of the AAT Act. His application to this Court has no reasonable prospect of success for the purposes of s 31A of the Federal Court of Australia Act . I will order that the application be dismissed and that the applicant pay the respondent's costs of the application. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

social security law decision to cancel newstart payment following repeated participation failures appeal pursuant to s 44 of the administrative appeals tribunal act 1975 (cth) whether a question of law stated proper construction of "to be negotiated" contrived by it's legislative setting right to negotiate limited in the context of social security law no error of law in tribunal's construction secretary not satisfied that applicant had reasonable excuse for repeated participation failures appeal dismissed administrative law

As against the State, Sportsbet seeks an order for production of documents over which the State claims parliamentary privilege, public interest immunity and/or legal professional privilege. As against Racing NSW, Sportsbet seeks an order for production of documents over which Racing NSW claims without prejudice or settlement privilege. Three other entities, TAB Limited, Tabcorp Holdings Limited and Luxbet Pty Limited (together, the TAB interests ), filed a notice a motion on 12 October 2009 seeking leave to be heard in respect of the documents the subject of a claim for without prejudice or settlement privilege. The Tab interests are the joint holders of that privilege with Racing NSW and wish to prevent disclosure of the settlement negotiations to which they were parties. In Betfair Pty Limited v Racing New South Wales (No 7) [2009] FCA 1140 ( Betfair (No 7) ) I determined questions of privilege on the same grounds (but for parliamentary privilege) in respect of some of the same documents. The State appealed against the part of my orders rejecting its claim for legal professional privilege over communications with Parliamentary Counsel involving instructions to and the provision of draft legislation and related communications. I found that there was no express or implied request for legal advice in these communications and thus that legal professional privilege was not attracted. On 22 October 2009 the Full Court of the Federal Court allowed the appeal and varied the orders I made. The Full Court delivered its reasons for decision on 12 November 2009 ( State of New South Wales v Betfair Pty Ltd [2009] FCAFC 160). The Full Court held that instructions to Parliamentary Counsel to draft legislation embody an instruction to provide legal advice. Hence, such instructions and Parliamentary Counsel's response (including the draft legislation itself) are prima facie privileged. The State provided a table identifying the documents the subject of the orders of the Full Court and documents it submitted were in the same class. The State also advised that Betfair filed and served a notice of contention in the appeal claiming that I erred in finding that the State's claim for legal professional privilege was not defeated by a lack of confidentiality in respect of the communications and waiver of privilege by reason of disclosure. The Full Court rejected these contentions. I have been provided with copies of the documents in dispute. All parties agreed that I should inspect the documents for the purpose of determining the issues (albeit recognising the principle that a court will not automatically inspect documents the subject of a claim for public interest immunity as to do so "would be to disregard the basis of the immunity for a document falling within the class described" ( Commonwealth v Northern Land Council [1993] HCA 24 ; (1993) 176 CLR 604 at 617)). They also agreed that the common law applied to the questions of privilege. In terms of the issues, I propose to deal with the State's claims for parliamentary privilege first, followed by its claims for public interest immunity and legal professional privilege. Most of the State's documents are the subject of more than one of these claims. I will deal with the claim for without prejudice or settlement privilege by Racing NSW and the TAB interests thereafter. These claims relate to a separate folder of documents. Before turning to the issues I should identify Sportsbet's claims in the principal proceeding as this sets the context for the relevance of the documents in question. Sections 33 and 33A of the Racing Administration Act and Pt 3 of the Racing Administration Regulation require a person such as Sportsbet to obtain an approval to publish NSW race fields. They also authorise Racing NSW to impose a condition on an approval requiring the payment of a fee of up to 1.5% of the wagering turnover of the approval holder. The conditions which Sportsbet claims are invalid require the payment of this fee. Sportsbet's further amended statement of claim filed on 25 September 2009 discloses the basis for its claims of invalidity. Sportsbet is a company incorporated and having its principal place of business in the Northern Territory. It engages in trade and commerce by providing online internet and telephone based wagering and betting services within Australia, including in New South Wales. It holds a sports bookmaking licence from the Northern Territory Racing Commission under the Racing and Betting Act (NT) authorising the conduct of its business. Sportsbet alleges that the legal and practical effect of the impugned legislation is to protect New South Wales waging and betting operators and discriminate against non-New South Wales waging and betting operators in a manner that contravenes s 49 of the Northern Territory (Self-Government) Act 1978 (Cth). Section 49 guarantees free trade between the Northern Territory and the States ("(t)rade, commerce and intercourse between the Territory and the States, whether by means of internal carriage or ocean navigation, shall be absolutely free"). It is a legislative equivalent of the guarantee of free trade between the States in s 92 of the Constitution ("(o)n the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free"). As a law of the Commonwealth, s 49 of the Northern Territory (Self-Government) Act prevails over any inconsistent State law to the extent of the inconsistency (s 109 of the Constitution ). Sportsbet claims that, as protectionist and discriminatory laws, ss 33 and 33A of the Racing Administration Act and Pt 3 of the Racing Administration Regulation are inconsistent with s 49 of the Northern Territory (Self-Government) Act and thereby invalid to the extent of the inconsistency. The NSW waging and betting operators that Sportsbet claims are protected from competition by the impugned legislation and conditions are bookmakers licensed in NSW, TAB Limited and racing clubs in NSW licensed or authorised to operate an on-course totalizator. A totalizator is a "system used to enable persons to invest money on events or contingencies with a view to successfully predicting specified outcomes of those events or contingencies and to enable the money left after the deduction of commission to be divided and distributed among those persons who successfully predict those outcomes" (s 6(a) of the Totalizator Act 1997 (NSW)). As part of its pleading, Sportsbet alleges that TAB Limited is required by the Totalizator Act to make commercial arrangements with the racing industry in respect of its licence and the conduct of the activities authorised by its licence (namely, conduct of a totalizator in respect of betting on events including horse racing, harness racing or greyhound racing events or contingencies). Further, that TAB Limited has made those commercial arrangements by entering into a racing distribution agreement with an entity known as Racingcorp Pty Limited ( Racingcorp ) as agent for the three racing codes in New South Wales (horse, harness and greyhound racing). Sportsbet claims that, pursuant to the racing distribution agreement, TAB Limited pays money to Racingcorp for distribution to the three racing codes, which include Racing New South Wales and Harness Racing New South Wales, the second and third respondents to this proceeding. As part of the commercial arrangement TAB Limited has a non-exclusive right to publish race field information without charge if certain conditions are met. Sportsbet has no such right and thus must pay the fee required by the conditions of its approvals to publish race field information. This provision, read with s 10 of the Evidence Act 1995 (Cth) preserving parliamentary privilege for all Australian parliaments, caused Gray J in Mees v Road Corporation (2003) 128 FCR 418 ; [2003] FCA 306 at [75] to conclude that there appeared to be "to be no constitutional or other difficulty about the recognition by this Court of the privileges of the two houses of the Victorian Parliament". I adopt the same reasoning in the present case. A member of Parliament, must be able to participate in debates and other proceedings in Parliament, safe in the knowledge that he or she will not be called to account in a court in respect of the truth or content of what is said (see Prebble at 334 and Sankey v Whitlam [1978] HCA 43 ; (1978) 142 CLR 1 at 35 per Gibbs ACJ). Only Parliament has the right to discipline its members for their conduct in its affairs. The courts must refrain from anything which would interfere with or usurp this function of Parliament (see Prebble at 334). It is a fundamental tenet of a Westminster-style democracy that there be debate in the community about political issues. The fundamental rationale of a court is the resolution of legal disputes through the exercise of impartial decision-making power and the ability to enforce the resulting decisions. Courts have a duty to resolve the disputes that are brought to them. There is therefore obvious scope for conflict between the duty of a court to decide a particular case according to law and the privilege of Parliament to retain control over its own proceedings in a case which raises, or has the potential to raise, an issue about what has occurred in parliamentary proceedings. The development of such rules is far from complete and the content of some that have been developed is not altogether clear. Section 16 , however, was a legislative response to the limited operation the courts gave to article 9 of the Bill of Rights in R v Murphy (1986) 5 NSWLR 18 and may well expand the scope of the common law privilege (see Mees at [84] and Rowley v O'Chee [2000] 1 Qd R 207 at 219). In any event, the State submitted that the present case was analogous to Rowley v O'Chee in which documents were held to be for the purpose of proceedings in Parliament within the meaning of s 16(2) of the Parliamentary Privileges Act in circumstances where the documents were created or prepared for the purpose of or incidental to the transacting of business in the Senate. According to the State it follows that draft laws are created or prepared for the purpose of or incidental to the transacting of parliamentary business. Making laws is an important part of the proceedings of Parliament. Hence, the three classes of documents in question attract parliamentary privilege. The doctrine operates to prevent the disclosure of the documents and their use. The fact that the documents cannot be used in the proceeding also affects the balancing exercise required as part of the public interest immunity claim. Sportsbet submitted that, with one possible exception (notes for a Minister to use in Parliament), none of the documents relate to the transaction of business by a member of Parliament. The documents relate to executive rather than legislative steps. There is no evidence that any member of Parliament has done anything with the documents for the purpose of transacting business in the Houses of Parliament. Sportsbet also observed that the discovery of the documents could not involve questioning or impeaching anything done in Parliament. The objection on this ground, even if well-founded, was thus premature. I have inspected the documents. Having regard to their content, and the inferences that may be drawn from the face of the documents, I generally accept Sportsbet's submissions. But for two documents (Exhibit CM1, Vol 2, 56 and 64, being notes for a Minister's use in Parliament) I am not satisfied that the discovery or use of the material in question would infringe parliamentary privilege. I do not accept the State's proposition that every document concerning the preparation of draft legislation is protected by parliamentary privilege because of the fact that, ultimately, Parliament makes legislation. The proposition depends on a connection with the business of Parliament far more distant and tenuous than that accepted as founding the privilege in Rowley v O'Chee . The documents are simply communications about the terms of the draft legislation. (2) As to the second category of documents which the State identified in a table, I accept that one document as identified above (Exhibit CM1, Vol 2, 56) should be inferred to have been created for the purpose of a Minister conducting business in Parliament. It is thus protected by parliamentary privilege. Consistent with the approach in Rowley v O'Chee , I consider that the privilege protects the document from disclosure and not mere use. The purpose for which the other document in this category (Exhibit CM1, Vol 2, 64) was created is less clear from its face. Frank Marzic, the manager of racing policy in the Office of Liquor, Gaming and Racing ( the OLGR ), attested that he prepared this document for the Minister's use in Parliament. This is confirmed by the last attachment, described as House Notes. Accordingly, I infer that the whole was created for a Minister's use in Parliament. It too is thus protected by the privilege. (3) As to the third category of documents which the State identified in a table, I am unable to draw any similar inference about the briefing note. It is not apparent from the briefing note that it was intended for use in Parliament as opposed to any one of a possible range of uses. The email is nothing more than a communication between Racing NSW and the OLGR and cannot be considered to have any particular connection with the conduct of business in Parliament other than in the most tenuous sense. It follows that I accept that two documents are protected by parliamentary privilege --- Exhibit CM1, vol 2, 56 and 64. I otherwise do not accept the claim for parliamentary privilege. The first affidavit was affirmed by Carol Mills who is the Director-General of Communities NSW, a Department of the NSW government. The OLGR is an office within this Department. Ms Mills also gave evidence in Betfair (No 7) . The general description of her evidence which I provided in Betfair (No 7) (at [8]-[11]) is also sufficient for the present case. In that capacity, the OLGR regularly consults with Racing NSW. Racing NSW also regularly makes unsolicited submissions to OLGR about the legislative regime governing horse racing. These amendments authorised Racing NSW to grant an approval to the use of race field information subject to conditions including a condition for the payment of a fee that does not exceed 1.5% of the approval holder's wagering turnover. The working group included officers of the OLGR and representatives of each of the racing bodies in NSW, being Racing NSW, Harness Racing NSW, Greyhound Racing NSW and the Greyhound and Harness Racing Regulatory Authority. The purpose of the working group was to assist OLGR in developing legislative drafting instructions to be provided to Parliamentary Counsel. Parliamentary Counsel's Office is a separate office within the NSW Department of Premier and Cabinet responsible, amongst other things, for drafting NSW legislation. The working group met on at least six occasions. Whenever a new participant joined Frank Marzic, the Manager, Racing Policy within the OLGR, according to Ms Mills, "would make a statement to the effect that the meeting was confidential and the that the discussions that took place were to stay within the room" to which participants indicated their agreement. Attendance varied but included officers of the OLGR, various representatives of Racing NSW, Harness Racing NSW, Greyhound Racing NSW and, for the initial meeting, the Greyhound and Harness Racing Regulatory Authority, subsequently abolished. The Working Group discussed drafting instructions to be provided to Parliamentary Counsel. The OLGR was ultimately responsible for deciding what instructions should be provided to Parliamentary Counsel. This is a consequence of the fact that the State is a party to the present proceeding and presumably holds additional documents to those discovered by Racing NSW in the Betfair proceeding. Further, Sportsbet, unlike Betfair Pty Limited ( Betfair ), challenges the validity of the legislation and not merely the conditions requiring the payment of the turnover fee. Hence, I infer that documents concerning the legislation have also been discovered. As both parties made submissions using Betfair (No 7) as a base I identify the exhibits with a cross-reference to those in Betfair (No 7) . The State's documents are contained in six folders marked as Exhibits CM1 (vols 1, 2, 3, and 4), CM2 and CM3. The four volumes of Exhibit CM1 are all new documents. But for a few extra documents, Exhibits CM2 and CM3 in the present case are the same as Exhibits CM1 and CM3 in Betfair (No 7) . (2) Documents concerned with briefing the Premier, Ministers and public servants on important matters of policy (Annexure B). (3) Documents concerned with meetings involving and correspondence with Ministers and officials from other jurisdictions (Annexure C). (4) Documents concerned with the working group (Annexure D). (5) Other documents concerning consultation with the controlling bodies in relation to the control and regulation of the racing codes (Annexure E). (6) Documents concerned with the provision of instructions to and receipt of advice from Parliamentary Counsel regarding the drafting of legislation (Annexure F). (7) Other documents revealing high-level deliberations, consultation and advice between various government departments and bodies (Annexure G). Apart from the working group documents it is difficult to align these categories with those considered in Betfair (No 7) (see at [12]). Sportsbet did not press for production of the Cabinet and related documents (Annexure A) and certain other documents identified as "Not Challenged" in the annexures to Ms Mills' affidavits. I therefore exclude those documents from consideration. Sportsbet made a formal submission to the same effect as that of Betfair in Betfair (No 7) that Australian law did not recognise any public interest immunity over a class of documents but for Cabinet documents. I considered and rejected this submission in Betfair (No 7) at [13]-[20]. The strength or weakness of the public interest protected (or the harm that might result from disclosure) does not affect the existence of the immunity. It affects the balancing exercise between that public interest and the interest of the party seeking access in order to litigate its claim. In any event, it is well-recognised that the classes of immunity are not closed ( Australian National Airlines Commission v The Commonwealth [1975] HCA 33 ; (1975) 132 CLR 582 at 591 and D v National Society for the Prevention of Cruelty to Children [1977] UKHL 1 ; [1978] AC 171 at 230). The ...application of the doctrine involve[s] three considerations: - (i) the harm that might flow from disclosure, (ii) the material assistance that disclosure might provide to the party seeking access, and (iii) weighing those conflicting interests. The public interest may vary in strength having regard to the different classes of the documents but, nevertheless, exists in respect of all. It is the public interest in enabling those involved in the formulation of government policy to be uninhibited in their task in the sense of both being free from concerns about future disclosure and of disclosure at a time when to do so might risk premature, distracting, ill informed or misdirected public comment. As to the latter aspect, however, I note that the legislative process in the present case is complete. The balancing exercise in this case, accordingly, is to be carried out having regard to that fact. In another case, where the legislative process was continuing, the risk of premature, distracting, ill informed or misdirected public comment by reason of disclosure may have far greater weight than a case such as the present. Again, and consistent with Betfair (No 7) at [28]-[32] I accept that there is a public interest served by requiring disclosure of the documents. Sportsbet's claims are broader than those of Betfair. Nevertheless, the essence of the two cases is the same. Sportsbet claims that the State has enacted legislation and State agencies have exercised governmental powers so as to protect traders within New South Wales (including the TAB interests) and to discriminate against a trader outside New South Wales (Sportsbet) in a manner that infringes a Commonwealth guarantee of free trade (s 49 of the Northern Territory (Self-Government) Act ). The State attempted to negate the relevance of the documents by observing that discerning Parliamentary intention is an objective process. This proposition is valid. But, as Sportsbet submitted, the State has discovered the documents presumably because they are potentially relevant to the facts in issue. The documents may not be admissible at the hearing to prove the truth of some asserted fact about legislative purpose. They may, however, be relevant for other purposes which, at present, can be the subject of speculation only (such as cross-examination or exposing a further chain on inquiry). The documents in dispute concern the formulation of the policy embodied in the impugned legislative scheme and its preparation. They are centrally relevant to Sportsbet's claims. The question of their disclosure is not necessarily determined by their admissibility either at all or so as to prove any particular fact. Before moving to the balancing exercise I should also record some other aspects of the submissions and the evidence. As to the submissions, I do not accept Sportsbet's submission that I should give little or no weight to Ms Mills' evidence. This also calls for vigilance by the courts lest documents are shielded from public scrutiny or inspection by parties to litigation under an unduly broad umbrella of public interest immunity. Her evidence about the events is based on information and belief from her discussions with Mr Marzic. Mr Marzic was available to give evidence about the events but did not do so other than in respect of a single document. Sportsbet submitted that Ms Mills' affidavit showed a lack of care in its preparation and a propensity for vague assertions. Ms Mills had not read all of the discovered documents to place the claims for privilege in context. Ms Mills did not have first-hand knowledge of the facts but had acquainted herself with the details of the process as her affidavit disclosed. Her affidavit is lengthy and relates to a large number of documents. The errors it contained are matters of form not substance. As the State submitted, Ms Mills is the Director-General of the Department. She has seen the documents over which the State claims privilege. Ms Mills, as the Department Director-General, is the proper officer to identify which documents are thought to engage the public interest such as to justify the claim for privilege and which do not. Sankey v Whitlam [1978] HCA 43 ; (1978) 142 CLR 1 is replete with references to the need for a head of a government Department or "high" official to deal with questions of public interest immunity. Further, the idea that Ms Mills should also have read the documents discovered by the State not subject to any privilege claim is not supported by authority. Ms Mills was entitled to rely on legal advice and assistance to found her undoubted inference that the documents with which she was concerned had not otherwise been disclosed. I give Ms Mills' evidence weight. I also have the benefit of evidence from Don Colagiuri SC, Parliamentary Counsel. Mr Colagiuri is the head of the New South Wales Parliamentary Counsel's Office. He is a senior counsel. His evidence is relevant to the claims for public interest immunity and legal professional privilege. Mr Colagiuri explains in his affidavit that, by long-standing convention, the Crown takes the advice of the Solicitor-General and Crown Solicitor on existing legislation and Parliamentary Counsel on the form of legislation required to reach a policy objective. Practice as Parliamentary Counsel is recognised as legal work under the Legal Profession Act 2004 (NSW). Parliamentary Counsel hold practising certificates from the NSW Bar Association (in a special class). This is not an issue at the core of traditional government functions. Insofar as the New South Wales government is concerned, wagering on horse racing is presumably a commercial activity relating to a form of recreation from which the State derives revenue. It cannot be compared to national security, relations with foreign governments or a raft of other traditional government activities of general importance. It is another to accept that all legislation embodies public policy at a high level. Statute law has grown by many multiples over the past decades regulating a great many matters that could hardly be described as involving high level public policy. Accordingly, the analysis should not stop at the mere recognition of the fact that the documents involve a proposal to amend legislation. Ms Mills' evidence does not persuade me to the contrary. The interest affected by the disclosure, as in Betfair (No 7) , is the protection of the general capacity for candour and the giving of frank and fearless advice to government in the future. I say general capacity because, as noted, the legislative process in question is complete. This is not a case where disclosure is sought while the process of governmental consideration continues. Hence, the interest in protecting against ill informed, distracting and premature comment is not engaged. I am unable to accept any general assertion that disclosure of the documents might risk a lack of candour or inhibition in the future by the horse racing industry. The controlling bodies, which include Racing NSW, have independent obligations under their enabling legislation (see Betfair (No 7) at [37]). It is apparent that Racing NSW (at least in part) is a lobbyist of government for the interests it represents. It is also apparent that the interests it represents are not aligned with those of Sportsbet. Yet the OLGR, which managed the process of the legislative amendments, involved Racing NSW in virtually all steps of the process. It did so, moreover, knowing that the controlling bodies would obtain their own advice from lawyers and consultants about the legislative proposals and consult with other interested persons such as stewards, bookmakers and the TAB interests. It did so while the process was continuing. In this context, generalised concerns about the risk of a future lack of candour by those advising government about horse racing lack substance. Moreover, because the proceedings concern a legislative amendment to the regulation of horse racing which is now complete, I also have difficulty in accepting that disclosure of these documents would cause any real concern to those involved in advising government about other issues in the future. Ms Mills' evidence also addressed documents concerned with meetings involving and correspondence with Ministers and officials from other jurisdictions (Annexure C). These documents essentially relate to the Australian Racing Minister's Conference ( the ARMC ) and the related meetings of racing and gaming officials. The purpose of the ARMC is to foster and co-ordinate inter-governmental relations for the development and implementation of harmonious laws regulating racing and wagering. According to Ms Mills the business of the ARMC is confidential. Ms Mills was concerned that disclosure of documents relating to these meetings would prejudice candour and thus undermine the utility of the meetings and perhaps the role of NSW in them. Ms Mills saw this as contrary to good inter-governmental relations. Weighing against these considerations, the documents are of potential central relevance to Sportsbet's claims that the legislation and action taken under that legislation are rendered invalid by operation of s 109 of the Constitution . I consider it necessary to inspect the documents in each class identified to determine where the balance of the public interest lies. For example, the documents include inter-Ministerial correspondence and minute papers of the Executive Council. Be that as it may, I am satisfied that, but for a limited number of documents, the public interest weighs substantially in favour of disclosure. The documents are of central relevance to Sportsbet's case. They disclose the development and thus factors relevant to the policy the New South Wales government was seeking to achieve by the legislative amendments impugned by Sportsbet in the proceeding. The public interest in the proper administration of justice, with both parties (not just one) having access to all potentially relevant material, is thus a powerful factor in favour of disclosure in this case. The fact that Sportsbet's claim is that the New South Wales Government has acted so as to infringe a statutory guarantee of free trade also lends weight to the interest served by disclosure. As against this, but for a limited number of documents, none are Cabinet documents or closely connected with the workings of Cabinet. The issue they address has been dealt with through the legislative amendments. The implementation of those amendments is complete. They deal with a topic that is undoubtedly important to those involved in the industry. The industry provides revenue to the State and presumably contributes to the State's capacity to attract tourism and investment. In that sense I accept the industry is of importance to the economic well-being of the State. But nothing in the documents undermines my view that the regulation of wagering on horse racing cannot meaningfully be compared to many other governmental functions where the public interest in non-disclosure would be manifest. Insofar as the documents disclose inter-State dealings it seems highly unlikely that disclosure of these documents, at this stage, could have any material impact on the workings of the ARMC or of the officials and officers involved. For these reasons I do not accept that the class of documents described as documents concerned with briefing the Premier, Ministers and public servants, being those documents listed in Annexure B to Ms Mills' affidavit, warrant protection from disclosure as a class. However, I have reached a different view with respect to certain documents within this class. The State prepared another list which it described as "Cabinet related documents --- miscellaneous categories" and submitted that those documents warranted protection from disclosure by analogy to Lanyon Pty Limited v The Commonwealth [1974] HCA 11 ; (1974) 129 CLR 650 in which documents directed to obtaining a Cabinet decision upon a matter of policy were held to be privileged. The State's additional list includes documents that extend beyond the scope of this description based on Lanyon . Speaking generally, such a claim will be upheld only if it is really necessary for the proper functioning of the public service to withhold documents of that class from production. However it has been repeatedly asserted that there are certain documents which by their nature fall in a class which ought not to be disclosed no matter what the documents individually contain; in other words that the law recognizes that there is a class of documents which in the public interest should be immune from disclosure. The class includes cabinet minutes and minutes of discussions between heads of departments ( Conway v Rimmer [1968] AC at pp 952, 973, 979, 987, 993; Reg v Lewes Justices; Ex parte Home Secretary [1973] AC at p 412; Australian National Airlines Commission v The Commonwealth [1975] HCA 33 ; (1975) 132 CLR 582 at p 591), papers brought into existence for the purpose of preparing a submission to cabinet ( Lanyon Pty Ltd v The Commonwealth [1974] HCA 11 ; (1974) 129 CLR 650) , and indeed any documents which relate to the framing of government policy at a high level (cf In re Grosvenor Hotel, London [No 2] [1965] Ch. 1210 at pp 1247, 1255). They should not be disclosed. (2) Exhibit CM1, vol 3, 105: I do not accept that a mere reference to the existence of a Cabinet minute (as opposed to the details of its content) engages the privilege. (3) Exhibit CM1, vol 2, 46: Consistent with the above I accept that drafting note 3.3 engages the privilege. (4) Exhibit CM1, vol 1, 1: The document is not one for the purpose of Cabinet. The privilege is not engaged. (5) Exhibit CM1, vol 1, 30: Consistent with the above I accept that the document engages the privilege. (6) Exhibit CM1, vol 1, 31: Consistent with the above I accept that the document engages the privilege but only insofar as it identifies the content of or attaches Cabinet minutes. (7) Exhibit CM1, vol 1, 33: The document is not one for the purpose of Cabinet. The privilege is not engaged. (8) Exhibit CM1, vol 1, 39: The document is not one for the purpose of Cabinet. The privilege is not engaged. (9) Exhibit CM1, vol 2, 42: The document is not one for the purpose of Cabinet. The privilege is not engaged. (10) Exhibit CM1, vol 2, 44: Consistent with the above I accept that the document engages the privilege. (11) Exhibit CM1, vol 1, 4: The document is not one for the purpose of Cabinet. The privilege is not engaged. (12) Exhibit CM1, vol 1, 26: The document is not one for the purpose of Cabinet. The privilege is not engaged. (13) Exhibit CM1, vol 2, 42: The document is not one for the purpose of Cabinet. The privilege is not engaged. (14) Exhibit CM1, vol 2, 63: The document is not one for the purpose of Cabinet. The privilege is not engaged. (15) Exhibit CM1, vol 1, 8: The document is not one for the purpose of Cabinet. The privilege is not engaged. (16) Exhibit CM1, vol 1, 38: The document is not one for the purpose of Cabinet. The privilege is not engaged. (17) Exhibit CM2, 3: The disclosure of the proposed Cabinet minute is in a Racing NSW document. The OLGR decided to release this Cabinet minute to Racing NSW. Racing NSW's board paper was brought into existence for its own purposes and not the purposes of Cabinet. The document is not one for the purpose of Cabinet. The privilege is not engaged. (18) Exhibit CM2, 42: The disclosure of the proposed Cabinet minute is in a Racing NSW document. The OLGR decided to release this Cabinet minute to Racing NSW. Racing NSW's board paper was brought into existence for its own purposes and not the purposes of Cabinet. The document is not one for the purpose of Cabinet. The privilege is not engaged. The documents are relevant to Sportsbet's case. They disclose the development of the policy ultimately embodied in the impugned legislation. As noted, I consider it most unlikely that disclosure of these documents would have any material effect on inter-governmental relations. Further, nothing in the documents or available evidence persuades me that the view I reached in Betfair (No 7) (at [33]-[44]) requires adjustment. As Betfair submitted, these officers of the OLGR appeared to have represented the NSW Government in the discussions. Those officers may be described, without any disrespect, as mid-level public servants. Another source is representatives of Racing NSW, the status and functions of which have been referred to above. Representatives of Racing NSW, in the discussions, must be inferred to have acted in accordance with their own obligations and in the best interests of their employer. Those interests may or may not have aligned with those of the NSW Government. A further source is representatives of Parliamentary Counsel's Office who were involved in the drafting of the legislative amendments. I consider that it may be inferred from their functions that neither Racing NSW nor Parliamentary Counsel would be likely to be anything less than full and frank in their communications to government irrespective of any risk of future disclosure. ...Accordingly, in terms of the spectrum ...these documents would fall towards or at the lower end of governmental sensitivities. The amendments to the Racing Administration Act were assented to on 21 November 2006 and came into force on 1 July 2008. The Racing Administration Amendment (Publication of Race Fields) Regulation commenced on 1 July 2008. Accordingly, the relevant decision-making process with which the documents deal has finished. Sensitivities about that process, therefore, are not engaged. The concern about candour relates to the future. As the present case involves documents of a particular nature and character, the concern about the future must be limited to documents of the same or an analogous character. In other words, the result of the balancing exercise in the present case could be relevant only to similar cases in future and not dissimilar cases (involving, for example, documents dealing with a dissimilar subject-matter, created by dissimilar people, or sought to be disclosed whilst the decision-making process was still ongoing). On the facts of this case the public interest in the former might be marginally advanced by non-disclosure but even that is speculative on the evidence and the inferences able to be drawn from it. In contrast, the public interest in the administration of justice would be significantly advanced by disclosure. They concern dealings with the controlling bodies, including Racing NSW. As noted, those bodies are independent of the NSW government. They are not subject to ministerial control and direction under their enabling legislation. It is apparent from their conduct that they are (in part at least) lobbyists for the interests that they represent and that those interests do not coincide with those of Sportsbet. In these circumstances I am satisfied that the public interest in disclosure of these documents in Annexure E to Ms Mills' affidavit outweighs the interest served by non-disclosure. In another case (or, possibly, many other cases), where the legislative process is continuing or the subject-matter more sensitive to proper government functioning or the process by which the legislation is being or has been prepared is or was different from that in the present, it may well be that disclosure of drafting instructions and draft legislation would harm the public interest so as to warrant the preservation of secrecy. However, I am unable to reach that conclusion on the particular facts of the present case. As discussed, I accept that all of Parliamentary Counsel's work is carried out on a confidential basis and that confidentiality is important to Parliamentary Counsel's functions. However, the general requirement of confidentiality needs to be measured against the facts of this particular case. The documents disclose that, from early in the drafting process, the OLGR liaised closely with the controlling bodies (which included Racing NSW) and that those bodies liaised with their "stakeholders" about the proposals to be embodied in the draft legislative scheme. The drafting instructions to Parliamentary Counsel apparently reflected the agreed outcomes of this broad process of consultation. The process of drafting, at all stages, appears to have been the product of ongoing consultation with the working group. The evidence in the present case also discloses that members of the controlling bodies felt free to obtain their own advice from third party consultants on the proposals to be embodied in the amended legislative scheme. I do not infer that the controlling bodies did so in breach of the confidentiality requirement the OLGR imposed; but the nature and breadth of the consultative process indicates a regime for this legislation quite different from that described by Mr Colagiuri as the usual course. Confidentiality, in any event, is not the only relevant consideration weighing in the balance. Given the nature of Sportsbet's claim the documents are relevant to, perhaps even determinative of, its case. Further, I do not accept that there is any inherent governmental sensitivity about the subject-matter of wagering on horse racing. I also do not accept that there could be any prejudice to the particular legislative process in question in this case because it has been completed. I accept that there is a public interest in encouraging clear and frank instructions to Parliamentary Counsel and responses to draft legislation. But I do not accept that disclosure of these particular documents creates a real, as opposed to speculative, risk that those instructing Parliamentary Counsel in the future about wagering on horse racing (or any other topic) will feel constrained by the fact that these documents about have been disclosed. People will recognise that this decision turns on its own facts particularly the facts concerning the nature of the topic in issue (wagering on horse racing) and the way in which the government chose to formulate its legislative response (by a wide process of consultation in which drafting instructions and draft legislation were disclosed to a relatively large number of groups and bodies not part of the government). Finally, and as I said in Betfair (No 7) at [43], the nature and functions of the Parliamentary Counsel's Office are incompatible with acceptance of a real risk of lack of future candour by its officers. For these reasons I am satisfied, on the facts of this case, that the interest in the proper administration of justice, outweighs the public interest served by non-disclosure of these documents in Annexure F to the affidavit of Ms Mills. Consistent with my conclusions above I am satisfied that the interest in the proper administration of justice, on the facts of this case, outweighs the public interest served by non-disclosure of these documents in Annexure G to the affidavit of Ms Mills. Otherwise the documents should be produced. As noted at [6] above, the Full Court of the Federal Court allowed an appeal by the State against my orders in Betfair (No 7) with respect to this second class of communications. There are, in any event, differences between this case and Betfair (No 7) . First, the claim is made by the State over its own documents and not those discovered by Racing NSW. Second, there are many more documents in issue. Third, the State's claim is supported by Mr Colagiuri's evidence, to the effect that one function of Parliamentary Counsel is to ensure the State's policy objectives may legally be achieved in the form of the draft legislation. Fourth, Sportsbet relies on additional evidence in support of its submissions about the lack of confidentiality in the drafting and advising process in this case (an issue I have touched on above in the context of the public interest immunity issues). There was no dispute between the parties about the relevant common law principles. Legal professional privilege protects confidential communications made in the course of a lawyer-client relationship if the dominant purpose is to obtain or give legal advice or to prepare or conduct existing or reasonably anticipated litigation. Despite Sportsbet's submissions about a general lack of confidentiality in the process, the evidence of disclosure of legal advice is limited. Sportsbet, like Betfair in Betfair (No 7) , relied on the extracts from the annual reports of Racing NSW on which Betfair relied. Those extracts, however, do not disclose the substance of any legal advice. Sportsbet also relied on a radio interview involving Peter V'Landys, the chief executive officer of Racing NSW, in which Mr V'Landys said that the State had "received the best legal advice possible both from Queen's Counsel barristers and the Crown Solicitor" who were "very confident that it [the legislative scheme] would meet any challenge...". I do not construe such a statement as disclosing the substance of any advice. In context the statement is a declaration to the effect that Mr V'Landys believed the State would successfully defend any challenge. Even if the statement did disclose the substance of legal advice, there would be an issue about the terms on which Mr V'Landys received copies of the State's legal advice (which it is clear that he did). A disclosure in breach of a confidentiality requirement will not necessarily waive privilege. It follows that, for this aspect of the claim also, a document-by-document approach in accordance with the applicable common law principles is required. Subject to these observations, I remain of the views that I expressed in Betfair (No 7) at [53]-[58] about the operation of the working group and the disclosure of information to it on a confidential basis. Having regard to these matters I now consider the documents over which claims for legal professional privilege are made. I include documents where the claim for public interest immunity has been upheld. According to Ms Mills, the colour scheme in this case is highlighted pink for legal professional privilege claims alone and highlighted green for claims of legal professional privilege that overlap with a claim for public interest immunity. All references to privilege below are to legal professional privilege only. The idiosyncratic order of the documents below reflects that of the lists in the annexures to Ms Mills' affidavit (but excludes repeated items) in Exhibit CM 1 vols 1-4. The substance of the advice is not disclosed. Insofar as the State said legal professional privilege privilege attached because the topic of the advice is disclosed, that fact was made public by Mr V'Landys in his radio interview so the mere topic can hardly remain confidential. Moreover, the reference is in a document about a meeting between jurisdictions. Ms Mills' evidence about the confidentiality of inter-jurisdictional meetings does not establish a basis for drawing an inference that the State itself retained a right to control further disclosure of this information ( Cadbury Schweppes Pty Ltd v Amcor Ltd (2008) 246 ALR 137 ; [2008] FCA 88 at [17] - [18] ). If privilege subsisted in this statement, the privilege has been lost. Document 22 : In contrast to document 14, the part highlighted pink referring to legal advice remains confidential (it is in a draft Cabinet minute) and thus is privileged. Document 23 : The part highlighted pink refers to legal advice and is privileged. Document 25 : The part highlighted pink refers to legal advice and is privileged. Document 26 : The part highlighted pink refers to legal advice and is privileged. Document 28 : The document is a summary of legal advice and is privileged. Document 31 : The parts highlighted pink and green are a summary of legal advice and are privileged. Document 40 : The part highlighted pink refers to legal advice and is privileged. Document 43 : The parts highlighted pink refer to legal advice and are privileged. Document 54 : As per document 14. Document 55 : The parts highlighted pink refer to legal advice and are privileged. Document 56 : The parts highlighted pink refer to legal advice and are privileged. Document 61 : As per document 14. Document 62 : The parts highlighted pink refer to legal advice and are privileged. The parts highlighted green include correspondence and attachments from the controlling bodies. They are not privileged and I can see no basis for the claim that legal professional privilege attaches to correspondence from a controlling body to the OLGR. Consistent with the orders of the Full Court, the drafting instruction to Parliamentary Counsel highlighted green is a request for legal advice and thus is privileged. Document 63 : The parts highlighted pink refer to legal advice and are privileged. Document 65 : The parts highlighted pink refer to legal advice and are privileged. Document 66 : The parts highlighted pink refer to legal advice and are privileged. Document 67 : The parts highlighted pink refer to legal advice and are privileged. Document 69 : The parts highlighted pink refer to legal advice and are privileged. Document 70 : The parts highlighted pink refer to legal advice and are privileged. The drafting instruction to Parliamentary Counsel highlighted green is a request for legal advice and thus is privileged. Document 72 : The parts highlighted green and pink all form part of an instruction to the Crown Solicitor for legal advice and thus all are privileged. Document 87 : The parts of this document highlighted pink do not refer to any legal advice and are not privileged. Document 91 : The parts highlighted pink refer to legal advice and are privileged. Document 100 : The parts highlighted pink refer to legal advice and are privileged. Document 102 : The parts highlighted pink refer to legal advice and are privileged. Document 103 : The parts highlighted pink refer to legal advice and are privileged. Document 105 : The parts highlighted pink refer to legal advice and are privileged. Document 106 : The part highlighted pink refers to legal advice and is privileged. Document 107 : The part highlighted pink refers to legal advice and is privileged. Document 110 : The parts highlighted pink concern the obtaining of legal advice and are privileged. Document 133 : The part highlighted pink refers to legal advice and is privileged. Document 142 : The parts highlighted pink concern the obtaining of legal advice and are privileged. Document 143 : The State no longer presses a claim for legal professional privilege over these documents approved by the Executive Council. Given the purpose of the documents (to obtain the approval of the Governor for the making of a regulation) I consider that this correctly reflects the fact of waiver of privilege over these documents insofar as they might have been privileged. Document 144 : As per document 143. Document 145 : The parts highlighted green and pink refer to legal advice and are privileged. Document 146 : The parts highlighted pink refer to legal advice and are privileged. Document 147 : The part highlighted pink records a recommended drafting instruction to Parliamentary Counsel and is privileged. Document 150 : The parts highlighted pink record a recommended drafting instruction to Parliamentary Counsel and Parliamentary Counsel's opinion and are privileged. Document 151 : As per document 147. Document 153 : Given my conclusions about document 150 this document is also privileged. Document 154 : As per document 143. Document 157 : The part highlighted pink refers to legal advice and is privileged. I should also note that the disclosure to a third party (the NSW Bookmakers' Cooperative Limited) of the topics on which the State has received legal advice confirms my view that various innocuous references to those topics scattered throughout the documents are not (or, at least, are no longer) privileged. Document 170 : The part highlighted pink refers to legal advice and is privileged. Document 171 : The part highlighted pink refers to legal advice and is privileged. The letter is nothing more than the position of one of the controlling bodies, put to the OLGR as part of the working group, on what that controlling body would like to see in the regulations. The document is not privileged. Document 60 : As per document 59. Document 73 : as per document 72. Document 86 : As per document 59. Document 88 : The drafting instruction to Parliamentary Counsel is privileged. The other parts highlighted green are in the same category as document 59. Document 92 : This document discloses the process of drafting legislation and thus is privileged. Document 95 : This document discloses the process of drafting legislation and thus is privileged. Document 112 : This contains some scattered innocuous references to the fact that legal advice was or will be obtained on topics. The topics have been disclosed publicly elsewhere and thus the references are not privileged. Document 113 : This document does not deal with legal advice and is not privileged on the same basis as document 59. Document 114 : This is a drafting instruction to Parliamentary Counsel and is privileged. Document 115 : The part highlighted green is a drafting instruction to Parliamentary Counsel. It is privileged. Document 117 : As per document 59. Document 118 : As per document 115. Document 119 : As per document 115. Document 120 : As per document 59. Document 121 : As per document 59. Document 122 : As per document 59. Document 123 : The parts highlighted pink refer to legal advice and are privileged. Document 124 : The parts highlighted pink refer to legal advice and are privileged. Document 125 : This document records a discussion by the working group about legal advice from the Crown Solicitor. The disclosure of the privileged communications was to a limited group, namely those attending the Meeting. While there is no evidence of an express undertaking by the non-clients present at the Meeting to preserve confidentiality, the circumstances suggest that the non-clients were under an implied obligation to respect the confidentiality of the communications at the Meeting. The Meeting took place with solicitors present. That of itself does not necessarily show that all communications were subject to legal professional privilege. But, as I have found, the purpose of the Meeting was to enable FH&P to give legal advice to the ARU, and indeed such advice was given. So far as the evidence goes, the representatives of the non-clients were in attendance in order to provide information required by the solicitors. The document is privileged. Document 126 : This is a letter from the OLGR to Mr V'Landys attaching a legal advice on a confidential basis. I consider the document remains privileged on the same basis as per document 125. Document 127 : This is an email attaching draft legislation. I accept the claim for legal professional privilege over part of the email as highlighted in pink and green and the draft legislation attached and highlighted green. Document 128 : I accept the claim for privilege. See Betfair Pty Limited v Racing New South Wales (No 8) [2009] FCA 1161. This is the same document the subject of that judgment. Document 129 : These are emails attaching draft legislation and are privileged. Document 130 : I accept the claim for privilege on the same basis as document 128. Document 131 This document discloses the process of drafting legislation and thus is privileged. Document 132 : These are emails attaching draft legislation and are privileged. Document 134 : The highlighted parts are privileged. Document 135 : As per document 134. . Document 136 : I accept the claim for privilege. Document 141 : These drafting instructions are privileged. Document 174 : This is a letter from the OLGR to Mr V'Landys attaching a legal advice on a "strictly confidential basis" with a requirement that it not be "provided to a third party in any circumstances". I consider the document remains privileged on the same basis as per document 125. Document 175 : As per document 174. Document 176 : I accept the claim for privilege. Document 179 : I accept the claim for privilege. Document 138 : I accept the claim for privilege. Document 139 : I accept the claim for privilege. Document 140 : I accept the claim for privilege. Consistent with the orders of the Full Court I accept that all communications to and from Parliamentary Counsel concerning the drafting of legislation are privileged (such privilege not having been waived given my conclusions about confidentiality). I have inspected these documents. I consider that, consistent with the orders of the Full Court, the claims made for privilege by the State and which it continues to press must be upheld. While the exhibit number altered, the document numbers remain the same. The State submitted that the scattered references to the topics on which legal advice had been obtained were privileged. As noted above, however, the fact that the State obtained advice on these topics is in the public domain so, if privilege subsisted about the mere topic as opposed to the substance of the advice, it has been lost. Otherwise, nothing in the present proceeding has altered the conclusions I reached about the issues of confidentiality and waiver in respect of these documents in Betfair (No 7) at [63]. Accordingly, for the documents in Exhibit CM2 in this proceeding I adopt the same approach and conclusions as in Betfair (No 7 ) at [63] but varied so as to be consistent with the orders of the Full Court. Document 45 : As per document 177 (this is a copy of the same document). Document 46 : As per document 178 (this is a copy of the same document). Document 47 : As per document 179 (this is a copy of the same document). Again, nothing in the present proceeding has altered the conclusions I reached about the issues of confidentiality and waiver in respect of these documents in Betfair (No 7) at [63]. Accordingly, for documents in Exhibit CM3 in this proceeding I adopt the same approach and conclusions as in Betfair (No 7 ) at [63] but varied so as to be consistent with the orders of the Full Court on the appeal in that matter. The only differences are that the TAB interests sought leave to appear and make submissions in the present proceeding and both Racing NSW and the TAB interests submitted that, unlike Betfair, Sportsbet had not identified any issue in its pleading in respect of which the negotiation documents might be relevant other than for the truth of the admissions therein (and that, hence, the privilege applied). As to the TAB interests, I consider that as holders of a joint privilege in the documents in Exhibit E those parties should be given leave to be heard (see, for example, Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts; In the matter of an application by Opel Networks Pty Limited [2007] FCA 1331 at [8] ). Order 6 r 17 of the Federal Court Rules permits this course having regard to, amongst other things, "whether the intervener's contribution will be useful and different from the contribution of the parties to the proceeding" (Order 16 r (2)(a)). The TAB interests emphasised the public interest in encouraging the resolution of disputes and the importance of not undermining the willingness of parties to do so by reason of the threat of subsequent disclosure. They relied on observations in support in Heydon. Cross on Evidence . 7 th Aust ed. LexisNexis. Sydney at [25350] and [25375] and Unilever PLC v The Procter & Gamble Co [2000] WLR 2436 at 2441-2442 and 2448-2449. There is, however, no debate about the importance of the public policy underlying the privilege or the impracticality of attempting to separate admissions from other communications in the course of negotiations. The issue in this case is whether the privilege is engaged at all where the documents are sought to be used by a third party not for the purpose of proving the truth or otherwise of any of the communications (including any admissions) but to prove only that the communications were in fact made. In common with the submissions of Betfair in Betfair (No 7) , Sportsbet says the documents are relevant for that latter purpose because the fact that the communications were made is capable of establishing a fact or facts in issue in the proceeding (as I understand it, the existence of a commercial relationship between the respondents and the TAB interests such as to support the alleged discriminatory and protectionist purpose which founds Sportsbet's challenges to the validity of the amendments to the legislative scheme and the turnover conditions). I do not accept the submissions that Sportsbet's pleading discloses no basis upon which it could be concluded that the disputed documents are relevant for this latter purpose. Sportsbet alleges commercial arrangements involving TAB Limited and Racingcorp as agent for Racing NSW. It alleges payments pursuant to that commercial relationship. It alleges discrimination against it and protectionism in favour of (amongst others) TAB Limited. It alleges invalidity by reason of these (amongst other) claims. The affidavit of Armina Antoniou, solicitor, in support of the TAB interests' motion confirms that the documents disclose matters relevant to the commercial relationship between those interests and Racingcorp as agent for Racing NSW. Accordingly, I am satisfied that my conclusions in Betfair (No 7) at [70]-[74] about this class of documents apply to the present case. The parties agreed a confidentiality regime should be imposed if I reached this conclusion. I will make orders for confidentiality as they proposed. I also accept part of the State's claims for legal professional privilege including the claims for communications with Parliamentary Counsel concerning the drafting of legislation or disclosing those communications (consistent with the conclusions of the Full Court in the appeal from part of my orders in Betfair (No 7) ). I do not accept Racing NSW's claim for without prejudice (settlement) privilege, although I am willing to make the agreed confidentiality order preventing further disclosure. I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

public interest immunity claim by state that documents associated with the drafting of legislation protected from disclosure by public interest immunity class claim whether public interest in ensuring candour outweighed by public interest in ensuring the administration of justice legal professional privilege documents concerning communications between a state and its lawyers where documents contain draft legislation whether documents created for the dominant purpose of obtaining legal advice whether documents confidential whether waiver without prejudice (settlement) privilege claim where subject-matter of the documents in question concern settlement negotiations in a dispute separate to the subject litigation where proposed use of the documents not the proving of the truth of any admissions made but of proving that a certain commercial relationship existed between the negotiating parties privilege privilege privilege

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. 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. Some of the terms used in that paragraph are defined in subs 164(7). ' 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 " ' . 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. 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. 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 . 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? 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". 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". No rebate is payable under the off road scheme in respect of diesel fuel purchased for use in those activities. 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. 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. 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. 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). 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 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.

diesel fuel, rebate meaning of "in rail transport" whether fuel used in rail transport customs and excise

Mirabell is said to have been agent for Tokio, meaning that Tokio is liable for Mirabell's representations and conduct concerning the supply of insurance cover for goods stored in premises said to be owned by Mirabell. In short, Logic alleges that Mirabell misrepresented the level and quality of security on the premises and the extent of the insurance which would cover the stored goods, and that Mirabell's conduct in allowing those goods to be stolen amounted to negligence. 2 The essence of Logic's case is that, in reliance on Mirabell's alleged misrepresentations, Logic entered into an insurance contract with Tokio in respect of the stored goods. Logic says that, by entering into the contract of insurance and accepting the premiums from time to time, Tokio was responsible for false representations concerning the insurance coverage which it provided. In addition, Logic says that Tokio cannot rely on any exclusion clause contained in the insurance contract to avoid liability in respect of the theft of the stored goods. Logic claims that it is therefore entitled to be indemnified under its insurance arrangements for the theft in the amount of approximately $38,000. The premises were originally purchased by Mirabell in 2003. They are now operated under the name "Storage King Cheltenham". 4 In early June 2005, Logic was seeking premises on which it could store bulk quantities of tyres. Mr Alex Wong, director of Logic, inspected the premises at Cheltenham and noted that they were advertised as possessing high security, including: monitored alarm systems; an on-site manager; safe, secure and clean lock-up areas; and other attractive features. Mr Wong also read assurances on the website for "Storage King Cheltenham" that insurance could be arranged through the premises, an offer which he considered it convenient to take up. At this time, Mr Wong spoke with Ms Rebecca Gilling, after calling a telephone number appearing on the website. He asked her about the storage and insurance facilities. Mr Wong says she suggested that Logic take up insurance which "Storage King" could provide. Mr Wong then asked her to send him a quote for storage and insurance. Soon thereafter, Mr Wong commenced storing tyres at the premises, and received from Ms Gilling a quote for storage together with a document entitled "Midland Insurance Premiums" which set out a range of insurance options. 5 On 6 June 2005, Logic entered into a contract with "Storage King Cheltenham" by signing a "Standard Self Storage Agreement" for the use of a storage space identified as Unit 13. The names of two persons appear on the document, namely, Mr Wong and Mr Dee Dejanovic, the latter of whom signed the document in three places. Prominent on the face of the document was a statement that the goods were stored at the customer's (that is, Logic's) sole risk, and that the owner of the premises (identified as "Storage King Cheltenham") was not liable for the loss of any stored goods. The document also contained an exhortation that any customer should take out insurance cover. Further disclaimers were contained on the second page of the document. On the same day, Mr Dejanovic also signed a document entitled "Certificate of Insurance for Self Storage Customers", which bore the names "Storage King Cheltenham" and "Logic Group Tyres", and also registered a broker's name, "Midland Insurance Brokers Australia P/L". This second document stated that Logic became an "insured person" for an amount of $50,000, subject to the payment of a premium. The terms and conditions of this insurance contract clearly excluded from coverage, "... fertilizer, tobacco, cigarettes, paint or tyres in bulk " (emphasis added). As noted above, goods stored by Logic at the Cheltenham premises included tyres in bulk. After 6 June 2005, invoices were issued to Logic under the title "Storage King Cheltenham". The Australian Business Number recorded on those invoices was not the same as Mirabell's. Despite this, the invoices were paid monthly by Logic. 6 On 1 March 2006, Logic arranged to rent three further storage spaces from "Storage King Cheltenham" at the same site, namely Units 14, 21 and 86. A further "Standard Self Storage Agreement" was entered into on 21 March 2006, containing the same disclaimers as the contract of 6 June 2005. The name of Mr Wong was printed on the document on behalf of Logic, and it was also signed by Mr Dejanovic. Logic again sought for insurance in respect of the extra three Units, signing several "Customer Storage Insurance Benefits Product Disclosure Statements". A Mr Chris Bell signed these Statements, and while it was not clear on the evidence what position Mr Bell occupied, I am satisfied for present purposes that he was not an employee or agent of Mirabell. It is important to note that each of these Statements expressly excluded from coverage "tyres in bulk". 7 On the face of the documents, it is evident that the insurance coverage taken out by Logic in respect of Units 14, 21 and 86 was underwritten by a different entity (namely, Tokio) than the entity which provided the insurance coverage in respect of Unit 13 (namely, Lumley General Insurance Limited). Yet another Australian Business Number was used on the invoices which were issued to and paid by Logic, this one being assigned to Moorabbin Cheltenham Public Storage Company Pty Limited. The role which this company played in the arrangements presently before the Court is not clear on the evidence. 8 It was after these arrangements were in place that the theft of the goods stored at the Cheltenham premises occurred. Mr David Ansell, Logic's Victorian Sales Manager, gave evidence that tyres were stored at the premises. Mr Ansell stated that, as at 27 March 2006, Logic owned tyres which it had imported from China and for which it had paid $37,294. These, he said, were stored in Unit 14. He also gave evidence to indicate that persons working on the site were aware that tyres were being stored. Mr Ansell said that, on 28 March 2006, he was informed that the tyres in Unit 14 had been stolen. He estimated that it would have taken two men about two hours to clear the storage unit and load tyres onto a truck. Mr Ansell also said that he was informed after the theft by a person on the site that the security arrangements had been changed from a night patrol to an alarm response security measure. This latter measure only responded when an alarm inside a Unit was activated; camera footage was only taken to monitor traffic at the front entrance to the site. As a consequence of this mishap, Mr Wong on 6 April 2006 wrote to the Regional Manager of Storage King and raised a number of issues as to the inadequacy of the security measures which were meant to prevent theft from the premises. 9 I now turn to address the issues raised by the parties in their submissions. WAS TOKIO LIABLE AS PRINCIPAL TO MIRABELL IN RESPECT OF INSURANCE COVERAGE? In response, Tokio submits that there is no basis for presuming that Mirabell was its agent in relation to the insurance of the tyres. 11 To succeed on this point, Logic must show that Mirabell acted in a way which attracted liability, and that any such liability is borne, as a result of a relationship between principal and agent, by Tokio. I shall begin by considering the first limb. 12 The first important matter is that, under the Standard Self Storage Agreement, it is Logic who is exhorted to take out insurance cover. It is clearly pointed out that the goods are stored at the sole risk of Logic, and that "Storage King Cheltenham" is not liable for the loss of any goods stored on its premises. This allocation of risk is reinforced by "Customer Storage Insurance Benefits Product Disclosure Statements" which state that Logic can arrange insurance coverage in respect of this risk or choose to bear the risk itself. By signing these Statements, the customer agrees that it has read and understood the document and its terms. The customer acknowledges that "Storage King Cheltenham" is not acting as an agent of the insurer, is in fact not the insurer, and has not provided any recommendation or opinion in relation to insurance benefits. The document says that it is signed "on behalf of all persons seeking to access the insurance benefit". This includes Logic. The Statements also expressly exclude from insurance coverage liability in relation to tyres in bulk . In these circumstances, it is abundantly clear that the exclusion clause is sufficiently wide to exclude any liability of Tokio as insurer in respect of the theft of the tyres. 13 In addition, insofar as it is suggested that Mirabell falsely represented the nature, effect and operation of the insurance arrangements to cover the storage of tyres in bulk and thereby negated the operation of the express exclusion clauses, I am not persuaded that any such misrepresentation has been established on the evidence. In my view, the comments attributed to Ms Gilling by Mr Wong were simply a notification that Logic could access the insurance benefits which "Storage King Cheltenham" could arrange as at 2005 in relation to Unit 13. While Mr Wong did not apply for the insurance immediately, preferring instead to ask for a quote, the relevant documents were eventually signed, including all of the disclaimers to which I have referred above. Any assertions of misrepresentations must fail in light of the fact that the documents were signed with (at least constructive) knowledge of those terms. 14 It cannot be suggested that the exclusion clause documentation in respect of Units 14, 21 and 86 was different in terms to the documentation in respect of Unit 13. It is important to note that neither Mr Dejanovic (who was signatory to both sets of documentation) nor Mr Bell were called by Logic to give evidence to establish that at the time of signature Logic was unaware of the exclusion clause or thought as a result of some misrepresentation that the exclusion clause could not apply. The evidence, as it stands before me, is not sufficient to establish this. The inference thus to be drawn from the evidence is that the express exclusion clause was or should have been read by Logic at the time of signing, and that Logic is bound by the express written terms of the contract into which it entered. An unexplained failure to call Mr Dejanovic or Mr Bell to depose otherwise reinforces this inference. 15 Given the above, I find that Logic has not proven any liability on the part of Mirabell which, on principles of agency, might result in Tokio bearing any liability arising out of either the alleged misrepresentations or the alleged conduct in respect of the theft. In other words, the first limb of principal liability --- that there be a breach of an obligation --- has not been met. DID MIRABELL OWE A DUTY OF CARE? Logic also says that Mirabell is liable for its own misrepresentations as to the arrangements for insurance and as to the sufficiency of the insurance policy to protect against theft. 17 Several documents in evidence provide details of how and by whom the business at the Cheltenham site was conducted. The first is the "Standard Self Storage Agreement", which, on its face, is made between Logic and "Storage King Cheltenham". Nothing in this document demonstrates that the owner of the business name "Storage King Cheltenham" was Mirabell or some other entity acting as an agent for Mirabell. 18 In addition, there is a letter of 6 June 2005 to Storage King Pty Limited from Mr Walker, a director of Mirabell, which confirms that the property and business at Cheltenham had been sold to a company known as "371 Warrigal Road Pty Limited", and the evidence indicates that the contracts of sale were due for settlement on 31 July 2006. This document suggests that, as at the date of the theft of Logic's goods from the Cheltenham site, the property was owned by Mirabell. 19 Also in evidence is a Licence Agreement dated 1 October 2003 between Storage King Pty Limited and Mirabell, in which Mirabell is given a sub-licence to use the name "Storage King" in the conduct of the business at Cheltenham. 20 There is also a "Specialist Management and Support Services Agreement" dated 3 September 2003 (and commenced on 1 October 2003) between Storage King Pty Limited and Mirabell, according to which Storage King is obliged to provide management services to Mirabell in respect of the storage business conducted at the Cheltenham site. Under this Agreement, Storage King Pty Limited disclaims liability in relation to the supply of the services. The services to be provided are listed in the Agreement and include "all ... things as may reasonably be necessary for the conduct of the Business at the [Cheltenham site] in a proper and professional manner". The "Business" is defined in the Agreement to mean "the business of licensing members of the public to store their goods" at the Cheltenham site. The precise services in relation to the conduct of the "Business" are set out more specifically in other paragraphs of the Agreement. 21 On the basis of this and other evidence, Logic submits that Mirabell must have been aware of the fact that Logic was storing tyres in bulk at the Cheltenham site. Logic says that Mirabell misrepresented through its personnel on the site that the storage of tyres in bulk was not excluded by the insurance cover provided, notwithstanding the express exclusion clause. This representation is said to have been known to persons working on the site and assisting with Logic's storage needs. 22 In my view, there is insufficient evidence before me to demonstrate that the persons working on the site were agents of Mirabell, as opposed to being employers of "Storage King Cheltenham" or some other entity. Furthermore, the evidence is not sufficient to draw an inference that Mirabell was aware of or made any of the alleged misrepresentation through their statements or conduct. It is important to stress that I do not find that these misrepresentations and relationships did not occur or exist; rather, the Court is simply not in a position to make those findings on the basis of the evidence with which it has been presented. 23 In relation to the misrepresentations which Logic asserts were made as to the nature and extent of the security of the premises at the Cheltenham site, the evidence adduced by Logic is not sufficient to persuade me that Mirabell was involved in those statements or is somehow otherwise responsible for them. The website appears on the evidence to be that of Storage King, which provides the services for the conduct of the business --- no link to Mirabell has been demonstrated or can properly be inferred on the evidence. 24 In relation to the allegation of negligence, the evidence again is simply not sufficient to establish that there was any duty of care owed by Mirabell to Logic in respect of the storage of tyres in bulk. The exclusion clauses in the contract between Logic and "Storage King Cheltenham" reinforce this conclusion, as does the fact that the invoices received by Logic bore a different Australian Business Number to that of Mirabell. Having regard to the fact that I find no duty of care has been established on the part of Mirabell in relation to the safe keeping of the tyres at the Cheltenham site, it is not necessary for me to consider whether in the circumstances there was a breach of such a duty and whether any such breach caused Logic's loss. In this finding, I have regard to the exclusion clause and the lack of any agency relationship such as that asserted by Logic. I also find that Logic has failed to establish that Mirabell was responsible for any false representations which may have been made. I am not persuaded that there was any duty of care owed by Mirabell to Logic in relation to the safe keeping of the goods at the Cheltenham site. Nor am I satisfied that there was any misrepresentation attributable to Mirabell in relation to the insurance cover or otherwise. 26 I therefore dismiss this application with costs. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

liability whether misrepresentations and negligence agency entry into contracts of storage and insurance exclusion clauses whether insurance for storage of tyres in bulk excluded. insurance

Both motions are issued by the third respondent in the proceeding. The first is a motion filed on 7 April 2009 and the second is a motion filed on 12 March 2009. By the first motion, the third respondent seeks an order that the further amended statement of claim delivered on 10 March 2009 be struck out and that the applicants in the proceeding pay the third respondent's costs of the motion assessed on a solicitor/client basis and that those costs be paid forthwith. The remaining paragraphs of the motion seek orders in terms of paragraphs of the earlier motion of 12 March 2009 and those paragraphs relate to costs in respect of other matters, predominantly reserved costs which are outstanding from some earlier applications in the matter. The issues in controversy between the parties on each of these motions have substantially been resolved during the course of negotiations this afternoon with the result that it is common ground that the further amended statement of claim is to be struck out; the applicants are to file and serve any notice of motion to re-plead by 15 May 2009; and, the costs referred to in order 5 made on 12 March 2009 are to be payable forthwith. There are some other orders proposed which are the subject of controversy. As to orders 4, 5 and 6, the ambit of the controversy is that the third respondent seeks those costs on a solicitor/client basis and the applicants contend that those costs ought to be ordered on the conventional party and party basis. A further order which is not controversial, is an order that the first respondent's costs of and incidental to each of these motions ought to be reserved and in that sense those costs are to be preserved for later determination. Accordingly, I make such an order. As to the question of the controversy involving whether or not the costs the subject of orders 4, 5 and 6 ought to be on a solicitor/client basis, the determination of that question turns a little on two factors. One is the history of the conduct of the matter generally and, secondly, the nature of each particular matter which is attracting an order for costs. Mr Mills on behalf of the applicants, makes the point that the question of whether the discretion ought to be exercised so as to make an order for costs on a solicitor/client basis ought to be determined in the context of the particular application and the time at which the application was made. In relation to the first matter concerning the general conduct of the proceedings, there is an area for some, I have to say, considerable degree of criticism. Without going to the total detailed chronology of the matter, it is fair to say that Dowsett J some considerable time ago, expressed very clear concerns about the formulation of the statement of claim as originally filed, in the sense that it contained very many allegations of mixed questions of fact and law and the pleading failed to set out in a coherent and clear sequence the precise formulation of the facts relied upon by the applicants, leading to the relief that ought to be ordered by the court arising out of those facts. That is to say, the causes of action, both statutory and otherwise, were not plainly and clearly formulated. It is not uncommon, of course, in litigation for pleadings to be amended and the court recognises that as instructions are more clearly formulated and fresh matters arise it may be necessary to make amendments to a pleading. However, in this particular case the difficulty seems to me to be that there was no real focus on the imperative of reducing the statement of claim to a concise and plainly coherent document in the way that Dowsett J had described. I should add that orders were made on 19 December 2008 and on 16 February 2009 in relation to this very question of the need to amend the statement of claim and, of course, those orders provide for a timeframe within which those amendments were to be made. Those orders were made with the support of the applicants. Unfortunately, those orders were not satisfied and a document was ultimately filed which was an amended statement of claim followed by a further amended statement of claim. On one of the occasions when the matter was before the court previously, I think on 16 February 2009, I made some observations in reasonably precise terms, I thought, that the statement of claim lacked the rigour and discipline and coherence that is required of a pleading according to the rules of this Court and I suggested to the applicants' advisers that it would be useful to formulate the pleading in a way which addressed the chronology of events disbursed throughout the existing amended pleading and reduced the material facts to the truly material facts properly particularised in a sequence which makes it plain that those facts, if proved, would give rise to the relief sought. It is true to say that the statement of claim does contain a series of allegations of mixed fact and law and in terms of taking the controversy to trial and ultimately quelling the controversy at trial, it is essential that the statement of claim frame facts properly particularised, but most importantly, material facts which logically give rise to the relief sought, whether derived from provisions of the Corporations Act 2001 (Cth) or otherwise, or howsoever those causes of action might be formulated. That particular vice, it seems to me, has bedevilled the matter and it is compounded in the sense that one of the steps taken by the court relatively early on in the proceeding was to try to advance the resolution of the issues to trial by allocating trial dates for 16 March and 17 March 2009. Ultimately, those dates had to be vacated with subsequent directions orders made for the completion of interlocutory steps. Most recently, orders were made again in terms of the amended pleading with consequential directions for the delivery of a request for particulars, answers to particulars, a defence, a reply, and then the nomination of a date for a directions hearing for the purpose of allocating trial dates. And so it follows, it seems to me, that there needs to be some real focus upon reducing the framework for the proceedings to a disciplined further amended statement of claim. Against that background, I then turn to orders 4, 5 and 6. Order 4, as I mentioned earlier, contemplates that the applicants ought to pay the third party's costs thrown away by reason of the amendment of the application and the further amendment of the amended statement of claim, assessed on a solicitor/client basis, and payable forthwith. It seems to me that having regard to the history of the matter and concerted efforts to encourage the reduction of the statement of claim to a further amended statement of claim and therefore a disciplined pleading, it is an appropriate to exercise the discretion so as to order that those costs be paid on a solicitor/client basis. As to order 5, as I mentioned earlier, order 5 seeks an order also in terms of solicitor/client costs in respect of the motion filed by the applicants on 28 November 2008. Whilst there might be some degree of legitimate controversy about that matter and although I understand and appreciate the agitation on the part of the third respondent in relation to that matter, it seems to me that the notice of motion of the applicants on 28 November 2008 (for summary judgment), although ultimately not dealt with in preference to expediting the trial of the action, renders it inappropriate to exercise the discretion to make an order that those costs be paid on a solicitor/client basis. In relation to order 6, similarly, as I mentioned earlier, an order is sought by the third respondent that the applicants pay the costs of and incidental to the notice of motion filed on 12 March 2009 on a solicitor/client basis. That notice of motion is, I think, it is fair to say, a distillation of the concerns arising out of the procedural anomalies in the matter and it seems to me that those costs ought to be ordered on a solicitor/client basis. Accordingly, I make an order in terms of paragraph 6, as formulated in the draft order. Order 7 is not controversial. I have made an order in terms of order 8 as indicated above. I will amend order 2 of the draft so that it will incorporate a date of 11 May 2009. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

consideration of an application for an order to strike out a further amended statement of claim and related orders practice and procedure

Lilly is also the patentee of the Austrian equivalent of the Australian Patent. The second cross claimant is the exclusive licensee of the Patent in Australia. 2 On 14 January 2000 the Commissioner of Patents granted an extension of term of the Patent for a period of five years ending 7 March 2009. 3 On 12 May 2008 Lilly and the second cross claimant filed a cross claim alleging infringement of the Patent. 4 The Patent describes and discloses a class of compounds which have an anti-viral therapeutic effect. The invention described and claimed in the complete specification is a class of compounds being antiviral nucleosides for the treatment of viral infections. 5 In its application for an extension of the term of the Patent, Lilly relied upon registrations on the Australian Register of Therapeutic Goods (ARTG) for the commercial product Gemcitabine hydrochloride. 6 The applicant claims there is a disconformity between the pharmaceutical substance with the indication described in the ARTG registrations and the class of antiviral compounds described and claimed in the specification. This perceived disconformity forms the basis for its application to review the extension of the term and revoke the Patent for lack of fair basis and false suggestion, the Trade Practices Act claim, and its defence to the infringement action pursuant to s 78 of the Patents Act . The first, by Lilly, seeks an order under s 31A of the Federal Court of Australia Act 1976 (Cth) that pars 1 to 6, 8 and 10 of the Amended Application, and pars 7 to 19 of the Amended Statement of Claim be dismissed. The second, by the applicant, seeks leave to amend its Amended Application and Amended Statement of Claim. 9 Lindgren J has recently collected the cases on the meaning and effect of s 31A and comparable provisions: White Industries Aust Ltd v Federal Commissioner of Taxation [2007] FCA 511 ; (2007) 160 FCR 298 at [58] - [59] , where he considered the test to be whether there are "real" as opposed to "fanciful" or "merely arguable" prospects. 10 Lilly's motion gives rise to three issues. The first is the viability of the applicant's claim to relief under s 52 of the Trade Practices Act . The second is whether the applicant has standing to claim relief under the ADJR Act, s 192 of the Patents Act and s 39B of the Judiciary Act . The third is whether, assuming it has standing, it should be denied relief because of its delay. In a s 31A context, in each case the question is whether the Court is satisfied that there is no reasonable prospect of the applicant succeeding in the relevant claim or issue. The applicant alleges that these representations were made in trade and commerce and were false. 12 In Glueck v Stang (2008) 76 IPR 75 the applicant alleged that Novopharm, in trade or commerce, engaged in misleading and deceptive conduct in relation to an application to the Australian Patent Office for the grant of letters patent. They were not made in the course of a trading or commercial relationship between Novopharm on the one hand, and ... the APO ... on the other hand. Novopharm had no trading or commercial dealings with the APO .... Nor were they made in the course of the negotiation of contracts .... The alleged representations were made to a government instrumentality pursuant to legislation for the purpose of obtaining an exclusive right or bundle of rights made available by that legislation. No doubt the alleged representations were made by Novopharm in trade or commerce in a broad non-s 52 sense. 14 The applicant sought to distinguish the present case from Glueck on the ground that the facts of the two cases were different. That is true, but the proposition derived by Lindgren J from the authorities referred to is applicable here. It is that relationship that is absent here. I am not persuaded that Glueck is plainly wrong, and accordingly I should follow it. 15 The applicant filed material that bore on the activities of the Patent Office. However, no reliance was placed on it in the applicant's counsel's submissions, and Lilly's counsel made no reference to it. I have not carried out my own investigation as to what might have been made of the material. 16 In my opinion the applicant has no reasonable prospect of succeeding in its s 52 claim. Section 192(1) of the Patents Act enables a "person aggrieved" by, amongst other things, an entry wrongly existing in the Register of Patents, to apply for an order to rectify the Register. Section 39B of the Judiciary Act does not use the expression "person aggrieved". It was, however, common ground that if the applicant was not a "person aggrieved" under s 5 of the ADJR Act or s 192, it would lack standing under s 39B. 20 As I understand the position, Lilly did not attack that formulation of the applicant's claim to be a person aggrieved. What it relies on, so as to assert that the applicant's standing has evaporated, is the decision of an Austrian court on 7 July 2008 enjoining EBEWE Pharma from making and exporting the product. Lilly contends that on the present pleadings the applicant cannot establish an interest in the outcome of the proceeding because, even with the extension of the term in place, it is not in a position to launch a product sourced from EBEWE Pharma in Austria. 21 It is because of the grant of the Austrian injunction that the applicant, in its motion, seeks to amend its Application to overcome that obstacle. (f) The Applicant has not yet obtained TGA approval for registration of Sindan-Pharma Gemcitabine Hydrochloride powder but believes that it will obtain such approval in late 2008 or early 2009. At the time InterPharma became aware of the [extension] Decision on 2 August 2007, it had not applied for Pharmaceutical Benefits Scheme (PBS) listing of Gemcitabine EBEWE. PBS listing is central to the successful marketing of oncology pharmaceutical products in Australia. InterPharma cannot apply for PBS listing of Gemcitabine EBEWE until it has obtained TGA registration of Gemcitabine EBEWE. At the time of swearing this my Affidavit, InterPharma has not obtained TGA registrations of Gemcitabine EBEWE. 27. It is not possible to apply for PBS listing of any pharmaceutical until TGA registration has been achieved. Upon obtaining TGA registration and obtaining PBS listing of the Gemcitabine EBEWE, InterPharma, (if not restrained by an order of this Court) intends to import, market and sell Gemcitabine EBEWE for the treatment of cancer, which formulations are alleged by Eli Lilly Australia Pty Ltd and Eli Lilly and Company to infringe the Anti-Viral Patent. If the said formulations do fall within the scope of the claims of the Anti-Viral Patent (which is denied), then the period during which InterPharma may be prevented from importing, marketing and selling such formulations has been prolonged by the extension of the term of the Anti-Viral Patent in the Decision. The EBEWE application for TGA approval was filed in October 2007 and, as appears from the applicant's pleading, approval is not expected until the third quarter of this year. The Sindan-Pharma application was not lodged until April 2008. Lilly says that no reason is advanced for the belief in [21(f)] that approval will be granted in late 2008, and that it should be inferred that it will be later. 24 Lilly also relies on the evidence of Mr Grainger that a PBS application typically takes three months to be processed. However, if a listing involves a change in the price of other brands (for example, a generic product is listed on the PBS at a lower price and this results in price changes for other brands of that product) then, it may only be listed on the PBS Schedule on one of three dates per year --- 1 April, 1 August and 1 December .... For an application to be listed on one of these dates, it must have been made by, respectively, the 1 January, 1 May and 1 September prior to the associated listing date. 25 Lilly's counsel asserted that the Shilpa product would be "listed on the PBS at a lower price". Accordingly, it was said, if there were to be a TGA approval given in late 2008 or early 2009, the earliest time a PBS application could be lodged would be 1 January 2009, and the earliest the Shilpa product would be listed would be 1 April 2009. That would see it available for commercial use after the expiry of the extended term on 7 March 2009. Accordingly, it was said, the applicant's commercial activities will not be affected by the extended term, "other reasons having intervened and having nothing to do with the extension of term". 26 Counsel for the applicant did not challenge the assertion in [25] that the Shilpa product would be listed at a lower price, with the TGA consequences alleged. Rather they took issue with the contention that obtaining PBS listing is a prerequisite to the launch of a product. They did not accept that Mr Gray was saying that. Rather they contended that he was saying that once TGA registration and PBS listing was obtained, importing, marketing and selling would occur. 27 I return to the Assa Abloy test recorded at [18]. Adapted to the present case, the question is whether there is a reasonable possibility that the applicant would be disadvantaged in the sense that it would be prevented from exploiting the invention in any of the respects falling within the definition of "exploit" in the Patents Act . That includes a number of things preparatory to placing a product in the marketplace. Matters falling within the concept of "launching" a product include importing, keeping for the purpose of offering for sale, and using. In my view the fair reading of par 49 of Mr Gray's affidavit is that propounded by the applicant. Nor do I think the use of the word "marketing" in par 26 of that affidavit bears the emphasis Lilly places on it. All Mr Gray is saying is that in order successfully to sell a product, that is to say make money out of it, PBS listing is essential. As appears from [19] and [21], the applicant has pleaded only that it has not yet obtained TGA approval, believes it will obtain it in late 2008 or early 2009, and will not import and sell the product until it receives TGA registration. It does not plead PBS listing as a precondition. The Assa Abloy test speaks of the existence of a reasonable possibility of disadvantage. For the purposes of a s 31A application, I am not satisfied that that possibility does not exist. I am not persuaded that the applicant has no reasonable prospect of successfully prosecuting the ADJR, s 192 and s 39A parts of the proceeding by reason of a lack of standing. Under sub-s (3) the prescribed period is the period commencing on the day on which the decision is made and ending on the 28 th day after the decision is "furnished to the applicant". Subsection (4) provides that where no period is prescribed, the court may refuse to entertain an application if of the opinion that the application was not made within a reasonable time after the decision was made. In forming an opinion for the purposes of subs (4), the court is to have regard to the time at which the applicant became aware of the making of the decision: subs (5)(a). 29 In my view delay in relation to the ADJR part of the proceeding is to be determined under s 11(4) and (5) and not under subs (3). In this case the applicant discovered the existence of the decision through its own resources. I agree with Pincus J in Australian Foreman Stevedores Association v Crone (1988) 20 FCR 377 that the expression "furnished to the applicant" contemplates delivery specifically to the applicant by the decision-maker. Accordingly the matter is to be approached under subss (4) and (5). 30 It is common ground that the alleged delay in relation to the s 192 and s 39B parts of the case are to be dealt with on the same basis as the ADJR aspect, so that relief may be refused if application was not made within a reasonable time. 31 A chronology of the relevant events will assist in understanding the parties' contentions on delay. However the applicant was not incorporated until March 2002, and blame cannot be attributed to it until after that time. It nevertheless remains a relevant consideration that the extension was granted so long ago. See [39] and [40]. The delay between incorporation and application is six years. 33 Lilly also notes the nearly five years interval between the signing of the EBEWE Pharma agreement and the application. 34 There is a more than four year gap between the signing of the agreement and the applicant becoming aware of the patent and extension of term. The only activity in this period is Mr Gray's evidence that he recalls discussing the patent position with Dr Schnait of EBEWE Pharma "during product development and launch meetings in late 2005 and during 2006/2007". Dr Schnait told him that Lilly had a patent in Austria for the product but that he could not find any equivalent patents in Australia. I infer from this that the applicant did not undertake its own searches of the patent databases including those in Australia. 35 It was on 2 August 2007 that the applicant became aware of the extension of the term. It was not until over seven months later that application was made. It was during this interval that the correspondence took place in relation to a "without prejudice" meeting. The correspondence, the meeting and the failure of negotiations account for two of the seven months. 36 Five months elapsed between the applicant obtaining the complete file from IP Australia and the institution of proceedings, a little less than that between the applicant seeking TGA registration and the proceedings, and a three month interval between Lilly's infringement claim and the proceedings. 37 Although I have taken the view that s 11(1)(c) of the ADJR Act is not applicable here, it has relevance notwithstanding that the delay is to be assessed under subss (4) and (5). That is because it prescribes a comparatively short period within which, in the most common situation, an application must be made. In terms of a legislative intention as to what is a reasonable period after an applicant becomes aware of the making of the decision (s 11(5)(a)), there is no great difference between an applicant to whom the Commissioner hands a copy of the decision and one who obtains the decision as a result of its own investigations. 38 I agree with Lilly that the applicant's conduct with respect to its investigation of the extension decision demonstrates a marked lack of urgency at every stage. The explanations for the delay cover only comparatively small parts of the overall period between becoming aware of the extension and the institution of proceedings. There is no evidence that the applicant made its own enquiries and searches in relation to an Australian patent. All that appears is very general evidence, purporting to cover a more than two year period, when Mr Gray spoke to Dr Schnait, and apparently relied on that information (from EBEWE) rather than making his own investigations. 39 Another relevant matter in relation to delay is that the term of a patent is not of interest only to the patentee. As Lilly points out, it is effectively a right in rem, and of significance to all in the patent area who might be interested in trading within or near the subject matter of the patent. For this reason, the Commissioner must publish in the Official Journal a notice that an extension application has been made and is open to public inspection. If an application for extension is accepted, the Commissioner must publish a notice to that effect in the Official Journal. Provision is made for opposition proceedings. If the Commissioner grants an extension, a notice of the grant must be published in the Official Journal. See ss 72 , 74 (2)(b), 75 and 76 (2) of the Patents Act and reg 5.3 of the Patents Regulations 1991 . 40 I agree with Lilly that once the opposition period has expired and an extension is granted, the patentee and third parties are prima facie entitled to proceed on the basis of the extension. Admittedly, one must take into account that the applicant was not incorporated until nearly two years after the extension. Nevertheless, the public interest to which I have referred is relevant notwithstanding that. As a matter of fairness in the administration of the patent system, it would be extraordinary if extensions could be challenged some eight years after grant. Even taking into account the applicant's date of incorporation, it would still be extraordinary that a challenge could be made six years after that. Because those parts of the proceeding will not proceed, it would be pointless to allow the amendments sought in the applicant's notice of motion. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

misleading and deceptive conduct "in trade or commerce" application to commissioner of patents for extension of patent term application alleged to contain misleading and deceptive statements whether statements made in trade or commerce. extension of patent term application for review of decision to grant standing of applicant whether person aggrieved delay in making application whether disentitling. summary judgment application by defendant applicable principles. trade practices administrative law practice and procedure

He sought an extension of time until 14 days after the determination of an appeal from the judgment on which the bankruptcy notice was founded. Ultimately, after being provided with a bank guarantee in an amount of approximately the judgment debt, the trustee consented to the extension of time sought. The appeal against the judgment has been successful. The only issue between the parties which now requires judicial resolution is the appropriate order, if any, to be made as to costs. Each party seeks a costs order in his favour. The trustee is the trustee of the bankrupt estate of Mr Milad Elias. On 13 July 2003 the Official Receiver, on application by the trustee, by written notice under s 139ZQ of the Bankruptcy Act 1966 (Cth), required Mr George Elias to pay the trustee $70 561.00. The notice asserted that Mr George Elias had received this amount as a result of a transaction that was void against the trustee under Division 3 of Part VI of the Act. 3 On 6 June 2005 summary judgment was entered against Mr George Elias in the District Court of New South Wales for $70 561.00 plus costs. Shortly before that date an application to set aside the s 139ZQ notice had been filed in the Federal Magistrates Court. The District Court declined to stay the proceedings before it to allow the application to the Federal Magistrates Court to be heard and determined. 4 On 1 July 2005 Mr George Elias filed a holding summons for leave to appeal to the Court of Appeal from the judgment of the District Court. As a consequence he had three months thereafter to file an ordinary summons for leave to appeal (NSW Supreme Court Rules pt 51 r 4). An ordinary summons for leave to appeal was filed within that time. 5 On 17 August 2005 a bankruptcy notice requiring payment of the judgment of the District Court was served on Mr George Elias. On 1 September 2005 Mr George Elias instituted this proceeding. 6 On 13 September 2005, by consent, an order was made by the duty judge extending the time for compliance with the bankruptcy notice up to and including 27 September 2005 when the matter was again to come before the duty judge. The Court was invited on 13 September 2005 to note that, on or before 27 September 2005, Mr George Elias would procure an unconditional and irrevocable bank guarantee in favour of the trustee in the amount of $80 000.00 which the trustee would be entitled to call upon should the appeal from the judgment of the District Court be dismissed, withdrawn or discontinued. The Court was further invited to note that the parties envisaged that, if the bank guarantee were provided, the trustee would on 27 September 2005 consent to the time for compliance with the bankruptcy notice being extended until the determination of the appeal --- provided that, on that day, Mr George Elias undertook to prosecute the appeal with diligence. 7 On 5 October 2005 a duty judge extended time for compliance with the bankruptcy notice until 14 days after the appeal was determined, withdrawn or discontinued. Her Honour also ordered that Mr George Elias pay the trustee's costs incidental to an earlier attendance before a duty judge at which there had been no appearance by Mr George Elias. 8 On 9 May 2006 the New South Wales Court of Appeal granted Mr George Elias leave to appeal against the judgment of the District Court, allowed the appeal and set aside the judgment ( Elias v Pascoe [2006] NSWCA 110). Those principles, so far as presently relevant, may be summarised as follows. First, the Court should be ready to facilitate the conclusion of the proceeding by making a costs order. Secondly, although the Court will not ordinarily seek to determine the likely outcome of a hypothetical trial, it may be more ready to do so where the issues are simple and issues of credit do not arise. Thirdly, it will ordinarily be appropriate for the Court to consider the reasonableness of the conduct of the parties in instituting and defending the proceedings and it may be appropriate for the Court to consider whether unreasonable conduct of the respondent precipitated the commencement of the proceeding. 10 In my view, the above principles also ordinarily guide the exercise of the Court's discretion in comparable circumstances to award costs pursuant to s 32 of the Bankruptcy Act . As I observed in Principal Strategic Options Pty Ltd [2001] FCA 664 at [17] - [18] , s 32 gives the Court a very wide discretion with respect to orders for costs, albeit that the discretion must be exercised judicially. He argued that, once the holding summons for leave to appeal had been filed, it was inherently risky to serve the bankruptcy notice; the risk having eventuated, the trustee should pay the costs reasonably incurred by him with respect to the bankruptcy notice. 12 The trustee submitted that as no stay of the judgment of the District Court had been obtained, or indeed sought, he had acted reasonably and properly in serving the bankruptcy notice and in respect of the conduct of this proceeding. However, it would have been reasonable for him to conclude that the considerations that persuaded the learned judge to refuse to stay the proceedings before her, but rather to enter summary judgment against him, would have disinclined her Honour from granting that stay. It was not put to me that Mr George Elias should have applied to the Court of Appeal for a stay of execution of the District Court judgment. I conclude that it would probably not have been possible to obtain a hearing before the Court of Appeal a significant time (perhaps any time) ahead of the hearing of the application for leave to appeal. In the circumstances I attach only limited weight to the failure of Mr George Elias to obtain a stay of the judgment of the District Court. The power to extend time for compliance is in aid of the power to set aside the notice itself should the judgment ultimately be set aside ( Byron v Southern Star Group Pty Ltd (1997) 73 FCR 264 at 268). The judgment upon which the bankruptcy notice was founded has now been set aside. I conclude that Mr George Elias acted reasonably in instituting this proceeding. 15 The trustee was entitled to serve the bankruptcy notice as no stay of execution of the District Court judgment had been sought (s 40(1)(g) of the Bankruptcy Act ). I am not satisfied that he acted unreasonably in doing so. However, he must be assumed to have understood that, if the judgment were set aside on appeal, the judgment debt on which the bankruptcy notice was founded would no longer exist and the notice would be liable to be set aside. 16 The judgment of the Court of Appeal setting aside the judgment of the District Court was unanimous. One member of the Court of Appeal was implicitly critical of the conduct of the trustee in opposing a stay of proceedings in the District Court to allow the s 139ZQ notice to be challenged in the Federal Magistrates Court (Giles JA at [51]). Another member of the Court of Appeal considered that there was 'some plausibility' in the contention that the District Court proceeding should have been stayed but found it unnecessary to consider the issue (Santow JA at [111]). The third member (Bryson JA) of the Court of Appeal also found it unnecessary to consider the issue. However, all members of the Court of Appeal concluded that the District Court erred in entering summary judgment against Mr George Elias. I infer that the District Court adopted this course at the invitation of the trustee. I incline to the view that, in this sense, unreasonable conduct of the trustee precipitated the events that led to the institution of this proceeding. I have not been invited to set aside or vary the order for costs in favour of the trustee made by the duty judge on 5 October 2005. It will be ordered that the amount payable pursuant to that order be set off against the costs ordered to be paid by the trustee. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

costs principles governing exercise of the court's discretion to award costs pursuant to s 32 of the bankruptcy act 1966 (cth) where bankruptcy notice issued despite debt on which bankruptcy notice founded being the subject of an appeal not yet determined effect of not seeking stay of execution reasonableness of parties' conduct bankruptcy

I note that there has been repeated default by both respondents. I have also had regard to the correspondence and emails in the history of the proceeding and, having considered the affidavits that are before me, I consider it appropriate to make orders in terms of the short minutes of order. 2 So far as the question of additional damages is concerned, there has been no opportunity to ventilate this and, in the circumstances, I am prepared to award half the amount of the compensatory damages. In reaching this conclusion, I have taken into account the fact that substantial costs have been incurred and will be the liability of the respondents under the orders. 3 Accordingly, I make orders in accordance with the short minutes, except that in relation to the issue of additional damages, I award half of the compensatory damages sought which equates to an amount of $15, 047.50.

application for default judgment pursuant to o 35a respondents failed to enter appearance, file defence and appear at directions hearing application allowed. copyright

The claim made in the proceeding is said by the applicant to be within the original jurisdiction of the Court, "being an application for a declaration as to the proper construction of s 494C of the Migration Act 1958 (Cth)". The legislative basis for the Court's jurisdiction to hear the application and grant the relief sought is said by the applicant to be s 39B(1A)(c) of the Judiciary Act 1903 (Cth) ("the Judiciary Act ") and s 21 of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"). That section specifies various methods whereby a document may be given to a person and those methods are by hand, by handing to a person at the last known residential or business address, by dispatching by prepaid post or by other prepaid means and transmission by fax, e-mail or other electronic means. Section 494C sets out when a person is taken to have received a document which the Minister has given by one of the methods specified in s 494B. The Court held that the effect of the section was to identify the date of receipt of a document and that it was not open to a person to establish that in fact he received the document on another date. In other words, the effect of the section was not merely to create a rebuttable presumption of fact (see also Murphy v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 657 ; (2004) 135 FCR 550). The declaration which the applicant seeks is to the effect that s 494C creates nothing more than a rebuttable statutory presumption. As I understand it, the applicant acknowledges that, in order to succeed, she would have to persuade the Court not to follow the decision in Xie . She also acknowledges that only a Full Court could make the decision not to follow Xie . The second respondent, the Minister for Immigration and Citizenship, has filed and served a conditional appearance. They are as follows: There is no justiciable controversy or "matter" arising under a law made by the Parliament and therefore paragraph 39B(1A)(c) of the Judiciary Act is not a proper source of jurisdiction and the declaratory relief sought under s 21 of the Federal Court Act is not available. The relief sought should be refused in any event because an adequate alternative remedy is available, being a review by the first respondent, the Migration Review Tribunal, and, if appropriate, an application for constitutional writs directed to the Tribunal. At the beginning of her oral submissions, counsel for the second respondent also suggested that I could make an order under O 9 r 7 of the Federal Court Rules where I was satisfied that the applicant did not have a prima facie case on the merits. She also referred to this Court's statutory power to give summary judgment (see Federal Court Act s 31A). Neither of those matters is referred to in the notice of motion or supporting affidavit and, by the conclusion of submissions, I do not think they were pressed, or pressed strongly, by the second respondent. However, as they were mentioned, I will deal with them. Before considering the issues, it is necessary to set out the factual context in which the issues arise. That can be done fairly briefly. There does not appear to be any relevant factual dispute between the parties. The applicant is a national of Malaysia. In about the middle of December 2007, she completed a course of study in Australia as an overseas student. On 28 or 29 December 2007, she applied for a Class VC Subclass 485 Skilled (Provisional) Graduate Visa. On her application, she stated that she agreed to the Department contacting her via e-mail and she provided an e-mail address. She said in her affidavit, which was in the agreed book of documents, that she was in the habit of checking her e-mail account on a regular basis. On 22 September 2008, a delegate of the second respondent decided to refuse the applicant's application. The delegate refused her application on the ground that she did not have competent English. The delegate's decision and the reasons for it were given to the applicant by forwarding the documents to her e-mail address. The applicant's computer had been stolen from her home on 25 June 2008. She had contacted the police and officers had attended at her home. The applicant had been able to use a friend's computer to read her e-mail correspondence, including a letter dated 25 July 2008 sent by the Department, inviting her to provide relevant documents. She had provided documents to the Department in August 2008. Meanwhile, she had asked a friend in Malaysia to buy a new computer for her. He had done so on 24 September 2008. She had received the computer in Australia in late September 2008. She had difficulty obtaining access to her e-mails and did not do so until 16 October 2008. It was on that date that she saw, for the first time, the decision and reasons for decision of the delegate. The applicant sought legal advice on 20 October 2008. She received advice that an application for review by the Tribunal was out of time because the time limit was 21 days from the date she received notice of the decision (see Migration Regulations 1994 (Cth) reg 4.10), and because the Department was likely to take the view that she had received such notice on 22 September 2008 when the decision was sent to her e-mail address. She was also advised by her solicitors that, had she had the right to seek review by the Tribunal, she could have put forward further evidence of her English language ability. On 20 October 2008, the applicant's solicitors wrote to the Department, asking the second respondent to re-notify or treat as void the delegate's decision of 22 September 2008. The basis of the request was that the applicant had not in fact become aware of the delegate's decision until 16 October 2008, and that there was reason to think that she could satisfy the Tribunal that she had competent English. On the same day, the Department advised the applicant's solicitors that her request was refused. On 6 November 2008, the applicant made an application for review by the Tribunal. The following day, a Tribunal officer acknowledged receipt of the application. As I have said, the proceeding before this Court was issued on 14 November 2008. The Department made its decision on 22 September 2008 and is taken to have notified the visa applicant of the decision on 22 September 2008. As the Department's letter was emailed to the visa applicant, this date is the same day as the date of the Department's notification letter. This means that the last day you could have made the application for review was 13 October 2008. You made the application for review on 6 November 2008. We must receive your letter by 5 December 2008 . In Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365 (" Cell Tech Communications "), Lindgren J made a number of observations about the scope of O 9 r 7(1). His Honour said that the rule was to be distinguished from an application for summary dismissal (O 20 r 2) and an application for the striking out of pleading (O 11 r 16). To these I would add an application for summary judgment (Federal Court Act s 31A) and an order for dismissal which may follow the determination of a separate question under O 29 r 2. Lindgren J also made the point (at 370) that, although the other procedures he identified were to be distinguished from O 9 r 7, that was not to say that "considerations relevant to such applications may not be relevant to an application under one or other of the paragraphs of O 9, r 7(1)". The authorities establish that O 9 r 7(1) is not confined to cases where there has been service outside the jurisdiction. While O 9 r 7(1)(b), (c) and (d) refer to service of an originating process, (a) does not, and under that subparagraph an originating process may be set aside where the Court does not have jurisdiction to entertain the claim made in it, or where the originating process constitutes an abuse of process: F Sharkey & Co Pty Ltd v Fisher [1980] FCA 146 ; (1980) 50 FLR 130 ; 33 ALR 173 ; Cell Tech Communications (at 370). The second respondent's first ground (see [7] above) raises an issue of jurisdiction and, if made good, engages the power to set aside the originating process. By contrast, the second ground does not raise an issue of jurisdiction, and, even if made good, does not engage the power to set aside the originating process. The power in O 9 r 7 may be exercised where the originating process has been served outside the jurisdiction and the Court is satisfied that there is no prima facie case: Amust Computer Corporation Pty Ltd v Australia Entre Business Centres Pty Ltd (No 2) [1987] ATPR 40-829; Trade Practices Commission v The Gillette Company (No 1) [1993] FCA 496 ; (1993) 45 FCR 366 ; Southern Cross Airlines Holdings Ltd v Arthur Andersen & Co (A Firm) (unreported, Cooper J, 7 May 1998). That follows from the fact that, in certain cases, a prima facie case must be shown before service outside the jurisdiction is effective: O 8 r 3. I have not been able to find any direct authority addressing the submission by the second respondent that an originating process served within the jurisdiction may nevertheless be set aside because the applicant has no prima facie case on the merits. There is authority that it is not appropriate to exercise the power in O 9 r 7 on the ground that a party's pleadings are defective: Cell Tech Communications at 371 per Lindgren J. I do not think the power in O 9 r 7 extends to cases where the originating process has been served within the jurisdiction and a respondent claims that the applicant has no prima facie case on the merits. The rules, and now s 31A of the Federal Court Act, provide adequate procedures for a party who claims that the case against him or her has no substance. The second respondent's submission that I can order that the application be set aside under O 9 r 7 because the applicant does not have a prima facie case on the merits must be rejected. I would not permit the second respondent to call in aid s 31A of the Federal Court Act in circumstances where it was not referred to in the application or supporting affidavit and was only mentioned briefly in submissions. The important provision is s 39B(1A)(c) because s 21 gives this Court power to grant declarations only in those matters in which the Court has original jurisdiction. The second respondent contends that the Court does not have jurisdiction to entertain the application because there is no matter , in the sense of a justiciable controversy, within s 39B(1A) of the Judiciary Act . It is common ground that the word matter in that subsection has the same meaning as it has in Ch III of the Constitution (see Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1 ; (2001) 204 CLR 559 at 584-586 [50] , [51] and [54] per Gleeson CJ, Gaudron and Gummow JJ). The starting point in determining whether there is a matter within s 39B(1A) of the Judiciary Act is the early decision of the High Court in In re the Judiciary Act 1903-1920 and In re the Navigation Act 1912-1920 [1921] HCA 20 ; (1921) 29 CLR 257 (" In re Judiciary and Navigation Acts "). For there to be a matter , it is not enough that there be a legal proceeding; there must be "some immediate right, duty or liability to be established by the determination of the Court" (see at 265 per Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ). The Court said (at 267) that the power to confer jurisdiction under Ch III of the Constitution did not include a jurisdiction to "determine abstract questions of law without the right or duty of any body or person being involved". There have been considerable developments in the law relating to declarations since the decision in In re Judiciary and Navigation Acts . One of the leading High Court decisions in the area of declarations is Forster v Jododex Australia Pty Ltd [1972] HCA 61 ; (1972) 127 CLR 421. That case dealt with the statutory power of the Supreme Court of New South Wales in s 10 of the Equity Act 1901 (NSW) to make a declaration. Gibbs J said (at 437) that it was neither possible nor desirable to fetter the broad discretion in s 10 by laying down rules as to the manner of its exercise. His Honour said that, in general, the requirements identified by Lord Dunedin in Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 should be satisfied before the discretion to make a declaration is exercised. Beyond that there is no legal restriction on the award of a declaration. There is also a question of whether jurisdiction and discretion are "congruent" in relation to declaratory relief. That was said by French J in IMF (Australia) Ltd v Sons of Gwalia Ltd (admin apptd) (2004) 211 ALR 231 (" Sons of Gwalia ") at 243 [45] to be debatable. One issue which has arisen is the extent to which the jurisdiction to make a declaration in the exercise of federal judicial power is narrower, because of the need to show that a matter is involved, than it is in the case of the exercise of non-federal judicial power. This issue was mentioned by Brennan J sitting as a judge of this Court in Re Tooth & Co Ltd [1978] FCA 9 ; (1978) 31 FLR 314 ; 19 ALR 191 (" Re Tooth & Co ") at 330-331; 206 (see also Re Tooth & Co Ltd (No 2) [1978] FCA 36 ; (1978) 34 FLR 112 at 118-119 per Bowen CJ). Perhaps the point will not matter a great deal in practice because, in the case of non-federal judicial power, the considerations identified in the authorities as relevant will be, in any event, powerful discretionary considerations likely to lead to the refusal of declaratory relief. In any event, it is clear enough that there is no matter if there is no real controversy between parties. Various words have been used to describe what will not qualify as a matter on this ground: abstract question, theoretical question or hypothetical question. In Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 , Mason CJ, Dawson, Toohey and Gaudron JJ referred to the discretionary power to grant a declaration as being confined by considerations which mark out the boundaries of judicial power. It is a discretionary power which '[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise. ' However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have 'a real interest' and relief will not be granted if the question 'is purely hypothetical', if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen' or if 'the Court's declaration will produce no foreseeable consequences for the parties'. The considerations referred to in the above passage are essential to the presence of a matter and therefore the jurisdiction of this Court under s 39B(1A) of the Judiciary Act (see also Mentha v GE Capital Ltd (1997) 154 ALR 565 at 574 per Finkelstein J; Re Gidley [2006] FCA 102 ; (2006) 150 FCR 345 ; Purchas v Estore Pty Ltd (in liq) [2006] FCA 1222 ; (2006) 154 FCR 246). The second respondent's submission in this case is that there is no matter within s 39B(1A)(c) of the Judiciary Act because there is no real controversy between parties. He submits that the question raised, and the relief sought, is abstract or hypothetical. If that proposition is rejected, the second respondent does not put any other argument suggesting that the Court does not have jurisdiction to make the declaration sought. It is not said, for example, that the Court would never make the declaration sought because it is claimed in relation to circumstances that have not occurred and might never happen in the sense explained by Gibbs J in The University of New South Wales v Moorhouse [1975] HCA 26 ; (1975) 133 CLR 1 at 9-11, or because it will produce no foreseeable consequences for the parties in the sense explained by Mason J in Gardner v The Dairy Industry Authority of New South Wales (1978) 52 ALJR 180 ; 18 ALR 55 at 188; 69. In Re Tooth & Co , Brennan J addressed the difference between a hypothetical and a non-hypothetical question. His Honour was dealing with a case involving a declaration as to the lawfulness of future conduct. Basically, the question in every case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. If the prospects of the applicant engaging in the conduct are uncertain, the uncertainty may deprive the controversy of a sufficient immediacy and reality to warrant the making of a declaration ( Steffel v. Thompson [1974] USSC 53 ; (1973) 415 U.S. 452 , at p. 460). The degree of uncertainty as to whether the applicant will engage in the conduct proposed will usually determine whether the circumstances call for the making of a declaration. It involves a real question, namely whether IMF can lawfully proceed to do what it intends to do in using information on the Sons of Gwalia register to approach members and former members of the company with a view to joining them in possible recovery action against the company. The capacity of courts to declare that conduct, which has not yet taken place, will or will not be in breach of the law 'contributes enormously to the utility of the jurisdiction': Commonwealth of Australia v Sterling Nicholas Duty Free Pty Ltd [1972] HCA 19 ; (1972) 126 CLR 297 at 305; [1972-3] ALR 23. There is a real controversy and the question raised is not an abstract or hypothetical question. It seems to me important not to confuse considerations relating to the desirability of the Tribunal ruling on the issue and then the matter proceeding by way of judicial review through the seeking of constitutional writs. Those considerations are relevant, perhaps highly relevant, to whether this Court should, as a matter of discretion, entertain the application for declaratory relief. They do not go to the question of whether there is a matter . In this case, the facts necessary for determining whether a declaration should be made have occurred and are not in dispute. The second respondent claims that the applicant was given notice of the delegate's decision and the reasons therefor on 22 September 2008, and that by reason of s 494C of the Act (and the construction placed on that section in Xie ) the applicant's application for review by the Tribunal is not competent. The applicant wishes to pursue an application for review by the Tribunal with a view to having the decision of the delegate reversed. Those circumstances are sufficient to give rise to a matter . One submission made by the second respondent should be addressed before leaving this topic. It was suggested that this case was similar to Re McBain; Ex parte Australian Catholic Bishops Conference [2002] HCA 16 ; (2002) 209 CLR 372 in that the thrust of the application was an attack on the reasoning in Xie and that did not give rise to a justiciable issue (cf at 394-396 [22] and [26] per Gleeson CJ). That argument must be rejected because, in this case, the proper interpretation of s 494C of the Act has a direct effect on the competency of the applicant's application for review. I should make it clear that it was not suggested in this case that the provisions creating the alternative procedure or remedy evinced an intention to exclude the Court's power to make a declaration. On the face of it, there is a strong case for declining to make a declaration solely on the ground there is an alternative procedure or remedy available to the applicant. That alternative procedure or remedy involves pursuing the matter before the Tribunal and then by an application for constitutional writs in the Federal Magistrates Court. In fact, the Act provides that such an application for constitutional writs must be brought in the Federal Magistrates Court (see s 476 and s 476A). The difficulty for the second respondent is that this is a discretionary matter and I do not think the procedure in O 9 r 7 can be used to set aside an originating process on discretionary grounds. For reasons I have given, I think O 9 r 7(1)(a) is confined to cases where the Court does not have jurisdiction or the originating process is an abuse of process. Whether it is open to the second respondent to utilise a different procedure which will enable him to ventilate the issue as a preliminary question is a matter for him. I will hear the parties as to costs. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

application for skilled (provisional) graduate visa delegate of second respondent refused application decision and reasons transmitted to applicant by e-mail applicant taken, under legislative provision, to have received document at end of day on which document transmitted applicant first saw decision and reasons after time period for application for review by first respondent had elapsed, due to applicant's computer having been stolen and subsequent difficulty in obtaining access to e-mail second respondent's department refused applicant's request to re-notify or treat as void delegate's decision tribunal wrote to applicant, noting possible ineligibility of application applicant brought proceeding seeking declaration that relevant legislative provision creates rebuttable presumption as to date of receipt of document application by second respondent to set aside originating process whether originating process can be set aside because applicant has no prima facie case on merits whether there is a matter in sense of justiciable controversy whether there are jurisdictional limits on power of court to make declaration, aside from statutory intention to exclude remedy whether jurisdiction to make declaration in exercise of federal judicial power is narrower than in case of non-federal judicial power migration

The Superannuation Complaints Tribunal is constituted by s 6 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) (the Act). It has as its objectives and functions the conciliation of complaints made under that Act or, if a complaint cannot be resolved by conciliation, the review of the decision or conduct to which the complaint relates: ss 11 and 12 . A complaint may be made to the SCT under ss 14AA , 14 , 14A , 15A , 15B , 15CA , 15E , 15F , 15H or 15J of the Act. 2 In this case, the SCT reviewed two decisions; one being that of the first respondent, Australian Super Pty Ltd (formerly STA) (the trustee); and the other of the second respondent, Colonial Mutual Life Assurance Society Limited (the insurer) who had made decisions rejecting the applicant's claim for a Total Permanent Disablement Benefit (TPD). 3 It would seem the insurer rejected the applicant's claim on 18 August 2005. It internally reviewed that decision but by letter dated 27 September 2005 maintained that rejection. 4 The trustee rejected the applicant's claim on 3 November 2005. The Claims Review Committee of the trustee reviewed that decision and resolved on 16 December 2005 to maintain its decision to decline the applicant's claim on the ground that "there was not sufficient evidence to support the view that you [the applicant] met the definition of Total and Permanent Disablement. The appeal is, of course, an application in the original jurisdiction of the Court: Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 581. 6 The SCT has been appropriately joined as the third respondent to the appeal: SAAP v Minister of Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 228 CLR 294 at [43] , [91], [153] and [180]. It has filed a submitting appearance which is also appropriate: The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13 ; (1980) 144 CLR 13. On 9 February 1999 the appellant joined the ANZ Super Advantage Superannuation Fund (ANZ) whilst employed by Bradflo Pty Ltd. He was in that employment from 4 January 1999 until 13 August 1999. He was a member of ANZ and was covered by the ANZ's Insurance Policy which covered its members for TPD and death. His last insurance premium was deducted from his account on 9 September 2003. He withdrew all his superannuation on 26 September 2003 on the basis of financial hardship. 8 On 6 November 1999 he joined the trustee as a member of its superannuation fund whilst employed as a sales representative for Ness Security Products Pty Ltd. He was covered by a Group Life Insurance Policy No. K003779 issued by the insurer. 9 On 9 April 2001 he commenced employment with Rexel Australia Pty Ltd as a sales clerk. On Friday, 19 April 2002, whilst riding a motor cycle to his home from work, he was involved in an accident. He claims that as a result of that accident he suffered injuries to his ankles, right knee and lower back. He said he consulted a general practitioner on Sunday, 21 April 2002 and was prescribed painkillers and anti-inflammatory medication. He said he was advised by "GP doctors and took painkillers as well as muscle relaxants" and remained in his employment until 2 August 2002. He claims that he resigned on that day because of back pain, ankle pain, nightmares and "an extreme amount of pressure from management". 10 In October 2002, on his general practitioner's advice, he says, he commenced employment at Mayne Armaguard. He said that that job involved very light duties and no stress. Nevertheless, he said he was unable to continue in the employment as his pain was too intense to handle even though he had been treated with painkillers and muscle relaxants. He resigned in November 2002. 11 He became in receipt of a Disability Support Pension from Centrelink on 13 January 2003. 12 The applicant claims that as a result of pressure exerted by Centrelink and as part of a placement by the Commonwealth Rehabilitation Service, he commenced work in August 2003 in paid employment with Northside Mini Mix. He said that he resigned from that employment on 30 June 2004 because of pain and suffering. He has not been employed since that time. 13 On 6 August 2003, whilst the applicant was still a member of ANZ and covered by TPD Insurance, the applicant lodged a claim for TPD against ANZ which was rejected by Tower Australia Ltd (Tower), the insurer to ANZ, on 29 August 2005 and by ANZ on 26 September 2005. The claim against that trustee and insurer was for $81,000. "Total and Permanent Disablement" means the Life Insured. 15 ANZ rejected the applicant's claim on the basis that the applicant was not eligible to make a claim because his cover had lapsed on the relevant date. The applicant's last insurance premium was deducted from his account on 9 September 2003 and he had withdrawn his entire benefits on 26 September 2003 on the basis of financial hardship. ANZ noted that as the relevant TPD claim form dated 6 August 2003 recorded that the applicant had only ceased work entirely on 30 November 2003 (actually 2002), and that the applicant had worked with Northside Mini Mix until 30 June 2004, he was ineligible for any TPD benefit because he had withdrawn all of his benefits on an earlier date, viz 26 September 2003. 16 Tower decided that the applicant ceased to be entitled to any TPD benefit when he ceased paying premiums (being 9 September 2003) and any entitlement needed to have accrued before September 2003. Tower stated that as the applicant was able to work after September 2003, he could not have been totally and permanently disabled according to the relevant definition. 17 On 20 February 2006 the applicant complained to the SCT that the decisions of ANZ and Tower were unfair or unreasonable. The applicant submitted to the SCT that due to the motorcycle accident he suffered impact damage to his ankles, his right knee and jarred his lower back. He outlined the medical treatment he had received for those injuries and submitted that in denying his TPD claim Tower had labelled his general practitioner and an unbiased Federal government doctor "Liars". Treating Doctor's Report for Centrelink completed by Dr RS in January 2003. 2. Initial Medical Report Form from Dr RS, dated 14 July 2003. 3. Report of Dr GR after assessment of applicant for Centrelink purposes on 10 February 2003. 19 The SCT observed that there was very little medical evidence concerning the extent of the applicant's disabilities. It stated that there was no medical evidence about the cause of the applicant's claimed disability. The applicant had not been assessed by an orthopaedic specialist nor had he undergone a CT scan or an MRI and it had not been determined whether the motorcycle accident in 2002 aggravated his Scheuermann's disease, which he was diagnosed as suffering in 1994. 20 The SCT found that despite the applicant's TPD form stating that he had a motorcycle accident in April 2003, which was the basis upon which Tower proceeded, the accident had occurred in April 2002. The SCT found that Tower suspected that the applicant may have manufactured his claim because of the discrepancy in the dates and therefore did not thoroughly investigate his alleged disabilities. It consequently decided that the making of a decision in those circumstances could not have been said to operate fairly and reasonably in relation to the applicant. 21 The SCT held that ANZ and Tower did not have the necessary evidence to conclude that the applicant did not meet the definition of TPD. Neither had sufficiently clarified the facts surrounding the applicant's accident and did not obtain appropriate specialist medical reports taking account of both the impact of the accident and the Scheuermann's disease. The SCT held that the two decisions therefore operated unfairly and unreasonably in relation to the applicant in the circumstances. The Insurer and Trustee to assess the Complainant's claim for payment of a TPD benefit in light of the correct facts in relation to the Complainant's accident and work history and the further medical opinion/s obtained in accordance with these directions. 24 On 29 July 2003 the insurer received the applicant's claim for TPD against the trustee, the STA Superannuation Fund. 27 The applicant was employed with Rexel Australia Pty Ltd until 2 August 2002. As the applicant's participating STA employer, it paid his final contribution to the trustee for the period ending 30 August 2002. That final payment was received by the trustee on 19 September 2002. The trustee therefore determined that the applicant's insurance cover ceased on 28 February 2003, six months after the date on which his last contribution was paid. 28 The trustee declined the applicant's TPD claim because the applicant had worked after his insurance cover had ceased on 28 February 2003. In that regard, the applicant did not meet the definition of TPD. 29 The insurer also refused the applicant's claim as he had earned an income and demonstrated work capacity after the date for which he was claiming to be totally and permanently disabled and therefore did not meet the criteria set out in the relevant insurance policy. 30 On 28 April 2006 the applicant lodged a complaint with the SCT claiming that those decisions were unfair or unreasonable. 31 On 23 March 2007 the SCT dismissed that complaint. It is that decision which is the subject matter of this appeal. 32 Section 14(2) of the Act provides that a person who is a member of a regulated superannuation fund may make a complaint to the SCT that a decision made by a trustee is or was unfair or unreasonable: s 15(1)(b). If such a complaint is made, the parties to the complaint are to be the complainant, the trustee and, if the subject matter of the complaint relates to a disability benefit under a contract of insurance between the trustee and an insurer and the Tribunal decided that the insurer should be a party to the complaint, the insurer: s 18(1). 33 Section 37 identifies the SCT's powers if a complaint is made under s 14. In particular, the SCT has all the powers, obligations and discretions that are conferred on the trustee: s 37(1)(a). If an insurer has been joined as a party to the complaint under s 14 , the SCT, when reviewing the trustee's decisions, must also review any decision of the insurer that is relevant to the complaint and, for that purpose, has all the powers and obligations that are conferred on the insurer: s 37(2). 34 Section 37(3) provides for the relief that the SCT may give after review and determination of the decision. The SCT may affirm the decision; remit the matter to which the decision relates to the trustee or insurer or other decision maker; vary the decision; or set aside the decision and substitute a decision for the decision so set aside. Centrelink Medical Certificate completed by Dr BC on 13 August 2002. 2. Treating Doctor's Report for Centrelink completed by Dr RS in January 2003. 3. Initial Medical Report Form from Dr RS (completed for the SCT's first decision), dated 14 July 2003. 4. Report by Dr RS also of 14 July 2003, completed on the Insurer-generated form "Claim for Total and Permanent Disablement benefits". 5. Reports provided by Dr RS to the insurer on 31 March 2005 including all medical notes regarding consultations the applicant had with doctors in his surgery from 1990 until July 2003. 6. Medical Assessment Report of the applicant by a Centrelink Doctor for Centrelink purposes on 20 February 2003 (some pages missing). 7. Report of general practitioner, Dr AR of 11 October 2004, obtained at the insurer's request. 8. Health Insurance Commission reports relating to the applicant including his Medicare claims history report and Pharmaceuticals Benefit Scheme information from 1 January 2002 until 17 December 2004. 9. Video surveillance of applicant taken on 14 July 2005 and from 4-7 August 2005. 38 The applicant provided the SCT with detailed submissions. He claimed that in his motorcycle accident his ankles took the full force of the impact and that his right knee and lower back were also jarred and damaged by the impact. The applicant said that he could not continue working because of pain, feelings of animosity towards his bosses, nightmares due to the accident and being unable to sit or stand at work. He complained that he had developed sleep apnoea, and that due to stress from his employer and the "defamatory rulings by the superannuation company", he suffered several psychological and psychiatric illnesses. The applicant said that he had not seen an orthopaedic surgeon. He said that by denying his TPD claim the insurer was labelling his general practitioner and an unbiased Federal Government doctor as "Liars". 39 The SCT considered the medical evidence and noted that Dr RS's evidence was inconsistent both with other reports of Dr RS and with Dr BC's evidence, and it stated that it preferred the evidence of Dr BC. The SCT accepted that the applicant was granted a disability support pension in January 2003, however, it noted that the criteria for obtaining such a pension were quite different to those for a TPD benefit. Although the applicant had stated that his sleep apnoea meant that he could not drive and that the HIC reports confirmed he had undergone Sleep Studies in June 2004, video surveillance which was undertaken of the applicant in July and August 2005 showed that he was capable of driving without restriction. The video surveillance evidence contradicted the applicant's submission that he required assistance to help him with his daily activities, including driving. The SCT concluded that this may have meant there had been some improvement in his condition. 40 The SCT held that there was no convincing medical evidence that supported the applicant's decision to cease work due to his back condition in late 2002. The SCT found that he had resigned from this position for his own reasons. The SCT held that due to the applicant's age and the sedentary nature of his work, that there was a high possibility that he could return to some form of employment. The SCT concluded that although some of the medical evidence was incomplete, there was sufficient evidence for it to be satisfied that the decisions of the insurer and the trustee were fair and reasonable. It therefore affirmed the decisions under review pursuant to s 37(6) of the Act. 41 Section 46(1) of the Act limits appeals to this Court to a question of law. This provided for appeals from the Board of Review which "involved" a question of law. The result was that if some question of law was involved, the whole of the decision of the Board was open to review, not merely the question of law ... This no longer will be the case with appeals brought to this court under s 44 of the AAT Act. The existence of a question of law is now not merely a qualifying condition to ground the appeal, but also the subject matter of the appeal itself. (Footnotes omitted. 43 The questions of law must be stated with precision: Australian Securities & Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244 ; (2003) 133 FCR 290. Order 53B rule 2 of the Federal Court of Australia Rules 1979 (Cth) provides that O 53, with any necessary changes, applies for appeals from the SCT. Order 53 relates to appeals from the Administrative Appeals Tribunal (the Tribunal). In particular, O 53 r 3(2)(b) provides that the notice of appeal shall state the question or questions of law to be raised on the appeal. 44 It is the respondent's contention that this notice of appeal does not comply with O 53 r 3(2)(b) but, more particularly, does not raise any question of law. 45 In Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 322 ; (1993) 43 FCR 280 , the Full Court of the Federal Court sought to identify from previous decisions what might amount to a question of law. That decision was considered by the High Court in Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36 ; (1996) 186 CLR 389. The question whether a word or phrase in a statute is to be given its ordinary meaning or some technical or other meaning is a question of law. 2. The ordinary meaning of a word or its non-legal technical meaning is a question of fact. 3. The meaning of a technical legal term is a question of law. 4. The effect or construction of a term whose meaning or interpretation is established is a question of law. 5. The question whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law. But they lose a degree of their utility when, as in the present case, the phrase or term in issue is complex or the inquiry that the primary decision-maker embarked upon is not clear. 47 Here the inquiry which the Tribunal had to undertake was clear and the matter was not complex. The Tribunal needed to determine whether it was satisfied that the decisions under review were fair and reasonable under the circumstances. Inconsistent findings in two determinations of the same matter. b. Failure to take into account all the facts. c. Errors and incorrect inferences relating to the facts. d. Withholding of natural justice. The SCT made a finding on the 30 October 2006 against the decision by a different Insurer and Trustee for the same matter. b. The SCT failed to take into account all the facts in the matter and took the opinion of people with no medical qualifications who made incorrect inferences towards abilities. c. The SCT made numerous errors in their determination to affirm the decision of the Insurer and Trustee. d. The determination of the SCT withheld natural justice and is biased against and judgemental toward the applicant, as well as not being fair. e. The SCT made the determination by relying upon inadmissible evidence. Failure of the SCT to consider all the Facts of the matter. 2. Errors made by SCT in determination. 3. Inconsistent Determinations of the SCT. 4. Inadmissible Evidence relied upon by SCT. 5. Withholding of Natural Justice. 6. Denying Procedural Fairness. 7. Section 37(6) of the Complaints Act --- Not applicable. 8. Section 37(3) (4) (5) of the Complaints Act --- Should have been applied. 9. Conspiracy of Insurer/Trustee. The applicant's oral presentation addressed the outline of argument. 51 The respondents were content to address the expanded version addressed by the applicant in the outline of argument and in his oral presentation. 52 In a sense, to do so is to ignore the cases to which I have referred which have considered O 53 r 3(2) and which have determined that the notice of appeal should contain a precise statement of the questions of law which are sought to be agitated. However, the respondents should not be criticised for taking a practical approach in the circumstances of this case. I have merely made the observation because if the respondents had sought to limit the applicant to the grounds of appeal in the notice of appeal I would have acceded to that request. 53 However, I shall deal with each of the asserted grounds of appeal in the outline of argument seriatim. 1. 55 A failure to take into account particular facts will only raise a question of law if the Tribunal was bound to take that fact or that matter into account: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24. The applicant complained that the SCT should not have taken into account the video surveillance evidence because it was in digital format. He said that the video might have been altered, cropped, edited or corrupted in its conversion to the digital format. He also complained that the SCT failed to take into consideration that the medical report from Dr BC was based on a short term medical treatment. It failed to take into account that Dr BC was a general practitioner, not a specialist. It failed to take into account any and all pain levels experienced in the activities seen on the video footage. He said that the SCT could not know what medication he had taken on that day or prior to being able to drive his vehicle. The SCT failed to take into account the disadvantage that he had been placed in by receiving his disability support pension. He said also that the SCT should not have taken into account the report of the private investigators. They were not signed and therefore they were inadmissible. 56 The Tribunal's powers, for complaints under s 14, are identified in s 37. In particular, the Tribunal is obliged to affirm a decision in relation to a complainant if satisfied that the decision was fair and reasonable in the circumstances. 57 The Tribunal is not compelled or obliged to take into account any particular consideration in determining whether or not a decision was fair and reasonable. 58 The matters about which the applicant complained were not matters which the SCT was bound to take into account. However, they were matters which were relevant to the inquiry which the SCT was bound to undertake. It was for the Tribunal to determine whether or not the decision under review was fair and reasonable and the SCT took into account the matters relevant to the applicant's claim for total and permanent disability. 59 Effectively, this "ground" seeks a merits review and does not raise a question of law. 2. The applicant did not identify what was said to be the errors except, generally, that the SCT did not reach the correct conclusion. This, like the first "ground", is an invitation to this Court to conduct a merits review. The invitation has to be declined because of the provisions of s 46 of the Act. 3. 62 In this "ground" the applicant is referring to the SCT's 30 October 2006 decision. 63 There is in fact no inconsistency between the two decisions. In the decision made on 30 October 2006 the SCT found that the insurer had misinformed itself about the date of the accident and proceeded to make a decision without having before it all of the medical evidence. 64 When the decision by the SCT was made which gives rise to this appeal, the SCT had before it evidence which had not previously been available to it. A medical certificate dated 13 August 2002 from Dr BC. That medical certificate stated that the applicant was unable to work from 1 August 2002 until 1 September 2002 because of "work related stress problems with management". It did not assert that he was unable to work as a result of his injuries suffered in the motor bike accident. It also asserted that the applicant was unlikely to have any long-term problems with lifting which would seem to be inconsistent with the claimed physical injuries. It also asserted that the applicant could work at least 8 hours per week. 2. A print-out from the Pharmaceutical Benefits Scheme of medication dispensed to the applicant between 1 January 2002 and 17 December 2004 which indicated that he was not having dispensed anti-inflammatory and strong pain-killing medication during 2002. 3. Health Insurance Commission records which indicated that the applicant did not seek treatment for any physical injuries in the month of April 2002 or in November 2002 when he ceased working for Mayne Armaguard. 4. Video surveillance evidence taken in July and August 2005 inconsistent with the applicant's complaints. 65 Clearly, the evidence which was before the SCT which gave rise to this decision was substantially different and more complete than that considered by the SCT in the 30 October 2006 decision. 66 However, even if there were inconsistencies between the two decisions, that would not, in my opinion, raise a question of law. It would, like the first two grounds, be an invitation to this Court to embark on a merits review. 4. 68 Presumably, the applicant is complaining as he says in the grounds that the Tribunal took the opinion of people with no medical qualifications. He also said in his oral submissions that the video footage was inadmissible because of its digital format. He said the reports of private investigators relating to this video footage were unsigned. There is nothing in either of those points. 69 This is not a question of law. The SCT was not bound by the rules of evidence: s 36 of the Act. It is entitled to inform itself of any matter relevant to the review in any way it thinks appropriate: s 36(c) of the Act. 5. Withholding of Natural Justice and 6. They appear to be paragraph 2d of the questions of law and paragraph 4d of the grounds in the notice of appeal. 71 If the SCT had denied the applicant procedural fairness, or did not offer the applicant natural justice, that could raise a question of law. 72 The difficulty the applicant has is that he has not precisely identified the question of law which is said to be raised. During his oral submission he said that natural justice was withheld because the SCT watched the video and judged him on that. He said he was denied procedural fairness by the video being admitted. The SCT did not inform him that Australian Super Pty Ltd was to be joined and that it had changed its name. He said that he was not given the opportunity to state his case adequately. The SCT was aware and knew that I was on limited income, disability support pension, your Honour, and yet placed no limitations on the amount of money or resources that the trustee and insurer were able to use to make their submission. I believe that was not fair in that matter because I am on limited funds, and I don't have the same resources that a big multi-national conglomerate does like that. 73 None of the matters which the applicant identified in his submissions amount to denial of procedural fairness or a failure to provide the applicant with natural justice. 74 In fact, the applicant made a written submission to the SCT. The SCT provided him with the submissions made by the trustee and by the insurer. The applicant's submissions were provided to the trustee and to the insurer but neither made further submissions in reply. The applicant was notified accordingly. The submissions made by the parties were considered by the SCT in the course of making its decision. The applicant complained that he was not given an oral hearing. However, there is nothing in that complaint. The SCT had to proceed in accordance with s 34(1) of the Act and consider the matter without proceeding to an oral hearing. 75 The applicant has not identified any facts which give rise to the claimed question of law. 7. Section 37(6) of the Complaints Act --- Not applicable and 8. I have already identified s 37(6) earlier in these reasons. 77 This claimed question of law is no more than an assertion that the SCT should not have come to the decision that it did. 9. He gave no details of the conspiracy or how it might raise a question of law. 79 The applicant has not raised any question of law which would provide him with a right to appeal to this Court pursuant to s 46 of the Act. 81 The trustee's original consolidated Trust Deed is dated 24 June 1997 (1997 Trust Deed). That Deed was amended by a Deed of Variation dated 29 May 2001 and by a further Deed of Variation approved at a meeting of its directors on 30 May 2002 and executed on 27 June 2002 (2002 Trust Deed). It was subsequently varied on 19 December 2002 (and executed on 26 February 2003), but that variation is not relevant on this appeal. The Deed which is relevant to this appeal was the 2002 Trust Deed adopted on 29 May 2001 and varied as executed on 27 June 2002. The Tribunal is of the view that the version of the Fund's trust deed that is relevant in this matter is that which was in effect on the date when the complainant ceased employment with the Employer (i.e. 2 August 2002), being the Trust Deed as amended to 27 June 2002 (Trust Deed). I will return to that statement. 83 In paragraph [14] of its reasons the SCT set out the definition of interpretation of total and permanent disablement. The definition which it has included is that definition which is in the 2002 Trust Deed but it is incorrectly numbered by reference to the 1997 Trust Deed. 86 The only difference between the definition of total and permanent disablement in the two deeds is that in the 1997 Trust Deed after the word "employed" in the third sentence are the words "by an employer" so that the introductory words read "... whilst the member was employed by an employer ...". 87 The definition which is referred to in the SCT reasons therefore is the definition in the 2002 Trust Deed, but incorrectly numbered as if it were the definition in the 1997 Trust Deed. 88 The SCT also referred to the trustee's powers to take out insurance and the cover which would be available to a member for total and permanent disablement benefit. The two definitions which are referred to in that regard are from the 1997 Trust Deed. 89 Notwithstanding the SCT has made reference to the wrong definitions in relation to insurance and total and permanent disablement benefit, that does not impact upon the integrity of its decision for two reasons. First, the definitions of both "insurance" and "total and permanent disablement benefit" are almost identical in the two deeds and not dissimilar to affect the SCT's reasoning process or the decision arrived at. Secondly, and even more importantly, neither of those definitions became relevant in the SCT's reasons because the SCT found that the applicant did not come within the definition of total and permanent disablement. 90 It follows, therefore, that the error in numbering the definition of total and permanent disablement and the wrong reference to the power to insure and the wrong reference to the total and permanent disablement benefit does not impact upon the SCT's decision. 91 I raised with counsel for the respondents two other matters. 92 The SCT also made reference to the definition of total and permanent disablement in the life insurance policy operating between the first and second respondents. 93 Condition 13 of the relevant policy defines "total and permanent disablement". This has been referred to above: [25]. 94 In its reasons, the SCT did not indicate in terms whether it was determining the applicant's claim of total and permanent disablement against the definition contained in the Trust Deed or the definition contained in the insurance policy. 95 Because of the definition of total and permanent disablement in the 2002 Trust Deed itself (set out at [24] above), the SCT needed to determine the applicant's eligibility by reference to the definition of total and permanent disablement in the insurance policy. 96 It is implicit, in my opinion, in the SCT's reasons, that it did have regard to the definition contained in the insurance policy although it does not expressly say so. If it were otherwise, it would not have included a reference to that definition. It appears to me that it has included the definition in the insurance policy so as to comply with the definition in the 2002 Trust Deed. 97 In any event, even if it determined the applicant's eligibility as against the definition in the 2002 Trust Deed, the result would have been the same because there is no difference in the meaning of the definitions in the 2002 Trust Deed and the insurance policy. 98 The second matter I raised is more substantial. As I have said, the SCT said in paragraph [13] of its reasons that the relevant version of the fund's Trust Deed is the date when the complainant ceased employment with the employer, namely 2 August 2002. 99 In my opinion, that is not correct. The procedure under s 37 of the Act is to review the decisions made by the trustee and insurer. The SCT needs to determine whether those decisions were correct when they were made. Counsel for the applicant submitted that the relevant time to consider whether the applicant was TPD within the meaning of the contract of insurance was 19 February 1999, that being six months from the date on which he last worked. I do not agree. What the Tribunal had to review and either affirm, vary or set aside was the decision of the Trustee made on 23 December 1999 and subsequently reviewed and affirmed by the Trustee on 1 June 2000 and 28 June 2000. Although not explicitly stated, it would seem that the Tribunal regarded its task as reviewing the decision of the Trustee as at the last mentioned date, an approach I think was correct. The system of review under the Act is to be distinguished from claims made by an insured under a policy: cf Giles v National Mutual Life Association of Australasia Ltd (1986) 4 ANZ Ins Cas 60-751. See also Samaras v Australian Retirement Fund Pty Ltd [2007] FCA 1323 per Gordon J at [18]. 100 In this case, the SCT was obliged to consider, on review, whether the decisions were fair and reasonable when they were made. 101 The decisions were finally made by the insurer on 27 September 2005 and the trustee on 16 December 2005. 102 It seems to me therefore that the SCT conducted its review by reference to the wrong date. Moreover, there was no evidence as to the terms of the Trust Deed or the insurance policy as at the date when the review needed to be conducted. 103 In those circumstances, the SCT has made an error of law by reviewing the applicant's entitlement as at the wrong date. 104 In those circumstances, the appeal must be allowed and the decision made by the SCT quashed. The applicant's complaint should be remitted to the SCT for determination according to law. I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

appeal from a determination of the superannuation complaints tribunal where the sct affirmed decisions of the first and second respondent that the applicant was not totally and permanently disabled whether any questions of law raised on appeal whether the sct considered the relevant time in determining whether the applicant was totally and permanently disabled appeal allowed. superannuation

Relevantly, the issue between the parties, as determined by Gray J in favour of the Union, was whether the Victorian Arts Centre was a premises of a state government instrumentality for the purposes of clause 8A of the Building Services (Victoria) Award 1994 ("the 1994 Award") and clause 15.3 of the Building Services (Victoria) Award 2003 ("the 2003 Award"). His Honour held that it was because the Victorian Arts Centre Trust was a state government instrumentality for the purposes of the 1994 Award and the 2003 Award. 2 Prestige has appealed from his Honour's judgment and seeks a stay of his Honour's orders. Prestige relies on the affidavit of John Louis Lazzari sworn 23 February 2006. The Union relies on the affidavit of Lisa Marie Chesters sworn 3 March 2003. 3 Amongst other things, Mr Lazzari's evidence was that Prestige was unable to pay the monies that his Honour had ordered it to pay to its 27 employees unless it borrowed funds from its parent company. He also deposed that "if Prestige is forced to pay the judgment amount to the named employees, it is very unlikely that it will ever be able to recover them if Justice Gray is ultimately overturned". In support of this proposition, he referred to the fact that all the relevant employees were paid at the minimum wage award and all but one was engaged by Prestige on a part-time basis. Although the company had not had any difficulty in the past in recovering overpayments from any of these employees, he deposed to difficulties that the company had in recovering payments from its employees in the past. 4 Ms Chester's evidence was that she had spoken to all but three of the relevant employees. She said that they had indicated that they hoped to enjoy the monies identified by the Court as owing to them as soon as possible and that, in the event that the judgment was overturned on appeal, then they were able and willing to pay the monies back. 5 The Court has the power to grant a stay in its discretion pursuant to O 52 r 17 of the Federal Courts Rules. The principles governing applications for a stay are settled. It is sufficient for the respondent to demonstrate that there is a reason or it is an appropriate case to warrant the exercise of the discretion: see Powerflex Services Pty Ltd v Data Access Corp (1996) 67 FCR 65 at 66. 6 The prima facie assumption is that the judgment appealed from is correct and the Court should not deprive a litigant of the benefit of a judgment in its favour. Counsel for the Union relied on this and opposed the grant of a stay upon the basis, first, that the appeal disclosed no arguable ground of appeal, alternatively, the prospects of success were weak; secondly, Ms Chester said all but three of the employees had indicated that they would repay the money if called upon to do so pursuant to a judgment of the Court on appeal; and, thirdly, the evidence for Prestige did not rise above speculation as to the difficulty of recovery. 7 According to counsel for Prestige, it proposed to challenge the judgment under appeal on two bases, first, that as a matter of construction the Victorian Arts Centre is not a premise of a state government instrumentality for the purposes of the relevant industrial awards in the ordinary sense of those words; and, secondly, as understood in context, having regard to relevant history, it was not such an instrumentality. 8 Whether or not the appeal is ultimately successful is a matter for an appellate court. The most that can be said at this stage is that the appeal does not justify the epithet "hopeless" as disclosing no tenable ground. I accept that the appeal is genuine and arguable. 9 Counsel for Prestige further submitted that, as to the exercise of discretion, the Court should take into account the likely difficulty of recovering the monies paid to 27 different individuals, who in all probability were of modest means. Counsel submitted that the cost and inconvenience of recovering the monies was disproportionate to the detriment they suffered by not now having the fruits of a judgment, to which they were not in any event parties. There was a real risk, so counsel submitted, that the appeal would be rendered nugatory by the fact that monies could not be recovered if the appeal were successful. 10 Notwithstanding Ms Chester's statements about what she had been told by the employees, I accept that, as the appellant has submitted, it is likely that Prestige will find it difficult to recover at least some of the monies paid to the 27 individual employees should its appeal succeed. There is a real risk that it would not be able to recover all the monies it is presently obliged to pay under his Honour's judgment. 11 At the same time, as noted above, Prestige has adduced evidence that it is presently in a net debt position and will have to borrow the funds to pay the monies under his Honour's orders. 12 In these circumstances, it is appropriate that the appellant have its stay on the order in paragraph 4 of the orders of Gray J made 23 January 2006, upon the condition that the monies the subject of this order be paid into an appropriate account, which the parties agreed was an interest-bearing account of the Federal Court of Australia Litigants' Fund. I would order accordingly.

stay of orders pending appeal appellant claimed it would be unable to recover monies paid if it were successful on appeal stay granted on condition relevant monies are paid into court pending appeal practice and procedure

That rule requires the Court to have regard to the matters in O 6, r 17(2). The basis upon which AFMA wishes to intervene is quite limited. It would not be an overstatement to describe it as a lobby group for the industry. Its role is to represent the interests of its members and advocate what it describes in its evidence as a "sensible and proportionate regulation of the wholesale banking and financial markets". 4 It is an association made up of 141 direct and indirect participants ('Members'). Citigroup is a Full Member and has a representative on the AFMA board. ASIC is an Affiliate Member. 5 One of AFMA's core functions is to seek government and regulatory policy outcomes that facilitate certainty and confidence in how the markets operate. It has been an active participant in consultations with Government bodies and ASIC on the implementation of s 912A(1)(aa) of the Corporations Act . 6 AFMA is a member of the International Council of Securities Associations. It has contributed to ASIC's work. It has established a Conflict of Interest Working Group, which has a specialised role to consider conflicts of interest policy and regulation and its impact on Members' business. 7 In ASIC media releases and addresses, the Chairman and Deputy Chairman have made reference to the significance of the present case for the securities industry. Of particular interest is whether Citigroup had adequate arrangements for managing inside information and dealing with conflicts of interest. Needless to say, ASIC and Citigroup, as well as other large investment banks, have a strong interest in these issues. 8 AFMA submits that it is uniquely placed to make submissions on these issues from a broader perspective than the parties to the proceedings, in particular in relation to the implications for the entire wholesale banking and financial markets. It is submitted that this would be a contribution which is "useful and different" within O 6, r 17(2)(a). Mr Hutley SC, for AFMA, submits that this contribution would be unaffected by tactics and forensic considerations which necessarily enter into the approaches of the immediate parties to litigation. 9 He emphasised that AFMA's role would be limited to making written and oral submissions based upon the competing factual contentions that are likely to be put by the opposing parties at the conclusion of the evidence. AFMA's submissions would be based on assumptions as to the relevant factual findings. In particular, AFMA would not advance any factual findings to be made by the Court. 10 Mr Stevenson SC, for ASIC, opposes intervention. He submits that it is inappropriate for a body, which is in essence a lobby group for the industry, to intervene. He says, with some force, that AFMA's position cannot really be distinguished from that of other large institutions which comprise its membership. Of course, they have a substantial interest in the outcome, but on his submission that is not a basis for permitting them to intervene. I accept Mr Stevenson's submission that it would be inappropriate to permit AFMA to intervene so as to put submissions as to the proper application of the law to the facts of the case, whether on competing factual assumptions or otherwise. 11 Mr Hutley draws attention to the remarks of Branson, Lindgren and Finkelstein JJ in Sharman Networks Ltd and Others v Universal Music Australia Pty Ltd and Others [2006] FCAFC 178 ; (2006) 155 FCR 291 at [8] . Their Honours recognised that industry associations whose members' interests may be affected, directly or indirectly, by the outcome of litigation, may be an appropriate class of interveners: see also Dorajay Pty Ltd v Aristocrat Leisure Ltd [2005] FCA 1483 ; (2005) 147 FCR 394 at [22] - [24] . 12 I accept that the limited form of intervention proposed by AFMA would not unreasonably add to the length of the hearing nor would it unreasonably interfere with the ability of the parties to conduct the proceedings as they wish. However, I am not satisfied, on the material put to me this morning, that AFMA's contribution will be useful or different from the contributions of the parties. The parties are very well represented by substantial teams of counsel and solicitors. I think it is likely that the matters to which AFMA would refer will be addressed by Citigroup. 13 Moreover, I do not consider that ASIC will be influenced by tactical or forensic considerations which would be necessary to be off-set by submissions made by AFMA. ASIC's duty as a litigant is analogous to that of the executive branch of Government. As to this, Mahoney J said in P. & C. Cantarella Pty Ltd v Egg Marketing Board for the State of New South Wales [1973] 2 NSWLR 366 at 383: "it is the duty of the executive to assist the Court to arrive at the proper and just result". 14 However, against the possibility that in the course of the proceedings I should come to the view that AFMA's submissions would provide a useful and different perspective, I will reserve liberty to it to renew this application. 15 I have no doubt that AFMA will closely observe the conduct of the proceedings so that if, at or toward the close of the hearing, it wishes to renew its application it should be well placed to do so. 16 I think the appropriate order is I stand this motion over generally with liberty to apply on 48 hours' notice. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson J.

(no. 3) [2007] fca 393

Put shortly, the first issue is whether the Tribunal in further conducting a review of a delegate's decision --- the previous decision of a differently constituted Tribunal having been set aside by a decision of a Federal Magistrate --- complied in the circumstances with the obligation imposed on it by s 425 of the Migration Act 1958 (Cth), notwithstanding that the appellant was only invited to appear at the hearing of the invalid decision. No subsequent hearing was held. The second issue is whether, if there was a jurisdictional error so committed, should relief be refused on the ground that it would be inevitable that the appellant's application for a protection visa would fail because of s 91S of the Act. The second Tribunal decision was that, because of the manner in which that section applied to the appellant's claim, he would be treated as not having a well-founded fear of persecution by reason of membership of the particular social group (ie his family), his claim being based on such membership. 2 Though I will express a view on the first issue, I am satisfied that the appeal must fail in any event on the second. The following is an adaptation of those paragraphs. I should indicate at the outset that the Tribunal has made three decisions in relation to review applications of the appellant. Though it is technically inaccurate, I will for ease in exposition differentiate between what I will call the "first Tribunal", "the second Tribunal" and the "third Tribunal". 4 The Tribunal decision, the subject of the present judicial review proceedings, is in fact the third decision of the Tribunal in relation to the appellant. The first review was conducted in 2000. The appellant was unsuccessful, both before the delegate of the Minister and before the Tribunal at that time and for reasons of lack of credibility in each instance. In the claim advanced by the appellant in 2000 he and his wife used false identities. His claimed entitlement to a protection visa and to refugee status under the Refugee Convention arose from a fear of his being persecuted by Serbs, arising out of what he said was his forced conscription into the Kosovo Liberation Army. 5 Notwithstanding the lack of success of their application, in 2001 the Minister exercised his discretion under s 417(1) of the Act and provided the appellant and his wife with three year protection visas on humanitarian grounds. 6 In 2004 the appellant and his wife re-applied for protection visas using the same false identities and asserting the same grounds as in 2000. In 2006 their false identities were uncovered. The Minister's second delegate refused their application again for reasons of lack of credibility. No claim under their real identities was pursued before the delegate at that time. This delegate's decision is the operative one for the Tribunal decision which gave rise to the judicial review application which is the subject of this appeal. The appellant and his wife again sought Tribunal review of the delegate's decision. For the first time, I would emphasise, the appellant pursued a claim arising from his membership of a particular social group, said to be constituted by his family. This was a similar claim to that which had been successfully made by his brother in 2000. At the second Tribunal hearing, the appellant said that his and his wife's use of false names upon their arrival in Australia was related to their fear as to what would happen to them if they were to return to Albania under their real names. 7 A blood feud was now said to give rise to the Convention related fear. It was contended that in June 1999 the appellant's cousin killed someone by the name of Fran Kola. His family invoked the traditional laws of the Kanun . The appellant's cousin disappeared and hence other males of his family were at risk. The appellant's brother Leke left Albania in December of 1999 and both he and his son made successful claims for protection when they arrived in Australia. 8 The appellant and his wife were found to be refugees by the second Tribunal. The decision of that Tribunal was successfully reviewed, on the Minister's application, in proceedings that were determined by Brown FM. The sole issue before the Federal Magistrate related to the applicability of s 91S to the appellant and his wife's claims. His Honour concluded that it was attracted by the claims advanced but that it was not considered by the second Tribunal, hence there was a jurisdictional error. The matter was again remitted to the Tribunal which this time was differently constituted. I would comment in passing that the remitter might be thought to be somewhat surprising, given that the application seemed doomed in any event because of s 91S. 9 The third Tribunal conducted no oral hearing. There was a series of s 424A letters sent to the appellant which canvassed matters that concerned the Tribunal. Essentially the Tribunal indicated its concerns in relation to what it says were lies told during the first application before the delegate and before the first Tribunal, and what were said to be lies told by the appellant and his wife during the hearing before the second delegate. Attention was drawn in the s 424A letters to the Tribunal's concern that the whole substance of the earlier applications promoted by the appellant had been a complete fabrication. 10 During the course of the review by the third Tribunal, the Tribunal found that evidence had been provided to it of criminal activity on the part of the appellant in Italy and Switzerland, which criminal activity was perpetrated under a variety of names. This material was put to him and his wife during the course of the s 424A correspondence and was denied by them. The denial included the provision of an email from someone said to be an Italian policeman, the contents of which email the Tribunal found to be false. 11 The Tribunal's findings in relation to credibility are most conveniently set out in two passages. Neither do I have any faith in any claim made by the applicant, since I have no way of knowing when he will stop attempting to mislead Australian authorities and tell the plain unvarnished truth. He clearly has not stopped in relation to his written statements to the Tribunal presently constituted. I therefore do not accept any of his claims that flow from that claim. I therefore do not accept that there is a real chance of his suffering harm amounting to persecution in Albania from such a feud. 13 The Tribunal noted that the appellant's brother had succeeded on a similar claim. The appellant's brother's claim had been made prior to the amendment of s 91S of the Act that was effected by the Migration Legislation Amendment Act (No 6) 2001 (Cth) . The effect of these amendments is described in the decision of the High Court in STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 61 ; (2006) 231 ALR 556. In considering such a claim, s 91S of the Migration Act would be relevant and, in interpreting that provision, I would be bound by the terms and reasons of the High Court's decision in STCB v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 61 ... Following that decision and applying s 91S(a) , it is clear that the applicant's cousin, Martin's fear of persecution would be for a reason other than those mentioned in Art 1A(2) of the Convention --- namely revenge for murder. Section 91S(a) would then require that fear of persecution to be disregarded. Section 91S(b)(i) would then require the applicant's fear of persecution to be disregarded, since it would be reasonable to conclude that that fear would not exist if his cousin's fear had never existed. And s 91S(b)(ii) would require that his father's and brother's fear of persecution be disregarded, since it would be reasonable to conclude that neither of those fears would exist either if the cousin's fear had never existed. The result of disregarding the fears of persecution of the cousin, the applicant, the father and the brother would then be that the applicant would be treated as not having a well-founded fear of persecution for the reason of membership of a particular social group that consists of the (sic) his family. The applicant is to be invited "to give evidence and present arguments relating to the issues arising in relation to the decision under review ". The reference to "the issues arising in relation to the decision under review" is important. [34] Those issues will not be sufficiently identified in every case by describing them simply as whether the applicant is entitled to a protection visa. The statutory language "arising in relation to the decision under review" is more particular. The issues arising in relation to a decision under review are to be identified having regard not only to the fact that the Tribunal may exercise ... all the powers and discretions conferred by the Act on the original decision-maker (here, the minister's delegate), but also to the fact that the Tribunal is to review that particular decision, for which the decision-maker will have given reasons. [35] The Tribunal is not confined to whatever may have been the issues that the delegate considered. The issues that arise in relation to the decision are to be identified by the Tribunal. But ... unless some other additional issues are identified by the Tribunal (as they may be), it would ordinarily follow that, on review by the Tribunal, the issues arising in relation to the decision under review would be those which the original decision-maker identified as determinative against the applicant. To reiterate the Albanian blood feud claims were only raised for the first time before the second Tribunal whose decision was quashed by Brown FM. 20 There has been recent discussion and some level of disagreement between judges of this Court on the operation of s 425(1) where a Tribunal decision is quashed and the matter remitted to the Tribunal (whether or not constituted by the same member) for determination. For present purposes I would merely note the following. 21 (i) Until the Tribunal makes a valid decision on the review that has been initiated by a valid application under s 414, it has a duty to perform that particular review: SZEPZ v Minister for Immigration and Multicultural Affairs (2006) 159 FCR 291 at [39]. 22 (ii) An invalid Tribunal decision in purported performance of a particular review is to be treated for all purposes as having no operative effect and it does not represent a performance by the Tribunal of its duty in connection with that review: SZILQ v Minister for Immigration and Citizenship (2007) 163 FCR 304 at [10]. 23 (iii) When a decision on a particular review is set aside, it is a decision of the Tribunal, not of the person constituting it, that is set aside: Minister for Immigration and Multicultural Affairs v Wang [2003] HCA 11 ; (2003) 215 CLR 518 at [31] . Correspondingly, a redetermination of the particular review is a redetermination by the Tribunal, not by the particular member who happens to constitute the Tribunal for the purpose: SZEPZ at [38]. The Tribunal still has before it the materials that were obtained when the decision that had been set aside was made. To the extent that Cowdroy J is properly to be taken as suggesting to the contrary in SZHLM v Minister for Immigration and Citizenship [2007] FCA 1100 ; (2007) 98 ALD 567 at [34] , his Honour's view ought not be followed in my view. 25 (v) As it is the Tribunal which continues to conduct the particular review consequent upon a remitter, the steps taken by the Tribunal to discharge its statutory obligations under s 424A and s 425 in the conduct of that review prior to the making of an invalid decision may, but need not necessarily, be a sufficient discharge of those statutory obligations for the purpose of making a subsequent and valid decision on the review: SZEPZ (on s 424A); SZILQ (on s 425); and also NBKM v Minister for Immigration and Citizenship [2007] FCA 1413. Thus, a s 424A notice or a s 425 invitation given prior to the Tribunal's invalid decision may, or may not, suffice without a further notice or invitation depending upon whether on the remitter the circumstances then are such that s 424A or s 425 does or does not require, according to their respective terms, a fresh notice or invitation. The first is that, since the second delegate's decision, two issues have been raised concerning his visa application in respect of which he should have received, but did not receive, an invitation to appear before the Tribunal to give evidence and present arguments under s 425. It was made under a false name and it related to the appellant's alleged fear of persecution by Serbs arising from his conscription into the Kosovo Liberation Army. When the delegate's decision was made --- it was founded on the claims made not being credible --- the appellant's false identity had been discovered. 28 Clearly when the second Tribunal issued its invitation to attend the hearing on the review of the second delegate's decision, the appellant's credibility was an "issue arising" in relation to that decision. In the second Tribunal decision that issue was decided favourably to the appellant, but in the quite different setting of the blood feud claim. That claim alone continued to be advanced. 29 When the third Tribunal recommenced the conduct of its review of the second delegate's decision, it early indicated in a s 424A letter to the appellant that in light both of the false claims made and false documents submitted by him and his wife, and of information since acquired that they had police records in Italy and Switzerland, his truthfulness and the reliability of documents he submitted were in issue in relation to the blood feud claims he was advancing. Later s 424A correspondence concerning alleged criminal activity heightened the issue. 30 In a sense, it can be said that the third Tribunal was doing no more than enlarging the information base upon which a judgment could properly be made of the appellant's credibility. Nonetheless, I am satisfied that in taking the particular course that it did in relation to the appellant's criminal record, the Tribunal was identifying an "additional issue" not before the delegate in the sense that it was garnering a corpus of distinct evidence to justify rejection of the blood feud claim which itself had a different evidentiary and documentary base to that of the abandoned claim. 31 There was, in my view, a sufficient change in circumstances from those obtaining when the second Tribunal issued its hearing invitation as to necessitate the issuing of a further hearing invitation if there was to be compliance with s 425. The issue at the second Tribunal hearing may have been the same, ie the appellant's credibility. The context was not. In consequence, I am satisfied that the third Tribunal decision was infected by jurisdictional error. If, as the decision under appeal seems to suggest, his Honour was of the view that no further invitation was required in the circumstances, I equally am satisfied an appellable error has been made out. Section 91S is relied upon as providing the basis in the circumstances for refusing relief. His was a classic, unqualified, Albanian blood feud claim on the evidence he presented to the Tribunal, and it was consistent with that of his brother who, prior to the enactment of s 91S, was granted a protection visa on the basis of the same blood feud claim. There was no other evidentiary basis for his claimed fear of persecution. And, as the Federal Magistrate indicated in his reasons, the appellant did not eschew the fundamentals of his claim before his Honour. 34 I note in passing that while the invalid second Tribunal decision is to be treated as having no operative effect the hearing before the second Tribunal canvassed fully his claim and its factual setting. 35 It is now well accepted that, where an application for an administrative decision such as here is one which the decision-maker was bound by the governing statute to refuse, irrespective of any question of procedural fairness, then relief may be refused on the ground of utility: see Re Refugee Review Tribunal; Ex parte Aala [2000] FCA 57 ; (2000) 204 CLR 82 at [57] - [58] ; SZBYR v Minister for Immigration and Citizenship [2007] FCA 26 ; (2007) 235 ALR 609 at [29] . But for such to occur, it must be quite clear that a rehearing or reconsideration would be futile: Lee v Minister for Immigration and Citizenship (2007) 159 FCR 181 at [48]. 36 The present, in my view, is clearly such a case --- hence the surprise I noted in Brown FM's remitter of this matter to the Tribunal after the invalidation of the second Tribunal decision. 37 Though the appellant has not addressed, and has not been asked to address, the application of s 91S to his claim, he so founded and formulated it that the section applied inevitably and inexorably as to ordain that that claim "lacked the requisite Convention nexus": SZBYR at [29]. I am, in consequence, satisfied the Federal Magistrate did not err in dismissing the application for judicial review. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

s 425 invitation to hearing when necessary on remitter after invalidation of a tribunal decision jurisdictional error discretion to refuse relief migration migration

Mr O'Connor did not appear at the hearing on either liability or penalty. The sixth respondent is the national body of the Australian Workers' Union (the AWU). The seventh respondent is the New South Wales branch of the Australian Workers' Union (the AWU-NSW). Each was registered as an organisation of employees and building association within the meaning of Sch 1B (now Sch 1) of the Workplace Relations Act 1996 (Cth) (the Workplace Relations Act ) and s 4 of the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act) respectively. I refer to the AWU and the AWU-NSW collectively as the unions. The remaining issue is the penalties which should be imposed on the respondents with respect to the contraventions. This understanding was based not only on representations by Mr O'Connor and other employees but also by the AWU through Mr Goring's conduct [Mr Goring was the AWU organiser responsible for the Lake Cowal site]. Mr Goring accepted that Mr O'Connor was the AWU delegate when he attended the site in August 2005 and dealt with Mr O'Connor, the employees and John Holland management on the basis that Mr O'Connor was the AWU delegate. He knew that the Lake Cowal gold mine project was large. He thus knew that hundreds of employees, being members of different unions, were present on site and living at the accommodation site. From these circumstances he must have been aware that the union delegates (including Mr O'Connor as the AWU job representative or delegate on site) would have been involved on behalf of the AWU in dealing with issues as between AWU members on site and John Holland management on a routine basis. He was also aware that Mr O'Connor had not resigned and continued in the role of AWU delegate on the site. He knew too that there were many potential issues and difficulties with respect to the site. Although Mr Goring told the workers at the meeting in August 2005 that they could not hold a stop work meeting without management's permission he did not inform any of them about limitations on the powers of Mr O'Connor as the AWU job representative or delegate or that, rather than going through their delegate, the employees should contact the AWU directly. Insofar as John Holland was concerned Mr Goring said nothing about Mr O'Connor's role but conducted himself on the basis that that Mr O'Connor was the AWU's delegate. He said nothing knowing that Mr O'Connor had been acting as a conduit between members and the union about issues with John Holland since at least July 2005. The conduct of other leaders (such as Mr Wakelin) who may have been even more active does not undermine the importance of Mr O'Connor's role. He was and acted as the AWU's delegate and encouraged and incited the members of his union to take industrial action by stopping work between 6.30 am on 15 October and 6.30 am on 18 October 2005 and between about 11.00 am on 10 November and 6.30 am on 11 November 2005 and they did so (including Mr O'Connor himself). In the lead up to the stoppage in October 2005 Mr O'Connor attended all of the critical meetings with management (along with other delegates) and took an active role in encouraging others to vote in favour of the stoppage (as his conduct with respect to Mr Best, the AMWU delegate who opposed the strike, shows). Mr O'Connor also informed John Holland management of the decision (along with the other delegates). He attended the meetings with management during the stoppage. He called Mr Goring (no doubt about the stoppage) but Mr Goring did not return his call. As to the stoppage on 10 November 2005, Mr O'Connor stood at the front of the meeting with other delegates. He was shouting and yelling (along with other delegates) and kicking dirt around after Mr Bryce's intervention [Mr Bryce was part of John Holland's management]. He called for the employees to get back on the buses. He thereby encouraged and incited other employees to stop work. On both occasions he, as AWU delegate and on his own behalf, voted in favour of the strikes. 35 members of the AWU were involved in the industrial action in that period. Of those 35, 15 were also members of the AWU-NSW. (2) In the period of 10 to 11 November 2005 approximately 280 employees (excluding management and a few others) were rostered on for work and all went on strike. 35 members of the AWU were involved in the industrial action in that period. Of those 35, 17 were also members of the AWU-NSW. (3) During the industrial actions John Holland did not pay the wages of the employees on strike but continued to bear costs that were reimbursed by the mine owner. A rough approximation of these costs is around $49,000 per day (or $196,000 in total). Further, John Holland could not claim its profit margin on these additional costs. (4) Benjamin Swan, the National Secretary of the AWU, has expressed the regret of the AWU and AWU-NSW that "Mr O'Connor did not notify and seek directions from the relevant AWU of NSW Organiser, Mr Goring, before taking the unlawful industrial action and/or breaching the certified agreement" and further regrets that "Mr O'Connor's actions may have contributed to a lack of productivity at the Lake Cowal site". (5) According to Mr Swan, the AWU determined that it would co-ordinate the training of all delegates and officials of the AWU and its branches in late 2007 and early 2008. The AWU engaged a national campaigns and organising officer in February 2008. This officer began periodic training of AWU branches in May 2008. This training could include education about rights and responsibilities under the BCII Act and Workplace Relations Act . The AWU and the AWU-NSW would be willing to allow officers of the Australian Building and Construction Commission to conduct periodic training with AWU delegates to improve knowledge and awareness of obligations pursuant to the BCII Act. (6) The AWU had not breached the BCII Act before October 2005. The AWU was found to have breached s 38 of the BCII Act and s 178 of the Workplace Relations Act in March 2006 ( Furlong v Australian Workers' Union [2007] FMCA 443). The AWU-NSW has not breached the BCII Act but was found to have breached an enterprise agreement in 2003 ( Bluescope Steel (AIS) Pty Ltd formerly known as BHP Steel (AIS) Pty Ltd v Australian Workers' Union, New South Wales (2004) 136 IR 48 ; [2004] NSWIRComm 145). By the same industrial actions, the AWU and Mr O'Connor, but not the AWU-NSW, also contravened s 170MN of the Workplace Relations Act , as well as the certified agreement. (2) For the AWU-NSW, in respect of s 38 of the BCII Act --- $110,000 (s 49(2) of the BCII Act). The parties did not agree about the capacity to treat the AWU-NSW as a manifestation of the AWU. The unions submitted that not to take into account this reality would involve a form of double penalty. Therefore the unions submitted that perhaps one penalty should be calculated for and apportioned equally between the unions. The applicant submitted that the AWU and the AWU-NSW were separate entities and separately liable for their conduct. The applicant submitted that penalties at the mid to high end of the scale were warranted given: --- (i) the objective seriousness of the contraventions, including the unions' conduct in cloaking Mr O'Connor with authority and failing to take reasonable steps to ensure that he did not incite unlawful industrial action, as well as the interference with the work on the mine and loss suffered by John Holland and the mine owner, (ii) the need for deterrence, (iii) the denial of liability by the unions and their limited factual admissions, (iv) the lack of any apology to John Holland other than the recent and "lukewarm" expression of regret by Mr Swan (which did not extend to Mr Goring's conduct, or lack of it, or the unions' responsibility for the strikes), (v) the restricted offer with respect to training, which showed a lack of any real action by the unions to prevent a recurrence, and (vi) Mr O'Connor's failure to appear and the time and cost associated with substituted service applications for Mr O'Connor. The applicant submitted that the penalties in the present case should exceed those imposed in Alfred v Wakelin (No 1) [2008] FCA 1455. Alfred v Wakelin (No 1) involved industrial action by members of the Construction, Forestry, Mining and Energy Union (the CFMEU). Through its site delegate, Mr Wakelin, the CFMEU was found to have contravened s 38 of the BCII Act with respect to the industrial action between 10 and 11 November 2005 at the Lake Cowal gold mine. The applicant said that the penalty had to be greater than that imposed on the CFMEU ($8,000) given that: - (i) the CFMEU admitted the contravention, (ii) the proceeding against the CFMEU did not involve any alleged contravention with respect to the October 2005 industrial action and was limited to the events of 10 to 11 November 2005, and (iii) the proceeding against the CFMEU did not involve any alleged contraventions of s 170MN of the Workplace Relations Act or the certified agreement. The AWU and the AWU-NSW submitted that the objective seriousness of their contraventions was low. The unions were liable only by reason of Mr O'Connor's conduct. Had Mr O'Connor obeyed Mr Goring's instructions then the unions would not have been placed in contravention of the statutes. This is not a case where senior management of the unions were directly involved in, or had knowledge of, the unlawful industrial action. The action was "wildcat" industrial action. Mr O'Connor deliberately gave no notice to Mr Goring and lied to Mr O'Reilly when asked about giving notice. Mr O'Connor's conduct was undertaken in defiance of Mr Goring's instructions. In these circumstances, the unions submitted that of the three sentencing purposes set out by Lander J in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 ; [2007] FCAFC 65 at [93] --- [94], those of punishment and deterrence should be given less weight than rehabilitation in the present case. The unions submitted that, given the way in which the applicant had pleaded and put its case, Mr Goring's conduct was relevant only to the case for exculpation under s 69(2) of the BCII Act and not to penalty. Further, the unions' admissions of fact had utilitarian value and should be given weight. The applicant's evidence of loss should not be given weight as the calculations could not be traced back to the contract. In any event, members of the unions who went on strike were only a small proportion of the entire workforce. The unions said they had good prior records. Furlong v Australian Workers' Union involved conduct after the date of the industrial actions in the present case and thus was irrelevant. Mr Swan's evidence was not tested and should be accepted as communicating the unions' regret and willingness to undertake training to avoid any recurrence of the breaches. These circumstances confirmed that deterrence was of limited relevance. For these reasons, the unions submitted that they should not be subjected to any penalty. If any penalties were imposed, they should be at the lower end of the scale and not exceed those in Alfred v Wakelin (No 1) given the lesser relative culpability of the unions in these proceedings compared to that of the CFMEU in Alfred v Wakelin (No 1) . In this regard, the unions referred particularly to the reference in my findings in Alfred v Wakelin (No 2) (at [55](6), quoted in [4] above) to Mr Wakelin's conduct (Mr Wakelin being the CFMEU's site delegate at the Lake Cowal gold mine). The main object of the Act is to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole. Penalties must be imposed at a meaningful level if they are to serve as a general deterrent to others who may be disposed to engage in proscribed conduct. The unions are separate legal entities. However, as the facts found and agreed disclose, the unions attracted liability by reason of the actions of Mr O'Connor, the unions' job representative or site delegate, who was a member of both the AWU and the AWU-NSW. Further, the 15 to 17 AWU-NSW members who were involved in the industrial actions were each also members of the AWU. In Haynes v CI & D Manufacturing Pty Limited (No 2) (1995) 60 IR 455 the Full Court of the Industrial Court of New South Wales dealt with breaches of occupational health and safety legislation by two companies. The first was the owner of the premises. The second was the lessee and employer. The second company was a wholly owned subsidiary of the first. The evidence available showed that Manufacturing at the time of the accident employed at the Somersby plant about nine workers and that for purposes related to company structure was a company wholly-owned by Industries. The personnel on whom the ultimate responsibility for ensuring the supervision of the employees rested at the time of the accident were the same. We have come to the view on the evidence that the connection between the two companies was so intimate that it is permissible to view the offence in a global way. We are of the view that an appropriate penalty in all the circumstances would be a total fine of $30,000. Were such a course available any risk that the impecuniosity of one respondent would cause undue hardship would be avoided with management being able to determine the most convenient method of funding the fine. We have been unable to come to the view that such a course is open to the Court. In determining the way in which the totality of the fine should be apportioned, we have decided that Manufacturing and Industries are so clearly linked that each should bear the fine equally - $15,000 by Manufacturing and $15,000 by Industries. The unions are closely related. They share liability by reason of their common rules, the appointment of Mr O'Connor as the job representative or site delegate, and their overlapping membership. It is impossible to distinguish between their culpability and unrealistic to suggest that their close relationship should be disregarded. These circumstances indicate that a common sense approach to the unions' overall culpability is required by adopting the same approach as the Full Court did in Haynes v CI & D Manufacturing Pty Limited (No 2) . In this case, however, the issue is complicated by the fact that the AWU and the AWU-NSW both contravened the BCII Act on two occasions (between 6.30 am on 15 October 2005 and 6.30 am on 18 October 2005, and between 11.00 am on 10 November 2005 and 6.30 am on 11 November 2005). However, only the AWU contravened the certified agreement and, thus, the Workplace Relations Act . This raises the question of how the totality principle should be applied to the facts of the present case. The principle has been stated many times in various forms: `when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong [']; `when ... cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences'. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts. It should, however, be emphasised that the inquiry is not to be attended by "excessive subtleties and refinements" [Barry, The Courts and Criminal Punishments (1969), p 14]. It should be approached as a matter of common sense, not as a matter of semantics. The High Court's observations also expose the difficulty of accepting the unions' approach of imposing a single penalty on the unions for all contraventions (with the single penalty to be apportioned equally). The fact is that the AWU-NSW (unlike the AWU) did not contravene the certified agreement and, thus, the Workplace Relations Act . The AWU-NSW should not be exposed to any part of the penalty for those additional contraventions by the AWU. It follows from these considerations that, on the facts of this case, the approach which best reflects the requirements that any penalty be according to a person's "just deserts" and that the aggregate of all penalties be "just and appropriate" is to: - (i) recognise the relationship between the AWU and the AWU-NSW by determining a single penalty for each of the unions' contraventions of the BCII Act and apportioning those penalties equally between the unions, (ii) determine single penalties for all other contraventions by the AWU, and (iii) for each of the AWU and the AWU-NSW, consider the penalties in aggregate to ensure the aggregate is "just and appropriate". It is part of the circumstances informing the objective seriousness of the contraventions. As I found in Alfred v Wakelin (No 2) , Mr O'Connor's actions made the unions liable because of the context in which his actions were carried out. He was appointed the job representative or site delegate. Mr Goring knew the site was difficult. Mr Goring knew that Mr O'Connor was dissatisfied with the constraints placed upon him. Knowing all this, Mr Goring left Mr O'Connor in charge on site without giving Mr O'Connor or John Holland a copy of the unions' rules or limiting Mr O'Connor's apparent authority with respect to either John Holland or AWU and AWU-NSW members on site. Mr Goring did not make contact with Mr O'Connor despite a union member, Mr O'Reilly, having resigned in frustration with what he considered stupid conduct by the employees after the action between 15 and 18 October 2005 and being told that the employees (including, it must be inferred, AWU and AWU-NSW members) had gone on strike. In these circumstances the unions' present attempts to disassociate themselves from Mr O'Connor's conduct during the industrial actions are unpersuasive. Mr O'Connor was found to have taken "a leading role in the industrial actions on the site during October and November 2005" ( Alfred v Wakelin (No 2) at [55(6)]). Further, and as noted in the same paragraph, the "conduct of other leaders (such as Mr Wakelin) who may have been even more active does not undermine the importance of Mr O'Connor's role". The same considerations inform the weight that should be given to the unions' description of the industrial action as "wildcat" industrial action. Despite this, it is true that this is not a case where any union official (in the sense of an employee of the union) actually knew and endorsed the taking of the industrial actions. All of these facts are relevant to the unions' culpability. The unions admitted certain facts. Those admissions, however, related to matters about which there could be no real doubt given the available evidence. The unions contested liability and other factual matters. It is difficult to conclude that the unions' limited admissions saved any real time or expense. The fact that the hearing extended over three days (15 to 17 September 2008) supports this conclusion. I do not consider that the unions are entitled to any material discount on account of their admissions of fact. Those admissions cannot be equated to an admission of liability at an early time, which is likely to have genuine utilitarian value. I accept that the unions' members made up a relatively small proportion of the overall workforce. I accept also that I cannot identify what effect Mr O'Connor's actions might have had on employees who were members of other unions beyond my finding that he (along with site delegates from other unions) took a leading role in the industrial actions, which resulted in all employees going on strike for three days in October and one day in November 2005. The unlawful industrial actions must have caused substantial inconvenience to John Holland, as well as loss (mainly in the form of increased costs to the mine owner). I do not accept the unions' submissions to the contrary. I accept, however, that the rough approximation of increased costs (about $196,000 in total) relates to the overall impact of the strikes, rather than the specific conduct of the unions. This is a factor (albeit not a major factor) that should be taken into account in determining penalty. Furlong v Australian Workers' Union involved breaches after the industrial actions in this case. However, that matter became part of the AWU's record before penalty in the present case is determined. Bluescope Steel , equally, is part of the record of the AWU-NSW. However, despite those matters, I consider that the unions have good prior records. I do not accept the unions' submissions about the limited relevance of deterrence in the present case. In Alfred v Wakelin (No 1) (at [40]) I said that "...there is no reason to treat liability attracted under s 69 [of the BCII Act] as necessarily of a different character or consequence for the purpose of making orders under s 49". I remain of this opinion. It is consistent with the main object of the BCII Act in s 3(1) ("to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole"). It is also consistent with the means by which that object is to be achieved as set out in s 3(2)(b), (c) and (d) in particular ((b) promoting respect for the rule of law, (c) ensuring respect for the rights of building industry participants, and (d) ensuring that building industry participants are accountable for their unlawful conduct). The restricted scope of Mr Swan's evidence also supports this conclusion about the relevance of deterrence. As the applicant submitted, Mr Swan's expression of regret is limited. It does not extend to the circumstances which ensured that the unions could not avail themselves of the defence to liability in s 69(2) of the BCII Act (the taking of reasonable steps to prevent the industrial action). The unions could not make out that defence because of the circumstances referred to in [24] above. The unions have expressed no regret for those circumstances. This indicates that general and specific deterrence remain relevant considerations. The steps taken by the unions to initiate co-ordinated training are commendable. However, and as the applicant submitted, Mr Swan's evidence discloses that the unions have not yet included training with respect to rights and responsibilities under the BCII Act. Nor have the unions yet made contact with the Australian Building and Construction Commission with respect to such training. The unions were found liable for the industrial actions in October and November 2005 in Alfred v Wakelin (No 2) , delivered on 17 October 2008; it is now March 2009. Further, relevant training could have been provided long ago without any prejudice to the unions' defence of these proceedings. I do not accept that no penalty should be imposed on the unions. That would be inconsistent with the objective seriousness of the contraventions and the unions' culpability for the commission of those contraventions. I also do not accept that the penalties should not exceed those in Alfred v Wakelin (No 1) . The unions' submission that their culpability was of a lesser relative seriousness than that of the CFMEU failed to take into account a number of relevant factors. The CFMEU admitted liability relating to the November 2005 industrial action. The applicant did not press its case against the CFMEU with respect to the industrial action in October 2005. By the agreed facts between the applicant and the CFMEU, liability was limited to breach of s 38 of the BCII Act and did not extend to breaches of the certified agreement and, thus, the Workplace Relations Act . The agreed facts did not permit any finding to be made about the number of employees involved in the industrial action (see Alfred v Wakelin (No 1) at [33]). The question of penalty in the present case is to be determined in a different context. The unions defended all charges and were unsuccessful. They have been found liable for breaches of the BCII Act, the certified agreement and, thus, the Workplace Relations Act . Their liability relates to the industrial action in October and November 2005 (in circumstances where the action in October 2005 extended over three days). The evidence was also more extensive in the present case and enabled findings about the number of employees involved in the industrial actions, both in total and belonging to the AWU and the AWU-NSW. In other words, despite the common substratum of facts, the circumstances relevant to penalty in the present case bear little resemblance to those prevailing in Alfred v Wakelin (No 1) . I do not accept the applicant's submission that penalties at the higher end of the range are warranted. The penalty "must be proportionate to the gravity of the offence committed" ( Hadgkiss v Construction Forestry Mining and Energy Union (No 5) [2008] FCA 1040 at [83] ). The unions did take some steps in an (albeit unsuccessful) attempt to restrain Mr O'Connor. The steps were insufficient and not reasonable in all of the circumstances, but at least something was done. Employed officials of the unions did not have actual knowledge of, or endorse, Mr O'Connor's actions. The industrial actions were limited to three days in October 2005 and one day in November 2005. The actions were unlawful and unjustifiable but were not calculated to intimidate or maximise harm to John Holland. AWU and AWU-NSW members were a relatively small proportion of the overall workforce. Mr O'Connor did not act alone. Other union site delegates were also responsible for inciting the employees to take industrial action. These considerations indicate that a more moderate level of penalty is required than that for which the applicant advocated in order to reflect the seriousness of the breaches and the unions' culpability for them. They are each exposed to a maximum penalty of $110,000 for each of the industrial actions in October and November 2005. Having regard to all of the circumstances to which I have referred, I consider that the October 2005 breaches of the BCII Act call for a penalty of $25,000. The November 2005 breaches of the BCII Act call for a penalty of $11,000. The close relationship between the AWU and the AWU-NSW to which I have referred above indicates that it would be unfair and disproportionate to the unions' true culpability for these penalties to be imposed on each of them. Consistent with the approach of the Full Court of the Industrial Court of New South Wales in Haynes v CI & D Manufacturing Pty Limited (No 2) , I apportion the penalties 50% each between the AWU and AWU-NSW for these breaches ($12,500 and $5,500 each). The AWU's contraventions of the Workplace Relations Act arose out of the same set of circumstances as the breaches of the BCII Act. Standing alone these contraventions warrant penalties as follows: - (i) ss 178(4)(a)(iia) and (iib) of the Workplace Relations Act respectively - $11,500 for the October 2005 industrial action (on the basis of a penalty of $7,500 for the first day of the contravention and $2,000 for each day thereafter) and $3,000 for the November 2005 industrial action, and (ii) s 170MN of the Workplace Relations Act - $7,500 for the October 2005 industrial action and $3,000 for the November 2005 industrial action. On the facts of the present case I consider the aggregated penalties for the AWU (but not the AWU-NSW) excessive. To reflect the AWU's true culpability, the penalties must be reduced. Aggregated total: - $28,000. No suspension of these penalties is warranted in the circumstances. Accordingly, I know little, if anything, about his circumstances. I cannot take into account his financial position because I am unaware of it. From the fact that he has not appeared and has conducted himself so that both parties have had to make applications for substituted service, I infer that he has no contrition for his unlawful conduct or the consequences that conduct created for John Holland, the owner of the mine or, indeed, the AWU and the AWU-NSW. I can also infer that, apart from the directions given by Mr Goring, Mr O'Connor was not provided with any relevant training about his responsibilities under the BCII Act and did not have access to the unions' rules (as Mr Goring had not provided them to Mr O'Connor).

penalties unlawful industrial action breaches of workplace relations act 1996 (cth) and building and construction industry improvement act 2005 (cth) related unions totality principle industrial law

2 ABB Australia declared a dividend payable on a specified future date. Before that date arrived, ABB Zurich, for valuable consideration, contracted to assign its right to receive the dividend to another non-resident, Barclays de Zoete Wedd Limited (BZW). BZW, in turn, and still before the date fixed for payment, and again for valuable consideration, contracted to assign the right to receive the dividend to a resident company, Barclays Australia Limited (now called ABN Amro Facilities Australia Limited) (BAL). BAL paid BZW and BZW paid ABB Zurich the amounts of the respective considerations. ABB Zurich directed ABB Australia to pay the amount of the dividend to BAL. When the date for payment of the dividend arrived, ABB Australia did so. The applicants seek declarations that ABB Zurich is not liable to withholding tax on the dividend of $49 million paid by ABB Australia on 21 June 1996, and that ABB Australia was not required to make a deduction from that sum in respect of withholding tax. Accordingly, subject to exceptions not presently relevant, dividend income is subject to either the assessable income régime including s 44(1) or the withholding tax régime of Div 11A of Pt III of the Act, but not to both. It will be noted that it is an express condition of the operation of s 44(1) that the dividend be paid to the shareholder. As will appear below, this is not an express condition of the operation of the withholding tax provisions. I will address this question below. 9 Section 6(1) defined the word "paid" in relation to dividends as including "credited or distributed". Thus, withholding tax is a form of income tax, although, as noted above, the income that is the subject of it lies outside the assessable income régime. 11 Section 128B was within Div 11A of Pt III of the Act. Division 11A introduced withholding tax into the Australian tax régime as from 1 July 1960. It was introduced by the Income Tax and Social Services Contribution Assessment Act (No 3) 1959 (Cth) (No 85 of 1959). At the relevant time it comprised ss 128A-128TF. The same Act of 1959 introduced into Pt VI of the Act a new Div 4 (discussed below) providing for the collection of withholding tax. 12 Prior to the introduction of withholding tax, the system of annual returns of income and the making of formal assessments applied to non-residents and residents alike. There was a considerable lapse of time between receipt of the income and the fixing of rates of tax and forwarding of a notice of assessment, finality being reached only with the subsequent payment of the tax. In several countries, including the United States of America, Canada and South Africa, a flat rate of tax was levied on various forms of investment income derived by non-residents of the country concerned. In those countries the resident making the payment to the non-resident retained the amount of tax payable and subsequently remitted it to the taxation authority. In addition to the problem of delay mentioned earlier, there was the additional problem that some non-residents of Australia who were familiar with such a withholding tax system and who received dividends from Australian companies, were doubtful as to their responsibility to furnish returns to the Commissioner. 15 Section 128B(1) is one of two pivotal provisions in the present case. However, as will be noted below, the applicants submit that payment was necessarily the only mode of derivation recognised in the case of the present dividend, with the result that it could not be "derived" before it was paid, and it could not be derived by a person to whom it was not paid. It is common ground that it was not paid by ABB Australia until 21 June 1996. According to the applicants, on that date it was paid to BAL and not to ABB Zurich. According to one of the Commissioner's submissions, on that date it was paid to BAL but that payment was also payment to ABB Zurich. 16 By the time of the events of present concern, subs (3A) of s 128B had been omitted from the Act by No 105 of 1989, although the drafter had not removed the reference to it in subs (1). 18 Section 128C provided for payment and recovery of withholding tax and for payment of additional tax by way of penalty on unpaid withholding tax. Subsection (1) made withholding tax due and payable at the expiration of 21 days after the end of the month in which the income to which the tax related was derived or of such further period as allowed. When it becomes due and payable, withholding tax was a debt due to the Queen on behalf of the Commonwealth and payable to the Commissioner (subs (2)). If any withholding tax remained unpaid at the expiration of 60 days after the time when it became due and payable, additional tax, by way of penalty, was due and payable at the rate of 16 percent per annum on the amount unpaid, computed from the expiration of that period (subs (3)). Subsection (4) of s 128C, however, empowered the Commissioner to remit additional tax in certain circumstances. Subsection (5) provided for the Commissioner or a Deputy Commissioner to sue for and recover unpaid withholding tax and additional tax in a court of competent jurisdiction. Subsection (6) provided that an ascertainment of withholding tax was not deemed to be an assessment within the meaning of any provisions of the Act. 19 Section 128D provided, relevantly, that subject to certain exceptions, income upon which withholding tax was payable, was not to be included in the assessable income of a person. Accordingly, s 44(1)(b) of the Act (noted at [6] above) could not have the effect of including the dividend in the assessable income of ABB Zurich if withholding tax under s 128B was payable on the income constituted by that dividend. Div 4 was headed "Collection of Withholding Tax" and, at the relevant time, comprised ss 221YJ---221YY. Section 221YJ provided that the object of Div 4 was to facilitate the collection of withholding tax and that the Division was to be construed and administered accordingly. 21 Sections 221YL and 221YN, respectively, imposed obligations on a resident company that paid a dividend subject to withholding tax to deduct the tax from the dividend and to pay the amount deducted to the Commissioner. 22 It follows that ABB Australia was not required to make a deduction from the dividend in the present case (as it did not do) if withholding tax was not payable by ABB Zurich in respect of it. Subsection (4) provided for payment of additional tax and subs (5) for its remission by the Commissioner. 25 Where withholding tax was not deducted from a dividend, s 221YQ(1) imposed on the company paying the dividend an obligation to pay to the Commissioner an amount equal to any unpaid withholding tax and an amount equal to any unpaid additional tax payable under s 128C(3) in respect of that withholding tax. 26 Withholding tax is not assessed (see s 128C(6) noted at [18] above). The liability arises directly once the factual circumstances identified in the Act exist, although it is the Commissioner's practice, as occurred in the present case, to send a letter of demand before seeking to recover the tax as a debt. 27 The applicants seek a declaration that ABB Australia was not required by s 221YL(1) of the Act to make a deduction in respect of withholding tax from the dividend of $49 million paid by it on 21 June 1996 (to BAL), and a declaration that ABB Zurich is not liable to withholding tax under s 128B(4) and s 128C of the Act on that dividend. They submit that the only payment made by ABB Australia was the payment it made to the resident company, BAL, on 21 June 1996. 29 According to the applicants, the word "derived" in s 128B(1)(a) and "derives" in s 128B(4) refer to a derivation that is constituted by a receipt of payment. They submit that s 128B(1) must be read as a whole and that what must be derived is income that is or has been paid. Moreover, in the case of dividend income, it is established law, according to the applicants' submission, that it is not derived until received. 30 The applicants submit that although ABB Zurich did derive a profit or gain from the sale of its right to receive the dividend, it did not derive, because it did not receive payment of, "income consisting of a dividend". 31 Further, according to the applicants, the giving of the direction by ABB Zurich to ABB Australia, and the subsequent payment by ABB Australia to BAL, occurred at times when ABB Zurich was a bare trustee of the right to receive the dividend, and a taxpayer derives as income only amounts to which it is beneficially entitled. 32 The Commissioner puts his case in three alternative ways. First, he submits that upon the declaration of the dividend by ABB Australia on 30 May 1996, ABB Zurich derived income consisting of the dividend with the consequence that para (a) of s 128B ( 1 ) was then satisfied, and that later on 21 June 1996 the dividend was paid by ABB Australia, "a company that is a resident", with the consequence that para (b) of s 128B(1) was then satisfied. According to this submission, it is not required that payment be to the non-resident who derived the income consisting of the dividend. 33 In relation to derivation, the Commissioner submits that in accordance with generally accepted accounting principles as established by expert evidence adduced in the case, the dividend was income derived by ABB Zurich at the time of its declaration. ABB Zurich was an accruals basis taxpayer, and derived as income the amount of the dividend when the dividend was declared, and became, as it is common ground it then did, a debt owed by ABB Australia to ABB Zurich. According to the Commissioner's submission, the words "derived" in s 128B(1)(a) and "derives" in s 128B(4) are not to be read down as limited by reference to the requirement of payment: derivation and payment may occur at different times. 34 The second and alternative way in which the Commissioner puts his case is that if the dividend could not be derived by ABB Zurich until it was paid, then in all of the circumstances surrounding the declaration of the dividend and implementation of the two assignment transactions, the dividend was paid to ABB Zurich at some time after 30 May 1996 and at the latest by 21 June 1996. According to the Commissioner, there are two alternative limbs to this argument. The first limb is that the dividend was derived beneficially by ABB Zurich "in that there was the arrangement involving a carefully planned sequence of steps to ensure that ABB Zurich obtained the benefit of the dividend". The second and alternative limb is that, even if the dividend was not derived beneficially and was derived by ABB Zurich exclusively as trustee, derivation by a non-resident as trustee is within s 128B(1). 35 The third, and further alternative way in which the Commissioner put his case, is that under the statutory régime, ABB Zurich could not, without assigning the underlying shares, effect an assignment of the debt that would avoid derivation by it of the "dividend". This third submission depends largely, though not entirely, on Norman v Federal Commissioner of Taxation [1963] HCA 21 ; (1963) 109 CLR 9 ( Norman ). 36 I will elaborate on the parties' submissions below. On 30 May 1996, in accordance with Article 82 of the Articles of Association of ABB Australia, the members of the company resolved at an annual general meeting that a final dividend of A$49,000,000 be paid to members holding shares in the company as at 30 May 1996 and that the dividend be payable on 21 June 1996 (the " Dividend "). The payment must be made for value 21 June 1996 to the following account [there followed particulars of an agreement at the National Australia Bank in Sydney]. The company shall on receipt of any such Notice pay the dividend in accordance with the terms of the Notice. Also on 16 December 2003, the Respondent sent a letter to ABB Zurich which stated that ABB Zurich was liable to pay withholding tax, pursuant to s.128B and s.128C of the 1936 Act, in respect of the Dividend, and required ABB Zurich to pay to him the amount of $15,540,581.40 comprising unpaid withholding tax of $7,350,000, unpaid additional tax by way of penalty of $3,082,367.90 and unpaid general interest charge of $5,108,213.50. 39 ABB Zurich's written offer of assignment to BZW (the First Offer) stated that it was able to be accepted verbally on the day on which it was made, namely, 3 June 1996. It was accepted verbally on that day in Switzerland by BZW's duly appointed attorney. According to the terms of the First Offer, upon acceptance ABB Zurich and BZW became immediately bound to perform their respective obligations set out in the First Offer document. Accordingly, ABB Zurich became bound to assign the dividend of $49 million to BZW, and BZW became bound to pay the price of $48,816,995 (a sum calculated according to a formula attached to the First Offer document) by wire transfer to ABB Zurich or at its direction, no later than 5 June 1996. 40 There are two other terms of the First Offer that are of present interest. First, ABB Zurich undertook to give a direction to ABB Australia to pay the dividend to such bank account as should be designated by BZW or to a "Permitted Assign" (defined as being a subsidiary of BZW). Second, ABB Zurich agreed that the benefit of the offer was given to BZW for itself, its successors in title, and Permitted Assigns, but it was stipulated that a Permitted Assign might not itself assign any of the benefits of the First Offer. 41 BZW's written offer dated the following day, 4 June 1996, to assign its right to receive the dividend to BAL (the Second Offer) also stated that it was able to be accepted verbally. It was accepted verbally by BAL's duly appointed attorney on 4 June 1996. It was expressed as an offer to assign to BAL absolutely all of BZW's right to receive the dividend. It was a term of the Second Offer that if BAL should accept it, BAL must to give notice "to the beneficial owner of the shares or [to ABB Australia] of the assignment by [BZW] to [BAL] of its right to receive the Dividends". 42 BAL was not a Permitted Assign of BZW within the definition of that expression contained in the First Offer because BAL was not a subsidiary of BZW. 43 On 5 June 2006 BZW paid ABB Zurich and BAL paid BZW (we do not know in what sequence the payments were made but this is of no consequence). Also on 5 June 1996 BAL wrote to ABB Zurich advising it that pursuant to the Second Offer, a copy of which was attached to BAL's letter, and which, BAL advised, it had accepted on 4 June 1996, BZW had assigned to BAL all of BZW's "rights to receive ... a final dividend of A$49 million which was duly declared by [ABB Australia] on 30 May 1996 ... due and payable in Australian Dollars on 21 June 1996". By its letter, BAL requested ABB Zurich to instruct ABB Australia to pay the dividend by transferring $49 million in immediately available cleared funds to BAL's bank account in Sydney (which it identified) "for value 21 June 1996". 44 The next day, 6 June 1996, ABB Zurich gave a written notice to ABB Australia, purportedly irrevocably, directing it to pay the debt of $49 million due and owing by it to ABB Zurich to BAL by paying that amount into BAL's bank account in Sydney, which ABB Zurich identified. 45 There is in evidence an "Acknowledgement of receipt" at the foot of the notice dated 6 June 1996 from ABB Zurich to ABB Australia, in which Mr PM Kinsey, a director and a secretary of ABB Australia, acknowledged on behalf of ABB Australia receipt of the notice and agreed to be bound by its terms, but without prejudice to any rights ABB Australia might have against ABB Zurich in relation to the subject matter of the assignment. 46 On 11 June 1996, Mr Kinsey responded in writing to ABB Zurich's direction, advising ABB Zurich that in his opinion, under ABB Australia's articles of association, he was unable to comply with ABB Zurich's direction until the articles of association were altered to require ABB Australia to do so. He asked whether ABB Zurich wished him to convene a general meeting of ABB Australia to enable the articles of association to be amended. ABB Zurich replied that it did. 47 As a result, on 20 June 1996, there was a meeting of the members of ABB Australia at which it was resolved that its articles of association be amended by the addition of the new Article 82(3) that was set out at [37] above. ABB Zurich did not give a further direction to ABB Australia between the making of the amendment and the making of the payment by ABB Australia into BAL's bank account the following day. 48 The Commissioner submits, and the contrary was not suggested, that express notice in writing for the purposes of s 12 of the Conveyancing Act 1919 (NSW) (s 136(1) of the Law of Property Act 1925 (UK) was relevantly in the same terms), was not given by any person to ABB Australia of any absolute assignment by writing under the hand of ABB Zurich of the debt of $49 million. The parties approached the case as one concerning contracts for valuable consideration to assign a legal chose in action, and on the basis that the only express written notice that was given to the debtor, ABB Australia, was the direction that ABB Zurich gave it on 6 June 1996 to pay to BAL. Therefore I need not consider the requirements that inhere in the expression "absolute assignment by writing under the hand of the assignor" or the expression "of which express notice in writing has been given to the debtor ..." in s 12 of the Conveyancing Act 1919 (NSW) (and in s 136(1) of the Law of Property Act 1925 (UK)). In fact, the directors' preceding resolution was expressed as a resolution that a final dividend of $49 million "be declared" for the year ended 31 December 1995 payable on 21 June 1996 to be paid to the holders of ordinary shares named on the register of members as at 30 May 1996 "the date of the Annual General Meeting be recommended to the shareholders at an Annual General Meeting". Notwithstanding the confusion that characterised this preceding resolution, it is clear that the directors intended only to make a recommendation to the members. 50 At the meeting of members held on 30 May 1996, the members resolved that in accordance with the directors' recommendation, a final dividend of $49 million be paid to members holding shares in the company as at the date of the meeting (30 May 1996) and that the dividend be payable on 21 June 1996. (2) The directors may authorise payment by the company to the members of such interim dividends as appear to the directors to be justified by the profits of the company. (Emphasis added. 53 The dividend was declared before ss 254U and 254V were introduced into the predecessor to the Corporations Act 2001 (Cth), the Corporations Law , by the Company Law Review Act 1998 (Cth) (No 61 of 1998) with effect on and from 1 July 1998. Therefore I need not discuss the purpose and effect of those provisions. See the discussion of them in Bluebottle UK Ltd v Deputy Commissioner of Taxation [2006] NSWSC 706 ; (2006) 233 ALR 747 at [14] ---[45] and, on appeal, Deputy Commissioner of Taxation v Bluebottle UK Ltd [2006] ATC 4803 at [35]---[53] per Santow JA, [105]---[112] per Basten JA. (Special leave to appeal to the High Court was granted on 25 May 2007. A declaration of a final dividend by the shareholders gave rise to an immediate debt owed by the company to the shareholders, whereas a resolution by the directors to pay an interim dividend did not do so: Potel v Inland Revenue Commissioners [1971] 2 All ER 504 at 511---512; Industrial Equity Limited v Blackburn [1977] HCA 59 ; (1977) 137 CLR 567 at 572; Marra Developments Ltd v BW Rofe Pty Ltd [1977] 2 NSWLR 616 at 625; Brookton Co-operative Society Limited v Commissioner of Taxation [1981] HCA 28 ; (1981) 147 CLR 441 at 455. Thus, a declaration of a final dividend could not be revoked and the company's indebtedness to its shareholders eliminated, if profits ceased to be available to fund the dividend between the time of the declaration and the time fixed for payment. A decision of the directors to pay an interim dividend, on the other hand, could always be revoked down to the time fixed for payment. Section 191 is not presently relevant, and it has not been suggested that as at 30 May 1996 ABB Australia did not have profits out of which the dividend of $49 million was lawfully able to be paid. 56 The declaration of the final dividend on 30 May 1996 created a debitum in praesenti solvendum in futuro --- a present indebtedness payable in the future. That debt was a legal chose in action capable of being assigned at law under s 12 of the Conveyancing Act 1919 (NSW) and its counterparts in other jurisdictions, before as well as after the time fixed for payment arrived. 58 The applicants read an affidavit of the Rt Hon Lord Millett who, as is well known, is a former member of the Appellate Committee of the House of Lords and Judicial Committee of the Privy Council. He was not cross-examined. His affidavit answered questions that had been put to him by the solicitors for the applicants relating to the effect in English law of the transactions and events in question. The answers that his Lordship gave do not suggest any difference between English and Australian law in relation to those questions. 59 The following summary account of general principles is in accord with his Lordship's affidavit. (2) Although the common law did not recognise assignments of legal choses in action, equitable assignments of them were recognised. Lord Millett states that "[e]quitable assignments of legal choses in action are of great antiquity". (4) Notice to the debtor was not a requirement of a valid equitable assignment, as it is in the case of a valid legal assignment under the statutory provision: Gorringe v Irwell India Rubber and Gutta Percha Works (1866) 34 Ch D 128; Ward and Pemberton v Duncombe [1893] AC 369 at 392. As between assignor and assignee, an equitable assignment is complete and binding from the time when it is made or when the assignor has agreed, for valuable consideration, to make it. (5) The debtor's state of mind is irrelevant. However, the debtor's liability will be discharged if it pays the assignor before receiving notice of the assignment. In such a case, the assignor will hold the amount paid to it upon trust for the assignee. (6) Notice to the debtor need not be in any particular form and may be given by any party. Lord Millett states: "The question is whether the debtor has notice of the assignment or has been put on enquiry whether there has been an assignment. If he goes ahead without enquiry and pays the assignor, he is at risk of having to pay twice. Accordingly, an equitable assignment need not purport to be an actual present assignment, and may take the form of a contract, for valuable consideration, to assign: see Cotton v Heyl [1930] 1 Ch 510 at 520---521; In Re Warren; ex parte Wheeler v The Trustee in Bankruptcy [1938] Ch 725 at 734---6; and see Tolhurst, op cit at [7.16]. (8) Whether or not it is correct to say that the assignor holds the legal chose in action on trust for the assignee before the promised consideration is paid, once the promised consideration is paid, it does. It will then hold the benefit of the obligor's undertaking upon a constructive trust for the assignee, even if specific performance of the contract to assign between assignor and assignee could not have been obtained by the assignee previously. As Lord Millett summarises the position, "[t]he trust ceases to be defeasible or contingent; the vendor becomes a fiduciary; and the purchaser has all the remedies of a beneficiary under an ordinary trust", citing Rose v Watson (1864) 10 HLCas 672 (11 ER 1187) esp per Lord Cranworth at 683---4 (ER 1192), and see also Lake v Bayliss [1974] 2 All ER 1114. The operative principle is that equity regards as done that which ought to be done, the assignor's conscience being bound to that end: Holroyd v Marshall (1862) 10 HLCas 191 (11 ER 999); Tailby v Official Receiver (1888) 13 App Cas 523. There is, however, criticism of descriptions of the purchaser's equitable interest between contract and payment of the purchase money as that of a beneficiary under a trust; see for example Heydon JD and Loughlan PL, Cases and Materials on Equity and Trusts (6 th ed, Butterworths, 2002) at [6.7], [6.16]---[6.18]. Dr Tolhurst goes further and suggests (op cit, [4.07]) an "assignment analysis" according to which, even in the former class of case (where the consideration for the assignment has been paid), a trust of the legal chose is unnecessary except as a remedial device granted by the court. In such a case, however, the case law is all one way in favour of a constructive trust arising as a matter of substantive law. In any event, his Lordship's evidence to that effect was not challenged. 61 I turn now to the application of these general principles to the facts of the present case. (ii) On verbal acceptance of the First Offer, ABB Zurich became contractually bound to assign the dividend to BZW, and BZW became bound to pay the price, which proved to be $48,816,995, to ABB Zurich. (iii) Similarly, on verbal acceptance of the Second Offer, BZW became contractually bound to assign the dividend to BAL, and BAL became bound to pay the price of $48,826,480 to BZW. (iv) Upon payment of the respective prices of $48,816,995 to ABB Zurich and $48,826,480 to BZW, both on 5 June 1996, those two companies became trustees for BZW and BAL respectively under constructive trusts of that which they had respectively contracted to assign, namely, the right to receive payment from ABB Australia of the amount of the dividend. If the amount of the dividend had been paid to ABB Zurich on 21 June 1996, it would have held the amount on trust. (v) It does not matter which of the two payments was made first. If BAL paid BZW first, the assignment from BZW to BAL may have temporarily operated as an equitable assignment of future property. (vi) On the same day, 5 June 1996, BAL gave notice to ABB Zurich of the further assignment of the dividend by BZW to BAL. There being no question as to the effectiveness of the two assignments, ABB Zurich was constituted a constructive trustee for BAL of ABB Australia's indebtedness to it in the sum of $49 million and if the amount of the dividend had been paid to ABB Zurich, ABB Zurich would not have been entitled to pay it to BZW; it would have obtained a good discharge only by paying it to BAL. (vii) When BAL notified ABB Zurich on 5 June 1996 of the assignment to it (BAL) by BZW, it also requested ABB Zurich to instruct ABB Australia to pay the amount ($49 million) into BAL's bank account in Sydney. (viii) When, on 6 June 1996, ABB Zurich complied with BAL's request of the preceding day by directing ABB Australia to pay the dividend into the BAL bank account, ABB Zurich demonstrated that it consented to the assignment by BZW to BAL, even though BAL was not a "Permitted Assign" of BZW within the terms of the First Offer. Any difficulty that may have previously existed on that account was thus overcome on 6 June 1996. (ix) The direction given by ABB Zurich to ABB Australia on 6 June 1996 had no dispositive effect on the right to receive the dividend, but operated as a revocable mandate, which authorised, but did not compel, ABB Australia to pay the amount into BAL's bank account in Sydney. However, unless and until the mandate was revoked by ABB Zurich, ABB Australia could discharge its indebtedness to ABB Zurich by paying the amount into BAL's bank account as ABB Zurich had directed. (x) The amendment of ABB Australia's articles of association on 20 June 1996 had the effect of obliging ABB Australia to pay the amount of the dividend in accordance with a direction of the kind that ABB Zurich had given to it on 6 June 1996. When ABB Australia paid $49 million into BAL's bank account on 21 June 1996, it complied both with the direction from ABB Zurich and with the newly introduced art 82(3) of its own articles of association, and discharged its indebtedness to its shareholder, ABB Zurich. (xi) Because ABB Australia was never given notice of any assignment of its indebtedness to ABB Zurich, the legal right to be paid the dividend remained vested in ABB Zurich throughout (until the payment made on 21 June 1996). However, from, at the latest, 6 June 1996 when it demonstrated that it consented to the assignment from BZW to BAL, ABB Zurich had no beneficial interest in ABB Australia's indebtedness to it but held the right to be paid upon trust for BAL. By that date the purchase prices payable under the respective contracts to assign had been fully paid. They submit that, ordinarily, "income" signifies an "incoming" or "receipt", and that trading income is treated as exceptional only because in that case it is impracticable and would give rise to distortion to use a cash or receipts, rather than an earnings or accruals, basis of accounting to reflect income. 63 The authorities cited by the applicants are St Lucia Usines and Estates Company Limited v Colonial Treasurer of St Lucia [1924] AC 508 ( St Lucia ) at 512; Commissioner of Taxes (SA) v The Executor Trustee and Agency Company of South Australia Limited [1938] HCA 69 ; (1938) 63 CLR 108 ( Carden's Case ) at 155; Permanent Trustee Co v Federal Commissioner of Taxation (1940) 6 ATD 5 ( Prior's Case ) at 13; South Australia v Commonwealth [1992] HCA 7 ; (1992) 174 CLR 235 at 253; and Bowaters Sales Co Ltd v Commissioners of Inland Revenue (1958) 38 TC 593 ( Bowaters ) at 597---599. As well, the applicants refer to the Commissioner's Public Ruling TR 98/1 at [19], in which the Commissioner has said that as a general rule, the receipts method is appropriate to determine income derived from investments, although there are exceptions, such as in the case of interest from a business of money lending carried on by the taxpayer. 64 The applicants submit that the giving of the direction by ABB Zurich and the subsequent payment of the dividend to BAL occurred at a time when ABB Zurich was a bare trustee of the legal right to receive the dividend, both as a matter of Australian law (they refer to Commissioner of Taxation v Everett [1980] HCA 6 ; (1980) 143 CLR 440 at 450) and as a matter of English law (the proper law of the contracts to assign) as explained in the evidence of Lord Millett. They submit that a taxpayer derives as income only amounts to which it is beneficially entitled (citing Countess of Bective v Federal Commissioner of Taxation [1932] HCA 22 ; (1932) 47 CLR 417 at 423; Shepherd v Commissioner of Taxation [1965] HCA 70 ; (1965) 113 CLR 385 at 397; Zobory v Commissioner of Taxation (1995) 64 FCR 86 at 89; Service v Commissioner of Taxation [2000] FCA 188 ; (2000) 97 FCR 265 at [73] ; and Reiter v Commissioner of Taxation [2001] FCA 1068 ; (2001) 113 FCR 492 at [23] ---[24]). Finally, they submit that s 128A(3) (set out [14] above) was enacted "to maintain a corresponding principle in relation to withholding tax for dividends or interest paid to non-resident beneficiaries", citing the Explanatory Memorandum to the Income Tax Assessment Bill (No 4) 1967 , p 25. 65 The Commissioner submits that it is inadequate to characterise ABB Zurich's shareholding in ABB Australia simply as "an investment" for the purpose of determining when the dividend could be "derived". Rather, it is necessary to recognise ABB Zurich's position as a holding company. The evidence shows that in May/June 1996 ABB Zurich was owned in equal shares by ABB AB, Stockholm (Sweden) and ABB AG Baden (Switzerland), and was the holding company within the ABB Group of approximately 1,000 companies around the world, including ABB Australia. 66 The Commissioner submits that for the purposes of identifying the appropriate basis of accounting, the authorities show or suggest that a holding company is classified as a trading company. He cites Carapark Holdings Ltd v Commissioner of Taxation [1967] HCA 5 ; (1966) 115 CLR 653 ( Carapark ) at 663---664; Esquire Nominees Limited v Federal Commissioner of Taxation [1972] HCA 32 ; (1973) 129 CLR 177 ( Esquire Nominees ) at 212 per Barwick CJ, 221 per Menzies J; Brookton Co-operative Society Limited v Commissioner of Taxation [1981] HCA 28 ; (1981) 147 CLR 441 ( Brookton ) at 469 per Aickin J; and Broken Hill Pty Co Ltd v Federal Commissioner of Taxation (1999) 99 ATC 5193 ( BHP v FCT ) at [48] per Kenny J. 67 The Commissioner submits that as a company carrying on business through its some 1,000 subsidiaries, ABB Zurich was prima facie an accruals basis taxpayer; that its trading activities were conducted for the purpose of deriving dividend income from its subsidiaries; and that its dividend income was directly the product of its trading activities and was therefore trading income, not investment income. 68 Like the applicants, the Commissioner relies on the seminal judgment of Dixon J in Carden's Case [1938] HCA 69 ; 63 CLR 108. The Commissioner refers to his Honour's statements to the effect that the tendency of judicial decision has been to place increasing reliance upon the conceptions of business and the principles and practices of commercial accountancy (at 153), and that unless some definite direction is discoverable in the statute, the choice of the method of ascertaining "the true income" must depend upon the method's "actual appropriateness" (at 154). 69 The Commissioner distinguishes Bowaters 38 TC 593 on the basis that Harman J noted (at 597) that "[t]here is no evidence here that the function of this Company was mainly the holding of investments". The Commissioner suggests that his Lordship was intending to distinguish holding companies from purely passive investment companies. The first is evidence relating to the international group of companies known as the ABB Group and its accounting practices. This evidence is found in an affidavit of Alfred Storck of the ABB Group and documentary exhibits. The second class of evidence is expert evidence of an accountant, Brigid Therese Curran, adduced by the Commissioner. The Commissioner read Ms Curran's affidavit subject to objection by the applicants on the ground of relevance. 71 Mr Storck is the Deputy Chief Financial Officer and the person responsible for Corporate Finance and Taxes for the ABB Group. In 1996, he was employed by ABB Zurich as head of its Taxation Division. Mr Storck states that ABB Group "specialises in the engineering of power and automation technologies" and "supplies products and services to utility and industrial customers around the world". 72 Since 1999 the ultimate parent company of the ABB Group has been ABB Limited, a publicly listed company whose shares are listed on the Swiss, New York and Stockholm Stock Exchanges. ABB Limited owns ABB Zurich which is the holding company for the various companies within the ABB Group. 73 The structure of the ABB group was somewhat different in 1996, however, when, as noted earlier, ABB Zurich was owned as to 50 percent by ABB AB of Sweden and 50 percent by ABB AG of Switzerland. That was the position until a corporate restructuring in 1999 in which the shareholders in ABB AB and ABB AG exchanged their shares in those companies for shares in the new company, ABB Limited. It was at that time that ABB Zurich became a wholly owned subsidiary of ABB Limited. ABB Zurich continued as before, however, to hold the shares in the some 1,000 ABB Group companies around the world. 74 In 1996, ABB Australia was the holding company of the Australian companies within the ABB Group, and apparently has continued to fulfil that role. Thus, ABB Australia derived dividend income from its subsidiaries, and ABB Zurich derived dividend income from ABB Australia. 75 Subject to an objection on the ground of relevance, copies of the financial statements of ABB Australia for the calendar years 1993, 1994, 1995, 1996 and 1997 are in evidence. The latter note relates to dividends declared by ABB Australia (I treat "declared" and "approved" as synonyms). The effect of the latter note is that ABB Australia recognises dividends it pays in its accounts of the year in which it declares them. Thus ABB Australia treated the time of declaration as the time at which it recognised in its accounts both dividends from its subsidiaries and dividends to its parent. The Directors' Report contained in ABB Australia's Annual Report for 1996 disclosed that ABB Australia had paid a dividend of $49 million "to the parent company during the year". Thus, notwithstanding the transactions described, the Directors' Report stated that ABB Australia had paid the dividend of $49 million to ABB Zurich. 77 I turn now to the evidence of Ms Curran. 78 Ms Curran was retained by the Commissioner as an independent expert. Ms Curran is a chartered accountant specialising in the provision of financial reporting advice. She operates as a self-employed financial reporting consultant. Until 2001 she was a partner with PricewaterhouseCoopers, and was the National Technical Partner in the Audit and Business Assurance Services Division of the firm. She was responsible for the provision of technical financial reporting advice on the application and interpretation of financial reporting requirements, in particular in relation to the application and interpretation of Accounting Standards, both Australian and international. 79 Ms Curran is a member of CPA Australia and of The Institute of Chartered Accountants in Australia. She was a member of the Australian Accounting Standards Board from 2000 to 2003, and since 2006, has been a member of the Audit Quality Review Board. 80 Four questions were put to Ms Curran on behalf of the Commissioner. I will not set out the questions and her answers to them but will summarise the general effect of her evidence. 81 Ms Curran states that in 1996 there was no Australian Accounting Standard dealing specifically with the accounting treatment for the recognition of dividend income, and that dividend revenue was required to be recognised in Australia in accordance with the general principles prescribed by Accounting Standard AASB 1001: Accounting Policies ( AASB 1001 ). (Paragraph 6.1, AASB 1001 . In relation to the receipt of dividends from an investment, application of the accrual basis of accounting necessitates that the dividend revenue be recognised by the shareholder when the entitlement is established. This will usually be when the declaration of a dividend is approved by the shareholders of the company. 29. At the point in time when the dividend declaration is approved, the shareholder has an entitlement to receive the dividend, such entitlement qualifying as an asset. Similarly, the company declaring the dividend has an obligation at that time, such obligation qualifying as a liability. Under the principles of accrual accounting, the shareholder and the company declaring the dividend would each need to record their respective entitlement or obligation, as the case may be, in their financial reports. She states that this "text-book" recognition of two separate transactions or events is implemented by the raising of separate journal entries, but that if both occur in the same financial accounting period there is no loss of information if a single accounting entry is made, and this departure from the text-book approach is common. If, however, the transactions or events occur in different financial periods, the dividend receivable will be shown as income in the earlier period, and it will be shown as converted to cash in the later period after the dividend is received. 84 Ms Curran states that if ABB Zurich had been an Australian entity for the calendar year ended 31 December 1996, it would have been required under Australian Accounting Standards to recognise the $49 million dividend revenue as at 30 May 1996 when the dividend was approved for payment, but that since ABB Zurich's 1996 financial reporting year did not end between 30 May 1996 and 21 June 1996, ABB Zurich would have been permitted to recognise the dividend revenue upon receipt, without being in breach of any Australian Accounting Standard and without any loss of information in its financial statements. 85 According to Ms Curran, not only was the accrual basis of accounting, and therefore the recognition of dividends receivable as income when declared, required by AASB 1001 : it in fact reflected the ordinary practice of Australian companies in 1996. Ms Curran acknowledges, however, that when declaration and receipt occurred within the same financial reporting period, it could have been a common practice to make just a single journal entry. Ms Curran states that although the relevant Accounting Standard reference has changed since 1996, and the more generic AASB 1001 has yielded to "the development and promulgation of Accounting Standards that prescribe specific recognition, measurement and disclosure requirements applicable to an extensive range of transactions", the substance of the accounting requirement regarding recognition of dividend revenue remains unchanged, as does the practice of Australian companies in applying the accrual basis of accounting in that respect. 86 Ms Curran also states that the direction given by ABB Zurich to ABB Australia to pay the dividend of $49 million to BAL and ABB Australia's subsequent compliance with that direction constituted a transaction distinct from the establishment of the entitlement to the dividend, and should be accounted for separately. No revenue or expense item arising from the subsequent transaction was permitted to be combined with or offset against the dividend revenue itself. 87 As evidence of company accounting practice in 1996, Ms Curran quotes from the 1996 financial statements of ABB Australia, Note 1 (Summary of Significant Accounting Policies), the first of the two extracts set out at [75] above. 88 Ms Curran was not cross-examined on her affidavit. The applicants submitted that her evidence was irrelevant because it relates to company accounting practice, not the terms of the Act. In substance, the applicants submit that the notion of the time of derivation of income consisting of a dividend is established by the Act, and authoritative judicial expositions of it, as being the time of receipt, so that there is no scope for evidence of business and accounting practice. I will address the applicants' objection to Ms Curran's evidence below. 89 The applicants raise a second objection to Ms Curran's evidence. This is that the assumptions that the "Background Facts & Assumptions" that she identified in her report did not exhaust all of the relevant background facts, and, in particular, did not include reference to the assignment by ABB Zurich to BZW or by BZW to BAL. The Commissioner responds by pointing to Appendix C to Ms Curran's report which lists her "sources of information" as including documents which described those two transactions. 90 I do not sustain this second objection raised by the applicants. Ms Curran's testimony is directed primarily to the accounting treatment in 1996 of dividends declared and later received, first in the Australian Accounting Standards at that time, and, second, in commercial practice at that time. Her evidence is clear that any subsequent transaction dealing with the right to receive the dividend would have to be accounted for separately. She addressed what might be conceived of as one such subsequent transaction, namely, the giving of the direction to pay by ABB Zurich to ABB Australia, and ABB Australia's compliance with that direction. It is implicit that the contract to sell between ABB Zurich and BZW would have to be accounted for separately in the financial statements of those respective companies and would post-date derivation by ABB Zurich. 91 The assumptions stated by Ms Curran were adequate for the purpose of the particular opinions that she expressed. Indeed, her opinions relating to the appropriate time (time of declaration or time of payment) at which dividends should be and were treated in commercial accounting as "income" were expressed at such a level of generality or abstraction that it is difficult to see that assumptions concerning the facts of the present case had any role to play for her. Ms Curran's evidence was framed by the questions she was asked. She was asked questions in relation to "reporting entities" generally in Australia in respect of the calendar year ended 31 December 1996. The applicants would accept that if, on 21 June 1996, the dividend had been paid to ABB Zurich rather than to BAL, s 128B(1) would have been enlivened, albeit on that date and not earlier. 93 The applicants make two submissions: first, the dividend is "investment income" and, in accordance with general principles, investment income is derived when it is received; and, second, on the true construction of s 128B(1), the same item of income must, by some moment of time, satisfy both the descriptions of "derived" and "paid". According to this second submission, even if ABB Zurich derived income consisting of the dividend on 30 May 1996, it was not that same item of income that consisted of the dividend that was paid to BAL on 21 June 1996. 94 The Commissioner contests both submissions. He submits that whatever may be the position in other circumstances, in this case income consisting of a dividend was derived by ABB Zurich within para (a) of s 128B(1) when the dividend was declared on 30 May 1996, and the payment by ABB Australia on 21 June 1996 was a payment that satisfied para (b) of s 128B(1). 95 Before I turn to the authorities on the derivation of income to which I was referred, it is useful to note the following matters. 96 First, ABB Zurich became absolutely, indefeasibly and beneficially entitled on 30 May 1996 to be paid to the amount of the dividend on 21 June 1996: it satisfied on 30 May 1996 the only condition of entitlement, namely, being a member of ABB Australia on that date. 97 Secondly, unlike s 44(1) of the Act (set out at [6] above), s 128B(1) does not expressly require that the dividend be paid to the "shareholder". Whereas s 44(1) includes in the assessable income of a taxpayer "dividends paid to him by the company", s 128B does not identify the payee. It would have been possible for s 128B(4) to make the payee of the dividend the person liable to pay withholding tax, but it did not do so. It identified the person liable to pay withholding tax simply as a "person who derives income to which [s 128B] applies". In my opinion, the terms of s 128B(1) do not require that at the time of derivation, income must already satisfy the description "consists of a dividend paid by a company that is a resident". The primary concept is simply "income", and it is only once something that is income satisfies both paras (a) and (b) that s 128B(1) is satisfied. The terms of s 128B(1) leave open the possibility that para (a) will be satisfied before para (b), that para (b) will be satisfied before para (a), or that both will be satisfied simultaneously. 98 The applicants submit, however, that by reference to more general principles there is no derivation without payment, so the declaration of the dividend by ABB Australia on 30 May 1996 did not satisfy para (a) of s 128B(1). If there is no derivation without payment, in order for ABB Zurich to be liable to pay withholding tax, the only payment that was made by ABB Australia, namely that made on 21 June 2007 to BAL, would have had to be also a payment to ABB Zurich for s 128B(1) to apply. As noted earlier and discussed below, the Commissioner's alternative submission is, indeed, to that effect. 99 I turn now to consider, in chronological sequence, the cases to which I was referred. 100 St Lucia [1924] AC 508 concerned the question whether interest on unpaid purchase money, payable but not paid, was "income arising or accruing" to the creditor for the purposes of the Income Tax Ordinance 1910 of St Lucia. After selling its estates and business in St Lucia, the taxpayer company did not reside or carry on business there, but was owed part of the purchase price at interest. Twelve months' interest fell due on 30 November 1921 but was not paid. Whether the company was liable to pay income tax in respect of the year 1921 on that interest depended on whether that interest was "income arising or accruing" to the company derived from a source in the colony. 101 The Privy Council rejected the Colonial Treasurer's contention that the interest accrued to the company in 1921. To give them that meaning is to ignore the word "income". The words mean "money arising or accruing by way of income". There must be a coming in to satisfy the word "income". This is a sense which is assisted or confirmed by the word "received" in the proviso at the end of s 4, subs 1. If the taxpayer be the holder of stock of a foreign Government carrying say 5 per cent interest, and the Government is that of a defaulting State which does not pay the interest, the taxpayer has neither received nor has there accrued to him any income in respect of that stock. A debt has accrued to him but income has not. It does not follow that income is confined to that which the taxpayer actually receives. Where income tax is deducted at the source the taxpayer never receives the sum deducted but it accrues to him. It is said, and truly, that a commercial company, in preparing its balance sheet and profit and loss account, does not confine itself to its actual receipts --- does not prepare a mere cash account --- but values its book debts and its stock in trade and so on and calculates its profits accordingly. From the practice of commerce and of accountants and from the necessity of the case this is so. But this is far from establishing that income arises or accrues from ... an investment which fails to pay the interest due. 102 The sale that gave rise to the liability to pay the interest appears to have been a one off, indeed a final, sale of the company's estates in St Lucia. The facts are therefore far removed from those of the present case in which ABB Australia was one of 1,000 wholly owned subsidiaries of ABB Zurich, and the latter company, in its role as shareholder, declared the dividend and framed the terms of payment. On the other hand, the passage does distinguish between money falling due and payable (in the present case, the amount of the dividend had not fallen due and payable as at 30 May 1996) and money coming in. 103 I turn next to the judgment of Dixon J in Carden's Case [1938] HCA 69 ; 63 CLR 108 --- a seminal judgment on the question of the appropriateness of the receipts or accrual method of tax accounting for income derived. 104 The case concerned the income of a medical practitioner subsequently deceased. The issue arose under the Taxation Act 1927 --- 1935 (SA). A question before the Court was whether the earnings or accruals method of identifying the deceased's fees income was appropriate. 105 Dixon J, with whom Rich and McTiernan JJ agreed (Latham CJ dissenting), held that the receipts basis of accounting (on which Dr Carden had furnished returns) had been the appropriate method in relation to the complete years of income during Dr Carden's lifetime (the earnings basis was held appropriate for the broken period from 1 July 1935 to his death on 15 November 1935). Accordingly, Dr Carden had not been required to return as income fees earned during those years but not paid during them, which were outstanding as "book debts" at the end of those years. (2) "... in nearly every department of enterprise and employment the course of affairs and the practice of business have developed methods of estimating or computing in terms of money the result over an interval of time produced by the operations of business, by the work of the individual, or by the use of capital. The practice of these methods of computation and the general recognition of the principles upon which they proceed are responsible in a great measure for the conceptions of income, profit and gain and, therefore, may be said to enter into the determination or definition of the subject which the legislature has undertaken to tax. The courts have always regarded the ascertainment of income as governed by the principles recognized or followed in business and commerce, unless the legislature has itself made some specific provision affecting a particular matter or question" (at 152). (3) "The tendency of judicial decision has been to place increasing reliance upon the conceptions of business and the principles and practices of commercial accountancy ... But the process by which the principles and practices evolved in business or general affairs are drawn upon for the solution of questions presented to courts of law almost inevitably leads to a development in the law itself. For, under our system of precedent, a decision adopting or resorting to any given accounting principle or application of principle is almost bound to settle for the future the rule to be observed and the rule thus comes to look very like a proposition of law" (at 153---154). (4) "Unless in the statute itself some definite direction is discoverable, ... the admissibility of the method which in fact has been pursued must depend upon its actual appropriateness ... [t]he inquiry should be whether in the circumstances of the case it is calculated to give a substantially correct reflex of the taxpayer's true income. We are so accustomed to commercial accounts of manufacturing or trading operations, where the object is to show the gain upon a comparison of the respective positions at the beginning and end of a period of production or trading, that it is easy to forget the reasons which underlie the application of such a method of accounting to the purpose of ascertaining taxable income. Although the field of profit-making which it covers in practice is probably much greater than any other among the manifold forms of income or revenue, it is a system of accounting which does not represent the primary or basal position from which an investigation of income for taxation purposes begins. Speaking generally, in the assessment of income the object is to discover what gains have during the period of account come home to the taxpayer in a realized or immediately realizable form" (at 154---155). (5) The expressions "derived" and "arising or accruing" ordinarily signify receipt, but not in relation to debts due to a trading company, in which case debts due but not paid must be included as income. With regard to non-trading income there must be something "coming in", that is to say, "for income tax purposes receivability without receipt is nothing" (at 155 quoting from Sir Houldsworth Shaw & Baker, Law of Income Tax p111). (6) "The reasons which underlie the practice of estimating for taxation purposes the income from trade or manufacture by means of a commercial profit and loss account consist in the impracticability of computing income in any other way and in the adoption for fiscal purposes of recognized commercial principles. The computation of profits from manufacture and trading has always proceeded upon the principle that profit may be contained in stock-in-trade and 'outstandings'" (at 155). (7) "... a tax upon the profits or income of such a business [a manufacturing or trading business] must be understood as a tax upon the profits or income computed according to the system, because, according to common understanding and commercial principles, that is the method of determining the profits" (at 156). (8) The word "derived" is the equivalent of "arising or accruing" ( Harding v Federal Commissioner of Taxation [1917] HCA 13 ; (1917) 23 CLR 119 at 133), and none of these three words, nor the words "income", "profit" or "gain" in the statute, throw any light on the question of which basis of accounting is appropriate to reflect income in the circumstances of a particular case (at 157). (9) "Where there is nothing analogous to a stock of vendible articles to be acquired or produced and carried by the taxpayer, where outstandings on the expenditure side do not correspond to, and are not naturally connected with, the outstandings on the earnings side, and where there is no fund of circulating capital from which income or profit must be detached for actual enjoyment, but where, on the contrary, the receipts represent in substance a reward for professional skill and personal work to which the expenditure on the other side of the account contributes only in a subsidiary or minor degree, then I think according to ordinary conceptions the receipts basis forms a fair and appropriate foundation for estimating professional income. But this is subject to one qualification. There must be continuity in the practice of the profession" (at 157---158). Dixon J's reasons suggest, however, three things. First, we should expect to be able to identify the meaning and timing of the derivation of dividend income, not necessarily simply by exploring the text of the Act, such as the term "income" or the term "derived", but by reference to relevant business and accounting practice. Second, trading and manufacturing companies have particular features that make an accrual or earnings basis appropriate for them, that are not features of a group holding company such as ABB Zurich, namely, a depletion in a stock of vendible articles on one side of the ledger that would be apt to give a misleading picture as to the company's gain or loss over a period if the corresponding earnings (book debts) arising from the depletion during that period were not shown as income on the other side of the ledger. Third, generally speaking, in order to see whether income has been derived, we should ask whether the income has come home to the taxpayer in a realised or immediately realisable form. 108 Carden's Case [1938] HCA 69 ; 63 CLR 108 suggests that in the absence of features taking the case out of the ordinary or evidence of business and accounting practice pointing to a different result, I should treat the present dividend as income derived if and when it came home to ABB Zurich in a realised or immediately realisable form. 109 Prior's Case 6 ATD 5 was concerned with the application of s 19 of the Income Tax Assessment Act 1922---33 to a capitalisation by a Deed of Dissolution of Partnership dated 13 August 1932, and therefore within the financial year ended 30 June 1933, of an amount of ₤2,097 that represented a balance of interest outstanding by one former partner to the other. The sum of ₤2,097 was included in a sum of ₤8,388 that was agreed to represent the total amount owing by the former partner to the other. As part of the agreement on dissolution, the amount of ₤8,388 was secured by a charge "on property already heavily mortgaged and quite incapable of producing a surplus out of which the amount representing interest could be paid" (at 13). 110 The interest was not paid but was carried to a capital account, and in that sense capitalised. Section 19 of the Income Tax Assessment Act 1922---1933 was all but identical to s 19 of the Act (set out at [9] above --- the words "or money" did not appear in the earlier version). Rich J, with whom Starke and McTiernan JJ agreed, considered that the facts showed that the taxpayer got nothing except a new obligation to pay in exchange for the existing obligation to pay, which made him "no nearer getting his money or of transferring it into anything of any value" (at 12). Rather colourfully, his Honour said: "[a]ll that happened in this case was to change a forlorn hope of interest into a still more forlorn hope of capital" (ibid). Rich J thought that in order to see whether income is being derived, "one must look to realities", adding that while usually payment of interest by cheque involves receipt of income, "payment by a valueless cheque does not" (at 13). Like Dixon J in Carden's Case [1938] HCA 69 ; 63 CLR 108, his Honour also quoted from Sir Houldsworth Shaw & Baker, Law of Income Tax , p111: "for income tax purposes receivability without receipt is nothing". 111 Prior's Case 6 ATD 5 stands for the proposition that s 19 is not engaged where there is no increase in the taxpayer's resources. There was such an increase in the resources of ABB Zurich upon declaration of the dividend. It was certain that the dividend would be paid; it was ABB Zurich's decision to fix a future date for payment; and immediately after declaration of the dividend ABB Zurich was able to sell the right to be paid it. Prior's Case is therefore of little relevance to the present case. 112 Arthur Murray (NSW) Pty Ltd v Commissioner of Taxation [1965] HCA 58 ; (1965) 114 CLR 314 ( Arthur Murray ) was, in a sense, the converse of Carden's Case [1938] HCA 69 ; 63 CLR 108. The taxpayer company received fees for dancing lessons yet to be given. It placed the fees in a suspense account until the lessons were given, when it transferred them to its revenue account. The High Court held that the fees were not assessable income at the time of receipt. 113 In their joint judgment, Barwick CJ, Kitto and Taylor JJ said that Dixon J's reference in Carden's Case [1938] HCA 69 ; 63 CLR 108 to monies having "come home" to the taxpayer, was a reference, not simply to receipt, but to the reaching of a situation in which monies received might properly be counted as gains completely made, so that there was neither legal nor business unsoundness in regarding them, without qualification, as income derived. A conclusion as to what that understanding is may be assisted by considering standard accountancy methods, for they have been evolved in the business community for the very purpose of reflecting received opinions as to the sound view to take of particular kinds of items. ... A judicial decision as to whether an amount received but not yet earned or an amount earned but not yet received is income must depend basically upon the judicial understanding of the meaning which the word conveys to those whose concern it is to observe the distinctions it implies. What ultimately matters is the concept; book-keeping methods are but evidence of the concept. 114 Their Honours recognised that where statute lays down a test for the inclusion of particular kinds of receipts in assessable income, commercial and accounting practice cannot be substituted for the test, but said there was no such test in the case before the Court, the only relevant word being "income", which was to be understood according to "the vocabulary of business affairs" (at 320). 115 Subsection (1) of s 128B does not, in my view, lay down a test of the kind contemplated by their Honours. The subsection invokes the notion of "income ... derived", and I am required to have regard to general commercial and accounting practice, if evidence of it is put before the Court, as to when income consisting of a dividend declared in the circumstances of the present case is regarded as having "come home" to the parent company. 116 In South Australia v Commonwealth [1992] HCA 7 ; (1992) 174 CLR 235, Dixon J's judgment in Carden's Case was again referred to by the High Court. In a joint judgment, Mason CJ, Deane, Toohey and Gaudron JJ said (at 252) that in accordance with Dixon J's statement in Carden's Case [1938] HCA 69 ; 63 CLR 108 at 152 (see [106] (1), (2) above), "the courts have placed reliance upon the conceptions of business and the principles and practices of commercial accountancy in order to arrive at an assessment of income, the object being 'to discover what gains have during the period of account come home to the taxpayer in a realised or immediately realizable form'" (their Honours were quoting from Dixon J in Carden's Case [1938] HCA 69 ; 63 CLR 108 at 155). 117 In relation to interest on money lent, their Honours observed that it was not the vesting of the chose in action, but the derivation of the interest by the taxpayer that resulted in its inclusion in assessable income. In the case of income by way of interest, the income is derived when the interest payment is received or, if the taxpayer's taxation accounts are compiled on an accruals basis when the interest payment accrues, that is, when the amount of the interest becomes due and payable. Although the debt for interest is a chose separate from the debt for the principal sum, the chose in action in respect of the interest comes into being upon the making of the loan. Interest is earned, however, by money being made available over time in accordance with the contract of loan. 118 I do not regard the passage quoted as pointing to one answer or the other as to whether ABB Zurich derived income consisting of the dividend on 30 May 1996. Moreover, the applicants' contention is that derivation occurred on 21 June 1996, not because the dividend became due and payable on that date, but because dividend income is derived only when the dividend is paid. Consistently with their submission, if the dividend in the present case had not been paid until, say, 29 June 1996, they would contend that derivation could not have occurred before that date, and, in particular, that it could not have occurred on 21 June 1996 when the dividend had fallen due and payable. 119 The last of the cases principally relied on by the applicants, Bowaters 38 TC 593, concerned a dividend declared by an Australian subsidiary of a United Kingdom parent. The case concerned provisions of the Finance Act 1937 (UK) and the Finance Act 1952 (UK). The dividend in question was declared on 16 December 1953 but not paid until 28 January 1954. The relevant accounting period commenced on 1 October 1953 and ended on 31 December 1953. Accordingly, the dividend was declared during that chargeable accounting period, but paid after it. 120 The taxpayer company was the main selling company of the Bowaters organisation and was the principal member of a group of companies. It had two subsidiaries that were ordinarily resident in the United Kingdom and a number of non-resident subsidiaries, including the Australian company that declared the dividend. At the annual general meeting of the Australian company held on 16 December 1953, the dividend was declared, in respect of its accounting year ended 30 September 1953, payable forthwith. Bowaters' accounts for the year ended 30 September 1953 anticipated the dividend to be declared by the Australian company. 121 The particular dividend was not included in Bowaters' computation of its profits for the purposes of Excess Profits Levy for the period of three months to 31 December 1953, on the ground that it was received after 31 December 1953. However, the Crown included it in the assessment of profits to Excess Profits Levy for that three month period on the ground that the income arose during that period. It was against that assessment that Bowaters appealed. The Crown affirmed the assessment. As required by Bowaters, a case was stated for the opinion of the High Court. 122 Section 19 of the Finance Act 1937 (UK) charged a tax on the profits arising in each "chargeable accounting period" from any trade or business to which that section applied. Subsection (2) of s 19 made the tax chargeable on "all trades or businesses of any description carried on in the United Kingdom", and from 1947 the tax applied only to corporations. Subsection (4) of s 19 provided that where a company's functions consisted wholly or mainly in the holding of investments, the holding of them was deemed, for the purposes of s 19, to be a business carried on by the company. 123 The Finance Act 1952 (UK) introduced an "Excess Profits Levy", which, as events transpired, existed only for the years 1952 and 1953. For Bowaters, there were three "chargeable accounting periods" during that two year period: the first nine months of 1952; the year ended 30 September 1953; and the last three months of 1953. It was during this final period that the dividend was declared by the Australian subsidiary. 124 Harman J noted that there was no evidence that the functions of Bowaters was mainly the holding of investments. Rather its business was mainly that of trading in paper, although it also had a number of wholly owned subsidiaries from which it might draw dividends. Accordingly, s 19(4) had no application. 125 His Lordship considered that various English authorities to which he referred established that "excepting the case of receipts from trade or receipts analogous to trading receipts, the [fundamental conception of Income Tax legislation] is ... receipt and not receivability" (at 599). His Lordship rejected the Crown's submission that the dividends were as much a part of Bowaters' trade as were the profits of its trading activities. 126 It followed that the expression "income arising" in the context before his Lordship (a dividend declared and paid by an Australian subsidiary to its United Kingdom parent) and in every context except that of trade debts, meant income received. The company's appeal was allowed. 127 Harman J expressed the opinion (at 599) that the method by which Bowaters kept its accounts had no relevance for tax purposes. 128 Bowaters 38 TC 593 is said to be against the Commissioner's contention in the present case. I note that I do not see any relevant distinction between the concepts "arising" in ss 19 and 20(1) of the Finance Act 1937 (UK) and "derived" in the Australian s 128B(1): see Harding v Federal Commissioner of Taxation [1917] HCA 13 ; 23 CLR 119 at 133 noted at [106] above. 129 Unlike Bowaters, ABB Zurich would apparently have qualified for the purposes of s 19(4) of the Finance Act 1937 (UK) as a company whose functions consisted wholly or mainly in the "holding of investments". Indeed, the only business of ABB Zurich was that of managing the affairs of its some 1,000 subsidiaries. It appears, although not clearly so, that the reason why Harman J did not accept a submission by the Crown that the receipt of dividends was as much a part of Bowaters' trade as was the profit from its trading activity, was that s 19(4) did not apply (at 599). In other words, if s 19(4) had applied, as it apparently would have done to the circumstances of ABB Zurich, his Lordship would have treated a dividend from its subsidiary in the same way as he would have done a trading receipt. It seems that his Lordship would have treated the dividend as derived when the debt for it arose, that is to say, when the subsidiary declared the dividend (at 598). 130 Before returning to consider the evidence, in particular that of Ms Curran, I will refer to the authorities called in aid of the Commissioner. 131 In Carapark [1967] HCA 5 ; 115 CLR 653, the taxpayer was a holding company which had a contract of insurance providing for payment to it of a lump sum in the event of death by air accident of its employee or the employee of an associated or subsidiary company. An employee of a subsidiary was killed when an aeroplane in which he was travelling in the course of his employment crashed. The proceeds of the policy were paid to the taxpayer company. The Commissioner contended that the amount was received as "income" in the ordinary sense of the word. It will be noted that there was no question that the amount was received, the issue being as to its proper characterisation. 132 The High Court held that the amount was in the nature of income because it was intended to provide against loss of dividend income the taxpayer might suffer in consequence of the death or disablement of employees of its subsidiaries. In their joint judgment, Kitto, Taylor and Owen JJ said (at 663---664) that the insurance monies must be considered as having been gained in the course of the parent company's business, using "business" in "the broad sense which makes it relevant to the tax problem, that is to say as meaning the continuous course of conduct which the appellant was following for the derivation of income". 133 It is common ground that the dividend of $49 million was "income" and I accept that ABB Zurich was carrying on business. I do not see, however, how these circumstances or the decision in Carapark determine the criterion by virtue of which, and therefore the time at which, ABB Zurich derives income consisting of dividends declared by its subsidiaries. Neither Carapark nor any other authority of which I am aware equates any form of "carrying on of business" at all with the trading or manufacturing activity that has been referred to as exceptional in the cases. 134 The Commissioner relies on a statement in Esquire Nominees [1972] HCA 32 ; 129 CLR 177 by Barwick CJ (at 212) that a company may make profits without trading in goods or commodities, or, for that matter, in securities, and that it may do so simply through its investment portfolio, indeed, through investment in a single subsidiary. 135 Esquire Nominees [1972] HCA 32 ; 129 CLR 177 concerned an issue over the location of the source from which income was derived. The taxpayer company, Esquire Nominees Ltd, was incorporated in Norfolk Island, as was Mitchell Credits Ltd. Each had its registered office and central management and control in Norfolk Island. In the year ended 30 June 1969, Esquire Nominees Ltd received a dividend from Mitchell Credits Ltd. Mitchell Credits Ltd derived the funds for the payment of the dividend from a dividend which it received from Pharmaceutical Investments Ltd, which was also incorporated in Norfolk Island. That company paid the dividend to Mitchell Credits Ltd from funds constituted by a dividend it received from an Australian company, whose income came from dividends paid to it by another Australian company carrying on business in Australia. 136 Barwick CJ (at 212) said that the place where a company makes its investment income is the place where it has its central management and control, whereas the place where a trading or manufacturing company makes its income is the place where its trading or manufacturing activities are carried on. 137 The High Court held that Esquire Nominees Ltd was a resident of Norfolk Island and that the source of the dividend, the fund out of which Mitchell Credits Ltd declared it, was within Norfolk Island. 138 With respect, in my view the case has nothing to do with the meaning, and therefore the timing, of "derivation of income consisting of a dividend" in s 128B(1). 139 The Commissioner also refers to a passage in the judgment of Aickin J in Brookton [1981] HCA 28 ; 147 CLR 441. His Honour stated (at 469) that in the case of a company that had no activity other than the receipt of dividends from shares that it had purchased, it would ordinarily be regarded as carrying on a business, even if it did not actively manage its portfolio of investments, whereas an individual in the same circumstances would not necessarily be regarded as carrying on such a business. Aickin J cited Esquire Nominees [1972] HCA 32 ; 129 CLR 177 at 212 per Barwick CJ and 221 per Menzies J. Again, the statement is relevant only to the question whether ABB Zurich carried on a business. I accept that it did. 140 Finally, the Commissioner relies on BHP v FCT 99 ATC 5193, in which Kenny J said (at [48]) that the taxpayer company carried on businesses which included holding shares in, and managing, its subsidiaries. Her Honour stated, citing Esquire Nominees [1972] HCA 32 ; 129 CLR 177 and Brookton [1981] HCA 28 ; 147 CLR 441, that the holding of shares in subsidiaries can of itself constitute the carrying of a business for the purposes of s 51(1) of the Act. 141 Clearly ABB Zurich was carrying on a very substantial business in May/June 1996. That business can be described as one of managing its investments in, and the affairs of, some 1,000 subsidiaries around the world. It was far removed from the position of a passive investor, whether corporate or non-corporate. 142 I return now to Ms Curran's evidence relating to the accounting treatment of dividends. Ms Curran's evidence, summarised at [78]---[87] above, is evidence both of the contents of Accounting Standards that applied in 1996, notably, AASB 1001 , and of the extent to which AASB 1001 reflected the ordinary business practices of companies in Australia at that time. Ms Curran's evidence is that the practice was to use the accrual basis of accounting in the recognition of dividend revenue. I refer, in particular, to paras 28 and 29 of her report set out at [82] above. 143 Her evidence in this respect is consistent with evidence relating to the ABB Group. We know that ABB Australia took dividend income from its own subsidiaries into profit when the subsidiaries declared a dividend, and recognised its dividends to ABB Zurich when they were declared. It seems reasonable to infer on the basis of this evidence that ABB Zurich would similarly have treated dividends declared by its subsidiaries around the world as its income upon their being declared. I draw that inference. I also infer that ABB Zurich would cause its subsidiaries to declare dividends only at times when they were able to pay them out of profits, that is to say, at times when the subsidiaries were able lawfully to pay them. 144 The Accounting Standards were relevant to the profit and loss account required by s 292 of the Corporations Law . That section, which was in force in 1996, required a company's directors to cause to be made out a profit and loss account for each accounting period that gave a "true and fair view of the company's profit or loss for that accounting period". Section 292 fell within Pt 3.6 ("Accounts") of the Corporations Law . Accounting standards were authorised to be made only for the purposes of Pt 3.6 or Pt 3.7 ("Audit") of the Corporations Law : s 285A. 145 Business and accounting practice relevant to the preparation of the profit and loss account may be taken to have influenced and been influenced by the Accounting Standards. I do not think, however, that this necessarily deprives evidence of when a particular class of income is recognised for profit and loss account purposes of relevance to the question of when that class of income is regarded as having "come home". 146 In Commissioner of Taxation v Citibank Ltd (1993) 44 FCR 434, Hill J, with whom Jenkinson and Einfeld JJ agreed, cautioned against a too ready reliance on business and accounting practice relating to preparation of the company's profit and loss account required in accordance with s 269(1) of the Companies (New South Wales) Code (at 443---446). What that evidence establishes is that the outcome of the finance or actuarial method is an appropriate figure to be used in the preparation of the profit and loss account of the respondent for the year in accordance with the Companies (New South Wales) Code : s 269(1). If the relevant issue were the determination of the profit of the respondents, or whether that profit was to be seen as on revenue account, the evidence would clearly be most cogent. But it must be remembered that the role of the accounting standards is in the determination of profit so as to ensure that financial statements, required to be prepared by statute, give a true and fair view and not the determination of "income", notwithstanding that those two concepts may, as will be seen, sometimes overlap. Thus Professor Walker [an expert witness] states that he has been asked to advise as to the correct method of accounting in relation to the leases in question. But his affidavit and subsequent explanation makes it clear that he has answered that question by reference to the companies law for the purposes of which the relevant standards have been prepared and with which of course each of the respondents was obliged to comply. Mr Westworth's affidavit [regarding accounting practices] makes clear that he too has addressed himself to that issue, not relevant in the present proceedings. All that may be said is that if there be no impediment in the Act to bringing into account, in a case such as the present, a net profit figure as gross income, then that profit figure will need to be calculated in accordance with the accounting standards. The real issue for decision is rather a question of construction of the Act, namely, whether in a case such as the present, the scheme of the Act precludes treating as gross income the net profit calculated in accordance with the financial or actuarial method. He gave as an example the issue whether a cash receipts or accruals basis of accounting will give "a true reflex of the income derived by a taxpayer" (at 443, citing Carden's Case [1938] HCA 69 ; 63 CLR 108 --- his Honour also cited Arthur Murray [1965] HCA 58 ; 114 CLR 314). 147 Ms Curran's evidence as to the ordinary business practice of companies in Australia in 1996 was that dividend revenue was recognised by "the application of the accrual basis of accounting as required in AASB 1001 ". On the specific question whether dividend income is derived when a parent company causes its subsidiaries to declare dividends, I see no basis for distinguishing as entirely irrelevant the preparation of profit and loss accounts for profit and loss purposes under the companies legislation. For profit and loss purposes, the question is whether the amount has been fully earned so as to be reflected in profit, whereas for income tax purposes the question is whether it has "come in" or "come home", but when it is recalled that a gain can come home in an "immediately realisable form" as well as in a "realised form", the distinction is not determinative of the question of relevance. 148 Evidence of business and accounting practice in the present respect would, of course, be irrelevant if the terms of the Act made it so by themselves making it clear what the answer is, because evidence could not accepted that was inconsistent with the Act. In my view, however, the "open textured" nature of the terms "income" and "derived" in s 128B(1) invites evidence of business and accounting treatment of a specific class of income such as a company's derivation of dividend income from another company. 149 In Commissioner of Taxation (Commonwealth) v Sun Alliance Investments Pty Limited (in liq) [2005] HCA 70 ; (2005) 225 CLR 488, the High Court in a joint judgment, drew attention to the fact that the meaning of the word "derived" in a particular provision could not be ascertained without at least some reference to the thing said to be derived (in that case, the profits of the company) (at [42]). In particular their Honours cautioned against conflating the concept of derivation of income with derivation of profits. Their Honours referred to the fact that for the most part the notion of "income" directs attention to "receipts" by a taxpayer. Their Honours further referred to the late Professor RW Parsons's work, Income Taxation in Australia (The Law Book Company, 1985) in which the learned author stated (at [2.10]): "For the most part, the law expresses an ordinary usage notion of derivation of a receipt". I do not think that their Honours or the late learned author were intending to exclude the possibility that business and accounting practice might demonstrate, in the case of the particular category of income, that it is derived at a time other than upon receipt. Arthur Murray [1965] HCA 58 ; 114 CLR 314 stands against the existence of any such universal rule. 150 Generally speaking dividend income is derived when it is received. But generally speaking the shareholder is passive, does not control the declaration of the dividend, and is not carrying on a business of which the very act of declaring the dividend forms part. ABB Australia was wholly owned and controlled by ABB Zurich; ABB Zurich's business was that of managing its investments, and the affairs of, some 1,000 subsidiaries around the world including ABB Australia; the decision to declare the dividend and to defer payment of it was entirely that of ABB Zurich; immediately upon declaration of the dividend, ABB Australia became indebted to ABB Zurich for $49 million; and that indebtedness was an immediately realisable asset of ABB Zurich and was in fact immediately realised by it. 151 I am required to decide only whether the dividend was derived by ABB Zurich when it was declared in the circumstances of this case. I do not think it is ignoring the separate legal personalities of the two companies to take all of the circumstances to which I have just referred into account. Those circumstances, supported by the evidence that ABB Australia and, I infer, ABB Zurich, recognised dividends at the time of declaration, and to less extent the general evidence of Ms Curran, lead me to conclude that ABB Zurich derived income consisting of the dividend when it was declared by ABB Australia on 30 May 1996. 152 I do not think that Taxation Ruling TR98/1 is inconsistent with this conclusion. Paragraph 1 of the Ruling indicates that the Ruling is concerned with assessable income, and para 7 states that the Ruling does not apply to income that is subject to specific provisions of the Act. It gives as illustrations dividends assessable under s 44(1) or securities assessable under Div 16E of Pt III of the Act. Paragraph 7 adds that the Ruling "applies to income assessable under subsections 6-5(2) and (3) of the [ Income Tax Assessment Act 1997 (Cth)]". 153 Income derived by a non-resident consisting of a dividend paid by a resident is not assessable income and is, moreover, the subject of specific provisions of the Act, namely, those found in Div 11A. Was the dividend income derived by ABB Zurich after 30 May 1996 but on or before 21 June 1996? I assume here, contrary to my conclusion above, that the only way in which ABB Zurich could derive income consisting of the dividend was by the payment of the dividend to it. ABB Australia did not pay the dividend to anyone prior to the payment it made on 21 June 1996. Accordingly, the question is whether ABB Australia paid the dividend to ABB Zurich on that date. 155 On the assumption stated, in my view ABB Zurich derived income consisting of that dividend on 21 June 1996 because ABB Australia paid the dividend of $49 million to ABB Zurich on that date. (2) Notwithstanding the two equitable assignments, legal title to that debt remained in ABB Zurich throughout. (3) Associated with the equitable assignment from ABB Zurich to BZW, ABB Zurich undertook various contractual obligations (described below). 157 I have previously described the First Offer (see [39]---[40] above). Following payment of the price of $48,816,995 by BZW to ABB Zurich on 5 June 1996, ABB Zurich remained under contractual obligations to BZW under the First Offer. The primary obligation was to "assign the Dividends to the Assignee" (cl 3.1), but ABB Zurich also gave warranties and representations to BZW in cl 4 as to its title to the shares in ABB Australia. It had undertaken to give a direction to ABB Australia to pay the dividend to such bank account as BZW or its Permitted Assign should designate (cl 5). BZW had a right to assign the benefit of the First Offer to any Permitted Assign, and, by implication, ABB Zurich was obliged to recognise and not to detract from the existence of that right or from any exercise of it by BZW. 158 In addition to these personal obligations arising from the unilaterally executed First Offer document, ABB Zurich incurred obligations under two other associated documents. They were a Guarantee and Indemnity Agreement and an Offshore Custody Deed, each executed also on 3 June 1996 by both ABB Zurich and BZW. By the Guarantee and Indemnity Agreement, ABB Zurich guaranteed to BZW that if ABB Australia should not pay the sum of $49 million into such bank as should be designated by BZW, its successor in title, or a Permitted Assign, as the case might be, on 21 June 1996, ABB Zurich would on demand pay the amount together with interest as from 21 June 1996 until payment (cl 2.1). By cl 3, ABB Zurich agreed to indemnify BZW in respect of any non-payment of the dividend in the event that for any reason the guarantee in cl 2 should not be enforceable against ABB Zurich. By cl 10, ABB Zurich agreed that the benefits of the Guarantee and Indemnity Agreement were given to BZW, its successors in title and its Permitted Assigns. 159 By the Offshore Custody Deed, ABB Zurich and BZW agreed generally to the effect that the First Offer document and the Guarantee and Indemnity Agreement were not to be brought into the United Kingdom or Australia, unless BZW was required to bring one or more of the documents into the United Kingdom for the purpose of enforcement, in which case ABB Zurich undertook to pay to BZW the amount of any stamp duty payable. 160 In summary, while, from the time of payment of the purchase price of $48,816,995 by BZW to ABB Zurich on 5 June 1996, ABB Zurich held its legal right to be paid the dividend upon trust for BZW, and while it subsequently came to hold the debt on trust for BAL, ABB Zurich had ongoing contractual obligations to BZW for the non-performance of which it would be liable in damages to BZW. First, ABB Zurich directed ABB Australia to pay BAL. Second, ABB Australia's articles of association were amended (in effect by ABB Zurich) to require ABB Australia to pay the amount of any dividend to any person nominated in writing by the shareholder. (On discharge of the obligor's obligation to the assignor where there is nothing more than an equitable assignment, see Tolhurst, op cit [8.06]. The word "paid" is used in the Act in relation to dividends in both ss 44(1) and 128B(1)(b). The present question, however, is not one of the construction of the word as used in the Act. Rather, the question is whether, assuming that a dividend is derived only when it is paid, the dividend was paid to, and therefore derived by, ABB Zurich on 21 June 1996. This question involves general law notions of payment. 163 In Charter Reinsurance Co Ltd v Fagan [1997] AC 313 Lord Mustill described the word "paid" as a "slippery" word (at 384). In the present case, it is not in dispute that the debtor, ABB Australia, paid the amount of its indebtedness on 21 June 1996: the question is whether the payment it then made to BAL was also payment to ABB Zurich. 164 Essential to the notion of payment is the agreement of a creditor to accept something as payment. If a creditor directs the debtor to pay to a third party to whom the creditor has an obligation and the debtor does so, the payment to the third party is payment to the creditor because the creditor has consented to treat it as such. Take the ordinary case of the application of s 44(1) of the Act to the declaration of a final dividend payable immediately. Could it be seriously suggested that it was not paid to the shareholder because it was paid to a third party at the direction of the shareholder? It would have been paid to the shareholder even absent the inclusory definition of "paid" in s 6(1). 165 Even a payment into a creditor's bank account is a payment to a third party, namely, the bank. The payment is made on the basis that the amount will be credited to the creditor's account with the bank, and we have no difficulty in saying that the debtor has "paid" the creditor. 166 It is said that in order for payment to occur, there must be a monetary obligation, the offer of an act by the debtor in discharge of it, and an acceptance of that offer by the creditor; see Proctor C, Mann on the Legal Aspect of Money (6 th ed, Oxford University Press, 2005) at [7.04]; Brindle M and Cox R (eds), The Law of Bank Payments (3 rd ed, Sweet & Maxwell, 2004) at [1-002] ff, and cases referred to in those works, including Libyan Arab Foreign Bank v Bankers Trust Co [1989] QB 728 at 764 per Staughton J; Goode RM, Payment Obligations in Commercial and Financial Transactions (London, Sweet & Maxwell, 1983) at 11 ff; and Derham SR, The Law of Set-Off (3 rd ed, Oxford University Press, 2003) at [16.01] and fn 2. These conditions are satisfied in the present case. ABB Australia had a monetary obligation to ABB Zurich; these companies were in agreement that that monetary obligation should be discharged by ABB Australia's paying the amount to BAL. 167 Cases on the statutory definition of "paid" similarly suggest that the word "paid", even standing alone, refers to the making over of a benefit that is accepted in discharge of the dividend debt. Brookton [1981] HCA 28 ; 147 CLR 441 concerned s 44(1)(a) of the Act (set out at [6] above). It will be recalled that s 44(1) referred to dividends paid to a shareholder. I do not construe the word "paid" in art 82(1) of ABB Australia's articles of association (see [51] above) or understand the general law notion of payment so narrowly that the effectuation of the dividend declared in favour of ABB Zurich by payment could take no form other than the transfer of money to it. 168 In Jolly v Federal Commissioner of Taxation [1933] HCA 63 ; (1934) 50 CLR 131 ( Jolly ), Dixon J summarised the effect of two earlier High Court decisions on the description of income in s 14(b) of the Income Tax Assessment Act 1915-1921 (Cth), to include "dividends, interest, profits or bonus credited or paid to any member, shareholder, or debentureholder of a company which derives income from a source in Australia" (the two earlier cases were Webb v Federal Commissioner of Taxation [1922] HCA 27 ; (1922) 30 CLR 450 and James v Federal Commissioner of Taxation [1924] HCA 34 ; (1924) 34 CLR 404). His Honour stated that whatever else the provision might include, it extended to "all profits that a company allocated as such to all or some class of its members severally, and, under lawful authority appropriates in discharge of claims to which they are individually liable" (at 142). 169 In Commissioner of Taxation (NSW) v Stevenson [1937] HCA 72 ; (1937) 59 CLR 80 ( Stevenson ), Evatt J stated in relation to s 11(b) of the Income Tax (Management) Act 1928 (NSW), which referred to "dividends ... credited, paid, or distributed to the member or shareholder", that the words "credited", "paid" and "distributed" were concerned with the manner in which a shareholder "receives the benefit of the dividend" (at 108). 170 I acknowledge that Jolly [1933] HCA 63 ; 50 CLR 131 and Stevenson [1937] HCA 72 ; 59 CLR 80 concerned more than simply the word "paid", and that Jolly involved the discharge of indebtedness of the shareholder to the company. I suggest, however, that the general tenor of the passages quoted is that "payment" can take such form of satisfaction of the dividend debt as the shareholder may have agreed to accept, whether that agreement is contained in the company's articles of association or is external to them. 171 The articles of association of ABB Australia provided (art 82(1)) that "the company in general meeting may from time to time declare dividends ... to be paid to members". Similarly, under the Corporations Law the company could lawfully pay a "dividend" to its members. As noted at [76] above, ABB Australia's financial statements for the year ended 31 December 1996 disclosed that it had paid a "dividend" of $49 million during that year, and the Directors' Report contained in its Annual Report for 1996 disclosed that ABB Australia paid that dividend to the "parent company" during that year. So long as ABB Australia is to be regarded as having paid a "dividend" rather than having made a different kind of payment, it must be found to have "paid" the amount of $49 million to ABB Zurich on 21 June 1996. 172 In my view, in the alternative to my conclusion that ABB Zurich derived income consisting of the dividend when it was declared on 30 May 1996, it derived it on 21 June 1996 because it was then "paid" to ABB Zurich. It was paid to ABB Zurich because the payment ABB Australia made to BAL on that date (a) was, as between ABB Australia and ABB Zurich, the agreed mode of discharge of ABB Australia's monetary obligation to ABB Zurich, (b) was an amount with which ABB Zurich was to be credited in its dealings with BZW and BAL, and (c) was the payment of a "dividend", necessarily paid to a shareholder. 173 The payment on 21 June 1996 benefited ABB Zurich personally to the extent that it discharged its contractual obligations referred to above. The Commissioner submits, however, that even if the payment was to ABB Zurich exclusively as trustee, this does not matter because ss 128B(1) and (4) impose withholding tax in respect of a derivation by a non-resident shareholder in its capacity as a trustee. The applicants, on the other hand, submit that withholding tax is imposed only where income consisting of a dividend is derived by, and paid to, a non-resident beneficially. 174 The applicants rely on s 96 of the Act which provided that except as provided in the Act, a trustee was not liable as trustee to pay income tax upon the income of the trust estate. As noted earlier, s 6(1) of the Act defined "withholding tax" as a form of income tax. 175 The first response to be made to the applicants' submission is that in its application to the present case, s 96 could signify only that a trustee is not liable to pay withholding tax in so far as the dividend in question was income of a trust estate. But the dividend of $49 million was not income of a trust estate. It was the income of ABB Zurich's shareholding in ABB Australia, and that shareholding was not held on trust. 176 The expression "trust estate" was not defined in the Act, but the many references in Div 6 to "income of the trust estate" show that the trust estate and its income are distinct concepts, the income being the product of the estate. 177 The applicants refer to ss 99, 99A and 102 as descriptions of the exceptional circumstances in which a trustee is made assessable and liable to pay tax on the income of the trust estate. They submit that the effect of ss 128A(3) and 128B(3)(d) and (e) is to ensure that "a corresponding principle" applies to withholding tax (they cite the Explanatory Memorandum for the Income Tax Assessment Bill (No 4) 1967 p 25). 178 The Commissioner submits that when the Act speaks of derivation of income, it contemplates, unless there is an indication to the contrary, both a beneficial derivation and derivation by a person in the capacity of trustee. The Commissioner refers to s 25(1)'s reference to "the gross income derived directly or indirectly from all sources whether in or out of Australia". No one suggests that this expression does not encompass income derived by a person as a trustee. The Commissioner points out that in some instances the Act expressly refers to a derivation by a person in the capacity of trustee, eg s 102AG(4). 179 The Commissioner's submission is that the express exclusion of income in the specific trust situations described in paras (d) and (e) of s 128B(3) indicates that income consisting of a dividend that is derived by a non-resident as trustee in other circumstances was intended to fall within s 128B. 180 The applicants, on the other hand, rely, in support of their construction, on s 128A(3) (set out at [14]). They submit that the express inclusion of a beneficiary presently entitled to a dividend included in the income of a trust estate, suggests that where there is no beneficiary presently entitled, dividends included in the income of a trust estate are excluded from the withholding tax régime. 181 The Commissioner responds to this particular submission by suggesting that the purpose of s 128A(3) is to catch a situation in which, while the beneficiary presently entitled is a non-resident, arrangements are made to ensure that the trustee is a resident: without the provision, ensuring that the trustee was a resident would provide a simple and straightforward means of escaping liability to withholding tax. 182 Section 128B(4) imposes liability to pay income tax on "a person who derives income to which [s 128B] applies". The notion of income to which s 128B applies is given content by the earlier subsections of s 128B. Subsections (1), (2), (2A) and (2B) identify the classes of income to which s 128B applies and subs (3) identifies classes of income to which it does not apply. Subsection (3) has the appearance of excluding classes from subss (1), (2), (2A) and (2B), that is to say, of presupposing that the classes of income referred to in it would or could otherwise fall within the earlier subsections. 183 The effect of s 128B(3)(d) and (e) (set out at [16]) above is that ss 128B(1) and (4) do not apply to income consisting of a dividend on which a trustee is assessable under ss 99, 99A or 102. 184 I accept the Commissioner's submission that s 128A(3) does not tell against the approach outlined above. But for that provision, a non-resident beneficiary presently entitled would not be within subss (1), (2), (2A) or (2B) of s 128B where the trustee was a resident. The policy underlying s 128A(3) is, as the Commissioner submits, to prevent circumvention of the withholding tax régime by the interposition of a resident trustee between the resident company and the non-resident beneficiary presently entitled. 185 In my opinion, ss 128B(1) and (4) apply to income consisting of a dividend derived by a person as trustee, unless one of the exceptions to be found in Div 11A applies. Thus, if a non-resident beneficiary is presently entitled to the dividend that is included in the income of a trust estate, it is the beneficiary rather than the trustee who is deemed to have derived the income (s 128A(3)). With this provision may be compared ss 97 and 98 within Div 6. 186 Although I do not think s 96 could apply in the circumstances of this case because the dividend was not income of a trust estate, if I should be wrong in that view, I would hold that the régime of provisions in Div 11A to which I have referred provides, as an exception to s 96, for circumstances in which a trustee is liable as trustee to pay tax upon the income of a trust estate. 187 The withholding tax régime applies, subject to the exclusions referred to, to income consisting of a dividend derived by a non-resident in the capacity of trustee. It is important to appreciate that for the purpose of considering this submission, one must assume, contrary to my view earlier expressed, that ABB Zurich did not derive income consisting of the dividend either (1) by virtue of the declaration of the dividend on 30 May 1996, or (2) by virtue of the amount of the dividend having been paid to ABB Zurich on 21 June 1996 (in the latter case either because the payment was not to ABB Zurich, or because, although it was, it was to ABB Zurich as trustee, and ss 128B(1) and (4) do not catch payment to a non-resident shareholder in the capacity of trustee). 189 The Commissioner relies, first, on Norman [1963] HCA 21 ; 109 CLR 9 at 16 per Dixon CJ. 190 In Norman , by deed dated 21 December 1956 a taxpayer purported to assign to his wife by way of gift, relevantly, all the interest, dividends and other income arising from two estates in which the taxpayer had a beneficial interest. Subsequently, company shares representing the taxpayer's interest in the estates were transferred to him and he was registered as the shareholder in respect of them. In the year of income ended 30 June 1958, after the shares had been transferred to the taxpayer, dividends were declared on them. The companies posted to the taxpayer cheques for the dividends drawn in his favour. He endorsed them when necessary and had them paid into his wife's bank account --- a practice of which his wife was aware. The companies had no notice of the deed. 191 The amounts of the dividends were returned as income of the taxpayer's wife, but the Commissioner contended that they should have been returned as income of the taxpayer. Section 44 and the sections which follow are framed to deal specially with the case of members of companies who are entitled to dividends. The whole question of tax upon the profits of companies is dealt with specially in the Act, including the scheme relating to rebates. It would become impossible if a shareholder could without transferring his shares assign a future undeclared dividend so as to exclude the operation of the provisions. Of course, had he been a trustee of the shares the provisions of Div 6 of the Act would have applied. 194 There are several differences between the facts of Norman and those of the present case. The statement by Dixon CJ refers in terms only to assignment of "a future undeclared dividend". The statement by Menzies J refers to the fact that the dividends were paid to the shareholder. 195 The facts in Norman which their Honours must be taken to have had in mind were extreme: the companies, having no notice of the earlier purported gift, drew the dividend cheques in favour of a shareholder and posted them to him. In substance, it was he who effected payment to his wife. The assignee, of course, takes subject to any disabilities on the subject matter of the assignment flowing from the relationship between the assignor and the company, but this does not preclude assignment nor its tax consequences. It is not to the point that the "source" of the dividend is "an effectuation or realisation of the rights obtained by the acquisition of the share;" the same could be said in respect of interest and principal, rents and land or royalty and intellectual property. I do not understand that there is any dispute that s 12 of the Conveyancing Act 1919 (NSW) or the equivalent United Kingdom provision, s 136 of the Law of Property Act 1925 (UK), made the debt assignable at law "subject to equities having priority over the assignee". The assignment in the present case was not under the statute, but it is useful to note that if it had been, there would, in my opinion, have been no "equity" in favour of the Commissioner in respect of withholding tax for three reasons. First, I do not think that the liability of a non-resident to pay withholding tax is an "equity" for present purposes. Second, ABB Zurich was not liable to pay withholding tax prior to the assignment, and so the assignment could not take effect "subject to" that supposed equity. Third, the "subject to equities" qualification relates to the position of the assignee (BAL in the present case) not that of the assignor (ABB Zurich in the present case). 200 The Commissioner's present submission draws attention to certain special features of a dividend debt, and Simpson [1964-65] NSWR 603 exemplifies them. In that case, a company was indebted to shareholders who were trustees of twelve trusts for ₤34,471.18s.1d on account of dividends that had been declared. The debt was recorded in the company's books. The trustees notified the company that in accordance with the trusts, a person had elected to become the beneficiary of each trust fund. Accordingly, the company transferred the amount of its indebtedness to the trustees into an account in the name of the beneficiary. 201 Upon liquidation of the company, the beneficiary sought to prove for the debt of ₤34,471.18s.1d. The liquidator rejected the proof on the basis that s 200(1)(g) of the Companies Act 1936 (NSW) applied. The effect of that provision was that on a winding up a debt owed by the company to a person in the person's capacity as a member of the company, such as by way of dividend, was, relevantly, deemed not to be a debt payable to that member (cf the postponement now provided for in s 563A of the Corporations Act 2001 (Cth) referred to at [196] above). 202 The beneficiary submitted (1) that the sum owed to her was not by way of dividend, and (2) that she was not a member but an assignee from a member. 203 As to the first submission, Jacobs J held that the debt retained its nature of a dividend. This holding suggests that if ABB Zurich had assigned the present dividend debt to BAL by a statutory assignment, the amount of the resulting indebtedness of ABB Australia to BAL would be "by way of dividend" for the purposes of the present s 563A. This holding by his Honour does not assist the Commissioner vis-à-vis ABB Zurich. Accordingly, the assignee-beneficiary could not avoid the operation of s 200(1)(g) by pointing to the fact that she was not a member. 205 As I indicated earlier, I do not think that this "subject to equities" provision assists the Commissioner in establishing that ABB Zurich derived income consisting of the dividend. 206 I am not persuaded to accept the Commissioner's third submission. The amount that ABB Australia was required to deduct from the dividend was 15 percent of the amount of the dividend, that is to say, $7,350,000. Because ABB Australia "refused or failed to make" the required deduction, it is liable to pay to the Commissioner an amount equal to the unpaid withholding tax plus an amount equal to any unpaid additional tax: see s 122YQ(1) of the Act (set out at [25] above). I certify that the preceding two hundred and eight (208) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

withholding tax under div 11a of pt iii of income tax assessment act 1936 (cth) australian resident company wholly owned subsidiary of swiss parent company australian company declares dividend payable 22 days after date of declaration swiss parent contracts to sell right to receive dividend to english company english company contracts to sell right to receive dividend to australian resident company swiss company directs australian subsidiary to pay dividend to end purchaser australian resident company by paying into its bank account in sydney when date for payment arrives, australian subsidiary does so whether income consisting of dividend was "derived" by swiss parent upon declaration of dividend in alternative, whether swiss company derived income consisting of dividend by payment made to end purchaser australian resident company relevance of evidence of business and accounting practice relating to derivation of dividend income whether liability to withholding tax can be avoided by assignment of assignment of right to receive dividend without assignment of underlying shares. held : (1) evidence of business and accounting practice admissible; (2) income consisting of dividend derived by swiss parent upon declaration of dividend by australian subsidiary; (3) alternatively, income consisting of dividend derived by swiss parent upon payment to australian end buyer. " paid ", " derived " income tax words and phrases

By 2004 the bulk of the sum which he received, comprising $995,000 after costs, had been dissipated. That dissipation was due in large part to his poor judgment, naivety and lack of the skills necessary to manage his finances. He made a claim for a disability support pension but that claim was refused on the basis that, under the Social Security Act 1991 (Cth) (the Act), the payment of the pension was precluded until 2022 by reason of the compensation which he had received. 2 Mr Homewood appealed unsuccessfully to the Social Security Appeals Tribunal (the SSAT). However in the Administrative Appeals Tribunal (the Tribunal) the decision of the SSAT was set aside and a decision made which had the effect that he would be eligible for disability support pension from 1 July 2006. 3 The Secretary of the Department of Employment and Workplace Relations (the Secretary) challenges the Tribunal's decision in this Court on the ground that the Tribunal did not comply with its statutory obligation to give reasons for the basis upon which it reduced the preclusion period for the receipt of disability support pension to a period expiring on 1 July 2006. 4 For the reasons which follow, I am satisfied that the Tribunal did comply with its statutory obligation to give reasons for its decision and the application will be dismissed with costs. On 3 February 1993 in Queensland, he suffered an injury to his neck as the result of a fall into an above-the-ground swimming pool. The A-frame on which he was climbing to get access to the pool toppled over. His injury resulted in partial quadriplegia. He was in hospital for nine months in Brisbane and was then transferred to the Shenton Park Campus of Royal Perth Hospital. There he underwent inpatient and outpatient rehabilitation for five years. By 1998 he was able to walk with the aid of an elbow crutch and was able to drive a car. 6 In July 1997 Mr Homewood was awarded compensation of $1,250,000 by way of an agreed settlement. On 17 July 1997 he was informed by a Centrelink officer that as a result of the payment he would be precluded from receiving any compensation affected Centrelink benefit for a period of 1,550 weeks from 3 February 1993 until 18 October 2022. 7 On 8 August 2001 Mr Homewood sustained further neck injuries in a motor vehicle accident. He was driving on a road near his farm at dusk when he swerved to avoid two kangaroos and drove into a tree. Following the accident he was confined to a wheelchair. 8 On 10 September 2001 Mr Homewood lodged a claim with Centrelink for disability support pension. On 14 September 2001 Centrelink informed him that the claim for disability support pension had been rejected because of the application of the preclusion period. He requested a review of the decision. On 14 January 2002 a Centrelink authorised review officer affirmed the decision to reject the claim. 9 Mr Homewood lodged a further claim for disability support pension on 20 April 2004. He was advised on 22 June 2004, by the original decision-maker, that because the calculation of his preclusion period had been confirmed as correct and as no special circumstances could be identified in his case, it was not possible to exercise any discretion to reduce the preclusion period. He was told that the decision to reject his claim for disability support pension was correct. He requested a review of that decision but a Centrelink authorised review officer affirmed it on 19 October 2004. Mr Homewood appealed, on 26 October 2004, to the SSAT. 10 The SSAT approached the matter on the basis that the issue to be considered was whether Mr Homewood had special circumstances which would warrant reducing the preclusion period so that he would be paid disability support pension. It heard his appeal on 3 December 2004 and on 17 December 2004 affirmed the decisions under review. It identified those decisions as the decisions made by Centrelink officers, on 14 September 2001 and 23 June 2004 [sic], respectively affirmed by authorised review officers on 14 January 2002 and 19 October 2004, to reject his claims for disability support pension. 11 On 8 February 2005 Mr Homewood lodged an application with the Tribunal for review of the decision of the SSAT. That appeal was lodged on 2 February 2006. It rests solely on the ground of the inadequacy of the Tribunal's reasons for decision. It dealt with that evidence largely by setting out his responses to various documentary exhibits put to him. The exhibits were not always identified with clarity. 16 First, the Tribunal referred to a statement of income and expenses which Mr Homewood had prepared. He explained particular outgoings including $500 per month for house repairs to make his house wheelchair accessible and high electricity and fuel costs were accounted for largely by the cost of driving to see his lawyer and to attend specialist appointments. A bank account which had been shown as containing $3,695.20 contained about $3 at the time of his Tribunal hearing. 17 Mr Homewood was referred to several Westpac statements covering periods from 16 September 2005 to 17 October 2005, 17 May 2005 to 17 June 2005, 22 July 2005 to 30 September 2005, 17 June 2005 to 15 July 2005 and 15 July 2005 to 17 August 2005. He gave explanations of a number of deposits and withdrawals. One of the deposits was for a sum of $10 which his brother was paying him fortnightly to repay a loan. Another deposit of $79,806.56 made on 13 June 2005 represented the balance recovered after the sale of a property at Vance Street in Dudley Park. He had sold the property for $269,000 at a loss. A withdrawal on 20 June 2005 of $10,000 consisted of $5,000 given to his sister so she could pay rent for six months, and $5,000 to his parents so they could pay off a credit card on which they had made payments to assist him. 18 Mr Homewood told the Tribunal that because of injuries to his bladder he had to catheterise some six to eight times daily and purchase catheters in bulk at a cost of $157.50 for 150. Since his accident he had suffered recurrent urinary tract infections and depression. The depression had improved and he had become very mobile but the accident in 2001 had resulted in his condition deteriorating, which meant he was now in a wheelchair. Because of the second accident he had to sell a property of 24 acres that he had bought following his compensation payout. He said he was unable to qualify for emergency housing because he did not have any income. As a result he was no longer on the emergency housing list of the Department of Housing and Works. Mr Homewood believed his situation would change if he were paid the disability support pension. 19 Mr Homewood said that out of the lump sum compensation of $1,250,000 for which he settled his claim in 1997, he actually received $995,000 after costs. He spent $55,000 of this on a Senator motor vehicle. He paid $310,000 for the 24 acre property at Harts Road. He spent $13,000 on a Pajero car for his parents; $30,000 on a Jeep for the farm and $17,000 for a Land Cruiser for his brother. The Land Cruiser was registered in his brother's name and his brother subsequently left and disposed of it. Mr Homewood purchased two large demountable site huts for storage and office space for a total of $23,000. He spent $30,000 on putting in a road to his property. He bought another utility vehicle for $15,000 and spent $10,000 on it. He sold it for $13,000, representing a loss of $12,000. He sold the $30,000 Jeep for $17,000, representing a loss of $13,000. 20 In July 1999 Mr Homewood purchased the lease of a video store for seven months. This cost $20,000 plus an additional $10,000 for stock. He thought he would be able to run the business with the assistance of his sister. However, it soon became apparent that the outgoings of the business were greater than cash coming in so he sold what remained of the lease at a loss of $2,000. Some of the videos he sold for about $5,000. In 2001 he sold the Harts Road property for $295,000, again representing a loss. 21 Mr Homewood set up a $300,000 portfolio with Westpac in October 1997. It paid him an income of $1,500 per month. However he started debiting increasing amounts each month and by the end of 2000 had only $30,000 left. This was completely expended by late 2002. 22 Mr Homewood told the Tribunal he had lent $45,000 to his sister which she has repaid. He lent $35,000 to a brother who agreed to repay it at $250 per fortnight. This he ceased to do after six months. Mr Homewood said he believes his brother still owes him $28,000 although his brother says it is only $24,000. This is currently being repaid at $10 per fortnight. Another brother, Shane, owes Mr Homewood $500. 23 Mr Homewood currently owns a station wagon for which he paid $5,000 plus some extra for improvements which he thinks would be worth $3,000. He has $3,000 worth of furniture, including a bed, computer, projector and stereo equipment. He has recently spent over $5,000 on a car for one of his brothers who is helping him out. He told the Tribunal he had assets with Fremantle Auctioneers valued at approximately $12,000. He had DVDs worth $4,000. Books, magazines, coins and medallions he had in storage would be worth about $4,000. 24 The Tribunal referred to Mr Homewood's submissions and those of the Secretary. It set out the relevant statutory provisions and then considered his financial hardship. It began by observing that to qualify as 'special circumstances' financial hardship must be 'truly exceptional'. It accepted Mr Homewood's evidence that he had little left of value despite receiving a compensation payment totalling $1,250,000 in 1997. His remaining disposable assets were identified by the Tribunal as coin collections and other collectables worth approximately $12,000 and a further 20 boxes of items which would be worth about $4,000. He also had DVDs worth some $4,000, a motor vehicle worth less than $5,000 and loans of $28,500 to two brothers. The Tribunal found that the $28,000 was unlikely to be recovered and was currently being repaid at $10 per fortnight. 25 The Tribunal concluded that Mr Homewood's current financial circumstances had arisen primarily because of his inability to handle money, his lack of skills, his naivety and, at times, reckless purchasing. His investment of $300,000 in an investment portfolio with Westpac indicated that he understood the need for funds to be available in the long term. But that money was drained very quickly to compensate for poor decision-making in other areas. His purchase of collectables appeared to have been extravagant. This would not have been the case if he had retained the Harts Road property and if the $300,000 investment portfolio had remained intact. The Tribunal did not conclude that he had been unreasonable in the expenditure of the lump sum. Rather it found that his history of spending money, his lack of ability and poor management skills were consistent with a background which had not prepared him for dealing with large sums of money. There was no medical evidence directly on the matter. However the Tribunal accepted Mr Homewood's evidence to the SSAT that he is now confined to a wheelchair. This was supported by correspondence from the South Metropolitan Health Service. The Tribunal appeared to accept evidence that Mr Homewood's current medical condition requires him to purchase bladder catheters, costing $157.50 for 150 approximately every three to four weeks. It also accepted evidence that he is on a range of medication for conditions including diabetes and depression. 27 Because of Mr Homewood's undisputed need to use a wheelchair, the Tribunal concluded that his current housing situation was not adequate. This was supported by correspondence from an officer of the South Metropolitan Health Service who had visited his residence and concluded that his housing was not appropriate for him. He had no income source in Western Australia and was not eligible for rental housing assistance. He had been placed on a waiting list. However even if an appropriate house were to become available, he would not qualify for it if at the time he had no income. 28 Following the SSAT decision of 17 December 2004 Mr Homewood had disposed of his one remaining significant asset, that being the house at Vance Street. The Tribunal found the balance from that transaction of $79,806.56, which was deposited in his Westpac account on 13 June 2005, had been reduced to approximately $3,000. He also has one motor vehicle worth less than $5,000 and personal effects and furniture. He is unable to access appropriate housing even if it became available because he has no income. Little is to be gained now by pointing to the folly of how he has managed his compensation or the wisdom of such a large amount being paid as a lump sum and resulting in a preclusion period of nearly thirty years. The Tribunal accepts this as an accurate projection based on the evidence before it. The Tribunal concludes that based on Mr Homewood's current financial situation, which can be described as straitened, as well as his health needs and in particular that he is wheelchair bound and unable to even go on a waiting list to access appropriate housing, "special circumstances" do exist. If, however, one adds together all of the assets otherwise found by the Tribunal and includes the irrecoverable loan of $28,000, there is a total nominal value of $53,500. Subtracting the sum of $28,000 leaves non-cash assets of $25,500. Section 1169(1) of the Act provides that a compensation affected payment is not payable during a lump sum preclusion period. 30 The method for calculating a lump sum preclusion period is set out in s 1170(4) of the Act. It involves dividing the compensation part of the lump sum payment by the income cut-out amount. The 'compensation part of a lump sum compensation payment' is defined in s 17(3)(a) as 50 per cent when the payment is made in settlement of a claim in respect of an injury. The income cut-out amount is the amount of income that would, through the application of the income test, produce a nil rate of pension. This appears from s 17(8) of the Act. It was necessary to the exercise of the power conferred by that section that the Tribunal identified 'special circumstances of the case' in which it thought it 'appropriate' to treat the whole or part of the relevant compensation payment as not having been made . Identify the circumstances of the case which it found to be 'special' and the reasons for which it arrived at that finding. 2. Explain why, in the special circumstances so found, it thought it appropriate to treat the whole or part of the compensation payment as not having been made. 3. Explain why it selected the particular quantum (ie the whole or part) of the compensation payment as not having been made. Absent misconstruction of the statute, the Tribunal's finding that circumstances are special for the purposes of s 1184K cannot enliven the Court's jurisdiction under s 44 of the AAT Act. In this case the Tribunal treated Mr Homewood's reduced financial circumstances and his poor health as amounting, in combination, to 'special circumstances'. That finding was not challenged. So far as the reasons for decision went they properly set out the findings in support of that conclusion and the evidence on which it was based. 36 Central to the Secretary's case was the proposition that the Tribunal failed to give its reasons for disregarding so much of the compensation payment as would bring the preclusion period to an end on 1 July 2006. And we say that, you know, although there is undoubtedly a wide discretion given by section 1184K particularly when it goes to the recognition of special circumstances, the implementation of that discretion, that is the selection of the part of the compensation payment that is to be disregarded ought to be driven by some principle and the principle ought to be in our submission derived from the object and the purposes and the surrounding provisions of this part of the legislation, particularly that part which prescribes the method by which the compensation preclusion period is calculated in the first place by dividing the money that is deemed to be available to support the applicant ... by the income cut-out amount. The primary obligation imposed on the Tribunal by the section is to 'give reasons ... for its decision'. They must include but are not limited to its findings on material questions of fact and reference to the evidence on which those findings are based. It must be possible '... to discern from the reasons given the actual reasoning process adopted ...' --- Comcare Australia v Mathieson (2004) 79 ALD 518 at [61] per Weinberg J. 38 The present case is not about a failure on the part of the Tribunal to include in its reasons the findings on material questions of fact which it has made. Nor is it a complaint that the Tribunal has failed to refer to the evidence on which those findings were based. Many of the reported cases involve claims of that kind of failure --- see Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 331-332 (Gleeson J), 338 (Gaudron J), 346 (McHugh, Gummow and Hayne JJ) cf 367 (Kirby J). The question always is whether the decision maker has revealed his or her findings and conclusions. 40 The obligations set out in s 43 are not necessarily discharged by merely setting out findings on material questions of fact, referring to the evidence on which those findings are based and then stating a conclusion. There will always be some legal rule or principle or discretion to apply. It may be that a rule or principle, like the major premise of a syllogism, will embody the factual circumstance necessary to give rise to a right or liability. Then it may be sufficient to state that rule or principle in the reasons, the facts found as the minor premise, the evidence on which they are based and, the result which follows. Not all, and perhaps not many results are so easily explained. Whether the reasoning is syllogistic or otherwise, the Tribunal will have discharged its duty under s 43 if its reasons disclose its findings of fact, the evidence on which they were based and the logical process by which it moved from those findings to the result in the case. 41 Where a case involves the exercise of a discretion, the Tribunal's duty is not discharged by setting out the findings of fact necessary to enliven the relevant discretion. That is so even in a case in which the enlivening facts are of an evaluative character, such as the existence of special circumstances. What must appear from the reasons is why the discretion was exercised in the way it was. 42 The question in this case reduces to whether the Tribunal gave reasons for contracting the preclusion period to a period which expires on 1 July 2006. The Secretary's argument, as earlier summarised, involved the contention that, on a proper approach to the exercise of its discretion, the Tribunal would have treated Mr Homewood's remaining assets as a compensation payment and calculated a fresh preclusion period based on that amount. In the Secretary's submission this would have yielded a less generous contraction of the preclusion period than that which was selected. The complaint that the Tribunal did not do that cannot, of course, constitute a complaint that it failed to comply with s 43. So expressed, it would mean no more than that the Tribunal did not reason the way in which the Secretary thought it ought to have reasoned. 43 The Secretary acknowledged that the Tribunal accepted, as an accurate projection, the submission that Mr Homewood would be destitute within six months. However the Secretary complained that the Tribunal did not explain why this was an accurate projection given its other findings. On the Tribunal's findings, as the Secretary's submissions summarised them, Mr Homewood's assets amounted to something in the order of $40,000-$50,000. That finding, it was said, could not be reconciled with the selection of 1 July 2006 as the date for ending the preclusion period. Importantly, the application of the discretion is not confined to cases in which all or part of a compensation payment has been dissipated or lost. There may be other cases giving rise to special circumstances in which it is appropriate to treat a payment in whole or in part as not having been made notwithstanding that it has not been lost. There may, for example, be circumstances in which a person in receipt of a compensation payment has also subsequently acquired obligations to support a close relative which places an ongoing drain on his or her assets. 45 The Tribunal's obligation is to give its reasons for its decision in the sense explained earlier. In so doing it is not required to express itself with the precision that might be required of a court of law. It had regard to his asset position in coming to that conclusion. The complaint that it has not adequately disclosed its reasons for so concluding amounts to little more than a complaint about its findings of fact. 46 The Secretary accepted, by reference to [44] of the Tribunal's reasons, that the amount available for Mr Homewood's support could arguably be fixed at a lower range of between $20,000 and $30,000. That is not a reading of the Tribunal's reasons which is particularly generous to Mr Homewood. It is to be noted that the assets giving rise to those figures are comprised of 'coin collections and other collectibles', '20 boxes of items' 'DVDs ...; a motor vehicle worth less than $5,000'. 47 Having regard to the nature of the assets to which the Tribunal adverted in its reasons, its finding that Mr Homewood would be destitute within six months was open to it. That finding formed a base, in principle, for the exercise of the discretion under s 1184K(1) of the Act. The way in which it approached the exercise of that discretion was adequately explained by reference to its finding of fact. While it may be argued that a more elaborate and principled approach by reference to the rules governing the fixing of preclusion periods under the Act would have been preferable, that is not the basis upon which the Tribunal's decision is attacked in this case. It is attacked only on the basis that it has failed to give adequate reasons. In my opinion that challenge is not made out and the application should be dismissed. The applicant will be required to pay the respondent's costs. I certify that the preceding forty eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

administrative appeals tribunal duty to give reasons for decision nature of duty not limited to setting out findings of fact and references to the evidence tribunal's reasoning process adequately disclosed application dismissed disability support pension compensation payment for injury giving rise to disability preclusion period during which pension not payable calculation of preclusion period dissipation of compensation imminent destitution of applicant for pension discretion to treat whole or part of compensation payment as not made shortened preclusion period special circumstances nature of decision-making process nature of discretion whether discretion confined by reference to principles upon which preclusion period is determined under the act administrative law social security

On 30 September 1998, by operation of the Native Title Amendment Act 1998 (Cth), the application became a proceeding in this Court. The application was amended on 17 August 1999 by, amongst other things, further particularisation of the native title claim group. The State and the applicant are agreed that the effect of that amendment was not to change the composition of the native title claim group so that it should be considered different in substance from the group originally named in the application. The Court proceeds on that basis. Accordingly, the application is an "old Act" application which did and does not require the authorisation of all the persons in the native title claim group. See, to like effect, Bodney v Bropho [2004] FCAFC 226 ; (2004) 140 FCR 77. The application was made in accordance with the relevant provisions of the Native Title Act as at 18 November 1997. The application is therefore valid and the Court has jurisdiction to proceed to determine the application. The Registrar of the Tribunal considered the claim made in the application as amended as required by s 190A of the Native Title Act . By decision dated 28 January 2000, the Registrar found the application satisfied all the conditions of s 190B and s 190C of the Native Title Act and accepted the application for registration. The Registrar then gave notice of the amended application under s 66 of the Native Title Act . The period of three months after the notification day referred to in s 66(8) and s 66(10)(c) of the Native Title Act ended on 16 August 2000. The Thudgari application was then further amended by order of this Court on 27 July 2001. On 7 September 2000, the application was referred by order of this Court to the Tribunal for mediation pursuant to s 86B of the Native Title Act . Mediation formally commenced in May 2007. That group, by attachment A to the amended application, contains some 198 persons. During the course of negotiations both the applicant and the State agreed that the description of the native title claim group in the amended application was problematic (principally because of the absence of any reference to the descendants of the named individuals). They also agreed that the description used wrongly implied that the claim was made by the applicant on behalf of individuals holding individual rights, and that native title would cease to exist on the death of the last surviving individual. It also became apparent that some of the individuals whose names appeared in the description of the native title claim group on the amended application (namely some members of one of the two Dodd families) no longer satisfied the membership criteria for inclusion in the Thudgari native title holding group, in particular the requirement that a person must identify as Thudgari. The parties then settled on a description of native title holders having satisfied themselves that the description accurately reflected the position as described in the connection materials provided by the applicant to the State and captures all native title holders. A similar situation where the final description of the native title holders was altered between application and determination arose in Billy Patch and Others on behalf of the Birriliburu People v State of Western Australia [2008] FCA 944. French J at [18] accepted the submission of the parties that, provided the application is valid, the Court may proceed to make a determination in such form as it sees fit based on the evidence. The parties to this proceeding make a similar submission in relation to this case. I accept that submission. The application area encompasses all or part of 16 pastoral stations, as well as the Barlee Nature Reserve. The Dampier to Bunbury Natural Gas Pipeline and De Gray-Mullewa and De Gray-Mingenew Stock Routes traverse the application area. A very small portion of unallocated crown land exists on the southern boundary of the claim area. With the assistance of the Tribunal, the parties have reached agreement as to the terms of the determination which they submit should be made in relation to the land and waters covered by part of the Thudgari application, which may be referred to as the "Determination Area". The terms of the agreement involve the making of consent orders for a determination of native title, pursuant to s 87 and s 94A of the Native Title Act , that native title exists in relation to the Determination Area as set out in a minute of consent determination provided to the Court. The Determination Area does not completely correspond with the area the subject of the Thudgari application. Members of the Dodd family referred to above, who no longer identify as Thudgari, claim an association with the far western portion of the application area around Middalya Pastoral Station. At a Thudgari community meeting in June 2009, representatives of the Dodd family expressed the view that they did not wish for the area of Middalya Station in which they claimed an interest to be determined as part of the current Thudgari claim. The applicant subsequently resolved to discontinue its application in respect of its area to allow for timely resolution of the bulk of the Thudgari application claim area and for continued mediation between Thudgari and members of the Dodd family. No determination of native title is therefore sought in respect of land and waters comprised in that area. The parties consent to the Thudgari application being discontinued in relation to that area on the basis that there be no order as to costs. In the circumstances described, I consider that to be an appropriate order. The external boundaries of the Determination Area are as described in the First Schedule of the minute provided to the Court. There is an agreement in writing, signed by all of the parties to the Thudgari application and filed in the Court, for a proposed determination of native title, the terms of which are reflected in the minute provided to the Court. The parties submit, and the Court accepts, that an order in or consistent with the proposed determination is within the Court's power. In this regard: First, the application is valid. In particular, as noted above, the application was made under s 61 of the Native Title Act as it stood prior to the amendments made by the Native Title Amendment Act 1998 . While the application was amended on 17 August 1999, that amendment did not have the effect of requiring compliance with s 61 of the Native Title Act as amended. Accordingly, no issue of authorisation arises. Secondly, the application is for a determination of native title in relation to an area in which there is no approved determination of native title and there remains no approved determination in relation to the area the subject of the proposed determination, matters to which s 13(1)(a) and s 68 of the Native Title Act refer. Thirdly, there are no other proceedings before the Court relating to native title determination applications that cover any part of the area subject to the proposed determination, which would otherwise require orders to be made under s 67(1) of the Native Title Act . Fourthly, the form of the proposed determination complies with s 94A and s 225 of the Native Title Act . Fifthly, the requirements of s 87 of the Native Title Act are otherwise satisfied. In that regard, in Lota Warria (on behalf of the Poruma and Masig Peoples) v Queensland (2005) 223 ALR 62 at [7], Black CJ explained that the discretion conferred by s 87(1) must be exercised judicially and within the broad boundaries ascertained by reference to the subject matter, scope and purpose of the Native Title Act . The Chief Justice noted that that includes the resolution of native title disputes by mediation and agreement. Those principles have been generally accepted and, with respect, I agree with them. In assessing the appropriateness of a proposed determination the Court is not required to undertake an inquiry into the merits of the claim: Billy Patch and Others on behalf of the Birriliburu People v State of Western Australia [2008] FCA 944 at [13] per French J. Numerous decisions of the Federal Court have emphasised that provisions such as s 87 and s 87A of the Native Title Act are designed to facilitate and encourage the resolution of native title claims by agreements between parties. They recognise that the Court adopts a different approach to the task of deciding whether it is appropriate to make a determination reached by agreement, than it brings to the task of deciding if native title should be recognised after a contested hearing. In each case, the definition of native title is the same. The Act requires the Court to set out details of the matters mentioned in s 225 of the Native Title Act in all determinations whether reached by agreement or following a hearing. These decisions make plain that, although there needs to be some foundation upon which the Court can exercise its jurisdiction, in matters in which the parties have reached agreement on the terms of a determination, the Court will have particular regard to whether the agreement has been freely entered into on an informed basis. See for example: Eringa, Eringa No 2, Wangkangurru/Yarluyandi and Irrwanyere Mt Dare Native Title Claim Groups v The State of South Australia [2008] FCA 1370 per Lander J at 33; Nangkiriny v State of Western Australia [2002] FCA 660 ; (2002) 117 FCR 6 ; Ward v State of Western Australia [2006] FCA 1848 ; Lovett on behalf of the Gundtjmara People v State of Victoria [2007] FCA 474. If that question is answered in the affirmative, the Court will consider the fact that an agreement has been reached as weighing in favour of the making of the determination of native title: James on behalf of the Martu People v State of Western Australia [2002] FCA 1208. It may even be that in some cases, the freely informed agreement will be a sufficient basis for the Court to make such consent orders: Ward v State of Western Australia , North J at [8]; Hughes (On behalf of the Eastern Guruma People) v Western Australia [2007] FCA 365 , Bennett J at [9]. The requirements of s 87 in a case such as that presently before me will usually be met, however, where the Court is satisfied that the State, through competent legal representation, is satisfied as to the cogency of the evidence upon which the applicants rely. Generally this will not involve the Court making findings on the evidence on which the State relies, but it might consider that evidence for the limited purpose of being satisfied that the State is acting in good faith and rationally: see Munn (for and on behalf of the Gunggari People) v Queensland [2001] FCA 1229 ; (2001) 115 FCR 109 at [29] - [30] , per Emmett J; Lovett on behalf of the Gunditjmara People v State of Victoria [2007] FCA 474 at [37] , per North J; Smith v State of Western Australia [2000] FCA 1249 ; (2000) 104 FCR 494 at [38] , per Madgwick J. In this case, the State has played an active role in the negotiation of the proposed consent determination. In doing so, the State, acting on behalf of the Western Australian State community generally, and having regard to the requirements of the Native Title Act , plainly have conducted a thorough assessment process and has satisfied itself that the determination is justified in all the circumstances. Other respondents have also regarded the State's assessment. On behalf of the State, the affidavit of Gary John Hamley, Executive Director, Office of Native Title, has been filed in support of the application and sets out relevant aspects of the State's assessment process. Mr Hamley affirms the State's satisfaction, based on that assessment, with the evidence of the Thudgari People's connection with the Determination Area. Mr Hamley's affidavit produces a copy of the State Position Paper dated August 2007. From this the Court is able to appreciate the extent to which the connection materials provided by the applicant have satisfied the requirements of the State's Guidelines for the Provision of Information in Support of Applications for a Determination of Native Title (October 2004). The State Position Paper , in quite a detailed way, addresses the identity of the native title claim group by reference to the group, group membership, genealogies and society. Following its assessment the State is confident that the connection material indicates that the Thudgari claimants acknowledge and observe a shared set of normative rules for determining group membership. The State Position Paper also deals with the nature of the system of law and custom under which native title is held and such matters as traditional and contemporary systems of land tenure, totemism, areas of cultural significance, kinship and marriage, resource use, language and the vitality of traditional law and custom. Having considered these matters, the State has formed the opinion that the Thudgari claimants have continued to exist as a body united by the acknowledgement and observance of a normative system of traditional laws and customs, which continues to be transmitted to younger members of the claimant group. While there has been significant change experienced by the Thudgari as a result of European settlement and some aspects of their system of law and custom have been substantially altered or discarded, the extant system of law and custom practised by the Thudgari claimants is traditional, vital and normative. The State Position Paper also assesses the continuity of connection of the claimant group to the claim area, especially by reference to first contact, the commencement of the pastoral industry, the impact of colonisation, pearling, pastoral downturn, Christian missions and also considers continuity of connection. The State concludes that the material before it contains sufficient information to suggest that the Thudgari claimants have an association with their country that is a continuation of traditional land affiliation. The State believes that the connection material has demonstrated that the continued connection to the claim area by the Thudgari claimants has been underpinned by acknowledgement and observance of a normative system of law and custom. The State is also satisfied that the boundaries of the claim area are supported by the ethnography which relates identifiable groups of Aboriginal people to particular land. As to the native title rights and interests claimed under their laws and customs, the State ultimately concludes, based upon the connection materials submitted on behalf of the Thudgari claimants and the advices received from the anthropologists, Dr Martin and Dr Sackett, and the State Solicitor's Office that there is evidence: that the ancestors of the Thudgari claimants were likely to have been traditionally associated with the claim area; of continuity of connection by the claimants to the claim area from settlement to the present day; and that the Thudgari People have traditionally asserted the rights and interests which appear in the minute of the proposed consent determination. In relation to the traditional and contemporary system of land tenure, the State Position Paper notes, amongst other things, that descent and birthplace are the two most important elements of a Thudgari person's proximate connections to land. A person with such connections is known as ngurrara and they can be seen to have a special status over particular parts of land for which they are ngurrara . They are also seen as having pre-eminent authority for a location associated with a parent or grandparent, and this authority is enhanced if they were themselves born at that location. The term ngurrara is widely used throughout the Pilbara and comes from the term ngurra which is glossed as meaning "land", "country" or "camp". Thus a ngurrara is a traditional landowner who has special authority over a particular place or country. Although others may share rights in the land itself, the person or people with the most say is or are the ngurrara . Groups of people with common places of birth in Thudgari country are regarded as joint ngurrara . In addition to birth and descent, residence and knowledge assist to determine the authority with which a person can express rights, and should be deferred to by others. While members of the cognatic group and the ngurrara have primary rights, others might have secondary rights or contingent rights to country. These people are usually the spouses of Thudgari people. The State Position Paper also notes that within the claim area, there are areas of cultural significance to the claim group, including mythological sites whereby natural features including hills, creeks and other water sources are interpreted as evidence of activities of creative beings during the Dreaming. Knowledge of these sites has been transmitted to the Thudgari claimants by their elders. Thudgari people also believe that some places in the claim area are dangerous and consider it important to teach children about such places when they are young. Other sites are believed to be manifest with such powerful forces that they should be avoided altogether. For example, the claimants believe that harmful spirits reside at burial sites, and there is evidence in the connection materials that claimants were told by their elders to avoid entering such places. Burial sites are dispersed throughout the claim area. The claimants also believe water sources to be home to the Warnamarnkura or Kajuru , a mythological snake being who is responsive to actions undertaken around the source. To avoid the wrath or irritation of the water snake, Thudgari people approach water sources with precaution and self-introduction, either by throwing sand into the water and announcing their presence, or by blowing water from one's mouth into the source. Gender restrictions apply at some sites within the claim area. There are also a number of thalu sites in the claim area where rituals were performed in order to increase natural species. They include sites traditionally utilised to increase fish, kangaroos, frogs, sexual desire, rainfall, fertility, dingos, firesticks, ducks and kookaburras, as well as a site associated with health and the power to confer or inflict wellness or illness. Knowledge of the sites and the rites and how they should be performed, and by whom, is retained by the claimants. Many art sites also lie within the claim area, particularly near and within the Barlee Range. Historical places, including the Mukurlu Massacre site, are also regarded as areas of cultural significance to the claimants. Consent determinations such as that proposed here will often deal with questions concerning extinguishment of native title. It is important and relevant that they do, so that the rights of respondents are also properly indicated by the consent determination. In this case, the Court notes that the proposed consent determination does not contain express provisions for extinguishment by pastoral improvements and the land reasonably necessary for the operation of them, an issue made relevant by the decision of the Court in De Rose v South Australia (No 2) [2005] FCAFC 110 ; (2005) 145 FCR 290. However, the Court notes that the pastoral respondents to this proceeding have agreed to enter into the consent determination on the basis of an agreement with the applicant that a form of Indigenous land use agreement (body corporate agreement) (ILUA) under the provisions of Pt 2 , Div 3, Subdiv B of the Native Title Act will be executed upon or shortly after a determination and the vesting of native title in the Wyamba Aboriginal Corporation. A determination in this form was held to be appropriate by North J in Hunter v State of Western Australia [2009] FCA 654 , and I consider it also to be appropriate here. Consequently, the Court accepts that the determination together with the ILUA deals with the topic of extinguishment of native title in such a manner that the Court can be satisfied that it is relevantly "appropriate" for the Court to make the determination on the terms agreed to by the parties. It thus appears to the Court, on the basis of the informed consent of the parties and the materials before the Court, that it is appropriate to make an order under s 87(2) of the Native Title Act , consistent with the agreement reached by the parties as to the terms of a determination, without holding a hearing. The agreement is, no doubt, the culmination of many long years of expectation by the members of the Thudgari People, and many years of investigation and hard work by their lawyers, anthropologists and other advisers. It also reflects the good faith commitment of the State of Western Australia and other parties to reach agreement in native title proceedings such as this, so that native title determinations can be made under the Native Title Act without resort to lengthy and costly contested hearings. It is fitting that the hearing in relation to the application for the proposed determination should be conducted today on Thudgari traditional lands, here at South Bore on Ullawarra Station, which is both within the traditional country of the Thudgari People and a pastoral lease that they hold. I propose therefore to make the proposed determination in the terms of the minute submitted to the Court and will now proceed to sign the consent determination. I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker J.

consent determination of native title whether determination should be made pursuant to s 87 of the native title act 1993 (cth) proposed determination within court's power and appropriate orders made native title

The first topic relates to Mr Seward having made no complaint to Quadrant about having been misled by it in 2001 or thereafter until the commencement of these proceedings in June 2003. The reason that the respondents wish to cross-examine on this topic is that they may wish to submit that the court should infer, from Mr Seward's failure to complain, that the representations allegedly made to him were not made at all or, if made, that they were not relied upon. 2 The second topic proposed for cross-examination is Mr Seward's involvement in the preparation of forecasts. The respondents wish to pursue this because, depending on the course of the evidence, they may wish to submit at the final hearing that Mr Seward's level of involvement in the preparations of forecasts in the year 2000 should not be accepted having regard to the degree of his involvement in 2001. 3 I am satisfied on the evidence and from what Mr Sackar QC told me from the bar table that it did not occur to him to cross-examine Mr Seward on these topics until some time during the week commencing 18 September 2006, nor did it occur to any of the other members of the respondents' legal team to raise this matter for cross-examination until Mr Sackar adverted to it in September. At that time the parties and many of their legal representatives were in the United States to take evidence on commission before me. 4 I am satisfied that the failure to cross-examine Mr Seward on the proposed topics was not the result of a tactical decision made by the respondents or their advisers. His Honour pointed out at 729 that "[o]ne important consideration is that litigation must be resolved and not be the subject of continuous reopening and prolongation". 6 In Ishac v David Securities Pty Limited (No 5) (unreported, Young J, 24 March 1992) His Honour listed four common situations where it is appropriate to allow further cross-examination. Only the first is relevant to the present case. It is where there is a bona fide omission by cross-examining counsel to deal with the subject and the omission comes to the cross-examiner's attention shortly after the witness has left the witness box. I do not consider that his Honour was attempting to lay down an exhaustive list. Rather, he set out guiding factors for the exercise of the discretion in situations which may be thought commonly to arise. 7 The principles stated in Brown v Petranker (1991) 22 NSWLR 717 at 728-9 by Clarke JA (with whom Handley JA and Waddell AJA agreed) applied to an application by a party to recall a witness to give further evidence in chief. Nevertheless, in my opinion the overriding principle stated by Clarke JA seems to be the appropriate test. That is, the exercise of the court's discretion is dependent upon whether the interests of justice require leave to be granted or refused. Inquiry includes an examination of any prejudice to the other party; see also R v Gassy (No 3) (2005) 93 SASR 454 at [318]. 8 The principles stated by Jeffrey J in Henning v Lynch [1974] 2 NSWLR 254 at 259, to which Clarke JA referred with approval in Brown v Petranker, also dealt with reopening to tender additional evidence. In my view the test of "accident, mistake or want of foresight" to which Jeffrey J referred is only a guiding factor. The overriding consideration is the interests of justice. 9 Two questions seem to me to be relevant to the exercise of my discretion in the present case. The first is whether the evidence sought to be adduced in cross-examination is likely to be sufficiently probative to carry any real weight in the determination of the issues or otherwise of sufficient substance. 10 The second is whether there is real prejudice to Mr Seward. This reduces to two sub questions. The first is prejudice said to arise by reason of the delay between the conclusion of Mr Seward's evidence on 7 September 2006 and the time of his proposed recall in February 2007. The second is that it is said that Mr Seward may have lost the opportunity to adduce evidence from other witnesses in the proceedings, in particular, Mr Tom Slick and Ms Elaine Addison on the topic of the failure to complain. Thus, it is submitted by the respondents that the proposed cross-examination goes to an issue in the cause rather than to credit; see Dukemaster Pty Ltd v Bluehive Pty Ltd [2002] FCAFC 377 at [58] ; see also Cordelia Holdings Pty Ltd v Newkey Investments Pty Ltd [2004] FCAFC 48 at [71] - [77] . 12 The reasons why a failure to complain may have relevance or may assist in resolution of an issue were stated by Einstein J in Biscayne Partners Pty Ltd v Valance Corp Pty Ltd [2003] NSWSC 874 at [150] . What underlies his Honour's explanation is that a failure to complain may point to a finding of absence of any real ground for complaint or reliance where a plaintiff would be expected to have spoken. But the principle assumes that the person had knowledge of the alleged misrepresentation at the relevant time. That is to say, how can a failure to complain about that which the party was unaware have any real probative value? 13 Whether the failure to complain goes to credit or to an issue in the proceeding will depend on the facts and circumstances of each case. In the present proceedings it may be that the proposed cross-examination goes in some way to the issue of reliance as shown in the authorities relied upon by the respondents. However, in light of the material which the respondents wish to explore as set out in the draft list of proposed topics of cross-examination, I am inclined to the view that the cross-examination will go in some significant respects to Mr Seward's credit. 14 To the extent that the proposed cross-examination will go to credit I am not satisfied that it would have substantial probative value. Moreover, I am not persuaded that a sufficient evidentiary basis has been established on the present motion to warrant reopening cross-examination. In particular, it appears from evidence adduced in the proceedings that in the period from 2001-2002 BWC was suffering increasing financial difficulties but it is not established on this motion that Mr Seward was at that time aware, as the applicants contend, that Quadrant had allowed Mr Blom to present projections to the applicants without revealing that Blom's earlier (and less optimistic) projections had failed. 15 Insofar as the respondents call in aid the "most walks of life" ordinary human nature test referred to by Einstein J in Biscayne , the material referred to in the respondents' affidavits on the motion seems to me to be insufficient to justify the exercise of my discretion. I do not consider that the topics listed in the draft list illustrate with a sufficient degree of confidence that the evidence would have sufficient evidentiary value to justify me in exercising my discretion in this matter. 16 It is true, as the High Court said in Fox v Percy [2003] HCA 22 ; (2003) 214 CLR 118 at [31] , that a factual finding should, so far as possible, turn on the basis of "contemporary materials, objectively established facts and the apparent logic of events". Nevertheless, I do not see that a sufficient basis has been established to allow the issue of failure to complain to be explored in the manner proposed; nor do I consider that the observations of the High Court in MWJ v The Queen [2005] HCA 74 ; (2005) 222 ALR 436 at [39] - [40] on the application of the rule in Browne v Dunn assist in the resolution of this motion. 17 The question whether leave ought to be granted to further cross-examine a witness is to be determined upon the principles I have already stated. Whether or not the respondents are precluded under the rule in Browne v Dunn from relying in final submissions on Mr Seward's failure to complain is another question. I do not need to answer it on today's application. However, it does seem to me that there would be substantial prejudice to Mr Seward to have to re-enter the witness box some five months after he was excused from further attendance. This is particularly so where his credit is put in issue and he has been extensively cross-examined over three separate days. He was in the witness box for over a day and a half in the period from 5 September 2006 to 7 September 2006 and his credit was tested extensively during cross-examination. 19 It is true that I have power to prevent unfair cross-examination by the exercise of my discretion under the Evidence Act 1995 (Cth) but I do not see that this is a sufficient answer in a case where credit is hotly in issue and debates are likely to arise as to the limits of any further cross-examination. Nevertheless, her evidence addressed the case brought by Mr Slick. In my view there is more than a theoretical possibility that she may be able to give evidence on communications involving Mr Seward that might possibly be able to explain his failure to complain. It may only be a possibility rather than a real likelihood but in my view it is sufficient in all the circumstances of the present motion. 21 I do not consider that it was incumbent upon the applicants to adduce evidence in anticipation of what might be put to Mr Seward to support the submission that there was at least a possibility as has been pointed to by them. I have not addressed every matter that was put but I think that the reasons that I have given sufficiently cover the principal considerations. I will leave the written submissions with the papers in case there is a need to refer to them. As Mr Studdy rightly pointed out, the ground upon which the respondents have sought to recall Mr Seward is his failure to complain. They did not in their evidence intend to set out the proposed list either as indicative of the matters which will be covered or which would limit the proposed cross-examination. 24 I accept that this is so. However, it does seem to me that the matters referred to in paragraphs [10]-[18] of the list would be matters which would be likely to be explored in cross-examination. I think on refection that the only use that could be made of this is that it does demonstrate that the length of cross-examination may well be likely to be greater than that which has been estimated by the respondents. I say this with respect to counsel but I do think that in the light of the history of this matter and the other matters referred to in the evidence in support of the present motion, it is optimistic to suggest that cross-examination would be limited to an hour or so. 26 I think the proper order is that the motion should be dismissed with costs. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson J.

cross-examination application to recall witness for further cross-examination applicable principles discretionary considerations whether evidence has probative value whether real prejudice to witness leave refused practice and procedure

The applicant seeks to challenge that decision under s 39B of the Judiciary Act 1903 (Cth) and s 476A(1)(c) of the Principal Act. The applicant also seeks damages for false imprisonment. To the extent that it is necessary for him to do so, the applicant also seeks an extension of time pursuant to s 477A of the Principal Act. 3 By agreement, the claim for damages awaits determination of whether the Minister could cancel the applicant's transitional (permanent) visa. On 8 July 1970, the applicant entered Australia, at which time the applicant was granted a permanent entry permit. The applicant left Australia for a short period of time in 1977 to travel to Greece. As a result, his permanent entry permit lapsed. However, his entry permit was 'reinstated' upon his return to Australia later in 1977. He has spent over 20 years in criminal custody since he first arrived in Australia in 1970, and on three separate occasions had served a period of imprisonment of greater than five years for armed robbery offences. It appears to be uncontested that the applicant failed to pass the character test by reason of the fact that he had a substantial criminal record within the meaning of s 501(7)(c) of the Principal Act. The applicant contended that by virtue of s 501(2) of the Principal Act, the Minister may only cancel a visa " that has been granted to a person ". The applicant's transitional (permanent) visa was, it was argued, never granted to him. Where a visa has been granted to a person, s 501F(3) operates so that any other visa held by that person is cancelled. On this basis, where an absorbed person visa is cancelled, a transitional (permanent) visa held by that person is also cancelled. However, the Full Court indicated that this process could not operate in reverse. It will be necessary to say something more about this judgment later in these reasons. 13 The applicant also submitted that he had not "ceased to be an immigrant" prior to 2 April 1984, and hence has never held an absorbed person visa as contemplated by s 34 of the Principal Act. If so, it was submitted, the applicant is not the holder of an absorbed person visa and is the holder of only one visa, a transitional (permanent) visa, which cannot be cancelled. "Granted", in the context of s 501(2), encompasses any means by which a person is given or acquires a visa. The word "granted", as it appears in s 501(2), should be read as encompassing any means of giving under the law, including giving by statute as well as giving by administrative decision. Indeed, the purpose of the language in question ("granted to a person"), it was submitted, is to distinguish s 501(2), which concerns the cancellation of visas that are already in effect, from s 501(1), which concerns a refusal to grant visas on character grounds. For the purposes of s 501(2), what is significant is that the person has a visa and not the means by which that visa was acquired. 15 The Minister submitted the Transitional Provisions Regulations were not intended to create a category of visa (namely, transitional (permanent) visas) that cannot be cancelled on character grounds. Prior to the commencement of the Transitional Provisions Regulations, permanent entry permits that continued in force by regulation 4 were susceptible to cancellation on character grounds pursuant to s 180A of the Principal Act, which empowered the Minister to "cancel a valid visa or entry permit that has been granted to a person". Section 180A had been introduced by the Migration (Offences and Undesirable Persons) Amendment Act 1992 (Cth) . It was a predecessor provision to s 501(2). It would be anomalous, so the Minister submitted, if the effect of the drafting used in reg 4 of the Transitional Provisions Regulations converted permanent entry permits that had been susceptible to cancellation on character grounds into visas that were not susceptible to such cancellation. That is, because permission to remain in Australia granted before the Migration Reform Act continues in force as a visa, it may be cancelled as a visa. Any other construction would result in the absurd position that a non-citizen who constitutes a danger or threat to the Australian community by reason of his or her past criminal conduct could not be removed from Australia. 17 The Minister submitted that the anomalous situation referred to in paragraph [15] above would be compounded by the fact that although it would be possible to cancel the transitional (permanent) visa of a person who had been absorbed into the community prior to 2 April 1984 (by cancelling his or her absorbed person visa, which by virtue of s 501F(3) would lead to the cancellation of his transitional (permanent) visa by operation of law), it would not be possible to cancel the transitional (permanent) visa of a person who had not been absorbed into the community prior to the relevant date (and hence did not hold an absorbed person visa). No sensible reason presents, the Minister submitted, why someone who was not absorbed would have been given such a benefit given it is a benefit denied to someone who had been absorbed into the Australian community. Division 1 of Part II of the Principal Act (as it stood in 1970) dealt with the issue of entry permits. The effect of s 6(8) of the Principal Act was that if a child under the age 16 of years entered Australia on a parent's passport, that child is deemed to be included on any entry permit granted to the parent. I am satisfied that the applicant, on his arrival in Australian in 1970 aged 12 years, was granted a permanent entry visa either in his own right, or as a result of entering Australia on a parent's passport. By virtue of s 9(1) of the Principal Act (as it stood in 1977), the applicant's permanent visa lapsed as a result of him leaving the country. However, the applicant's entry permit was reinstated (under s 6(2) or 6(3) of the Principal Act) on his return to Australia later in 1977. Following the enactment of 1989 Amendment Act, although permission to enter and to remain in Australia was primarily dependent upon the non-citizen holding a valid entry permit (s 14(1)), s 17 and s 18 of the Principal Act authorised the holders of entry visas (a visa was defined as "permission to travel to Australia": s 4(1)) to enter the country in certain circumstances). Under s 4(1), the applicant was classed as being the holder of a "valid entry permit", which, since it was not subject to any limitation as to time, was also a "valid permanent entry permit". The power is exercisable in two circumstances. The first of these is where subsection (2) applies to the person because the Minister is satisfied that the person is not of good character. That subsection applies to a person if the Minister is.satisfied that the person is not of good character, after considering the person's past criminal conduct or the person's general conduct. Currently the Principal Act provides for one form of authority, a visa, which permits a person to travel to Australia, and for another form of authority, entry permit, which permits a person to enter and remain. The two documents were merged in practice in many cases with the introduction of entry visas in 1989. Under the Reform Act, entry permits will be omitted altogether and visas will become the only authority to travel to, enter and remain in Australia. Indeed, the Migration Regulations 1994 did not specify the content of transitional visas, nor did they specify the method by which persons acquired transitional visas. The content of, and how the applicant came to acquire a transitional (permanent) visa, is dealt with in the Migration Reform (Transitional Provisions) Regulations 1994 (Cth) (No 261 of 1994) which were made pursuant to s 40 of the 1992 Reform Act. The validity of reg 4(1) of the Transitional Provisions Regulations was upheld by the High Court in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50 ; (2006) 228 CLR 566 at [23] --- [28]. 30 The Transitional Provisions Regulations were made pursuant to s 40 and s 42 of the 1992 Reform Act (see the discussion in Nystrom at [26]). the relevant clause of the Migration Reform Bill 1992 which introduced proposed s 40(5) and s 40(6)] also provides that regulations may continue in force visas or entry permits of specified classes which were held immediately before the commencement of the Reform Bill provisions dealing with visas. Related to this provision, the regulations may also deem specified persons to be taken to have been granted visas in a specified class created after the commencement of the Reform Bill provisions dealing with visas. Indeed, and in contradistinction to reg 4.01, reg 9 of the Transitional Provisions Regulations provides that the holders of particular types of visas are deemed to have been granted a transitional (permanent) visa on 1 September 1994. This proposition is said to be apparent from the temporal proximity between the enactment of the Offences and Undesirable Persons Act and the enactment of the 1992 Reform Act, which as noted earlier, created a distinction between visas that are taken to have been granted and visas that are deemed to continue in effect. 33 As the applicant also pointed out in his submissions, the power to cancel under s 180A (now s 501) of the Principal Act (as introduced by the Offences and Undesirable Persons Act ) expressly applied to entry permits and visas that have been granted to persons. Indeed, although s 501 has been amended since it was first enacted in 1994 (as s 180A), a central feature has remained consistent throughout its history, namely, that the Minister can only cancel visas or entry permits that have been granted to a person. 34 It is necessary to say something more about the Full Court judgment in Moore v Minister for Immigration and Citizenship. The observations of the Full Court in [42]-[45] of their reasons entail a fairly unequivocal statement that a power to cancel a visa "that has been granted" would not be exercisable in relation to a transitional (permanent) visa because that type of visa had not been "granted" or could not be taken to have been granted. However these observations do not, in my opinion, form part of the ratio of the decision. The observations were made in a passage in which the Full Court was discussing ground one in the appeal. At [39], the Full Court indicated that two questions arose in the consideration of ground one. The first was whether the appellant could be taken to have been granted an absorbed person visa (which depended on whether he had been absorbed into the Australian community). The second was if he had not obtained an absorbed person visa, had the Minister effectively cancelled his transitional (permanent) visa. At [60] the Full Court concluded that the appellant had been absorbed into the Australian community well before to April 1984. The Full Court then concluded that the appellant held an absorbed person visa which was taken to have been granted to him. In the result, it was a visa which had been "granted" and one the Minister was empowered to cancel. It does not appear to me that this chain of reasoning necessarily depended on a conclusion that the Minister had no power to cancel a visa which had not been granted. 35 Nonetheless, even though these observations do not form part of the ratio of the decision in Moore , it is necessary for me, as a single judge, to give them significant weight. However, I am firmly convinced that the power to cancel conferred by s 501 was intended to be exercisable in relation to a transitional (permanent) visa. In this case, the applicant held such a visa because he had been originally granted an entry permit. When s 180A was enacted in 1992, the applicant held an entry permit that had been granted. That permit could have been cancelled by exercise of the power conferred by s 180A. The removal of the reference to a power to cancel "a valid entry permit that had been granted" occurred at a time when, by the combined effect of legislative amendments and the promulgation of regulations, visas became the sole means of conferring a right to remain lawfully in Australia. 36 It is inconceivable, in my view, that the amendments made in 1994 to s 180A were intended to render immune from the power to cancel, an entry permit which had been transmogrified into a transitional (permanent) visa. The power conferred by what was then the renumbered s 501 was plainly intended to authorise the Minister to cancel whatever visa was held by a person who the Minister thought ought no longer be able to remain in Australia having regard to that person's character. Obviously I am not concerned here with the appropriateness of the underlying policy or the way in which the power has been exercised in this or any other case. However, I have no doubt the power is intended to be exercisable in relation to any visa and the words "that has been granted" were not intended to condition or limit the power. These words remained as the truncated residue of the formulation first appearing in s 180A, namely "a valid visa or a valid entry permit that has been granted". 37 In my opinion, the Minister had power to cancel the applicant's transitional (permanent) visa. I order that the period within which the applicant is to file his application be extended, and the application be dismissed with costs. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

minister's power to cancel visas on character grounds cancellation power limited to visas that have been granted to persons applicant holder of a transitional (permanent) visa whether applicant was granted a transitional (permanent) visa whether the minister had the power to cancel the applicant's transitional (permanent) visa migration

2 The proceedings were commenced in this Court on 25 October 2005. The applicant is Mr Peter Ivan Macks in his capacity as trustee of the bankrupt estate of Mr Noel Ross Edge and he brings a claim against Mrs Keryn Dawn Edge, who is the respondent. Mrs Edge was married to the bankrupt. Her application for an order transferring the proceedings to the Family Court is opposed by the trustee. The Official Receiver was appointed the trustee of his estate on the date of sequestration and continued in that capacity until 5 July 2004. Since that date, Mr Macks has been the trustee of the bankrupt estate. 6 The ownership of three assets is in issue. First, there is a freehold interest in property at 68 Range Road North, Upper Hermitage in the State of South Australia. The bankrupt and Mrs Edge were joint tenants of that property. I will refer to this property as 'the freehold property'. Secondly, there is a leasehold interest in property at 32 and 33 Pelican Point, Morgan, in the State of South Australia. The bankrupt and Mrs Edge were joint tenants of that property. I will refer to this property as 'the leasehold property'. Thirdly, there was a 1980 Camero V8 speedboat. The speedboat was owned by the bankrupt. I will refer to this as 'the speedboat'. 7 By memorandum of transfer dated 19 September 2002, the bankrupt's interest in the freehold property was transferred to Mrs Edge. The memorandum of transfer was lodged for registration on 24 September 2002, and was registered on 26 August 2003. The trustee alleges that Mrs Edge either gave no consideration for the transfer, or alternatively, gave consideration of less than the market value of the freehold value of the property at the time of the transfer. The trustee alleges that the transfer is void within the provisions of s 120 of the Bankruptcy Act , or, in the alternative, s 121. He makes various allegations of fact, which are said to bring the transfer within those sections, but, for present purposes, it is not necessary to set out those allegations. 8 By instrument dated 18 September 2002, the bankrupt's interest in the leasehold property was transferred to Mrs Edge. The instrument was lodged for registration on 24 September 2002 and was registered on 26 August 2003. The trustee alleges that Mrs Edge gave no consideration for the transfer, or, alternatively, gave consideration of less than the market value of the leasehold value of the property at the time of the transfer. Again, he alleges that the transfer was void within the provisions of s 120 of the Bankruptcy Act , or, in the alternative, s 121. Again, it is not necessary for me to set out the factual allegations which the trustee says bring the transfer within those sections. 9 The bankrupt's interest in the speedboat was transferred to Mrs Edge in or around September 2002. The trustee alleges that Mrs Edge gave no consideration for the transfer, or, alternatively, consideration of less than the market value of the speedboat the time of the transfer. The trustee alleges that the transfer was void within the provisions of s 120 or, in the alternative, s 121 of the Bankruptcy Act . 10 In short, the trustee alleges that each transfer was void, and he claims declarations to that effect. He also claims orders under s 64 of the Real Property Act (1886) (SA) directing the Registrar-General to cancel the relevant certificates of title and issue new certificates of title. 11 Mrs Edge has filed a Defence in the proceedings. She alleges that she and the bankrupt separated in August 2002 and were divorced on 12 December 2003. She alleges that in about September 2002 she and the bankrupt entered into an oral agreement which she calls the separation agreement ('the separation agreement') and that the transfer of the freehold property, the leasehold property and the speedboat occurred pursuant to or under that agreement. Mrs Edge alleges that the separation agreement dealt with all of the existing claims, rights and interests as between the bankrupt and herself. Mrs Edge alleges that the separation agreement was formalised by the bankrupt and herself on 22 May 2003 when they entered into what she calls a written certificated financial agreement ('the certificated financial agreement'). 12 Mrs Edge alleges that, by reason of the separation agreement, from about September 2002 the bankrupt held his interest in the freehold property on trust for her. It therefore did not become part of the bankrupt's estate under s 116 of the Bankruptcy Act . In the alternative, Mrs Edge alleges that she gave consideration for the transfer of the freehold property, the leasehold property and the speedboat. For present purposes, it is unnecessary to set out the matters which she pleads in support of that allegation. Mrs Edge denies that the trustee is entitled to the relief that he claims. She claims in the alternative, and should it be be held that the transfers are void, that, under ss 120(4) and 121 (5), respectively, of the Bankruptcy Act , she is entitled to an amount equal to the value of the consideration that she gave for each transfer. Those subsections provide that the trustee must pay to the transferee an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee. 13 The trustee has filed a Reply, but, for present purposes, it is not necessary to outline the allegations in the Reply. 14 On 18 May 2006, Mrs Edge issued proceedings in the Family Court of Australia against the trustee and the bankrupt seeking certain orders under the Family Law Act 1975 (Cth) ('the Family Law Act '). During the course of the submissions on the application, counsel for Mrs Edge indicated that the orders sought in the proceedings in the Family Court may need to be amended. After the submissions, a member of the firm of solicitors acting for Mrs Edge filed an affidavit in which it is said that Mrs Edge has amended the application in the proceedings in the Family Court in terms of the orders sought. Subject to the question of costs, I am prepared to decide this application on the basis of the orders sought in the amended application. That pursuant to section 44(3) of the Family Law Act 1975 , leave of the Court be granted to institute proceedings for the orders applied for hereinafter. I have no information before me as to whether an extension of time will be granted, and I think it is appropriate to proceed on the basis that it may be granted. I will refer to this Act as 'the Amending Act'. In terms of the issues in this case, it was not suggested that the relevant provisions of the Amending Act did not apply by reason of the fact that the relevant provisions came into effect during the course of 2005. I note that the amendments in Schedule 1 came into operation on 18 September 2005, those in Schedule 2 on 18 March 2005 and the balance on 15 April 2005. 17 In order to explain the effect of the Amending Act on the legal rights and interests between a non-bankrupt spouse and the trustee in bankruptcy of a bankrupt spouse, it is necessary to briefly examine the position before that Act. For present purposes, the previous position may be summarised as follows. 18 First, s 120(2) excludes from the operation of subsection (1) (among other things) a transfer to meet all or part of a liability under a maintenance agreement. Before 15 April 2005, 'maintenance agreement' was defined to include a financial agreement within the meaning of the Family Law Act . A similar exclusion or exception applied in relation to other provisions in the Bankruptcy Act , but it was not an exclusion or exception in the case of the operation of s 121 where the main purpose of the transfer was to prevent the transferred property from becoming divisible among the transferor's creditors or to hinder or delay the process of making property available for division among the transferor's creditors (s 123(6)). Before the introduction of the Amending Act, Mrs Edge could have raised as a defence or exception to the trustee's claim under s 120, but not s 121, an allegation that the transfers were to meet liabilities under a financial agreement. 19 Secondly, before the introduction of the Amending Act, the Family Court could not, generally speaking, make orders which affected the rights, powers and interests of third parties. 20 The original jurisdiction of the Family Court is defined in ss 31 and 33 of the Family Law Act . For present purposes, it is sufficient to say that the Court had and has jurisdiction with respect to matrimonial causes. Section 78 deals with the Family Court's power to declare the interests in the property of the parties to a marriage and s 79 gives the Family Court power to alter the interests of parties to a marriage with respect to the property of them or either of them. The section sets out the matters the court must take into account in determining the order which should be made (s 79(4)). Part VIIIA deals with financial agreements between the parties to a marriage and provides that Part VIII (which includes s 79) does not apply to financial resources to which a financial agreement that is binding on the parties to the agreement applies: s 71A. The court is given various general powers in s 80 and power to make declarations and injunctions in Part XIV (s 112A et seq). 80 and 114 must be understood in the context of the Act, which confers jurisdiction on the Family Court in matrimonial causes and associated matters, and in that context it would be unreasonable to impute to the Parliament an intention to give power to the Family Court to extinguish the rights, and enlarge the obligations, of third parties, in the absence of clear and unambiguous words. It can safely be assumed that the Parliament intended that the powers of the Family Court should be wide enough to prevent either of the parties to a marriage from evading his or her obligations to the other party, but it does not follow that the Parliament intended that the legitimate interests of third parties should be subordinated to the interests of a party to a marriage, or that the Family Court should be able to make orders that would operate to the detriment of third parties. There is nothing in the words of the sections that suggests that the Family Court is intended to have power to defeat or prejudice the rights, or nullify the powers, of third parties, or to require them to perform duties which they were not previously liable to perform. It is one thing to order a party to a marriage to do whatever is within his power to comply with an order of the court, even if what he does may have some effect on the position of third parties, but it is quite another to order third parties to do what they are not legally bound to do. Apart from any constitutional limitation, it is now authoritatively established that as a matter of construction the general powers of the Family Court are to be understood in the context of the Family Law Act which confers jurisdiction upon the Court in matrimonial causes and associated matters. Those powers, which include the power to grant injunctive relief under s. 114 , are not to be construed so as to confer jurisdiction to defeat the rights, or enlarge the obligations, of persons who are not parties to the marriage involved in the relevant matrimonial cause: Ascot Investments Pty. Ltd. v. Harper . The Family Court, in the pursuit of its duty (in an appropriate case) to adjust rights as between the parties to a marriage, has no power to deprive other parties of their rights. Its power to deal with the property of the parties over whom it has jurisdiction must start with the property that is theirs, not with property that the law (whether the Bankruptcy Act or some other law) has vested in another. If the trustee could bring the transfers within the provisions of s 120 or s 121 then that was the end of the matter. 25 Thirdly, (in terms of the position before the Amending Act) s 35A of the Bankruptcy Act has been in the Act since 1988 and the above principles did not mean that this Court would never exercise its discretion to transfer proceedings under the Bankruptcy Act to the Family Court. The circumstances of the case might suggest that that course was appropriate even though, once transferred, the Family Court was bound to give full force and effect to the provisions of the Bankruptcy Act : Re Sabri; Ex parte Sabri v Brien (1995) 60 FCR 131. I also refer to Re Boscolo; Ex parte Botany Council (1996) 62 FCR 397 as an example of a case where this Court refused to transfer proceedings to the Family Court. 26 Had this application been made under the law as it stood prior to the enactment of the Amending Act, I would have seen no reason to transfer the proceedings to the Family Court. It is true that the Family Court would have had jurisdiction to hear the trustee's claim by reason of the order for transfer and the provisions of s 35A, but the Family Court would have had no power to make orders altering the ownership interests in the freehold property, leasehold property and speedboat if and once the trustee had brought the transfers within the provisions of s 120 or s 121 of the Bankruptcy Act . If he was unsuccessful in doing that then the ownership interests would remain as they are. Furthermore, there is no existing order of the Family Court that might suggest, as it did in Re Sabri; Ex parte Sabri v Brien , that to avoid the appearance of conflict between orders, the proceedings should be transferred to the Family Court. 27 For the purposes of this case, the important change introduced by the Amending Act is that it gives the Family Court the power to make such orders as it considers appropriate, altering the interests of the bankruptcy trustee in what is referred to as 'the vested bankruptcy property'. It is necessary to examine the amendments in some detail because, as the submissions developed, counsel for Mrs Edge submitted that in pursuing a matrimonial cause the trustee 'had simply issued in the wrong court'. 28 The starting point is the introduction into the Family Law Act of two new paragraphs in the definition of 'matrimonial cause'. For this purpose, property has the same meaning as in the Bankruptcy Act 1966 . Sections 58 and 59 of the Bankruptcy Act deal with the vesting of property upon a sequestration order being made. 36 In addition to these changes in the substantive law, the Commonwealth Parliament has given the Family Court jurisdiction in bankruptcy, in addition to that which it may have on an order for transfer being made under s 35A. Section 27 has been amended to include a further exception to the exclusive jurisdiction in bankruptcy which is vested in this Court and the Federal Magistrates Court. 38 There might be interesting questions in a case such as this one as to when the jurisdiction conferred by s 35 of the Act is engaged. For example, are there proceedings with respect to vested bankruptcy property only when a court declares transfers to be void within the provisions of ss 120 or 121 or are there such proceedings at an earlier point in time? I can pass over the possible questions which might arise under s 35 because it is clear that if I make the order for transfer, the Family Court has jurisdiction to hear and determine the trustee's claim under the provisions of s 35A itself. 39 At the same time, there is nothing to suggest that this Court does not have jurisdiction over the trustee's claim and I reject the submission that the trustee has issued proceedings in the wrong court. The Family Court has jurisdiction to alter the trustee's rights with respect to vested bankruptcy property, but this Court retains jurisdiction to determine the prior questions of whether the transfers are void because they fall within the provisions of ss 120 or 121. 40 It was suggested in submissions that the power in the Family Court to alter the trustee's rights in vested bankruptcy property arose in the alternative under s 79(1) of the Family Law Act or under s 90K(3). The latter subsection deals with the Family Court's powers to make orders upon setting aside a financial agreement. I doubt whether it is necessary to go to s 90K and consider the consequences of setting aside a financial agreement rather than going straight to s 79(1) , although I do not need to decide the point. It seems to me that by reason of s 71A(2) of the Family Law Act any claim with respect to the vested bankruptcy property is simply made under s 79(1). In any event, subject to an extension of time, the Family Court would have the power to alter the trustee's rights with respect to the three assets should it be found that by reason of the provisions of ss 120 or 121 the transfers were void. I do not think that that proposition was contested by the trustee. 41 It follows from what I have said that the first issue in proceedings between the trustee and Mrs Edge is whether the trustee's claim under the provisions of the Bankruptcy Act ought to be upheld. If the trustee is successful then Mrs Edge may make an application against the trustee under s 79(1) of the Family Law Act , with respect to the freehold property, leasehold property and speedboat, seeking an order 'altering the interests of the bankruptcy trustee in the vested bankruptcy property'. It seems to me that that is the substance of any proceedings she may bring in the Family Court. Her claim is in a sense a contingent claim in that it only becomes relevant if the trustee's claim is successful. If the trustee is unsuccessful then Mrs Edge's claim falls away because there is no relevant vested bankruptcy property. Should the trustee be successful, the Family Court has the power to alter the interests of the trustee in the vested bankruptcy property. 42 In those circumstances, whether the order for transfer should be made comes down to whether it is appropriate in the exercise of the discretion to make the order for transfer. This Court can hear and determine the trustee's claim, but it cannot hear and determine Mrs Edge's claim should it become necessary to do so. If I make the order for transfer, the Family Court can hear and determine both claims. That is a powerful reason for making an order for transfer. On the other hand, the proceedings in this Court are nearly ready for hearing and, so far as I can see, involve some fairly concise issues. The hearing of the trustee's claim should not take very long. If the trustee's claim is unsuccessful, there will be no need for Mrs Edge to pursue the claim against the trustee in the Family Court. On balance, I am of the opinion that the proceedings should not be transferred to the Family Court. 43 Mrs Edge's application to transfer the proceedings to the Family Court is dismissed. I will hear the parties on the costs of the application. I certify that the preceding forty three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

application for order under bankruptcy act 1996 (cth), s 35a, that proceedings be transferred from federal court of australia to family court of australia where trustee in bankruptcy alleges in federal court that transfers to bankrupt's former spouse are void where separate proceedings on foot in family court in which bankrupt's former spouse seeks order against the trustee altering the interests of trustee in vested bankruptcy property where federal court and family court both have jurisdiction in bankruptcy. power of family court of australia to bind third parties effect of bankruptcy and family law legislation amendment act 2005 (cth). bankruptcy family law

The application for extension of time was filed with the Court on 25 June 2008. The application is not a great deal out of time. Mr Foster, who was unrepresented, gave as an explanation that there was apparently some misunderstanding in his communication with Court staff as to what was required. I am satisfied that there is a reasonable explanation for the delay. No prejudice is asserted by the second respondent. I would be prepared to grant an extension of time if the proposed appeal had some reasonable prospects of success, or even was arguable. Unfortunately, however, that is not the case. 2 To understand the unfortunate position in which Mr Foster finds himself, it is necessary to refer to an earlier decision of the Tribunal constituted by Mr John Handley, Senior Member, given on 21 November 2006 (the first decision). 3 It appears from the first decision that Mr Foster's complaint concerns the "portability" of his Disability Support Pension (DSP). In July 1996 Mr Foster suffered a massive cerebral haemorrhage whilst on holidays in the United Kingdom. Thereafter he was treated extensively, both in that country and in Australia. He qualified for a DSP in 1998, and continues to receive it. He has restriction and loss of use of his left arm and shoulder, both legs, and some loss of vision. He has no difficulty with verbal communication, but impaired comprehension and impairment of decision-making. He was assessed by Health Services Australia in October 2006 as having a total impairment rating of 50. The minimum rating required under s 94 of the Social Security Act 1991 (Cth) to qualify for a DSP is 20. 4 Since 1999 Mr Foster has resided in Thailand. His intention was to work as a tour operator, or tour guide, and possibly to start up his own travel business. The problem, however, is that since 2004 the Act has limited portability of the DSP. The effect is that a recipient of a DSP can only receive it whilst outside Australia for a period of 13 weeks. (3) If the Secretary revokes the determination, this Part has effect after the first time at which one of the qualifying circumstances does not exist as if the person's maximum portability period for the pension were 13 weeks starting at that time. This decision was affirmed by a Centrelink authorised review officer. Mr Foster then unsuccessfully appealed to the Social Security Appeals Tribunal. Mr Foster's appeal to the Tribunal was dismissed by the first decision. I specifically asked him to consider that part of the section of the Act, and I am satisfied that he understood the meaning of the words. There is no evidence lodged or filed which would indicate that he has been diagnosed with or suffers a terminal illness. He certainly has extensive disabilities which will incapacitate and hinder him into the future but nothing points to any of those illnesses being of a terminal nature. But his preference would be to live in Australia and he regards Australia as being his permanent home. That is to say, he does not intend to live in Thailand permanently. He has not taken out Thai citizenship and is permitted to live in Thailand by reason of a business visa which is issued 12 monthly. 14 The purpose of Mr Foster's absence of [sic] Australia is not to be near or with family members --- because they all live in Australia. Additionally, his country of origin is Australia. The remaining part of 1218AA(e) of the Act is also not satisfied. 8 In discussion before me Mr Foster presented a picture which arouses considerable sympathy. He is trying to establish a tour guide business in Thailand by advertising on the internet. His limited resources, which would otherwise be spent in establishing his business, are taken up with the cost of periodic travel to Australia. But Mr Foster, fortunately, is not terminally ill within any reasonable construction of that term, nor is his purpose of being in Thailand to be with or near a family member, or to return to his country of origin. It is plain that there is no basis on which he could satisfy those mandatory requirements of s 1218AA. Still less is there any question of law raised, as is required for an appeal to this Court by reason of s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). The wisdom or fairness of s 1218AA is not a matter on which I can pass judgment. I have to apply the law as it is, sympathetic though I am to Mr Foster's plight. 9 For these reasons, the application for extension of time to file and serve a notice of appeal will be refused. The respondent did not seek any order as to costs. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey.

receipt of disability support pension whilst residing outside of australia limited portability period minister's discretion to extend portability period where certain conditions satisfied social welfare

His Honour was satisfied that the Federal Magistrates Court had no jurisdiction to hear the application because s 477(1) of the Migration Act 1958 (Cth) requires an application to the court to be made within 28 days of the actual notification of a decision of the Tribunal. 2 His Honour observed that the decision of the Tribunal was made on 11 September 1998, affirming the decision of a delegate not to grant the applicant a protection visa. The applicant told the court that he had never received a copy of that decision. The applicant did inform the Federal Magistrate that he became aware of the Tribunal's decision when he was located by officers of the Minister's Department in February 2005 and placed in immigration detention. 3 Mr Chami, solicitor, who appears for the Minister, fairly conceded that he was unable to establish that there had been personal delivery of the reasons of the Tribunal. The learned Federal Magistrate proceeded upon the basis that the applicant was notified of the reasons of the Tribunal on 11 September 1998 or at very latest that he was notified of those reasons when he was placed in detention in February 2005. His Honour therefore came to the view that the application for judicial review which was filed in the Federal Magistrates Court on 13 February 2007 was well and truly outside the time limit referred to in s 477(1) of the Act. 4 However, the decision of Scarlett FM was handed down before the decision of a Full Federal Court in Minister for Immigration & Citizenship v SZKKC (2007) 159 FCR 565. That case is authority for the proposition that s 477 of the Act requires actual notification of the written statement required by s 430(1). Buchanan J, with whom Gyles J and I agreed, said at [37] that the sole method of actual notification is physical delivery by hand. 7 The decision in SZKKC is now the subject of an application for special leave to appeal to the High Court. However, plainly enough, I am bound by the decision of the Full Court unless and until it is overturned by the High Court. 8 The Minister, in his written submissions, pointed to a number of discretionary considerations as to why I ought not to grant leave to appeal. Mr Chami also pointed to the fact that ordinarily presumptions would be raised against the applicant on the question of receipt of the reasons of the Tribunal. However, it seems to me that none of the matters to which reference is made in the Minister's submissions go to the question which was before Scarlett FM as to whether the Federal Magistrates Court had jurisdiction to entertain the application for judicial review. 9 In light of the decision of the Full Court in SZKKC there can be no real argument but that the decision of the Federal Magistrate is attended by sufficient doubt to warrant the grant of leave to appeal. There would, of course, be an injustice to the applicant if leave were denied because he would be shut out from a substantive hearing of his application for review. 10 It follows that I propose to grant leave to appeal against the decision of Scarlett FM. Moreover, it seems to me that the practical course is to allow the appeal because the matter cannot be distinguished from the decision of the Full Court in SZKKC . 11 After some debate, Mr Chami accepted the inevitability of this outcome and did not really oppose an order that the appeal be allowed because the effect of this will be that the matter is to be remitted to the Federal Magistrates Court for hearing of the application for review of the decision of the Refugee Review Tribunal. 12 In his reasons for judgment Scarlett FM drew attention to the delays in this matter. He expressed the view that the delays on the part of the Minister's Department are "nothing short of astonishing". Whether or not this is so, it does seem to me that this is a case which calls out for an urgent hearing. Of course, arrangements for any further hearing would have to be dealt with as part of the ordinary administration and allocation of matters by the Federal Magistrates Court. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

reasons of the refugee review tribunal must be personally served on an applicant time for application for judicial review does not start running until applicant is personally served migration

This proceeding is one of a number of ancillary proceedings in which allegations of the same or similar conduct are made. It is an action brought by the applicant, Cadbury Schweppes Pty Ltd ("Cadbury"), against Amcor for damages under the Trade Practices Act 1974 (Cth) ("the damages proceedings"). Visy has been joined by Amcor as a respondent to Amcor's cross claim in the damages proceedings. 2 An interlocutory dispute has arisen in the damages proceedings. The Australian Competition and Consumer Commission ("ACCC") makes a claim for legal professional privilege and public interest immunity privilege in relation to specified documents created in connection with the ACCC proceeding. Amcor and Visy have discovered the documents in the damages proceedings, but the ACCC seeks to prevent them from producing those documents to Cadbury on discovery. Copies of the statements were retained by Amcor's external solicitors and Amcor respectively. The documents in each category are listed in Appendix A. 5 For the reasons that follow, I reject the ACCC's claims of privilege, except as to the documents in Category I. However, production of the 111 witness proofs forming Categories II and III will be stayed for further consideration of whether Visy's implied undertaking to the Court not to use documents produced by other parties in the course of the ACCC proceedings except in those proceedings should prevent their disclosure to Cadbury in the damages proceedings. The communications were for the dominant purpose of enabling the ACCC to prosecute the penalty proceedings. Unfortunately, in the circumstances of this dispute, the precise nature and scope of the common law legal professional privilege is, in a word, unclear. As will be seen, almost immediately, the cases are not consistent in approach, legal principle or result. The High Court has not yet had reason to reconcile the particular but differing statements that are found in the cases decided by trial and intermediate courts. 7 It is sufficient for present purposes to begin by stating that in order to maintain a claim of legal professional privilege, a proponent must demonstrate the communication is protected by "advice privilege" or "litigation privilege. " The relationship between the two types of legal professional privilege is just one of the matters that is unclear in Australian privilege law. Some cases support the proposition that "litigation privilege is a separate category of legal professional privilege ": Public Transport Authority of Western Australia v Leighton Contractors Pty Ltd [2007] WASCA 151 at [18] ; See also R v King [2007] 2 NZLR 137; Westgold Resources NL v St Barbara Mines Ltd [2007] WASC 47 ; Mitsubishi Electric Australia Pty Ltd v Victorian Work Cover Authority [2002] VSCA 59 ; (2002) 4 VR 332; Southern Equities Corporation Ltd v West Australian Government Holdings Ltd (1993) 10 WAR 1 and Dingle v Commonwealth Development Bank of Australia (1989) 23 FCR 63. On the other hand, it is also true that the " High Court has yet to make clear whether litigation privilege has an existence and rationale distinct from the advice privilege ": eg, Leighton [2007] WASCA 151 at [20] ; AWB Ltd v Cole [2006] FCA 571 ; (2006) 152 FCR 382; Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2006) 67 NSWLR 91; Westpac Banking Corporation v 789Ten Pty Ltd (2005) 55 ACSR 519 and Pratt Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 122 ; (2004) 136 FCR 357. 8 With respect to advice privilege it was, until recently, uncontroversial that the proponent had to establish three elements: (1) a confidential communication, (2) between a lawyer and client, (3) made for the dominant purpose of giving or receiving legal advice: see Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1997) 188 CLR 501, 508-09 (stating that a confidential lawyer-client relationship is required) and Esso Australia Resources Ltd v Commissioner of Taxation (Cth) [1999] HCA 67 ; (1999) 201 CLR 49 at [61] (adopting the dominant purpose test). The Full Court of the Federal Court has now dispensed with the second requirement, holding that third-party communications may come within the ambit of advice privilege: Pratt Holdings [2004] FCAFC 122 ; (2004) 136 FCR 357 at [49] , and [105]. 9 However, the witnesses whose statements are at issue here had no express agreement or arrangement relating to confidentiality at the time the statements were made. Indeed, the ACCC's own witness in the present application confirmed that Amcor made no attempt to seek confidentiality: see [28] below. And it was not suggested that any implied agreement relating to confidentiality of communications between any of the witnesses and the investigators can be identified. It follows that advice privilege cannot attach to communications between the witnesses and investigators. And it also follows that no advice privilege inherently attaches to any documents (ie, the witness statements) summarizing those communications (which is not to say that privilege could never attach to copies or summaries of the communications depending on the purpose for which the copies or summaries were created: see Propend [1997] HCA 3 ; (1997) 188 CLR 501). Accordingly, a claim of advice privilege fails with respect to all three categories of disputed documents. 10 With respect to litigation privilege, on the other hand, the analysis is not so simple. It is clear that the privilege applies only to documents or communications if they are made or prepared (1) in anticipation of litigation (or during pending litigation) and (2) for the purpose of the litigation (eg, with a view to obtaining legal advice or evidence for use in the litigation): Leighton [2007] WASCA 151 at [12] . (That the documents in question here were all prepared at a time when litigation was anticipated or on foot was common ground. ) A lawyer-client relationship is not required: Pratt Holdings [2004] FCAFC 122 ; (2004) 136 FCR 357. However, in contrast to the settled confidentiality requirement of the advice privilege, the authorities are divided as to whether litigation privilege may attach to communications (or documents summarizing communications) between a third-party, independent witness and a client even where they are not confidential: State of New South Wales v Jackson [2007] NSWCA 179 at [37] ( "There is some controversy over the need for confidentiality in litigation privilege at common law, and the controversy is particularly material to privilege for communications between client and third party" ); Leighton [2007] WASCA 151 at [21] - [30] (collecting and summarizing the conflicting authorities). The picture becomes even more complicated if one makes a further distinction, as some authorities do, based on whether such witness statements are found in the hands of the witness or in the hands of the lawyer: A Ligertwood, Australian Evidence (4 th ed) at 291-92, quoted in Leighton [2007] WASCA 151 at [26] . 11 It is at this point that the doctrinal relationship between the advice and litigation branches of the privilege becomes relevant. As McLure JA noted in Leighton , the " High Court has made numerous general statements which, on their face, are capable of applying to all categories of legal professional privilege, to the effect that the privilege only attaches to confidential communications ": Leighton [2007] WASCA 151 at [22] . In fact, some of those general statements can be fairly read to support the view that confidentiality is required for all categories of legal professional privilege. 12 As it turns out, however, the Court in this case is spared from having to enter the confidentiality thicket surrounding litigation privilege because of a concession made by Cadbury, " that [legal professional privilege] subsisted in each of the [Category II documents] immediately prior to [the documents] being served on Visy. " In its oral submissions, Cadbury clarified that what had appeared earlier to be a separate argument - that the communications by which the ACCC effected service of the Category II documents, although they may have captured the substance of earlier privileged communications, were not themselves privileged - was not an attempt to qualify or otherwise place conditions on this concession. In reliance on this concession and clarification, the ACCC refrained from calling evidence about the circumstances in which the "communications" were served and it was agreed between the parties that the only issue to be resolved is whether the ACCC waived privilege when it, at the direction of the Court, filed the documents and served them on Visy. 13 The High Court looked at an aspect of waiver of legal professional privilege in Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1. The test applied there was whether there was " conduct inconsistent with the maintenance of the confidentiality which the privilege is intended to protect ": Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at [29] . The High Court has not looked directly at the immediate question now in issue. And decisions of trial and intermediate courts both pre and post Mann v Carnell have looked at the question but have not spoken with one voice. On the one hand, there is a body of authority supporting the proposition that " statements or affidavits filed and served in proceedings, but not read in open court, remain ... subject to legal professional privilege ": Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283 at [15] (citing Nilsen Industrial Electronics Pty Ltd v National Semiconductor Corporation (1994) 48 FCR 337; State Bank of South Australia v Smoothdale Ltd (No 2) (1995) 64 SASR 224; Akins v Abigroup Ltd (1998) 43 NSWLR 539; Sevic v Roarty [1998] NSWSC 462 ; (1998) 44 NSWLR 287); Spotless Group Ltd v Premier Building & Consulting Pty Ltd [2006] VSCA 201 ; AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2004] FCA 1196 ; Polyaire Pty Ltd v K-Aire Pty Ltd (2003) 226 LSJS 109 and ACCC v Telstra Corp Ltd [2000] FCA 28 ; (2000) 96 FCR 317. 14 Because the Category II (and Category III) documents were never read in open court, the ACCC relies upon this line of authority in support of its contention that the privilege remains intact. 15 On the other hand, there is also authority for the proposition that filing and service, without more, operates as a full or limited waiver: eg, Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125; Austress v Marlin [2002] NSWSC 958 ; Chief Executive Officer of Customs v Neate (1998) 144 FLR 373; Black & Decker Inc v Flymo Ltd [1991] 1 WLR 753; In the Marriage of Crowe [1988] FLC 91-983 and Leaders Shoes (Aust) Pty Ltd v National Insurance Co of New Zealand Ltd [1968] 1 NSWR 344. As one would expect, Cadbury relies on these cases. Cadbury also relies on Liberty Funding (2005) 218 ALR 283, where the Full Court of the Federal Court considered this conflicting authority. Although the Full Court did not formally decide the issue, it did suggest that the proper approach must recognize the distinction between legal professional privilege and the implied undertaking (with respect to the implied undertaking, see [19-22] below). Barrett J, on the other hand, was dealing with the question whether a party could tender, as an admission, parts of an affidavit sworn by the opposing party in the same proceeding. Barrett J said, buttressed by ample authority, that this could be done, because it was within the range of permitted use --- the purpose of the proceedings. Barrett J was undoubtedly correct. Thus, it is necessary to posit a limited waiver, within a broad framework of the conduct of proceedings, which may bring about the result (as in Austress ) that it is in the other side's power to destroy the privilege entirely by putting the statement or affidavit into evidence or examining or cross-examining on its contents. (Emphasis added. I need not decide that question. The decision in Liberty Funding (2005) 218 ALR 283 was a decision of the Full Court of the Federal Court. The reasoning, if I may say so, is both persuasive and sensible. If it is conceded, as it must be, that a party upon whom a witness statement is served may use that statement in any way within the context of those proceedings (that is the whole reason why it is filed and served), it follows that it is conduct "inconsistent with the maintenance of the confidentiality which the privilege is intended to protect " ( Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at [29] ) and an implied waiver of privilege has occurred. Indeed, if one follows the Full Court's reasoning to its logical conclusion, the filing and service operates as a complete, not simply limited, waiver of legal privilege. 17 To put the proposition in different terms, if " it is in the other side's power to destroy the privilege entirely ," (see [15] above) it can no longer be said that the original holder can reasonably expect any continued confidentiality. In such circumstances, the existence of the privilege cannot be made to turn on whether the other side in fact places the document into evidence or uses it for examination - either legal privilege exists or it does not, and either the client controls it or they do not: Telstra Corporation Ltd v Minister for Communications, Information Technology and the Arts (No 2) [2007] FCA 1445 at [21] ( "If a communication qualifies for legal professional privilege, the privilege is absolute. It cannot be overridden by some supposedly greater public interest. It can be waived by the person, the client entitled to it, and it can be overridden by statute, but it is otherwise absolute. " ) In other words, once it is found that the original holder of the privilege cannot control further dissemination of the document, the privilege is destroyed as a matter of law without further inquiry into whether the communication was in fact disseminated. 18 This is not to say that there could never be something less than a full waiver of privilege; rather, the point is that for there to be only a limited waiver, the original holder must still retain full control as to further dissemination of the document. So, for example, providing a witness statement to a party but subject to conditions that the party may use it only for internal purposes, may not read it in court, may not place it into evidence and may not otherwise rely on it in examination or the proceedings generally might constitute a limited waiver only: see Goldberg v Ng [1995] HCA 39 ; (1995) 185 CLR 83, 96 (stating that the waiver "can be limited so that it applies only in relation to particular persons, materials or purposes" ); Goldman v Hesper [1988] 3 All ER 97 (cited in Mann v Carnell [1999] HCA 66 ; (1988) 201 CLR 1 at [29] for the proposition that disclosure "for a limited and specific purpose" will not lead to loss of the privilege). 19 Here, however, Visy was under no constraint as to the purposes for which it could use the witness proofs filed and later served on Visy by the ACCC. As Cadbury correctly acknowledges, even if the ACCC has no privilege claim over the Category II and Category III documents, Visy may nevertheless be prevented from producing the documents by virtue of its implied undertaking to use the statements only for a purpose relating to the ACCC proceeding. 21 A basic principle of Australian litigation is that parties give an implied undertaking to the court not to use any document produced to them in the course of litigation except in the context of that litigation: Esso Australia Resources Ltd v Plowman [1995] HCA 19 ; (1995) 183 CLR 10, 32, 36-37, 46; see also Harman v Secretary of State for the Home Department [1983] 1 AC 280. Where other courts have erred doctrinally is in failing to distinguish the implied undertaking analysis from the waiver analysis. The Full Court in Liberty Funding recognized this error when it stated (at [26]): " This so-called 'limited waiver' by service such that the privilege is waived only for the purpose of the legal proceedings in question might be seen to be no more than the operation of the implied undertaking dealt with in Harman ": Liberty Funding (2005) 218 ALR 283. In other words, the limitation on Visy's use of the witness proofs stems not from limitations to be inferred from the conduct of the ACCC in serving them, but in Visy's own obligations to the Court. 22 Depending on whether the restrictions on Visy's use of the witness proofs is sourced doctrinally to the legal professional privilege of the ACCC or, instead, the implied undertaking, is vital. It is vital because the implied undertaking is not absolute but the privilege is. 23 Moreover, even if the implied undertaking does not automatically give way, a party may still be released from it in the court's discretion upon showing "special circumstances": Liberty Funding (2005) 218 ALR 283 at [31]. Although Cadbury anticipated the implied undertaking issue in its written submissions in these proceedings, the ACCC did not address the implied undertaking in its submissions, nor was the issue fully ventilated in oral submissions by any party . Accordingly, the parties in the damages proceeding and the ACCC will be invited, though not required, to make further written and oral submissions about whether Visy's implied undertaking in the ACCC proceedings prevents Visy producing the Category II and Category III documents and, if the implied undertaking is not overridden, whether Visy should be released from it. 25 A court will not order the production of a document if disclosure of the document would be injurious to the public interest: Alister v The Queen [1983] HCA 45 ; (1984) 154 CLR 404; Sankey v Whitlam [1978] HCA 43 ; (1978) 142 CLR 1. The court must undertake a balancing test, considering "whether the public interest which requires that [a] document should not be produced outweighs the public interest that a court of justice in performing its functions should not be denied access to relevant evidence" : Sankey [1978] HCA 43 ; (1978) 142 CLR 1 at 38-39. As this formulation of the test makes clear, the onus is on the party seeking to prevent disclosure of a document. 26 This onus has been described by Lindgren J as a "heavy burden" requiring the proponent of immunity to "establish a 'real' rather than merely 'some' or 'any' detriment to the public interest from disclosure" of the documents: Somerville v ASC (1995) 60 FCR 319 at 354. If the proponent cannot establish any such interest as a threshold matter, then the balancing test never arises, and the immunity claim will fail at the outset: As the High Court said in Alister v The Queen [1983] HCA 45 ; (1983) 154 CLR 404 at 412, " the balancing exercise ... can only be taken when it appears that both aspects of the public interest do require consideration " (Emphasis added). 27 The "public interest" claimed by the ACCC to require protection of Category III documents from disclosure was said to be to encourage, by ensuring the confidentiality of information they provide, cartel whistleblowers to come forward. In ACCC v ABB Power Transmission Pty Ltd [2003] FCA 626 at [43] , the Court suggested in obiter dicta that such a public interest might exist. In ACCC v ABB Power Transmission Pty Ltd [2003] FCA 626 at [44] , the Court suggested that the force of any public interest immunity claim will be vitiated where the independent witnesses cooperating with the ACCC did not even seek confidentiality. I agree. Moreover, even the broader factual merit of the claim is suspect, as the ACCC led no evidence that any cartel whistleblower, whether in this case or otherwise, has demonstrated reluctance to come forward based on a concern that information provided might become public. 30 The theoretical merit of the ACCC's confidentiality contentions is even more deficient. A cartel claim, by definition, involves collusion between two or more actors. In the same way that it is both inevitable and self-evident that the statements of a cooperating criminal conspirator will be used against (ie, disclosed to) the non-cooperating conspirators, it must be taken for granted that a cartel participant contemplating a confession to the authorities knows, or should know, that his statements will be used by the authorities to prosecute the other party or parties. As such, the ACCC's claim that a party like Amcor can have a reasonable expectation of confidentiality with respect to statements made to investigators is devoid of substance. And without such a reasonable expectation, the ACCC's contention that non-disclosure of the documents is required to protect the public interest cannot stand. 31 That the speculation regarding witness reluctance is likely to be unfounded is further supported by the fact, acknowledged by counsel for the ACCC, that even if production of the Category III documents were barred, Cadbury would be free to undertake its own investigation. As noted by McLure JA in Leighton , " Privilege in respect of [the disputed] communications would not prevent the respondent interviewing [third-party] witnesses and obtaining all relevant information from them concerning the issues in the litigation ": Leighton [2007] WASCA 151 at [31] . It is perhaps, therefore, unsurprising that counsel for the ACCC ultimately fell back on a "free rider" argument - that is, that Cadbury should not have the benefit of the ACCC's work precisely because it could easily do the work itself. This argument fails for two reasons. 32 First, there is at least an equal, if not more compelling, public interest in allowing private litigants to rely on the output of regulatory investigations, which are undertaken by public regulators at least in part on their behalf. The ACCC should be " motivated by a desire to do its duty, both towards the public and towards individual investors " ( ACCC v Michigan Group Pty Ltd [2002] FCA 1439 at [22] ). It is not motivated by corporate profit motives or competitive concerns. Indeed, the ACCC often justifies requests for findings of fact, declarations, and injunctions that may be of little or no importance in the matter before the court on the grounds that they will be useful to follow-on private litigants: ACCC v Michigan Group Pty Ltd [2002] FCA 1439 at [24] ; ACCC v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665 at [105]-[107] (discussing s 83 of the Trade Practices Act 1974 (Cth), which outlines the circumstances in which findings made in penalty proceedings under s 77 may be used as prima facie evidence in damages proceedings brought under s 82). 33 Second, the "free rider" argument fails because it is, ultimately, founded on a theory of "work product" privilege not accepted in Australia. The work product doctrine, recognized by the United States Supreme Court, states that information or material prepared by attorneys reflecting attorney mental impressions, strategy, or other "work product," even though not documenting lawyer-client communications or otherwise within the ambit of ordinary legal professional privilege, may be independently protected from discovery: Hickman v Taylor (1947) 329 US 495. The problem for the ACCC, however, is that work product is not recognized in Australia as an independent head of privilege: Commissioner of Propend [1997] HCA 3 ; (1997) 188 CLR 501 at 570 (describing the US work product doctrine as part of general privilege law in Australia) (Gummow J); Leighton [2007] WASCA 151 at [17] (stating in Australia that the work product doctrine is recognised in the context of the litigation privilege). The ACCC itself has acknowledged this state of affairs: ACCC Position Paper, "Review of Leniency Policy for Cartel Conduct" (26 August 2005) at 19 n 21, available at http://www.accc.gov.au/content/item.phtml?itemId=725616&nodeId=3a1faa8ec1e755f25adef02560676bf5&fn=Leniency%20position%20paper.pdf (viewed 1 February 2008). 34 As noted earlier, the ACCC waived any legal professional privilege claim it may have had over the Category II documents, of which the 8 Category III documents are a subset, when it filed and then served the documents on Visy. Accordingly, the attempt to resurrect such a claim in the guise of a "work product" claim, which has no independent existence, must fail. 35 Where, as here, there is no evidence the independent witnesses either sought or could reasonably have expected that information they provided to the ACCC was or would remain confidential, and where there is no evidence that either those witnesses or others similarly situated have been or would be dissuaded from coming forward without confidentiality, the ACCC has failed to establish a real public interest. Moreover, the desire of a public regulator to prevent private litigants from relying on its "work product" fails, as a matter of law, to present any cognizable public interest, much less a real one. To be clear, this second conclusion is not intended to challenge the viability of a "work product" claim when made within the ambit of legal professional privilege. However, the conclusion does render a claim unviable when the claim is made in the guise of public interest immunity or as an independent theory. As noted earlier, the communications of the witnesses themselves are not inherently subject to any advice privilege. However, in the circumstances here, for the following reasons the six draft Amcor witness statements are not subject to production. 37 For the sake of completeness, I should first note Cadbury's overall argument regarding the Category I documents. It was based on the fact that the copy witness statements retained by Amcor were just that - copies - and thus under Propend , their privilege status may differ from that of the original. To the extent that I have correctly understood the argument put by counsel, it misunderstands Propend . Propend established that the copy of a document may under some circumstances (ie depending on the dominant purpose for which it was created) be privileged even though the original is not privileged: Propend [1997] HCA 3 ; (1997) 188 CLR 501 at 508 per Brennan CJ, 543-544 per Gaudron J, and 554 per McHugh J. I do not, however, consider that Propend also establishes the converse; that is, the copy of a document may be unprivileged even though the original is. 38 Instead, I understand Propend to say that a copy of a privileged document will also be privileged unless the privilege has been expressly or impliedly waived (although it may be that allowing a copy to be made in certain circumstances is capable of being conduct constituting such a waiver, such as when a copy is made and communicated to a third party for purposes not related to legal advice or litigation): cf Spotless Group Ltd v Premier Building Pty Ltd [2006] VSCA 201 at [60] - [66] (noting that Propend left the issue open but concluding that whether a copy of a privileged document is privileged is distinct from whether privilege has been waived). As such, Cadbury's argument, notwithstanding the way in which counsel sought to frame it, may be reduced to two questions: (1) are the documents privileged; and (2) has privilege been waived? As noted earlier, three of the Amcor witness statements in Category I (specifically, documents numbered A.119.004.0161, A.119.004.0137, and A.119.004.0157) were drafted by Amcor's external solicitors. Copies of those documents remain in the possession of Amcor's external solicitors. Preparation of the documents was subject to confidentiality at the request of the ACCC's investigator Mr Williams. Indeed, the evidence of Amcor's external solicitor was that the three drafts were so confidential that they could not even be shown to Amcor itself, a condition which Amcor understood and agreed to. Although Amcor (and by extension its external solicitors) was cooperating with the ACCC in order to obtain leniency, there is no basis for finding that Amcor, a party whose interests were adverse to those of the ACCC, was an agent of the ACCC. On the contrary, Amcor's witnesses remained independent third party witnesses entitled to discuss the issues with the ACCC or any other entity or person. 41 In this case, the drafts were created not at the request of the ACCC's solicitors (whether in-house or the Australian Government Solicitor), but at the request of the investigator Mr Williams. Moreover, the drafts were not communicated to an ACCC solicitor, but to Mr Williams. However, Mr Williams' evidence was that the documents were generated for the dominant purpose of being put before the ACCC's solicitors with the object of obtaining their advice and enabling them to prosecute the penalty proceedings. Accordingly, the three documents were privileged. Cadbury argued, however, that the dominant purpose element could not be made out because the documents were provided to in-house counsel rather than directly to the witness. I do not see any reason to reject a privilege claim on this basis. In-house corporate counsel represent individual employees of the corporation in their capacity as employees, which is the capacity in which the Amcor witnesses at issue here were involved in the ACCC investigation. In this case, the in-house counsel acted as the witnesses' agent, whose role it was simply to pass the draft on to the witnesses and to assist them in settling the contents pursuant to the ACCC request. In other words, contrary to the contention of counsel for Cadbury, the inference to be drawn from the evidence is that although the documents were passed first to in-house counsel, they were still communications between a party and a third person made for the dominant purpose of settling the contents of a witness proof to be used in or to facilitate prosecution of the penalty proceedings. As such, these three documents were also privileged. Cadbury correctly notes that there is no evidence as to how or why copies of Category I documents were made and retained by Amcor or Amcor's external solicitors. As noted earlier, Cadbury agitated this argument as a reverse Propend claim. It is, however, more properly understood as a waiver claim. That is to say, Cadbury appears to argue that although the original documents may have been created by or provided to Amcor under circumstances of confidentiality and even express claims of privilege, allowing Amcor to make or retain copies for its own use is conduct by ACCC inconsistent with its privilege claim. " He added that the firm's copies were not being retained " for the ACCC . " Thus the argument might go that while Amcor may have been (and may still be) under some equitable or quasi-contractual obligation of confidentiality (ie it may not be free to simply distribute the documents as it sees fit), that cannot override the obligations of compulsory court process in this case: see Leighton [2007] WASCA 151 at [28] (stating that contractual or equitable duties cannot prevail over compulsory court process). 45 To restate the question, it comes down to this: did the ACCC, in allowing Amcor via its solicitors to make and retain copies of the Category I documents, engage in conduct impliedly waiving its privilege? To answer the question, I return to the analysis employed earlier at [15]-[18]. In contrast to the Category II and III documents, with respect to which the ACCC ceded complete control over disclosure to Visy by filing and serving the documents, the evidence with respect to Category I was that the use to which Amcor's solicitors could put the documents was limited to one purpose and one purpose only: advising the client. Indeed, as noted earlier, the three documents drafted by Amcor's solicitors could not even be shown to Amcor. The disclosure to Amcor was for a "limited and specific purpose" (advice to the client) and "applies only in relation to particular persons and materials" . Amcor employees were the particular persons. The materials were the communications and documents recording them. The ACCC's conduct in allowing copies of the documents to be made and retained constitutes only a limited waiver: see [18] above. It follows that the Category I documents are barred from production to Cadbury. However, I think it appropriate before concluding to make a general observation about the ACCC's overall interest in this case and whether the courts are the appropriate forum for its resolution. The ACCC's submissions and the evidence from its witnesses demonstrated a concern that the increasing threat of private suits for damages brought by cartel victims will interfere with the ACCC's ability to obtain the cooperation from cartel participants necessary for it to bring and prosecute penalty actions. The interference was said to arise because potential cooperators will be deterred from coming forward, notwithstanding offers of leniency, by the prospect of having essentially given away the store in the inevitable damages actions. In other words, in considering whether to confess, the potential costs in damages may be seen by a cartel player to outweigh the potential savings in penalties. Distilling the point still further, one can see that the real concern of the ACCC - that is, the real deterrent to cooperation faced by the Amcors of the world - is damages exposure itself. In my view, the confidentiality and free-rider arguments ostensibly advanced here by the ACCC are, at best, a proxy for that concern, and at worst a smokescreen obscuring it. To be fair, the appropriate total level of private civil liability (ie, penalties plus damages) an actor should face for cartel conduct is a valid issue, and one which was long ago recognized by authorities and commentators in the United States in the context of cooperation and leniency: see eg, Giancarlo Spagnolo, "Leniency and Whistleblowers in Antitrust," Centre for Economic Policy Research Discussion Paper Series No. 5794 (August 2006) at 15, available at http://www.cepr.org/pubs/dps/DP5794.asp (visited 11 February 2008). 47 But to acknowledge the ACCC's concern is not to approve of its proposed method for resolving that concern. On the contrary, the ACCC's attempt to use common law privilege doctrine to protect cooperators when they are faced with private suits for damages, albeit partially successful here, appears to me to be misguided. Whether cartel whistleblowers such as Amcor or those who cooperate with the regulators after the commencement of penalty proceedings (either by settling like Visy or in some other manner) should be rewarded or encouraged by reduced exposure or enhanced protection in damages proceedings is a broad question of policy that should be addressed by the legislature, not by ad hoc judicial tinkering through the backdoor of privilege. The matter will be set down for further hearing, if necessary, at a date to be fixed in consultation with the parties.

legal professional privilege advice privilege litigation privilege implied undertaking public interest immunity work product draft witness statements and witness proofs whether filing and service, without more, of witness statements constitutes waiver of privilege distinction between privilege and implied undertaking whether encouragement of cartel whistleblowers by protecting confidentiality of statements made to investigators presents a real public interest where there is no evidence that confidentiality was sought or that whistleblowers would be deterred from coming forward by lack of confidentiality whether public regulatory agency's interest in guarding its work product presents a cognisable public interest whether work product doctrine has a separate existence from legal professional privilege in australia privilege

In particular, the meaning of r 5.19 is in issue in relation to the criteria for the grant of a subclass 856 visa under the Employer Nomination Scheme. Regulation 5.19 deals with approval of nominated positions for the purposes of certain subclasses of visa, including subclass 856 visas. 2 The second appellant is the husband of the first appellant and the third and fourth appellants are children of the first appellant. The second, third and fourth appellants' applications are dependent upon the first appellant's application. Accordingly, I shall refer to the first appellant as the Visa Applicant . Item 1114A of Part 1 of Schedule 1 to the Regulations deals with Employer Nomination (Residence) (Class BW) visas. Subitem (4) specifies subclasses, which relevantly include subclass 856 (Employer Nomination Scheme) visas. Clauses 856.21 and 856.22 in Schedule 2 to the Regulations specify the criteria that must be satisfied for the grant of a subclass 856 visa. Clause 856.21 specifies the criteria to be satisfied at the time of the application for a visa. Clause 856.22 specifies the criteria that must be satisfied at the time of the decision. 3 At the relevant time, clause 856.213 relevantly provided that one of the criteria that must be satisfied at the time of application was that the applicant had been nominated, in accordance with r 5.19(2), by an employer for an appointment in the business of that employer and that the applicant was a highly skilled person , within the meaning of r 5.19, in relation to that appointment. Under clause 856.214, if the appointment was an approved appointment at the time of application, a further requirement was that the period that had elapsed since the appointment became an approved appointment did not exceed six months. Under clause 856.221, one of the criteria that must be satisfied at the time of the decision was that the appointment mentioned in clause 856.213 was an approved appointment . 4 Regulation 5.19 deals with "Approval of Nominated Positions (Employer Nomination)". Regulation 5.19 provided that an employer could apply to the first respondent, the Minister for Immigration and Citizenship ( the Minister ), for approval of a nominated position as an approved appointment . The Minister could approve or reject such an application. As soon as practicable after deciding an application, the Minister was required to give the employer a copy of the instrument approving or rejecting the application. Regulation 4.02(4)(e) provided that a decision to reject an application for approval of a nominated position was an MRT-Reviewable Decision . Divisions 2 and 3 of Part 5 of the Act provided for review of an MRT-Reviewable decision by the second respondent, the Migration Review Tribunal ( the Tribunal ). 6 It is important to set out the terms of r 5.19(3) verbatim. The Minister approved the application on 6 July 2005. 8 On 10 March 2005, the appellants applied to the Minister for a subclass 856 visas. On 25 November 2005, a delegate of the Minister refused the grant of visas to the appellants. The delegate concluded that the Visa Applicant failed to meet the definition of highly skilled person in r 5.19(3). Therefore, she did not meet the requirement of clause 856.213. As the Visa Applicant had not met the criteria for the grant of a visa, the other appellants also failed to meet the relevant criteria for the grant of visas. 9 On 12 December 2005 the appellants applied to the Tribunal for review of the delegate's decision. On 21 June 2007, the Tribunal affirmed the decision not to grant visas to the appellants. On 17 July 2007, the appellants commenced a proceeding in the Federal Magistrates Court seeking Constitutional writ relief in respect of the Tribunal's decision. On 21 April 2008, after a hearing on 8 February 2008, the Federal Magistrates Court ordered that the proceeding be dismissed. The appellant filed a notice of appeal in this Court from those orders on 9 May 2008. (2) The Tribunal committed jurisdictional error by failing to consider a request by the Visa Applicant that the approved appointment as sales and marketing manager with the Employer be treated as exceptional for the purposes of r 5.19(3)(b). The grounds of appeal to the Federal Court are, in essence, that the Federal Magistrates Court erred in rejecting those grounds. That is to say, the Tribunal considered that the question before it was whether the Visa Applicant, at the time of her application, was a highly skilled person in relation to the approved appointment of sales and marketing manager in the business of the Employer. 12 The Tribunal concluded that it had no evidence to demonstrate that the Visa Applicant had completed formal training over a period of at least three years. The Tribunal therefore considered that, for the Visa Applicant to be a highly skilled person, she must have completed experience equivalent to three years of formal training. 13 In that regard, the Tribunal had regard to the Australian Standard Classification of Occupations , which is published by the Australian Bureau of Statistics ( the ASCO Dictionary ). The ASCO Dictionary states that the entry requirement for a sales and marketing manager is a bachelor degree or higher qualification or at least five years' relevant experience. It states that, in some instances, relevant experience is required in addition to the formal qualification. The ASCO Dictionary also sets out the tasks that would be performed by a sales and marketing manager. 14 The Tribunal examined the evidence before it as to the qualifications and work experience of the Visa Applicant. The Tribunal concluded that, in the absence of formal training, the Visa Applicant was required to have completed experience equivalent to three years' formal training and observed that the ASCO Dictionary, as a guide, indicated that five years' relevant experience may be comparable to a bachelor degree or higher qualification. 15 In the light of that finding, the Tribunal found that a period of eight years' experience was required. This was based on five years' experience, being the equivalent of three years' formal training, as provided in r 5.19(3)(a), plus a period of three years' employment in work of the kind in which she is experienced, after completing that equivalent experience, as provided in r 5.19(3)(b). 16 Accordingly, the Tribunal examined the evidence of employment provided by the Visa Applicant. It considered that, in some respects, the evidence was not credible and that the material provided, particularly in terms of dates relating to the Visa Applicant's employment history, was contradictory. The Tribunal concluded that, on the evidence before it, it was not satisfied that the Visa Applicant had worked and gained experience as a sales and marketing manager for a period of at least eight years to the date of her application. The Tribunal was not satisfied that the Visa Applicant is a highly skilled person as defined in r 5.19(3) and therefore considered that she did not satisfy clause 856.213. The Tribunal, so the argument ran, misdirected itself as to the minimum period of work experience that the Visa Applicant needed to demonstrate as being equivalent to completing formal training over a period of at least three years. 19 The primary judge rejected that submission on the basis that such a construction would leave no role for the legislative expression of the word "equivalent", in the phrase "equivalent experience". Her Honour interpreted r 5.19(3)(a) to require the work experience to be equivalent to at least three years of formal training. 20 However, I am of the view that the phrase "over a period of at least 3 years" in r 5.19(3)(a) qualifies both of the expressions that follow, namely, "formal training" and "equivalent experience". That is to say, the requirement will be satisfied if a person has completed formal training over a period of at least three years. The requirement will also be satisfied if the person has, over a period of at least three years, completed experience that is equivalent to formal training. It is, of course, a matter for the decision maker as to what kind of experience will be equivalent to formal training. In that regard, it would open to the decision maker to have regard to the ASCO Dictionary as a guide. However, it is not necessary for a person to have completed the relevant experience over a period of more than three years. 21 That follows from the syntax of r 5.19(3)(a). Further it does not deprive the word "equivalent" of a role; that expression serves the function of requiring the experience to be equivalent to formal training. 22 It follows that the Tribunal misdirected itself in so far as it construed r 5.19(3)(a) in a way that permitted the Tribunal to treat the requirement as being satisfied only if five years equivalent experience had been completed. It also follows that the primary judge erred in failing to reach that conclusion in relation to the Tribunal's decision. 23 Secondly, in relation to r 5.19(3)(a), the Visa Applicant also contended before the primary judge that the Tribunal additionally misdirected itself by holding that, to meet the equivalent experience requirement, only employment experience at the level of a sales and marketing manager was comparable to undertaking tertiary study in that field. That contention was directed to the Tribunal's finding that the Visa Applicant's work experience before October 2003 did not amount to experience at the level of a sales and marketing manager. 24 The Visa Applicant argued that the Tribunal's approach implied that, from the first day of the relevant experience, the Visa Applicant should have had skills and abilities of a fully trained sales and marketing manager. She argued that it was erroneous to fail to consider whether her experience could have amounted to a graded development from unskilled to skilled, that would be equivalent to formal training. The Visa Applicant said that the Tribunal erred in taking the view that any experience that was not at the level of a fully qualified sales and marketing manager was not comparable to undertaking formal training. She contended that the Tribunal should have accepted any experience that could be interpreted as equivalent to formal training and not only experience at the level of a fully trained sales and marketing manager. 25 The primary judge did not consider that the Tribunal was required to assess a graded development from unskilled to skilled in determining equivalence to formal training. That is essentially a matter of fact for the Tribunal. I do not consider that the Tribunal asked itself the wrong question or took into account irrelevant considerations as contended by the Visa Applicant. I do not consider that there was any error on the part of the primary judge in dealing with the second aspect of the Visa Applicant's contention in relation to r 5.19(3)(a). In essence, the Visa Applicant contended that the Tribunal failed to discharge its function of assessing and determining whether the approved appointment as marketing and sales manager in the employment of the Employer was exceptional. 27 A requirement of clause 856.213 was that, at the time of the application by the Visa Applicant, the Visa Applicant had been nominated by the Employer in respect of an appointment in the business of the Employer. It was not necessary that, at the time of the application, that appointment be an approved appointment. However, clause 856.214 required that, if the appointment was an approved appointment at the time of the application, no more than six months had elapsed since the granting of approval. In the present case, the appointment as sales and marketing manager in the business of the Employer was not an approved appointment at the time of the Visa Applicant's application. 28 On the other hand, the requirement of clause 856.213 was that, at the time of the application, the Visa Applicant be a highly skilled person in relation to the appointment as sales and marketing manager in the business of the Employer. That is to say, it was necessary that the Visa Applicant was a highly skilled person within the meaning of r 5.19(3) as at the time of her application. 29 Prima facie , in order to be a highly skilled person, the Visa Applicant must have been employed in work of the kind in which she was relevantly experienced for at least three years after completing that experience. It is only if "the approved appointment is exceptional" that that prima facie requirement need not be satisfied. At the time of the application by the Visa Applicant, there was no approved appointment. Accordingly, it was not possible to conclude that the approved appointment was exceptional. 30 It would have been open to the Visa Applicant to wait until the appointment as sales and marketing manager in the employ of the Employer had become an approved appointment. However, in the present case, at the time of her application, it was not an approved appointment and, accordingly, the exception in r 5.19(3)(b) could not arise. 31 It is difficult to see the rationale for drawing such a distinction and there may be a degree of arbitrariness in such a construction. That is to say, it is difficult to see why the exception in r 5.19(3)(b) should be limited to a case where there was an approved appointment prior to the making of an application for a visa. 32 In any event, the question of whether an approved appointment is exceptional is not one for the decision maker in relation to the application for a visa. The scheme of the provisions indicates that decisions concerning the approval of an appointment, and whether an approved appointment is exceptional, are to be made independently of the decision on an application for a visa (see An v Minister for Immigration & Citizenship [2007] FCAFC 97 ; (2007) 160 FCR 480). The application for approval of an appointment is made by an employer and there is a separate process and regime for dealing with such an application. Thus, it was not part of the function of the Tribunal, in reviewing the application by the Visa Applicant, to consider whether or not the position of sales and marketing manager in the business of the Employer was exceptional. The regime for that decision is independent of the granting of the relevant visa. 33 Finally, even if it were within the function of the Tribunal to consider whether the approved appointment was exceptional, I do not consider that the Tribunal was fairly requested to consider that question. Under cover of a letter dated 7 March 2005, the Visa Applicant's migration agent submitted various documents to the Department in relation to the Visa Applicant's application. Nothing in that material addressed the question of whether the proposed appointment as sales and marketing manager in the employ of the Employer should be treated as exceptional. The Minister's delegate requested further information from the migration agent and further information was furnished in November 2005. Once again, no question of the proposed appointment's being treated as exceptional was raised. 34 Following the delegate's decision, the Visa Applicant's migration agent submitted an application for review by the Tribunal under cover of a letter dated 12 December 2005. The question of the approved appointment's being treated as exceptional was not raised in that material. 35 However, on 15 June 2006, the Tribunal wrote to the Visa Applicant's migration agent. In a letter of 13 July 2006 in response to that specific invitation, the migration agent referred to the relevant paragraph of the ASCO Dictionary, which was ultimately relied on by the Tribunal. If the Tribunal is of the opinion that [the Visa Applicant] does not meet the requirements, then [the Visa Applicant] requests that she should be exempted from the prescribed requirement. There were sufficient documentations that were previously presented to support her case. 36 Once again, although the response referred to exemption, there was no express request to treat the appointment as sales and marketing manager in the employ of the Employer as exceptional. Further, the response contained no suggestion as to why the approved appointment should be considered exceptional. The migration agent's response was not a request to the Tribunal to exercise any function of determining whether or not the approved appointment should be treated as exceptional. Thus, even if it were part of the Tribunal's function to determine that question, there was no effective request for it to do so. In any event, there was no material before the Tribunal upon which it could possibly have made a determination that the approved appointment was exceptional for the purposes of r 5.19(3)(b). 37 The ground involving the operation of r 5.19(3)(b) has not been established. There was no error on the part of the primary judge in relation to that ground. The primary judge erred in failing to reach that conclusion. The appeal should therefore be upheld. The orders made by the primary judge should be set aside. In lieu of those orders, there should be orders that the decision of the Tribunal be quashed and that the Tribunal be ordered to complete its review of the delegate's decision according to law. The Minister should pay the applicants' costs of the proceeding in the Federal Magistrates Court. The Minister should pay the appellants' costs of the appeal. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

employee nomination scheme subclass 856 visa definition of "highly skilled person" in r 5.19(3) of the migration regulations 1994 (cth) meaning of expression "the person has completed, over a period of 3 years, formal training or equivalent experience" found in r 5.19(3)(a) whether the migration review tribunal was required to consider whether the approved appointment is "exceptional" for the purposes of r 5.19(3)(b) migration

2 Because the order of Jarrett FM was interlocutory, leave to appeal from his Honour's decision is required to be given by this Court (s 24(1A) Federal Court of Australia Act ). 3 The applicant was self-represented, however the respondent had legal representation. Both parties are located in northern New South Wales. The hearing before me this afternoon was conducted by telephone. A penalty imposed on the employer in accordance with s 665(a). 2. Compensation in accordance with s 665(c). 3. An apology in accordance with s 665(e). 5 In summary, the grounds for the application before his Honour are that the respondent failed to give notice or adequate notice of termination to the applicant pursuant to s 661 of the Workplace Relations Act , and that the respondent terminated the applicant's employment for reasons in s 659 of that Act. 6 The application before me arises from a hearing in these proceedings last Thursday 29 May 2008 before Jarrett FM, where the applicant sought an adjournment of the hearing listed for 4 June 2008. Both parties appeared by telephone at that hearing. Despite the short time frame which has elapsed since the application was filed, and despite the fact that I understand that this material was served on the respondent only yesterday, DDR Belcher contacted both the applicant and Mr Hooper for the respondent by telephone yesterday morning, and informed them that the matter was listed for hearing before me today at 2.15 pm. Both parties were agreeable to this course of action. The respondent is in breach of Federal Court Rules Order 35A rule 2, the time for the respondent to file a defence has expired and the respondent has failed to file a defence by the due date. 2. The respondent failed to serve an affidavit that was required by Order 15, the affidavit by Barbara Genz was served with paragraphs missing from it. 3. The affidavit by Barbara Genz has alterations to the "Date Affirmed" without being initialled. 4. The respondent has changed solicitors thereby failing to file a notice of the change and serve a notice on the other parties and, where practicable, his former solicitor. 5. He has not been given sufficient time to prepare his case before trial. 6. He seeks an order to vacate the date for trial under Federal Court Rules Order 30 rule 7. 7. He seeks an order granting judgment by default against the respondent against Federal Court Rules Order 35A rule 3. 11 In Court this afternoon the applicant clarified the first paragraph in his affidavit as being referable to the fact that the respondent had filed Ms Genz's affidavit after the date ordered by Jarrett FM on 13 March 2008, rather than the fact that the respondent had not actually filed a defence. In relation to this point I note in passing that there is no general requirement to file a defence in such matters before the Federal Magistrates Court. Part 4 of the Federal Magistrates Court Rules allows the respondent to file a response (r 4.04) which must be filed and served within 14 days after the service of the application, and an affidavit must be filed with the response (r 4.05). I understand that the respondent filed a response and supporting affidavit on 24 December 2007. 12 In this case I am unable to see that the decision of the Federal Magistrate was attended by sufficient doubt to warrant it being reconsidered, or that substantial injustice would result if leave to appeal were refused to the applicant. 13 First, in my view, paras 2, 3 and 4 deposed by the applicant in his affidavit of 30 May 2008 have little merit as grounds for leave to appeal. Part 9 of the Federal Magistrates Court Rules deals with lawyers, and in particular r 9.02 which deals with change of lawyers. It is not clear to me how the applicant is affected, or has been affected, by the respondent changing its lawyer. The fact that a solicitor from the newly merged firm may have contacted him contrary to an arrangement that there be no telephone contact between the parties does not in my view form a reason of any substance for his Honour refusing to adjourn the substantive hearing. 14 Second, I am not persuaded that the applicant would suffer substantial injustice should leave to appeal be refused. The principal issue raised by the applicant, namely the fact that the respondent served an affidavit several days late and with a page missing, was addressed by his Honour during the hearing on 29 May 2008. Although the applicant indicated at that hearing that the lateness and incompleteness of the affidavit would prejudice him in preparation of his case for the hearing, including calling witnesses, I do not see how the applicant has suffered more than some inconvenience. The applicant has commenced these proceedings - it is his responsibility to prosecute his case. This includes organisation of evidence for the trial, and filing and serving affidavits of witnesses upon whose evidence the applicant wishes to rely at trial. I note that, according to the Federal Magistrates Court file, the only witness upon whose evidence the applicant is currently relying is himself and yet if the applicant wished to rely on the evidence of other witnesses it would have been incumbent on him to file and serve affidavits of those witnesses in accordance with the timetable ordered by the Federal Magistrate. Indeed, the applicant would be in breach of the orders of Jarrett FM were he to produce at trial witnesses whose evidence was not previously filed and served. While the applicant has a number of complaints about the lack of cooperation of the respondent and his resultant inability to contact potential witnesses to give evidence in support of his application, this is not in my view relevant to the application currently before me. 15 Further, the applicant claims that he has not been given sufficient time to prepare his case for trial. However these proceedings have been on foot since December 2007. The applicant today raised the need to care for his son as an issue which impacts upon his ability to prepare for trial. While I consider this to be a very real issue, there is no evidence before me that this has ever been raised before Jarrett FM as an issue relevant to the timing of the trial; nor does it relate in my view to the issue of lateness of service and incompleteness of Ms Genz's affidavit which forms the basis of the primary submissions of the applicant in this case. 16 The applicant has indicated that he is not ready for trial tomorrow. However the decision for me, in deciding whether to grant leave to appeal, is whether the judgment of Jarrett FM refusing to adjourn the hearing of the substantive proceedings is attended by sufficient doubt to warrant reconsideration. In my view it is not. The appropriate order is that leave to appeal be refused, and I so order. I will also order that the applicant pay the respondent's costs of today's proceedings, to be taxed if not otherwise agreed. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

application for leave to appeal from interlocutory decision of federal magistrate whether decision attended by sufficient doubt to warrant reconsideration practice and procedure

On that date, the primary judge ordered that Channel pay Television Network G.P's ("Television") costs thrown away, on an indemnity basis, as a result of a Court ordered mediation being abandoned. This is so because the indemnity costs order made by the primary judge was an interlocutory order. It follows that Channel had no right of appeal against that order and instead it had to seek leave to appeal it: see s 24(1A) of the Federal Court of Australia Act 1976 (Cth). Channel should, therefore, have filed an application under O 52 r 10 for leave to appeal the order and, at the same time, sought an extension of time under O 52 r 10(2A) in which to file that application. Nonetheless, I do not consider this is fatal to Channel's application because, in practical terms, there is little difference in the conditions Channel would have to meet under either rule: see Sharman License Holdings Ltd v Universal Music Australia Pty Ltd [2005] FCA 802 (" Sharman License Holdings ") at [20], per Lindgren J. I will therefore proceed to treat Channel's application filed on 5 June 2009, as an application for leave to appeal under O 52 r 10 combined with an application for an extension of time in which to file that application. They are as follows: As to the second condition (above), I explained in Food Channel Network Pty Ltd v Television Food Network G.P [2009] FCA 1445 , that the sufficiency of the doubt about the interlocutory judgment and the extent of the potential injustice involved, must be balanced against each other and not considered in isolation: see at [14]. For similar reasons, I consider that the explanation for the delay and the requirement to show special reasons should also be included in the same balancing process. In other words, if Channel's case is strong on its merits and if it can show substantial injustice will flow if leave is not granted, I consider I should be less demanding in relation to its explanation for delay and the special reasons it is required to show. In this respect, I note, and respectfully agree with, what appears to be a similar approach, outlined by Rares J in SZJFC v Minister for Immigration and Citizenship [2009] FCA 1322 at [20] --- [21]. The substantive proceedings before the primary judge involved an appeal by Television against a decision of a delegate of the Registrar of Trade Marks in favour of Channel. The delegate found that Television had not substantiated its grounds of opposition in respect of the Trade Mark and ordered that the Trade Mark proceed to registration under the Trade Marks Act 1955 (Cth). Mr Lawrence, the sole director of Channel, was given leave to appear for Channel at various case management directions hearings conducted throughout 2007. However, the primary judge had made it clear to Mr Lawrence that this leave would not extend to him appearing for Channel at any pre-trial mediation, or at the trial of the proceedings, and he would need to retain legal assistance for those purposes. On 30 November 2007, the primary judge ordered the parties "to attend, participate in and act reasonably and genuinely in a mediation to be conducted at a time and place to be agreed between the parties". The primary judge also ordered that "the mediation [was] to be conducted by a Registrar of the Court or such other mediator as agreed between the parties" and it was to occur by 4.00 pm on 13 February 2008. On 7 December 2007, a Registrar of the Court sent a letter to the parties confirming the direction of the primary judge that they attend a mediation conference, stating it was to be conducted " pursuant to Order 72 of the Federal Court Rules ", and giving notice that the mediation conference had been listed at 9.30 am on 22 January 2007 (sic 2008). Channel alleges that it did not receive this letter, claiming it was sent to the wrong address. Apparently it was later returned to the Court unclaimed. On 22 January 2008, the same Registrar sent a further letter to the parties. This letter did not refer to O 72 of the Federal Court Rules , nor the mediation conference that was supposed to have occurred at 9.30 am on the date of this letter. Instead, it noted that the "mediation is to be conducted by a Registrar of the Court or such other mediator as agreed between the parties". The letter went on to state: " It has been assumed, in the absence of advice to the contrary, that the parties require the mediation to be undertaken by a Registrar. To that end, a mediation conference has been listed for 10.00 am on 4 February 2007 (sic 2008)". Channel claims to have received this letter on 24 January 2008. On 25 January 2008, Channel claims that it briefed a firm of solicitors to appear for it at the mediation conference. On 30 January 2008, the solicitors Channel had briefed advised Mr Lawrence that they could not be ready to attend the mediation conference on 4 February 2008. They suggested that he contact the Registrar and ask him to adjourn the mediation conference to a later date, but before 13 February 2008, when the primary judge had ordered it should be concluded. Accordingly, on 31 January 2008, Mr Lawrence sent a letter by email to the Registrar (with a copy to the solicitors for Television) in which he stated that: " The date proposed does not give us sufficient time to prepare for the mediation. The 12 th February 2008 is a date that is workable for the mediation for myself and our representative. This date will give us time to be sufficiently prepared for the hearing ". There followed an exchange of letters and emails on 31 January 2008 between the Registrar and Mr Lawrence (copied to the solicitors for Television), the outcome of which was that the Registrar was not available to hold the mediation conference on 12 February 2008 (or on any other date around that period) and the matter should therefore proceed to mediation on 4 February 2008. Despite this, on 1 February 2008, the Registrar sent an email to the parties confirming his oral advice of earlier that day that: On 5 February 2008, the primary judge heard from counsel for Television and Channel and proceeded to make the orders referred to above. It should be noted that the primary judge was not informed of the detailed history set out above, because it appears neither of the parties was fully aware of it at the time. The hearing of the substantive proceedings proceeded before the primary judge on 17, 18 and 19 March 2008. The primary judge reserved her decision and delivered it on 27 March 2009. Channel has since sought leave under s 195 of the Trade Marks Act 1955 (Cth) to appeal that decision. That application was made in a separate set of proceedings, No QUD 103/2009. It is unknown why this matter, ie QUD 132/2009, has been pursued in separate proceedings. I propose to deliver my decision on that application at the same time as I deliver this decision. Mr Bennett told her Honour that Television had incurred considerable expense in briefing Senior Counsel to attend the mediation conference on 4 February 2008. He asserted that the mediation conference was abandoned because Mr Lawrence had not instructed his solicitors until the last minute and they were therefore not able to be ready to proceed on that day. He therefore sought an order for indemnity costs against Channel based upon, what he described as, its misconduct. Mr Bickford confirmed that Mr Lawrence had recently retained his firm to act for Channel. He told her Honour that when his firm was briefed, he had informed Mr Lawrence that he would not be able to prepare in time to attend a mediation conference on 4 February 2008. He asserted that Mr Lawrence could have attended the mediation on behalf of Channel. However, he said the Registrar had taken the view that, if Channel was unrepresented at the mediation, it should not proceed. Mr Bickford queried whether Television was justified in briefing Senior Counsel for the mediation and submitted that, in any event, the usual situation was that each party bore its own costs of a mediation conference. Frankly, from what I have heard this morning I am in complete agreement with Mr Bennett. I had made it very clear to Mr Lawrence of the importance of having representation. The fact that he has taken those urgings which I sort of made to him and those orders which I indeed made to him to heart somewhat late in the piece is hardly the problem of the applicants. I had given him leave to appear, [for] the purpose of the directions previously [and] it was [made] very clear to him he needed representation including at the mediation. I also made it very clear from my last orders on 30 November that the parties were directed to attend a mediation in good faith and to participate reasonably. The fact that Mr Lawrence have left it so late to advise that they really weren't ready for a mediation again is not the problem of the applicants. It is not uncommon to have senior counsel in a mediation. I am prepared to make the order sought by Mr Bennet (sic) in those circumstances. Before doing so, I set out below three observations that I consider are central to my consideration of Channel's application. First, a court should be careful to avoid converting a leave application of this kind into a preliminary hearing of the appeal. I should therefore avoid making any detailed analysis of the issues raised, or expressing any concluded views on them. I consider my assessment of the issues should be more akin to the "rough and ready" approach suggested by Brennan CJ and McHugh J in Jackamarra v Krakouer [1998] HCA 27 ; (1998) 195 CLR 516 at [9] . Secondly, the indemnity costs order made by the primary judge was a discretionary order and it follows that, in order for Channel to succeed on any appeal against such an order, it must show that the primary judge acted upon some wrong principle in making the order: see House v The King [1936] HCA 40 ; (1936) 55 CLR 499 at 505. Thirdly, an indemnity costs order involves a departure from the usual position that costs are awarded on a party/party basis. It follows that there must be some special or unusual features to justify such an order being made: Colgate-Palmolive Company v Cussons Pty Limited [1993] FCA 536 ; (1993) 46 FCR 225 at 232 --- 233 per Sheppard J and Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 per Black CJ and French J. Furthermore, where an indemnity costs order is sought on the basis of the misconduct of a party, the Court will require some evidence of that misconduct before making the order: see Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 616 per Mason P (with whom Meagher and Clarke JJA agreed) and Wu v Avin Operations Pty Ltd (No 2) [2006] FCA 792 at [41] --- [42] per Kenny J. As to the requisite "special reasons", Channel relied upon the very unusual circumstances set out above and claimed that it would cause it substantial injustice if it were forced to pay an indemnity costs order made in those circumstances. That means it was about fifteen months out of time when it lodged its application on 5 June 2009. Its explanation for its failure to lodge the application for leave to appeal in time was that it did not become aware of the surrounding the fixing and abandonment of the mediation conference set down for 4 February 2008, until its solicitors received a response to its request under the Freedom of Information Act 1982 (Cth) for all of the documents relating to that issue. It claims it received those documents on 12 May 2008 and by that time it was already about three months out of time to seek leave to appeal. This goes to the question whether substantial injustice will be caused by the order if Channel is not granted leave to appeal it. On the strength of the merits of Channel's challenge to the indemnity costs order, without making a detailed analysis of the issues (or reaching any concluded view on them), taking into account the following matters, I consider there is sufficient doubt about the primary judge's decision to warrant the order being reconsidered by a Full Court: There is a further aspect of this matter, not specifically raised by counsel for either party, but one that I think involves a more fundamental question about this costs order. That is whether the Court has power to order, and if it does, whether it is consistent with public policy, for a court to order that one party to proceedings pay the costs of another party, in relation to a consensual mediation (albeit one ordered by the Court) conducted as an adjunct to those proceedings. Channel be granted leave to appeal the interlocutory judgment delivered on 5 February 2008. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves.

application for an extension of time in which to file an application for leave to appeal indemnity costs order whether there is a satisfactory explanation for the delay whether there are sufficient prospects of success if leave were granted whether there are 'special reasons' to justify the extension of time indemnity costs order as a result of a court ordered mediation being abandoned whether the court has the power to order one party pay the costs of the other party in these circumstances practice and procedure practice and procedure

That report is presently exhibit A for identification. The report is supplemented, insofar as Mr Tait's knowledge, training, and experience is concerned, by an affidavit from that gentleman which was filed by leave today. Section 55 of the Evidence Act 1995 (Cth) (Evidence Act) provides that the evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect, directly or indirectly, the assessment of the probability of the existence of a fact in issue in the proceeding. Section 56 of the Evidence Act then provides that, except as otherwise provided by this Act, evidence that is relevant in a proceeding is admissible in the proceeding. As a corollary and perhaps, with respect, unnecessarily, that section further provides that evidence that is not relevant in the proceeding is not admissible. So far as opinions are concerned, s 76 of the Evidence Act provides that evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed. An exception to that particular generality, found in s 76 , is provided by s 79 , which materially provides that, if a person has specialised knowledge based on the person's training, study or experience, the opinion rule - ie, that in s 76 - does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge. The objection taken to the receipt of evidence from Mr Tait goes to both relevance as well as whether Mr Tait meets the requirements of s 79 so far as the exception to the opinion rule is concerned. The arguments for and against the reception of Mr Tait's evidence are more particularly detailed in the outlines of submissions which have been filed and then supplemented by oral submissions made on behalf of the parties. It is instructive, insofar as relevance is concerned, to recall exactly what is the contravention that is alleged in the proceeding. The statement of claim has undergone, to use an understatement, some revision following the institution of proceedings. In its present further amended form, the contravention with which it is concerned is that alleged in para 27. The allegation there made is of a contravention of s 142 of the Environment Protection and Biodiversity Conservation Act (1999) (Environment Protection and Biodiversity Conservation Act) in the following manner. Materially, condition 3 attached to the approval given by the Minister under that Act required Burnett Water at all material times to: install a fish transfer device on the dam suitable for the lungfish; and commence the fishway when the dam became operational. For completeness, I should observe that there is an allegation as to future conduct in contravention of s 142 of the Environment Protection and Biodiversity Conservation Act, in para 28 of the further amended statement of claim. The allegations there made, in effect, reproduce in terms of apprehended future conduct, conduct which is alleged to have occurred in contravention of condition 3 already. It is the alleged contraventions in para 27 which are said to give rise to the power enjoyed by the Court under s 475 of the Environment Protection and Biodiversity Conservation Act to grant injunctive relief. The apprehension as to future conduct is said to enliven a discretion to grant such relief. It is just as important as appreciating what the alleged contravention is also to appreciate what the alleged contravention is not. In that regard, para 17(a) of the further amended statement of claim might usefully be considered. That particular paragraph, under the guise of an allegation as to what is a suitable fish transfer device, makes particular affirmative allegations in relation to the qualities that are said to attend a suitable fish transfer device: for example, one likely to allow any normal-sized lungfish attempting to move upstream and downstream of the dam wall to do so without injury or death. There is no allegation of any contravention by Burnett Water insofar as the qualities of the fish transfer device are concerned with respect to whether the device as designed and installed might occasion injury or death to lungfish attempting to move upstream and downstream. Paragraph 17(a) is disconnected with the affirmative allegation of contravention made in para 27, and further, with the allegation as to proposed future conduct made in para 28 of the further amended statement of claim. Insofar as it contains allegations of fact; it is, therefore, truly embarrassing in the technical sense of that term in a pleading. There was no particular endeavour to defend that paragraph when that apprehended quality was drawn to the attention of Senior Counsel for the Conservation Council. An application was made orally on behalf of Burnett Water for the striking out of that paragraph. It seems to me that it is necessary to do that, lest it be thought that in some way, the allegations which repose in that paragraph are in any way germane to the contravention that is alleged in para 27. Once it is appreciated what the alleged contravention is, the relevance considered intoto of Mr Tait's report becomes, for that reason alone, a very moot point indeed. It is apparent from the letters of instruction and from the report itself that the report is in the nature of a wide-ranging critique, as Mr Tait sees it, of the Paradise Dam, the fish transfer device, and also of the merits or otherwise of that dam. It also contains a collation of material sourced from the research of others concerning the lungfish. It is by no means impossible to see how, as a matter of discretion, evidence which might go to demonstrate that the contraventions as alleged are important because the lungfish have nowhere else to go, in terms of migration upstream or downstream is relevant. It is, further, by no means impossible to see how evidence which would show that passage over the dam wall in a flood event, particularly given the stepped configuration of the dam wall, would be likely to occasion injury or death to the lungfish is relevant. That evidence would go to emphasise why it is, as a matter of discretion, there is an importance in the granting of injunctive relief sought by the Conservation Council in the event that one or more contraventions are proved. The difficulty is that Mr Tait's report is wide-ranging, and without a detailed editorial exercise it is difficult, to say the least, to dissect from it that which might be regarded as relevant in the way I have described to matters of discretion, from that which is truly irrelevant, having regard to the contraventions alleged. The Conservation Council, though offered more than one opportunity so to do, has shown an absence of disposition to undertake such an editorial exercise, having regard to the contraventions pleaded in para 27. A helpful and reflective summary of principle in relation to the reception of expert evidence having regard to the Uniform Evidence Act (of which the Evidence Act is an exemplar), is to be found in the judgment of Allsop J, as his Honour then was, in Evans Deakin Proprietary Limited v Sebel Furniture Limited [2003] FCA 171 at [670] . This is a separate question from whether, for the opinions of the expert to be admissible, the basis of the opinions on the assumed facts must be set out, about which there may be different views expressed in Makita and Quick v Stoland . I think, however, any such difference is unlikely, in most cases, to be of significance in the light, in particular, of s 135 of the Evidence Act and its likely application to disembodied and unsubstantiated expressions of opinion, a matter to which reference was made in Quick v Stoland . By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience, the section requires that the opinion is presented in a form which makes it possible to answer that question. Though initially, on the face of the report itself, I was apprehensive as to whether Mr Tait had exposed any particular expertise in relation to fish ecology and biology as applied to lungfish, I am satisfied, having regard to his supplementation of his experience in the affidavit filed this morning by leave, that he does have experience in relation to the ecology and management issues associated with the passage of freshwater fish, including lungfish, over barriers. The difficulty is that his report, as I have observed, ranges much more widely than the issues on the pleadings. Further, insofar as section 4 in particular of the report is concerned, that appears to be but a mere collation, as opposed to, overtly, the views of someone experienced with lungfish enlarging upon, by reference to his own specialised knowledge, the views of others which he regards as correct and appropriately included by way of highlighting particular qualities of the lungfish. There is also the vice elsewhere evident in the report, insofar as it may be relevant, of not making plain what is fact and what is opinion. I do not regard it as appropriate to attempt to engage in a red pencil exercise in respect of a report which ranges far beyond issues in the pleadings and which, as to section 4 , contains the deficiency I have mentioned. The case is one in respect of which directions of longstanding have been in place in relation to the filing in advance of evidence upon which each party proposes to rely. It is incumbent, having regard to such directions, which reflect the usual practice of this Court since its creation, for parties to order evidence in a way which meets the formal requirements of the Evidence Act as to admissibility. For these reasons I regard the report either as not relevant, or, insofar as a process of minute dissection might disclose remnants which are relevant, those parts, having regard to the issues, have not been the subject of any alternative position put on behalf of the Conservation Council. I also regard the report as deficient in terms of technical compliance with the requirements of the exception to the opinion rule in s 79 , the latter largely for the reasons reflected and enlarged upon in the submissions, written and oral, made on behalf of Burnett Water. I therefore reject the tender of Mr Tait's report. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.

expert evidence application to reject tender of expert report relevance whether expert's evidence based on specific knowledge based on that expert's study, training or experience importance of identifying the relevant opinion of the expert and the material upon which the opinion is based whether expert has expertise with respect to the issues on the pleadings held expert does have particular expertise held expert report covers wider issues than those on the pleadings held difficulties distinguishing fact from opinion within expert report held detailed editorial exercise would be necessary to separate relevant from irrelevant tender of whole pressed held application allowed and tender of report rejected evidence

5 At 8.30 am on 5 August 2003, employees of Pratt and Maxim (Vic) stopped work to attend a meeting conducted by representatives of the Union. After the meeting, the site safety committee, comprising representatives of the head contractor, Multiplex Limited, and representatives of the Union, conducted a site safety audit. 6 The applicant and the Union agree that the Union organised or engaged in the industrial action which occurred on 6 August 2003, with the intent to coerce Pratt and Maxim (Vic) to pay the employees concerned for the period for which they engaged in industrial action and did not work on 5 August 2003. 7 The Union has agreed that it breached s 187AB(1)(b) of the Act by organising or engaging in industrial action against an employer with intent to coerce it to make a payment to employees in relation to a period during which those employees engaged in industrial action and did not work. 8 The applicant and the Union also agree that the Union failed to comply with the provisions of the dispute settlement clause contained in the Maxim (Vic) certified agreement. 9 The issue for the Court to determine is what orders should be made as a consequence of the agreement of the applicant and the Union, in the context of the abovementioned facts and the previous judgments in the proceeding. 10 The meeting and safety audit flowed from a death in the construction industry, which occurred at a site in Shepparton on 1 August 2003. 11 The safety audit took the form of a detailed inspection of the Concept Blue site, the identification of occupational health and safety risks and the recording of matters which required action to prevent those risks recurring. 12 The safety audit commenced shortly after the meeting and lasted until about 1.00 pm. During the audit the relevant employees did not perform work. 13 At about 1.10 pm representatives of Multiplex told representatives of the Union that the employees would not be paid for the time for which they did not work, while the safety audit was conducted. The employees did not work for the balance of the day, that is, until the usual 3.30 pm finishing time. 14 Nine Pratt employees did not perform any work on the next day, 6 August 2003. Eleven Maxim (Vic) employees did not perform work on 6 August 2003 between 7.00 am and 10.00 am. That refusal to work is agreed by the relevant parties to constitute industrial action. 15 In the previous judgment concerning Pratt, the Court made declarations that Pratt had breached s 187AA and a certified agreement. In refusing to order the payment of a pecuniary penalty, I followed the approach of Finkelstein J in Pine v Seelite Windows & Doors Pty Ltd [2005] FCA 500. 17 In the previous judgment concerning Maxim (Vic), I noted the steps taken by it to ensure no contravention of s 187AA would occur as a result of its acts in the future. I also observed that the facts and circumstances were not materially distinguishable from those referred to in the Pratt matter. 18 I said that, as with Pratt's breaches of s 187AA and a certified agreement, the like breaches by Maxim (Vic) were inadvertent and unlikely to recur. However, the parties, operating at arms length and competently advised, consider that a penalty of $1,750 should be imposed. I see no good reason to depart from that agreement as the sum is not a significant one for the seventh respondent. I will impose the penalty for breach of the Act but not impose any additional penalty for breach of the certified agreement, in respect of which a declaration will be recorded. The contraventions are unlikely to recur, given the current policy of the Union that productive work will continue on site, in the future, in the event of the conduct of a safety audit. In the circumstances, subject to what follows below, little would be achieved by the imposition of a penalty. However, I must bear in mind that the contravention was not inadvertent, but the consequence of a policy existing in 2003. I also must bear in mind that the Union has not breached s 187AB or any certified agreement previously. The applicant alleged the Union has previously engaged in one breach of s 170NC of the Act and one breach of s 45D of the Trade Practices Act 1974 (Cth). Each breach was not related to the construction industry and must be considered in the context of a Union which has existed for almost a century, through all three of its amalgamated constituent parts. 20 It must also be borne in mind that the Union has expended in excess of $80,000 through its involvement in this proceeding and that, as a consequence of such involvement, has devised a new policy to prevent recurrence of the contraventions. I also take into account that the admission of the relevant breaches has saved the expense of a trial but agree with counsel for the applicant that the agreed position has come relatively late in the proceeding. 21 In all the circumstances, I consider, having regard to the deliberate nature of the breach, despite the considerable ameliorating factors set out above, that I should impose a fine, but that the amount of the fine should reflect the factors referred to above. I will impose a fine of $1750. That fine is the same amount as ordered in the Maxim (Vic) case. That was in circumstances where, but for the agreement of the relevant parties, I would not have imposed a fine at all. I consider it would not be appropriate to fine the Union a higher amount than the employer which made a payment in breach of s 187AA, in circumstances where the employer and the Union were both complying with a policy which they adhered to on building sites, albeit in breach of ss 187AA and 187AB of the Act, being a policy which is a thing of the past. As with Maxim (Vic), I do not propose to impose an additional penalty for breach of the Maxim (Vic) certified agreement by the Union. That breach arose out of the same course of conduct that led to the breach of s 187AB. I propose to make orders which are materially the same as those made in the Maxim (Vic) matter as set out in [1] of that judgment. An additional order will be made that the proceeding be otherwise dismissed without adjudication of its merits concerning the fourth, fifth and sixth respondents. The first respondent has previously been removed as a party to the proceeding. (4) The proceeding is otherwise dismissed, without adjudication of its merits, concerning the fourth, fifth and sixth respondents.

organising or engaging in industrial action with intent to coerce payment for period of industrial action breach admitted penalty imposed industrial law

2 In those proceedings the present Respondent was the Plaintiff and the Applicant was the Defendant. What was in issue was the nature of the arrangement as between them in respect to the development of a property located at Merrylands. 3 During the course of the proceedings in the Supreme Court a costs order was made in favour of the now Respondent which was later assessed to be in the sum of $77,498.96. Judgment was subsequently entered against the present Applicant in the District Court on 19 December 2007. 4 The present Bankruptcy Notice was served on 11 February 2008 requiring either payment or the making of an " arrangement to the creditor's satisfaction for settlement of the debt " within 21 days. Annexed to the Bankruptcy Notice was a Certificate of Judgment of the District Court certifying the recovery of judgment in that Court. 5 The Application was filed in this Court on 29 February 2008. That Application seeks an order setting aside the Bankruptcy Notice . The power of this Court to set aside a bankruptcy notice was not questioned: Re Sterling; Ex parte Esanda Ltd [1980] FCA 61 ; (1980) 30 ALR 77 at 83 per Lockhart J; Dimasi v Nangiloc Colignan Farms Pty Ltd [2007] FCA 308 at [25] , [2007] FCA 308 ; 239 ALR 330 at 337 per Ryan J. 6 In the present proceeding it is claimed that the Applicant has " a counter-claim, set-off or cross-demand as referred to in s 40(1)(g) " of the Bankruptcy Act 1966 (Cth). Section 41(7) of the 1966 Act has the effect that, upon that Application having been filed, the time for compliance with the Notice is deemed to have been extended until the Court determines the Application . 7 The " counter-claim, set-off or cross-demand " relied upon by the present Applicant is his right to set-off the losses incurred in respect to the development of the Merrylands property. These losses, it is accepted by the parties, exceed the judgment debt upon which the Bankruptcy Notice is founded. 8 That " counter-claim, set-off or cross-demand " is said by the Applicant to be one that he " could not have set up in the action or proceeding in which the judgment or order was obtained " within the meaning of and for the purposes of s 40(1)(g). To be resolved was whether the nature of any arrangement between the then Plaintiff and Defendant was simply one whereby work was performed in return for remuneration or whether the parties would each be entitled to a 50% share of profits on sale. 10 On 26 April 2006 His Honour Justice Hall of that Court published reasons for his decision that the Plaintiff had an interest in the development property and was entitled to 50% of the profits on sale. His Honour granted leave to the parties " to bring in short minutes of orders to give effect to the orders proposed ": Esber v Massih [2006] NSWSC 321. That was done by way of orders made on 8 March 2007, including an order that " there be an account of such profits " and an order that the " Defendant pay the Plaintiff's costs of the proceedings as assessed or agreed ". 11 A Certificate of Determination of Costs dated 15 October 2007 certified that the present Applicant was to pay costs in the sum of $77,498.96. 12 On 8 May 2008 a Notice of Motion was filed in the Supreme Court seeking leave to file and serve a Cross-Claim or seeking a variation of the judgment of Hall J by way of a declaration that " the defendant is entitled to contribution from the plaintiff to half of any losses from the development and sale of the property ". The order speaks extremely briefly of an account of profits, obviously in contemplation of further detailed directions about the taking of such an account and about what was to be done with the matter ascertained on taking the account. ... [6] An order for an account of profits, including the order made on 8 March 2007 which used "such profits" to refer back to the declaration previously made, on its ordinary and natural meaning and without any further exposition is an order for an account of losses if matter accounted for should have generated losses. If the Court had intended anything so strange as an account or enquiry limited only to profits, and to leave ascertainment of losses, if there should be any, to be neglected and not dealt with, there would have been a marked departure from the Court's statutory duty to resolve the whole controversy. If the order of 8 March 2007 had been intended to effect any [sic] so strange a result I am confident that it would say so in a highly explicit manner. 16 Section 41(7) requires the Court to be " satisfied that the debtor has ... a counter-claim, set-off or cross demand " of the kind set forth in s 40(1)(g). 17 To " satisfy " the Court it is not necessary for the debtor to prove, as on a final hearing, the asserted entitlement to recover as against the creditor. That which is to be established is whether the Court is " satisfied " that the debtor " has a claim deserving to be finally determined ": Re Glew; Glew v Harrowell [2003] FCA 373 at [11] , [2003] FCA 373 ; 198 ALR 331 at 334. It may be that the first and second formulations are intended to cover the same ground. In [Re Brink; Ex parte Commercial Banking Co of Sydney Ltd (1980) 44 FLR 135] Lockhart J treated (at ALR 438---9; FLR 141) the reference to a "prima facie case" ... as a reference to "a fair chance of success". This was subsequently characterised by His Honour as a " relatively low threshold ": at [64]. The judgment to be made " involves weighing up considerations as to the legal and factual merit of the claim relied upon by the debtor, and the justice of allowing the bankruptcy proceedings to go ahead or requiring them to await the determination of the claim ": Guss v Johnstone [2000] HCA 26 at [40] , [2000] HCA 26 ; 171 ALR 598 at 606 per Gleeson CJ, Gaudron, McHugh, Kirby and Callinan JJ. 18 A debtor cannot " satisfy " the Court, for example, by showing no more than the fact that a claim is made and how the claim may be made out: Re Duncan, Ex parte Modlin (1917) 17 SR (NSW) 152 per Street J. It is not sufficient that a debtor believes he has a genuine claim; what is required is that the Court must be satisfied that it is just that the claim should be determined before the bankruptcy proceedings are allowed to continue: Dekkan v Evans [2008] FCA 1004 at [54] per Jacobson J. See also: Dekkan v Macquarie Leasing Pty Ltd (No 2) [2008] FCA 1431 per Buchanan J; Cirillo v Consolidated Press Property Pty Ltd [2007] FCA 139. Mere production of a statement of claim, without more, is not sufficient: Re Cox (1934) 7 ABC 98. Nor is a " shadowy " claim that could not fairly be litigated: Re Rivett; Ex parte Edward Fay Ltd (1932) 5 ABC 182 at 188. 19 The objective of the legislature in providing for a bankruptcy notice to be set aside where a judgment debtor has a " counter-claim, set-off or cross demand " is " to prevent a judgment creditor from pursuing bankruptcy proceedings when, as between himself and the judgment debtor, the balance of account is in favour of the judgment debtor ": In re Judd, Ex parte Pike (1924) 24 SR (NSW) 537 at 540 per Maughan AJ. See also: Van Leeuwen v Bank of Western Australia Ltd [2001] FCA 1826 at [14] per French J. 20 In the present Application it was not contended, nor could it have been contended, that the Court could not reach the requisite state of " satisfaction ". 21 And it was not put in issue that the claim that the Applicant asserts as against the Respondent was a " counter-claim, set-off or cross demand " within the meaning of s 40(1)(g); nor that it was equal to or exceeded the amount of the judgment debt. 22 The " counter-claim, set-off or cross demand " referred to in s 40(1)(g) and 41(7) " must be something sounding in money ": Re Brinks; Ex parte Commercial Banking Co of Sydney Ltd [1980] FCA 78 ; (1980) 30 ALR 433 , 44 FLR 135 at 138 per Lockhart J. See also: Re Jocumsen (1929) 1 ABC 82 at 85 per Henchman J. 23 In In re Judd, Ex parte Pike, supra, Maughan AJ observed that the word " counter-claim " most probably refers to " those claims which might be the subject of a counter-claim in equity "; the term " set-off " was said to refer to " those claims which might be the subject of a set-off at common law ". And the term " cross demand " was said to be " not a technical term and must ... refer to claims other than those which would be comprised in the two expressions 'counter-claim' and 'set-off' ": (1924) 24 SR (NSW) 537 at 539. An " unrestricted meaning ", it was said, was to be given to the word " cross demand " (at 540). The meaning of each of these terms was also explored in In re A Bankruptcy Notice [1934] 1 Ch 431. Declaratory relief sought in the Chancery Division as to an entitlement to a charge on the proceeds of property was held not to be a " counter-claim, set-off or cross demand ". Lord Hanworth MR there observed that " set-off " was " a word well known and established in its meaning " (at 437). " If a cross-demand is only to be interpreted as meaning something which could have been introduced into the action by way of counterclaim, it adds nothing to the word "counterclaim. " "Cross-demand" seems to me to be a word introduced in order to give a wider ambit to the meaning of these claims, something that would not be described, certainly, as a set-off, something that could not have been brought in the action, something that still lies outside a counterclaim, but is of a nature which can be specified and which is of such a nature that it equals or exceeds the amount of the judgment debt. I do not desire to say what "cross-demand" may include, but it is not difficult to say that it does not include a claim of such uncertain nature as appears in these Chancery proceedings. That claim does not appear to be one which it would be proper to describe as a cross-demand; it is a claim of right which may inure ultimately for the benefit of the judgment debtor. Therefore, it appears that there is no sufficient ground for setting aside this bankruptcy notice; the bankruptcy notice stands good and must be complied with. A claim for relief under the Industrial Relations Act 1996 (NSW), being a claim that the creditor pay the debtor any money that may be found owing under an arrangement as varied by the Industrial Relations Commission may also be a cross-claim or counter-demand: Re Zakrzewski; Zakrzewski v Rodgers [2000] FCA 1187 at [33] ---[34], [2000] FCA 1187 ; 178 ALR 694 at 704---5 per Madgwick J. A " cross demand " need not have any connection with the cause of action out of which the judgment debt arose: cf In re a Debtor [1914] 3 KB 726. A judgment debtor is thus able to " buy up a claim against the judgment creditor in order to have a 'cross demand' ": In re Judd; Ex parte Pike (1924) 24 SR (NSW) 537 at 540 per Maughan AJ. 25 Notwithstanding the fact that there was a level of agreement as between the parties to the present proceeding, it is considered that it remains for the Court itself to be " satisfied " as to each of the elements of s 40(1)(g). Agreement cannot absolve the Court of its responsibility to reach its own state of " satisfaction ". 26 That which was put in issue, and the matter about which there was no agreement, was whether or not the Applicant's claim was one which " could not have [been] set up in the action or proceeding in which the judgment or order was obtained ". 27 This provision exists for the benefit of the debtor: Re Willats; Ex parte Nissan Finance Corp Ltd [1991] FCA 407 ; (1991) 31 FCR 206. Notwithstanding that his creditor may have obtained a judgment against him, that judgment cannot be used to found a bankruptcy notice if there is -- outside the spectrum of those legal proceedings -- a counterclaim of equal or greater size. But the Act intends a debtor, at the earliest opportunity, to raise against his creditor such counterclaim, if any, as he may have and which can be properly raised in the creditor's proceedings; if he does not he cannot complain (by way of raising that counter-claim) when the creditor applies to this court to issue a bankruptcy notice. The statutory phrase " must not be narrowed ". A judgment debtor is " not to lie by with his cross-demand, but must prosecute it with due diligence ": Re Brown, Ex parte Peisley Brothers (1892) 3 BC (NSW) 13 at 14 per Manning J. " A debtor having a claim against his or her creditor can not just stand by while judgment is obtained and later seek to use that claim to set aside a bankruptcy notice founded upon that judgment ": Re Ling; Ex parte Ling v Commonwealth [1995] FCA 1410 ; (1995) 58 FCR 129 at 137 per Hill J. 28 Consistent with the legislative objective sought to be achieved by s 40(1)(g) , it has been held that the phrase " could not have been set up " refers to a " cross-claim, set-off or cross demand " which could not have been set up as a matter of law; a mere failure to take advantage of an opportunity to do so does not fall within s 40(1)(g): Re Vicini; Ex parte E A Sealey & Co (1982) 64 FLR 323. Mere failure to take advantage of the opportunity can hardly be said to be inability. '" In Re A Debtor the circumstances were that, at the time of judgment, the debtor was not the assignee of a debt, which debt he in answer to the bankruptcy notice relied upon as constituting a counterclaim which he could not have set up in the proceedings. Thus at the time of judgment he could not have as a matter of law set up the counterclaim. It was nothing to the point that he might have earlier taken an assignment. "I think it means a counter-claim which as things then stood the debtor could not set up in the action. That was not sufficient to bring himself within s 40(1)(g). There was no reason in law why he could not set up his counterclaim in the creditor's proceedings. 29 Whether a claim " could not have been set up " is thus to be determined by reference to legal considerations and not by reference to " practicalities ": Re Ling; Ex parte Ling v Commonwealth [1995] FCA 1410 ; (1995) 58 FCR 129 at 132. These comments have since been approved by the Full Court: Smart v Esanda Finance Corp Ltd [2000] FCA 235 at [17] per Lee, Goldberg and Kenny JJ. See also: Tzovaras v Nufeno Pty Ltd [2003] FCA 1152 at [34] ---[35] per Jacobson J. In Re Ling , Hill J concluded that a claim could be set up in the Federal Court as against the Commonwealth even though to do so the judgment debtor would have had to have commenced proceedings in the High Court of Australia and to have had those proceedings remitted to the Federal Court. The fact that such a " tortuous route " had to be followed did not mean that the proceeding could not have been set up in the Federal Court. The onus of showing that the claim is not one that could have been set up in the creditor's proceedings lies upon the debtor. That onus will not be satisfied merely by showing that some indirect course may need be followed (that course being in the discretion of the debtor) nor by showing that there existed a discretion which could have been exercised against the setting up of the claim as a cross-claim. To satisfy that onus the debtor must show that, as a matter of law and in the circumstances prevailing, he or she could not have set up the cross-claim. That the debtor has not done in the present case. In Nath v Clipway Pty Ltd [1999] FCA 625 at [4] Spender J agreed with these observations of Hill J. Kiefel and Hely JJ agreed with Spender J. See also: Lau v Accord Pacific Properties Pty Ltd [2003] FCA 795 at [9] ---[10] per Branson J. 30 Similarly, a claim which may be brought by way of a cross-claim, but only upon the claimant electing to discontinue a pending action, is nevertheless a claim which could be set up as a " counter-claim, set-off or cross demand ": Re Stokvis (1934) 7 ABC 53. 31 Some decisions involving the application of s 40(1)(g) have involved circumstances in which a costs order has been made in an interlocutory application and the question as to whether the " cross-claim, set-off or cross demand " sought to be relied upon could have been raised in that interlocutory application. An application had there been made for an interlocutory injunction to restrain the sale of property. That application failed because there was a failure to establish that an undertaking as to damages would have had any substance. The cross-claim or set off was there said to be a claim for damages for breach of an obligation as encumbrancee to exercise reasonable care with respect to the sale of the property. That cross-claim or set-off, Fitzgerald J held, could not have been set up in the action seeking the interlocutory injunction. The order for costs is therefore deemed by s 40(3)(b) of the Act to be a "final judgment so obtained", that is, a "final judgment" obtained in an "action". However, s 40(3)(b) of the Act does not stop there; the "action" is identified. For the purposes of s 40(1)(g), the statutory fiction effected by the deeming is extended to convert the "proceedings" in which the order was in fact obtained into the "action" in which the notional "final judgment" was obtained. In my opinion, the test in such circumstances called for by s 40(1)(g) of the Act is to ascertain not whether the cross demand could have been set up in the Supreme Court action No 1473 of 1982, but whether it could have been set up in the deemed action, the proceeding in which the order for costs was made, that is, the application for an interlocutory injunction in that action. The answer is clearly negative. An application had there been filed in the Supreme Court of New South Wales seeking leave to commence proceedings under the De Facto Relationships Act 1984 (NSW) out of time. The application was dismissed with costs. A certificate of taxation issued and, subsequently, a bankruptcy notice. It was accepted that there was a cross demand which exceeded the debt. But it was not a cross demand which could have been set up in the " proceeding ", that " proceeding " either being the application for the interlocutory order for leave or the application for the costs order in that interlocutory application. 32 But the phrase refers only to those causes of action which a debtor was entitled to plead up to the time of judgment that are capable of amounting to a " counter-claim, set-off or cross demand " within the meaning of s 40(1)(g): Re Deen, Ex parte Deen v Muller (1995) 58 FCR 441. A claim acquired subsequent to the time of judgment is not a claim which could have been set up as against the judgment debt, even though the debtor could have acquired the claim -- had he so chosen -- prior to judgment. THE ACTION OR PROCEEDING? 34 In the present Application there was a lack of precision in the identification by the Applicant of the " action or proceeding in which the judgment or order was obtained ". An analogy was sought to be drawn between the interlocutory nature of the " proceeding " before Hall J in the Supreme Court and the decisions in Re Gould and Chesson v Smith . The narrower the identification of the " proceeding ", the easier the Applicant contended it was to conclude that the claim in respect of losses could not have been set up as an answer. A more broadly phrased submission advanced on behalf of the Applicant in his written submission was that " where an order for costs is made on an interlocutory application within other proceedings, that interlocutory application is itself deemed to be the action in which the relevant order is obtained (see s40(3)(b)) ". 35 It is not considered that the " final judgment or final order " could be constituted by the order for costs made by the Supreme Court, either on its own or together with the Certificate of Determination of Costs : Franks v Warringah Council [2003] FCA 1047 , 131 FCR 287. A certificate that sets out the determination of the costs assessor, without being filed in a court of competent jurisdiction, is not sufficient to found a bankruptcy notice: Snelgrove v Roskell [2007] FCA 122 at [53] , 157 FCR 313 at 319 per Jacobson J. In Franks , the Land and Environment Court had there ordered that the Council's costs be agreed or assessed under the then Legal Profession Act 1987 (NSW). A bankruptcy notice was served, the schedule to which stated that costs had been so assessed and annexed a certificate. The Council submitted that in respect of each order of the Land and Environment Court, having received the determination of the costs assessor, it had two options open to it for the purpose of the Bankruptcy Act . The first option, it argued, was the option of filing the certificate issued under s 208J of the Legal Profession Act in a court of competent jurisdiction and issuing a bankruptcy notice on the judgment thereby deemed to have been obtained. The second option, it argued, was the option which it in fact adopted; that is, the option of issuing a bankruptcy notice founded on the order of the Land and Environment Court supported by the certificate issued under s 208J. The Council contended that the second of these options remained open to it even after it had filed in a court of competent jurisdiction the certificate issued by the costs assessor. Section 40(1)(g) does not, as it seems to me, admit of the possibility that a creditor may have obtained against a debtor more than one final judgment or final order in respect of the one debt, or perhaps more accurately, sourced from the same obligation. Further, s 40(1)(g) of the Bankruptcy Act refers only to final judgments and final orders that can be enforced by a writ of execution (Re Pannowitz; Ex parte Wilson (1975) 38 FLR 184 at 198 per Riley J). I incline to the view that Pt 44 r 7 of the Supreme Court Rules (NSW), as presently worded, does not allow a writ of execution to issue in respect of the orders of the Land and Environment Court on which reliance is here placed. It seems to me to be implicit in Pt 44, r 7, as presently worded, that a writ of execution may only issue in respect of costs determined under the Legal Profession Act to enforce a judgment entered as a result of the filing of a certificate under the Legal Profession Act . ... [32] I conclude that each of the bankruptcy notices should be set aside on the basis that it is fatally flawed because the judgment or order upon which it is founded, and which is attached to it as required by Form 1, is not "a final judgment or final order, being a judgment or order the execution of which has not been stayed" within the meaning of s 40(1)(g) of the Bankruptcy Act . 36 The " final judgment or final order " in the present proceeding, it was ultimately submitted by the Applicant, was the judgment of the District Court. A copy of the judgments or orders relied upon by the creditor is attached. At the time of applying for this Notice, execution of the judgments or orders had not been stayed. If a bankruptcy notice is to satisfy the requirements of s 41(1) and (2) of the Bankruptcy Act as to form, it must correctly identify the source of the bankrupt's liability to make the payment demanded by the notice: Re Gibbs; Ex parte Triscott (1995) 65 FCR 80 , 133 ALR 718 at 721 per Drummond J. Only a judgment upon which a creditor is in a position to issue execution when he issues the bankruptcy notice can constitute a final judgment for the purposes of s 40(1)(g): cf. Pepper v McNiece [1941] HCA 27 ; (1941) 64 CLR 642 at 657 per Williams J. A judgment which has been stayed may not found a bankruptcy notice: s 41(3)(b) ; Re Pannowitz; Ex parte Wilson (1975) 38 FLR 184 at 187---8 per Riley J; Reasonable Endeavours Pty Ltd v Dennehy [2001] FCA 188 , 107 FCR 144. 37 Attached to the Bankruptcy Notice as served upon the Applicant on 11 February 2008 was the judgment of the District Court, being the Certificate of Judgment signed by the Registrar of that Court. For the purposes of s 40(1)(g) , the " action or proceeding " in which that judgment was obtained was necessarily the District Court proceeding. " A proceeding ", it may be noted, " may mean something as distinct from an action or any step thereunder in which final orders are made for the payment of money. It may also mean a step in an action, in which proceeding a final order is made for the payment of money ": Re Black; Ex parte Jeffery (1932) 4 ABC 157 at 160 per Lukin J. 38 The judgment entered by that Court was entered as a consequence of the Certificate having been issued in respect to those costs which had been ordered to be paid by the Supreme Court and the subsequent filing of that Certificate by the Respondent with the District Court. There was no suggestion that that judgment had in fact been stayed. The Bankruptcy Notice as served stated that it had not been stayed. 39 The process whereby that judgment came to be entered by the District Court is regulated by the provisions of the Legal Profession Act 2004 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW) . Provision is made for the review of determinations made (ss 373---383) and for an appeal against a decision of a costs assessor " as to a matter of law " (s 384. See: O'Brien v Doherty [2008] NSWSC 205 ; Cassegrain v CTK Engineering [2008] NSWSC 457). 41 When making a determination, it is no part of the function of a costs assessor to entertain cross-claims which may be brought or to determine whether or when costs are payable: Muriniti v Lyons [2004] NSWSC 135. It is no part of their function to determine whether or when such costs are payable. The matters set out in s 208A which they must, and in s 208B which they may, take into account are all matters relevant to putting a value on the work done or services rendered and the fairness or justice of the amount claimed; but are not matters which relate to the terms of a costs agreement (particularly if oral) and whether any conditions precedent to payment have been fulfilled. The determination of such questions requires the reception of sworn evidence, which can be tested by cross-examination, and an assessment of such evidence. Costs Assessors do not have the power to deal with such matters. [57] For similar reasons it has been held that a Costs Assessor has no power to hear a cross-claim by a client against a solicitor based on negligence, nor to award damages: Ryan v Hansen, supra per Kirby J; or to make an assessment when no costs are presently due and payable: Lace v Younan [1999] NSWSC 1072 per Master Harrison (no bill of costs rendered); Baker v Kearney [2002] NSWSC 746 per Master Malpass (judgment in District Court that applicant for assessment not entitled to costs). I am therefore satisfied that on being notified of the dispute as to the plaintiff's liability to pay the costs, the Costs Assessor should have declined to make a determination or issued a certificate unless and until such issue was resolved. Nothing said by the Court of Appeal in Wentworth v Rogers [2006] NSWCA 145 , 66 NSWLR 474 detracts from this particular conclusion of Dunford J. See also: Ryan v Hansen [2000] NSWSC 354 , 49 NSWLR 184. The same observations may be made in respect to the 2004 legislation. 42 Once a costs assessor has discharged his tasks, however, and once a determination has been made, of immediate relevance to the manner in which a certificate is thereafter given effect is s 368(5) of the 2004 Act. Part 36 r 10 of the Uniform Civil Procedure Rules provides for the filing of a certificate in either the existing proceeding in which the order was made or in fresh proceedings. (2) If, in relation to proceedings in which a cost assessor's certificate is filed, there is also filed an affidavit, sworn not earlier than 14 days before it is filed, stating: (a) if the affidavit is filed with the certificate, how much of the amount of costs included in the certificate has not been paid, and (b) otherwise, the amount of the costs included in the certificate that, at the time the certificate was filed, had not been paid, the registrar may enter judgment for the amount of the costs that have not been paid, without a direction of the court or request of a party. 43 For the purposes of s 40(1)(g) of the Bankruptcy Act , the inquiry is thus directed to determining whether or not in that proceeding in the District Court whereby the Certificate was filed, the Applicant " could not have set up " his claim to bring losses in the development of the Merrylands property into account. Those claims could not have been " set up " during the earlier administrative processes being undertaken by the costs assessor. 44 Nor is it considered that the Applicant's claims could have been set up in the " action or proceeding " in the District Court. The present Respondent, having obtained the Certificate of Determination of Costs , thereafter filed the Certificate with the District Court and it was s 368(5) of the 2004 Act which gave effect to that Certificate as a " judgment " of the District Court. No submission was advanced that the filing of the Certificate with the District Court did not constitute an " action or proceeding " for the purposes of s 40(1)(g). 45 The fact that Part 36 r 10 of the Uniform Civil Procedure Rules confers a discretion upon the Registrar does not detract from this conclusion. Whatever be the ambit of that discretion, it would not empower the Registrar to decline to register a Certificate which had been properly obtained and properly filed and where the costs remained outstanding. 46 The result of the present Application, it is considered, can be stated simply. For the purposes of the present Application , it was accepted that the joint venture agreement as between the Applicant and the Respondent gave rise to losses, those losses being said to be approximately $160,000. Those losses obviously exceed the judgment debt of $77,498.96. But, as at the date upon which the Bankruptcy Notice was served in February 2008, no account had been taken -- as had been ordered by Hall J in March 2007. Whether an account had or had not been taken, however, those losses could not have been set up during the process whereby the costs assessor made a determination as to costs. Nor could those losses have been set up in opposition to the filing of the Certificate of the costs assessor with the District Court and the judgment thereafter being taken to have been made by reason of s 368(5) of the Legal Profession Act . 47 The Application to have the Bankruptcy Notice as served on 11 February 2008 set aside should thus be allowed. The Application be allowed. 2. The Bankruptcy Notice No NN 0290 of 2008 be set aside. 3. The Respondent is to pay the costs of the Applicant. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

application to set aside bankruptcy notice need for court to be " satisfied " counter-claim, set-off or cross demand could not have been set up as a matter of law in the action or proceeding in which judgment or order obtained application allowed bankruptcy

The applicant taxpayer is not liable to make withholding payments in connection with salary and wages because the salary and wages paid by the applicant are exempt income under s.23AG of ITAA36. Accordingly, the requirement of 91 days continuous period of foreign service should still be satisfied. Further and alternatively, and without in any way limiting any of the grounds in this objection, if the Commissioner purported to have formed any opinion or to be satisfied or to have failed to be satisfied as to any matter or to have exercised any discretion or power or to have failed to exercise any discretion or power under the FBT Act or the TAA as a basis of, or as justifying the Assessment, including any assessment of additional tax and of exercising any discretion to remit additional tax, then the Commissioner took into account an irrelevant consideration or considerations, and/or failed to take into account a relevant consideration or considerations and otherwise acted arbitrarily, capriciously and contrary to law. 6 Thereupon, the applicant filed an Application on 7 May 2008 appealing to the Court against the relevant appealable objection decision, being the decision of the respondent made on 12 March 2008 to disallow in full the applicant's objection, said to have been dated 5 October 2007, against the Notice of Assessment issued by the respondent on 30 May 2007 of the applicant's Fringe Benefits Taxable Amount for the tax period ending 31 March 2007. The relief sought in the Application was that the applicant's objection be allowed in full and the setting aside of the fringe benefits tax assessment. 7 The applicant, a company incorporated in the Hong Kong Special Administrative Region of the People's Republic of China, is a wholly owned subsidiary of Cathay Pacific Airways Limited ('Cathay Pacific'). 8 The applicant retains the services of air crew around the world who are made available to serve as air crew for Cathay Pacific under a service agreement between the applicant and Cathay Pacific. The form of the offer of employment was expressed to be subject to the 'Overseas Aircrew Basing Limited Conditions of Service (2002)', a copy of which was attached to the form of letter. That document comprised some 90 odd pages. In turn, it provided for it to be 'read in conjunction with the Operations Manual, Volume 1, as the same may be amended from time to time, subject to the provisions of Section 21' (Volume 1 of Cathay Pacific's Operations Manual comprised some 390 odd pages). It also provided for the Conditions of Service to 'be interpreted in accordance with the law as set out in the various applicable Ordinances of the Hong Kong Special Administrative Region'. This employment contract is governed by and shall be construed in accordance with the laws of Hong Kong and the parties hereto shall submit to the non-exclusive jurisdiction of the courts of Hong Kong. If you agree to accept the terms of our offer, kindly sign the duplicate of this letter and return the same to us. 12 The former agreement would appear to have been reached between the Hong Kong Aircrew Officers' Association on behalf of its members of the one part and Cathay Pacific, the applicant, New Zealand Basing Limited, USA Basing Limited and Veta Limited (collectively referred to as 'the company') of the other part. ADMINISTRATION 16.1. The Base Administrative Centres are: a. Sydney for the Australian and New Zealand Base Areas; b. London for the European Base Area; and c. Vancouver for the Canadian and USA Base Areas. Travel between the Officer's residence and HB or PP and any accommodation and expenses at the HB or PP are for the Officers' own account. The Basing Company will satisfy all reporting and income tax withholding requirements on behalf of any of its employees who are subject to such requirements. Protection given to Officers, in accordance with the "Responsibility of the Company" Section of the Conditions of Service, in the event of incident or accident, shall be no less than that provided by CPA [Cathay Pacific] . Current Base Areas are Asia, Australia, Canada, Europe, New Zealand and the USA. 16 As indicated in clause 16.1 of the Permanent Basings Policy Agreement 2006, Sydney is the Base Administrative Centre for the Australian and New Zealand Base Areas. 17 Clause 6.9 of the Permanent Basings Policy Agreement 2006 provided for the crew establishment in each Home Base to be determined by Cathay Pacific. 18 A number of provisions within the Overseas Aircrew Basing Limited Conditions of Service 2002 make reference to aircrew with a Home Base in Hong Kong and aircrew with Home Bases elsewhere (see for example clauses 38 and 39). 19 Clauses 44 and 45 contemplate applications by aircrew to be temporarily based in ports other than their Home Base or to be permanently based in such ports. Clause 50 deals with the situation which arises where a Home Base is closed in which case an opportunity is afforded to the relevant aircrew to relocate to another Home Base within the relevant Base Area or to Hong Kong. 20 Clause 51.1 dealt with the possibility of the applicant being 'wound up' or otherwise ceasing to operate, in which case aircrew were to 'rejoin' Cathay Pacific in their existing rank and grade on Cathay Pacific Conditions of Service, Veta on Veta Conditions of Service or USAB on USAB Conditions of Service. Alternatively, they could apply to join NZBL on NZBL Conditions of Service. 21 Matters dealt with by the Overseas Aircrew Basing Limited Conditions of Service 2002 included Terms of Employment (clause 3), Salary (clause 7, when taken with Schedule 1), Rostering (clause 21), Crew Positioning (clause 22), Annual Leave (clause 25), Guaranteed Days Off (clause 26), Statutory Holidays (clause 27), Sickness Allowance (clause 28), Compassionate Leave (clause 29), Maternity Leave (clause 30), Redundancy (clause 31), Discipline and Grievance (clause 32), Suspension of Employment (clause 33), Termination of Employment (clause 34) and Retirement (clause 35). An Officer will serve the Company by operating any aircraft as defined in the Cathay Pacific Airways Limited ("CPA") Air Operator's Certificate in any part of the world and on any of the routes served by the Company, including the operation of special or chartered flights as required by the Company, and perform such other duties in the air and/or on the ground that relate to the Company's flight operations. In addition to the duties defined in 3.1, 3.2 & 3.3, an Officer, subject to mutual agreement between the Company and the Officer, will perform such other duties in the air and/or on the ground that the Company may require. Officers who are unfit to exercise the privileges of their Aircrew Licence for medical reasons may be assigned ground duties by the Company in accordance with recommendations of the Company's Aeromedical specialists. Salary will be paid monthly in arrears. Salary will be credited to an Officer's bank account in Hong Kong nominated in writing by the Officer. The Salary scale is specified in Schedule 1 of these Conditions of Service and will be reviewed annually. For the avoidance of doubt, the specified Salary scale may not be reduced without the individual Officer's written consent. If the income is wholly exempt then there is no fringe benefits tax payable in respect of benefits provided to the pilots. If the income is partly exempt then there'll be consequences which the parties are agreed should not tax your Honour but rather, if your Honour can decide the extent to which the income is exempt or the criteria by reference to which it is exempt in your Honour's reasons and then stand the matter over, the parties will do the calculations and resolve the differences. In other words, we're not going to ask your Honour to do elaborate calculations of the amount of fringe benefits tax. This suggestion was soundly rejected by senior counsel for the applicant because, firstly, he said that a separate question had not been formulated and, secondly, 'formulating separate questions generally involves more controversy than simply dealing with the matter'. The rosters themselves are seven pages in length for each of pilots 2, 43, 58, 71, 75 and 104, the roster for pilot 82 being six pages in length. They each cover the period 1 April 2006 to 31 March 2007, although the last entry for pilot 43 is shown as 30 March 2007. 28 These pilot rosters were selected by the parties as illustrative of the various combinations and permutations, sufficient to enable the matters of principle to be determined, without the necessity of exploring the detail of each and every member of the applicant's aircrew's circumstances. 29 Mr Slater has invited the Court to address the question as formulated by him in paragraph 26 above on the basis that, once it has been decided, the matter should be stood over for a period of three months to allow the parties to bring in short minutes to give effect to the Court's reasons for judgment. 30 Senior counsel for the respondent, Mr B J Sullivan SC, invited the Court to proceed generally along the lines that Mr Slater proposed. 31 I note that for the purposes of Order 29 of the Rules, 'question' includes any question or issue in any proceeding, whether of fact or law or partly of fact and partly of law, and whether raised by pleadings, agreement of parties or otherwise. 32 In the foregoing circumstances, I will proceed to address the question as formulated by Mr Slater on the basis that a precise formulation of it and the Court's decision thereon will be settled at the conclusion of this part of the appeal. I must say that I would have preferred a greater degree of formality. His criticism appears to be well founded. 34 To enable the question as agreed between the parties to be determined it is necessary to turn to, firstly the FBT Act, secondly the Taxation Administration Act 1953 (Cth) ('the Administration Act') and Schedule 1 thereto, thirdly the Income Tax Assessment Act 1997 (Cth) ('the 1997 Act') and, fourthly, the 1936 Act. At times one senses that one is caught in a maze, where there is no way out. (d) By virtue of s 3AA(2) of the Administration Act expressions used in Schedule 1 to the Administration Act have the same meanings as they have in the 1997 Act. The definitions in the 1997 Act are to be found in s 995-1 which spans some 180 pages. Apart from the definitions contained in s 995-1 of the 1997 Act there are expressions that are defined elsewhere in the 1997 Act, which supplement those definitions eg the definition of 'entity' in s 960-100 of the 1997 Act. It covers all kinds of legal person. It also covers groups of legal persons, and other things, that in practice are treated as having a separate identity in the same way as a legal person does. (l) Section 23AG of the 1936 Act dealt with the exemption of income earned in overseas employment. These 2 periods of foreign service constitute a continuous period of foreign service, because the total period of absence is never more than 1/10 of the total period of foreign service. No matter how long the further period lasts, it can never constitute a continuous period of foreign service with the first 2 periods of foreign service, because on the fourth day of the second absence the total period of absence is 1/5 of the total period of foreign service. 39 Section 23AG was inserted into the 1936 Act by the Taxation Laws Amendment (Foreign Tax Credits) Act 1986 (Cth) (Act No. 51 of 1986). This relation of income to a geographically located source has provided its problems in the past and no doubt will do so in the future. (per Barwick C.J. in Esquire Nominees Limited v The Commissioner of Taxation of the Commonwealth of Australia [1972] HCA 32 ; (1973) 129 CLR 177 at 211). 42 The ascertainment of the actual source of a given income is a practical, hard matter of fact (per Isaacs, Gavan Duffy and Rich JJ in Nathan v The Federal Commissioner of Taxation [1918] HCA 45 ; (1918) 25 CLR 183 at 190). In each case, the relevant weight to be given to the various factors which can be taken into consideration is to be determined by the tribunal entitled to draw the ultimate conclusion as to source (per Barwick CJ in Commissioner of Taxation of the Commonwealth of Australia v Mitchum [1965] HCA 23 ; (1965) 113 CLR 401 at 407. This was a case concerning income derived by the actor, Robert Mitchum, a non-resident of Australia, who had entered into a contract with a Swiss company under which he agreed to provide services as a consultant and to act in certain motion pictures. The Swiss company had agreed to make Mr Mitchum's services available to Warner Bros. Pictures Inc. to appear in a film entitled "The Sundowners" which it was contemplated would be produced partly in Australia and partly in England. The Income Tax Board of Review found that no part of the sum payable to Mr Mitchum by the Swiss company was derived from a source in Australia. That finding of fact was not the subject of consideration by the Full High Court). 43 An ordinary artisan earns his pay where he does his work (per Dixon C.J. in Federal Commissioner of Taxation v French (1957) 98 CLR 398 at 405). A person who worked his way up to become an engineer in a sugar refining company after serving his apprenticeship with that company and who served it mainly in the State of New South Wales but also was assigned to perform services as an inspecting engineer in the company's business in New Zealand, was held to have derived his income from a source out of Australia in respect of the period during which he performed services for the company in New Zealand. Dixon CJ was of the opinion (at 405) that Mr French's position was no different from that of the ordinary artisan. 100 of 1991). The original s 23AG(3) which was repealed by Act No. Both s 23AG(2) and its predecessor s 23AG(3) each commenced with the expression 'An amount of foreign earnings derived in a foreign country is not exempt from tax under this section...'. The former s 23AG(3) then proceeded to focus on 'that country', being the foreign country in which foreign earnings were derived. S 23AG(2) proceeded to focus on the tax treatment given in "the" foreign country to the amount of foreign earnings derived in it. 47 Whilst the definition of 'foreign earnings' in subsection (7) has been amended, the essential wording at the commencement of the definition has remained unchanged. The definition of 'foreign service' has not changed at all. In addition, subsection (6) remains essentially as it was when first enacted. 48 Subsequent to the introduction of s 23AG into the 1936 Act by Act No. 2) 1988 (Cth) (Act No. 2) 1991 (Cth) (Act No. 3) 1991 (Cth) (Act No. 4) 1994 (Cth) (Act No. 3) 1997 (Cth) (Act No. 2) 1999 (Cth) (Act No. 5) Act 2005 (Cth) (Act No. 162 of 2005 and were made applicable in relation to foreign service performed on or after 19 December 2005. When they were inserted the then existing subsections (6A), (6B), (6C), (6D) and (6E) were repealed along with subsection (6J). Subsections (6F) (which had itself been amended by Act No. 216 of 1991) and (6G) survived. Subsection (6H) had already been omitted by Act No. 100 of 1991. 50 Each of subsections (6A), (6B), (6C), (6D), (6E), (6F), (6G), (6H) and (6J) had originally been inserted into s 23AG by Act No. 78 of 1988. The several subsections which were inserted at that time and subsequently repealed, omitted, amended or left in place are not without their significance in that they introduced, amongst other things, the concept of a 'whole day' and the manner in which hours should be taken into account. 15 of 2007 took effect on 15 March 2007. By those amendments subsection (5) was modified and paragraphs (a), (b), (c) and (d) were inserted in the definition of 'foreign earnings' in the place of the previous paragraphs (a) and (b). For the purposes of this case, the amendments effected by Act No. 15 of 2007 are without significance. 52 It will be apparent from the history of s 23AG as recited above that, when first enacted, exemption from tax applied where a person had been 'engaged in foreign service' for a continuous period of not less than 365 days. Apart from dealing with sick leave and recreation leave attributable to foreign service (see s 23AG(6)), s 23AG, as originally enacted, did not address discontinuity in a person's 'engagement in foreign service'. However, by Act No. 78 of 1988, discontinuity provisions were inserted into the section. Section 23AG(6D), as introduced by that Act, permitted a 'first foreign service period' and a 'second foreign service period' to be treated as 'a continuous period during which the person was engaged in foreign service' where at the beginning of the second foreign service period the person had 'absentee credits' referable to the first foreign service period which exceeded the 'absentee debits' referable to the period between the first foreign service period and the second foreign service period. 53 In addition, s 23AG(6E), as introduced by Act No. 78 of 1988, provided for a period of discontinuity to be ignored if the period between the first foreign service period and the second foreign service period was less than 24 hours. 54 If (say) a company executive resident in Australia was engaged in foreign service in Hong Kong, that person's foreign service would be treated as continuous if he or she flew back to Australia to visit a relative who was ill, returning within 24 hours. Otherwise, the period of discontinuity would be subjected to the absentee debit regime for which s 23AG(6C) provided and the significance of the absentee debit would fall to be determined by reference to s 23AG(6D), after allowing for absentee credits in accordance with s 23AG(6B). 55 When the original subsections (6A), (6B), (6C), (6D), (6E) and (6J) were repealed, they were replaced by the current subsections (6A) and (6B) to deal with periods of discontinuity in respect of 'engagement in foreign service' not covered by sick leave or recreation leave for which s 23AG(6) already provided. ... The Bill will not effect (sic) the existing provisions of the income tax law that exempts, in certain circumstances, remuneration derived by persons working overseas on approved projects. The Bill will also exempt salary or wages earned overseas that is subject to tax in the country of source, where derived by an Australian resident in performing services overseas for a continuous period of at least 12 months - a proportionate exemption will apply where the period is from 3 to 12 months with a credit being allowed for foreign tax paid on any amount not exempted. However, under the Bill, salary or wages earned overseas that is to be exempt on the foregoing basis will be taken into account in calculating Australian tax on other income, so that exemption of the salary or wages will not also reduce the tax payable on the other income. ... ... Clause 6 : Exemptions Clause 6 amends section 23 of the Principal Act by omitting paragraphs 23(q) and 23(qa). As indicated earlier in these notes, paragraph 23(q) exempts many categories of income derived by a resident of Australia from sources outside Australia and Papua New Guinea which would otherwise be assessable by virtue of paragraph 25(1)(a) of the Principal Act where, broadly, the income is not exempt from tax in the country where it is derived. ... Neither paragraph will be required once the foreign tax credit system commences to apply from the commencement of the 1987-88 income year, and both will, by virtue of clause 32 of the Bill (see notes on that clause), case (sic) to apply from that time. From that time also, new section 23AG will provide an exemption from Australian tax for salaries and wages earned overseas in certain circumstances - see notes on clause 8. ... Clause 8 : Exemption of income earned in overseas employment Clause 8 proposes the insertion of a new section section 23AG - into the Principal Act, the purpose of which is to provide an exemption from Australian tax for salary or wages earned overseas by an Australian resident during a continuous period of service of at least 12 months. A proportionate exemption will apply where the period is from 3 to 12 months, provided in either case that the income is not exempt from tax in the country in which it is derived, and any foreign tax due has been, or will be, paid. ... Sub-section 23AG(6) in effect specifies that, for the purpose of determining the length of a period of foreign service on which entitlement to exemption under the section is based, various periods when the person is not actually on the job are to be taken into account. A proportionate exemption will apply where the period is from 3 to 12 months, with a credit being allowed for foreign tax paid on any amount not exempted. Section 23AG authorises a full or partial exemption from Australian tax, depending on the term of the period of employment, for salary or wages earned overseas by an Australian resident individual that are subject to tax in the country of source. Where the foreign earnings are derived during a continuous period of foreign service of at least 12 months a full exemption is provided. A proportionate exemption applies where the continuous period of foreign service is between 3 and 12 months. Under the current operation of section 23AG, a continuous period of foreign service ends when the person ceases, either temporarily or permanently, to be engaged in foreign service. As the basic test for determining whether the whole or a proportion of foreign earnings is to be exempt relates to a continuous period during which a person is engaged in foreign service, a temporary absence, either within a continuing period of foreign service [sic] or between two or more periods of foreign service, could affect a person's exemption entitlement. Proposed new subsections (6A) to (6D) will, in certain circumstances, allow two successive continuous periods of foreign service to be taken to constitute one continuous period of foreign service. This will be so where the break between successive periods of foreign service does not exceed a specified number of days. For each whole day that a person is engaged in foreign service he or she will accrue an "absentee credit" of 31/334 of a day. A person who has been engaged in a continuous period of foreign service of 334 days or more will have an absentee credit balance of 31 days (31 days is the maximum credit balance that a person can have at any time). Where a person breaks a continuous period of foreign service by, for example, returning to Australia for reasons not directly related to his or her continuing foreign service engagement or by changing jobs overseas, the credit balance will be taken into account. Provided the person is not absent from foreign service for a period in excess of his or her accrued absentee credit balance, the period of foreign service either side of the period of absence will together constitute a continuous period of foreign service. ... Subsection (6D) sets out the circumstances in which two successive continuous periods of foreign service will be taken together to constitute a single continuous period of foreign service. In broad terms, this will be where the number of days in the break between the two periods does not exceed the accumulated absentee credit balance available at the commencement of the break. Subsection (6E) enables a break of less than 24 hours between two successive continuous periods of foreign service to be disregarded. ... Subsection (6J) defines a "whole day" for the purposes of subsections (6B) and (6C) which respectively provide for absentee credits or debits to arise at the end of each whole day of engagement in foreign service or absence from foreign service. A whole day is the period from midnight to midnight. It aims to reduce compliance costs for taxpayers, and to address some specific issues that have arisen. Compliance cost impact : The amendments relating to treatment of absences should reduce compliance costs for taxpayers, since it reduces complexity. The amendments aim to reduce compliance costs for taxpayers and address some specific issues that have arisen. ... Context of amendments 1.3 Section 23AG exempts foreign employment income of Australian resident individuals engaged in foreign service for a period of 91 continuous days or more (subject to some conditions). Section 23AG was originally introduced as a method of preventing double taxation for individual taxpayers. However, over time as individuals' circumstances and employment conditions have diversified, situations have arisen that were not considered when the legislation was first developed. 1.4 One area of complexity this measure addresses is the 'credits and debits' rule used to allow an individual to be considered to have a continuous period of foreign service despite short absences. This test will be replaced with a simpler and generally more generous rule that allows different foreign service periods to be aggregated, unless the period of absence that separates them exceeds one-sixth of the total number of days of foreign service at any time. 1.5 These amendments also modify section 23AG in two specific situations: where a taxpayer was employed in Iraq during the suspension of the income tax system, and where a taxpayer dies before reaching 91 days of continuous service. Summary of new law 1.6 These amendments have three components: • Individuals will not break a period of foreign service until the time that absences exceed one-sixth of the days in foreign service. ... ... Comparison of key features of new law and current law New law Current Law Time away from foreign service that does not constitute foreign service, will not break the period of foreign service provided the time away from foreign service is not greater than one-sixth of the number of days of foreign service at any time. Time away from foreign service that does not constitute foreign service will not break the period of foreign service if the individual's absentee credit balance is greater than nil. Absences of less than 24 hours are disregarded for the purposes of calculating the absentee credit balance. ... .... Detailed explanation of new law Simplification of section 23AG: the one-sixth rule 1.7 Section 23AG contains rules to allow individuals to take short breaks from foreign service without breaking a continuous period of foreign service. A continuous period of not less than 91 days of foreign service is necessary to claim the exemption. 1.8 Certain types of absences are counted in foreign service under subsection 23AG(6) (eg recreation leave). Other types of absences are not included or not considered to be part of foreign service (eg long service leave). The current rules apply only to absences that are not considered to be part of foreign service. 1.9 The amendments do not change this distinction, but merely substitute a new rule for calculating whether absences that are not included in foreign service break a period of foreign service. 1.10 Under the current rules, absences from work that do not constitute foreign service will not break a foreign service period if the individual's absentee credit balance is greater than nil. Although an individual earns 2.2 hours credit for one day of foreign service the absentee credit balance only counts whole days. An individual can only accumulate a maximum of 31 days credit. For every 24 hour absence the individual incurs a 24 hour debit. Absences from foreign service of less than 24 hours are ignored. 1.11 The 'credits and debits' system will be replaced by a rule that allows periods of foreign service to be added together until a time that absences exceed one-sixth of the days of foreign service. 1.12 The one-sixth rule is generally more generous than the credits and debits system. It allows for more absences and does not have a 31 days credit limit. It will also reduce compliance costs for taxpayers as the calculations will be simpler. 1.13 The amendments allow two or more continuous periods of foreign service to be combined into a total foreign service period until an individual ceases to be engaged in foreign service, or the one-sixth rule is exceeded, whichever occurs first. 1.14 When applying the one-sixth rule the numerator is the days absent from foreign service that do not constitute foreign service, and the denominator is the total number of days of foreign service. The days included in a total period of foreign service, at a particular time, are the foreign service days from the beginning of the first of the foreign service periods up until that time. The days included in a total period of absence at a particular time are the days of absence from the beginning of the first foreign service period up until that time. [Schedule 1, item 3, subsections 23AG(6A) and (6B)] 1.15 If the total days of absence exceed one-sixth of foreign service days at any time, an individual ceases to be engaged in a period of foreign service for the purposes of subsection 23AG(1). The individual will begin a new period of foreign service when he or she next engages in foreign service and must determine anew whether that foreign service lasts for at least 91 continuous days. [Schedule 1, item 3, subsections 23AG(6A) and (6B)] 1.16 The definitions of 'total period of foreign service' and 'total period of absence' are only relevant for determining whether multiple periods of foreign service may be combined into a continuous period of foreign service. An absence is not considered to be part of a continuous period of foreign service (subject to subsection 23AG(6)). 1.17 The aim of the amendment is to allow taxpayers a similar total period of absence to that allowed by section 23AF, (ie a foreign employment income exemption for individuals working on approved projects). Section 23AF also contains a one-sixth rule. 1.18 However, the rule in section 23AG differs to that in section 23AF, reflecting differences in the basic structure of the two sections. For example, the one-sixth rule in section 23AF applies only to absences in Australia, while the rule in section 23AG does not have this limitation. Also, the one-sixth rule in section 23AF is not applied on an on-going basis, but to an overall period. The one-sixth rule to be inserted into section 23AG will be applied on an on-going basis, in the same way as the current 'credits and debits'. Individuals will effectively calculate daily whether they remain engaged in a continuous period of foreign service or not. He takes five days off due to illness which is in accordance with the terms and conditions of that service. This is considered to be foreign service under paragraph 23AG(6)(b). He then takes a further 10 days off that is not considered to be part of foreign service, and re-commences for a further 40 days. In determining whether these two periods of foreign service constitute one continuous period of foreign service for the 91 continuous days test, he must determine whether the total period of absence exceeds one-sixth of his days of foreign service. Since he has been engaged in foreign service for 110 days (65 + 5 + 40) he would be entitled to the exemption under section 23AG for earnings from those days. Jason's total foreign service period was therefore limited to 70 days once his absence exceeded one-sixth of his 70 days in foreign service (ie at day 12 of his total period of absence). When Jason recommences work for 40 days he will start a completely new period of foreign service and needs 91 days of service before any of his earnings for the period are exempt. (4) A person shall not be taken to have been engaged on qualifying service on a particular approved project while the person was travelling between Australia and the site of the approved project unless the Commissioner is satisfied that the time for the journey is reasonable. (5) A person shall not be taken to have been engaged on qualifying service on a particular approved project by virtue of paragraph (3)(c) during a period of incapacity for work unless the person is taken to have been engaged on qualifying service on that approved project by virtue of paragraph (3)(a), (b) or (d) during a period that commenced immediately after the incapacity ceased. This tax exemption applies to the foreign earnings of Australian residents engaged in foreign service for a continuous period of 91 days. The existing credits and debits rule used in determining whether a taxpayer with breaks in their employment service satisfied the 91-day rule period will be replaced with a simpler and more generous rule. The new rule --- the one-sixth rule --- states that a period of foreign service will not be considered to have been broken until the point when absences exceed one-sixth of the days in foreign service. This rule allows for more absences and reduces compliance costs for taxpayers. 65 In order that one may understand the rosters for the seven individual pilots, whom the parties have agreed are representative of the applicant's 116 pilots (see [27] above) it is necessary to consider, in a little more detail, duty cycles, the function of pilot rosters before and after the event and the avoidance of fatigue in aircrews. 66 As mentioned at [9] above, the applicant's Conditions of Service, which formed part of the relevant contracts of employment between the applicant and the seven individual pilots, were to be read in conjunction with Volume 1 of Cathay Pacific's Operations Manual and interpreted in accordance with the law as set out in the various applicable Ordinances of the Hong Kong Special Administrative Region. 67 Volume 1 of Cathay Pacific's Operations Manual was divided into five separate parts headed "Organization", "Operations", "Flying", "Crew Administration" and "Flight Safety". Section 3 of Part 2 dealt with "APPROVED FLIGHT TIME LIMITATIONS SCHEME" and Section 3 of Part 4 dealt with "ROSTERING PRACTICES FOR FLIGHT CREW OPERATING CATHAY PACIFIC AIRWAYS AIRCRAFT EFFECTIVE 1ST JANUARY 2005 [superseding those effective 1 st August 2001]". When approved by the DGCA the scheme must be published in the Operations Manual, or when an Operations Manual is not required by the Order, incorporated in a separate document. The Operations Manual, or separate document, shall be readily available to every person employed by the operator as a member of an aircraft crew. The Operator is further required to take all reasonable steps to ensure that the provisions of their approved FTL Scheme are complied with. It comprised some 23 pages identified as 2-3-1 to 2-3-23 inclusive under the heading " APPROVED FLIGHT TIME LIMITATIONS SCHEME ". They are not intended to take account of commercial circumstances, social considerations and lifestyle. The distinction should be drawn between normal tiredness resulting from the physical and mental efforts of flight, and cumulative fatigue resulting from the interaction of sleep loss and circadian disruption which can lead to significant decreases in operational performance. However, it is recognised that on occasions a flight will experience Service Disruption. Under these circumstances the Company may request the aircraft Commander to use Commander's Discretion in accordance with the provisions of this Scheme, or the aircraft Commander may do so at his own initiative. DEFINITIONS For the purpose of this scheme various terms have the meanings defined below ascribed to them. When a crew member finishes a Duty Period at a place where the Local Time differs by more than three hours from his/her Home Base Local Time, straightaway he/she will be considered as Unacclimatised. A period at Home Base available for leisure and relaxation and free of all Duties. A single DDO will comprise a minimum period of thirty four consecutive hours and will include two Local Nights. Consecutive DDOs will be extensions to a single DDO, will be of at least twenty four hours duration and will include a further Local Night for each additional consecutive DDO. A Rest Period may be included as part of a DDO. At the request of the individual crew member, and with the agreement of the Company, a DDO may be taken at other than the crew member's Home Base. In this case the crew member will be considered Acclimatised to the place where the DDOs are taken, provided that the conditions of 7.1 are met. It includes any Flight Duty, Positioning, ground training, ground duties and Reserve Duty. It starts and finishes in accordance with the provision specified in 8. An EXB will comprise a minimum period of thirty consecutive hours during which Suitable Accommodation is available to the crew member. A Rest Period may form part of an EXB. It starts at the Actual Reporting Time specified in 8.2 and finishes at on-chocks, or engines off, whichever is the later, on the final Sector. ... 7.12 Home Base The place nominated by the Company to the crew member, or as otherwise contractually agreed between them, from where the crew member normally starts and ends a Duty Cycle and at which place, under normal conditions, the Company is not responsible for the accommodation of the crew member concerned. 7.13 Late Night Period (LNP) The period 0100 to 0659 hours Local Time of the place to which a crew member is Acclimatised. ... 7.17 Normal Rest A Rest Period required after the completion of a Duty Period where the Local Time difference between the places where the Duty Period started and finished is less than six hours. ... 7.20 Positioning The practice of transferring crew members from place to place as passengers in surface or air transport at the behest of the Company. 7.21 Recovery Period A period free of duty following a Duty Cycle of length greater than forty eight hours on completion of which the crew member is Unacclimatised. A Rest Period may form part of a Recovery Period. ... 7.23 Reporting time The time at which a crew member is required by the Company to report for any duty. 7.24 Reserve Duty A period during which the Company places constraints on a crew member who would otherwise be off Duty. 7.25 Rest The word "Rest" will be taken as meaning repose or sleep. 7.26 Rest Period A period of time before starting a Flight Duty Period which is designed to give crew members adequate opportunity to rest before a flight. 7.27 Roster A means by which the Company notifies crew members in advance, of their Duties for the whole of the Roster Period. The Roster will normally be published at least fifteen days in advance of the start of the Roster Period. 7.28 Roster Period The length of each Roster Period will be one calendar month. ... 7.30 Sector/Sector Time The time between when an aircraft first moves from its parking position until it next comes to rest, after landing, on the designated parking position. ... 7.38 Ultra Long Range Operation An operation by a Two Crew Aircraft requiring three or more pilots involving a time difference of six hours or more between the places where the Duty Period starts and finishes. ... 8. For Flight Duty, Scheduled Time of Departure ("STD") minus sixty minutes or such earlier time as may be notified to the crew member. For Positioning on international flights, STD minus sixty minutes or such earlier time as may be notified to the crew member. For Flight Duty, termination of the FDP will be Scheduled Time of Arrival ("STA") of the final Sector of the FDP. Where no other subsequent duty is to be undertaken, termination of the Duty Period and commencement of the Rest Period will be STA plus thirty minutes. b. For Positioning, where no other subsequent duty is to be undertaken, termination of the Duty Period and commencement of the Rest Period will be STA plus thirty minutes. c. For Other Duties, where no other subsequent duty is to be undertaken, termination of the Duty Period and commencement of the Rest Period will be the time at which the duty is Scheduled to end. Actual Reporting Times For all duties, the Scheduled Reporting time or the time at which the crew member actually reports for duty, whichever is the later. Actual Finishing Times. a. For Flight Duty, termination of the FDP will be either as specified in 7.10 or in accordance with 15.5.E, 16.7 or 31.3.D.e. as applicable, whichever is the earlier. When no other duty is subsequently undertaken, termination of the Duty Period and commencement of the Rest Period will be ATA on blocks plus thirty minutes, or such later time as may be required by other than normal post flight duties. b. For Positioning, when no other duty is subsequently undertaken, termination of the Duty Period and commencement of the Rest Period will be ATA on blocks plus thirty minutes, or such later time as my be required by other than normal post flight duties. c. For other duties, when no other duty is subsequently undertaken, termination of the Duty Period and commencement of the Rest Period will be at the time at which the duty ends. 8.3 Delayed Reporting Time A. When a crew member is informed, before leaving the place of Rest, of a delay to the Reporting Time, the FDP will be calculated as follows: a. The maximum allowable FDP will be determined by the more limiting time band of the original Scheduled Reporting Time and the Actual Reporting Time; and b. When the delay is less than four hours, the actual FDP will start at the Actual Reporting Time; or c. When the delay is four hours or more, the actual FDP will start four hours after the original Scheduled Reporting Time. ... 9. Travelling Time, other than that time spent on Positioning, will not be counted as Duty. The provisions of this paragraph may be applied only to preserve the stability of an individual Flight Crew member's notified Roster. They may be exercised only once in any Roster Period and will apply only to a minimum required Recovery Period of duration four or more DDOs. B. When Unforeseen Circumstances delay a Flight Crew member's return to his/her Home Base at the end of a Duty Cycle: a. The Company may reduce the Flight Crew member's minimum required Recovery Period by one DDO; and b. Subject to the agreement of the individual Flight Crew member concerned, the minimum required Recovery Period may be reduced by a further one DDO to a total maximum reduction of two DDOs. ... 26. The total of all previous Sector Times during the period of twelve calendar months, expiring at the end of the previous month, exceeds nine hundred hours. DOMESTIC DAYS OFF (DDO) ... 28.1 Flight Crew members: A. Will not be Scheduled for duties on more than six consecutive days before being given a DDO or EXB. However, subject to the agreement of the Flight Crew member, the duty may be extended to seven consecutive days; and B. Notwithstanding 28.1.A, on occasion may be Positioned to their Home Base on the seventh consecutive day (eighth consecutive day if the duty is extended to seven days), provided they are then allocated at least two consecutive DDOs; and C. Will have a minimum of two consecutive DDOs in any period of fourteen consecutive days following the previous two consecutive DDOs; and D. Will have a minimum of seven DDOs in any period of four consecutive weeks; and E. Will have an average of at least eight DDOs in each period of four consecutive weeks averaged over three such periods. 29. In some cases this may require the allocation of a Recovery Period before flying duties may be undertaken. In addition, such flight crew members have an entitlement to a minimum of seven Domestic Days Off in every four week period. 72 It is unnecessary, at the moment, to go into the detail whereby duty hours are calculated. Suffice it to say that different rules are engaged to determine the number of duty hours depending on whether the relevant duty is flight period duty, positioning or other duties (see clauses 7.5 and 8). 73 Plainly, rosters whereby crew members are notified in advance of their duties for the next ensuing month are an essential part of an airline's operations, consistent with the avoidance of fatigue and the maintenance of a healthy alertness. Equally, an after the event diary record of duty hours is necessary to ensure that flying hour limitations and duty hour limitations are not exceeded (see clauses 8, 26, 27 and 30). 74 When a member of flight crew undertakes a series of duty periods, they will together constitute a duty cycle for that member to the extent that they are uninterrupted by a "Domestic Day Off" ie a period at that member's Home Base which is available for leisure and relaxation and free of all duties, such as would be available to many "9 to 5" workers on weekends (see clauses 7.4, 7.6, 7.7 and 7.12). One function of a roster is to identify duty periods, duty cycles and domestic days off. 75 Captain Walker was responsible for the construction of and implementation of pilot rosters for Cathay Pacific. He was responsible for, amongst others, the Crew Patterns Section within Cathay Pacific which determined the content of duty cycles to be used in roster construction. That section was charged with constructing duty cycles to be used on the various rosters to minimise costs and also to give effect to the "APPROVED FLIGHT TIME LIMITATIONS SCHEME" and also a roster practices agreement between Cathay Pacific and the Hong Kong Aircrew Officers' Association. That industrial agreement was itself incorporated in Section 3 of Part 4 of Volume 1 of Cathay Pacific's Operations Manual at pages 4-3-1 to 4-3-13 inclusive under the heading "ROSTERING PRACTICES FOR FLIGHT CREW OPERATING CATHAY PACIFIC AIRWAYS AIRCRAFT EFFECTIVE 1ST JANUARY 2005". 76 The industrial agreement introduced the concept of a "Guaranteed Day Off", the concept of an "O Day" and the concept of an "Available Day", all of which were effectively subsets of a "Domestic Day Off", as defined in the "APPROVED FLIGHT TIME LIMITATIONS SCHEME", with minor modifications. A single Guaranteed Day Off will comprise a minimum period of 36 consecutive hours [34 in the definition of Domestic Day Off] at Home Base and will include 2 Local Nights. Consecutive Guaranteed Days Off will be extensions to a single Guaranteed Day Off, will be of at least 24 hours' duration and will include a further Local Night for each additional consecutive Guaranteed Day Off. A Rest Period may be included as part of a Guaranteed Day Off. In this case the crew member will be considered as Acclimatised to the place where the Guaranteed Days Off are taken, provided that the conditions of the Approved Flight Time Limitations Scheme are met. Where this annual GDO entitlement is prorated, then the additional GDOs will be prorated in the same proportion. Other than in abnormal circumstances, this will be between 1100 and 2100 Home Base Local Time. A single O Day will comprise a minimum of 34 consecutive hours and will include 2 Local Nights. Consecutive O Days will be extensions to a single O Day, will be of at least 24 hours' duration and will include a further Local Night for each additional consecutive O Day. A Rest Period may be included as part of an O Day. If the O Day is at Home Base then the crew member must be informed before the actual day and at least 12 hours before the time of start of the Duty. When these conditions cannot be met, the crew member may be Requested to undertake a Duty. Such that GDOs both immediately precede and immediately succeed them; and B. For crew members based outside Hong Kong, such that they are immediately preceded by Reserve Duty and immediately succeeded by a flying Duty except as required by the Domestic Day Off provisions of the Approved Flight Time Limitations Scheme. However, such crew members may elect not to be Rostered for any Available Days. 80 As duties were completed the relevant aircrew rosters were updated to provide a record of the duties as performed, including flight duties, with a notation of the relevant cities of departure and arrival. For each of the seven pilots within the representative sample, the evidence included a cumulative twelve month diary as so maintained. 81 The precise location of the Home Bases of the pilots within the representative sample was not entirely clear from the evidence. 2 Perth Pilot No. 43 Sydney Pilot No. 58 Sydney Pilot No. 71 Melbourne Pilot No. 75 Sydney or Brisbane Pilot No. 82 Sydney Pilot No. 83 As to where a member of the aircrew performs his or her duties when engaged in the flying of an aircraft in the course of an international flight, the straightforward and obvious answer is, in the cockpit of the aircraft. In a geographical sense it may be said that the duties are performed in the country from which the flight commences, in the relevant airspace which may or may not be airspace in relation to which a country claims sovereignty and the country at which the aircraft lands. 84 Activities are generally speaking defined by duty cycles which begin and end at the relevant aircrew member's Home Base or Preferred Port. The home of such a person will normally be located within one and half hours travelling time from his or her Home Base or Preferred Port being his or her normal departure airport. 85 Whilst a duty cycle may be broken by periods for rest, recovery and relaxation, they begin and end at the relevant Home Base or Preferred Port where time is available for leisure and relaxation, free of all Duties. This principle was announced long ago by Justinian. ... [4] ...The owner of land owns as much of the space above him as he uses, but only so long as he uses it. All that lies beyond belongs to the world. The air is a public highway, as Congress has declared. Were that not true, every transcontinental flight would subject the operator to countless trespass suits. Common sense revolts at the idea. To recognise such private claims to the airspace would clog these highways, seriously interfere with their control and development in the public interest, and transfer into private ownership that to which only the public has a just claim. 89 The arrogation of sovereignty by Australia to the airspace over the territory of Australia and the territorial sea of Australia is evident from, inter alia, s 15B of the Acts Interpretation Act 1901 (Cth) and the definition of "Australian Territory" in s 3 of the Air Navigation Act 1920 . The airspace above international waters may be taken to be international airspace. When working in international airspace a member of the applicant's aircrew performing service for Cathay Pacific could not be said to be engaged in "service in a foreign country" in the capacity of an employee within the meaning of "foreign service" in s 23AG of the 1936 Act. 90 It is unnecessary at this stage to explore, in great detail, the duty cycles of the individual pilots making up the representative sample, all of whom were residents of Australia. 92 Service in a foreign country in the capacity of an employee is not synonymous with service outside Australia in the capacity of an employee. Section 23AG is directed at, relevantly, exempting from tax in Australia, salaries derived in a foreign country in which those salaries are taxed. It is not directed at exempting from tax in Australia salaries derived in Australia, in Australian airspace, in international airspace, in the airspace of other countries of the world or in other countries to which and from which their employer directs them to fly aircraft. The applicant's representative sample of pilots fall into the latter category, not the former. 93 Section 23AG exempts salaries from tax in Australia where they are derived by persons engaged in service in a particular foreign country and the particular foreign country is the base from which they derive those salaries. The section was not directed at exempting earnings of international airline aircrew based in Australia from tax. 94 It is fallacious to say that a person who is a resident of Australia, whose home is in Australia, whose Home Base or Preferred Port is in Australia and whose duty cycles begin and end in Australia is engaged in service in a foreign country in the capacity of an employee within the meaning of s 23AG of the 1936 Act. The section is concerned with persons who are "actually on the job" in the particular overseas country in which their foreign earnings are derived. The Explanatory Memorandum to the Bill that became the Tax Laws Amendment (2005 Measures No. 5) Act 2005 (Cth) (Act No. 162 of 2005) made it clear that s 23AG(6A) and (6B) were directed at preserving continuity in respect of a period of engagement in foreign service where the relevant employee took "time away" from his or her foreign service or "short breaks" from his or her foreign service or "absences", none of which terms sit comfortably with the situation of aircrew who derive their salaries from their service in the cockpits of aircraft and on the ground in numerous countries, including Australia and in international airspace as well. 95 I am unable to conclude that when a member of aircrew employed by the applicant and assigned by it to operate Cathay Pacific aircraft flying into or out of that member's Home Base or Preferred Port in Australia, he or she is engaged in service in a foreign country or is taking "time away" from foreign service or a "short break" from foreign service or an "absence". When in Australian airspace or landing at or taking off from an Australian Airport, no question of an engagement in service in a foreign country arises nor does any question of taking a break from such an engagement. 96 Having said that, I should make it clear that engagement in service in a foreign country is not limited to days on which work is undertaken. It includes all days during a period in which work is undertaken on working days for the relevant employee. 97 Furthermore, absences, which may bring about discontinuity in a period of engagement in foreign service are not limited to absences where the relevant employee departs from the foreign country (cf s 23AG and s 23AF in this regard). 98 An absence from work is what breaks a period of foreign service. Taking what is colloquially referred to as a "sickie", which is not occasioned by a genuine illness, would bring a period of engagement in service in a foreign country to an end. Whether it would take a person outside the reach of s 23AG(1) of the 1936 Act or not, would depend upon the effect of the relevant absence under the "one sixth rule" for which s 23AG(6) makes provision. 99 Activities undertaken in a period set aside for recreation and leisure eg a typical weekend for a Monday to Friday worker could take the form of a departure from the relevant foreign country in which foreign earnings are derived without breaking the continuity in the period of engagement in foreign service. For example, if an Australian resident was working in East Timor and he or she chose to fly to Darwin after work on a Friday night, returning on the succeeding Sunday, the continuity of the person's engagement in foreign service would not be broken. 100 If, contrary to my opinion, the representative sample of pilots, or some of them, were engaged in service in a foreign country in the capacity of an employee in the tax year 1 April 2006 to 31 March 2007, one could not determine whether, for the first quarter of the tax year, their respective salaries were exempt from tax without having an understanding of their several employment histories in the period 1 January to 31 March 2006. The applicant's obligation under s 12-35 of Schedule 1 to the Administration Act to withhold amounts from their respective salaries could only be avoided for the period from 1 April to 30 June 2006 if, under s 12-1(1) of Schedule 1 to the Administration Act, there was no obligation to withhold amounts under s 12-35 in respect of the payment of their monthly salaries at the end of April, May and June. 101 If, in the tax year 1 April 2006 to 31 March 2007, there were periods during which the salaries of the representative sample of pilots or some of them were exempt from tax in accordance with s 23AG of the 1936 Act, but such salaries were not exempt from tax for the whole of the year, it would seem to me that benefits could only come within the definition of "fringe benefit" in s 136(1) of the FBT Act if the benefits were provided in respect of a period or periods of employment when the salaries paid were not exempt from tax in accordance with s 23AG of the 1936 Act. 102 In my opinion the first part of the question tendered for determination by the Court and referred to at [26] above should be answered in the negative. In these circumstances, I have not attempted to address any issues going to partial exemption. 103 Having reached the conclusion which I have in relation to the answer to the question as presently formulated I propose to stand the matter over to allow the parties to bring in short minutes to give effect to the Court's reasons for judgment. If less time is required to allow this task to be completed than that for which my order will allow, I would invite the parties to approach my associate with a view to bringing in short minutes at an earlier point in time to enable the matter to be disposed of on a final basis. I certify that the preceding one hundred and three (103) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

exemption from tax of foreign earnings derived by residents of australia engaged in service in a foreign country whether australian based aircrew flying aircraft for an international airline are engaged in foreign service within the meaning of s. 23ag of the income tax assessment act 1936 consequential implications for the employer under the fringe benefits tax assessment act 1986 taxation

She commenced these proceedings against the publisher of The Daily Telegraph newspaper, Nationwide News Pty Limited and its associated company, News Digital Media Pty Limited. News Digital publishes material on the internet including extracts from the Daily Telegraph . On 3 December 2008, The Daily Telegraph also published an editorial headed "Sydney's Own Horror House". The text of the editorial appears to have been republished on the internet by News Digital on either 3 or 4 December. On the same day the Daily Telegraph published an article under the headline "Sex Slave Trade Revealed". The article had a subheading, "Brothel Madam Walks Scott Free". On 4 December 2008, News Digital published an internet article headed "No Way Out for Women in Debt and Total Despair". A web blog or section on the News Digital website allowed readers to post comments on this article. On and after 4 December 2008 a number of comments were posted on this part of the website. Ms Ra claimed that each of these publications contravened s 53B of the Trade Practices Act 1974 (Cth). She alleged that one or other of the publishers had engaged in conduct that was liable to mislead persons seeking such employment as to the nature, terms or conditions of that employment by making a variety of misleading representations in each of the five publications in relation to employment that was or may be offered by her. Similarly, Ms Ra complained that each of the publications complained of defamed her. She seeks to recover damages for the alleged contraventions of s 53B and for the alleged defamatory publications. The publishers have filed defences denying the contraventions and pleading defences of truth, contextual truth, honest opinion and fair report under the Defamation Act 2005 (NSW). Ms Ra opposes that order, but she argues that, if a jury is to be summoned, it should be a jury of 12, under s 20(2) of the Jury Act 1977 (NSW), rather than of 4 as provided under s 20(1) of that Act. The provisions of the Jury Act are applied by force of s 41 of the Federal Court Act . (2) What, if any, role ss 21 and 22 of the Defamation Act play in the exercise of the discretion to order a jury under the Federal Court Act . (3) Whether the power to order a jury ought be exercised. (4) If a jury is ordered, whether the circumstances justify making an order under s 20(2) of the Jury Act for a jury of 12. However, the gravamen of the meanings complained of in most of them can be gleaned from the article headed " Sex Slave Trade Revealed ". Ms Ra alleges that, in its natural and ordinary meaning, this conveyed a number of imputations that were defamatory of her. She also alleged that most, but not all of these imputations were representations conveyed in contravention of s 53B about the employment she offered in her brothel. The common representations and imputations complained of were that Ms Ra: In addition, Ms Ra relied on two further defamatory imputations that she alleged were conveyed by these publications, namely that: Ms Ra has given particulars of damage for all her causes of action that the employment which she offered was for the purposes of prostitution and that the damage she had suffered was to her reputation generally and as an employer has been injured by the publications. s 41(1)(d)), extend to and apply in civil proceedings in a trial by jury in this Court sitting in that State. Thus, if an order is made for trial by jury, the considerations relevant to whether a jury of 4 or 12 should be ordered under s 20 of the Jury Act will be applicable here. However, one area in which these Acts are not uniform is the use of trial by jury. The Defamation Act 2005 (NSW) provides that either party to a defamation action may elect for a trial by jury of all issues other than, relevantly, damages. The same right exists under the Victorian, Queensland, Western Australian and Tasmanian Acts, but there is no such provision in the legislation in South Australia, the Australian Capital Territory or the Northern Territory. Both parties have proceeded, correctly in my opinion, on the basis that ss 39 and 40 of the Federal Court Act requires the publishers to establish a basis for the exercise of this Court's discretion to order a departure from the usual mode of trial by judge alone. However, in exercising that discretion, it is appropriate to have regard to the provisions of the relevant State or Territory Defamation Act (and in particular, ss 21 and 22 of the New South Wales Act or their analogues, if any) where, one party has elected to seek a trial by jury as would have been its right were the matter wholly within State jurisdiction. Of course, here, the matter is in Federal jurisdiction, there being a claim under s 53B of the Trade Practices Act and, an application under s 40 of the Federal Court Act . In addition, the publishers have given notice under s 78B of the Judiciary Act 1903 (Cth) in relation to the inconsistency between the State and Federal Acts as to whether a jury should be the tribunal of fact for all issues but damages in the part of the controversy that arises under the Defamation Act . She anticipated that such an election would have been made by the publishers under s 21(1) of the Defamation Act had she commenced proceedings in either the State Supreme Court or the District Court. She argued that she had an expectation that this Court would proceed in accordance with its usual mode of trial mandated by s 39 of the Federal Court Act . The publishers argued that a defamation action, quintessentially, ought be tried by jury and that all the issues of liability (including under s 53B) in this matter were essentially concerned with Ms Ra's reputation. The importance of the law of defamation in balancing the right of an individual to the protection of his or her reputation and the right commonly described as freedom of speech plays a crucial role in our democratic system of government. That balance is affected at common law by the operation of the defence of qualified privilege as elaborated in Lange v Australian Broadcasting Corporation [1997] HCA 25 ; (1997) 189 CLR 520 , see at 565-576 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ. In times less free than those in which we now live, the charge of criminal libel was often employed as a means of censoring freedom of expression and opinion. Until the passage of Fox's Libel Act in 1792 (32 Geo 3 c 60), the judges of England had asserted that it was their province to determine whether or not a matter was defamatory: R v Shipley ( The Dean of St Asaph's Case ) (1784) 4 Doug 73 at 164-165 per Lord Mansfield CJ, as explained by Lord Blackburn in The Capital and Counties Bank v Henty (1882) 7 App Cas 741 at 772-776. But juries constantly defied them by refusing to convict on a direction by a judge that the matter complained of was libellous. Fox's Libel Act squarely placed the decision of whether or not the matter complained of was a libel in the hands of the jury, and there it has remained in England to the present time, as it has until recent times in many of the Australian States. Lord Denning graphically explained, in his inimitable style, some of the history that informed the passage of Fox's Libel Act in Landmarks in The Law (1984) at 284-294. One of the great virtues of having a jury try the substantial factual issues in a defamation action is that they represent the very audience to which the defamatory publication was addressed. In assessing whether or not a publication, first, is defamatory in the sense complained of and, secondly, has been defended under defences such as truth, honest opinion or fair report, a jury of ordinary reasonable people is able to evaluate the competing factual issues bringing to bear the moral and social standards that they share with the community at large. And, they are better placed than judicial officers to assess how ordinary reasonable people understand mass media publications. That simple question embraces two elements of the cause of action: the meaning of the words used (the imputation) and the defamatory character of the imputation. Whether the alleged libel is established depends upon the understanding of the hypothetical referees who are taken to have a uniform view of the meaning of the language used, and upon the standards, moral or social, by which they evaluate the imputation they understand to have been made. They are taken to share a moral or social standard by which to judge the defamatory character of that imputation ( Byrne v. Deane [1937] 1 KB 818 , at p. 833, being a standard common to society generally ( Miller v. David (1874) LR 9 CP 118 ; Myroft v. Sleight (1921) 90 LJKB 883 ; Tolley v. J.S. Fry & Sons Ltd. [1930] 1 KB 467, at p. 479). Rather, the test identifies the attributes of persons who share the standards of the general community and will apply them: Chesterton 254 ALR at 616 [37]-[38]. And, the moral or ethical standards held by the general community may be relevant to imputations which reflect upon a person's business or professional reputation: Chesterton 254 ALR at 618 [46]. The standard to be applied must be one common to society rather than one which reflects an attitude of a section of it: Chesterton 254 ALR at 619 [48]. Before the recent uniformity in defamation legislation, a national publication of an article that defamed a person might have resulted in up to eight different governing laws being applicable: John Pfeiffer 203 CLR at 539 [81]. But now s 11 of the uniform Defamation Acts have provided a solution to choice of law issues in defamation actions. The applicable substantive law is now the law of the jurisdiction with which the harm occasioned by the publication has its closest connection: see s 11(2). The Parliament has evinced a general policy in s 39 of the Federal Court Act of trial in this Court by judge alone. That policy informs but does not overwhelm the exercise of the discretion to order a trial by jury. In McDermott v Collien [1953] HCA 44 ; (1953) 87 CLR 154 at 157 Fullagar J considered whether to exercise a discretion to order a trial by jury under provisions similar to ss 39 and 40 of the Federal Court Act . He observed that, by providing that trial by a justice alone was the usual mode of trial then available in the High Court, unless that Court ordered otherwise, the relevant legislation had settled on a general policy for such a mode of trial. Fullagar J observed that one could hardly expect much guidance from decided cases in considering whether a case warranted departure from that usual mode of trial. In Construction Industry Long Service Leave Board v Odco Pty Ltd (No 2) (1988) ATPR p40-887 at 49,604, Jenkinson J observed that this Court would be likely to grant an application for a trial by a jury in a matter where claims under the Trade Practices Act were "tenuous" and the real subject matter was a defamation action. He distinguished an earlier decision of Northrop J in Insurance Commissioner v Australian Associated Motor Insurers Limited (No 2) (1982) 49 ALR 714 who refused to order a trial by jury of a claim by a comprehensive insurer of motor vehicles for damages arising from a contravention of s 52 by radio and television advertisements. Neither of those proceedings appears to have involved an individual's right to his or her personal reputation or allegations of the kind involved in the publications complained of here. This factor was considered to be of significance by Tamberlin J in Stalyce Holdings (Aust) Pty Ltd v Cetec Pty Ltd (2002) ATPR p41-866 at 44,852 [15]. I am of opinion that where the real substance of a matter in this Court's jurisdiction is a claim for damage to reputation, ss 39 and 40 of the Federal Court Act permit the Court to have due regard to the appropriate procedural law of the State or Territory that is the lex loci delicti and the historical mode of trial of such actions in order to decide how best the controversy between the parties should be resolved at trial. Ordinarily, where any party to a defamation action in New South Wales so elects, there will be a trial of that action by a jury. Of course, there will be cases where it may be more appropriate to try a defamation action without a jury, as s 21 of the Defamation Act itself provides. And, in some States and Territories, their laws provide that the trial of a defamation action must be by judge alone. This matter raises issues that very much involve giving effect to moral and social values of the community. I am satisfied that a trial by a jury would be a better mode of trial than by judge alone to assess the various claims and defences in these defamation proceedings. The jury will be better able to make such an assessment than a judge and to do so in a way likely to arrive at a reflection of the attitude of society generally: Lamb 150 CLR at 506. And, in this case the defamatory meanings alleged to have been conveyed to the ordinary reasonable reader are largely congruent with the representations alleged to have been made by the same publications in contravention of s 53B. In determining whether representations have been conveyed to the public (such as by a mass media or internet publication) the Court usually must identify the effect of the publication, including what representations it made, on ordinary or reasonable members of the public: Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at 85-86 [101] - [103] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ. Thus, here, a jury will be able to determine whether the representations alleged were made at the same time as deciding on whether the same defamatory meanings were conveyed. Ms Ra asserted that the length of the trial would increase from one to two weeks to four to five weeks if there were a jury. I reject that submission. In my opinion it is unlikely that the length of the trial will be any greater with a jury. Essentially, the issues for trial will revolve around the oral evidence of witnesses concerning what did or did not happen in Ms Ra's business so far as that relates to the issues in the matters complained of. Ms Ra also relied on a suggestion that the police or prosecution brief, for the purposes of the criminal proceedings, consisted of about 40 lever arch folders of documents. There was no evidence before me that any substantial amount of this material is likely to be adduced in evidence. The allegations that Ms Ra mistreated young women in her employ and exploited them by imposing significant debts on them which were not otherwise merited are the issues at the heart of this matter. It is unlikely that young women providing sexual services in a brothel would be engaged in keeping significant books of account, involving the necessity for prolonged examination of those documents. Nor would Ms Ra's records of their wages or debts be likely to be complex. Such documents as may be relevant to those issues are highly likely to be understood by a jury. If those documents were kept in a foreign language the jury would be likely to be concerned only with their translation. Again, these matters will be within relatively confined bounds and simple to understand. Ms Ra also argued that s 40 of the Federal Court Act was wide enough to permit the jury to be allowed to assess damages. The Parliament of New South Wales evinced a public policy in its legislative choice in s 22(3) of the Defamation Act to withhold that matter from determination by the jury. However wise or unwise that policy choice may have been, I must have regard to it and its concurrence with the ordinary mode for assessing damages in this Court as well. I am not persuaded that it is in the interests of justice to order that any issue of damage be assessed by the jury. I am of opinion that the essential balances that will need to be struck in respect of the critical issues in this matter (other than damages) are quintessentially better determined by a jury. This assessment will best be done by the community referees to whom French CJ, Gummow, Kiefel and Bell JJ referred in Chesterton 254 ALR at 616 [37]-[38], 618 [46], 619 [48] as did Brennan J in Lamb 150 CLR at 506. Accordingly, I am satisfied that the ends of justice render it expedient to direct a trial by jury of all issues in the proceedings, other than damages and any other issue which, pursuant to the Defamation Act would not be left to the jury. Thus, the question of the capacity of the matters complained of to convey any of the defamatory meanings alleged (as opposed to whether they in fact were conveyed) would remain a question of law to be decided by a judge. The part of this controversy that arises under s 53B of the Trade Practices Act should also be decided by a jury. This is because it is inextricably related to the meanings conveyed to ordinary reasonable readers by the matters complained of and whether Ms Ra has been injured in her reputation as an employer for the purposes of s 53B. However, if the jury returned a verdict in her favour on the issues of liability, the amount of compensation to be awarded pursuant to s 82 of that Act should be assessed by a judge. Some discussion occurred during argument as to whether the trial with the jury would be separated, in time, from the trial of the damages issues. In my opinion that course should not occur. First, evidence as to the effect of the publication on the reputation of Ms Ra is likely to be relevant to both liability and damages. It is desirable that all the evidence be tendered during the course of the one trial. Secondly, it is likely that there will be some examination of Ms Ra's conduct of her business on the issue of liability. There is no claim for special damages. Thirdly, the jury will be directed and, so, well aware, that they are not assessing damages. She contended in the course of submissions by her counsel, as an alternative, that if I were to order a jury trial, any such prejudice would be more likely to be diluted in a jury comprised of 12 rather than 4 persons. She contended that a jury of 12 is more likely to reflect appropriately varying shades of community thought. The publishers argued that owning and running a brothel was a lawful occupation. They asserted that a person in Ms Ra's position could not suggest community prejudice of a kind that would warrant an order for a jury of 12. The ordinary mode of trial by jury in New South Wales is that there be a jury of 4: Jury Act s 20(1). However, the discretion to order a jury of 12 is open to be exercised where it is shown that the case is more fitly tried by a larger jury. He held that the matter was one of public importance and public interest so as to make it appropriate to have a larger jury. His Honour found that the plaintiff held a high position and reputation in the Australian community and that what he did was of great public interest and concern to a large number of people. That decision was upheld by the Court of Appeal of the Supreme Court of New South Wales: O'Shaughnessy v Mirror Newspapers Limited [1969] 1 NSWR 422 per Wallace A-CJ, Walsh and Holmes JJA. On the other hand, Hunt J refused the Prime Minister of Australia a jury of 12 in respect of the publication in a country newspaper of an allegedly defamatory letter. That occurred more than a year before he became Prime Minister in Hawke v Tamworth Newspaper Co Ltd [1983] 1 NSWLR 699 at 706E-707B. Where a person is a contentious figure or one with a prominent public role, his or her position as a party to an action tried before a jury may cause concern about its potential effect on a jury of 4 persons. He or she is more likely to be given a dispassionate and fair trial by a jury of 12. This is because a larger jury is more likely to dilute the influence of any single juror whose passions or antipathies are aroused for or against one of the parties. Balanced against that concern, must be the Court's recognition that jurors obey the directions of trial judges to put aside their own personal prejudices and feelings. They allege criminal and other serious wrongdoing by Ms Ra. And she has the highly contentious occupation of running a brothel. I am comfortably satisfied that the nature of the publications complained of here and the fact that, on this application at least, no challenge has been made to their capacity to convey the imputations alleged raise matters which could well excite prejudice in some members of the community, particularly those with strong moral views against Ms Ra. Such moral views might be held by a member of the jury. I am of opinion that an expanded jury of 12 is more likely to reflect and balance the range of community values, morality and thought so as to ensure a fair trial. Accordingly, I will grant Ms Ra's application that the jury be a jury of 12. WHAT QUESTIONS WILL BE ASKED OF THE JURY? This was much more prolix than necessary. As Ms Ra argued that such a large number of questions, amounting, on her calculation, to over 300 for the jury to answer would make the trial unduly long. I am not satisfied that it is at all likely that the jury will be directed to answer so many questions. The issue of whether they should be asked any questions, and, if so, how many will be a matter to be determined at the trial. In some cases it is convenient to take the jury's answers to questions whether particular imputations are conveyed and whether they are defamatory of the plaintiff as well as to interrogate them about individual aspects of the factual ingredients of each defence. In other cases, it is convenient to take a general verdict. It will be a matter for assessment at the trial, having regard to the way in which the issues at the trial are joined, whether the jury should be directed to answer questions and, if so, on what issues, or simply be asked to bring in their verdicts. Thus, the jury will decide whether the publishers published each of the five alleged defamatory matters and made the representations alleged to contravene s 53B of the Trade Practices Act pleaded in the amended statement of claim about Ms Ra. If so, they will also determine whether any defence raised by the publishers has been established. That will leave for the trial judge the question whether Ms Ra is entitled to any damages and any other questions under the Defamation Act that ought be tried by a judge alone. In my opinion the costs of the motion for a jury should be the publishers' costs in the proceedings. I will direct the parties to bring in short minutes of order to give effect to these reasons and to prepare the matter for trial. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

defamation jury trial ss 39 and 40 federal court of australia act 1976 (cth) usual mode of trial in federal court by judge alone unless the court otherwise orders proceeding for damages for injury to reputation by reason of publication of defamatory matter together with representations in contravention of s 53b of trade practices act 1974 (cth) s 21 of defamation act 2005 (nsw) giving party right to elect for trial by jury unless court otherwise orders whether court should order that trial be heard by a jury factors that weigh in exercise of discretion matters where resolution will involve consideration of the moral and ethical values of community where substance of proceeding is claim for damages to reputation, court should have regard to the procedural law of the lex loci delicti and historical mode of trial by jury of such actions issues in defamation actions quintessentially more appropriate for resolution by a jury defamation jury trial ss 39 and 40 federal court of australia act 1976 (cth) whether jury should consider trade practices act allegations where representations identical or similar to defamatory imputations defamation jury trial s 40 federal court of australia act 1976 (cth) whether court should order damages to be decided by the jury when s 22(3) of defamation act 2005 (nsw) requires hearing by judge procedural law of the lex loci delicti indicates policy preference to withhold consideration of damages from jury any damages for defamation and under s 82 should be decided by judge size of jury 4 or 12 members s 20 jury act 1977 where plaintiff or applicant is contentious or prominent person and matter complained of relates to allegations of criminal conduct and contentious moral issues need for a more representative spread of views of the community in larger jury procedure procedure procedure jury

I reserved the costs of the motion pending receipt of written submissions as to whether costs can or should be ordered in favour of the applicant, having regard to the provisions of s 824 of the Workplace Relations Act 1996 (Cth) ('WRA'). 2 On 31 May 2006, the applicant and the respondents filed written submissions as to costs. Both parties have consented to me disposing of the question of costs without hearing further oral argument. 3 It is common ground that the Court's jurisdiction in this proceeding arises because there are claims for final relief under the WRA. It follows that all of the claims in the proceeding are matters of federal jurisdiction. It also follows that the matter of costs is governed by s 824 of the WRA, both as to the statutory claim under the WRA and as to all claims in the Court's associated jurisdiction: Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36 FCR 439. It appears that subs (2) of s 824 was based upon the provision now found in s 666(1) of the WRA. Pre-reform subsection 347(1) provides that a party to proceedings under the WR Act shall not be ordered to pay the costs of another party unless the first party instituted the proceedings vexatiously or without reasonable cause. Proposed subsection 347(1A) would serve as an exception to subsection 347(1). It would enable a court hearing proceedings in a matter arising under the WR Act to order one party to pay the costs of another party where that first party has, by unreasonable act [or] omission, caused the second party to incur otherwise unnecessary costs. A costs order under this subsection could be made irrespective of the outcome of the proceedings. 8 The respondents also contended that s 824(2) does not apply to the costs of a particular aspect of the proceedings, such as an unsuccessful motion to discharge or stay an earlier interlocutory order. They submitted that subs (2) is only concerned with acts or omissions in the practical sense of things done or omitted to be done which do not accord with reasonable notions of the conduct of proceedings, such as failing to turn up at a hearing, failing to meet deadlines laid down in court directions and not giving timely notice. This submission was said to be supported by an illustrative example given in the Explanatory Memorandum. 9 In my opinion, these submissions do not accord with the authorities. 10 In Shackley v Australian Croatian Club Ltd (1996) 141 ALR 736 (' Shackley' ), a decision of the Full Bench of the Industrial Relations Court of Australia, Wilcox CJ held that the expression 'proceeding in a matter' in s 347(1) of the Industrial Relations Act 1988 (Cth) included a subsidiary application made in the course of the principal action: at 744. In the course of his reasons for decision, Wilcox CJ disagreed with the view expressed by Gray J in Andrews v Uniting Church in Australia Frontier Services (t/a Old Timers) (1995) 60 IR 437 (' Andrews ') at 441-442 that interlocutory motions ought not to be regarded as proceedings for the purposes of s 347. Wilcox CJ preferred the view expressed by Northrop J in Viner (Minister of State for Industrial Relations) v Australian Building Construction Employees' & Builders Labourers' Federation (1981) 38 ALR 550 at 553 that 'proceeding' encompasses 'a step in the proceeding as well as the action itself'. Von Doussa J agreed with Wilcox CJ. The other member of the Full Bench, North J, did not express any view on the question whether the Court has power under s 347 to make orders for costs in interlocutory applications which are brought vexatiously or without reasonable cause: at 750. 11 In Commonwealth v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115 ; (2003) 129 FCR 271 (' CFMEU '), the Full Court (Black CJ, Tamberlin and Sundberg JJ) followed Shackley . The case concerned an interlocutory application by the Union for inspection of a document over which the Commonwealth claimed public interest immunity. The trial judge granted the application and ordered inspection, but the Commonwealth successfully appealed to the Full Court. The Commonwealth then sought an order that the Union pay the costs of the application and the appeal. 12 The Full Court regarded the interlocutory application for inspection as a proceeding in the principal matter, with the consequence that s 347(1) applied. Viewed in that way, the policy choice that s 347(1) reflects would be undermined since the so-called ordinary rule as to costs would often, perhaps nearly always, prevail in interlocutory matters. Only the trial of the principal action would be unassailably a proceeding in a matter arising under the Act. Such a result could not have been intended. 13 The respondents' construction of s 824(1) was founded upon Australasian Meat Industry Employees Union (WA) v Woolworths Ltd (2006) 149 IR 213 (' Woolworths' ). The case concerned the costs of a directions hearing at which the applicant advised the Court that it no longer wished to pursue its claim for interim relief to restrain the certification of an agreement under the WRA. The claim was not pursued because the agreement had in fact been certified after the institution of the proceedings but prior to the directions date, without the knowledge of the applicant. The respondent sought costs on the basis that the applicant had not mounted its interim application urgently and in accordance with the rules concerning the filing of affidavit evidence. 14 In the present case, the respondents relied on Nicholson J's statement at 214-215 [8] that the proviso to s 347(1) afforded no ground for making a costs order in respect of a step in the proceeding, as distinguished from the institution of the proceeding. However, it is not clear that the reference by Nicholson J to a 'step in the proceeding' was directed to the application for interim relief, rather than to particular procedural 'steps' in relation to that application. In my opinion, Woolworths does not support the respondents' contention that costs cannot be awarded under 824(1) in respect of an interlocutory notice of motion. 15 In Gray v Australian Liquor Hospitality and Miscellaneous Workers Union (unreported, Marshall J, 26 June 1998), Marshall J also expressed the view, in reliance upon Andrews , that the reference to 'proceeding' in s 347(1) of the WRA is a reference to the substantive proceeding and not to a motion brought within the matter for the discharge or variation of an earlier order. I have also noted the discussion of Shackley and Andrews in Marshall J's judgment in Konrad v Victoria Police (1998) 78 IR 54 at 56-57. Both decisions by Marshall J predate the Full Court's decision in CFMEU. In my opinion, even if the views expressed by Marshall J were capable of standing with Shackley , which I respectfully doubt, they have been overtaken by the later Full Court decision. The law which I must apply is that stated by the Full Court in CFMEU. However, I see no reason why s 824(2) should be given the narrow construction contended for by the respondents. As with s 824(1), the references in subs (2) to a 'proceeding' encompass a step in the proceeding, such as the institution and hearing of an interlocutory application. However, s 824(2) goes further than s 824(1). The proviso to s 824(1) applies if the entire proceeding, or a step in the proceeding, has been instituted vexatiously or without reasonable cause. Section 824(2) is not confined to costs associated with the institution of the proceedings or a step in the proceedings; it extends more broadly to costs incurred as a result of any unreasonable act or omission. On a plain and natural meaning of s 824(2), there is no reason why the reference to an unreasonable act or omission that has caused another party to incur costs in connection with the proceeding should not extend to unreasonable acts or omissions in connection with an interlocutory application. And, as the Explanatory Memorandum suggests, the power conferred by s 824(2) can be exercised irrespective of the outcome of the particular application in question, and of the proceedings as a whole. 17 The illustrative example given in the Explanatory Memorandum concerns costs incurred as a result of a party's non-compliance with Court directions. The example is consistent with the construction I have placed on s 842(2). But I do not accept that the illustrative example was intended to be exhaustive of the type of circumstances in which s 824(2) would apply. 18 In support of a narrow construction of s 824(2), the respondents referred me to several authorities that had considered the former provisions of s 170EHA, which effectively continued as s 170CS (now s 666 of the WRA): see Thomas v School of Mines Services Pty Ltd (unreported, Industrial Relations Court of Australia, Farrell JR, 5 August 1996); Turner v Composite Buyers Ltd (unreported, Industrial Relations Court of Australia, Millane JR, 28 January 1997) and Fenech v Perfect Health Medical Centres Pty Ltd (unreported, Industrial Relations Court of Australia, Ryan JR, 12 June 1998) (' Fenech' ). These cases do not support the contention that s 824(2) should be narrowly construed. In fact, in Fenech , Ryan JR referred to an earlier order made by Marshall J in the proceedings, to the effect that the respondent should pay costs pursuant to s 170EHA as a result of the dismissal of its application for an interlocutory injunction. 19 For the foregoing reasons, I consider that s 824(1) and (2) are capable of applying to the respondents' interlocutory motion seeking the discharge or stay of my earlier orders. Thus, the costs order sought by the applicant is only available if the applicant satisfies me that the notice of motion for discharge or variation was instituted vexatiously or without reasonable cause, or that the pursuit of that application by the respondents involved unreasonable acts or omissions that caused the applicant to incur costs. 20 The applicant contended that the discharge application was bound to fail. It was submitted that the respondents had no prospects of establishing the exceptional circumstances required by the authorities and that, accordingly, the notice of motion was instituted without reasonable cause. The applicant also pointed out that the respondents had placed heavy but misguided reliance upon the decisions in Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd [2006] VSC 170 and Nominal Defendant v Manning [2000] NSWCA 80 ; (2000) 50 NSWLR 139, and did not address themselves to the relevant authorities, which included Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39 ; (1981) 148 CLR 170 at 178, Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 All ER 745 at 751 and Dudzinski v Centrelink [2003] FCA 308 at [11] . 21 The respondents submitted that the notice of motion was not unreasonable. They contended that they considered, bona fide, that the Court had a discretion to reconsider its earlier order to the extent that it was based upon a less than complete appreciation of the facts concerning the breakdown in the relationship between the applicant and her immediate superiors. Notwithstanding that they consciously determined not to refer to certain facts on the earlier injunction application, they considered that, in their own interests and in accordance with their duty to the Court, they should place those facts before the Court. 22 My reasons for judgment of 26 May 2006 explain why I rejected the application to discharge the interlocutory injunction. In my opinion, the application had very limited prospects of success in the absence of evidence establishing new facts or changed circumstances. There is, however, a distinction between an application that proves unsuccessful and an application or argument that is so misconceived that it can be characterised as unreasonable or vexatious. An order for costs might be made under s 824 in the latter case but not the former: see Standish v University of Tasmania (1989) 28 IR 129 at 138-139 per Lockhart J; and Foxcroft v Ink Group Pty Ltd (1994) 57 IR 65 at 69. This case comes very close to the line, but in the end I am not persuaded that the motion was vexatious or unreasonable within the meaning of s 842(1), or that the pursuit of the motion involved unreasonable acts or omissions by the respondents that inflicted costs on the applicant in such a way as to attract s 824(2). 23 Accordingly, while I have concluded that there is power to award costs in favour of the applicant in relation to the unsuccessful motion brought by the respondents, I am not satisfied that this is an appropriate case for the exercise of that power. The application for costs is refused. In lieu of my previous order that costs be reserved, I will order that there be no order in respect of the costs of the notice of motion dated 25 May 2006. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young.

costs of notice of motion meaning of 'proceeding' under s 824 of workplace relations act 1996 (cth) whether notice of motion instituted vexatiously or without reasonable cause whether notice of motion an unreasonable act or omission application for costs refused workplace relations

2 The facts relating to the circumstances by which the appellant claims a well-founded fear of persecution for a Convention reason are recited at AB133 and 134. For present purposes, I propose to adopt some of the observations in relation to the background facts which are succinctly put, consistent with the findings at AB133 and 134, by Federal Magistrate Emmett, and those observations are contained at paragraphs 2 to 9 of her Honour's reasons (AB18 and 19). The applicant was born on 21 October 1973, and claims to be from the People's Republic of China, ( "the PRC" ), and of Christian faith. The applicant arrived in Australia on 19 December 2005, having legally departed from Pudong on a passport issued in his own name, and a subclass 456 business visa issued on 8 December 2005. On 1 February 2006, the applicant lodged an application for a protection (class XA) visa with the Department. In his protection visa application, the applicant claimed that he feared persecution by PRC authorities due to his involvement in Christian underground church activities in Sanming City. The applicant claimed that he worked in his father-in-law's factory from March 2000 and that in 2002, his father-in-law had a dispute about arrears in respect of an order for spring products and the quality of those products. The applicant claimed that he and his father-in-law were prevented from entering the plant with which they had the dispute, and that, in January 2003, they were arrested by the Public Security Bureau ( "the PSB" ) and detained for a month. The applicant claimed that, whilst in detention, he and his father-in-law were beaten by police until they signed a confession. The applicant stated that, during the detention, he met a Christian who was a key member in the underground Christian church in the Sanming area. The applicant stated that, after his release in March 2003, he contacted this person and began to participate in underground church meetings and activities, such as distribution of religious promotion materials. The applicant stated that, in around August 2005, the religious activities at the workshop of his father-in-law's factory came to the attention of the PSB and the applicant was threatened by members of the PSB in respect of his religious activities. The applicant stated that, in mid-December 2005, the friend whom he had met in detention and who had introduced him to the underground church, was arrested with two of his assistants, and that, shortly after this arrest, the PSB discovered the applicant's role in underground church activities. For those reasons, the applicant asserted that he would be subject to persecution because of his Christian beliefs and activities in the PRC, were he to return to the PRC. On 8 March 2006, a delegate of the first respondent ( "the Delegate" ) refused the applicant's application for a protection visa on the basis that the applicant is not a person to whom Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol ( "the Convention" ). There is, in the Appeal Book before me, a transcript of the hearing and some aspects of the transcript require some attention. 5 The Tribunal Member at AB34, at about point 2, recognised that the appellant wished the Tribunal to take into consideration, as part of the application, a letter from an elder in the Ashfield Presbyterian Church. At AB34.5, the Tribunal Member made it clear that in considering the review, the Tribunal Member would take a fresh look at all of the information and that the Tribunal Member would consider the information in the Department's file which included the application for a protection visa and a copy of the decision. 6 In addition, of course, the appellant prepared a statement in the form of a statutory declaration which is contained at AB87, 88 and 89. At AB35.7, the Tribunal Member explained the notion of the definition of a 'refugee' and the importance of the Tribunal being satisfied that the appellant is a person who holds a well-founded fear of persecution for reasons of race, religion, nationality, membership of a particular social group or by reason of his political opinions, and is unwilling to avail himself of the protection of his country of origin. 7 At AB36.6, the Tribunal asked the appellant whether there was anything about the explanatory definition that the appellant might like the Tribunal Member to further explain and the appellant accepted that there was nothing further to explain. 8 At AB36.10, the Tribunal Member asked the appellant if there was anything that he did not understand or that he was not clear about, and that, if so, the appellant ought to tell the Tribunal Member and the Tribunal Member would try to make the matter clear. 9 At AB37.2, the Tribunal Member emphasised that because the Tribunal Member was taking a fresh look at the appellant's application it was important that the appellant give a detailed, accurate and truthful account of the claims and at AB37.3, the Tribunal Member made it clear that because the hearing was very important the appellant would need to explain to the Tribunal Member the claims in some detail. 10 At AB38, the Tribunal Member asked the appellant questions about when he finished school, what the appellant did after school, his farming work after school, his movement to Sanming to work in his father-in-law's factory, the time period during which he worked and aspects of the role he was to perform, the nature of the enterprise, the number of employees, the duties to be discharged and such matters. 11 The examination of the appellant is contained at AB41 and AB42. At AB43.5, the Tribunal Member asked the appellant questions going to the basis for a fear of returning to the People's Republic of China and the appellant discusses with the Tribunal Member his Christian beliefs and related matters. During the course of the examination, the appellant described aspects of the contended arrest by the PSB, the signing of a confession, the meeting of a Mr Chen, the appellant's conversion from Buddhism to Christianity, the worship practices of the Christian belief system, some of the appellant's knowledge of the central tenets of the Christian faith, the appellant's knowledge of the Bible and aspects of the appellant's baptism and embracing of the Christian value system. 12 These matters are discussed or canvassed in the transcript of the hearing reflected at AB46, 47, 48 and 49. At AB50, the Tribunal Member asks the appellant questions about the ease or otherwise of worship of the Christian faith within the People's Republic of China and the circumstances which might either encourage or constrain or deter such practices. These matters are dealt with at AB52 and 53. 13 At AB54, the Tribunal Member returned to the question of the basis for a well-founded fear or persecution for a Convention reason and asked further questions of the appellant as to why he would be worried about returning to the People's Republic of China. The appellant contended that he would be arrested should he return. At AB53, the appellant seemed to recognise that the individuals who would be most disposed to difficulty in the practice of the Christian faith would be leaders of the church and the appellant is not a leader of the church. 14 At AB48 and 49, the Tribunal Member discusses with the appellant, in questioning, certain aspects of the Christian faith and, in particular, the appellant seemed unable to identify aspects of the resurrection which is, of course, the foundation of the Christian faith and the appellant was not able to explain in any detail aspects of the sacrament of baptism which reflects the rebirth in the Christian light. These matters may perhaps be a function of language difficulties but nevertheless in simple terms the central notions do not seem to be reflected in the observations by the appellant. 15 At AB57.5, the transcript reflects that the Member asked the appellant whether there was anything else that he would like to put before the Tribunal before the end of the hearing to support his claims and the appellant responded that there was nothing he wished to add. At AB57, the Tribunal Member then examined aspects of the letter from the elder of the Ashfield Presbyterian Church and questions were asked of the appellant about when he joined that church, his worship practices and other related matters. 16 I mention these matters in some detail because the appellant has appeared before this court unrepresented but with the assistance of an interpreter and one of the contentions advanced this morning is that the Tribunal Member was biased against the appellant on the footing that the Tribunal Member was not 'a businessman' and 'not familiar with business practices in China, did not accept the contentions as to the Christian faith' of the appellant and 'ignored the fact that the appellant was an active member of the Christian faith'. Frankly speaking, it is very and very difficult for me to believe that the Presiding Member has genuinely intended to consider my claims, properly and fairly. To my understanding, what the Presiding Member's job is actually seeking some of reasons or picking up some of inconsistencies solely for the purpose to deny my right for seeking a protection (visa) in Australia. There is no foundation whatsoever in any of the material, and especially in the transcript record of the hearing, to support that contention. The findings of the Tribunal, in fact, are recorded at AB139 and I propose to quote these findings. They are these. The applicant claimed to have worked as an assistant to his father-in-law for almost five years yet he had little or no knowledge of the products made by the factory and could not describe the nature of his work during that period of time. He claimed that his wife and children lived with him at the factory, but could not describe their living arrangements or accommodation. Firstly I do not accept that he worked in a factory in Sanming for the reasons set out above. Further the applicant was not able to describe the circumstances of his detention in any detail and claimed that he did not receive any documents in relation to his detention or a fine. If the applicant had been detained as claimed I consider that he would have received some form of documentation relating to either his detention, release or the imposition of a fine. Further when questioned about the practices and beliefs of the underground church to which he claimed he belonged he was not able to demonstrate knowledge of Christian beliefs and practices other than at a very superficial level. His reasons for becoming a Christian were not clear. He did not know the essential differences between the official and unofficial churches in China and was vague when asked questions about the particular church to which he claimed to belong. The level of his knowledge was not consistent with a person who has been a committed Christian and allegedly been heavily involved in activities with an underground Christian Church in China so as to bring him to the attention of authorities. I do not accept that he organised gatherings in his father-in-law's business premises or that he distributed pamphlets. I do not accept that he spread the Gospels or encouraged people to become Christians. I do not accept that officers of the PSB or any Chinese authorities came to his home or the business of his father-in-law and sought his whereabouts. The applicant came to Australia using a temporary business visa and claimed that he had no knowledge of how that visa was arranged. Further I consider that the superficial level of knowledge of Christian practice and the belief demonstrated by the applicant is consistent with a person who has attended church services and Bible classes for a relatively short period of time. The judgment of Federal Magistrates Court ("Magistrates Court") in relation to above-mentioned matter is absolutely incorrect. The other grounds are reflected in terms of an alleged failure to act consistently with the provisions of the Migration Act 1958 (Cth). 24 In relation to the general question of unfairness, I have canvassed the content of the transcript not only in terms of the specific issues addressed by the Tribunal Member but also in terms of the Tribunal Member's explanation of the notion of a well-founded fear of persecution, the explanation of the role to be discharged by the Tribunal in considering the matters afresh, and the invitation by the Tribunal to the appellant to place any other matter before it, or to add any other observations orally that would assist or support the appellant's contentions. 25 Having regard to all of these matters, there is no basis for concluding that there has been any denial of natural justice or any unfairness in the conduct of the review. The Tribunal has asked questions about the central matters and has considered the written material in support. The conclusions reached by the Tribunal in terms of the findings were, plainly enough, open to the Tribunal and there is no foundation for any contention of jurisdictional error. 26 In relation to the remaining matters, the appellant pressed before Federal Magistrate Emmett the notion that there was a failure to comply with s 424A(1) of the Migration Act 1958 (Cth), and her Honour observed that the contention was misconceived because the particular material relating to the letter from the Elder of the Presbyterian Church was provided by the appellant to the Tribunal and in those circumstances s 424A(3)(b) provides an exemption to any obligation to provide a copy of that letter to the appellant. I assume for present purposes that the contention in relation to the contravention of s 424A(1) is the same matter which was put by the appellant to Federal Magistrate Emmett. No other contention has been made. 27 Further, the appellant contended before Federal Magistrate Emmett that reference to country information by the Tribunal involved a contravention of s 424A(1) of the Migration Act 1958 (Cth), and I am satisfied that that contention is unsound and that the assessment of the operation of the provisions of the Act adopted by her Honour is correct. The relevant material was not specific to the appellant. I find no error of law in relation to the matters going to s 424A(1) of the Act. 28 The contention in relation to s 425 of the Act before Federal Magistrate Emmett involved the notion that the Tribunal failed to provide the appellant with an opportunity to give evidence and present arguments, not because the appellant was not invited to attend but rather because the conduct of the proceedings before the Tribunal Member was such that, constructively, or, in effect, the appellant was not given a fair and clear opportunity to give evidence and present arguments. 29 This notion, based upon the contention of frequent interruptions , is consistent with the allegation that the Tribunal was biased by reason of its attempt to isolate inconsistencies expressly for the purpose of making an adverse finding against the appellant. I can find no substance whatsoever in the ground advanced by the appellant. It is clear that the appellant was provided with an opportunity to attend a hearing and put before the Tribunal any documents and make oral submissions in support of his contentions. 30 The transcript reflects that the Tribunal Member conducted the examination at the hearing by focusing upon the relevant matters and although some of the questions are probing, the very function of the Tribunal is to ask questions which elicit a basis upon which the Tribunal might be satisfied of the relevant matters. Plainly enough, the Tribunal was not satisfied and the findings, as I have said, were open to the Tribunal. 31 Accordingly, I am not satisfied that the appellant has been able to make out any error of law or that there was any denial of natural justice on the part of the Tribunal. Further, I am not satisfied that the appellant has been able to demonstrate a contravention of s 424A(1) of the Migration Act 1958 (Cth) nor a contravention of an obligation arising under s 425 of that Act. 32 The ultimate summary that the appellant recites in his grounds of appeal that the Federal Magistrates Court has not made a fair decision is unsupported by the careful consideration by her Honour of each of the contentions advanced by the appellant. 33 Accordingly, I find that there is no jurisdictional error on the part of Federal Magistrate Emmett and that the grounds of appeal are unsustained. As a result, the appeal must necessarily be dismissed, with costs, and the court so orders. 34 The court gives leave to amend the title of the first respondent to 'Minister for Immigration and Citizenship'. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

consideration of whether the decision of the federal magistrate reflects an error of law in failing to find a lack of procedural fairness in the conduct of the hearing by the refugee review tribunal consideration of whether the tribunal engaged in contraventions of s 424a(1) of the migration act 1958 (cth) and s 425 of that act. migration

There are exceptions to the rule. The question here is whether the order sought in the instant application falls within the exceptions. 2 The circumstances giving rise to the application are as follows. In 1999 Edensor Nominees Pty Ltd and Normandy Consolidated Gold Holdings Pty Ltd entered into an agreement that Yandal Gold Pty Ltd, a subsidiary of Yandal Gold Holdings Pty Ltd a company in which each of them would hold shares, would make a takeover bid for all of the shares in Great Central Mines Ltd. At the time of the agreement the Edensor group and the Normandy Consolidated group already held shares in Great Central Mines. There was a side agreement between the two groups that neither would accept the offer for its shares. Following the bid ASIC took proceedings against the companies seeking a declaration that both the shareholders' agreement and the side agreement contravened s 615 of the Corporations Law , being the law then in force. The action was heard by Merkel J. He found that there had been a contravention. He also found that statements in Yandal Gold's bidder statement were incorrect, in particular the statements that the Yandal Group held no relevant interest in Great Central Mines and the Yandal Group had not acquired any shares in Great Central Mines in the four months preceding the bid: see Australian Securities and Investments Commission v Yandal Gold Pty Ltd (1999) 32 ACSR 317. 3 On the question of relief Merkel J said that as a result of the contravention the price offered to shareholders was significantly less than would have been offered if there had been no contravention. As a result he made orders permitting accepting shareholders to avoid the contracts pursuant to which they sold their shares to the bid company. He also fashioned an order to provide compensation to those shareholders who did not avoid their contracts. To that end he ordered that Edensor Nominees Pty Ltd pay to ASIC $28.5 million and for ASIC to distribute the fund on a pro rata basis to non-rescinding shareholders. He reserved liberty to apply. A later order provided for the fund to be established by Newmont Australia Limited (previously Normandy Mining Limited) either on its own behalf or on behalf of Edensor Nominees. 4 In due course the fund was established by Newmont Australia. Thereafter ASIC distributed all but 0.9 per cent of the fund to non-rescinding shareholders. The balance of the fund, approximately $300,000 plus interest, has not been paid out. The reason is that cheques that were sent to 253 non-rescinding shareholders were not presented. Extensive efforts have been made to contact the missing shareholders but to no avail. In a practical sense there is little more that ASIC can do to find them. 5 As a result ASIC seeks an order that the amount which it still holds, after deduction of its costs and expenses, be paid to Newmont Australia. That company will undertake that if a non-rescinding shareholder turns up before 3 January 2009 and seeks payment of the amount due to him Newmont will pay the amount. 6 In my view there is power to make the order sought. It has always been accepted that a court retains jurisdiction after final judgment to deal with matters involved in or arising in the course of the operation of the court's order. If the need to deal with an order is foreseen the order usually reserves liberty to apply. At any rate a court has inherent power to deal with such matters. That a court retains the ability to deal with matters arising out of its orders does not permit it to grant substantive relief of a kind not originally sought in the proceeding or which is substantially different from that given by the final order: Phillips v Walsh (1990) 20 NSWLR 206, 209. Indeed, reservation of liberty to apply is usually confined to "questions of machinery which may arise from the implementation of a court's orders": Abigroup Ltd v Abignano (1992) 112 ALR 497, 509. But it is not limited to matters of machinery. A court can make a variety of orders provided what is involved does not undermine the finality of the orders already made: Penrice v Williams (1883) 23 Ch D 353. 7 It is not possible to define the limits of a court's power to deal with aspects of its final orders. For the purposes of the instant application it is sufficient to say that I am in no doubt that there is jurisdiction to make the order sought. The problem in this case has come about because of events that occurred after the final orders were made. The result of those events is that ASIC has funds which it cannot dispose of. It was not intended that the funds remain with ASIC or be paid to State governments under unclaimed moneys legislation. Something else must be done to deal with the money and it falls upon the Court to decide what that should be. The appropriate thing to do is to return the money with a provision that if a shareholder shows up in the next six years he is to be paid the amount due to him. 8 There is precedent for the type of order ASIC seeks. It used to be the case that on a reduction of capital it was necessary to settle a list of creditors and require a fund to be set aside out of which the claims of creditors would be satisfied. The order confirming the reduction would reserve "liberty to the [company] to apply for payment out to it of the funds in Court on production of evidence that the alleged claims of [creditors] have been secured and generally with reference to the said moneys": Thereby the court retained control over the fund and the ability to provide for its disposition in the event of difficulties. An example of such an order may be found in Seton on Decrees vol III p 2428-2429. 9 I will make orders in accordance with the short minutes of orders handed up by Mr Strong. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

final judgment fund established for distribution to a class unable to locate all members of class liberty to apply reserved whether power to order the return of the balance of the fund practice and procedure

In the early morning of 30 March 2008, the Mitra was boarded by personnel from a Royal Australian Navy patrol boat about 7 nautical miles inside the Australian fishing zone ('AFZ'). Soon after it was boarded, an officer (under s 4 of the Fisheries Management Act 1991 (Cth) ('the Act')) gave notice of seizure of the Mitra, along with its nets, traps, other equipment and catch, under s 106C of the Act. That notice began a process which would result in the Mitra and its equipment and catch being the forfeited to the Commonwealth of Australia, if it had been used to commit certain offences under the Act. The two relevant offences are using a foreign boat for commercial fishing in the AFZ, or having a foreign boat equipped for fishing possession in the AFZ. However, it is a defence to each of these offences if the Mitra was in the AFZ as a result of a mistaken but reasonable belief of fact. 2 The owners of the Mitra say that the 'mistake of fact' defence is available to them because the Master of the Mitra plotted his position using the Geographical Positioning System ('GPS') onboard the Mitra and he believed he was 11 nautical miles outside the AFZ. The owners say that in all the circumstances this was a reasonable mistake and they have therefore commenced these civil proceedings seeking a declaration that the Mitra is not forfeited and seeking to have the Mitra returned to them. 3 The Australian Fisheries Management Authority ('AFMA') and the Commonwealth of Australia are the respondents in these proceedings. I will refer to them jointly in these reasons as AFMA. AFMA says that the Master did not have a reasonable mistaken belief as claimed, relying upon a number of inconsistencies between his evidence (and that of his crew) and other evidence they have called. In particular, they rely upon evidence which they claim shows that the Mitra was used for commercial fishing while it was in the AFZ. Because of these matters, AFMA says that the Master should not be believed when he claims to have made a mistake as to his location. Further, AFMA says that if the Master did make any such mistake, it was not a reasonable mistake in all the circumstances so that the owners cannot avail themselves of the defence. 4 Before determining the central issues in these proceedings, it is necessary to determine certain threshold evidentiary issues raised by the parties in their written submissions. The two evidentiary issues are who bears the onus of proof and what standard of proof applies to the central issues. (b) Did the Master have a mistaken but reasonable belief about his location? 5 However, before turning to deal with these four issues, it is necessary to set out some of the factual background to explain how the Mitra came to be where it was at the time it was boarded. Further, while most of the facts relevant to these proceedings have been agreed between the parties and do not need to be set out here, it is necessary to set out certain of the agreed facts to clarify which elements of the offences under the Act are not in issue; and also to make it clear that the complicated processes at work under the Act are not in dispute. Finally, the relevant legislative provisions are set out below to make clear the various offences that may have applied to the Mitra in the circumstances and how the defence of a mistaken but reasonable belief may apply to those offences. The Master received a radio message from another fishing vessel in the area telling him that Indonesian Navy ships were conducting exercises in the vicinity and, because the Indonesian Navy had a reputation for "causing trouble" for foreign fishing vessels in Indonesian waters, the Master decided to leave that area to avoid contact with them. As a result, the crew of the Mitra ceased fishing, pulled in the nets and set sail on a course south towards Australian waters. 7 The Mitra sailed south for about seven hours, at the relatively high speed of about eight to ten knots. As he came closer to Australian waters, the Master says that he saw a 'red line' on the GPS monitor which he assumed was the line in the GPS he had previously been told was the border of the AFZ. At about 11.30pm on 29 March 2008, the Master stopped the Mitra at a point which he thought, by reference to the GPS, was about 11 nautical miles north of the 'red line' and therefore 11 nautical miles north of the AFZ border. At some point before the Master stopped the Mitra, the Chief Engineer of the Mitra, a Mr Xieu You Chai ('the Chief Engineer') told the Master that he had detected some problem with the main engine and wanted an opportunity to work on it. After the Master stopped the Mitra, he told the Chief Engineer that he could start work on the engine. 8 The owners say this work continued for about five hours and that the Mitra drifted on the tide during this period. AFMA says that this is the period when the Mitra was used for commercial fishing. If the owners are correct, then the Master's actions are unimpeachable; but if AFMA is correct, then the Mitra was being used to commit an offence of the very kind that the enforcement provisions of the Act are intended to combat. 9 At about 4.30am on 30 March 2008, while the engineers were working on the engine, the Master says he detected a boat approaching. He says he initially thought it was an Indonesian Navy boat but that it turned out to be an Australian Navy Patrol Boat, 'the HMAS Maryborough'. At 5.12am a boarding party from the HMAS Maryborough boarded the Mitra. It appears to be common ground that at the time of boarding, the engineers were working on the main engine of the Mitra and the engine was not operating. AFMA relies upon the observations of the boarding party to establish that the Mitra was used for commercial fishing while it was in the AFZ. 10 As noted above, the agreed facts make it clear that certain elements of the offences under the Act are not in issue and that the complicated processes at work under the Act are not in dispute. (b) Tay Shan Jang was the master of the Mitra and the Mitra was in his possession and under his control at all relevant times. That claim was treated by Australian Fisheries Management Authority ("AFMA") as a claim made under s 106E of the Act. A declaration that the seized things are not forfeited pursuant to section 106G of the Act. An order that the seized things be delivered up and returned to the Applicants. Its functions and objectives are set out in ss 7 and 6 respectively of that Act, along with s 3 of the Act. In essence, these provisions require AFMA to implement efficient and cost-effective fisheries management on behalf of the Commonwealth and to ensure that the exploitation of its fisheries resources is conducted in a manner consistent with the principles of ecologically sustainable development as defined in s 6A of the Fisheries Administration Act . This kind of legislation has been described as being "of great importance economically and politically to the preservation of Australian fishing interests" see Chiou Yaou Fa v Morris (1987) 87 FLR 36 (' Morris '). The exclusive economic zone shall not extend beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured. 13 Part 6 of the Act (ss 83-108B) deals with surveillance and enforcement . The relevant enforcement provisions for foreign boats such as the Mitra are set out in Division 5 of Part 6 (ss 99-105) of the Act. The purpose of these types of enforcement provisions is "to protect Australian fishing grounds from exploitation by the use of foreign boats without the permission of an Australian official: see Cheatley v The Queen (1972) 127 CLR 291 at 295-296 per Barwick CJ. Leaving aside the question of the mistake of fact defence, the parties agree that the Mitra was involved in offences against ss 100 and 101 of the Act. (2A) Strict liability applies to subsection (2). [emphasis added] 101 Having foreign boat equipped for fishing--strict liability offence (1) A person must not, at a place in the AFZ, have in his or her possession or in his or her charge a foreign boat equipped for fishing unless: [again, it is agreed that these exceptions do not apply --- see above] ... (2) A person who contravenes subsection (1) is guilty of an offence punishable on conviction by a fine not exceeding 2,500 penalty units. (2A) Strict liability applies to subsection (2). S 3 of the Criminal Code Act 1995 (Cth) gives effect to the Criminal Code (the ' Criminal Code ') as a law of the Commonwealth and, under s 2.2(2) of the Criminal Code , that Code applies to the offences under ss 100(2) and 101(2) of the Act. ... (3) The existence of strict liability does not make any other defence unavailable. Further, s 6.1 makes it clear that where an offence is described as an offence of strict liability (as here), the offence does not involve any fault elements for any of the physical elements of the offence. Given the size of the AFZ and the significant resources required to police it, it is not difficult to see why the legislature has decided to expressly exclude the need to prove a fault element in the prosecution of the offences under ss 100(2) and 101 (2). The meaning of 'reasonable belief' as used in s 9.2 of the Criminal Code will be considered later in these reasons. WHO BEARS THE ONUS OF PROOF AND WHAT STANDARD OF PROOF APPLIES? Neither counsel referred me to s 13 of the Criminal Code which deals with the onus of proof in the prosecution of offences under the Criminal Code . Since AFMA has conceded that the owners have discharged their evidential onus (see 19(b) above), it follows from s 13 that AFMA bears the onus of disproving or negativing the defence of mistake of fact: see ss 13.3(2) and 13.1 (2) respectively of the Criminal Code . 21 As to the question of the applicable standard of proof, AFMA relied upon the decision of French J. in Olbers v Commonwealth of Australia (No 4) [2004] FCA 229 ; 136 FCR 67 (' Olbers '). In Olbers , French J had to consider the same sections of the Act as have arisen for consideration in this case. In determining what approach he should take to the question of whether or not offences had been committed under ss 100 and 101 of the Act, his Honour observed (at [65]) that: "although these are civil proceedings a finding that offences had been committed is a serious matter and it is necessary that an appropriate degree of satisfaction be reached, albeit it is not necessary that I be satisfied beyond reasonable doubt that offences have been committed". 22 His Honour's observations are based upon Dixon J's often quoted observations in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 at 362 and the long line of High Court authorities since then, including Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66 ; (1992) 67 ALJR 170. In that case, in the joint judgment of Mason CJ and Brennan, Deane, and Gaudron JJ their Honours observed that while "the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove", such statements "should not, however, be understood as directed to the standard of proof" (at 170 --- 171). Their Honours had earlier emphasised that the standard of proof in civil proceedings is the 'balance of probabilities', even where the matter sought to be proved involves criminal conduct. While the civil standard applies to the proof of these two issues, since they involve serious matters, namely contraventions of the Act, clear or cogent evidence is required to prove the alleged conduct. WAS THE MITRA BEING USED FOR COMMERCIAL FISHING AT THE TIME? On this issue AFMA has relied upon observations made by Royal Australian Navy personnel shortly after they boarded the Mitra, in submitting that the inference should be drawn that the Mitra had been used for commercial fishing "some 3 --- 4 hours" before it was boarded. These observations concerned the condition of the equipment on the Mitra, the presence of fish on the deck of the Mitra and the condition of some fish in the freezer of the Mitra. AFMA has also relied upon a number of inconsistencies which it says exist in the evidence of the Master, the Chief Engineer and the crew of the Mitra on this and other issues. 25 While much of the evidence at hearing was directed to this issue, I do not consider it necessary to do more than set out a summary of the main parts. This is because there is other independent, objective evidence which I consider establishes that it is unlikely that the Mitra could have been used for commercial fishing while it was in the AFZ. I will briefly refer to, and make some observations on, the evidence of the owners and of AFMA before turning to consider that independent and objective evidence. In their interviews with AFMA personnel, conducted some days after they arrived in Darwin Harbour on 2 April 2008, and while they were in detention, the crew members of the Mitra variously stated: that the fishing nets had last been hauled onto the boat about 10 hours before the boat was boarded (according to Mr Song Shi Young); that the last episode of fishing had occurred on the afternoon of 29 March 2008 (according to Mr Xiao Hai Zheng), or that the last fishing occurred on the morning of 29 March 2008 when it was "nearly noon" (according to Mr Zheng Shi Xeng). 27 There are some obvious inconsistencies in these various versions. However, they are all consistent in claiming that the Mitra was last used for fishing before it began its run south. Moreover, they are all consistent in claiming that no fishing occurred in the 3 to 4 hour period before the Mitra was boarded, as is asserted by AFMA. 28 The Master said in evidence that he was certain that there had been no fishing in Australian waters at any time and that there had been no fishing for at least 24 hours before entering Australian waters. On its face, this evidence is inconsistent with the statements of the crew members who put this intervening period at between 10 and 18 hours. However, it is broadly consistent with the statements that the Master made in his interview with CPOB Manley soon after the Mitra was boarded and it becomes more consistent with the statements of the crew members when the explanations he gave in cross-examination are taken into account. The interview with CPOB Manley was conducted through an interpreter, using numbered interpreter cards. Among the questions asked, and the Master's answers were: In response to being shown Indonesian card 21 and Taiwanese card 16 which both ask "How many days have you been in the area? ", the Master responded one day. In response to being shown Taiwanese card 18 which asks "How many days have you fished here? ", the Master indicated that he had not been fishing in this area. In response to being shown Taiwanese card 24 which asks "How long has your fishing equipment been in the water? ", the Master responded not in this area. In response to being shown Taiwanese card 27 which asks "Have you caught any fish in the area? ", the Master answered that he had not caught any fish in this area. In response to being shown Taiwanese card 31 which states "You are currently in Australian water", the Master disputed his position and claimed that the position on the vessel's GPS indicated that he was in Indonesian waters and not in the Australian area. In response to being shown Taiwanese card 33 which states "It is illegal to fish here without a license", the Master replied that he was not fishing here, but in Indonesian waters. In response to being shown Taiwanese card 34 which asks "Why are you in this area? ", the Master responded that the engine was broken. In response to being shown Indonesian card 32 which asks "Which country's waters are you currently in? ", the Master responded that he was in Indonesian waters, and pointed at the vessel's GPS indicating from the vessel's position up as Indonesian waters. ... After the Master stated during the questioning that Mitra 2139's engine had broken, I asked him [h]ow long to repair the engine and he replied one day. I then repeated the question and asked "one day to repair engine? ", to which the Master nodded his head and replied "yes". Mr Jang, can you look at the card marked number 34. It's page 24 to Mr Manley's affidavit, annexure RCM3. That asks does your engine work. ANSWER: The interpreter: I told them we still repairing. QUESTION: Mr Macliver: Yes, you told them the engine was broken? ANSWER: The interpreter: Yes, he told them they were still repairing. QUESTION: Mr Macliver: And did you also say that the engine had broken down and had been repaired for about a day? ANSWER: The interpreter: Yes. I tell them that we --- the engine is broken and we have been repaired a day. A Chinese day is not been 24 hours. Chinese day is today. Chinese means --- "one day" it means "today". MR MACLIVER: Thank you, Mr Jang. THE INTERPRETER: Yes, "a day" means "today". 30 Given that he had stopped at about midnight on 29 March 2008 and the Chief Engineer commenced work on the engine shortly thereafter, the Master's explanation that the engine had broken down and was being repaired "today" and not "one day" is plausible. AFMA submitted that this explanation should not be accepted, but did not call any evidence to challenge the claim the Master made (that 'one day' means 'today' in Chinese). I therefore reject AFMA's submission. 31 This exchange between the Master and Mr Macliver exhibits communications problems similar to others that arose during the hearing of this matter. It seems likely that such problems would have been present throughout the process, dating back to the time the Mitra was boarded. In my view these problems stem from language difficulties and cultural differences. Another example of the language difficulties arose in relation to the expression "broken down" and whether it meant "having problems with the engine" (burning a lot of oil for example), or whether it meant the engine was not operating at all. Another example of the cultural differences arose over the length of the Master's experience as the Master of the Mitra. He claimed he was appointed in 2004. He was challenged in cross-examination with a document obtained from the Taiwanese authorities that seemed to suggest that he was appointed in 1991. His explanation in cross-examination was to the effect that 2004 in the Western calendar was the equivalent of 1991 in the Taiwanese calendar. While AFMA maintained this attack on the Master's veracity during its initial closing submissions, it conceded in a subsequent set of submissions, by agreement with the owners, that the Master was correct. 32 The owners filed an affidavit by Ms Yu-Yen Chen. Ms Chen described in some detail the communications problems she witnessed the Master and the crew experiencing from, what she claimed was, incorrect interpretation. She said she thought these problems were further compounded by the technical language used in relation to commercial fishing. She also noted that the Master had a strong Taiwanese accent while other members of the crew were from two different provinces of China and had strong accents from the dialects they spoke. She gave various examples of what she said were "wrong translations" of words such as "charts" (she claimed that word would only be understood as "sea map" in Mandarin), "border", "EEZ", "bridge", "reluctant", "route" and "symbol". 33 While I am dealing with the question of the Master's credit, I should mention that AFMA also challenged the Chief Engineer's credit, in particular, in relation to his evidence about having worked on the engine of the Mitra for about five hours after it stopped. To do so, AFMA called Mr Ronald Halstead, a Marine Surveyor, to give some opinion evidence as to how long it would take to do the work that the Chief Engineer claimed he performed on the engine. Mr Halstead's evidence was to the effect that it would take approximately 15 hours to replace the piston rings on the two cylinders of the Mitra's engine. I reject this evidence. In my view, Mr Halstead did not have sufficient direct experience or knowledge of the relevant circumstances to allow him to express this opinion. He said in cross-examination that he last did any 'hands-on' work as an engineer on the engine of a boat in 1969 and most of his experience in the past 30 to 40 years has been in an administrative or managerial capacity. Further, he agreed in cross-examination that he has never replaced the piston rings on an engine of the same kind as the Mitra's engine and he also agreed that he had no knowledge of the Chief Engineer's skills as an engineer, or his speed of work. Having rejected this evidence, I see no reason not to accept the Chief Engineer's evidence that he worked on the Mitra's engine for about five hours after it stopped. 34 Having seen the Master and the Chief Engineer cross-examined in the witness box, and taking into account the various communications problems noted above, my impression was that most, if not all, of the apparent inconsistencies in their evidence arose from language difficulties and cultural differences. I consider that they were both doing their best when giving their evidence to accurately describe what had happened, whilst displaying some natural frustration about the communication problems that had beset them. CPOB Manley was the officer in charge. He was assisted by Messrs Bennett, Hughes, Peach, Schonewille and Wraight. 36 On the issue of the condition of the equipment and fish on the deck of the Mitra, various of the members of the boarding party said that they had observed that: the net on the rear deck of the Mitra was wet; there were fish caught in the net and fish on the deck around the net that were "wet", "soft" and "pliable"; there was mud on the net that was "soft" and "pliable"; and there was a small stingray on the deck that had traces of blood on its body which had not yet congealed and which was sticky when touched. AFMA tendered a number of photographs of the fish on the deck and of the fish in the Mitra's freezer. 37 In opposition to this evidence, there was evidence, particularly from the Master, that the net was wet because there was a deck hose in the area where the net was located and that hose was frequently used by the crew for ablutions. Further, in cross-examination of various of the members of the boarding party, Ms Kelly (Counsel for the owners) established that they each had very different ideas as to what the word "pliable" meant, ranging from: "the fish not drying out and therefore becoming firm and hard" (in the words of CPOB Manley), "when a finger is pressed into the flesh it leaves a sort of depression in the flesh" (in the words of Mr Schonewille), and "not entirely fresh, still sort of fresh in a way" (in the words of Mr Hughes). Mr Schonewille also said that the fish on the deck appeared to be "by-products" of a catch and that some of the fish had been caught up against the fish trays on the edge of the deck. 38 The evidence as to the condition of the fish in the freezer of the Mitra came from Mr Hughes and Mr Schonewille. They said that there were about six trays of fish in the freezer that appeared to be 'fresh', 'wet' and 'pliable'; and which had a 'shine on the skin', with 'no frost'. They said the heads of these fish had been cut off and that at the cut sites there was blood and raw flesh present. In addition, AFMA called Mr Peter Davies, an AFMA officer with extensive experience in the fishing industry including 10 years of experience owning and operating a prawn trawler. Mr Davies gave opinion evidence to the effect that he estimated that any fish placed in the freezer of the Mitra would be completely frozen within six to eight hours and that the smaller fish observed in the freezer would freeze in a period of "possibly less than two hours". He also said that because the fish were not in sealed plastic bags he would expect them to attain a coating of frost and that no such coating was shown on these fish. 39 In response to this evidence, the Master said that he only had one of the two freezer motors turned on at the time because the freezer was not full. The Master said that in his experience, with only one freezer motor turned on, it would take fifteen to twenty hours to start to see frost forming on these fish. There are numerous reasons why a net on a fishing trawler might be wet, apart from use in commercial fishing (from sea spray, rain, or as suggested in this case by the Master, spray from the deck hose). Moreover, no evidence was called to establish how quickly the net may have dried out, particularly at night time. 41 As for the fish that were observed on the deck of the Mitra, in my view, the most that could be concluded from their "sort of fresh" condition is that the Mitra had been used for fishing at some time in the recent past, which was not denied by the crew members (who said it had been 10 to 18 hours before the boarding). AFMA did not call any evidence to establish any clear and cogent correlation between the condition of those fish and the period of time that they had been out of the sea. Finally, I consider the condition of the fish in the freezer of the Mitra falls into the same category. The evidence does not provide any clear and cogent correlation between the condition of the fish in the freezer and the relatively short period of time during which AFMA says the Mitra was used for commercial fishing. 42 AFMA made a number of other submissions going to inconsistencies in the evidence of the Master, the Chief Engineer and the crew. However, I do not consider it necessary to detail these submissions in light of the independent, objective evidence that I will turn to now. That evidence shows that in the five or six hours before it was boarded, the Mitra was not moving at a sufficient speed to engage in commercial fishing. The VMS is a system used by various authorities around the world, including Australian authorities, to record the geographic co-ordinate positions of vessels, using satellites and computers. Among other things, the VMS data includes the longitude, latitude, date and Greenwich Mean Time ('GMT') of each vessel within the system. 44 The VMS data does not show the actual location of the vessel on a map, nor the speed at which the vessel is travelling --- rather it shows its geographic coordinates from time to time. Nonetheless, it is possible, using the VMS data to plot the course of a vessel on a map and to calculate the average speed of the vessel's movement from point to point on that map. For the purpose of these proceedings, both parties employed experts to carry out these exercises and calculations. Mr Wayne Bateman was employed by the owners and Mr Robert Stroud was employed by AFMA. After these two experts had prepared their reports, I directed them under O 34A of the Federal Court Rules 1979 to consult with a view to coming to an agreement on any issues upon which they disagreed. As a result the parties filed a "Statement of Issues agreed by Expert Witnesses" ('The Agreed Experts' Statement') as signed by Mr Stroud. There were four areas of disagreement addressed in the Agreed Experts' Statement, all relating to the movements of the Mitra on 29 and 30 March 2008. On each of those areas of disagreement, the agreed position the two experts came to was that Mr Stroud's calculations were more accurate. 45 In his affidavit sworn on 19 May 2008, Mr Stroud detailed the movements of the Mitra on 29 and 30 March 2008. From 1630 local time on 29 March 2008 to 2330 local time on 29 March 2008 (7 hours), almost due south at between 8.3 and 9.5 knots. b. This occurred about 48 minutes before the end of the Mitra's course due south. I find Mr Stroud's evidence (above) to constitute an accurate summary of the Mitra's movements at these various times. 47 In their final submissions, AFMA conceded that the Mitra could not have been used for fishing while it was travelling south at average speeds in excess of 8 knots (between 1630 hours and 2330 hours local time on 29 March 2008), for the reason described below. Since the Mitra passed into the AFZ at 2241 hours local time, it follows that the only period during which the Mitra could have been used for commercial fishing in the AFZ was between 2330 hours local time on 29 March 2008 (when it ceased its voyage south) and 0512 hours local time on 30 March 2008 (when it was boarded). The evidence on this point came from the Master and from Mr Davies. The Master's evidence was that the Mitra generally needs to travel at a speed of 3 to 4 knots to successfully trawl for fish. The Master said that if the Mitra travelled at less than 3 knots, the nets would not be suspended at the correct angle behind the Mitra and no fish would be caught. On the other hand, he said that if the Mitra travelled at more than 4 knots, the nets would come too close to the surface and no fish would be caught. When asked about this issue in cross-examination, the Master steadfastly maintained that the Mitra had to be travelling at 3 to 4 knots to catch fish and he rejected the suggestion that it could travel at a slower speed, saying (through an interpreter): "not 1 or 2, otherwise the net won't open. Have to be 3 to 4". Mr Macliver asked the Master whether the Mitra's "fishing speed of between 3 to 4 nautical miles per hour [could] be a combination of the vessel's own speed plus the speed of any water current that it is travelling through? " He responded: "Yes. The GPS can show if the, like, current waters, for example, reduce the speed, yes". 49 I interpolate that the only evidence about the tide movements at, or shortly before, the Mitra was boarded came from Mr Jeffrey Davison, a Royal Australian Navy officer, who said in his affidavit that the "prevailing set (current) and rate of drift in the area was 220 [degrees] at 1 knot (1nm per hour). The wind and swell at the time of boarding of Mitra 2139 was negligible in that there was only light and variable Easterly winds up to about 5 knots with a maximum Southerly swell of up to 0.5 metre --- in other words flat calm seas and beautiful weather. These conditions as to wind and swell but not current had been experienced for the previous 12 hours". 50 Mr Davies' evidence about the Mitra's requisite range of speeds for fishing was given in cross-examination by Ms Kelly. ANSWER --- Mr Davies: Usually around three knots, depending on the power of the vessel, which is, for us, a brisk walking speed, but around three knots. QUESTION --- Ms Kelly: A little bit more sometimes? ANSWER --- Mr Davies: Bigger vessels may have the power to go slightly more than that, but they're limited by the hydrodynamics of the net. QUESTION --- Ms Kelly: A little bit less sometimes? ANSWER --- Mr Davies: Down to two and a half knots, I believe they would still hold their shape --- the nets. QUESTION --- Ms Kelly: But if you go below that optimum fishing speed, the nets collapse, do they? ANSWER --- Mr Davies: Yes, and the boards --- the otter boards would fall in and start to bog and cause hazards. ANSWER --- Mr Davies: In my experience, that's as slow as I've ever seen equipment being able to maintain its shape, its integrity. QUESTION --- Mr Macliver: And when you say a trawling speed of two and a half knots, are you talking about ground speed or speed through the water? ANSWER --- Mr Davies: Speed through the water. 52 Based on this evidence, I find that the range of speeds necessary for the Mitra to successfully trawl for fish is between three and four knots, through the water. It is not clear to me whether Mr Davison's evidence that: "these conditions had been experienced for the previous twelve hours" is intended to refer to the prevailing current being at one knot, or the direction that the tidal current was flowing, or both, or neither. In my view it is unlikely that the tidal current was flowing in the same direction for the whole of the twelve hour period. This may have occurred in stage (b) (described in [46(b)] above). Otherwise, the Mitra would have been travelling at a maximum combined average speed of between 1.1 knots and 1.9 knots throughout this period (that is, in stages (c) described in [46(c)] above and (d) described in [46(d)] above). I therefore conclude that at no time during this 5 hour and 42 minute period was the Mitra travelling at the requisite average speed range through the water to allow it to successfully trawl for fish. 54 Of course, this leaves open the possibility that the Mitra moved at a higher speed during a part of one of these stages. However, because of the relatively low range of average speeds shown in the VMS data and the frequency at which those average speeds were plotted by Mr Stroud, I consider it most unlikely that the Mitra moved at between 3 to 4 knots for any sustained period such that it could have been used for commercial fishing. 55 On the contrary, based on the VMS data, it seems that during this entire period the speed and direction of the Mitra is more consistent with a sudden slowing at about 30 minutes before midnight on 29 March 2008, as would occur if the engine were turned off, and then a gradual loss of forward momentum and a drift under the influence of the tidal current very slowly eastward until the tide changed, and then a drift very slowly on the tide back in a west-south-westerly direction. This series of movements is generally consistent with the evidence of the Master and the crew (above) that the Mitra was not used for fishing during this period, instead the engine on the Mitra was inoperative as the engineers were working on it. Conversely, it is directly inconsistent with AFMA's submissions, based upon the observations made by the boarding party, that the Mitra had been used for commercial fishing at some time during the three to four hours prior to the boarding (since approximately 0100 hours local time when the VMS data shows it was generally drifting eastwards at between 0.1 and 0.9 knots). 56 It follows from all of this evidence, that AFMA has failed to establish on the balance of probabilities, by way of clear and cogent evidence, that the Mitra was being used for commercial fishing in the AFZ in contravention of s 100(2) of the Act. DID THE MASTER MAKE A REASONABLE MISTAKE OF FACT? If the Master did make a mistake about a fact, his mistaken belief was not reasonable in all the circumstances. It is therefore necessary to consider the evidence as to the nature of the Master's mistake, whether that mistake was a mistake of fact or law, and, if it was a mistake of fact, whether it was a mistaken but reasonable belief within the terms of s 9.2 of the Criminal Code . The background leading up to the mistake begins in October 2006, when a new 'Seafarer 12, 6 th Generation' GPS ('Seafarer GPS') was installed on the Mitra. At the time of that installation, all the mapping information (geographical and political), including two electronic chart cards, was pre-programmed into the Seafarer GPS by the manufacturer. The Master said in the affidavit he affirmed on 30 April 2008 that he did not program the Seafarer GPS in any way because he did not know how to. In his affidavit affirmed on 20 May 2008 he said that the Taiwanese GPS supplier told him that: "There is a line inside the Seafarer GPS. You can view the line at 10-20 nautical mile view and that line is the Australian border line". 59 In fact, as has been established by the evidence in these proceedings, the line that the Taiwanese GPS supplier referred to represented the '10 degrees south line'. And, while it varied depending upon the location of the baselines from which it was measured, the Australian or AFZ border was in fact approximately 20 nautical miles further north of that 10 degrees south line. 60 The Master also said in his affidavit of 20 May 2008 that he generally only used a paper chart in two circumstances: when he was sailing from Taiwan to Indonesian waters and back he used an Indonesian chart; and when he was sailing to a pre-arranged point at sea to collect or drop off Chinese fishermen, he used a Chinese chart. Otherwise, he relied solely on the GPS when he was fishing. He said that the GPS was easy to use to input and plot the route on screen. 61 The Master said in his final affidavit affirmed on 28 May 2008 that there was a number of levels of view available within the GPS and they ranged from a 5 nautical mile view to a 100 nautical mile view. He said he generally used the 20 nautical mile view when travelling from Taiwan to Indonesian waters. Once in Indonesian waters, because there are many small islands in the Indonesian Archipelago, he said he believed it much safer to use a low nautical mile view so that the obstacles and details of the waters could be viewed. Thus, while fishing in Indonesian waters he usually used the "han sing tu" (navigation mode) at a 5 nautical mile view. He also gave evidence that the GPS contained an 'A - B line function', which allowed him to plot a route from point A to point B and to measure the distance between those two points. 62 In his affidavit affirmed on 30 April 2008 the Master described his trip south on 29 March 2008 in these terms: "As the Mitra was moving closer to Australian waters, a big red line appeared on the screen of the Mitra's navigation system. On the upper side of the red line, the chart was marked light blue. On the lower side of the red line, it was marked with green hatching". He said further: "I thought that this was the border between Indonesian waters and Australian waters. The line was located in the geographical area where I understood the border to be located. I did not have any other information to tell me where Australian waters began, only the red line. I looked to see if I could find any information on the ship but could not locate any". 63 In his affidavit affirmed on 20 May 2008, the Master clarified that in this latter statement he was actually describing what happened after the Mitra had been boarded, rather than when he was heading south. About what happened after the boarding he said: "I could not believe that I was in Australian water already so my first response was to find my Indonesian chart in the cabin to see whether there was an Australian border line on it that I might have missed. I was stopped by the officer who followed me to the cabin from the wheelhouse. I had found no information then. His answer was that he did not, he said: "I believe the GPS with the red line. I didn't look at some other paper, you know, chart to be sure of anything. He said: "I believed that this was a safe distance from Australian waters". He said that he did not know that he was in the AFZ until the boarding party boarded the Mitra and that he was very surprised and therefore argued with one of the officers in the boarding party, "[b]y pointing to the GPS screen showing the Mitra position above the red line". This is consistent with his interview with CPOB Manley shortly after the Mitra was boarded (see [29] above). 66 In his affidavit affirmed on 20 May 2008, the Master said with reference to the trip south: "During the escape sail on 29 March 2008, I used the 10 nautical mile view first and I could not see a line. I therefore switched to a 20 nautical mile view and then I could see a red line which had net-like lines underneath. I believed that the red line was the border line and so I stayed at this view". While he did not mention the 10 or 20 nautical mile views in this version, it is broadly consistent with his earlier version (above). 67 However, in his final affidavit affirmed on 28 May 2008 the Master said that before he began to sail south on 29 March 2008, he first checked for any dangers at the 5 nautical mile view and then "switched to a 10, then 20 nautical mile view to look for the 'border line'. At the 20 nautical mile view, [he] saw the red line that [he] believed to be the border". I measured the distance of the ship to the border line by using the A-B line function under navigation mode after I stopped the ship. However, since it relates to an insignificant and peripheral aspect of the event, I do not consider this inconsistency to be of any moment. I stopped the speed and then measured the distance of the ship position (A) to the red line (B) by moving the cross (cursor) on the screen to the red line and then pressing down the "A B" key on the GPS machine. The distance of the A --- B line appeared on the bottom right corner of the screen as approximately 11 nautical miles. " He also described his use of the A-B key in his affidavit of 28 May 2008. 70 The Master annexed to his affidavit dated 20 May 2008 (as annexure TSJ 3), a photograph of the GPS screen on the Mitra on the day of seizure with the A --- B line and the distance of 11.61 nautical miles both clearly shown. This photograph is similar to a photograph annexed to the affidavit of CPOB Manley, the officer in charge of the boarding party, so I infer that it was taken by one of the Navy personnel shortly after boarding the Mitra. It provides clear evidence that the Master had used the 'A-B' key on the GPS to set his position 11.61 nautical miles north of the red line, as claimed. 71 Based on this evidence, I find that the Master's fundamental mistake was in thinking that the 'red line' shown on the GPS represented the location of the AFZ border. In making that mistake he adopted the mistaken statement of the Taiwanese GPS supplier, that the line inside the GPS at the 10 --- 20 nautical mile view was the Australian or AFZ border. Acting on that mistaken belief, he placed the Mitra at a position approximately 11.61 nautical miles north of the 'red line', thereby mistakenly thinking that the Mitra would be north of the AFZ border and therefore outside the AFZ. Was the Master's a mistake of law? On this issue, AFMA submits that the Master made a mistake of law. It submits that this is so because the Master thought that the red line, in fact the 10 degrees south line, was the border of Australian waters and he was therefore mistaken as to the location of the Australian or AFZ border, which it says was a mistake of law. AFMA says the Master was not mistaken as to his geographic location, which could have been a mistake of fact. Accordingly it says that the Master's mistake was not a mistaken belief as to an element of the offences under ss 100 or 101 of the Act. Finally it says that the Master believed the advice he received when the Seafarer GPS was installed - that the red line was the boundary of Australian waters - and this advice was a statement as to the location of that boundary, a matter of law. 73 In making its submissions, AFMA relied heavily upon the High Court's decision in Ostrowski v Palmer [2004] HCA 30 ; (2004) 218 CLR 493 (' Ostrowski '). In that case, Mr Palmer, the respondent, was the lessee of a commercial fishing licence which allowed him to fish for rock lobsters in a particular zone (Zone B) of a managed fishery in Western Australia. During November of 1998, Mr Palmer made a number of visits to the Fremantle office of the West Australian Fisheries Department ('Fisheries WA') to obtain information about the regulations relating to Zone B. He eventually obtained a copy of a number of documents, but none of those documents mentioned Regulation 34, which provided that: "A person who is the holder of a commercial fishing licence must not fish for rock lobsters at any time in the area described in the table to this regulation". The table identified an area in the vicinity of Quobba Point in Western Australia where commercial fishing licensees were not licensed to fish for rock lobster. Mr Palmer proceeded on the mistaken assumption that he had been fully advised as to the regulations specifying where he could fish. He remained ignorant of Regulation 34 relating to Quobba Point. 74 During February of 1999, Mr Palmer placed a number of rock lobster pots near Quobba Point within the waters described in the table to Regulation 34. He knew the true position of his pots and he intended to fish for rock lobster in that area, but he was not aware until he was informed by officers of Fisheries WA, that he was not able to fish legally in that area. Mr Palmer was subsequently charged with a breach of Regulation 34. In his defence, he claimed that he had been operating under a mistake of fact, within the terms of s 24 of the Western Australian Criminal Code Act 1913 (WA)(' Criminal Code WA'). That section is similar in terms (although not identical) to s 9.2 of the Criminal Code . The Criminal Code WA also contains a provision (s 22) to the effect that ignorance of the law does not afford any excuse for an act or omission which would otherwise constitute an offence unless knowledge of the law by the offender is expressly declared to be an element of the offence. S 22 is similar in terms to s 9.3 of the Criminal Code which provides: "A person can be criminally responsible for an offence even if, at the time of the conduct constituting the offence, he or she is mistaken about, or ignorant of, the existence or content of an Act that directly or indirectly creates the offence or directly or indirectly affects the scope or operation of the offence. In their decision Gleeson CJ and Kirby J described Mr Palmer's predicament in these terms: "He knew he held a commercial fishing licence; he knew he was fishing for rock lobster; and he knew where he was fishing...What he did not know was that there was a regulation prohibiting his conduct. He was fishing where he intended to fish; he did not know there was a law against it" (at [6]). 76 In his decision, McHugh J emphasised that Mr Palmer did not make a mistake about a factual element of the charge but rather he made a mistake about the law as to where he could fish legally. He said (at [49]): "His mistake was that he believed that the law of Western Australia did not prohibit or regulate fishing for rock lobsters in that area. His mistaken belief was not a mistake as to a fact or "state of things", but a mistake as to the operation of the law. His case fell within s 22, not s 24 , of the Criminal Code . It was ignorance of the law that caused him to make the mistake that he did...". Justices Callinan and Heydon came to a similar conclusion (at [90]). 77 It is of some significance to the present case that their Honours said the following circumstances may constitute a mistake of fact: "if, as a result of navigational error, [Mr Palmer] had been under an honest and reasonable, but mistaken, belief as to his location" (per Gleeson CJ and Kirby J at [11]), and "a mistake as to the location of his vessel or his lobster pots" (per Callinan and Heydon JJ at [90]). The expression "protected forest" was defined in the Forests Act 1958 (Vic) to include: "all unoccupied Crown land proclaimed as a protected forest ... and every unused road and every water frontage as defined in ... the Land Act 1958 ". His Honour held that questions of whether a particular area of land is Crown land; or unoccupied; or a road or an unused road; or a water frontage; or reserved from sale; or vested in trustees; or a municipality; or leased or licensed; or a water reserve under the Land Act 1958 (Vic), are all questions of fact (at 309 --- 310). 79 To similar effect, in Gibbon v Fitzmaurice (1986) 23 A Crim R 12 (' Gibbon ') at 19, Nettlefold J said, without referring to authority, that "a mistake as to whether a given piece of land is inside or outside of the reserve boundary is a question of fact". In that case the Full Court was dealing with an offence involving an area of land reserved as a national park. However, some of these propositions are not without controversy. In Iannella , Taylor J said that he thought the first proposition in (b) above was "heresy of the first order" (see 101, with Owen J agreeing at 116). 81 In Thomas , Latham CJ went on to say (at 286) that a mistaken belief that the defendant's prior marriage had not been effectually dissolved would have been a mistake of law. This statement was referred to by McHugh J in Ostrowski following which his Honour concluded that "... it is no defence to a criminal charge that the defendant believed that his or her actions were not regulated by law or that his or her actions satisfied the provisions of a law" (at [45] --- [46]). 82 The issue becomes more complicated where the mistake involves a compound event involving both fact and law. Again in Thomas , Dixon J (at 306) concluded that such compound mistakes will generally be classified as mistakes of fact. His Honour referred in support (at 306 --- 307) to the observations of the Jessel MR in Eaglesfield v Marquis of Londonderry (1876) 4 Ch D 693 (' Eaglesfield ') to the effect that a simple statement that a woman is "a single woman" is a statement of fact, but a series of statements that the woman had married, discovered the man she had married was a married man and that therefore the marriage was void, followed by a statement that "therefore she is a single woman", is a statement of law. McHugh J referred to this distinction in Ostrowski (at [43] fn 72). 83 In Power v Huffa (1976) 14 SASR 337 (' Power '), Bray CJ reached the opposite conclusion in dealing with the case of a woman who claimed she had been authorised by the Minister for Aboriginal Affairs to remain at the scene of a public protest. His Honour held that the woman's belief that the Minister's authority was lawful was a mistake of law, observing that "if one of the components vital to the total belief is a belief on a question of law ..." then the mistaken belief is a mistake of law (at 344 --- 346, with Jacobs J agreeing at 356). 84 Again in Ostrowski , McHugh J (at [35]) referred with apparent approval to the statement of Dixon J in Thomas (at 306), as did Callinan and Heydon JJ (at [87]). However, in a footnote to [35], McHugh J pointed to the decision of Gleeson CJ in Stratfield Municipal Council v Elvy (1992) 25 NSWLR 745 (' Elvy ') at 751 (Clarke JA and Lee A-J concurring), which is to the opposite effect. In their decision in Ostrowski , Gleeson CJ and Kirby J (at [13]) decided that they did not need to address "the difficulties that are sometimes involved in distinguishing between mistakes of law and mistakes of fact. " and referred to Elvy and Von Lieven v Stewart (1990) 21 NSWLR 52 (' Von Lieven ') at 66 --- 67. 85 In Elvy , Gleeson CJ was dealing with the failure by a member of a municipal council to declare a pecuniary interest before voting on a matter. His Honour was not willing to accept that members of a council, being aware of the primary facts giving rise to a pecuniary interest calling for disclosure, could determine for themselves whether they had to disclose and then claim that they were acting under a mistake of fact if they were wrong. He said, "Once one goes past the relevant primary facts, such questions of opinion and degree ... as to what kind of interest one is obliged by statute to disclose; these are mixed questions of fact and law ... [which] would not ordinarily constitute mistakes of fact". 86 In Von Lieven, the Court of Appeal of New South Wales held that the belief by a promoter of a scheme operated through a company, that it did not contravene any of the relevant codes was a mistake of law because it involved a mistaken belief as to the legal effect of the facts constituting the offence: see Clarke JA at 55 and Handley JA 66 --- 67. 87 Finally, it is a commonplace proposition, stated in numerous authorities, that whether a particular thing or place answers a particular description in a statute is a question of law: see, for example, Iannella at 116 per Windeyer J. 88 Based upon these authorities, I consider that AFMA's submissions must be rejected. The Master mistakenly thought that the 'red line' shown on the GPS was the AFZ borderline and that by taking up a position approximately 11.61 nautical miles north of that 'red line', he would be outside the AFZ. This mistaken belief was in turn based upon the mistaken statement of the Taiwanese GPS supplier that the line inside the GPS was the Australian border line. The only line that the Master saw was the 'red line' and he assumed this was the line the Taiwanese GPS supplier was referring to. 89 In this sense I agree with one of AFMA's submissions, that is, the Master was not mistaken as to his geographic location. He knew where he was located in relation to the 'red line'; in fact he plotted it carefully using the A-B key on the GPS. However, he thought that by being in that location he would be outside the AFZ. Thus his mistake was, in a sense, the vicarious mistake of the Taiwanese GPS supplier, in thinking that the line in the GPS, or the 'red line', was the AFZ border. In determining whether the Master's mistake was one of law or fact, I therefore consider it is necessary to focus on the nature of the underlying mistake of the Taiwanese GPS supplier. 90 The Taiwanese GPS supplier's underlying mistake did not constitute a statement that the Master had a legal entitlement to do something, or was not acting unlawfully by doing something, as arose in Ostrowski, Power , Elvy , and Von Lieven . That is, it was not a statement as to the meaning or effect of a law drawn from a process of reasoning based upon a stated, or unstated, set of facts. It is therefore quite different to the example of a question of law, given by Jessel MR in Eaglesfield , where a person makes a series of statements about the marriage history of a particular woman and concludes with the statement as to legal effect of those statements: "therefore she is a single woman". Conversely, it is somewhat similar to the contrasting example of a question of fact, where a person simply states that a particular woman is "a single woman". 91 Furthermore, it was a statement about a particular physical phenomenon, namely the location of the Australian or AFZ border. It is therefore more akin to the questions of fact identified in Handmer as to whether an area of land was Crown land, or a part of a road, or a water frontage --- here the question is whether an area of sea was part of the AFZ. It is also akin to the examples of mistakes of fact given in Ostrowski, as to the location of his vessel or his lobster pots, albeit that here it was the physical location of the AFZ border, rather than the Mitra's physical location. 92 It is very similar to the question of whether an area of land is inside a reserve boundary, which was stated to be a question of fact in Gibbon. This is undoubtedly so because the location of a boundary, such as the AFZ border, is the sort of thing that is usually determined (as it was in this case) by a process of measurement (in this case using a GPS). It is therefore usually proved by adducing evidence of that process of measurement or, as also occurred in this case, by tendering an official chart showing the AFZ border position. Of course, an official chart simply shows the final results of the process of measurement carried out by a relevant official. 93 In this case, there can be no suggestion of ignorance of the law as arose in Ostrowski . Unlike Mr Palmer, the Master knew he was not legally entitled to fish in or, with some irrelevant exceptions, to be in the AFZ. Indeed that is exactly what he was attempting to avoid by locating the Mitra where he did. Or, to state the matter within the specific terms of s 9.3 of the Criminal Code , the Master was not mistaken about or ignorant of the existence or content of the Act. 94 For these reasons, I consider that the Master's mistake was not a mistake of law. Rather, within the terms in s 9.2 of the Criminal Code , it was a mistake about whether or not a fact existed (the location of the AFZ border) which, if it had existed as he mistakenly thought (if the 'red line' were in fact the AFZ border), the Mitra's location would have been 11.6 nautical miles north of the AFZ border and therefore would not have constituted an offence under ss 101(2) or 100(2) of the Act. The fact that his mistake was based upon what he had been told by the Taiwanese GPS supplier does not alter this conclusion. Was the Master's mistake of fact reasonable? Did the Master have a mistaken belief? I need to briefly refer to the legal principles on this issue before briefly considering the facts. 98 Both the terms of s 9.2 of the Criminal Code and authority dating as far back as Proudman v Dayman (1941) 67 CLR 536 (' Proudman v Dayman ') require that the Master's mistake must constitute an affirmative belief as to the fact in question; inadvertence, a mere absence of knowledge, or not turning one's mind to the issue, is not sufficient: see Proudman at 541 per Dixon J, State Rail Authority of NSW v Hunter Water Board (1992) 28 NSWLR 721 (' SRA') at 725 per Gleeson CJ, Clough v Rosevear (1997) 69 SASR 67 at 73 --- 74 per Duggan J and CTM v The Queen [2008] HCA 25 (' CTM') at [7] per Gleeson CJ and Gummow, Crennan and Kiefel JJ. 99 AFMA's submission on this question proceeds from the proposition that I should not accept the Master as a witness of credit and should therefore not believe his claim that he thought that the 'red line' was the Australian, or AFZ, border. For the reasons I have given above, in considering whether the Mitra was used for commercial fishing and in considering the nature of the Master's mistake, I reject this submission. 100 Furthermore, for the same reasons, I find that the Master did have an actual belief that the 'red line' shown on the GPS represented the location of the AFZ border. In my view, this is not a case of inadvertence, or a mere absence of knowledge. Was the Master's mistaken belief reasonable? On this question AFMA raises two specific questions: were there matters that should reasonably have alerted the Master to his mistake; and did the circumstances reasonably require the Master to make enquiries that would have revealed his mistake? To begin with, these questions require me to consider what the word 'reasonable' means and what it requires in the context of s 9.2 of the Criminal Code . 102 Section 9.2 of the Criminal Code reflects the so-called Proudman v Dayman defence at common law. So much is clear from the recommendations of the Criminal Law Officers Committee of the Standing Committee of the Attorneys-General contained in its report on the Model Criminal Code dated December 1992, which formed the basis of the Criminal Code that was eventually adopted by the Australian Parliament: see Criminal Law Officers Committee of the Standing Committee of the Attorneys-General, Final Report, December 1992, page 55, paragraph 307 Mistake of Fact (Strict Liability); Explanatory Memorandum, Criminal Code Bill 1994 (Cth) at page 1; and Commonwealth, Parliamentary Debates, Senate, Criminal Code Bill 1994, Second Reading, 30 June 1994, 2379-2382 (Senator Crowley, Minister for Family Services) . The Committee's report also explains that the word 'honest' was deliberately excluded from ss 9.1 and 9.2 of the Criminal Code because it was considered redundant for offences where no fault element is involved: see page 55, paragraph 306. 103 Proudman v Dayman was a case involving a charge of permitting an unlicensed person to drive a motor vehicle. In that case, Dixon J said that: "An honest belief founded on reasonable grounds that he is licensed", afforded to the defendant "an excuse for doing what would otherwise be an offence" (at 540). The statement that the belief should be "founded on reasonable grounds" is consistent with what had earlier been said by Stephen J in R v Tolson (1889) 23 QBD 168 at 179. It was re-stated in those terms in the House of Lords in Sweet v Parsley [1969] UKHL 1 ; [1970] AC 132 at 165, and in the High Court of Australia in He Kaw Teh at 558---559 per Wilson J and at 592 per Dawson J. 104 In the Criminal Code jurisdictions of Queensland, Western Australia and Tasmania, the defence of acting under an honest and reasonable, but mistaken belief, has been said to reflect the common law with "complete accuracy": see Thomas at 305 --- 306 per Dixon J and CTM at [3] per Gleeson CJ and Gummow, Crennan and Kiefel JJ. (d) "For there to be an operative mistake under s 24 , an accused must have acted under an actual belief in the existence of a state of things (subjective element) and the accused belief must be reasonable (mixed element) ... the mixed element is not wholly objective; reasonableness is not to be judged by the standard of the hypothetical ordinary or reasonable person. The mixed element is a combination of subjective and objective aspects. The requirement that the belief be reasonable imports an objective standard. The subjective aspect is that the reasonableness is to be judged by reference to the personal attributes and characteristics of the accused that are capable of affecting his or her appreciation or perception of the circumstances in which he or she found himself or herself", in Aubertin v Western Australia (2006) 33 WAR 87 ; [2006] WASCA 229 at [43] per McLure JA (with whom Roberts-Smith JA and Buss JA agreed). What must be considered, in my view, is the reasonableness of an accused's belief based on the circumstances as he perceived them to be", per Holmes JA at [81]. 107 In my view, the two specific questions raised by AFMA require particular consideration of the matters in (c) and (d) above i.e. the rationality of the Master's mistaken belief by reference to his personal attributes and the information available to him at the time. 108 The first question i.e. were there matters that should reasonably have alerted the Master to his mistake; in my view, quite properly calls for a consideration of the information the Master actually considered at or about the time he formed his mistaken belief, in assessing whether his mistaken belief was rational or capable of being sustained. In making that assessment it is necessary to have regard to the Master's personal attributes. At the same time, it is important to keep in mind that this assessment does not involve any consideration of the information a reasonable person would have considered in the circumstances. 109 However, in my view, AFMA's second question i.e. did the circumstances reasonably require the Master to make enquiries that would have revealed his mistake; is not consistent with the approach outlined in the authorities referred to above. It is inconsistent because it seeks to introduce into the assessment a consideration of the information a reasonable person would have obtained by enquiry, rather than the information the Master had actually obtained, or actually had available to him, at the time he formed his belief. Moreover, in my view, such a requirement would be likely to render nugatory the defence of mistake of fact under s 9.2 of the Criminal Code because the reasonable person's enquiries are, of necessity, almost always likely to reveal the mistake. 110 In my view, therefore, the information the Master had actually obtained, or actually had available to him, at the time he formed his belief, is the only information that is relevant in assessing whether his mistaken belief was rational or capable of being sustained. This is not to say that it is impermissible to consider why the Master failed to have regard to certain information actually available to him when he formed his mistaken belief. It would seem that a question along the lines of: 'did the Master unreasonably fail to have regard to any information that was available to him at the time that would have revealed his mistake', would be permissible. Of course, in making that assessment it remains necessary to have regard to the Master's personal attributes. Since this may be what AFMA intends by its second question, I will consider this issue hereunder. But, first, I will deal with AFMA's first question. Was there any information that should have alerted the Master to his mistake? It appears to be common ground between the parties that the relevant circumstances were that: the Mitra was heading at a fast speed due south; the Master knew he was approaching the AFZ border; the Master knew that the Mitra was not permitted to enter or pass through the AFZ without fishing gear stowed; and the Master had not been in the area before. 112 It also appears to be common ground between the parties that the relevant attributes the Master possessed were that he was experienced as a fisherman and as the Master of the Mitra and he had particular experience with the use of the GPS on the Mitra, including its electronic charts. Further, he was not able to read or speak English. 113 AFMA pointed to four items of information the Master must have actually considered at or before the time he formed his mistaken belief, which should reasonably have alerted him to the fact that the 'red line' was not the AFZ borderline or, in other words, that demonstrated that his mistaken belief was not rational or capable of being sustained. 114 First, AFMA submitted that the 'red line' (which was in fact the same as the ten degrees south line), was a continuous straight line. It submitted that the Master, with his 34 years experience as a sailor, 18 years experience as a Master and 3.5 years experience as Master of the Mitra, should have realised that the border between Indonesian and Australian waters was not a continuous straight line because it was dependent upon the distance between the respective coastlines. As a result, they submitted the Master should have been alerted to the possibility that the 'red line' was not the border between Indonesian and Australian waters. 115 In my view, this submission is misconceived. The boundary of Australian waters (and therefore the AFZ) and the boundary of Indonesian waters is not set by reference to the distance between the coastlines of Australia and Indonesia. Instead, the boundary of the AFZ (which is the same as Australia's Exclusive Economic Zone), is set by reference to a distance of no more than 200 nautical miles from the baselines from which Australia's territorial sea is measured, as described in the United Nations Convention on the Law of the Sea (see [12] above). In Australia's case those baselines were declared in the Commonwealth Government Gazette Number S 29 dated 9 February 1983. Furthermore, the AFZ boundary is in fact a continuous straight line for large distances along its course as shown in the official charts, AUS 410 and AUS 311, tendered in evidence. I do not therefore consider that this was a matter that should reasonably have alerted the Master to the fact that the 'red line' was not the AFZ borderline. 116 Secondly, AFMA submitted that given the Master's experience as a Master and particularly his experience as the Master of the Mitra, he should have realised that the cross-hatching on the GPS screen (he was using on 29/30 March 2008) south of the 'red line' indicated that the 'red line' was the border of the GPS chart, rather than the AFZ borderline. AFMA says there was no other obvious purpose for this cross-hatching. 117 In his evidence, the Master said that he had not seen the cross-hatching on the GPS chart before 29 March 2008. I have no reason to disbelieve the Master on this evidence and that being so, I fail to see how this cross-hatching should reasonably have alerted the Master to his mistake. Its presence was just as consistent with signifying that part of the chart was Australian waters, as he mistakenly thought. Conversely, there was nothing in the nature of the cross-hatching which, in my view, should reasonably have alerted the Master to the fact that the 'red line' represented the boundary of the GPS chart. 118 Thirdly, AFMA submitted that there were other charts within the GPS that showed red lines and that this should reasonably have alerted the Master to the fact that the 'red line' shown on the GPS chart he was using on 29/30 March 2008 was not the AFZ borderline. While the Master admitted that he had seen red lines before, on other GPS charts he had used, he said in his affidavit affirmed on 28 May 2008, that he "... did not understand them as individual charts until I was told on the third day of the hearing of this proceedings. However, I have never seen them in navigation mode while sailing in Indonesian waters". Bearing in mind that the Master said elsewhere in his evidence that he had been using navigation mode on 29/30 March 2008, I do not consider that the presence of red lines on other GPS charts should reasonably have alerted him to the possibility that the 'red line' shown on the GPS chart he was using in navigation mode on 29/30 March 2008 was not the AFZ borderline. 119 Fourthly, AFMA submitted that cross-hatching similar to the cross-hatching shown on the GPS chart that the Master was using on 29/30 March 2008, is also present on the 'north of the 50 nautical mile' view for the GPS chart covering the area from the Philippines to Taiwan (as shown in tendered photograph 8 of the GPS screen views); and on the 20 nautical mile view for the GPS charts covering the area from Taiwan to Indonesia (as shown in tendered photograph 9 of the GPS screen views). AFMA submitted that since the Master gave evidence that he had used the 50 nautical mile view chart on occasions to check his position and that he had more often used the 20 nautical mile view chart, he must have seen this cross-hatching before. Accordingly, this should reasonably have alerted him to the fact that the cross-hatching on all of the GPS charts, including the one he was using on 29/30 March 2008 signified the boundaries of the GPS charts and therefore the 'red line' was not in fact the AFZ borderline. 120 In his affidavit affirmed on 28 May 2008, the Master comments on each of the tendered photographs of the GPS screen views, including photographs 8 and 9. Strangely, the Master does not expressly comment on the cross-hatching shown on the 50 nautical mile screen view (photograph 8). Instead, he says "I only ever used a up to [sic] 50 nautical mile view to quickly check the route for islands the Mitra might be approaching and then sail [sic] at a 5 nautical mile view most of the time". However, in the same affidavit he denied having ever seen the screen view shown on the 20 nautical mile screen view (photograph 9). I accept the Master's denial in this respect. As to the 50 nautical mile screen view (photograph 8), even if I were to infer from the Master's silence on this subject that he had seen the cross-hatching on the northern side of that chart, I do not consider this could constitute clear and cogent evidence that he should therefore have been alerted to the fact that the cross-hatching on all GPS charts, including the one he was using on 29/30 March 2008, signified the boundaries of the GPS charts and therefore the 'red line' was not in fact the AFZ borderline. In my view, there is no necessary logical connection between the two. 121 For these reasons, I reject all of AFMA's submissions that there was information the Master must have actually considered at or before the time he formed his mistaken belief which should reasonably have alerted the Master to his mistake, such that his mistaken belief was not rational or capable of being sustained. Did the Master fail to have regard to any information that would have revealed his mistake? That question is: did the Master unreasonably fail to have regard to any information that was available to him at the time, which would have revealed his mistake, such that his mistaken belief was not rational or capable of sustaining belief? In posing its second question, AFMA relied upon two items of information that it says were actually available to the Master at the time. 123 In my view the general answer to the Master's failure to have regard to these two items of information is that there was nothing in the circumstances that reasonably required him to do so. While he knew he was heading at speed towards the AFZ border, he knew he was not permitted to cross into the AFZ and he had not been in the area before, he was reasonably relying upon what he had been told by the Taiwanese GPS supplier about what he should do in such circumstances i.e. look for a line in the GPS. Once he found the 'red line' and assumed that was the line he had been told to look for, it was reasonable for him to continue to follow his usual practice of solely relying upon the GPS. 124 Indeed AFMA did not really suggest otherwise. The crux of its complaint was that the Master should have followed the precaution of cross checking his GPS with a paper chart, or by radio enquiry with another fishing vessel. 125 While it is true that a more cautious master might have taken one or both of these precautions, that is not the test. The test is whether it was reasonable for this Master in these circumstances to form the mistaken belief he did without such cross checking. 126 There is no suggestion the GPS was mal functioning, quite the opposite, he used it to precisely plot the position where he stopped the Mitra i.e. 11.61 nautical miles north of the 'red line'. Apart from an abundance of caution, there is, in my view, nothing in the circumstances that reasonably required the Master to cross check his GPS by having regard to these two items of information. It follows that he could not read the English writing on the charts, AUS 410 and AUS 311. (b) Secondly, even if it were to be assumed that the Master would be able to identify the AFZ borderline marked on chart AUS 410 without being able to read English, to make any use of that information he would have to first realise that the 'red line' on the GPS screen was not, in fact, the AFZ borderline as shown on this chart. Otherwise, it is most likely that he would have simply assumed that the AFZ borderline shown on chart AUS 410 was the same as the 'red line' shown on the GPS screen, as he mistakenly thought. In particular, he would have had to realise that the 'red line' was in fact the 10 degrees south line and then to realise that the 10 degrees south line shown on chart AUS 410 was not the same as the AFZ borderline shown on chart AUS 410. However, the Master's evidence, which I accept, was that he did not at any time realise that the 'red line' shown on the GPS screen was the 10 degrees south line. For these reasons, I do not consider that even if the Master could have identified the AFZ borderline on chart AUS 410, he would have been alerted to his mistaken belief that the 'red line' was the AFZ borderline. (c) Thirdly, and perhaps most significantly, the Master was not cross-examined about what, if any, use he could have made of these Australian charts, or about what, if any, radio enquiries he could have made of other Taiwanese vessels just before midnight on 29 March 2008. In the absence of such cross-examination, I am not willing to infer as AFMA says I should, that the Master could have used these charts to discover his mistake, or that he could have contacted someone at that time of night who would have been able to alert him to his mistake. The unfairness of drawing such inferences where the Master has not been given any opportunity to explain why I should not do so, is obvious. This is all the more so, where AFMA bears the onus of proving these matters on clear and cogent evidence. However, not without some hesitation, I have concluded that it was reasonable for the Master to proceed as he did in all the circumstances on the mistaken belief that the 'red line' was the AFZ borderline. 129 Apart from the many aspects mentioned earlier in these reasons, there are two factors that have influenced me more than others in reaching this conclusion. The first is the particular conduct which gave rise to the possible offences in this case. This was not, in my view, a case, where the Master was using the Mitra for commercial fishing in the AFZ and attempting to use the reasonable mistake of fact defence to excuse that conduct. Here, the primary conduct constituting the offence was the mere presence of the Mitra in the AFZ. Moreover, while it was in the AFZ, the Mitra was drifting on the tide while the engineers were fixing its engine. In my view, this conduct is objectively innocent. It is the very kind of innocent conduct to which the defence under s 9.2 of the Criminal Code is directed: see CTM at [3]-[4]. Indeed there is no sensible reason, apart from mistake, why the Master would have allowed the engineers to fix the Mitra's engine while it was drifting in the AFZ, knowing that it could be forfeited as a result. 130 The second factor relates to the first. Given the innocent nature of the conduct in question here, I do not consider it is an affront to the purposes of the Act, to hold that the owners should be excused from criminal responsibility in the circumstances. It is unlikely to lead to any significant erosion of AFMA's capacity to protect Australia's fishing resources, or to police the enforcement provisions of the Act. On the other hand, it is entirely consistent with the purpose of s 9.2 of the Criminal Code to hold that the defence of reasonable mistake of fact should be available to excuse it: see CTM at [7]. 131 For these reasons I find that AFMA has failed to prove, on the balance of probabilities, based upon clear and cogent evidence that the Mitra was not within the AFZ at the time as a result of a mistaken but reasonable belief of fact, on the part of the Master, under s 9.2 of the Criminal Code . 132 Accordingly I propose to make appropriate declarations in favour of the owners. I will hear the parties on the form of those orders and costs. I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves.

strict liability offences mistake of fact whether mistake of fact or law whether affirmative belief as to fact whether mistaken belief reasonable forfeiture of foreign fishing vessel civil proceedings to prevent forfeiture onus of proof and standard of proof whether vessel being used for offence purpose of enforcement provisions purpose of reasonable mistake of fact defence criminal admiralty

The application was filed with the National Native Title Tribunal in October 1997 by Dorothy Mary Lawson and Phillip Mark Lawson who are jointly the applicant in this proceeding and who act on behalf of the Barkandji (Paakantyi) People. Pursuant to amendments made to the Act the compensation application became a proceeding in this Court on 30 September 1998. In an affidavit affirmed on 19 October 2000, Philippe Savidis, a solicitor employed by NTS, gave details of the attempts that NTS had made to serve the applicant and the applicant's representative, Mr Mark Dengate. A letter, enclosing letters for Mrs Lawson and Mr Lawson, was sent to the last known address for Mr Dengate. Letters to Mrs Lawson and Mr Lawson were also sent to a number of different addresses. It is not necessary for me to detail the extensive efforts made by NTS to contact the applicant. It is sufficient to state that I am satisfied that every effort was made to contact them without success. Mr Savidis testified that he has responsibility for the day to day running of all native title claimant applications represented by NTS in the Western Division of New South Wales. Mr Savidis explained that in the ordinary course of proceedings filed under the Native Title Act , pursuant to s 84(3) and consistently with its statutory functions as the representative body, NTS joins applications by filing a Form 5 during the notification period. The present application has not yet been notified and therefore NTS has not been joined as a party. It now seeks to be joined as a party to the compensation application. 5 Section 84(5) of the Native Title Act provides that the Federal Court may join any person as a party to proceedings under the Act if it is satisfied that 'the person's interests may be affected by a determination in the proceedings'. NTS is no stranger to applications made under this section. In Bissett v Minister for Land and Water Conservation for the State of New South Wales [2002] FCA 365 , Tamberlin J considered an application for the New South Wales Aboriginal Land Council to withdraw as a party from a native title proceeding and for NTS to be joined as a party. In December 2001 the status of the Land Council as a Native Title Representative Body was withdrawn at its own request. The Aboriginal and Torres Strait Islander Commission decided to grant funds to NTS to assist in certain activities including carrying out the functions of a representative body as set out in s 203B of the Native Title Act . 6 In deciding whether NTS had the requisite interest under s 84(5) , Tamberlin J applied the principles identified by the Full Court in Byron Environment Centre Incorporated v Arakwal People (1997) 78 FCR 1. His Honour agreed with the views of Katz J in Woodridge v Minister for Land and Water Conservation for the State of NSW [2001] FCA 419 ; (2001) 108 FCR 527 that despite amendments to the Native Title Act the reasoning in Byron was applicable to the case before him. The "interests" must not be indirect, remote or lacking in substance and must be capable of clear definition such that they may be affected in a discernible way in relation to the application: at 7-10 per Black CJ. His Honour also observed that the expression, 'a determination in the proceedings' should not be equated with a final determination of native title rights. The provision empowers the Court at any time to order a party other than an applicant to cease to be a party to the proceedings. This power could be invoked by the Court if a representative body is a party to the proceedings and adopts a grossly unreasonable approach in relation to a proposed consensual determination of the proceedings. In addition, it should be kept in mind that the Court must always be satisfied that the person or body has the requisite interest in any particular circumstances and this provides a safeguard on the extent to which other persons or bodies can be joined. For the same reasons I am satisfied that NTS has sufficient interest in the compensation application and the order for joinder in this proceeding should be made. The following history of the matter, which I accept as correct, is taken from the affidavit of Mr Savidis. 10 The compensation application covers an area "identical to the external boundaries of the Barkandji Traditional Owner's Application (NSD 6084 of 1998)" in which NTS is a party and the legal representative of the applicant. This application, known as the Barkandji #8 application, was first lodged with the Tribunal on 8 October 1997. 11 As required by s 67 of the Act, the compensation application is listed at each directions hearing for the Barkandji #8 application. The Federal Court records show that the compensation application has been before the Court 28 times however no orders specific to progressing this matter have been sought by the applicant and no material in support of the application (apart from the form on which it was lodged) has been filed. There has been no appearance in the matter by or on behalf of the applicant for many years. In an affidavit affirmed on 3 November 2006, Mr Stephen Ryan, a community facilitator with NTS testified to the attempts that had been made to publicise the proposed meeting and to contact all those Barkandji group members who might have a present or former interest in the area covered by the Barkandji #8 application and the compensation application. Those efforts included extensive newspaper advertising as well as contact by mail, telephone calls, emails and faxes sent not only to claim group members but also to people who might have a traditional connection to 'country' falling within the claim area. NTS made arrangements for persons to attend the meeting, helping with arrangements and expenses for accommodation and travel. 13 Affidavit evidence was also given by Mr Nathan Ryan, a trainee community facilitator with NTS, who gave an account of strenuous efforts that had been made to contact the applicant during the period leading up to the claim group meeting. These efforts included contacting other Barkandji people who might have information about the whereabouts of Mrs Lawson and Mr Lawson. All of these efforts were unsuccessful. The meeting, which was chaired by Mr Stephen Ryan of NTS, was attended by 'at least' fifty people who, according to Mr Savidis, were "representative of the families who constitute the claim group". The agenda for the meeting shows that the question of the compensation application was one of a number of issues that were considered by the meeting. Mr Savidis' account of the conduct of the meeting, and the supporting documents attached to his affidavit, show that the question was put to the meeting in a clear and transparent way and that it was unanimously supported by those present. 15 The only question that remains is to consider is whether those who attended the meeting adequately represented the claim group in the compensation application. This is inevitably a somewhat unsatisfactory enquiry largely because changes in the legislation, including the registration test, have led to changes in the way in which a claim group is described. It was also the case that the Act did not require a claim group to be described with the precision presently required; see s 61(4). It was, however, necessary to describe the group in a manner that enabled one to determine if a particular individual met the description and was therefore a member of the claim group. 17 NTS put forward two bases on which they claimed that the application should be dismissed or struck out under s 84C. They are the failure of the applicant to progress the compensation claim and the fact that even under the requirements that pertained in 1997 the application was defective. 18 As I am satisfied that NTS has, in its own right, sufficient interest to be made a party, it follows that it is entitled to apply to have the compensation claim dismissed for want of progress. In my view the complete inactivity over many years coupled with the difficulty that NTS has documented in contacting Dorothy and Phillip Lawson suggests that the applicant has abandoned the claim and is sufficient to justify its dismissal without regard to the other aspects of the matter on which NTS relies. 19 The link between the claim group as described in the compensation application and the present Barkandji claim group that attended the meeting on 21 and 22 October is not entirely without flaws. Those flaws, however, are inevitable given the inadequate description of the claim group in the application. The information in the application is such that there is no way of determining whether the applicant had the authority of the claim group to make the application or even the areas of land to which the land applies. The application refers to 'substantial historical, anthropological and genealogical documents' that were to be provided in support of the claim. In nearly ten years since the claim was filed none has been forthcoming. 20 In Jango v Northern Territory [2006] FCA 318 ; (2006) 152 FCR 150 the applicants failed in their compensation claim for two independent reasons both of which indicate the evidentiary hurdles that must be overcome by an applicant in such a case. Under the circumstances, I accept that NTS has done everything possible to ensure that those who might have an interest in the claim have been consulted about the present application. They have obtained full support from all persons they have been able to contact except Dorothy and Phillip Lawson. I accept that NTS has been authorised by the Barkandji people to apply to have the compensation claim dismissed. 22 I am conscious that the Court's power under Order 35A rule 3 and under s 84C of the Native Title Act must be exercised cautiously. The applicable principles are helpfully set out by Finn J in McKenzie v South Australia (2005) 214 ALR 214 at [25] et seq. For the reasons set out above, I am satisfied however, that it is appropriate to exercise those powers in the present circumstances. I shall therefore make the orders sought by NTS. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. Counsel for the respondent: The respondent did not appear.

application by representative body to be joined as a party application for compensation application to be dismissed authorisation of representative body to seek dismissal of compensation application compensation application dismissed for applicant's failure to progress ; native title

Subject to orders 2 and 3 below, the applicant pay the respondents' costs of the proceeding. 2. The respondents pay the applicant's costs of the infringement of copyright claim in relation to the artworks and the breach of implied term claim in relation to the artworks and the provisions of O 62 r 36A(1) do not apply in relation to this order. 3. The applicant pay two-thirds of the respondents' costs of the submissions (including written submissions) as to the appropriate orders as to costs. 4. Pursuant to O 52, r 15(1)(a)(iii) of the Federal Court Rules the time for filing and serving any notice of appeal from the orders made in this proceeding be extended for a period of 21 days from today's date. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules . A Judge of the Court made an order that issues of liability be determined separately from and prior to issues of quantum. The applicant is the owner of copyright in the artworks. The second respondent authorised the first respondent's said infringement of the applicant's copyright in the artworks in breach of s 36 of the Copyright Act 1968 (Cth). 4. It was an implied term of the agreement between the applicant and the first respondent ("the agreement") that the artworks would be used by the first respondent for the purpose of fulfilling orders and for no other purpose ("the implied term"). 5. The first respondent breached the implied term by providing samples of skins bearing some of the artworks to persons including one Ian Bagnall of Powermove Distribution Pty Ltd without the authorisation of the applicant. Save for the applicant's claim for damages for the said infringement of copyright and for the said breach of the implied term, the application herein otherwise be dismissed. For the infringement of copyright there be judgment in favour of the applicant against the respondents in the sum of $10,010.00. 2. For breach of the implied term there be judgment in favour of the applicant against the first respondent in the additional sum of $10.00. 4 As I understood it, the applicant submitted that the respondents should pay its costs of the proceedings assessed on an indemnity basis. The respondents submitted that two orders should be made. First, an order should be made that the applicant pay the respondents' costs of and incidental to the proceedings up to and including 22 November 2007 on an indemnity basis. Secondly, an order should be made that the applicant pay the respondents' costs of and incidental to the proceeding from 23 November 2007 onwards on a party-party basis. Should separate orders be made? No doubt in circumstances where one party to proceedings has been largely successful the Court will examine the facts carefully before making a separate order as to costs in favour of the party which has been largely unsuccessful with respect to those issues in relation to which it has been successful. The respondents have been largely successful, but the issues in relation to which the applicant has been successful were sufficiently separate and distinct to warrant a separate order for costs. 6 The applicant made a number of claims against the respondents. Those claims are outlined in my liability reasons: Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd [2007] FCA 1621. The applicant was unsuccessful as to the majority of its claims. It was unsuccessful as to what it presented as the main claim, namely, that there was an implied term in a contract between it and Graphix Labels Pty Ltd which prevented Graphix Labels from manufacturing and selling skins. The applicant submitted that one order as to costs should be made and it should be an order in its favour. The problem for the applicant is that if it is appropriate to make only one order as to costs, and that order should be in favour of the successful party, or the party who has been largely successful, then neither party has been wholly successful, and it is the respondents who have been largely successful. The respondents have been largely successful in that they have resisted the majority of the applicant's claims including what was the main claim advanced by the applicant. The applicant's counsel attempted to argue that in terms of witnesses and their evidence, the case and the costs associated with it would have been the same, or more or less the same, even if it had not pursued the claims upon which it was unsuccessful. He also submitted that the applicant had been successful as to some claims and unsuccessful as to others. The applicant's attempts to characterise the proceedings in that way must fail because the fact is that the applicant failed on its main claim and the bulk of its other claims. My reasons for reaching that conclusion are apparent from my liability reasons and require no further elaboration. 7 For their part, the respondents submitted that the success or benefit ultimately achieved by the applicant in pursuing the proceedings, as reflected in my orders, was slight, whereas the costs were substantial. The success or benefit was submitted to be so slight that when regard is had to the undertakings as to the artworks offered by the respondent at the outset, the success or benefit achieved by the applicant should be ignored. As I understood the submission, it was that in practical terms the respondents have been successful. It follows, so it was submitted, that an order for costs should be made in their favour albeit the costs should be assessed on different bases for different periods. 8 In my opinion, the respondents' submission should be rejected for two reasons. First, the applicant has succeeded in its claim for infringement of copyright in relation to the artworks and for breach of an implied term in relation to samples containing the artworks. In relation to the first-mentioned claim, the applicant has received an award of damages including additional damages which, although modest, were based partly on a finding that the infringement was flagrant. Secondly, the undertakings proffered by the respondents to the applicant not to use the artworks were made with a denial of liability and did not include any indication that the respondents would pay damages or consent to an order for the assessment of damages. The applicant pointed out to the respondents in correspondence that they had not explained the basis upon which they denied liability for infringement of copyright. The denial of liability was maintained in the defence and indeed it was maintained until the fifth day of trial. I was told that the reason for the denial was that the respondents were not satisfied that the artworks were original works, but even if the reason for the denial is relevant, the particular reason was not conveyed to the applicant in their correspondence or in the defence in a way that may have reduced costs. It may be that the important fact is not that the respondents did not offer to pay damages or consent to an assessment of damages but, rather, the fact that ultimately the applicant received an award of damages. 9 In my opinion, the principal submission of each party should be rejected. In my opinion the applicant should be paid its costs of the infringement of copyright claim in relation to the artworks and in relation to the breach of implied term claim in relation to the artworks. In my opinion, the respondents should otherwise receive their costs of the proceedings. Those conclusions leave two submissions to be considered in relation to the applicant's infringement of copyright claim in relation to the artworks and breach of implied term in relation to the artworks, and one submission in relation to the respondents' costs in terms of the balance of the proceedings. One by the respondents and the other by the applicant. 11 The respondents submitted that the one-third off rule in O 62, r 36A of the Federal Court Rules should be applied. I refer to LED Builders Pty Ltd v Hope [1994] FCA 1353 ; (1994) 53 FCR 10 , Fasold v Roberts (unreported, Sackville J, 11 September 1997 MG942 of 1992), Australasian Performing Right Association Ltd v Pashalidis [2000] FCA 1815 and Australian Performing Right Association Ltd v Metro on George Pty Ltd (2004) 64 IPR 57. 13 I see no reason not to apply that principle in this case. Accordingly, I will order that the costs ordered to be paid, including disbursements, not be reduced by one-third under O 62 r 36A(1), for the nature of the claim being one appropriately brought in the Federal Court is "good reason" to depart from that rule: Axe Australasia Pty Ltd v Australume Pty Ltd (No 2) [2006] FCA 844 at [6] per Finkelstein J. It also follows that there is no scope for the application of O 62 r 36A(2). 14 The applicant's submission was that the aforesaid costs should be assessed on an indemnity basis because the respondents' conduct was unreasonable. The respondents conceded liability on the copyright claim on the fifth day of trial so that any submission that costs should be assessed on an indemnity basis because of an unreasonable denial of liability cannot go beyond that time. 15 The circumstances in which an unsuccessful party may be ordered to pay costs on a basis other than a party and party basis have been considered in a number of authorities. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the Court will need to consider how it should exercise its unfettered discretion. Shepherd J set out six principles or guidelines at 232-234 and I refer to those principles or guidelines. The discretion is a broad one and must be exercised according to the particular circumstances of the case. I have considered the submissions and I have had regard to the matters identified in my reasons as to damages: Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd (No 2) [2008] FCA 746 at [24] - [30] . I am not persuaded that the respondents' conduct was of such a nature as to justify an award of costs on an indemnity basis. The applicant was put to proof in relation to its claim for infringement of copyright, but that did not add to the length of the trial in any substantial way. The difficulties associated with the main claim should have been apparent to the applicant, but I am not prepared to go as far as the respondents asked me to go. Although of lesser significance, it is also relevant to take into account the fact that there were other claims made by the applicant in respect of which it was unsuccessful and I did not understand the respondents to suggest that the applicant, properly advised, should have known that it had no chance of success with respect to these claims. I will not make an order that the respondents' costs be assessed on an indemnity basis. 19 As far as the costs of the costs submissions including the written submissions are concerned, I think an order that the applicant pay two-thirds of the respondents' costs of those submissions fairly reflects the submissions made by each party including the orders sought and orders I will make. Subject to orders 2 and 3 below, the applicant pay the respondents' costs of the proceeding. 2. The respondents pay the applicant's costs of the infringement of copyright claim in relation to the artworks and the breach of implied term claim in relation to the artworks and the provisions of O 62 r 36A(1) do not apply in relation to this order. 3. The applicant pay two-thirds of the respondents' costs of the submissions (including written submissions) as to the appropriate orders as to costs. 4. Pursuant to O 52, r 15(1)(a)(iii) of the Federal Court Rules the time for filing and serving any notice of appeal from the orders made in this proceeding be extended for a period of 21 days from today's date. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.

multiple causes of action successful on only some causes of action whether separate orders should be made issues sufficiently separate and distinct separate orders made application of one-third off rule in o 62, r 36a federal court rules copyright litigation appropriately commenced in federal court indemnity costs conduct of unsuccessful respondent did not add substantially to length of trial indemnity costs whether unsuccessful applicant should have known main claim had no chance of success costs awarded on party and party basis. costs

The resolution of this dispute raises for consideration the scope of legal professional privilege prior to any retainer between a solicitor and his client. Following the hearing I declined to allow production of the disputed communications, with minor exceptions. What follow are my reasons. Legal professional privilege has its origins in Elizabethan times: see Berd v Lovelace (1577) Cary 62; [21 ER 33]. Strangely, certain aspects of the privilege are still to be settled. The current view is that there are two branches of legal professional privilege --- they are usually referred to as advice privilege and litigation privilege. Advice privilege is concerned with direct communications between a lawyer and his client, or their respective agents or employees: Greenough v Gaskell [1833] EngR 333 ; (1833) 1 My & K 98; [39 ER 618] ; Anderson v Bank of British Columbia [1876] 2 Ch D 644 , 649. Initially the privilege was confined to communications in relation to existing or contemplated litigation: The Southwark and Vauxhall Water Company v Quick (1878) 3 QBD 315 ; Wheeler v Le Marchant (1881) 17 Ch D 675. That is no longer the case: Grant v Downs [1976] HCA 63 ; (1976) 135 CLR 674. The rationale for advice privilege is to promote "the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers": Grant v Downs at 685. To qualify, the usual criteria are that the communication must be: (a) confidential; (b) of a professional nature; and (c) made with the intention of obtaining or giving legal advice: 1 McCormick on Evidence (6 th ed, 2006) § 88; Baker v Campbell [1983] HCA 39 ; (1983) 153 CLR 52 , 115-116. The third proposition should be amplified. The advice given or sought need not be confined to matters of legal principle. It may include advice as to what should or should not be done in a "relevant legal context": Balabel v Air India [1988] Ch 317 , 330 per Taylor LJ ("[L]egal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context"); Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2004] UKHL 48 ; [2005] 1 AC 610. Prima facie any communication between a lawyer and his client concerning the subject matter of the lawyer's retainer will satisfy the three requirements. Once the parties to the communication are known and its subject matter clear the privilege will be made out. But on occasion more information will be needed. The reason is that the privilege is subject to exceptions. For example, the privilege does not apply where the lawyer is not contracted in his professional capacity: Solosky v R [1980] 1 SCR 821 , 835. Nor does it apply to communications not intended to be confidential: O'Shea v Wood [1891] P 286 , 289. There is also the so-called "furtherance of fraud" exception, as to which see R v Cox and Railton (1884) 14 QBD 153 . Litigation privilege developed in the late 19th century because advice privilege did not apply to communications between the lawyer or client and a third party, although the communications were made for the purpose of enabling the lawyer to give his client advice. The courts were slow to hold those communications to be privileged. They are now protected by what is referred to as litigation privilege: The Southwark and Vauxhall Water Company ; Wheeler . For a recent discussion of litigation privilege see Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd [2009] FCAFC 32. This privilege is "essentially a creature of adversarial proceedings": In Re L (A Minor) (Police Investigation: Privilege) [1997] AC 16 , 26. It is confined to communications in aid of pending, or contemplated, litigation. There are significant differences between advice privilege and litigation privilege. One is that, in most common law jurisdictions, advice privilege does not apply to communications with third parties, though the purpose of the communications is to enable the lawyer to tender proper advice. Communications with third parties will only be protected if made in connection with litigation: Waugh v British Railways Board [1979] UKHL 2 ; [1980] AC 521 , 541-542. This approach is followed both in New Zealand ( Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart [1985] 1 NZLR 596 , 602) and Canada ( General Accident Assurance Company v Chrusz (2000) 180 DLR (4 th ) 241). Another difference is that litigation privilege provides protection to a wider range of communications. It applies to communications other than those made for the purpose of giving or obtaining legal advice. One instance is evidence gathered for the purpose of litigation. On the other hand, the scope of litigation privilege is narrower in that it applies only when litigation is in existence or in reasonable prospect. It does not, for example, apply to investigative or inquisitorial proceedings. By contrast, advice privilege applies even if there is no litigation in contemplation. Australian courts have not kept the two branches of privilege so distinct. The High Court considered litigation privilege in Grant v Downs . Barwick CJ (whose views were later affirmed in Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia [1999] HCA 67 ; (1999) 201 CLR 49) , stated (at 677) the relevant principle to be as follows: "[A] document which was produced or brought into existence either with the dominant purpose of its author ... of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection. " The majority (Stephen, Mason and Murphy JJ) described the issue (at 682) to be: "What then are the relevant principles of law governing the privilege which attaches to communications and materials submitted by a client to his solicitor for the purpose of advice or for the purpose of use in existing or anticipated litigation ...". They went on to hold (at 688) that unless documents are brought into existence for the sole purpose of submission to legal advisers for advice or for use in legal proceedings, the privilege would not attach. The point of departure from the English position (and that of other common law jurisdictions) is that third party communications are protected not only under litigation privilege but also under advice privilege. See also Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 126 FCR 357. In Waugh [1979] UKHL 2 ; [1980] AC 521 the House of Lords adopted the view of Barwick CJ as regards the dominant purpose test for litigation privilege. But the Law Lords confined the principle to documents submitted to the legal adviser "in view of litigation" (per Lord Wilberforce at 533, with whom Lords Keith and Russell agreed); "for the use of his lawyer in pending or anticipated litigation" (per Lord Simon at 536); and "litigation, apprehended or actual" (per Lord Edmund-Davies at 542). The Law Lords did not extend the ambit of advice privilege to third party communications. Returning to Grant v Downs, that case did not in other respects alter the law as regards advice privilege. In Trade Practices Commission v Sterling [1979] FCA 33 ; (1979) 36 FLR 244 , 245-246 a case which has frequently been referred to, Lockhart J described the various categories of communication to which legal professional privilege applies. He then rejected a submission that Grant v Downs had established a new test for all those categories. Lockhart J said (at 248): "It is clear that the High Court in Grant's case was considering the relevant principles of law governing privilege attaching to communications and materials submitted by a client to his solicitor for the purpose of advice or for the purpose of use in existing or anticipated litigation and not otherwise. Grant's case has nothing to say as to the other well-established categories of legal professional privilege. " What Lockhart J said is obviously correct. But, as Lord Edmund-Davis has observed, courts have not in their discussion of privilege kept "clear the distinction between (a) communications between client and legal adviser, and (b) communications between client and third parties made ... 'for the purpose of obtaining information to be submitted to the client's legal advisers for the purpose of obtaining advice ...'": Waugh at 541-542. For example, in Australia, dicta has crept into judgments, including those of members of the High Court, which suggests the dominant purpose test applies not only to third party communications but also to direct communications between a lawyer and his client. In The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49 ; (2002) 213 CLR 543 (a case concerned with whether legal professional privilege had been overridden by s 155 of the Trade Practices Act 1974 (Cth)), the following appears in the joint judgment of Gleeson CJ, Gaudron, Gummow and Hayne JJ (at 552): "It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings". This passage was cited with approval in Osland v Secretary Department of Justice [2008] HCA 37 ; (2008) 234 CLR 275 , 325. Another example is Z v New South Wales Crime Commission [2007] HCA 7 ; (2007) 231 CLR 75 , 79, where Gleeson CJ said that communications passing between the appellant, a legal practitioner, in his capacity as a legal practitioner and X, a client, were not privileged because they "were not made for the dominant purpose of obtaining legal advice". To a similar effect, are the observations of Hayne and Crennan JJ (at 87): "Legal professional privilege ... attaches to confidential communications between a lawyer and client made for the dominant purpose of seeking and obtaining legal advice. " On one reading, these dictum apply the dominant purpose test to all communications which may attract legal professional privilege, including communications between a solicitor and his client. It is by no means clear this is what was intended. If taken literally, the effect of the dictum is to alter advice privilege (in the traditional sense of solicitor-client communications) by adding an additional requirement. The dictum would also, unless qualified, narrow the scope of advice privilege in several respects. It is unlikely the High Court intended to make such a radical change to the law in the absence of argument or analysis. Returning to the case at bar, the documents over which legal privilege was claimed came into existence in the following circumstances. From about September 2005 MBC made it publicly known that it was investigating the commencement of a class action against Multiplex. It did this through media interviews, by posting information on MBC's website, by word of mouth and by contacting people who had held Multiplex securities. In those communications, security holders were asked to register with MBC their interest in becoming members of the class in a proceeding against Multiplex. People who did so (registrants) were recorded on a MBC database. MBC told registrants that they would be kept informed about developments to assist them in determining whether to participate in the proceedings. They were also told that becoming a registrant did not oblige them to participate in an action and did not make them a client of MBC. Registrants were informed that to become a client they had to sign a retainer agreement and to become a group member they had to sign a funding agreement with the litigation funder, International Litigation Funding Partners Pte Ltd. The communications were with registrants (including registrants who subsequently became clients) using both pro forma and individualised communications. The latter were usually made pursuant to an express request for information. The communications came into existence both before and after the commencement of the Multiplex proceedings. The existence of the privilege claimed by MBC's clients was attacked on several bases. First it was contended that the communications were made by MBC not for the dominant purpose of giving legal advice but for the dominant (or equally important) purpose of establishing a solicitor-client relationship with registrants. In substance the argument was that MBC wished to attract a sufficient number of persons to become clients and group members so as to enable the proceedings to get off the ground. Second it was said that in any event there was no solicitor-client relationship sufficient to attract the privilege. This argument was premised on the fact that many of the communications were made with registrants who had not signed a retainer agreement. Third it was said that the communications, or at least the pro forma communications, were not made in direct response to a request and were therefore not protected by privilege. Finally it was contended that it had not been established that the communications were confidential. The first ground, namely the purpose of the communications, was the subject of much debate. It centred on MBC's purpose in writing to the registrants. Its purpose is likely to be beside the point. If a solicitor-client relationship is established the solicitor's purpose in communicating with his client is not relevant to the existence of privilege. What is relevant is the client's intention in dealing with his solicitor. On the other hand, if there be no solicitor-client relationship, communications from the solicitor will not be protected by privilege whatever be the solicitor's purpose for making the communication. Nonetheless, in deference to the parties' approach to the case I will deal with the evidence. Mr Watson, a principal of MBC who has the conduct of the Multiplex proceedings, gave evidence about the communications. He explained that the communications fell into the following categories: (a) communications made for the purpose of providing legal advice to registrants to enable them to decide whether to participate in the proceedings; and (b) communications made for the purpose of advising clients as to the course of and issues arising in the proceedings. Dr Bell SC, counsel for Multiplex, put to Mr Watson that the communications were for the purpose of persuading registrants of the value of becoming group members. He suggested that, from a purely commercial perspective, it was in MBC's interest to secure as many group members as possible. This, it was said, followed from MBC continuing to contact registrants once the litigation funding had been secured. Mr Watson denied that the purpose of the communications was to persuade registrants to become group members. He explained that, although there was no retainer with MBC, he regarded himself as subject to an obligation to keep registrants informed of developments about the proposed action, and, after the action had commenced, its progress. Mr Watson said he could not "just, as it were, leave things hanging". I accept Mr Watson's evidence that the communications were made in order to discharge what he believed to be (and what probably was) MBC's obligation to keep registrants informed of developments. It is now convenient to discuss what can be made of the lack of a retainer between MBC and the registrants. In Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855 Barrett J said (at [11]) that for the purposes of solicitor-client privilege: "'Client', in its ordinary signification, must ... be regarded as referring to a person who, in respect of some legal matter within the scope of professional services normally provided by lawyers, has, with the consent of a lawyer, come to stand in a relationship of trust and confidence to the lawyer entailing duties of the lawyer to promote the person's interests, to protect the person's rights and to respect the person's confidences. The privilege exists so that a person may consult his legal adviser in the knowledge that confidentiality will prevail. " Whatever may be necessary to create the required "relationship of trust and confidence", it is clear that a retainer need not exist. In Minter v Priest [1930] AC 558 , 573 Viscount Dunedin said: "Now, if a man goes to a solicitor, as a solicitor, to consult and does consult him, though the end of the interview may lead to the conclusion that he does not engage him as his solicitor or expect that he should act as his solicitor, nevertheless the interview is held as a privileged occasion. " In Descôteaux v Mierzwinski [1982] 1 SCR 860 , Lamer J, in delivering the judgment of the Supreme Court of Canada, said (at 876): "[I]t is necessary, in my view, to distinguish between the moment when the retainer is established and the moment when the solicitor-client relationship arises. The latter arises as soon as the potential client has his first dealings with the lawyer's office in order to obtain legal advice. " He went on (at 880) to say: "[C]onversations with a solicitor's agents held for the purpose of retaining him would also be privileged, even though the solicitor was not then, or ever, retained. " This is consistent with early English authority: see Cormack v Heathcote (1820) 2 Brod & B 4, 6 per Dallas CJ; [129 ER 857] (overruled in Cox and Railton on different grounds) ("[H]ere is a client who goes to give instructions touching to a deed, and the communication must be deemed confidential, as between the attorney and client, though the attorney happens to refuse the employment"). What kind of communication between a lawyer and a 'client' with whom there is no retainer can be protected? If the communication is to the lawyer it will be privileged if it is confidential and provided to the lawyer in his professional capacity. A communication may be so characterised in a variety of circumstances, most usually if the person believes he is consulting a lawyer in that capacity and his manifest intention is to seek legal advice or legal services. For example, in Barton v Smithkline Beecham [2005] USCA9 320 ; 410 F 3d 1104 (9th Cir 2005) a law firm posted a questionnaire on the internet seeking information about potential class members for a class action. The responses were held to be privileged. The court said (at 1111): "The questionnaire is designed so that a person filling it out and submitting it is likely to think he is requesting the law firm to include him in the class action mentioned at the beginning of the form. Prospective clients' communications with a view to obtaining legal services are plainly covered by the attorney client privilege under Californian law, regardless of whether they have retained the lawyer, and regardless of whether they ever retain the lawyer". This case may be compared with Morisky v Public Service Electric and Gas Company 191 FRD 419 , 423 (DNJ 2000) where the attorneys for the plaintiffs in a putative class action failed to establish that the persons who completed a similar kind of questionnaire "were clients or sought to become clients at the time [they] ... returned the completed questionnaires". See also Vodak v City of Chicago 2004 WL 783051 (ND Ill). In the case of a communication from the lawyer, in my view the following (non-exhaustive) rule is appropriate. If a lawyer provides a person with unsolicited legal advice, the advice cannot be privileged. It cannot be privileged because the communication is not made during the course of a professional relationship; nor can it be characterised as confidential. If, on the other hand, the advice is given in pursuance of a request, whether express or implied, made of the lawyer in his professional capacity, or if the circumstances are such that the 'client' would reasonably expect to be given such advice, then it will be privileged. Thus, in Burlington Industries v Exxon Corporation 65 FRD 26 (DMd 1974), a patent infringement action, the court said (at 37): "While certain advisory communications from the attorney to the client were not in direct response to a client request, it is evident that an ongoing attorney-client relationship existed. Moreover, the attorney would have been remiss in his duties were he not to keep his client informed of pertinent legal developments with respect to the matters for which his services were obtained. Consequently, both the implied requests for legal advice and the self-initiated attorney communications were properly protected. " See also Jack Winter Inc v Koratron Company Inc 54 FRD 44 (ND Cal 1971). The application of these principles will dispose of the second and third grounds. The registrants (many of whom are now clients) indicated to MBC that they were interested in pursuing litigation against Multiplex. Not only had they expressed an interest in becoming a party to the proceedings, they had registered that interest in a formal way by providing details about their potential claim. The registrants expected to be kept posted on legal developments and, in those circumstances, the advice they received, including advice not given pursuant to an express request, is privileged. As regards the fourth ground, confidentiality is usually established by inference. Thus, in Minter Lord Atkin said ([1930] AC at 581) that "if the communication passes for the purpose of getting legal advice it must be deemed confidential". In the present case, the inference is not difficult to draw. First there is the relationship between MBC and the registrants, an aspect of which was that MBC would communicate with registrants to assist them in determining whether to participate in proceedings against Multiplex. The anticipated communications included legal advice and opinions. Second, it is likely that each registrant expected the content of the communications to be kept confidential. Third, Mr Watson said he had been instructed to claim privilege over the communications. The communications in issue are not confined to advice about litigation. Some communications concern the retainer agreements with MBC. No privilege attaches to most of those communications if for no other reason than the fact that copies of the agreements had been provided to Multiplex, by way of discovery, in other litigation. Even if copies had not been provided to Multiplex, it is unlikely that communications about their terms would be covered by privilege. MBC told registrants that it would not give them advice about the retainer agreement as it had a conflict of interest (I say nothing about the correctness of this statement). Having indicated it would not give registrants legal advice about the agreement, nothing it did say could be characterised as a confidential communication made in a professional context. Further, there are cases which hold that an executed retainer agreement is not in any event privileged: Cook v Pasminco Pty Ltd (No 2) [2000] FCA 1819 ; (2000) 107 FCR 44 , 53 per Lindgren J ("In my opinion, generally, an agreement between solicitors and their prospective client as to the terms of retainer of the solicitors does not attract either kind of legal professional privilege mentioned"); Securities and Investments Commission v Mercorella (No 3) (2006) 58 ACSR 40 , 45 per Mansfield J ("[A]n engagement letter between a solicitor and a client is not privileged except to the extent that it records legal advice or material touching upon legal advice to be given"); CSR Ltd v Eddy [2008] NSWCA 83 ; (2008) 70 NSWLR 725 , 739 per Basten JA ("The purpose of client legal privilege is to protect confidential communications between client and lawyer for the purpose of obtaining legal advice and the provision of that advice and communications in relation to the conduct of litigation. The existence of a retainer between client and lawyer is not the subject of the protection, but a precondition to its operation. Accordingly, and generally speaking, the retainer will not be privileged"). When copies of the retainer agreements were provided to Multiplex, certain portions were redacted. I withheld from production any communication which related to the redacted portions because none were relevant. There were also communications which dealt with the funding agreement. There is authority for the proposition that a funding agreement may be privileged: Re Global Medical Imaging Management Limited (in Liq) [2001] NSWSC 476 ; CSR Ltd v Eddy ; Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234. Notwithstanding the potential subsistence of privilege, a redacted version of the funding agreement had also been provided to Multiplex in other litigation. As the agreement had been disclosed, I allowed inspection of communications regarding the funding agreement, except to the extent that they related to the redacted portions. On the other hand, I withheld from production communications relating to the quantum and timing of the funding on the ground that it would be unfair to provide that information, which did not bear on the merits of the dispute, but might be used in the tactical battles that are a feature of most litigation. I also withheld from production communications which amounted to advice about the terms of the funding agreement. So far as the costs are concerned (which I had reserved when I made the order), as each side has had a measure of success, they should lie where they fall.

legal professional privilege applicable principles retainer not necessary unsolicited advice not privileged implied request for advice sufficient to attract privilege advice privilege the scope of advice privilege whether the dominate purpose test applies to direct communications between solicitor and client litigation privilege scope of litigation privilege differences between advice privilege and litigation privilege evidence

He has previously held permits to take various species of fish in the Western Tuna and Billfish Fishery ("the WTBF"). At various times in 1998, 1999 and 2000, Mr Kennedy suffered from illnesses which prevented him from fishing. In 2005 he applied for a new fishing concession. These concessions were known as Statutory Fishing Rights ("SFRs"). They were allocated by the Australian Fisheries Management Authority ("AFMA"). In determining quota allocations for each permit-holder AFMA applied a formula which was stipulated by the Western Tuna and Billfish Fishery Management Plan 2005 ("the Management Plan"). This plan was made under the Fisheries Management Act 1991 (Cth) ("the Act"). The formula took account of the weight of the catch taken by Mr Kennedy under the permits he held between 1997 and 2001. The more he caught during that period, the greater was his potential entitlement under the new SFRs for which he applied. The Management Plan took account of the possibility that former permit-holders might, like Mr Kennedy, have been prevented, by illness or other causes, from catching as many fish as they might otherwise have done but for the relevant disability. Mr Kennedy contends that, in applying this ameliorative provision to him, both AFMA and an appellate panel misconstrued it and did not apply it to the entire period during which he was entitled to its benefit. Mr Kennedy has exercised a right of statutory appeal from the panel's decision. I have concluded that the panel did not misconstrue the ameliorative provision and that, as a result, Mr Kennedy's quota SFRs have been calculated as required by the Management Plan. I have also concluded that Mr Kennedy has failed to establish error on the part of the panel in relation to its determination of the period during which he was prevented by illness from fishing. In my view, the reasons provided by the panel were, in certain respects, inadequate. That inadequacy does not, however, have implications for the validity of the panel's decision. Under s 95 of the Act, it is an offence to engage in commercial fishing in the Australian Fishing Zone, including the WTBF, without a fishing concession. SFRs and fishing permits are types of fishing concessions: see s 4 of the Act. In 2005 AFMA introduced the Management Plan which fundamentally changed the way the WTBF was managed. Prior to the introduction of the Management Plan, what is now the WTBF was regulated by fishing permits which were granted on the basis of "input controls" which included restrictions on equipment and access to fisheries. The Management Plan provided for the grant of SFRs which regulated the WTBF through "output controls" which imposed limits on the amounts of fish an operator could take in a fishing season. Each of the right to take a particular quantity of fish; the right to a particular proportion of the fishing capacity; the right to engage in fishing in a managed fishery at particular times; and the right to use a boat in a managed fishery is a separate SFR (s 21(1)(a), (b), (c) and (d) of the Act). The Management Plan provides for the grant of boat SFRs and quota SFRs, both of which are required in order to fish commercially in the WTBF (s 15 of the Management Plan). Boat SFRs permit the holder to have access to and operate in the WTBF. Quota SFRs authorise the holder to take a certain volume of a particular species of fish that is subject to a quota. Relevantly, those species are striped marlin, bigeye tuna, broadbill swordfish, and yellowfin tuna. The quota is the volume, calculated by weight, of a particular species that may be taken under an SFR in a fishing season. Before the start of each fishing season, AFMA determines the total weight of each species that can be taken in that season (s 11 of the Management Plan). The total weight for each species is then divided by the total number of SFRs for that species. A particular weight is thereby allocated to each SFR for the species. This weight is subject to change each fishing season. On 31 October 2005 AFMA published a notice in the Commonwealth of Australia Special Gazette No. S182 which invited interested persons to register as eligible for a grant of SFRs under the Management Plan. Mr Kennedy held an old longline permit (within the meaning of that term as defined in s 20 of the Management Plan) and was, therefore, an eligible person for the grant of SFRs. The allocation of boat SFRs is relatively straightforward. Each old longline permit entitled the holder to one boat SFR (s 24 of the Management Plan). As the holder of one old longline permit Mr Kennedy was granted one boat SFR. The allocation of quota SFRs involves a more complex calculation. AFMA determined on 2 May 2007 that 67 persons, including Mr Kennedy, were eligible for a grant of SFRs. Determine the 2 years, within the relevant period, during which a longline was set under the sequence of old longline permits the greatest number of times. Step 2 . Count, from logbook records held by AFMA, the total number of times a longline was set under the sequence in the 2 years determined in Step 1, giving the best 2 years' sets for the sequence. Step 3 . Calculate the total number of best 2 years' sets for all sequences of old longline permits. Step 4 . Divide the best 2 years' sets for the sequence of old longline permits by the result of Step 3, giving the set history for the sequence of permits. RPV has the meaning given in subsection (3). Note 1 If under subsection 29 (4) of the Act, SFRs are made available to a person, AFMA must notify the person (and each other person who registered under section 26 of the Act) about that fact and give a statement of reasons. Note 2 Section 30 of the Act provides that, within 30 days of SFRs being available to a person, the person must pay the amount of any charge due and payable under the Statutory Fishing Rights Charge Act 1991 . For this Management Plan, there is no charge. Note 3 The last in a sequence of old minor line permits or old longline permits is held by an eligible person at the end of the notice period: see section 20A". The formula treated all holders of the same permit class equally and recognised the asset value of a fishing permit. The number of quota SFRs each eligible person was allocated was determined on the basis of their catch history for each species and their shot history. A shot is throwing a line or a net out in an attempt to catch fish. The catch history and shot history were ascertained by reference to the person's AFMA Daily Fishing Logbook. Each permit-holder was required to maintain a logbook pursuant to determinations made under s 42 of the Act. Importantly, the formula allowed a fisherman to rely on his or her best two years' catches between 1997 and 2001 (inclusive), which s 20 of the Management Plan defined as the relevant period. Determine the 2 years, within the relevant period, during which the greatest calculated weight of fish of the species was taken under the sequence of permits. Step 2 . The best 2 years' catches is the total calculated weight of that species taken under the sequence in the 2 years". (4) In this Division, a reference to fish taken or caught, or longlines set, under a sequence of permits is a reference to fish taken or caught, or longlines set, under a permit or permits that form part of the sequence". In order to determine the calculated weight, AFMA was required first to determine the total weight of fish by referring to an applicant's catch history for the period as recorded in the AFMA Daily Fishing Logbook: see s 21(2)(a) of the Management Plan. It was then obliged to give a notice of this weight to the eligible person. The eligible person was entitled to notify AFMA that he or she disagreed with the calculated weight. If this occurred, AFMA could seek various documents from the eligible person and determine the calculated weight using those documents (s 21(5)(b)). By letter dated 16 December 2005 AFMA confirmed that Mr Kennedy had been registered as an eligible person for the grant of SFRs. AFMA also informed Mr Kennedy of its determination of the calculated weight of yellowfin tuna, bigeye tuna and broadbill swordfish taken under his permit during the 1997-2001 period. Mr Kennedy advised AFMA that he disagreed with its assessment. Subsequently, Mr Kennedy claimed that he had suffered serious misfortune from February 1998 to May 2001 within the meaning of s 27 of the Management Plan. In letters to AFMA dated 13 January 2006 and 9 April 2007, Mr Kennedy claimed serious misfortune because: Mr Kennedy claimed that, as a result of his serious misfortune, his SFRs should be calculated in accordance with s 27(1) of the Management Plan. Section 27 modified the formula in s 26 by providing an alternative to actual catch and set history if a person's fishing activity was reduced because of serious misfortune during the period between 1997 and 2001 (inclusive). Note If the holder of an old longline permit or old minor line permit suffered a serious misfortune that affected the holder's ability to fish under more than 1 permit, the total time of the misfortune is taken into account". AFMA determined that Mr Kennedy had not suffered "serious misfortune" within the terms of s 27 of the Management Plan. It made a provisional determination that Mr Kennedy should be granted the following SFRs: Dissatisfied, Mr Kennedy applied to the Statutory Fishing Rights Allocation Review Panel ("the Panel") for a review of AFMA's decision. No SFRs could be granted to any eligible person until the Panel had dealt with Mr Kennedy's application (s 23(3)(b) of the Act). By s 144 of the Act, each other person who was registered under s 26 in relation to the grant of a fishing right was deemed to be a party to the proceeding before the Panel. Mr Kennedy's application was heard on 12 and 13 December 2007 by Mr Baston (Principal Member), Mr Lister and Ms Yeoh (Members). Sometime after the hearing, but before a determination was made, Ms Yeoh's term expired and she left the Panel. She was later reappointed but was not a member when the Panel made its decision. As a result, only Mr Baston and Mr Lister made the decision and gave the reasons for decision which were delivered on 1 December 2008. The claim of Gary J Kennedy of serious misfortune under section 27 of the [Management] Plan is upheld for the periods from February 1998 to November 1998 and from July 1999 to April 2000. [AFMA] is to recalculate [Mr Kennedy's] SFRs based on the total average catch which should be assessed by reference to all permit holders. The Panel rejected AFMA's submission that serious misfortune was limited to "bad luck or unforseen circumstances outside of the control of the permit holder; not lack of planning or result of unfortunate or ill advised investment decisions". It adopted the definition contained in the Macquarie Dictionary (4 th Ed): "ill or adverse fortune, ill luck" and that contained in the Concise Oxford English Dictionary: "bad luck" and "an unfortunate event". (ii) Did the misfortune prevent Mr Kennedy from arranging another way for fishing to be carried out under the permit? (iii) Did the misfortune prevent Mr Kennedy from fishing under the holder's permit and arranging another way for fishing to be carried out under the permit for more than three months? In dealing with the first question, the Panel rejected AFMA's contention that, in order to establish serious misfortune, a person must not have earned any income from his fishing permit during the period of claimed misfortune. This "arbitrary" gloss was said to place "an unwarranted and unnecessary constraint upon the decision maker". It then turned its attention to Mr Kennedy's claimed misfortune. The principal witnesses who were called in support of Mr Kennedy's claim were the applicant himself and his general practitioner Dr Mark Zafir. Their evidence was critical in relation to the issues raised by the first question. The Panel was impressed by both witnesses. The Panel found that Mr Kennedy was an "honest and reliable witness", who gave a "full, frank and truthful account" of the facts. Dr Zafir was and still is Kennedy's local GP. There is no doubt that treating health professionals such as Dr. Zafir, when expressing opinion[s] before tribunals such as the Panel often take on the role of an advocate for their patient. The Panel observed Dr. Zafir to take on such a role for Kennedy. The Panel however is satisfied that Dr. Zafir's evidence is reliable and supportive of a finding of serious misfortune based upon illness alone". The Authority submits that the illnesses were in two distinct periods, February to November 1998 and July 1999 to April 2000 and that Kennedy's "fishing operations did not get up and running till May 2001". There is considerable merit in such an analysis. Depending on the Panel's view of the evidence of Kennedy and his witnesses it may be a determinative factor" (citations omitted). In his submissions to the Panel Mr Kennedy claimed that he was prevented by misfortune from fishing between February 1998 and May 2001. AFMA contended that, while Mr Kennedy's health affected his ability to fish, it did not prevent him from fishing altogether and that there were a number of causes of Mr Kennedy's inability to fish "between 1997 and May 2001" which could not be characterised as serious misfortune. The reasons put forward by AFMA for Mr Kennedy's inability to fish included: The Panel considered that it was necessary to assess Mr Kennedy's claim for serious misfortune having regard to the whole of the relevant circumstances, as part of an ongoing chain of events between 1997 and 2001, and that AFMA had failed to do this. In relation to the second question, the Panel rejected AFMA's submission that the definition of serious misfortune meant that Mr Kennedy must establish that he could not get someone else to use or operate the permit as too restrictive and unreasonable in the circumstances. It accepted the submission, advanced by Mr Kennedy, that the assessment of his actions should take into account the uncertainty surrounding his illness and his genuine desire to return to fishing. Kennedy claims to have suffered a serious misfortune from February 1998 to May 2001. [AFMA] claims that there were discrete periods of illness, being February to November 1998 and July 1999 to April 2000. There is much in this submission. The Panel finds that, on the whole of the evidence, Kennedy has established a serious misfortune claim for [the] period from February 1998 to November 1998 and from July 1999 to April 2000". The Panel's reasons do not summarise "the whole of the evidence" and, in particular, they fail to refer to any medical evidence that supported its findings that there were two discrete periods of illness between February and November 1998 and July 1999 and April 2000. The Tribunal had before it a series of reports from Dr Zafir. The findings in paragraph 82 of the Panel's reasons appear to be based on a report Dr Zafir gave dated 10 January 2006. In that report he records that Mr Kennedy was diagnosed with a severe bout of shingles on 11 February 1998 and had suffered "continuing pain and blisters in the right thoracic region for about nine months". Later in the report Dr Zafir recorded that, in July 1999, Mr Kennedy developed a severe bout of gastritis with diarrhoea, vomiting and persisting headaches which affected him "through until the boat was sold in approximately May 2000". The Panel's finding that Mr Kennedy had suffered serious misfortune meant that it was necessary to apply s 27 of the Management Plan to determine the number of SFRs that were to be granted to him. The Panel was therefore required to determine how s 27 was to be construed and, in particular, how AFMA was to perform the calculation required by s 27. The Form of Order/Statutory Construction. Kennedy submits that he should be heard on the matter of the method of calculation, should the Panel accept that s 27 applies, and contended that the total average catch should be assessed by reference to active permit holders. [AFMA] submits that the Panel must decide to whom the grant is to be made and how many SFRs are to be granted. [AFMA] submits that, should the Panel determine that section 27 applies, Kennedy must be given the average catch of the fleet for that period or periods (that being the total take of the fleet divided by the number of licence holders)" (emphasis in original, citations omitted). The Panel considers the interpretation asserted by [AFMA] to be correct. The expression "all sequences of old longline permits" to be reference (sic) to all sequences and not limited to those under which fishing activity took place in the relevant period". Mr Kennedy and AFMA had both based parts of their submissions on that provision and, in particular, the phrase "the average catch of the species in the fishery under all sequences of that kind ...". The Panel gave the parties 7 days to consider its reasons and gave AFMA seven days to calculate the SFRs to which Mr Kennedy was entitled, based on its findings. On 22 December 2008 the Panel set aside AFMA's decision and substituted its decision as to the persons to whom a grant of SFRs was to be made under the Management Plan and the number of SFRs to be granted to each person. Mr Kennedy was granted the following SFRs: striped marlin SFRs --- 909; bigeye tuna SFRs --- 11447; broadbill swordfish SFRs --- 11031; and boat SFRs --- 1. This appeal was said to be brought pursuant to s 161 of the Act, s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth). At the hearing Mr Kennedy was granted leave to file an amended notice of appeal dated 28 May 2009, subject to AFMA's objections. This was the tenth iteration of the notice of appeal. This version of the notice of appeal relied only on s 161 of the Act. AFMA has objected to the competency of the appeal on the ground that, with the exception of paragraph 2(c), no question of law was disclosed in the notice of appeal. (aa) Whether, on its proper construction, the presence of the word "may" in section 27(1) of the Plan confers a discretion on [AFMA] to perform a calculation of the kind described in sub-sections 27(1)(c) and (d) or whether, on its proper construction, the presence of the word "may" therein means that once a claimant satisfies the conditions set out in sub-sections 27(1)(a) and (b), [AFMA] must perform the aforesaid calculation. (e) If No to question (c) and/or (d), whether such a defect constitutes an error of law on the face of the record. (b) The Panel fell into error in pars 84 and 85 of its reasons for decision by failing to construe so much of section 27(1)(c) of the Plan as refers to "the average catch of the species in the fishery under all sequences of that kind" as requiring the decision-maker to leave out of calculation permits that have no catch history during the period under consideration. (c) The Panel fell into error in par 85 of its reasons for decision by failing to construe so much of section 27(1)(d) of the Plan as refers to "the average number of times a longline was set in the fishery under all sequences of old longline permits" as requiring the decision-maker to leave out of calculation permits that have no set history during the period under consideration. (d) The Panel fell into error by failing to show which evidence, if any, upon which it relied in arriving at the finding that [Mr Kennedy] had only established a serious misfortune claim for the "period from February 1998 to November 1998 and from July 1999 to April 200[0]" (par 83, reasons for decision). (e) The Panel fell into error by failing to disclose adequately or at all in par 84 or 85 or elsewhere in its reasons for decision its method of calculation. (f) As a consequence of the failures described in grounds (d) and/or (e), the Panel committed an error of law on the face of the record". AFMA complains that question (a) lacks precision because it does not specify for what period a permit must be "active". AFMA submits there are four potential periods: active over the whole five year qualifying period (1997 to 2001 inclusive), active over the best two years, active over one year or active over the period of serious misfortune. As a result, an answer to that question could not assist Mr Kennedy. Further, AFMA submits that the resolution of the question in 2(aa) would give Mr Kennedy no entitlement to relief nor would it identify an error of law: see Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 at 326-327. In any event, AFMA submits that the Panel did not make a finding upon which question 2(aa) is based. AFMA also complains that questions 2(d) and 2(e) do not raise pure questions of law. Section 161 of the Act, like s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"), allows an appeal to this Court only on a question of law. The existence of a question of law is not merely a qualifying condition to ground an appeal under s 44, but is also the subject matter of the appeal itself: see TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 119 ; (1988) 82 ALR 175 at 178 per Gummow J. The Court has repeatedly emphasised the need for pure questions of law to be identified and for them to appear in the notice of appeal in order for the Court to be able to entertain an appeal: see, for example, Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 524; Birdseye at 324-325; Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244 ; (2003) 133 FCR 290 at 300-302; Comcare v Etheridge [2006] FCAFC 27 ; (2006) 149 FCR 522 at 526-527; Commissioner of Taxation v Dixon [2006] FCA 1250 ; (2006) 155 FCR 101 at 104-106; Hussain v Minister for Foreign Affairs [2008] FCAFC 128 ; (2008) 169 FCR 241 at 253-7. It is in the specification of the grounds relied upon in support of the orders sought that, in our view, one should expect to find the links between the question of law, the circumstances of the particular case and the orders sought on the appeal" (emphasis added). I accept AFMA's submission that, with the exception of question 2(c), the "questions of law" which are said to be raised in the present appeal are not true questions of law. Each question lacks the necessary precision. The questions are cast at such a level of generality that an answer would not assist in forging the necessary link between the question, the circumstances of the case and the orders being sought by Mr Kennedy. In other cases in which the Court has been confronted with this problem and in which it has determined that it might be possible to frame an appropriate question of law, it has done so itself: see, for example, Birdseye . Under the cover of its objections to the competency of the appeal, AFMA conceded that questions of law could possibly be framed and argued on the substantive issues raised by Mr Kennedy. In the event, AFMA will suffer no prejudice if I attempt to frame questions of law. In my view, it is possible to identify three questions of law: Whether, on the proper construction of s 27 of the Management Plan, AFMA and the Panel are bound to take into account all permits extant during the period of an eligible person's serious misfortune when determining "the average catch of the species in the fishery under all sequences of that kind (old longline or old minor line, as the case may be)" under s 27(1)(c)? Whether on the proper construction of s 27 of the Management Plan, AFMA and the Panel were bound to take into account all permits extant during the period of an eligible person's serious misfortune when determining "the average number of times a longline was set in the fishery under all sequences of old longline permits" under s 27(1)(d)? Whether there was any evidence before the Panel upon which it was open to it to find that the period of serious misfortune suffered by Mr Kennedy was limited to the periods from February 1998 to November 1998 and from July 1999 to April 2000? When a person has suffered serious misfortune, AFMA may calculate: the best two years' catches of a species of fish under the sequence of permits by using, for the period of serious misfortune, the average catch of the species in the fishery under all sequences of that kind (old longline or old minor line, as the case may be) during that period (s 27(1)(c)); and the best two years' sets for the relevant sequence of permits for step 1 of the definition of set history in s 26(3), by using, for the period of the serious misfortune, the average number of times a longline was set in the fishery under all sequences of old longline permits during that period: s 27(1)(d) (set history was not incorporated in the formula for calculating quota SFRs for people who held old minor line permits). The relevant sequences of permits are therefore sequences of old longline permits. The Panel determined that Mr Kennedy had suffered serious misfortune within the meaning of s 27. In those circumstances, section 27(1) provides that "AFMA may" perform the calculations in s 26 by using the average catch of the relevant species under all sequences of longline permits (s 27(1)(c)) and the average number of times a longline was set under all sequences of longline permits (s 27(1)(d)) in calculating the number of SFRs to be granted to Mr Kennedy under s 26. Mr Kennedy contended that s 27 makes remedial provision for an eligible person who has been disadvantaged by having suffered a serious misfortune. For an eligible person so disadvantaged, s 27 provides a benevolent scheme: a person who suffered serious misfortune should be no worse off than he or she might have been had the relevant period been worked. Accordingly, once an eligible person comes within the purview of ss 27(1)(a) and (b) of the Management Plan, he or she is entitled as of right to AFMA's making the calculations prescribed by ss 27(1)(c) and (d): see Julius v Lord Bishop of Oxford (1880) 5 App Cas 214 at 222-223; The Metropolitan Coal Company of Sydney Limited v The Australian Coal and Shale Employees' Federation [1917] HCA 64 ; (1917) 24 CLR 85 at 96-100; Re United Firefighters Union (1969) 129 CAR 43 at 52-55; Finance Facilities Pty Limited v The Commissioner of Taxation of the Commonwealth of Australia [1971] HCA 12 ; (1971) 127 CLR 106 at 134-5; Stuart v Kirland-Veenstra [2009] HCA 15 ; (2009) 254 ALR 432 at 468. It was submitted that the word "may" in s 27(1)(c) of the Management Plan confers a power on AFMA which is to be exercised upon its satisfaction of the matters described in ss 27(1)(a) and (b): see Leach v The Queen [2007] HCA 3 ; (2007) 230 CLR 1 at 17-18 . AFMA maintained that the issue was not properly the subject of an appeal. It submitted that the question of whether or not it had a discretion or was obliged to make the calculations prescribed by ss 27(1)(c) and (d) was not a question that arose from the decision of the Panel. The Panel made no finding as to whether s 27 conferred a discretion or whether AFMA was obliged to make the calculations. The Panel exercised no discretion. It directed that the calculations required by ss 27(1)(c) and (d) be made without making a finding on the issue. A problem for the Court is that the Panel's reasons do not contain any analysis of s 27, or any elaboration on how the calculations were to be performed. The Panel certainly made no express finding as to whether s 27 conferred a discretion or whether AFMA was obliged to make the calculations. It merely directed that AFMA make the calculations required by ss 27(1)(c) and (d). It is unclear whether the Panel considered that AFMA had a discretion and (directed AFMA to exercise that discretion) or whether it considered that AFMA was obliged to make the calculations. Its failure to make such findings strongly suggests that it did not turn its mind to the matter. In the present case, however, nothing turns on the point. While it would have been preferable for the Panel to express its view on the issue, it was not necessary for the Panel to make an express finding on whether the word "may" in s 27 imposed a discretion or an obligation on AFMA for the calculations in s 27(1)(c) and (d) to be made. The Panel directed that the calculations be made. The calculations were made. The failure by the Panel to deal expressly with this issue did not affect how s 27 was applied to Mr Kennedy, or prejudice his interests. The primary issue in dispute between the parties, both before the Panel and in this Court, is what is meant by the phrase "all sequences" in s 27(1)(c) and (d) of the Management Plan. Mr Kennedy contends that the phrase should be limited to the old longline permits that were in use or "active" during "the period". AFMA, on the other hand, maintains that the phrase includes all of the old longline permits, whether those permits were "active" or "inactive". AFMA also complained that Mr Kennedy had not identified the period that was to be considered when assessing whether a permit was active or inactive: the entire relevant period, annually, or for each period of serious misfortune. Inactive permits have a catch history and a set history of zero for the period they are inactive. The total catch and the total number of sets for any defined period are, therefore, constant, whether one includes all permits or includes only active permits. What is in issue is the numeral by which these totals should be divided to produce the relevant average. If all sequences of old longline permits include only active permits, the averages will be higher than if one divides the total catch history and the total set history by all old longline permits, active and inactive. Because s 27 requires the averages to be fed into the formula in s 26, the number of permits that are included under "all sequences" of old longline permits directly affects the number of quota SFRs Mr Kennedy was entitled to receive. Mr Kennedy complained that, while the Panel directed AFMA to recalculate his SFRs "based on the total average catch which should be assessed by reference to all permit holders", it failed to specify what it meant by "average catch". He submitted that the Panel failed to construe so much of s 27(1)(c) of the Management Plan as refers to "the average catch of the species in the fishery under all sequences of that kind". The construction favoured by Mr Kennedy would require that the decision-maker leave out of the calculation permits that had no catch history during the period under consideration. The same complaint was made in relation to s 27(1)(d) with respect to permits that had no set history during the period under consideration. He submitted that the Panel should have construed (but failed to construe) s 27(1) as requiring AFMA to recalculate his quota SFRs based on the total average catch and/or sets assessed by reference only to active permit-holders rather than all permit-holders. Mr Kennedy contended that it was not appropriate to fasten upon the word "all" in s 27(1)(c) and 27(1)(d) and treat it as though it governed the construction of s 27 as a whole. The construction advanced by Mr Kennedy was that the references to "all" were to "all sequences of a particular kind", old longline or old minor line, during the period under examination. The use of the words "catch" in "the average catch of the species in the fishery" in s 27(1)(c) and "set" in "the average number of times a longline was set in the fishery" in s 27(1)(d) were said to speak of active fishing rather than "non-fishing". The argument ran that, to make a catch or set, it was necessary to put to sea to fish. Only permits that were active during the period of serious misfortune should thus be included in the calculation. The inclusion of inactive permit-holders in the calculations would erode the value of the SFRs held by an eligible person who has suffered a serious misfortune. It was submitted that, having regard to the Act as a whole, its objectives, and the Management Plan as a whole, such a construction could not be supported. AFMA submitted that the construction of s 27 of the Management Plan must be undertaken by reference to the language used, read in the legislative context, including the objects which the Act was intended to achieve: see Cooper Brookes (Wollongong) Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia [1981] HCA 26 ; (1981) 147 CLR 297 at 304-5 and s 15AA of the Acts Interpretation Act 1901 (Cth). The starting point must be the ordinary and grammatical meaning of the words of s 27 construed in the context in which they appear, including the Act and the Management Plan as a whole: see K. & S. Lake City Freighters Proprietary Limited v Gordon & Gotch Limited [1985] HCA 48 ; (1985) 157 CLR 309 at 315 (per Mason J); Mills v Meeking [1990] HCA 6 ; (1990) 169 CLR 214 at 235 and 242-243. AFMA contended that the plain language of s 27 requires the average of " all sequences of permits to be used". It submitted that the word "all" is to be given work to do and the language does not allow or permit a construction that means less than the total number of permits. The ordinary meaning of the word "all" is "the whole amount, quantity or extent of". It does not mean less than the total. It does not admit of the construction advanced by Mr Kennedy that only a subset of the permits, those that were "active" in a certain period, should be used to calculate the average. Mr Kennedy had invited the Court to read words into s 27 such that only "active" permits were to be taken into consideration. In such circumstances, it must be possible for the Court to state with certainty what the additional words were that would have been inserted by the draftsman and approved by Parliament, had their attention been drawn to the omission before the Bill passed into law: see Wentworth Securities Ltd v Jones [1980] AC 74 at 105. To seek to qualify the word "all" by the word "active" introduces ambiguity. The word "active" is not defined in the Management Plan. AFMA submitted that Mr Kennedy proceeded on an assumption that the Management Plan evinces an intention to maximise the allocation for those who consider themselves active fishers. Such an assumption is inconsistent with the language of the provisions, the portion of the formula which is based on permit value and with a choice of a particular qualifying period. AFMA rejected the significance which Mr Kennedy attached to the words "catch" and "set". Catch describes the product of fishing, rather than the activity of fishing. The words "catch" and "set" do not assist in limiting the class of permit-holders in "all sequences of that kind". The construction advanced by Mr Kennedy also ignored the definitions of "old longline permit" in s 20 of the Management Plan, which does not focus on activity under the permits, but the instrument which authorises fishing. The context and purpose of s 27 favour the construction advanced by AFMA which was accepted, without elaboration, by the Panel. Section 27 must be read in the context of the Management Plan as a whole. The Management Plan reflects policy choices on the allocation of commercial fishing rights, in relation to a finite resource. These choices are embodied in the formula in s 26. The phrase "all sequences of that kind" must be construed in this context. In Minister for Immigration and Ethnic Affairs v Teo (1995) 57 FCR 194 a Full Court was called on to construe various provisions of the Migration Act 1958 (Cth) and the Migration Regulations 1989 (Cth). As we have indicated, that is found in s 33 of the Act. This provides that the regulations may make provision that a person is entitled to be granted an entry permit of a particular class if the person satisfies all the prescribed criteria in relation to that class (s 33 (2)(b)). The power is expressed as being "subject to sections 40 and 45". Section 40 empowers the Minister to determine that the processing of entry permit applications of a specified class which have been made by persons who have entered and remained in Australia is to stop until a day specified in the notice given by him. Section 45 provides that an entry permit shall not be granted to certain deportees where an amount is still payable by them to the Commonwealth under s 65 or s 66. Section 65 deals with the costs of deportation, and s 66 with the costs of keeping deportees in custody. Further, s 34 imposes upon the Minister an obligation, where the relevant jurisdictional pre-condition is established, either to grant or refuse an entry permit. Judicial review of decisions of the Tribunal is confined by s 138 to an "appeal" which is "on a question of law". The result, if the statute and the regulations are taken as a whole, is to disclose a compromise which represents a balance between various competing interests which are involved. The particular pattern which is set in this way is not to be distorted by treating one element in it other than in accordance with the fair meaning allowed by the language which has been used. There is no reason to give a "broad and generous construction" to reg 131A. To do so may detract from the force given in the balance of the legislative scheme to the other interests which are involved. These include the view taken by other branches of government and reflected in the legislative text, being the statute and the regulations, of the social and material interests of the country as a whole in relation to the entry and settlement of aliens, and of the conditions which should be attached to permission to enter and stay in Australia: Robtelmes v Brenan [1906] HCA 58 ; (1906) 4 CLR 395 at 400; Pochi v MacPhee [1982] HCA 60 ; (1982) 151 CLR 101 at 106" (emphasis added). It may be accepted that a purpose of s 27 is to ameliorate the effect of serious misfortune on past catch and activity rates. Section 26 allows an eligible person to rely on his or her best 2 years' catches between 1997 and 2001 (inclusive). Section 27 must, therefore, seek to compensate for more than the vicissitudes of commercial fishing which are acknowledged by this part of the formula. The purpose of s 27 is not to maximise the possible benefit for an individual operator. Nor is it to put the operator in the position he or she would have been in but for the serious misfortune. That is simply not possible. The objects of ss 26 and 27 are advanced on the construction contended for by AFMA, notwithstanding that it is not the construction most advantageous to Mr Kennedy's financial interests. In my view, there is nothing in s 27 that supports Mr Kennedy's submission that the phrase "all sequences" in ss 27(1)(c) and (d) should be read as excluding inactive permits. It is true that s 27(1)(c) refers to "all sequences of that kind (old longline or old minor line, as the case may be)" which requires the person performing the calculation to limit the sequences to either old longline sequences or old minor line sequences. There is, however, nothing in s 27 which justifies further limiting "all sequences of that kind" to old longline sequences that were active during the period of serious misfortune. Sections 26 and 27, prescribe, with a high degree of specificity, how the grants of quota SFRs are to be calculated when a person has suffered serious misfortune. Section 27 could expressly have limited the permits that were to be included in the "average catch" and the "average number of times a longline was set" to those permits that had been used during the applicant's period of serious misfortune. It did not do so. It was submitted that, had it done so, it may have been possible to discern why it considered that Mr Kennedy had not established his claim for the longer period during which he said he had suffered such misfortune: see Australian Trade Commission v Underwood Exports Pty Ltd (1997) 49 ALD 411 at 422. In this Court he tacitly accepted the Panel's finding that the relevant period concluded in May 2000 and confined himself to arguing that the Panel should have found that he was incapacitated continuously from February 1998 to May 2000. To establish an error of law, Mr Kennedy must show that there was no evidence that was accepted by the Panel which supported its finding that the period of serious misfortune suffered by him was limited to February 1998 to November 1998 and from July 1999 to April 2000. The Panel dealt with the period of Mr Kennedy's serious misfortune in paragraphs 62 and 81-3 of its reasons: see at [21] above. In paragraph 83, the Panel found that "on the whole of the evidence" Mr Kennedy suffered serious misfortune for these two periods. Implicitly, it did not accept that Mr Kennedy suffered serious misfortune from December 1998 to June 1999 or from May 2000 to May 2001. In the course of its reasons the Panel referred to various parts of the evidence, including: The Panel accepted that the evidence of Dr Zafir was reliable and was "supportive of a finding of serious misfortune based upon illness alone". It is tolerably clear that the Panel was prepared to accept Mr Kennedy's claim for serious misfortune only for the periods that he was ill. What is not clear is why the Panel accepted that Mr Kennedy was ill only from February 1998 to November 1998 and from July 1999 to April 2000. Mr Kennedy claimed that he was ill continuously from February 1998 to April 2000. In oral evidence, Dr Zafir said that Mr Kennedy suffered from "a combination of debilitating symptoms". As to the period of Mr Kennedy's illness, Dr Zafir said "the times when his shingles gave him major dramas which is in February 1998 and when the pressure came off him in 2000, in that sort of time". Dr Zafir had also prepared three written reports for Mr Kennedy in support of his claim for serious misfortune. Reference has already been made above at [22] to Dr Zafir's report dated 10 January 2006. In his third report dated 30 July 2007, Dr Zafir also said that "the 7 th February 1998 to approximately to (sic) the 7 th November 1998 would have been the approximate period during which Mr Gary Kennedy would not have been able to attend to his business in the fishing industry, due to his serious medical illness". Dr Zafir further recorded that Mr Kennedy had suffered a right hand repetitive strain injury on 26 May 1999, which persisted for six weeks, and suffered from severe gastritis which persisted from 30 July 1999 to May 2000. AFMA submitted that the Panel's findings (which were not conceded by AFMA to be correct) were founded on the reports and clinical notes of Dr Zafir. In its submissions before the Panel, AFMA highlighted the discrepancies between Dr Zafir's reports and his oral testimony, which tended to expand the periods of illness into a single overarching period. AFMA submitted that the Panel plainly preferred Dr Zafir's written reports, over parts of his oral evidence, particularly as it had determined that Dr Zafir had sought to take on the role of advocate for Mr Kennedy (see [17] above). AFMA submitted that, given this express reservation, and its express acceptance of AFMA's submissions, it was tolerably clear that the reason for the findings of two discrete periods of serious misfortune were made because the Panel had accepted the documentary evidence of Dr Zafir to that effect and had declined to accept his oral evidence that extended the period. In addition, AFMA sought to rely on the fact that, as parties to the appeal, all eligible persons would have been entitled to a copy of the reasons. For that reason alone, AFMA submitted, the Panel was entitled to be circumspect in the detail it gave in its reasons about Mr Kennedy's health issues. In my view there was evidence on which it was open to the Panel to conclude, as it did, that Mr Kennedy suffered serious misfortune by reason of illness in the two periods which it identified. That evidence is to be found in the two reports of Dr Zafir to which reference is made above at [50]. Section 160(1)(b) requires the Panel to prepare a written statement setting out the reasons for its decisions. Mr Kennedy complains that first, the Panel made a bald finding on his claim for serious misfortune; second that it did not provide reasons for preferring AFMA's construction of s 27 to that advanced by him; and third that the Panel did not provide reasons as to how it reached its conclusion that he suffered serious misfortune only during the February - November 1998 and July 1999 - April 2000 periods. Mr Kennedy submits that a party is entitled to know why he won or lost. A reading of the Panel's reasons would, it was submitted, leave the fair-minded reader none the wiser as to why he was only partially successful. He relied on the decision of Gobbo J in State Electricity Commission v Commissioner for Equal Opportunity [1992] 1 VR 79 in which his Honour held (at 88) that reasons for decision which fail to disclose the process of reasoning of the decision maker are "defective and show error of law on the face of the record". There can, in my view, be no doubt that the Panel has failed to comply with the requirements of s 160(1)(b) that it "prepare a written statement ... setting out the reasons for [its] decision". Were it not for another statutory provision, to which I will shortly refer, it might readily be argued that the Panel has complied with this obligation. It has produced a document of some 20 pages which contains 86 paragraphs which it has published as its reasons for its decision on Mr Kennedy's appeal. The question remains, however, whether the published reasons are sufficiently detailed to meet the obligation imposed by s 160(1)(b). Section 25D of the Acts Interpretation Act 1901 (Cth) provides that, where another Act requires that a Tribunal give written reasons for its decisions "the instrument giving the reasons shall also set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based". When tested against this standard the Panel's reasons, in my opinion, are plainly deficient. In dealing with the construction of s 27, the Tribunal deals only with s 27(1)(d) and then makes the conclusionary statement that the interpretation of s 27, advanced by AFMA, is correct. No attempt is made to explain why it is that AFMA's construction is to be preferred to that contended for by Mr Kennedy. The Panel's reasons for fixing on the two periods of illness as being the periods during which Mr Kennedy suffered serious misfortune are equally terse and uninformative. The Panel does no more than record Mr Kennedy's claim, record AFMA's submission relating to the periods of illness, note that there was "much in this submission" and then proceed to its finding. No attempt was made to identify the facts or to explain the process of reasoning which led the Tribunal to reject Mr Kennedy's claim to have suffered serious misfortune continuously from February 1998 to May 2000 or to explain why the Panel was minded to fix on the two periods within the timeframe claimed by Mr Kennedy, as being the relevant periods for the purposes of s 27 of the Management Plan. The critical question is, however, whether the Panel's failure to provide adequate reasons for its decision can give rise to an error of law which would justify a reviewing Court setting aside the Panel's decision. As already noted there is authority to support an affirmative answer to this question. It is to be found in the Victorian Supreme Court's decision in the State Electricity Commission case. Authority is also to be found in decisions of this Court. In Dornan v Riordan (1990) 24 FCR 564 , a Full Court held that a failure to give adequate reasons constitutes an error of law justifying the setting aside of an administrative decision. See also Muralidharan v Minister for Immigration and Ethnic Affairs (1996) 62 FCR 402 ; Preston v Secretary, Department of Family and Community Services (2004) 39 AAR 177 at 184; Hill v Repatriation Commission [2004] FCA 832 ; (2004) 207 ALR 470 at 474; and, most recently, Civil Aviation Safety Authority v Central Aviation Pty Ltd [2009] FCAFC 137. These were cases in which the tribunal concerned had produced cryptic and uninformative reasons such that the reviewing court could not discern why it was that the tribunal had reached the impugned decision. In particular it was not possible to determine whether the correct legal principles had been applied. In Dornan , the Full Court drew on authorities such as Pettitt v Dunkley [1971] 1 NSWLR 376 in which appellate courts had found that trial judges erred in law if they failed to provide reasons or sufficient reasons thereby depriving the appeal court of the capacity to determine whether a verdict had been reached in accordance with law. This approach did not enjoy universal acceptance. In Comcare v Lees (1997) 151 ALR 647 at 656-9, Finkelstein J reviewed the authorities which commenced with Dornan and concluded that, were he not bound by these decisions, he would not follow them. He drew attention to conflicting decisions, including that of Brennan J in Repatriation Commission v O'Brien [1985] HCA 10 ; (1985) 155 CLR 422 at 445-6 and the English Divisional Court in Mountview Court Properties Ltd v Devlin (1970) 21 P & CR 689. He considered it to be inappropriate to draw on cases in which appellate courts found reasons to be inadequate because, in such cases, no remedies such as a statutory order in the nature of mandamus were available to require the relevant trial judges to rectify the deficiencies in their reasons. His Honour also noted that, in the appellate context, the appellable error was founded on common law doctrine rather than on the construction of a statutory obligation to provide reasons. One might add that there is no compelling reason for treating a decision as errant solely because no reasons or no adequate reasons have been advanced to support it, unless one was attracted to Lord Denning's notion that, if a decision-maker fails to give reasons for a decision, a reviewing court could infer that he did not have any good reasons: see Padfield v Minister of Agriculture, Fisheries and Food [1968] UKHL 1 ; [1968] AC 997 at 1007. In Civil Aviation Safety Authority v Central Aviation Pty Ltd [2009] FCA 49 ; (2009) 108 ALD 329 at 337 Perram J, without expressing a concluded view, said that there was "much to be said" for the views of Finkelstein J in Lees . His Honour suggested two additional considerations which supported Finkelstein J's reasons for doubting the correctness of the decision in Dornan . The reasons have no legal consequences in themselves. Rather, they provide material from which arguments about the correctness of the decision may be crafted. Their legal relevance is, therefore, derivative from the decision to which they are appurtenant. A decision accompanied by perfectly adequate reasons may be riddled with legal errors just as a decision which is accompanied by inadequate reasons may be legal impeccable. The fallacy in the view that the provision of inadequate reasons is an error of law in the decision springs from the conflation of rules concerned with the making of the decision itself with rules concerned with the provision of reasons, a conflation which is, in my opinion, wholly without warrant. This is not to say that questions of law do not arise from the operation of rules about the provision of reasons. It is only to say that such questions arise dehors the decision and cannot be errors in the decision itself": at 337-8. The issue was considered by the High Court in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323. In that case the Court dealt with a submission that a decision of the Refugee Review Tribunal should be set aside because the Tribunal had failed to comply with its obligations under s 430 of the Migration Act 1958 (Cth) to provide adequate reasons for coming to the decision. The argument was that the failure of the Tribunal to have regard to certain matters which had been pressed before it rendered its reasons inadequate with the consequence that, on this ground, its decision was a nullity. The Court rejected this argument. Gleeson CJ (at 330) was prepared to accept that, if a decision maker fails to make a finding on some question of fact in the course of giving reasons "that will indicate that it made no finding on that matter; and that, in turn, may indicate that the Tribunal did not consider the matter to be material". By setting out its findings, and thereby exposing its views on materiality, the Tribunal may disclose a failure to exercise jurisdiction, or error ... or may provide some other ground for judicial review...But all the tribunal is obliged to set out is such findings as it has made ...": at 331-2 (emphasis added). Other members of the Court made similar observations: see per McHugh, Gummow and Hayne JJ at 346, 349 and 351. The issue was further considered by the High Court in Re Minister for Immigration, Multicultural and Indigenous Affairs; ex parte Palme [2003] HCA 56 ; (2003) 216 CLR 212. In Palme the Court held that a failure to discharge the statutory obligation imposed by s 501G of the Migration Act 1958 (Cth) , to give reasons for a decision to cancel a visa, did not mean that the decision could be set aside because it was tainted with jurisdictional error. Four aspects of the reasoning in Palme are of present relevance. First, it is necessary to recognise that a distinction is to be drawn between the decision and the reasons for that decision: see Palme at 225. An attack on the reasons which seeks to have the decision set aside fails to appreciate this distinction. This is a different attack from one which focuses on a jurisdictional error arising from the failure of the reasons to refer to, for example, a relevant consideration: cf Yusuf at 351-2. Secondly, it is important to identify precisely what act is being impugned: Palme at 225. In Palme there was an attack by Constitutional writ on the exercise of the power to cancel a visa. In this case, there is an appeal from the Panel's decision to set aside AFMA's decision and substitute one more favourable to Mr Kennedy because it was not sufficiently favourable to his interests. The word "decision" in this context means the final and operative decision of the Panel as provided for in s 150(3) of the Act: Director-General of Social Services v Chaney [1980] FCA 87 ; (1980) 47 FLR 80. Section 161 fixes on the decision as the subject matter of the appeal, not on the reasons. Thirdly, the question of whether a failure to comply with a statutory requirement to provide adequate reasons can affect the exercise of power is one of statutory construction: Palme at 225. There is nothing in the scheme of the legislation which suggests that the provision of inadequate reasons could vitiate a decision of the Panel. On the contrary, given the nature of the Panel's task, the requirement that all operators be parties to the appeal to the Panel (s 144(3) of the Act) and the fact that the allocation of SFRs cannot be implemented until after any application to the Panel is dealt with (s 23(3) of the Act), it could not readily be inferred that the Act intended that a failure to give reasons should invalidate the decision. Finally, it was held in Palme that the appropriate remedy, in the event that a tribunal fails to satisfy a statutory obligation to provide adequate reasons for a decision, is an order in the nature of mandamus: at 224. That remedy can, and should, be sought independently of any rights of appeal such as those provided for in s 161 of the Act. The right of appeal, given by s 161, is confined by the requirement that the appeal be on a question of law from the decision of the Panel. The question must, therefore, be one which arises from the decision and not from any failure, on the part of the Panel, to satisfy its statutory obligations under s 160(1) of the Act. Such a failure, in my view, does not give rise to a question of law relating to the decision itself. Question of law 2(c) asked whether the Panel had complied with the obligations imposed on it by s 160(1)(b) of the Act. A negative answer to that question would not, however, have revealed any error affecting the Panel's decision: cf Birdseye at 326 (per Branson and Stone JJ). It could not, therefore, have assisted Mr Kennedy. Mr Kennedy submitted that Palme may be distinguished on the basis that there is no equivalent of s 501G(4) of the Migration Act in the Act. Where a decision has been made to refuse to grant a visa to a person or to cancel a visa, s 501G of the Migration Act requires the Minister to give the person a written notice which sets out the decision and the reasons for the decision. The relevant parts of the reasoning in Palme do not, however, depend on s 501G(4). As already noted, the Court emphasised the need to distinguish between a decision which is sought to be challenged and the reasons for that decision when determining whether the decision can be impeached for jurisdictional error. Such error may be found from what is disclosed by reasons provided under s 501G(1)(e). Failure to provide reasons may also be reviewed in this Court and compliance by the Minister with the statutory duty may be ordered. The reasons then provided may furnish grounds for prohibition under s 75(v) [of the Constitution ] in respect of the visa cancellation decision. But what is not provided for is for a prosecutor, as in this case, to bypass that earlier step utilising mandamus, and to impeach the visa cancellation decision itself for want of discharge of the duty to provide reasons. There is, as was pointed out in argument, a critical distinction between failure to comply with s 501G(1)(e) and using that failure to conclude that the visa cancellation decision is flawed by jurisdictional error". See also at 227-228 (per McHugh J). It was open to Mr Kennedy to seek an order of mandamus to compel the Panel to comply with its obligations under s 160(1) of the Act. He did not do so. Instead, he has proceeded to prosecute his appeal to this Court on the basis of the reasons which he, rightly, submits are inadequate. His failure to seek a mandatory order may have been the result of a forensic decision (cf Palme at 224) or for some other reason. Whatever the reason, the inadequacy of the Panel's reasons cannot, consistently with the decision in Palme , be relied on to impeach the Panel's decision. In Civil Aviation Safety Authority v Central Aviation Pty Ltd [2009] FCAFC 137 , the Full Court was concerned with an appeal, under s 44 of the AAT Act, from a decision of the Tribunal to set aside a decision of the Authority to cancel a certificate of approval. Both parties to the appeal accepted that the Tribunal had failed to satisfy the obligation, imposed on it, by s 43(2) of the AAT Act, to provide adequate reasons for its decision. It was common ground that such a failure constituted a "question of law" for the purposes of s 44(1) of the AAT Act. The primary judge correctly concluded that there had been non-compliance with s 43(2) and ordered that reasons now be provided by the original decision-maker. Compliance with that order is no longer possible. Because of the accepted failure to comply with s 43(2), the Tribunal decision must be set aside and the matter remitted for a new hearing in the Tribunal". The Full Court referred to Dornan and noted that, in Lees , Finkelstein J had acknowledged that he was bound to follow Dornan . It referred to Preston and Hill as authority for the proposition that a "failure to state reasons for a decision --- at least in those circumstances where a statement of reasons is a requirement of the exercise of the decision-making process --- constitutes an error of law": at [49]. There is no reference, in the Full Court's reasons, to either of the High Court's decisions in Yusuf and Palme . Given that it was common ground that, in giving inadequate reasons, the Tribunal had committed a jurisdictional error of law, I assume that the Court's attention was not drawn to these decisions although I note that, in the primary judge's reasons, His Honour observed, referring to Yusuf , that "it is unlikely that the error of law constituted by inadequate reasons could be jurisdictional": see Civil Aviation Safety Authority v Central Aviation Pty Ltd [2009] FCA 49 ; (2009) 108 ALD 329 at 345. Whilst it may be accepted that the failure, on the part of a decision maker, to comply with a statutory obligation to provide reasons might constitute an error of law it does not follow that such an error is jurisdictional in nature such as to justify the setting aside of the impugned decision. That position does not change simply because the decision-maker is no longer available to provide further and better reasons. That circumstance does not, in my respectful opinion, render it inevitable that the decision under review should be set aside. In my opinion, I am bound by Palme to hold that the Panel's failure to comply with its obligations under s 160(1)(b) of the Act does not constitute a jurisdictional error which would warrant the setting aside of the Panel's decision. No order was sought by Mr Kennedy, in the course of the present appeal, requiring the Panel to provide reasons which satisfied its statutory obligations. This decision was, no doubt, influenced, in part at least, by the fact that one of the two members of the Panel who made the decision (Mr Baston) is no longer a Panel member. Had a mandatory order been made, the Panel probably could not have complied with it because the reasons given must be those of the decision-makers and not their successors: cf State Electricity Commission at 86. The appeal must be dismissed. The applicant should pay the first respondent's costs of the application. I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.

appeal from a decision of the australian fisheries management authority to grant certain statutory fishing rights granting certain statutory fishing rights pursuant to s 26 of the western tuna billfish fishery management plan 2005 whether notice of appeal contained pure questions of law whether the court may frame its own questions of law based on notice of appeal whether reasons given by the statutory fishing rights allocation review panel (sfrarp) were adequate whether the sfrarp complied with its statutory obligation to give reasons whether a failure to give reasons for an administrative decision vitiates the making of that decision whether a failure to give reasons for an administrative decision can constitute an error of law administrative law

2 The Native Title Act 1993 (Cth) ('the Act') was substantially amended by the Amending Act, which came into effect on 30 September 1998. Where it is necessary to do so the Act as it stood prior to those amendments will be described as the 'old Act' and the amended Act described as the 'new Act'. 3 The applicants bring their application in reliance on s 39B(1A) of the Judiciary Act 1903 (Cth). They seek a declaration that they were at all material times registered Native Title claimants within the meaning of the Act with respect to any notices issued prior to 30 September 1998 pursuant to s 29 of the Act and affecting any land within the boundaries of the land the subject of native title determination claims WC95/1, WC95/12, WC95/21, WC95/22, WC95/41 and WC95/42. Permanent injunctions are sought restraining the respondents from granting any interests in land the subject of the s 29 notices unless or until one of the requirements under s 28 of the Act is satisfied. The following evidence appears in those affidavits. 5 The applicants are the applicants in application WAG 6008/1998 ('the consolidated claim') which is an application to the Court for a determination of native title pursuant to the Act. That application is a combination of six applications which were made and lodged by the applicants with the Native Title Tribunal from 23 December 1994 to 10 August 1995 ('the pre-combination claims'). Each of the pre-combination claims was made and registered under the Act before 27 June 1996. Applications WC95/1 and WC95/12 were registered on 8 September 1995. Applications WC95/21 and WC95/22 were registered on 20 July 1995. The application numbered WC95/41 was registered on 14 August 1995. The application numbered WC95/42 was registered on 12 August 1995. 6 Following the Amending Act the first respondent issued notices on 20 November 1998 pursuant to s 29 of the Act that mining tenements under the Mining Act 1978 (WA) may be granted over the land and/or waters set out in the notices. That land and/or waters included land/or waters within the area subject to one or more of the pre-combination claims. 7 The issuing of the notices obliged the Native Title Registrar ('the Registrar') to consider the applicants' native title determination applications under s 190A of the Act. The source of that obligation is in dispute. The applicants claim it was created by subitem 11(3) of Sch 5 to the Amending Act. The respondents claim it lies in s 64(4) of the Act. 8 On 31 December 1998 notices of motion dated 30 December 1998 were filed in the Court in each of the applicants' pre-combination claims. The motions all sought the amendment of the pre-combination claims so as to combine them in the one application pursuant to s 64(2) of the Act. 9 On 11 January 1999 the Court made orders to combine the pre-combination claims into the consolidated claim. 10 On 9 February 1999 a notice of motion was filed seeking to further amend the consolidated claim. Subsequently, on 4 March 1999 an amended native title determination application was filed in the Perth Registry. Also on that date the District Registrar made orders in respect of it including an order designating the consolidated claim as the lead application. 11 On 23 March 1999 the Registrar considered the consolidated claim and found it to comply with the requirements for registration pursuant to s 190A of the Act. However, on 16 November 1999, Carr J in State of Western Australia v Native Title Registrar [1999] FCA 1594 set aside the decision. 12 On 23 August 2003, the Registrar decided that the consolidated claim failed the registration test. 13 The applicants then brought an application in reliance on s 190D(2) of the Act seeking a review of the Registrar's decision. That application was dismissed by Nicholson J on 19 August 2004. The consequence was that the decision of the Registrar made on 23 August 2003 resulted in the pre-combination claims being removed from the Register from on or about 29 August 2003. 14 Mr Meegan's affidavit also gives evidence of the tenement applications which are affected by notices issued prior to 30 September 1998. In total there are 234 tenement applications wholly or partly within the applicants' claim area which will be granted if they do not have the right to negotiate over the s 29 notices. 15 The first and second respondents substantially accept the facts as deposed to in the affidavits of Messrs Meegan and Drayson and do not adduce any additional evidence. 16 By exchange of correspondence, the first respondent has agreed not to grant any tenements affected by this application until the Court has ruled on it. The applicants contend that the issue of statutory construction which arises here should be resolved in the manner which his Honour decided and that Bullen is indistinguishable from the present proceeding for all relevant purposes. The respondents contend that Bullen was wrongly decided and should not be followed. No purpose would be served by recasting or repeating in other words what was said by French J in that respect in [3]-[21] of his reasons. Although the present proceedings are concerned with the operation of the transitional provisions of the Native Title Amendment Act 1998 (Cth) those provisions must be viewed in their wider statutory context. This requires a consideration of the registration and so called "right to negotiate" provisions of the Act before and after the 1998 amendments. Put shortly, the Act provides mechanisms for the recognition and protection of native title and the validation of certain past dealings with land or waters which were invalid because of the existence of native title. Before the 1998 amendments, the Native Title Act 1993 set up a process for the recognition of native title involving the Native Title Registrar, the National Native Title Tribunal and the Federal Court. Applications for determination of native title in relation to an area were made to the Native Title Registrar (ss 13(1) and 61 ). Applications were to be accompanied by an affidavit sworn by the applicant that the applicant believed native title had not been extinguished or determined in any part of the area under claim (ss 62(1)(a)(i) and (ii)) and that all statements made in the application were true (s 62(1)(a)(iii)). All information known to the applicant about other non-native title interests in the land was to be included in the application (s 62(1)(b)) which was also to contain a description of the area over which native title was claimed (s 62(1)(c)). There was no requirement upon applicants to carry out searches or make inquiries about other interests or about extinguishment of native title in the land or waters in question. The Native Title Registrar, upon receiving an application, was required to include in the Register of Native Title Claims details of any claims contained in the application (s 190(1)(a)) --- Northern Territory of Australia v Lane (1995) 59 FCR 332 and Kanak v National Native Title Tribunal (1995) 61 FCR 103. The Registrar was obliged to accept the application for processing, a step distinct from its inclusion in the Register of Native Title Claims, unless of the opinion that it was frivolous or vexatious or that prima facie "the claim" could not be made out (s 63(1)) --- see generally North Ganalanja Aboriginal Corporation v The State of Queensland [1996] HCA 2 ; (1996) 185 CLR 595. The Registrar's decision to refuse acceptance was subject to review by a presidential member of the Tribunal and confirmation of that refusal was subject to review by the Federal Court. The Registrar was not entitled to take into account extrinsic evidence in assessing an application for acceptance, except to the extent that it might be relevant to the question whether an application was frivolous or vexatious --- North Ganalanja Aboriginal Corporation (supra). The processing of applications after acceptance involved their notification to persons whose interests might be affected by a determination and to the public (s 66(2)). Interested persons wishing to become parties would notify the Registrar in writing within a specified period, in effect two months, (s 68(2)(b)) and, subject to determination of their eligibility to be parties, would be joined as such. Absent any agreement resolving the application between the parties, the matter would be referred to a mediation conference (s 72). If mediation led to an agreement the matter would be referred to the Federal Court for a consent order and otherwise for litigation (s 74). The Act provided for the Tribunal to make a consent determination where agreement had been reached and for such determination to be registered in the Federal Court. However this was held to be unconstitutional --- Fourmile v Selpam Pty Ltd (1998) 80 FCR 151, applying Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10 ; (1995) 183 CLR 245. The process adopted for consent determinations to avoid this difficulty involved referring the matter to the Federal Court under s 74 on the basis that the parties would seek a consent order. The protection of native title was provided for in Division 3 of Part 2 relating to future acts and native title. Governments proposing to pass laws or do executive acts affecting native title were required to observe a non-discrimination principle in relation to native title holders. Onshore dealings with land affecting native title holders were to be done in a way that would not discriminate between them and freeholders (s 23(6)). Entitlements to compensation were created (ss 23, 24 and 25). There was a specific protection process known as the "right to negotiate" which required negotiation with registered native title claimants and, in default of agreement, arbitration before government could validly do certain onshore acts for the benefit of third parties where those acts would affect native title rights and interests (ss 31 and 33). The statutory scheme providing for the right to negotiate was found in Subdivision B of Division 3 (ss 26-44). The subdivision was expressed by s 26 to apply if the Commonwealth, a State or Territory (the Government party) proposed to do any permissible future act covered by subs (2) in relation to an onshore place. The acts covered by subs (2) included the creation of a right to mine, whether by grant of a mining lease or otherwise. The definition of "mine" in s 253 of the Act included "explore or prospect for things that may be mined". So the subdivision applied to the grant of an exploration licence. The government party was required under s 29 to give notice of its intention to do the act. Such notice had to be given to any registered native title body corporate in relation to any of the land or waters affected by the act and any registered native title claimant in relation to such land or waters. Each of those parties was designated a "native title party". Notice was also to be given to the relevant representative Aboriginal/Torres Strait Islander body in relation to the land or waters concerned and also to the person on whose request or application the issue of the licence or grant of a lease was to be made. The government party was also required to notify the public of its intention to do the act (s 29(3)) and could include in the notice that it gave under the section a statement that it considered the act was one attracting the expedited procedure (s 29(4)). If agreement were unable to be reached within the prescribed period, any one of the parties could apply to the Tribunal as arbitral body to conduct an inquiry and make a determination of whether or not the act could be done and, if so, on what conditions (ss 35, 36 and 38). The relevant government was required to give all native title parties an opportunity to make submissions to it and to negotiate in good faith with a view to obtaining the agreement of the native title parties to the doing of the proposed act or the doing of the act subject to conditions (s 31). Absent good faith negotiation on the part of the government party, the Tribunal lacked jurisdiction to embark upon its arbitral inquiry --- Walley v Western Australia (1996) 67 FCR 366. A government party could claim an exemption from the application of the right to negotiate process on the basis that the particular future act proposed would not directly interfere with the community life of the native title holders in relation to the land or waters concerned or with areas or sites of particular significance and would not involve major disturbance to the land or waters concerned. This bypassing procedure was called "the expedited procedure" (s 237). The application of the expedited procedure could be objected to by a registered native title claimant and it was a matter for the arbitral body to hear and determine such objections (s 32(4)). On 30 September 1998, major elements of the Native Title Amendment Act 1998 came into effect. One of those elements requires all new native title determination applications to be commenced by filing in the Federal Court instead of being given to the Native Title Registrar, as had previously been the case (ss 13 and 61). In broad terms, all native title determination and compensation applications are to be made in the Federal Court and referred to the Native Title Registrar to determine whether details of the claims in the applications should be included in the Register of Native Title Claims (s 190). The Registrar is also responsible for public notification of the application (s 66) although those who wish to become parties must now notify the Court instead of the Registrar as was previously the case (s 84). The Court will, after notification is completed, ordinarily refer the application for mediation by the Tribunal (s 86B). Inclusion or non-inclusion of details of a claim in the Register of Native Title Claims does not impact upon the standing of the application as a proceeding in the Federal Court. Registration is nevertheless a condition of an applicant for a native title determination to be a native title party under s 30 of the Act and is therefore a condition of the enjoyment by that applicant of the right to negotiate under Part 2 , Division 3, Subdivision P of the Act. The future acts to which it applies include the grant of an exploration licence (s 26(1) and see definition of "mine" in s 253). The application of the notice, negotiation and arbitration provisions for which the subdivision provides is a condition of the validity of the future acts to which it applies (s 24OA and s 28). The way in which that result is achieved in the statutory scheme of Subdivision P is that s 28 renders invalid an act to which Subdivision P applies to the extent that act affects native title unless one of a number of alternative conditions applies. Applications for native title determination are filed in the Federal Court pursuant to the amended Act after 30 September 1998 and are required to comply with more demanding conditions than applications given to the Native Title Registrar under the Act as it stood before that date. Persons making such applications must be authorised to do so by all the members of the relevant native title group (ss 61(1), 251B and 253). Persons in the native title group must be named or described "sufficiently clearly so that it can be ascertained whether any particular person is one of those persons" (s 61(4)). Applications cannot be made over areas the subject of previous exclusive possession acts (s 61A(2) and s 23B which defines previous exclusive possession acts). Nor can the right to exclude others be claimed in areas the subject of previous non-exclusive possession acts (s 61A(3) and s 23F). By s 62 certain information must now be provided with native title determination applications. This includes information which enables the boundaries of the area covered by the application to be identified (s 62(2)(a)), maps showing the boundaries (s 62(2)(b)), results of searches of non-native title interests (s 62(2)(c)) and a description of the native title rights and interests claimed including any activities in exercise of those rights and interests (s 62(2)(e)). It is also required that there be set out in the application a general description of the factual basis on which it is asserted that the native title rights and claims exist (s 62(2)(e)), details of activity currently carried on by any of the native title claim group (s 62(2)(f)), details of other applications in relation to a whole or a part of the area covered (s 62(2)(g)) and details of any notices under s 29 or corresponding provisions of a law of a State or Territory of which the applicant is aware that have been given and that relate to the whole or a part of the area (s 62(2)(h)). Upon an application being filed in the Federal Court under s 61, the Registrar of the Federal Court must, as soon as practicable, give a copy of the application to the Native Title Registrar together with any affidavits and prescribed documents accompanying it (s 63). Whenever the Native Title Registrar is given a copy of an application under s 63, the Registrar must comply with the requirements of s 66 which require notice to be given of the application as soon as reasonably practicable to the relevant State or Territory Minister and representative bodies in the area covered by the application. There is also provision under s 66(3) for the Registrar to give notice containing details of the application to categories of interested parties or bodies including persons holding proprietary interests in relation to any of the area covered by the application which is registered in a public register of interests and the public generally. However notice is not to be given under subs 66(3) until the Registrar has decided whether or not to accept the claim made in the application for registration (s 66(6)). The registration process referred to is the inclusion in the Register of Native Title Claims of details of claims contained in an application. Under s 190 the Native Title Registrar must, as soon as practicable, include in the Register details of any claims accepted for registration under s 190A. Section 190A imposes a duty on the Registrar to consider claimant applications for registration. Section 190A(6) requires the Registrar to accept a claim for registration if the claim satisfies all of the conditions in s 190B, which deals mainly with the merits of the claim, and s 190C which deals with procedural and other matters (s 190A(6)). Conditions relating to the merits of the claim to be satisfied under s 190B require identification of the area subject to native title, identification of the relevant native title claim group and of the claimed native title, satisfaction of the Registrar that there is a factual basis for the claimed native title and satisfaction of the Registrar that prima facie at least some of the native title rights and interests claimed can be established. The Registrar must also be satisfied that at least one member of the native title group currently has or previously had a traditional physical connection with part of the land or waters covered by the application or would reasonably have been expected to do so but for things done by the Crown or a statutory authority or a leaseholder. The application and accompanying documents must not disclose, and the Registrar must not otherwise be aware, that the application should not have been made by virtue of s 61A. Section 190C requires as a condition of registration that the application contain all details and other information and is accompanied by any affidavit or other documents required by ss 61 and 62. Other procedural conditions under s 190C relate to the absence of any common membership in overlapping claims, the definition of the identity of claimed native title holders and how the Registrar is to be satisfied that an application has been authorised where authorisation has not been certified by a representative body. As with the Act prior to the amendments, inclusion of details of a native title claim in the Register of Native Title Claims is a condition of the right of the applicants to attract the right to negotiate under the new Act. The new Act, unlike the old, makes specific provision in s 64 for the amendment of applications. An application may, at any time, be amended to reduce the area of land or waters it covers (s 64(1)). This does not by implication limit the amendment of applications in any other way which can be done under the ordinary rules of Court. Where an application is amended by the Federal Court, the Registrar of the Court is required by s 64(4) to give a copy of the amended application to the Native Title Registrar. The Native Title Registrar must consider the claims made in the application under s 190A (s 190A(1)). And by virtue of s 190(3), if the claim is accepted for registration under s 190A, the Register must be amended to reflect the amendment to the application. If the claim is not accepted for registration under s 190A, the Registrar must amend the Register to remove any entry relating to the claim. Transitional provisions concerning the registration of claims are found in Part 4 of Schedule 5 of the Native Title Amendment Act 1998 . That Schedule comprises one item, 11, which has a number of sub-items. . . . . . . . . . (2) The old Act is the Native Title Act 1993 , as in force immediately before the commencement of this Act (including as it applies in accordance with item 3). As a general proposition the new Act applies to future acts taking place after the commencement of the new Act. This is subject to the provisions of the Schedule (Item 2). They submit that they are given this right by subitem 11(11) of Sch 5 to the Amending Act. They claim that they and their application meet the requirements set out in subitems 11(11)(a) and (b) of that Schedule. 23 With respect to subitem 11(11)(a), it is said the applicants' application was made before 27 June 1996 because each of the pre-combination claims were made prior to that date: Western Australia v Strickland [2000] FCA 652 ; (2000) 99 FCR 33 at [6] , [12], [22], [32], [34], [41] and [44]. 24 With respect to subitem 11(11)(b), the details of the applicants' claims were removed by the Registrar under subitem 11(9). It is said this applies in this instance because the claim, which was considered for registration subsequent to subitem 11(3), did not satisfy all of the conditions in subs 190B and 190C of the Act. 25 Therefore, it is submitted that the combined application has the status of an application which was removed from the Register under subitem 11(9) despite the fact that as an amended application the Registrar was also obliged to apply the registration test to the application pursuant to s 64(4) and s 190A(1) of the Act. It is common ground that not all the facts in Bullen may appear from the reasons of his Honour. The facts are described by French J in [1]-[2] and [22]-[34] of the reasons. On 6 June 1996 Thomas Bullen lodged a native title determination application on behalf of the Nyungar people covering a significant area of the south coast of Western Australia. Details of the application were entered in the Register. This had the consequence that Mr Bullen, on behalf of the Nyungar people, had the right to negotiate provisions of the old Act. In September 1996 and October 1997 notices were published by the State of Western Australia ('the State'), the then first respondent in respect of the proposed grant of exploration licences on land within the area covered by the application. At the time the Amending Act came into effect on 30 September 1998, no agreement had been reached in relation to these licences. Additional s 29 notices in respect of other matters were issued after that date. As a result the Registrar was required to apply the more stringent conditions of the new registration test to the original application. The application was amended in order to meet those conditions. It failed the test in March 1999 and consequently details of the claim made in the application were removed from the Register. Before French J, the State maintained that the applicants (who had been substituted for Mr Bullen following his decease) had lost the right to negotiate in respect of the old Act s 29 notices because of the removal of the details of the application from the Register. The applicants in Bullen maintained that the transitional provisions of the Amending Act preserved the right to negotiate. They applied for declaratory and injunctive relief. 27 The applicants submit that there is an identity of legal issue between what is at issue here and what was decided in Bullen . The issue of the new Act s 29 notices gave rise to an obligation on the Registrar under Item 11(3), to consider the claim under s 190A of the new Act. The existence of those notices is disclosed in the amended application and was not in dispute in these proceedings. It is a condition of the existence of the obligation that "no such notice has previously been given in relation to an act affecting any of the land or waters covered by the claim". This derives from par (c) of Item 11(3). The "such notice" referred to here is "a notice...given under section 29 of the new Act...". So when the Registrar proceeded to consider the application in this case under s 190A it was a consideration mandated by Item 11(3) of Schedule 5. It was necessary in order to meet the new Act requirements for registration imposed in particular by ss 190B and 190C that the application be amended and that was done as outlined earlier. The State contends that Item 11 does not apply to amended applications. The transitional provisions have, it is said, no relevance to the case where the Registrar considers an amended application under s 190A and removes entries relating to the claim from the Register pursuant to that consideration. The State's position is, in effect, that subitem 11(11) operates to continue the right to negotiate where an application made before 27 June 1996 is removed from the Register under subitems 11(9) or 11(10). Removal under subitem 11(9), which is the relevant subitem for present purposes, is removal pursuant to a consideration of the application under s 190A where that consideration is mandated by subitem 11(3) following upon the issue of new s 29 notices. So subitem 11(11), it is said, does not operate when removal from the Register is occasioned by the requirement imposed under s 190A(1) of the new Act, rather than by the transitional provisions of the Amendment Act, to consider the amended application. The vice of this construction is that it appears to be informed by no coherent or intelligible policy. In order to meet the more stringent requirements of the new registration test which is applied because of the issue of new s 29 notices, the applicants amended the application. On the State's construction, in taking that step, they lost the transitional protection which Item 11 would have provided had they taken no step to amend the application and simply allowed it to go forward unamended and almost inevitably fail the test. In my opinion the resolution of this case turns on a narrow question of construction. Where the Native Title Registrar is required to consider a claim under s 190A of the new Act by virtue of the issue of new s 29 notices and the operation of subitem 11(3) and the application is amended before that consideration is concluded, is his removal of the details of the claim from the Register, where the claim fails to pass the registration test, still able to be described as removal "under subitem (9)"?. If it is, then the condition for the operation of subitem 11(11) which is imposed by par (b) of that subitem is satisfied. Paragraph (a) is also satisfied as the application was made before 27 June 1996. The obligation imposed by subitem 11(3) to consider the application under s 190A in this case is the relevant obligation. The obligation to consider the application under s 190A by virtue of amendment under s 64(4) is subsumed by it. On this construction it is open to amend an application in order to meet the requirements of the new registration test when it is to be applied because of the issue of new s 29 notices without losing the protection of the transitional provisions. Specifically, in such a case where the Registrar removes the details of the claim from the Register, the removal is a removal under subitem (9). I do not accept that amendment of an application which defines with greater precision the native title claim group and the rights and interests they assert and reduces the geographical area by excluding land and waters which in any event must be excluded under the Act, somehow transforms the application into a new application so that the transitional provisions are incapable of operating with respect to it. It is to be noted that on the State's argument any amendment, however minor, will have that effect and deprive the applicants of the protection of the transitional provisions. Nor do I accept that in the present case the amendments which were made have somehow transformed the original application into one qualitatively different. Neither does the substitution of the two named applicants for the original applicant who has died. The recognition of native title is recognition of rights and interests arising out of communal traditional laws and customs. The construction of the statute must not be undertaken in disregard of that important underlying reality which is recognised by the new requirements for applicants to be authorised by all the members of the native title claim group. For these reasons, in my opinion, the transitional protection provided by subitem 11(11) does apply in this case notwithstanding the removal of details of the claim from the Register. 29 It is this reasoning which the applicants contend should again be applied. They submit that Bullen ought to be followed by a single judge of the Court unless it is 'clearly' or 'plainly wrong': see Nezovic v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2003] FCA 1263 ; (2003) 133 FCR 190 at [52] . It tends also to uphold the authority of the courts and confidence in the law by the value it places upon consistency in judicial decision-making and mutual respect between judges. And where questions of law, and statutory construction, are concerned the proposition that a judge who has taken one view of the law or a statute is 'clearly wrong' is one not lightly to be advanced having regard to the choices that so often confront the courts particularly in the area of statutory construction. Indeed, where a serious doubt arises on the part of one judge, about the correctness of the law as stated by another, in a matter of importance, it may be desirable for a case to be stated to the Full Court for early resolution of the question in contention. Upon the issue of the s 29 notices on 20 November 1998 the Registrar became obliged by subitem 11(3) to apply the registration test to the claim contained in the application WAG 6008/98. That was an application made before 27 June 1996 which covered the area of the proposed future Act. Just under two months later, on 11 January 1999, that application was amended by being combined with the other five pre-combination claims and the Registrar was given notice of that on 5 March 1999 in accordance with s 64(4) of the new Act. Pursuant to s 190A(1) of the new Act the Registrar then was required to consider the claim made in the application (the consolidated claim). 31 As outlined above, the Registrar's first decision was set aside by this Court leading to the second decision on 23 August 2003. The respondents say the Registrar's second decision was still initiated by the copy of the amended application received by the Registrar on 5 March 1999. Thus, it is submitted, the Registrar's obligation pursuant to subitem 11(3), which first arose on 20 November 1998 and which would have led to the preservation of the applicants' right to negotiate if the claim had, pursuant to that obligation, failed the registration test was supplanted by an obligation arising from ss 64(4) and 190A(1) following the amendment of the application. Consequently and in those circumstances it is submitted there is no provision preserving any right to negotiate on the part of the applicants. 32 By way of supplementary submissions the respondents place considerable weight on subitem 11(8) of Sch 5. It is submitted this is extremely important to the transition between the old Act and the new Act in respect of registration testing. This is said to be because it enables applicants to have a further opportunity to 'provide any further information or other things, or to have any things done, in relation to the application' and obliges the Registrar to take this information into account in applying the registration test. 33 Attention is also directed to the insertion of s 61A into the new Act by the Amending Act. In subs (2) this prohibits, in certain conditions, a claimant application from being made over the area of any previous exclusive possession act ('PEPA'). The new section represented a clarification and strengthening of a prior prohibition, informed by the new definition of a PEPA in s 23B and developments in case law. 34 It is submitted that the transitional provisions of subitem 11(8) maintain the prohibition of the Act on native title claims being made over areas where native title had previously been extinguished. The result, it is argued, is that claimants whose areas covered areas of extinguishment would thus be left with the choice of either leaving the geographical area of the claim unchanged before facing the registration test, and so receiving the protection of subitem 11(11), or amending their claim so as to exclude any areas of extinguishment. While amending their claims would remove the protection of subitem 11(11), the amendments could readily address the greater detail required by the new Act, meaning that claims with merit would not be jeopardised in facing the registration test. 36 Reference is made to the fact that when the old Act first came into force, it enabled the registration of native title claims (s 62) but without any testing of the claims which were made. The result, it is submitted, is that too many claims with too little merit were being registered and thus acquired valuable rights to negotiate. Consequently, it is argued, Parliament sought to address that position in the 1998 amendments by introducing the registration test, specifically the issues addressed in ss 190B and 190C of the new Act. It is further submitted that in that context the transitional provisions were intended to address what was to happen in respect of claims which were already on the Register, having been registered under the provisions of the old Act. It is argued that such provisions were directed to claims in 'transition', claims caught as it were between the pre-1998 system and the post-1998 system. That, of course, would not include the applicants' claims because they had been removed from the Register. 37 Turning to the transitional provisions, it is contended that the issues addressed in them support an inference of a Parliamentary intention to address claims 'frozen in mid-stride' between the pre and post 1998 amendments. Those issues are the application of future act amendments (Pt 2); application of amendments relating to s 61 applications: proceedings relating to determinations (Pt 3) and application of amendments relating to s 61 applications: registration of claims (Pt 4). 38 In subitem 11(1) in Pt 4 attention is specifically directed by the respondents to the closing words in this item as supporting the view that the item only deals with claims which are already on the Register when the new Act came into effect. That the reference to notice in subitem 11(3)(c) must be read as a reference to the notice referred to in subitem 11(3)(b) is said to support the view that the item is only intended to address new mining proposals in respect of claims caught by the 1998 amendments by being on the Register at the relevant date of application of the amendments (27 June 1996 being when the Native Title Amendment Bill 1996 was first published). It is submitted that the evident purpose of the subitem read in the context of the scheme of the Act and other transitional provisions particularly subitem 11(5), is to bring all of the registered claims to the registration test. 40 These submissions are supported further by the contention that if a claim has been lawfully removed from the Register prior to the 1998 amendments, the s 29 notice given under the old Act lapses. There is, therefore, no proponent requiring the resolution of the question whether there are any native title interests to be taken into account before any work can be undertaken. 41 Turning to the provisions of subitem 11(8) the respondents submit that this is the most overlooked and underrated subitem of the transitional provisions. It is contended that it did not attract specific consideration by French J (apart from citation) in his reasons in Bullen although it had been raised in the course of submissions. The respondents submit that the important effect of subitem 11(8) is that it obliges the Registrar to take into account 'any further information or other things' (11(8)(c)) after the application was made, relevantly here, even though the application has not been amended. It is argued that this provides 'a huge liberty' allowing in effect the update of the claim. It is contended that in the light of this provision it cannot be correct to form the view, as French J did in Bullen at [41], that the respondents' construction would have the consequence that if no step had been taken to amend the application it would almost have inevitably failed the test. It is said that the applicants should have relied on this subitem rather than amend their claim to bring the claim up to standard. 42 Reference is also made in the respondents' submissions to s 190A(5A) of the new Act which authorises the Registrar, before making a decision on the registration test, to notify the applicant that the application may be amended under the Federal Court Rules . This is made relevant to the exercise of the Registrar's powers under s 64(3) which provides that an application may be amended while it is under consideration by the Registrar under s 190A. It is argued that this is a further safeguard making amendment unnecessary to prevent meritorious claims failing the test. 43 Even if the protection of subitem 11(11) is not available, that does not, as the respondents argue, mean the loss of the right to negotiate. The registration test must still be faced with the 'systems' in place as discussed above under subitem 11(8) and s 190A(5A) so that there would be no reason why meritorious claims should fail. 44 The respondents also dispute that on the evidence the applicants have established that the amendment of the applications was caused by the delivery of the s 29 notices under the new Act. On the occasion of the delivery of the prior s 29 notices, the applications had not been combined. 45 The respondents initially contended that one of the matters which may have been able to be submitted to the Registrar under subitem 11(8) was information that the areas of any PEPAs are not being pursued and are no longer covered by the claim. In supplementary submissions alternative submissions were made along the lines set out in [33] and [34] above. There reference is made to the insertion of s 61A(2) into the new Act prohibiting, on certain conditions, a claimant application from being made over the area of any PEPA. This is said to represent a clarification and strengthening of the previous provision, informed by a new definition of PEPA in s 23B of the new Act and developments in case law since the new Act came into effect. Nevertheless it is argued by the respondents that subitem 11(8) could be found not to include under the reference to 'things' any variation of the claim so as to remove from it areas of previous extinguishment. That is, it is not intended for subitem 11(11) to provide an extended protection for the extended right to negotiate for pre-27 June 1996 claims. If this were the case it is said it would place the claimants in a position directly analogous to claimants who lodged claims after the publication of the first Native Title Amendment Bill 1996 on 27 June 1996 who, it is contended, similarly do not have any retained right to negotiate under subitem 11(11). It is also said that claimants whose claims cover areas of extinguishment would thus be left with a choice of either leaving the geographical area of the claim unchanged before facing the registration test, and so receiving the protection of subitem 11(11), or amending their claims so as to exclude any areas of extinguishment. The amendments would then be the means of addressing the greater detail required by the new Act so that meritorious claims would not be jeopardised. 46 Therefore the respondents make their case on the basis that there are so many checks and balances in the transitional provisions considered in the context of the Act that the construction which they urge is not to be seen as 'draconian'. They maintain that such considerations point to the correct construction being that subitem 11(11) was included only in case there should be some negotiations commenced under an old Act s 29 notice which were still in progress when the claim failed the registration test following a new Act s 29 notice. In that limited situation, if the claim was made before 27 June 1996, the subitem preserves the right to negotiate. The context, it is argued, shows an absence of intention to provide an extended protection for the right to negotiate for pre-27 June 1996 claims which cover freehold. 47 The respondents case seeks support from the Explanatory Memorandum to the Native Title Amendment Bill 1997 (Cth) in [35.34] and [35.42] in particular. Additionally reference is made to some Parliamentary speeches. I have not found any of these of any great assistance. 49 First, reference is made to the possibility that Bullen could be distinguished on its facts. 50 Second, it is contended that Bullen was decided on the basis of a construction placed on the provisions of s 64(4) and item 11 which was not open because of the clear legislative intent to the different effect contended for by the respondents. 51 Third, the Court gave inadequate consideration to subitem 11(8). Had it done so it would have found that there was a clear and coherent policy behind the item, namely to meet the need for expedition in consideration of a new Act s 29 notice. It also would not have concluded that if the application had proceeded unamended it would almost inevitably have failed. 52 Fourth, it was wrong for the Court to have concluded that the combined application was not qualitatively different from the preceding applications. The respondents say that while in Bullen the application was reduced, in the circumstances of this proceeding the effect of the combination was to create a substantially different application, quantitatively different in size and qualitatively different in the multiplicity of land tenures involved. 53 It is therefore submitted that Bullen is plainly wrong and should not be followed. 55 I agree with the submission for the applicants that there is an identity of legal issue between what is at issue here and what was decided in Bullen . The factual circumstances, so far as they are different, do not in my view provide any justification for distinguishing the reasoning in Bullen . 56 The reasoning was unappealed by the respondents at the time it was delivered. It has stood as a relevant enunciation of the law since 28 October 1999. It is patent that the respondents seek to make again the arguments addressed and not accepted by French J. The issue is one of statutory construction where some area of choice is available, absent authority. French J's reasoning involves taking the language of the relevant transitional provision at its face value. The respondents' contentions involve a great deal of subtle understanding of a range of provisions and do not represent either the immediately apparent intention of the statutory language. If Parliament had so intended, it is fair to think the intention would have been made more apparent. The meaning contended for by the respondents was not one accepted by a primary judge possessed of extensive experience in the area of native title. In my view the circumstances here are not such as raise a 'serious doubt' in my mind so as to justify a reference to the Full Court 'for early resolution'. That is because, for the reasons here stated, I am not satisfied the reasoning of French J was 'clearly or plainly wrong'. 57 Importantly, in relation to reliance by the respondents on subitem 11(8) of the transitional provisions, the submission in reply for the applicants draws attention to the fact that the item refers not only to the provision of information but also to the application of s 190A of the new Act as if the conditions in ss 190B and 190C allowed not only the provision of information but also the provision of other things done in relation to the application. On the face of it, this would include the making of an amendment to the applications so as to comply with s 61A(2). That is, the transitional provisions in subitem 11(8) envisage that steps must or may be taken by applicants to address the requirements of the registration test and to ensure the satisfactory compliance of documentation. That does not support the respondents' submission that the applicants should have sat still on their pre-combination applications. 58 Furthermore the interpretation accepted in Bullen does not result in the giving carte blanche to applicants who cannot pass the registration test to have the right to negotiate in relation to s 29 notices issued at any time. This is because it appears subitem 11(11) of the transitional provisions takes effect only where the application was made before 27 June 1996 and the s 29 notice was given under the old Act. 59 There remains the issue whether the pre-combination applications were 'qualitatively different' from the consolidated claim. The applicants contend that what they did in bringing the consolidated claim was to attempt to satisfy the criteria of the new Act rather than change qualitatively or quantitatively the nature of the claim. I agree with this submission. It is not a basis upon which to distinguish the reasoning in Bullen . I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson.

right to negotiate registration of claims under 'old' and 'new' acts 'old' and 'new' rights to negotiate transitional provisions amendment of application application of new registration test to combined application of old claims by reason of new s 29 notices duty to consider registration test following amendments whether amendment of claim had the consequence of excluding application of transitional provisions whether loss of continuing right to negotiate notwithstanding removal from register whether prior decision of single judge should be distinguished native title

The joint venture was to operate through an Australian company, Amlaki Australia Pty Ltd, in which Pinnacle held 20 shares and Amlaki FZ held 80 shares. The directors of Amlaki Australia were Mr Balfaqih and Mr Richards, who was also its secretary and Chief Operations Officer. Pinnacle was appointed to provide consultancy services to Amlaki FZ. 2 In late 2007 the relationship between the parties broke down. Amlaki FZ decided to remove Mr Richards as director and secretary of Amlaki Australia. A resolution to that effect was purportedly passed at a meeting of members held on 22 April 2008. But there was no quorum. To repair the position Amlaki FZ and Mr Balfaqih applied under s 1322(1)(b) of the Corporations Act 2001 (Cth) for an order that the resolutions were not invalid notwithstanding the absence of a quorum. I made the declarations sought, but reserved the costs. 3 Immediately after the declarations were made, Pinnacle brought oppression proceedings against Amlaki Australia, Amlaki FZ and Mr Balfaqih. Pinnacle sought an order that its shares in Amlaki Australia be purchased either by Amlaki FZ or Mr Balfaqih at an amount fixed by an independent valuer. In the alternative Pinnacle sought the winding up of the company. 4 It is convenient to deal first with the costs of the s 1322 application. The immediate background to the irregularly held meeting is as follows. On 29 February 2008 Mr Richards wrote to Mr Balfaqih giving 14 days notice of the termination of the consultancy agreement. This was followed by a letter dated 4 March 2008 from Baker & McKenzie, acting on behalf of Amlaki FZ and Mr Balfaqih, requesting Mr Richards' "immediate resignation as a director and secretary of Amlaki Australia. " On 1 April 2008 Mr Balfaqih wrote to Mr Richards advising him that his appointment as Chief Operations Officer was "terminated with immediate effect". In the same letter Mr Richards was invited to resign as a director and secretary. On the same day Pinnacle was served with a notice of a general meeting to be held on 8 April 2008 if there was consent to short notice, or if there be no consent, on 22 April 2008. Pinnacle was advised that the meeting would be convened by telephone and initiated by Amlaki FZ. The only substantive item of business to be considered in the meeting was the removal of Mr Richards as director and secretary and the appointment of Mr Hinz to those positions. 5 Pinnacle did not consent to short notice. Accordingly, the meeting was held on 22 April 2008. There is some dispute regarding whether the parties agreed to postpone the meeting. Baker & McKenzie were told Pinnacle's solicitors, Kliger Partners, were not available on 22 April 2008 and that Mr Richards would be away. Kliger Partners asked that the meeting be deferred. They are of the view that an agreement had been reached to that effect. That view, however, was rejected by Baker & McKenzie in an email sent minutes before the meeting commenced. In the end nothing turns on the point. 6 The meeting commenced by teleconference at 6.10pm. Mr Balfaqih, with a lawyer for Amlaki FZ, attended the meeting from Dubai. Mr Hinz and two solicitors from Baker & McKenzie were in attendance in Melbourne. No representative of Pinnacle was present. Resolutions removing Mr Richards as a director and secretary were passed, as were resolutions appointing Mr Hinz to those positions. 7 The resolutions were ineffective because there was an insufficient quorum. Hence this application. According to s 1322(2) , a procedural irregularity will not invalidate a proceeding under the Corporations Act unless the irregularity has caused, or may cause, substantial injustice. Section 1322(1)(b)(i) specifies that a procedural irregularity includes the absence of a quorum at a meeting. Prima facie, the resolutions carried at a meeting inquorate may be regularised. Here the matter is not so simple. Amlaki FZ knew that the meeting was without a quorum. There is dispute in the cases as regards whether a "procedural irregularity" includes the absence of a quorum that is the result of deliberate conduct: see Re P W Saddington & Sons Pty Ltd (1990) 19 NSWLR 674; Re Pembury Pty Ltd [1993] 1 Qd R 125; McGellin v Mount King Mining NL (1998) 144 FLR 288; Whitehouse v Capital Radio Network Pty Ltd (2004) 13 Tas R 27. 8 For the purposes of this case, I need not enter the debate. It is clearly undesirable for a member of a company to convene a meeting where the member knows that a quorum will not be present. In most cases the meeting should be postponed or adjourned. In this case, however, the particular circumstances warranted a pragmatic approach. Counsel for Pinnacle and Mr Richards accepted the reality of the situation, namely that Mr Richards was to be removed as a director and secretary come what may. There is also the countervailing rule that a minority shareholder is not entitled to frustrate the wishes of the majority by absenting himself from company meetings: Re H R Paul & Son Ltd (1973) 118 Sol Jo 166. Accordingly I suggested to the parties it would have been an exercise in futility (and wasteful of costs) to require another meeting to achieve a known result. With but feint opposition I made the declaration that the absence of a quorum was a procedural irregularity that did not invalidate the resolutions. The costs were put to one side pending the resolution of the still threatened oppression proceeding. 9 So far as the costs are concerned, the usual rule is that where an indulgence is sought the party seeking the indulgence pays the costs. I can see no reason to depart from this rule. 10 This brings me to the second dispute. When I validated the resolutions I also ordered Pinnacle bring on its threatened oppression application. In due course that application was filed and Amlaki FZ and Mr Balfaqih were joined as defendants. I indicated to the parties that, having read the plaintiffs' material, I was minded to make an order that its shares be purchased because it was apparent that Pinnacle and the defendants, Amlaki FZ and Mr Balfaqih, could never work together. In these circumstances a buy-out order was preferable to a winding up. The parties seemed to be in agreement and, accordingly, I ordered that Pinnacle obtain an independent accountant to value its shareholding and that Amlaki Australia make its books and records available for that purpose. 11 In the course of preparing the valuation some rather surprising facts came to light. When Pinnacle and Amlaki FZ established their relationship they entered into a joint venture shareholders agreement. This is an important agreement. The recitals record that "Pinnacle and Amlaki Offshore (a company related to Amlaki FZ) wish to form a joint venture to develop and market information technology software in the Australian and New Zealand markets and have agreed to incorporate the Company [a reference to Amlaki Australia] as the joint venture vehicle. " To this end cl 4 of the joint venture agreement provided (in cl 4.1) that the shareholders would procure that Amlaki Australia carried on business; (in cl 4.2) that Amlaki Australia would allot twenty shares to Pinnacle and eighty shares to Amlaki Offshare; and (in cl 4.3) that further shares would be issued to Pinnacle and Amlaki Offshore if the net profit after tax of Amlaki Australia exceeded a certain sum. In other words the parties contemplated that Amlaki Australia would be an operating company through which the joint venture would be conducted. 12 Following the order that there be a valuation of Pinnacle's shares, Amlaki FZ alleged that Amlaki Australia was not the joint venture vehicle but rather the manager of a partnership between Pinnacle and Amlaki FZ. Mr Baron, an accountant who acts for Amlaki Australia, deposed that "the sole function of [Amlaki Australia] was to act as manager of the partnership. " He said that Amlaki Australia "has not owned assets or traded in its own right". He also said that if he "were to prepare accounts for [Amlaki Australia] in its own right, those accounts would show paid up share capital of $100 and assets of $100 and no liabilities. Accordingly the value of [ Amlaki Australia] is virtually nil. Nor did he explain why he had prepared no accounts for Amlaki Australia during the years of its operations. After all on his account Amlaki Australia did conduct operations as manager in at least the 2005, 2006 and 2007 financial years. However that may be Pinnacle and Amlaki FZ agreed to compromise the oppression action on the basis that Pinnacle would sell its shares for $5,000. It is in those circumstances that the costs issue must be resolved. 14 I propose to deal with the costs in accordance with the following propositions. Pinnacle's application was bound to succeed. It is problematic whether the evidence it filed in support of its application would justify a finding of oppression and, hence, a buy-out order. But there is little doubt Pinnacle would at least have succeeded on its alternative claim for the winding up of Amlaki Australia. 15 Against that I must assess the reasonableness of Pinnacle's conduct in rejecting two offers of settlement that were made. The first offer was made on 23 June 2008. Amlaki FZ offered to purchase Pinnacle's shares for $5,000. The offer was open for acceptance until 9.30 am on 24 June 2008. It was not accepted. The second offer was made on 9 July 2008. This time the offer was to purchase Pinnacle's shares for $10,000 plus pay the plaintiffs' legal costs assessed on a party and party basis. The second offer was open for acceptance until 24 July 2008. Pinnacle did not accept the second offer. If Pinnacle acted unreasonably in rejecting the two offers it would be proper to require it to pay the defendants' costs which, had Pinaccle accepted the offers, would not have been incurred. On this aspect, I think Pinnacle was justified in rejecting the first offer. At the time Pinnacle did not fully appreciate the lay of the land and was at least justified in bringing the action to see what discovery would disclose. The same cannot be said of Pinnacle's refusal to accept the second offer. That refusal was unreasonable and nothing has been put forward to justify it. 16 In my view, therefore, the costs of the action should be apportioned as follows: (a) Pinnacle should have its costs taxed on a party party basis until 12 July 2008 (giving it three days to consider and accept the second offer); and (b) Pinnacle should pay the defendants' costs on and after 13 July 2008 taxed on an indemnity basis. By that day Pinnacle knew, or it ought to have known, that the offer was more favourable than what it would achieve in financial terms by continuing with the action. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

meeting of members lack of quorum procedural irregularity declaration of validity costs oppression majority shareholder agrees to purchase minority interest costs corporations

The Tribunal affirmed the decision of the delegate of the Minister to refuse to grant the appellant a protection visa. 2 The only issue of substance that arose in the proceedings before the Federal Magistrate was whether the Tribunal was entitled to make a decision on the review on the papers without conducting a hearing. The evidence before his Honour was that the Tribunal had sent a letter inviting the appellant to a scheduled hearing and that the Tribunal had received the "response to hearing invitation form" with the appellant's name, address and signature and with the election that the appellant did not wish to attend the hearing. According to his Honour's reasons, the appellant had sought to explain that the form had been returned to the Tribunal by his migration agent without his knowledge. The appellant was unable to provide any details of the agent's identity and there was no evidence in the Court Book of the existence of an agent. The Federal Magistrate did not accept that the form had been returned without the appellant's knowledge. His Honour found that the Tribunal had discharged its obligation under s 425 of the Migration Act 1958 (Cth) and had correctly provided the appellant with an invitation to attend the hearing. His Honour then independently considered whether there was jurisdictional error in the Tribunal's decision, concluding that no such error was apparent. 3 The appellant has asserted in this appeal a version of the facts surrounding the return of the form. The appellant was not required to give sworn evidence before the Federal Magistrate. He merely made oral submissions in which various facts were asserted. The Federal Magistrate appears to have treated those asserted facts as evidence, even though his Honour did not ultimately accept the evidence as true. It seems to me that, in the ordinary course, where a party asserts in proceedings before a Federal Magistrate the existence of facts relevant to the application, the party should be required to give sworn evidence about those facts, at least where they are in issue. Unless that happens, it is difficult for this Court, on appeal, to consider in a structured way, further facts asserted by an appellant. In particular, unless sworn evidence was given in the Federal Magistrates Court, the provisions concerning the grant of leave to adduce further evidence in an appeal are difficult to apply: see s 27 of the Federal Court of Australia Act 1976 (Cth). It is preferable, in my opinion, for evidence to be given as sworn evidence, tested in cross examination and findings made at the hearing in the Federal Magistrates Court. This Court can then deal with any application an appellant might make under s 27 for leave to adduce further evidence and apply the well settled principles concerning the grant of leave. 4 However, given the way the Federal Magistrate dealt with the facts asserted in the proceedings before him, I will treat the facts asserted by the appellant in these proceedings as fresh evidence. The appellant's account was that at the time he had signed the form it was blank and in truth he wanted to attend the hearing. However, even if that the facts asserted by the appellant were true, it did not deprive the Tribunal of the power it exercised, namely the power to proceed to determine the matter without conducting a hearing. 5 The Federal Magistrate did not err in dismissing the appellant's application. The appeal should be dismissed with costs.

appeal from decision of federal magistrate where tribunal did not conduct a hearing where appellant gave unsworn evidence before federal magistrate that response to hearing invitation form had been returned to the tribunal by his migration agent without appellant's knowledge indicating the appellant did not wish to attend appellant's version of facts not accepted by federal magistrate application of s 27 of federal court of australia act 1976 (cth) where appellant asserts further facts in an appeal migration

2 The appellant on 22 January 2007, filed, in this court, an application for leave to appeal from the decision of Federal Magistrate Wilson and a notice of appeal. The applicants on the motion acknowledge that leave to appeal is not required from the decision of Federal Magistrate Wilson on the footing that the decision is a final decision of that court. 3 Mr Burgess has appeared this morning by telephone in response to the application for security for costs. 4 The background to the matter involves these circumstances. 5 Mr Burgess has been in receipt of a disability support pension since 16 April 2002. On 22 January 2006, Mr Burgess wrote to Centrelink requesting that he be paid a lump sum payment of disability support pension entitlements in an amount of $31,500. That amount arises out of a proposition that because Mr Burgess is currently 38 years of age and contends that he expects to live until a life age of 103 years, he has a remaining life expectancy of 63 years. He seeks an acceleration or advance of disability support pension payments of $500 per year multiplied by 63 years, thus deriving the lump sum amount of $31,500. Mr Burgess says that he seeks the acceleration because he wishes to invest the accelerated amount in income producing assets, so that he can get back on his feet. Because of his circumstances, he is not in a position to otherwise raise a loan from a banker in the conventional way. 6 The social security legislation which comprises the Social Security Act (1991) and the Social Security (Administration) Act 1999 , contemplates that an application by a person, relevantly qualified, might be made for an advance payment of a social security pension entitlement. The legislation provides, however, that there is to be a cap on the maximum amount that might be accelerated pursuant to such an application and s 1061ED of the Social Security Act (1991) sets that cap at $500 in any one year. Plainly enough, there are good social policy reasons why such a cap might exist in respect of accelerations or advance payments and they, no doubt, are that limited amounts of acceleration would not place a recipient at great danger of continuing insecurity should the accelerated amount be dissipated. The continuity of support in the payment of pension entitlements to the applicant is a critical matter. 7 Because the amount is capped at $500 in any one year, the original application made by Mr Burgess was rejected on the footing that there was no statutory foundation for a decision to accelerate pension entitlements by 63 years in a present day lump sum amount of $31,500. On 10 February 2006, an authorised review officer determined that Mr Burgess could not be paid the lump sum advance under the provisions of the Social Security legislation. On 13 March 2006, the Social Security Appeals Tribunal ('SSAT') reviewed, on application by Mr Burgess, the decision and affirmed the authorised review officer's decision. Mr Burgess sought a review of the decision of the SSAT and on 6 September 2006 the Administrative Appeals Tribunal affirmed the decision. 8 The appellant then appealed from the decision of the Administrative Appeals Tribunal to the Federal Court of Australia. That matter was remitted to the Federal Magistrates Court and on 18 December 2006, Federal Magistrate Wilson dismissed the application for leave to appeal and ordered the present appellant to pay the respondents' costs of the proceedings. On 22 January 2007, Mr Burgess filed an application for leave to appeal and a notice of appeal in this court. Pursuant to the order of Federal Magistrate Wilson, a bill of costs incurred in those proceedings has been prepared and the short-form bill reflects an amount of costs of those proceedings of $3,984. 9 There are some contextual circumstances in relation to the litigation which should be mentioned and they are these. 10 In 2004, Mr Burgess requested Centrelink to pay him his lifetime entitlement to rent assistance in a lump sum payment in advance to enable him to build a house. On 14 September 2005, an authorised review officer determined that the appellant could not be paid the lump sum payment in advance under the provisions of the social security legislation. On 7 October 2005, the SSAT reviewed and affirmed the authorised review officer's decision. Mr Burgess sought a review of the Tribunal's decision and on 16 January 2006, the Administrative Appeals Tribunal affirmed the decision. Mr Burgess appealed from the decision of the Administrative Appeals Tribunal to the Federal Court of Australia. 11 On 27 April 2006, the Federal Court dismissed the appeal (P)NSD105/2006, per Stone J. On 23 May 2006, the Federal Court ordered the appellant, Mr Burgess, to pay the costs of the respondent to those proceedings in an amount of $1,200. On 29 June 2006, the appellant applied to the court for an extension of time in which to appeal from the decision of Stone J. The application for an extension of time was dismissed by the court, per Tamberlin J, on 22 November 2006 ( Burgess v Secretary, Employment and Workplace Relations [2006] FCA 1725). Mr Burgess was ordered to pay the respondent's costs, fixed in an amount of $250. At the date of swearing the affidavit by Mr Richard McQuinlan in support of this motion on 5 April 2007, the costs ordered to be paid by Mr Burgess by Stone J and Tamberlin J in respect of decisions I have mentioned, have not been paid. 12 The principles to be applied in considering an application for security for costs derive at the outset, from a discretion conferred by the legislation. Section 56 of the Federal Court of Australia Act (1976) provides that the court or a judge may order an applicant in a proceeding in the court, or an appellant in an appeal to the court, to give security for the payment of costs that might be awarded against such a party. Order 28 of the Federal Court Rules also makes provision for security for costs and in general terms, provides that the court may order that the proceeding be stayed until security is provided. In the decision in Carey-Hazell v Getz , French J noted a number of considerations to be taken into account in the exercise of the discretion and those discretionary considerations derive, in large part, from the observations of Hill J in Equity Access v Westpac Banking Corporation (1989) ATPR 40-972 at 50,635, and the observations of Beazley J in KP Cable Investments Pty Ltd v Melt Glow Pty Ltd (1995) 56 FCR 189. 15 The considerations include whether the application for security for costs has been brought promptly; an assessment of the strength of the merits of the appeal and the bona fides of the appellant in bringing the appeal; whether the impecuniosity of the appellant was caused and, I might add, contributed to by the conduct of the respondents; whether the application for security for costs, in all the circumstances, is oppressive having regard to the circumstances of the appellant; whether there are persons who otherwise have an interest in the outcome of the proceedings; and other general discretionary questions going to the public interest. 16 One additional matter which seems to me to be important in such an application is the particular circumstances that arise when the controversy before the court is one between a citizen and the executive. It seems to me that the court should be particularly conscious of the disequilibrium between the executive and the citizen and, in exercising a judgment as to whether the discretion should fall in favour of making a security for costs order, the merits of the underlying appeal should be considered very carefully; the particular or special detriment which might arise in the appellant should an order for security be made, should be scrutinised carefully; so too the circumstances of the appellant; and the question of whether the appeal turns upon questions which might go to assessments of evidence rather than a question of construction of legislation, should be considered. 17 Mr Burgess in his observations, makes the comment that the costs of the respondents ultimately come from revenue derived by the respondents from the receipt of taxes, although Mr Burgess did not quite put it that way. I think the point is that because the respondents are supported by the community, then one should be careful in weighing the discretionary factors against Mr Burgess in making an order for security for costs. 18 Some of the circumstances which warrant attention in this matter are these. Firstly, Wilson FM had to consider the question of whether an application for an extension of time to file and serve a notice of appeal from a decision of the Administrative Appeals Tribunal ought to be summarily dismissed. There is no doubt that in considering the reasons of Wilson FM, the correct test, as a matter of law, has been applied for determining that application. In the course of dealing with the application, Wilson FM made these observations. As I have said, there are no issues of fact, which have to be determined in this case. It is one which turns upon the construction of legislation. The relevant legislation is that contained in the Social Security Act 1991 . Section 1061A(1) deals with the qualification of a person for an advanced payment of a social security entitlement. Section 1061A(4) provides for exclusions to an entitlement to advance payment. Section 1061EA(1) provides that the Secretary of the Department must determine the application in accordance with the Act. Therefore, if there is no statutory provision, which permits the commutation of a pension to a lump sum, the Department simply cannot allow an application in that regard. Section 1061ED(1) provides that the amount of an advance payment is calculated according to that section, and section 1061ED(2) provides for calculation of the amount of the advance payment. Here, the amount in question would be $500. In the present case, the Tribunal considered the correct legislation. No error of law is apparent from the reasons of the Tribunal. The dispute was in relation to the amount which could be advanced. The Tribunal member was, in my view, correct in saying that the effect of the legislation is beyond a doubt. The Secretary is not authorised to accumulate advances into a lump sum greater than $500. The member correctly held that the Secretary had properly refused Mr Burgess' application. No error of law is demonstrated, either from the reasons for decision or from the applicant's own material. In those circumstances, I am satisfied that the applicant has no reasonable prospect of successfully prosecuting an appeal in this case. The application before me, of course, is not to determine the question of the merits of the appeal. However, in determining the application for security for costs and in weighing the exercise of the discretion, the substance and merits of the appeal are particularly relevant. 20 It seems to me that in a contest between the citizen and the executive, the strength of the arguable case is particularly important. If the appeal raises an arguable question, or an arguable matter of statutory construction, although minds might legitimately differ on the strengths and weaknesses of the arguable question, it seems to me that the citizen should rarely be prevented from progressing his or her appeal by force of a security for costs order. In other words, in cases where an arguable question is raised, an order ought not to be made for security for costs against a citizen in a controversy between the citizen and the executive except in very unusual circumstances. 21 In this case, the appeal does not concern anything other than a question of construction of the provisions of the legislation. The legislation makes it plain that any entitlement to an acceleration or advance payment is capped at $500. In those circumstances, the proper conclusion to be made is that an appeal from the decision and orders of Federal Magistrate Wilson has no reasonable prospects of success. Although I am reluctant to say that such an appeal has no prospects of success at all, the extent to which an appeal, in this case, is unmeritorious having regard to the hypothecated lifespan and formulation for the calculation of the lump sum, seems to me to virtually reach the position where Mr Burgess has no prospects of success in the appeal. 22 A second factor is the question of whether there is a prospect that Mr Burgess will be in a position to meet a costs order should he be unsuccessful. Having regard to the history of the litigation I have previously described and the costs orders which remain unsatisfied, it is clear on the material that Mr Burgess is not likely to be in a position to pay an order for costs. Mr Burgess has placed emphasis upon his particular circumstances and his inability to raise an amount to provide security for costs. Those conditions derive from his present circumstances as a recipient of a disability support pension. Although those circumstances explain the source of Mr Burgess's inability, it is nevertheless clear that Mr Burgess will not be in a position to meet a costs order made against him in the event that the appeal is dismissed. 23 A third consideration is whether the application for security for costs is made in circumstances where the respondents are seeking to be oppressive in the conduct of the appeal. Having regard to the circumstance that Mr Burgess has exercised a right of review before the SSAT; has exercised a right of review before the Administrative Appeals Tribunal; and has had the benefit of a determination of issues before Federal Magistrate Wilson, it cannot be properly said that Mr Burgess has been deprived of an opportunity to ventilate each and every basis upon which the rejection of the acceleration payment was made. Thus, no question of oppressive conduct arises. 24 A further consideration is the question of the contribution of the respondents to the impecuniosity of the appellant, and I have addressed that briefly in the context of other remarks. The respondents have not caused or contributed to the impecuniosity of the appellant. 25 An additional factor to be addressed is the consideration of the public interest and other discretionary factors at large. Although I take the view that a controversy between the citizen and the executive requires very special consideration, it seems to me that the point of principle remains that in circumstances where there is such a demonstrated lack of merit in the appeal; a history of access to review in various fora and a demonstrated inability on the part of the appellant to meet an order for costs, the progression of the appeal without an order for security for costs is, as a matter of discretion, inappropriate. 26 A consideration that ought not to be overlooked is that the particular character of the decision under challenge is one to accelerate or advance payments at the maximum of $500 per year over a period of 63 years, thus generating a present amount of $31,500. The present circumstances of Mr Burgess are not altered or prejudiced by a rejection of that decision. Mr Burgess has an entitlement to a disability support pension; has had the benefit of those entitlements since 16 April 2002; and continues to receive those entitlements unchallenged. Had special considerations of detriment arisen, by reason of the exercise of a discretion on the part of the respondents resulting in a refusal to maintain present entitlements, the question would be a different one. 27 For all of these reasons, it seems to me appropriate to make an order for security for the costs of the appeal. I have been provided with an estimate of the costs of responding to the appeal, which is divided into two categories. The first category is the costs incurred in addressing the question of the appeal to date which amounts to $1,526. The second category of costs goes to those costs to be incurred from today forward, addressing such matters as preparation of the appeal books, development of submissions, retaining counsel and related matters. The total amount of costs in connection with Mr Burgess's appeal are said to amount to $3,439, although some categories of costs may not have been included in the schedule. 28 I propose to make an order for security for costs which is a discounted amount from the proposed schedule. The amount I propose to impose is a security of $2,000. 29 Accordingly, the orders I propose to make are these. First, that the appellant, Darren John Burgess, is to provide security for the costs of the respondents to the appeal in an amount of $2,000. Secondly, the appeal is to be stayed until security in that amount has been provided, or until further order. 30 I give liberty to the appellant and the respondents to make further application to the court on seven days' notice. 31 I further order that Mr Burgess is to pay the costs of the respondents of and incidental to the notice of motion filed 5 April 2007. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

consideration of an application for security for costs of an appeal from a decision of a federal magistrate consideration of the principles to be applied consideration of the circumstance that the controversy is one between a citizen and the executive practice and procedure

In the principal proceedings, Jennings claimed a declaration that it is the owner of the copyright subsisting in a plan lodged by the defendants with the Beaudesert Shire Council in October 2003; an injunction restraining further infringement of its copyright; damages pursuant to s 115 of the Copyright Act 1968 (Cth) ("the Copyright Act ") in the sum of $45,164.00; additional damages of $10,000.00 pursuant to s 115(4) of the Copyright Act and alternatively, damages pursuant to s 116 of the Copyright Act . The Magistrate erred in dismissing the proceedings. The Magistrate failed to give any or any adequate reasons for the decision. The decision was contrary to the evidence. Jennings is a well known designer and builder of homes throughout Australia. By paras 1(d), 3, 4 and 5 of the Amended Statement of Claim, Jennings says its employees designed and originated in 1997 a plan for a home described as the Cambridge 245 ; in 1999, the plan was refined and republished again as the Cambridge 245 ; thereafter, the plan was further refined and published as the Verona 245 , and further refined to incorporate a covered rear patio and an extended portico façade and renamed the Cortona 245 . By para 5(b)(iv) of the Amended Statement of Claim, Jennings contended that the Verona 245 was published in the Jennings catalogue of houses and plans. By para 5(c), Jennings contended that the plan for the Cortona 245 house was offered for sale by catalogue, exhibited at five display sites, and available on the Jennings website to customers as either the Verona 245 or the Cortona 245 . Jennings says that as a result of these steps the plan, under the description of either the Verona 245 or Cortona 245 , became its top selling house design in its display range of houses. There is no mention in the Amended Statement of Claim of a Jennings plan described as the Cortona 290 . Jennings by its solicitors wrote to Mr and Mrs Bogdan on 19 November 2003 asserting infringement of a plan described as the Verona 245 and on 21 November 2003 Mr and Mrs Bogdan were provided with a copy of a floor plan for the Verona 245 house, by those solicitors, as the work said to be infringed. Mr Henesey-Smith, the Jennings Executive General Manager for Queensland, gave evidence of the evolution of the plan described as the Cortona 290 upon which the plaintiff relies. At pp 2 and 3 of his statement (Exhibit 2 in the proceeding) he says the predecessor of the "Cortona" was a house described as the Siena first opened for inspection in December 1996. For marketing reasons, the name of the house then changed to the Daintree in September 1997, the Cambridge 280 in October 1998, the Mapleton ( Portico ) in February 2001, the Verona 270 ( Portico ) in December 2001 and the Cortona 290 ( Portico ) in November 2002. The Cortona 290 ( Portico ) house was first displayed at Marina Boulevard, Banksia Beach, Bribie Island in November 2002 and displayed at Mahogany Drive, Pelican Waters, Caloundra in December 2003. The plan and house are now known as the Terrace 290 . The matrix set out on pp 2 and 3 of Mr Henesey-Smith's statement makes no direct reference to the Cambridge 245 , the Verona 245 or the Cortona 245 described in the Amended Statement of Claim as the foundation work in suit in which copyright is said to subsist. It is important to identify the precise "work" for the purposes of the Copyright Act in which copyright subsists as the foundation of the claim of infringement. In this case, copyright is said to subsist in a "plan" described as the Cortona 290 . That plan is a drawing and thus an artistic work in which copyright will subsist provided the work is an original work of authorship (s 10(1) and s 32 of the Copyright Act ). Since Jennings rests the source of its rights in copyright on a work described as the Cortona 290 , Jennings would ordinarily seek to demonstrate the evolution of the Cortona 290 through the passage of design changes consistent with the Amended Statement of Claim by tracing the design development through the plans described as the Cambridge 245 , the Verona 245 , and the Cortona 245 , ultimately leading to the Cortona 290 . That evolution becomes important in at least two respects. First, as evidence establishing the originality and genetic footprint of the actual plan in suit in which the bundle of exclusive rights comprising the copyright (s 31 and particularly s 31(1)(b) of the Copyright Act ) is said to subsist and secondly, to establish the work said to have been reproduced in a material form by the defendants. That second matter becomes important in a case where there is no direct evidence of access to and use of the Jennings' Cortona 290 plan by the defendants and the plaintiff seeks to rely upon what is said to be significant or striking objective similarity between the Cortona 290 and the defendants' plan, as giving rise to an inference that the defendants had access to and made use of the Cortona 290 plan in bringing into existence their own plan and, further, that the defendants' plan is either a reproduction in a material form of the Cortona 290 plan (s 31(1)(b)) or a reproduction of a substantial part of that plan for the purposes of s 14 of the Copyright Act . These questions are separate but related matters of assessment. In developing the matrix at pp 2 and 3 of his statement Mr Henesey-Smith supports the matrix by reference to a number of annexed plans shown in brochures. The Siena is Annexure C. The Daintree is Annexure D. The Cambridge 280 is Annexure E. Annexure E also depicts the Cambridge 245 . The Mapleton is Annexure F. The Verona 270 is Annexure G which also depicts the Verona 245 . The Cortona 290 is Annexure H. It also depicts another plan described as the Cortona 260 . The annexed plans do not depict a version of the Cortona 245 referred to in the Amended Statement of Claim. Mr Henesey-Smith says that the principal difference between the Verona and Cortona families of plans is that the rear courtyard area depicted in the Cortona plans is roofed while the courtyard area in the Verona plans is open or unroofed. Jennings says it has offered the Cortona 290 for sale either as depicted in the brochures (Annexure H to the statement of Mr Henesey-Smith), that is, with the garage and its relationship with the laundry, kitchen, meals and family rooms to the left hand side of the house (as depicted in Annexure H --- looking towards the house from the street orientation for the structure) or on the right hand side of the structure in "mirror-reverse" layout to the depiction in the brochure. The location of the informal living areas down one side of the home and the bedroom areas down the other side. A garage under the main roof with direct access into the house. By para 1(d) of the Amended Statement of Claim, Jennings pleaded that it is the owner of the copyright subsisting in the floor plan and house design for the Cambridge 245 , the Verona 245 and the Cortona 245 for the purposes of s 35 of the Copyright Act . Mr and Mrs Bogdan by their defence did not plead to para 1(d) of the Amended Statement of Claim and are taken to have admitted subsistence of copyright in those plans and the ownership of the copyright in Jennings. Those admissions do not extend to the Cortona 290 which is a different (albeit, similar) plan to the three pleaded plans. However, as to this aspect of the case at trial, it is clear that Magistrate Payne treated, incorrectly in my view, the deemed admission of the contentions at para 1(d) as extending to the Cortona 290 . Counsel for Jennings at the trial, in response to some confusion surrounding the different descriptions of plans relied upon by Jennings, made clear that Jennings relies on the plan and house design for the Cortona 290 as the work said to be copied (Transcript p 24, ll 5 to 10). An examination of the plan for the Cortona 290 shows that it has a strong resemblance to the Cambridge 245 , the Verona 245 and the Verona 270 (but for the roof over the pavilion not present in the Verona plans). The evidence of Mr Henesey-Smith both in his statement and in oral evidence at the trial establishes the progression of the design and development of the Cortona 290 by employees of Jennings comprising the internal design group, known within Jennings as the "Leading Edge Design Studio", from the Cambridge 245 and the Verona 245 both of which are the subject of admissions. There is no reference to the Cortona 245 . The evidence at trial however established on the balance of probabilities what was said to be admitted, namely, that Jennings is the owner of the copyright in an original plan described as the Cortona 290 , as a work of authorship of its employees. In that sense, each earlier plan modified slightly to evolve the next, can be seen as part of a sequence of plans along a continuum in which iterations embody the earlier work and fundamentally preserve the essential layout and relationship of features evident in the Cambridge 245 , carried into the Verona 245 and expressed in the Cortona 290 . Jennings says the plan, Annexure K to Mr Henesey-Smith's statement (Exhibit 2) was lodged with the Beaudesert Shire Council for approval, approved by the Council (Exhibit 8 --- Reference Plan 0056324) and a house was built by Mr and Mrs Bogdan in accordance with the approved plan. Jennings contended at trial and on appeal that an examination of the Bogdan plan (Annexure K to Exhibit 2 and the plan forming part of Exhibit 8) reveals striking similarities to the Cortona 290 (Annexure J to Exhibit 2). Each plan is incorporated as Schedules 1 and 2 to these reasons. The similarities are said to be these. First, each plan incorporates a pavilion area at the rear of the house centred on a lineal axis through the centre of the "square" floor plan in which the walls of the pavilion separating the pavilion from a family room on one side and the principal bedroom on the other side of the pavilion are angled or splayed in precisely the same way, that is, in the same degree of angle, so as to make the pavilion area more expansive. Secondly, on each side of the axis, the structure divides the bedroom and bathroom areas from the common areas (laundry, kitchen, meals and family room) about a central space. That space and the pavilion space are characterised by ceilings at a higher elevation than other areas of the house so as to open the space, make the square structure lighter and give the space a feeling of being more airy. In the Jennings plan, the ceiling over the central area and the pavilion is elevated at 3,300mm. In the Bogdan plan, the ceiling elevation over the central area, the pavilion and the entry area is 3,600mm. Jennings contended that there is a relationship between the angled or splayed walls of the pavilion areas and the elevation of the ceiling in the central and pavilion areas so as to achieve a combination effect of space, light and integration. Jennings contended that these features, especially the combination of them, are striking features of differentiation of the Cortona 290 plan. Initially, counsel for Jennings described these features as "unique" to the Cortona 290 . However, on the evidence before the Magistrate, the case was put on the footing that these features distinguish the Cortona 290 as differentiating features readily identified with the Jennings plan. Thirdly, Jennings contended that other "design similarities" taken in combination with the two principal differentiating features of angled walls and elevated ceilings, suggest a striking similarity between the Cortona 290 and the Bogdan plan. Mr Deshon provided a report dated 7 January 2004 (Exhibit 3) in which he expressed the opinion that the Bogdan plan resembled "most closely" the "Cortona design" and that "there are fundamental similarities between the Bogdan and Jennings designs". Jennings also called evidence from Mr Neuson, a sales representative of Truss Master Queensland experienced in assessing for pricing purposes, plans for roof truss designs. He gave oral evidence that when presented with the Bogdan plan for the purpose of preparing a pricing estimate for the supply of roof trusses for the Bogdan house, he formed the opinion that the plan incorporated features which he thought were distinctive of Jennings plans. The features which led him to that view were the alfresco section at the rear of the house with angled walls at approximately 15 degrees, the overall design, size and proportions of the house, the location of rooms and, particularly, the raised ceiling in the alfresco and lounge room area. It will be necessary to further examine the evidence of these witnesses. Written submissions have been prepared on their behalf. Those submissions seem plainly enough to have been formulated by lawyers advising Mr and Mrs Bogdan, with references to a number of authorities. In those submissions, no point is taken that copyright does not subsist in the Cortona 290 plan or that Jennings is not the owner of the copyright. The central point made in the submissions (among others) is that no inference of access to or use of any Jennings plan arises on the evidence at trial and Magistrate Payne was correct in finding no infringement on the part of the respondents. Mr and Mrs Bodgan deny infringement of the Cortona 290 plan. They deny having had access to or made use of any Jennings plan. Mrs Bogdan made statements from the bar table in conducting the defence of the action on behalf of both defendants, concerning the authorship and evolution of the Bogdan plan. Mrs Bogdan also gave oral evidence in which she adopted those statements and further explained the authorship and evolution of the Bogdan plan. Mr Bogdan did not give any evidence. Mrs Bogdan gave this evidence. She has made a practice of collecting magazines to obtain design ideas for a house she and her husband intended one day to build. Mrs Bogdan's father-in-law, Mr Florien Bogdan, was a carpenter. He died in tragic circumstances on 6 April 2004. Mrs Bogdan had spoken to him from time to time about ideas for a house. She had kept a photograph from a magazine published in 1995 (Exhibit 6) depicting a rear-facing gable creating an effect, described in the text accompanying the photograph as "a huge dormer window shape which intersects with the main direction of the new sitting room ceiling". The text describes the "window wall" as creating a "dramatic effect". Mrs Bogdan took the photograph to her father-in-law and told him that she wanted the effect created in the magazine photograph. She wanted to see the living and dining areas of the house "all in one" when entering the house. Her father-in-law told her that he had retained a copy of a plan for a house he had built many years before in Canberra, probably in 1984 or 1985 ("the Canberra plan"). Using the photograph and the plan of the Canberra house, Mr Florien Bogdan took up ideas contributed by Mr Bogdan and the requests Mrs Bogdan had made, so as to draw up a draft plan. Mrs Bogdan says that everything started from the picture in the magazine. Mr and Mrs Bogdan responded to the Jennings' letters of demand by a letter from their solicitors dated 27 November 2003 (Exhibit 4). That letter attached a copy of the Canberra plan (Attachment A) and a copy of the plan prepared by Mr Florien Bogdan (Attachment B). The letter contended that Mrs Bogdan wanted a covered patio at the rear of the house and her request for that feature was given priority over the space allocated to two bedrooms depicted at the rear of the house shown in the Canberra plan. The letter of 27 November 2003 asserted that the use of angled walls was "a solution to optimizing both the indoor and outdoor spaces (as shown in the first rough drawing --- refer to "Drawing Annexure B" and subsequent "Drawing Annexure C" dated February 2003)". The design was then taken to Igor Designs, Architects and Draftsmen. Igor Designs prepared the final designs for the house based upon Mr Bogdan's father reworked design for Lot 663, Silver Wattle Drive, Jimboomba (refer to "Drawing Annexure E"). In addition, the respondents placed emphasis on a brochure (Exhibit 5) for a house advertised by a project home builder, Dixon Homes, which depicts a floor plan laid out on a "square" design ("the Dixon plan"). The plan shows two veranda areas each with an L shape comprising two walls and a third wall angled at 45 degrees rather than a U shaped section with two walls at an angle of 90 degrees to a third wall. The second plan shown in the brochure, depicts a floor plan with elevated ceilings at 3.6m in the entry, dining, living and patio areas. The Dixon plan is Schedule 3 to these reasons. Mrs Bogdan sought to rely on the Dixon plan as demonstrating that elevated ceilings are not something necessarily associated only with the Jennings Cortona 290 plan or the earlier pleaded Jennings plans and in that sense, an elevated ceiling does not differentiate the Cortona 290 plan in such a way that the presence of elevated ceilings on one plan gives rise to an inference of origin in another. Although reliance on the Dixon plan was criticised by Jennings as going only to originality in the Jennings plan which was said not to be in issue having regard to the pleadings, the evidence also goes to the question of whether reliance, in part, upon the important feature of elevated ceilings in the Bogdan plan aids in supporting an inference that the respondents saw and used the Cortona 290 plan with its elevated ceilings, in creating their own plan with elevated ceilings at 3.6m in the entry, lounge and patio areas, among other features. As previously mentioned, Mrs Bogdan gave evidence before Magistrate Payne. Mr Bogdan did not give evidence. Mr Florien Bogdan had not provided a statement in relation to the authorship of the Bogdan plan and did not give evidence. Mr Florien Bogdan died before the proceedings were commenced by Jennings. He died on 8 April 2004 and the proceedings were commenced on 13 April 2004. An adverse inference ought not to be drawn against the respondents on the footing that they failed to adduce evidence at the trial by way of a statement from Mr Florien Bogdan. At the time of Mr Florien Bogdan's death, the defendants would have had no reason to be at a stage of treatment of the Jennings earlier claims made by correspondence, of preparing formal statements of evidence as to authorship from Mr Bogdan senior. Plainly enough, the respondent Mr Tiberiu Bogdan, ought to have given direct oral evidence of the history of the development of the Bogdan plan. Mr Bogdan chose not to do so and was thus not exposed to cross-examination by counsel for Jennings. Unfortunately, a close examination of the transcript of proceedings before Magistrate Payne reveals that the possible consequences of Mr Bogdan choosing not to give evidence, were not drawn emphatically to his attention. There's nothing more you wish to add. What I'd --- and there was no other evidence either of you wish to call? I must ask you that. It seems to me that a fair inference is open that Mr Bogdan incorrectly assumed that since Mrs Bogdan had said things about the history and evolution of the Bogdan plan and had given evidence of those things that Mr Bogdan thought were the things of relevance, there was no further point in his giving evidence about the same matters. Unfortunately, Mr Bogdan was not encouraged strongly to enter the witness box and tell the Court his version of the events. Having reviewed the transcript and taking account of the circumstances that the respondents were self-represented at trial; Mrs Bogdan assumed the carriage of the defence to the claim; Mrs Bogdan had given some evidence about the authorship of the plan; and, Mr Bogdan was not encouraged to give oral evidence on the central matter of authorship coupled with a warning that his failure to do so might be prejudicial to his case and that of the respondents generally, no inference properly arises adverse to the defendants by reason of his failure to enter the witness box and give evidence as to authorship with attendant cross-examination. Although no adverse inference arises, it remains the position that there is no evidence from either author of the Bogdan plan as to the circumstances of the authorship of that plan. Mrs Bogdan gave evidence that she was not an author and was not present when either Mr Florien Bogdan or he and his son drew the draft plans annexed to Exhibit 4. The respondents contend that the detailed drawing prepared by Mr Florien Bogdan (Annexure D1 to Exhibit 4) based upon contributions made by Mr Bogdan and the requests by Mrs Bogdan for particular features, was taken to Igor Designs, Architects and Draftsmen for the preparation of a final detailed drawing (Annexure E to Exhibit 4). The particular individual who prepared that drawing, Mr Dan Djako, was not called to give evidence by the respondents. The explanation for that failure was that Mr Djako was regrettably overseas at the time of the trial visiting a sick relative and was simply not available to give evidence. That position which emerged at trial, was not able to be tested by Jennings. One further matter relating to the availability of evidence should be mentioned. Mrs Bogdan gave evidence of the identicality of the ceiling arrangement in the Bogdan house as built and a raked feature of the ceiling shown in the photograph (Exhibit 6) she collected from the magazine mentioned in evidence, although in cross-examination Mrs Bogdan accepted that the ceiling over the central area (lounge/dining) and the entry area is flat consistent with the sectional line shown on the drawing depicting a flat ceiling. Mrs Bogdan in earlier evidence said she had taken photographs showing the identicality with the magazine picture but had forgotten to bring the photographs to Court. Mr Henesey-Smith in his report (Exhibit 2) expressed the opinion that the Bogdan plan "most resemble[d]" the plan and elevations of the Cortona 290 ( Portico ). He identified the two features of elevated ceilings and identically angled walls to the outdoor living areas and those other features described at [18] as the basis for that opinion. In oral evidence, he accepted that the Dixon plan had "some fundamental similarities" to the Cortona 290 plan "in the basis of a rear central patio and the raised ceilings through the patio and the living area ... that's really the main distinguishing feature". Mr Henesey-Smith said that he was familiar with some house products offered in the market by competitors but it was not his function to undertake competitor analyses or to become intimately familiar with the plans of competitors of Jennings. With that limitation in mind, he said that he was not aware of any competitor that offered a home in the marketplace with a portico area at the rear of the house with splayed or angled walls. Mr Henesey-Smith identified a range of differences between the Cortona 290 and the Bogdan plan on the one hand and the Dixon plan on the other. In cross-examination. Mr Henesey-Smith said that although the Cortona 290 and Bogdan plans were not identical, "they've got what I'd say, very, very significant similarities". The witness accepted that there was "a slight difference" between the Bogdan plan and the Cortona 290 in relation to the entrance area and that there are some differences in the size of rooms. The witness accepted that there was a "subtle difference" between the two plans due to the different roofline. The witness described the roofline as "very similar" apart from the fact that "the access to the roofline over the garage was slightly different". The witness added "however, I don't believe that it changes the overall fundamental similarity". Mr Henesey-Smith described the similarity between the two plans as "comprehensive" and said they were "very, very strong similarities". The Bogdan plan and the Cortona 290 when compared side by side in terms of Annexures J and K to Exhibit 4, demonstrate these common features. There is a porch or portico area (dimensionally different), leading to an entry area through a large open space on an axial alignment leading to a rear entertaining or pavilion area. The ceilings in the entry, central area (lounge/lounge dining) and external entertaining area are elevated at a height greater than other ceiling areas of the structure. Each plan exhibits a line drawn across a section of the external area at the rear, a line drawn across the central open area and a line drawn across the entrance area. Each of those lines reflects an architectural practice of depicting a flat ceiling although Jennings accepts that the ceiling in the rear entertaining area of the Bogdan plan although depicted as flat is raked. There is an axis through the central part of the structure and the bedrooms are laid out on one side and the public areas on the other. In the Cortona 290 plan, on the left hand side of the access there is a bedroom (described as Bed 2), a walk-in robe area and a corridor which provides access to bedroom 3, toilet and bathroom facilities, bedroom 4 and bedroom 1 with ensuite facility. On the right hand side of the axis, the structure lays out the garage leading to a laundry, a kitchen with U shaped benches, a pantry and a meals and family area. In the case of the Bogdan plan, the layout on the left hand side of the axis is very similar. Bedroom 2 in the Cortona 290 is described as bedroom 4 in the Bogdan plan and the room incorporates the space described as the walk-in robe area in the Cortona 290 plan. Bedroom 3 and the associated toilet and bathroom areas are very similar. Bedroom 2 is very similar to bedroom 4 in the Cortona 290 plan and bedroom 1 with associated ensuite is similar. There are, of course, dimensional differences and some differences in shape and configuration. However, the layout of the rooms and their alignment and configuration are, it is fair to say, very similar. On the right hand side of the axis in the Bogdan plan there is an immediate difference in that a study has been incorporated (18 x 21) in the Bogdan plan and the garage has been located on the right hand side of the study which removes the garage from the contained square of the plan. That configuration affects the roofline of the house. As to the remaining areas, the laundry is dimensionally different. The shape of the kitchen configuration and pantry design is similar and the family and meals area is very similar. Apart from these matters of layout and orientation, there are three features given emphasis. The first is the elevated ceilings in each structure although the height of the ceilings differs. Secondly, the angled or splayed walls are identical in their degree of angulation and orientation to the structure. Thirdly, although perhaps a small point, each plan incorporates a cosmetic "nib wall" with cut out sections within the central open area. The wall is not structural and represents a cosmetic addition not dictated to the author by structural necessity. Jennings called an expert, Mr Deshon. He was asked to give expert evidence on the question of whether he could see the progressive evolution of the Bogdan plan from the drawings annexed to the letter dated 27 November 2003 from Mr and Mrs Bogdan's solicitors. Mr Deshon gave evidence that it was "very difficult" to see how the author of the Bogdan plan could "get from the Canberra plan to the final plan". He said he could not see how either Drawing C or D developed from Drawing A. Mr Deshon said that the "striking distinguishing feature" of the "Cortona or Verona" is the splayed walls at the rear of the house. He said "the way that these walls which form a rear external area, although it's roofed, are off the right angled rib and are splayed is the thing that immediately distinguishes the plans" and [that feature] "would distinguish the three-dimensional model of the house". It is very common, in project home building in particular ... to simply make a roof which has a monoplane ceiling; a ceiling the same level right through. These designs don't have that. They, in my opinion, are a fairly intricate part of the splayed wall design and the desire of the designer to optimise, if you like, the advantage caused by the splayed walls. This is what we'd call a deep plan rather than a shallow plan. A shallow plan is a long, thin building. A deep plan approaches the square. What this does, by increasing the ceiling space in the centre of the house, is create, first of all, a feeling of airiness, a feeling of space but also it enhances ventilation of the plan simply by the venting effect. I would think the other thing is the amenity, the visual amenity of the place is enhanced considerably by opening up the back of the house with a higher ceiling. Mr Deshon could not say. Mr Deshon said that the layout of the rooms reflected in each plan was "similar" and that there are "some fundamental similarities". The plan layout is developed around a lineal axis centred on a living space with family/kitchen/laundry/garage (and in one case the study) --- the house "public" rooms --- on one side and bedrooms and bathrooms on the other. All have a recessed porch entrance and a large area at the other end of the axis which is walled on three sides. The opposing walls of this large space are splayed: they are not parallel to each other but diverge as they progress towards the outer edge of the space they define. The relationship of the spaces to one another follows the same sequence. The insertion of a study in the Bogdan plan results in offsetting the garage and changes the internal access to it and angling the corridor at 45 degrees at bedroom 3 and 4 in the Bogdan plan eliminates the walk-in wardrobe in the Cortona/Verona plan; but the relationship of the rooms common to all plans to one another is identical. In cross-examination by Mrs Bogdan, Mr Deshon was asked to examine the Dixon plan. He accepted that the Dixon plan is a deep plan reflecting a "square" approach to design with symmetry around an axis, similarity of layout and the same planning policy inherent in the design. Mr Deshon accepted that the Dixon plan follows the same design strategy as the two plans in issue and that there are "some similarities within the layout". Mr Deshon accepted that in all three plans the ceilings are raised in the centre area (3.6 in the Dixon and Bogdan plans and 3.3 in the Cortona 290 ). Mr Deshon gave evidence that "the raised ceiling is a distinguishing feature of, I'd say, all three houses". The central matter of significance for Mr Deshon was not simply the angled walls or the elevated ceilings or similarity in layout and orientation or similarity in some detail but rather the combination of all of these elements. The Dixon plan for example, does not combine elevated ceilings and angled walls "off the right angled rib" at all or, more particularly, at 15 degrees rather than any other angle. As to the evolution of the Bogdan plan, Mr Deshon maintained his evidence under cross-examination that he could not see any progressive development from the Canberra plan leading to the Bogdan plan. Although Mr Deshon accepted that changes from the Canberra plan plainly might be made, Mr Deshon could not see how the Canberra plan could become the Bogdan plan. Mr Deshon also gave evidence that the Bogdan plan was a plan in "very hard and precise line over the Canberra plan house, which superimposes the outline of the Bogdan house on it " [emphasis added]. Annexure C, which is the next sketch which I think developed from it, is a far more sketchy drawing . I would have thought that ought to have been reversed, if there was a logical progression of thought from one plan to another. Look, I am not denying that there is some other --- some other drawings, it's just that I don't see them. The thing that allows this to happen [the configuration in the photograph] is that the ceiling is raked. He said that he saw the Bogdan plan for the purpose of pricing trusses required for the house. Mr Neuson is a frame detailer working for Truss Master Queensland and has worked for that firm for over eight years. He gave evidence that the drawing "caught his eye" as it was "quite distinctive" to a Jennings design. The first most distinguishing feature to me was ... the angle of those walls. A lot of houses use a 50 --- a 45 degree angle wall, but the Jennings design actually has ... something that's similar to ... a 15 degree ... angled wall. That's the first thing that caught my eye. Then the overall design, the size, proportions of the house was the next thing and just the general layout, the location of the rooms. And then, of course, the thing that really sealed it for me was the raised --- in the alfresco and the lounge room, which is quite --- I wouldn't say unique to an A V Jennings design but particularly to this design and the areas in which those ceilings are raised. In cross-examination, Mr Neuson considered the Dixon plan and the Jennings plan. He accepted that both plans exhibited raised ceilings over the rear patio section and the lounge area, that is, the alfresco section and the inside section generally described as the lounge/living areas. --- Yes. - Similar characteristics. She said she had never seen a Jennings plan nor entered a Jennings display house before receiving the letters of demand. She looked at the Jennings plan enclosed with the letter of 21 November 2003 and "saw the similarities", but had never seen the document before. My father-in-law together with my husband, came up with the rest. Mr Florien Bogdan told her the entry would be like the Canberra plan, the family room would remain the same, the ceiling would be elevated to 3.6m and the glass window feature (a "big slider" --- large sliding doors) from the magazine would be at the end (rear) of the living/dining room and "then my husband got involved ... with the rooms ... living on one side and bedrooms on one side ... they did a few drawings and we came up with the Bogdan plan". ... On Exhibit B is where my husband drew the patio and that's how we ended up with a --- with a unique --- that Jennings' claim is theirs, unique patio, angle, angular ... which left the living areas, the kitchen and the laundry and the garage on one side of the house. That's how we came up with these plans. My father-in-law and my husband sat together and then they came up with B1 [Annexure B to Exhibit 4], I believe . In cross-examination, Mrs Bogdan gave this evidence. Mr and Mrs Bogdan applied for approval to build a house as owner/builders, secured approval of their plan and built their house in accordance with the plan. A cosmetic change to the house as built included a triangular window. The plans show a flat ceiling over the rear patio at 3.6m and Mrs Bogdan said "that's what it is" as built. Similarly, a flat roof is shown at an elevation of 3.6m over the internal lounge/living room and, said Mrs Bogdan, "that's what it is". Annexure A to Exhibit 4 is the plan of Mr Florien Bogdan's Canberra house. Annexure B to Exhibit 4 is an overlay onto Annexure A on some changes to be made to it. Mr Florien Bogdan and Mr Bogdan drew Annexure B together. As to who drew what, Mrs Bogdan said, "You will have to ask my husband, I don't know. I wasn't present". I wanted an L shape and that's how I explained it to him and that's what he came up with ... Initially he did an L shape and then I asked him to spread them. It was to my taste. I have a choice, do I not? It's my house --- I designed it together with my father-in-law and my husband. I asked them to do that and they came up with this. I asked them to do something. I showed them and this is what they came up with. I'm not an architect nor a draftsman. Annexure C was drawn by either Mr Bogdan or Mr Florien Bogdan although Mrs Bogdan ultimately said, "I think --- my husband came up with this one". Mr Hackett took Mrs Bogdan to Annexure C and particularly a measurement of 3.7m along the rear wall representing the distance between the point at the rear of the house at which one angled wall of the patio reaches the rear section, to the rear back corner point of bedroom 1. You're asking the wrong person. I have ideas but I can draw. As to the toilet and bathroom arrangement below bedroom 4, Mrs Bogdan accepted that they have the same shape and that bedrooms 2 and 3 are in the same position in Annexure C as in the Jennings plan. As to the nib walls, Mrs Bogdan accepted that nib walls are present in both plans. In Annexure C to Exhibit 4, the nib walls do not show any cut-out section yet in the final Bogdan plan a cut-out section is shown for the nib walls. The Jennings plan exhibits nib walls with a cut-out section. As to that idea of cut-out sections in a nib wall, Mrs Bogdan said she got that cosmetic idea from her head. She just "came up with [it] ... from a magazine". As to the elevated ceilings, Mrs Bogdan accepted that the ceiling over the front patio, living, dining and back patio area is elevated at 3.6m, higher than other ceilings in the house. Mrs Bogdan accepted that the Jennings plan depicts elevated ceilings at 3.3m higher than the rest of the Jennings house ceilings at 2.7m. As to the configuration of the U shaped kitchen, related pantry and position of the refrigerator, Mrs Bogdan accepted that that particular configuration was not evident in the Canberra plan. She said that she chose that configuration as an idea she conceived. Mrs Bogdan said that the Canberra plan did not assist her in conceiving the U shaped kitchen and that "not everything came from the Canberra design". The configuration of the kitchen "just made sense, you have your laundry, you have your kitchen and you have the window along the wall". The defendants admitted by their pleading that Jennings is the owner of the copyright in plans described as the Cambridge 245 , the Verona 245 and the Cortona 245 and further, by para 2(c) of their defence, the respondents admitted that at all material times they were in day to day control of the house design and plan used by them to build their house and that they were in control of the construction works carried out on site. Magistrate Payne perceived the issues to be whether the respondents had infringed the appellant's copyright; whether they did so with knowledge; and, if so, the assessment of the true measure of the appellant's loss. Magistrate Payne noted that Jennings had called Mr Deshon as an expert witness. Her Honour noted that part of Mr Deshon's evidence in which he said that the distinguishing features of the plan are the higher ceilings and splayed walls. Magistrate Payne noted that Mr Deshon examined the Dixon plan and compared it with the Bogdan plan and the Cortona 290 and gave evidence that the same planning policy applied to all three, that is, the same "design strategies" evident in the two plans in issue are evident in the Dixon plan with "some similarities within the layout". Magistrate Payne also noted Mr Deshon's evidence that the raised ceiling is a distinguishing feature of "all three houses". She said that she had not seen an A V Jennings plan before she was faxed one by the plaintiff's solicitor. I accept Mrs Bogdan's evidence in this regard and also her evidence that to her knowledge the Bogdan plans were not a copy of any A V Jennings plan. Magistrate Payne noted that Mr Bogdan did not give evidence and this was unhelpful as he was, according to Mrs Bogdan's evidence, one of the persons who drew up the plan. Magistrate Payne found it unhelpful that no evidence was called from anyone from Igor Designs. Her Honour referred to ss 10 , 14 , 31 and 36 of the Copyright Act and placed reliance upon paras [38], [41], [42], [44], [49] and [55] of the reasons for judgment of Wilcox and Lindgren JJ in Tamawood Ltd v Henley Arch Pty Ltd [2004] FCAFC 78 ; (2004) 61 IPR 378 (Moore J agreeing). Magistrate Payne noted those paragraphs as they contain a statement of principles that, in her Honour's view, governed the resolution of the case. At those paragraphs, Wilcox and Lindgren JJ note these principles. The application of the law of copyright to project homes gives rise to special difficulty as the drawing of plans for project homes involves a mixture of the use of familiar ideas based on objects in the real world and many other project homes and plans for them, on the one hand; and the labour, skill and judgment of an author in combining and expressing those ideas in an original work on the other. The more simple and straightforward the work, the closer the similarity must be for infringement to be found. The notion of reproduction involves resemblance to the owner's work and actual use of that work ( S W Hart & Co Proprietary Limited v Edwards Hot Water Systems [1985] HCA 59 ; (1985) 159 CLR 466 at 472 per Gibbs CJ), or put another way, what is required is "a sufficient degree of objective similarity between the two works and ... some causal connection between [the two works]" ( Francis Day & Hunter Ltd v Bron (1963) 1 Ch. 587 at p 614 per Willmer LJ). Causal connection and objective similarity are components of reproduction of the work in a material form. Causal connection might be inferred from access to the plan in suit and objective similarity between that work and the plan said to infringe. Too much can be made of the distinction between the work and a substantial part of it. The notion of substantial part may be found most useful where particular quantitatively small parts of the work in suit, are taken. Can it be said that a quantitatively small part is, for identified reasons given in evidence, nevertheless a substantial part of the work? The ultimate question is not infringement of the part but infringement of the whole . Whether there has been infringement of the whole requires that the originality of the part taken be considered in relation to the work as a whole. The question is whether the part is an "essential or material" feature of the whole. His Honour referred to "the overall design and combination of features" but gives no further detail . His Honour did not attempt to identify any part of the Baltimore as being a qualitatively substantial part of the Baltimore in the sense discussed at [47] --- [56] above. With respect we think his Honour erred in this regard. Likewise, "striking similarity", without more , does not necessarily mean that there has been a reproduction of the whole or a substantial part of the plan of a project home. The similarity referred to may have been that of common ideas . There is also similarity between the Bogdan plan and the AV Jennings Verona plan, and again there are differences, and I say this noting that the Bogdan plan was a mirror reverse of the AV Jennings plans. There is a similarity between the arrangement of the rooms and the footprint of the buildings, although all three are different from each other in some respects. These differences include a different floor plan and different roof line. However, it is not the footprint or floor plan alone the plaintiff complains of. The plaintiff says it is the footprint with the original or distinguishing feature of displayed walls and the higher ceilings. ... However, despite this little assistance the onus rests on the plaintiff in this matter. When considering all of those similarities and dissimilarities which I have done and then, in applying the law, I do not consider that the plaintiff has discharged its burden of proof. As to the last matter, no such claim is made. In this case, actual use is sought to be established as an inference arising out of contended striking similarities between the two plans. Those striking similarities then speak to reproduction of the plan in suit and thus infringement. In the absence of any direct evidence of use of or access to the Jennings plan in suit, the causal link can be established by inference. The greater the degree of objective similarity between the two plans, the more likely it is that an inference of actual use might be drawn ( S W Hart & Co (supra) per Gibbs CJ at 472; Clarendon Homes (Aust) Pty Ltd v Henley Arch Pty Ltd (1999) 46 IPR 309 per Heerey, Sundberg and Finkelstein JJ). Exact copying is rarely the conduct in controversy. Normally an inference is sought to be drawn in the face of quantitative features of the plan in suit, present in the plan under challenge, or by correspondence with a substantial part qualitatively of the plaintiff's plan, or both. If the contention is that a substantial part of the plan in suit has been taken, a question of "fact and degree" arises ( Inform Design and Construction Pty Ltd v Boutique Homes Melbourne Pty Ltd [2008] FCA 912 per Weinberg J at [71]) and the "protected element may arise out of a combination of elements, any one of which considered individually might not qualify as sufficiently original to attract copyright" ( Inform Design , per Weinberg J at [71] [emphasis added]). An allegation of substantial reproduction of the work by reproduction of a substantial part will be made out if what is taken is an essential or material part of the work in suit. The phrase "substantial part" refers to the quality of that taken and the importance it bears to the work as a whole ( Tamawood v Henley Arch at [50], [52] and [54]; Dixon Investments Pty Ltd v Hall 18 IPR 490 at 494 per Lockhart, Spender and Ryan JJ; Autodesk Inc. v Dyason [No. 2] [1993] HCA 6 ; (1993) 176 CLR 300 per Mason CJ at 305). It may be that a particular orientation and layout of rooms which draws a user through a structure in a particular way is an essential or material part of a plan ( Eagle Homes Pty Ltd v Austec Homes Pty Ltd [1999] FCA 138 ; (1999) 161 ALR 503 at [74] ). Essentiality is a question of fact and degree. In this case, Magistrate Payne made a finding of "fact and degree" that the Bogdan plan and the Jennings Verona and Cortona plans exhibit "striking similarities". That finding is consistent with the weight of the evidence. The influential considerations which support that conclusion are these. A rear porch area with angled walls has been a significant or material part of each Jennings plan for this house (ultimately called the Cortona 290 and now described as the Terrace 290 ) since the Siena house design in 1995. Walls angled at approximately 15 degrees have formed part of the plans for the Cortona 290 from the Daintree plan in 1997 and continued in the Cambridge 245 , the Cambridge 280 , the Mapleton , the Verona 245 , the Verona 280 , the Cortona 260 and ultimately the Cortona 290 . The repeated incorporation of this feature in each of these plans gives weight to the oral evidence of Mr Henesey-Smith and Mr Deshon that a rear patio space of particular dimension configured with angled walls at 15 degrees is an essential and material feature of the evolved Cortona 290 plan. Secondly, the evidence of Mr Deshon is that there is a relationship between the elevated ceilings and the splayed or angled walls. In that sense, there is integration between the two in the Cortona 290 plan. The elevated ceilings through the entry, lounge, living and rear porch, patio or pavilion areas are part of the amenity or airy feel of the structure and important to its plan and layout. Thirdly, although there are some differences in dimension and size and the introduction of a study in the case of the Bogdan plan, the layout and orientation of the rooms are very similar. Fourthly, the Cortona 290 plan exhibits a combination of angled walls in the rear patio at 15 degrees, elevated ceilings at a height greater than the other ceilings of the structure and a particular arrangement or orientation of rooms within a square plan configuration. The Bogdan plan also exhibits a combination of angled walls to an external rear patio angled at 15 degrees rather than any other angle, elevated ceilings over the entry, lounge, living and rear patio areas and a substantially similar layout of rooms notwithstanding some differences. Fifthly, the expert Mr Deshon, described by Magistrate Payne as helpful, was not able to see or understand the evolution of the Bogdan plan as a matter of progression from the Canberra plan through the drawings annexed to Exhibit 4. In that sense, Mr Deshon, as an expert witness, cast doubt on the explanation of the origin of the Bogdan plan as a document that emerged as an independent expression of the ideas of Mr and Mrs Bogdan applied to and representing a modification of the floor plan of the Canberra house of Mr Florien Bogdan from 1984 or 1985, which is said to be the foundation of the Bogdan plan. Sixthly, Mrs Bogdan acknowledged some of the similarities in the draft plan Annexure C to Exhibit 4 leading to the Bogdan plan, and the Verona and Cortona plans. Seventhly, Mrs Bogdan was not able to explain the source or origin of the exact measurement of 3.7m as the length of the rear wall section from the angled point on the rear wall where the angled patio wall engages the rear section, to the rear bedroom corner, on drawing Annexure C, which is precisely the same measurement as that shown on the Jennings plan. Eighthly, Mrs Bogdan was not present when Annexure C was drawn or any other preliminary Bogdan drawing or, for that matter, the ultimate draft plan Annexure D1 to Exhibit 4 given to Igor Designs. Mrs Bogdan could not say how features came to be expressed in the drawings Annexure C and Annexure D1 to Exhibit 4. Lastly, although no adverse inference should be drawn against Mr Bogdan to the effect that he used a Jennings plan in making a contribution as author to the expression of the Bogdan plan, by reason of his failure to give evidence having regard to the factors mentioned at [28] and [29] of these reasons, there is nevertheless no evidence from him as one of the identified authors of Annexure C leading to Annexure D1 and ultimately Annexure E to answer the weight of factors 1 to 8. Accordingly, the evidence supports the finding made by Magistrate Payne that the Bogdan plan bears "striking similarities" to the Cortona plan. In Tamawood at [111], Wilcox and Lindgren JJ (Moore J agreeing) noted that striking similarities however may not be enough in circumstances where the plaintiff has failed to identify the "substantial part" reproduced and has put its case on the footing of the "overall design and combination of features but gives no further detail ". In such circumstances, their Honours noted that substantial similarities may simply be referable to "common ideas". Magistrate Payne found that splayed walls and raised ceilings are a "common idea" and not sufficient to sustain a conclusion of reproduction of the whole or a substantial part of either the Verona plan or the Cortona plan by either respondent. The evidence before Magistrate Payne did not establish the notion that angled walls are a common idea. It is true that the Jennings plans, the Bogdan plan and the Dixon plan exhibit elevated ceilings. However, the conclusion reached by Magistrate Payne did not take into account the particular combination of features reflected at [61] to [65] of these reasons, the evidence of Mr Deshon concerning the evolution of the Bogdan plan as a contended progression from the Canberra plan and the evidence in relation to the features of Annexure C (that is, the elements of [61] to [69]). The evidence that supports the conclusion of striking similarities based upon the identified combination of precise features makes it clear that the combination cannot be described as commonplace or simply a common idea. Taken separately, the notion of elevated ceilings may not suggest actual use of a Jennings plan. The adoption, by itself, of angled walls at 15 degrees "off the right angled rib" might not be sufficient to suggest actual use although the evidence suggests that such a feature is an essential or material feature. The combination of those two features adds incremental weight to the notion of objective similarity suggesting use. The combination of those features together with a floor plan exhibiting substantial similarity in orientation and layout of rooms further supports an inference of use. The expert evidence casting doubt on the proffered explanation of the origin of the Bogdan plan adds further weight to the inference as does Mr Deshon's evidence that the magazine photograph (Exhibit 6) would not lead him to a design of elevated flat ceilings had the photograph been produced to him as a starting point for a design of the rooms and ceilings in a new house, reflecting the design depicted in the photograph. Accordingly, her Honour in reaching the finding as to a "common idea" did not take into account all of the evidence. Moreover, the notion that something more must be shown is put in proper context by their Honours in Tamawood . As their Honours noted, that case concerned circumstances where the plaintiff had failed to identify the substantial part said to be reproduced and had put its case on the basis of overall design and a combination of features in circumstances where no detail had been given. That is not this case. It follows therefore that the evidence supports an inference that the Bogdan plan evolved through the use of either of the Jennings Verona 245 plan, the Cortona 245 or the Cortona 290 (as the embodiment of the combination of features identified and relied upon by the appellant). The question that remains is whether the evidence supports an inference of actual use by either or both of the respondents. Mrs Bogdan gave the evidence described earlier in these reasons which led to a finding of fact and a finding of credit ([50] of these reasons) in her favour. Magistrate Payne accepted her evidence entirely and especially her evidence that she had not seen a Jennings plan and did not have any knowledge that the Bogdan plan was a copy of any Jennings plan. That finding was plainly open on the evidence and counsel for Jennings accepted that such a finding was open to her Honour. It follows therefore that Mrs Bogdan did not make actual use of any Jennings plan in either formulating her ideas or contributing those ideas to her husband and/or Mr Florien Bogdan and there is no basis for disturbing those findings. However, the evidence of Mrs Bogdan makes it plain that Mr Bogdan was an author of Annexure C to Exhibit 4 and contributed together with Mr Florien Bogdan to the draft drawings. Mr Florien Bogdan produced Annexure D1 which was given to Igor Designs to produce Annexure E. Mr Bogdan, by his submissions, says that it is apparent from the transcript that he made statements throughout the proceeding that illustrate the nature of the evidence he would have given had Magistrate Payne made it plain to him that an adverse inference might arise should he not give evidence and those statements are set out at pp 26, 33, 35, 36, 62, 74 to 76 and 84 and 85 of the transcript. However, even if an assumption is made that the statements at those pages of the transcript ought to be treated as, in effect, oral evidence, the statements do not answer the conclusion open on the totality of the evidence that authors of the Bogdan plan used either the Verona 245 plan, the Cortona 245 plan or the Cortona 290 plan (as the embodiment in final form of the features in those plans and the plan in suit) in bringing into existence the Bogdan plan with its combination of features evident in the Cortona 290 plan. It may be that an inference is open that either Mr Bogdan used a Jennings plan and reproduced the combined features relied upon by the appellant or alternatively, Mr Florien Bogdan did so. Alternatively, an inference might be found that both men so used the plan. It seems likely as a matter of inference from all the evidence and particularly that of Mrs Bogdan, that Mr Florien Bogdan as a carpenter who had previously built eight houses, used a Jennings plan and thus reproduced the combined features relied upon by the appellant. However, the evidence of Mrs Bogdan makes it plain that Mr Bogdan was responsible for Annexure C and was a contributory author to the drawings (see [44] to [48] of these reasons). Mrs Bogdan referred to eight drawings in all in the evolution of the Bogdan plan, although only those drawings annexed to Exhibit 4 were produced in evidence. It follows, that Magistrate Payne erred by failing to find use of the appellant's work and reproduction in a material form of that work in suit, as against the respondent, Mr Tiberiu Bogdan. It follows that the order of the Court below dismissing the appellant's claim against Mr Tiberiu Bogdan is to be set aside and judgment entered for the plaintiff below. The second question that arises is the assessment of damages. The Court below did not assess nor make findings as to the quantum of the plaintiff's damage. Accordingly, it is necessary for this Court to do so. Therefore, it follows that the profit derived by Jennings in connection with any particular home project is a function of both design and the construction activity it undertakes on behalf of a client. Jennings says this approach is particularly the case in geographical areas called the Jennings "build areas" where Jennings conducts building operations. Locations such as that of the respondents' land, falling outside the "build areas" attract a surcharge between 1% and 2.5% applied to the contract price for the design, construction and handover of a particular home. Mr Henesey-Smith says that Jennings, as a project home builder, does not grant a licence of the copyright in any of its plans to members of the public to build a home based on any of its plans. The management process adopted by Jennings in relation to its design and construction activities is described by Mr Henesey-Smith as a "rigorous" one. It involves documenting and maintaining the plans and building specifications applicable to each home. Jennings documents all of its plans through the use of computer-aided design software. The drawings are maintained by the "senior draftsman" as part of the Jennings archive of drawings. The company also maintains detailed "bills of quantity" for each home and the Jennings "estimating and purchasing manager" maintains a master bill of quantities for each home on an estimating package called the "Business Craft" estimating software. Mr Henesey-Smith says that the standard direct building cost for a Cortona 290 home in January 2004 was $118,912.00. Mr Henesey-Smith says that the respondents relocated the garage off the square configuration on the right hand side of the house, extended the porch/patio area and added a study to the home. Had Jennings built the Bogdan home, the cost of those variations would have been $16,424.00. The total direct cost of building the Bogdan home would then have been $135,336.00. Jennings says it seeks to achieve a profit margin of 25%. On one view that may mean a margin of 25% over and above the direct building cost. That margin would amount to $33,834.00 based on direct building costs of $135,336.00. However, Jennings says its "turnover", that is, the gross sale price (excluding GST) would be $180,500.00 to construct the Cortona 290 including the Bogdan variations. A turnover price of $180,500.00 (excluding GST) represents a dollar margin over cost of $45,164.00 which is a margin over cost of 33.37%. However, a margin of 25% struck on the turnover price (excluding GST) which is the method of calculation adopted by Jennings in determining its expected profit, is $45,125.00 which is a margin over cost of 33.34%. No doubt a margin of 25% calculated on the turnover price is the margin designed to recoup all fixed and variable costs of conducting the business undertaking across the portfolio of anticipated design and construction work undertaken in any year. Jennings claims it has suffered a loss of $45,125.00 by reason of the infringement of the copyright in its plan. It can immediately be seen that the profit component derived by Jennings is a function of aggregated activity. That aggregation involves the design of plans for a family of homes, the cost of maintaining an archive of plans and costs associated with providing a client with a house plan for a particular home Jennings will build for that client. The aggregation of services also involves the maintenance of accurate and up-to-date building specifications for each home and the maintenance of detailed bills of quantity for all materials used and deployed in the construction of any particular home. Importantly, that aggregation of services involves the planning, supervision, construction, practical completion and handover of a home to a client. Mrs Bogdan made submissions on behalf of the respondents which go to damages. She did not give evidence on these questions but having regard to the credit finding made by Magistrate Payne, I proceed on the footing that the statements made by Mrs Bogdan in submissions reflect the evidence she would have given from the witness box had she turned her mind to these matters in giving evidence, as she did in making submissions to the Magistrate. In making submissions, Mrs Bogdan said this. Initially, Jennings sent Mr and Mrs Bogdan a letter of demand in which an amount of $20,000.00 was claimed. The letter of 19 November 2003 put the matter on this footing. Mrs Bogdan notes that by para 12 of the Amended Statement of Claim, Jennings pleads that it has suffered loss and damage by reason of the denial of a proper fee "for use of the plan" of $20,000.00 or, alternatively, by the denial of the profits it would ordinarily have made from the construction of either the Verona 245 or the Cortona 245 (and now the Cortona 290 ) including the Bogdan variations, of $45,164.00. Although Mr Henesey-Smith says that Jennings does not licence the copyright in its plans, Jennings has made a claim for damages, alternatively put, on the footing that $20,000.00 represents a proper fee for use of the plan (para 12(a)). Mrs Bogdan says that she cannot understand how both claims can be maintained. The Amended Statement of Claim however makes the claim in the alternative. Mrs Bogdan says that if the respondents had agreed to pay a licence fee to Jennings of $20,000.00, it would follow that Jennings would have no claim for the construction profit as the respondents would not have engaged Jennings to do the work. Mrs Bogdan says that conversely, if an assumption is made that Jennings would have been engaged to construct the respondents' house, there would be no licence fee. More fundamentally, Mrs Bogdan says that Jennings has not suffered any loss of profit based on construction because "we weren't intending to hire A V Jennings to build our house". Mrs Bogdan said that she had obtained advice from lawyers who advised her that on the authority of New England Country Homes Pty Limited v Bradley Moore [1998] FCA 345 , per Burchett J, the appropriate fee for use of a project home drawing was found to be $750.00 and that the case is authority for the proposition that no claim for loss of profit can be sustained in the face of evidence that the infringing respondent would not have engaged the plaintiff to construct the home. We're not intending to make business out of our home. We built it for us. We're not builders. We've got an owner/builder permit to do our own home. There is, understandably, no evidence of a discounted cash flow valuation of the copyright as a capital asset nor, equally understandably, any evidence of any diminution, by reason of the infringement, in the capacity of Jennings to derive revenue by exploiting the copyright work, that is, by using the plan and constructing houses representing a three-dimensional reproduction of the plan, for clients. In this case, the respondents built a single house as their residential dwelling. They are not project home builders and they are not in the business of repetitious infringing conduct. Since there is no demonstrated impact on the exploitation revenues Jennings derives from the use of the Cortona 290 plan, there is very likely to be no corresponding impact on the value of the copyright as an incorporeal right. However, the formulation of Lord Wright in Sutherland has been described as "no more than a convenient label for the various ways of assessing damages which are available in any particular case" ( Australasian Performing Rights Association v Grebo Trading Co. Pty Ltd (1978) 23 ACTR 30 per Blackburn CJ at 31) and the question to be answered is, what loss has Jennings suffered as a result of the infringement of its copyright? ( Interfirm at 446) As to the general principles concerning the assessment of damages for breach of copyright, see Autodesk v Cheung (1990) 94 ALR 472 at 474 --- 477; Amalgamated Mining Services Pty Ltd v Warman International Ltd [1992] FCA 542 ; (1992) 111 ALR 269 at 285; Microsoft Corporation v TYN Electronics Pty Ltd (in liq) (2005) 63 IPR 137 and Eagle Rock Entertainment Ltd & Anor v Caisley (2006) 66 IPR 554. Jennings contends that it does not licence its copyright to enable third party construction to occur. It keeps its copyright in a Jennings safe harbour and uses it solely in its own construction activity. Therefore, it is said, Jennings ought not to be treated in an analogous position to an architect who might, by reason of the nature of the professional work an architect undertakes, be subject to an implied licence of the copyright in a work produced in connection with particular projects. Nor, it is said, should the hypothetical "construct" of a notional willing licensor and licensee be adopted as the framework for determining a surrogate measure of damages by reference to a licence fee. The pleading claims damages on the alternative bases of either a fee for use of the plan or lost profits in the construction of the Bogdan home. Presumably, the pleading does so in order to preserve alternative possible formulations of a remedy in damages in respect of proven infringing conduct. However, it is clear that the letter of demand from Jennings dated 19 November 2003 made a claim for a fee for use of the plan for an amount which remains the amount claimed as a fee for use in the amended pleading. Mrs Bogdan referred to the authority of New England Country Homes Pty Limited v Bradley Moore (supra) and observations made by Burchett J. In that case, Burchett J considered a claim for compensatory damages in circumstances where, like this case, the respondent "did not construct a house for sale, but as a home to live in" (p 7). His Honour at p 8 referred to a number of authorities that support the proposition that the Court may adopt as a measure of damages where it thinks the course appropriate, a fair fee for the use of the plan the subject of the infringement. Burchett J noted that the applicant sought an assessment of damages on the basis of the profit it would have earned by the sale of a kit for the construction of the respondents' house. However, the evidence demonstrated that the respondent would never have purchased a kit home from the applicant "under any circumstances" and thus the infringement did not cause the loss of profit on the sale of a kit home. The applicant sought an assessment of damages on the basis of a licence fee of $6,000.00 for the use of the kit home construction plans. His Honour referred to evidence that suggested a licence fee based on a fee paid to a draftsman of $535.00 was a more likely fair licence fee and thus awarded the applicant damages of $750.00, as mentioned in submissions by Mrs Bogdan. In this case, it is equally clear that had Jennings quoted to the respondents an amount of $198,550.00 (including GST) as the price for the construction of the Bogdan home including the variations to the plan the subject of the amount of $16,424.00 mentioned in the evidence of Mr Henesey-Smith, the Bogdans would not have accepted that quote. Jennings would not have undertaken the project and would not have derived the construction profit or any profit. In Autodesk v Cheung , Wilcox J did not apply the licence fee approach to the assessment of damages because his Honour could not draw the inference, on the facts of that case, that the respondent, presented with a choice between paying a licence fee or not using the work, would have paid the licence fee. It was simply not a likely event. Similarly, Tamberlin J took the view on the facts before his Honour in Columbia Pictures Industries Inc. & Anor v Luckins (1996) 34 IPR 504 at 509 that a licence was unrealistic. In that context, Tamberlin J rejected the utility of the licence fee approach. A similar view was taken in Eagle Rock v Caisley which concerned the assessment of damages arising out of the sale of DVD copies of an unauthorised recording of a live performance by Eric Clapton and his band. In Eagle Rock at [12], Tamberlin J said this: ... I do not consider that Eagle would, if requested, have granted a licence to Caisley or that Caisley would have paid the licence fee if he was given the choice between so doing or not using the copyright work. The two parties were in direct competition. The evidence in this case does not suggest any element of a competitive threat by the respondent, Mr Bogdan, to the activities of Jennings nor is there any suggestion of any disruption to the applicant's activities manifest in the class of case reflected in the decisions in Autodesk v Cheung , Columbia Pictures v Luckins and Eagle Rock v Caisley . Equally clearly, the element of disruption was the factual foundation upon which their Honours came to the conclusion that the applicants in each case would not have granted a licence. It is clear in this case that had a licence been sought by the respondents from Jennings it would either not have been granted or alternatively a licence fee of $20,000.00 might have been nominated by Jennings. That possibility is at least consistent with the letter of demand and the pleading. Nevertheless, had Jennings sought a licence fee from the respondents of $20,000.00, plainly enough, the respondents would not have taken up that licence. It follows that applying a licence fee in the present circumstances is an inappropriate measure of damages. Thus, damages should be assessed on the footing that damages are, in this case, at large ( Fenning Film Service Limited v Wolverhampton, Walsall and District Cinemas Limited [1914] 3 KB 1171 ; Gaunt v Hille [2007] FCA 2017 at 75 - 79). Accordingly, in assessing the damages on that footing, I take into account these matters. In this case, the respondents, like the respondent in New England Country Homes , chose to devise a plan for and then construct a home to live in rather than a house for sale. In doing so, Mr Bogdan engaged in conduct of reproducing the appellant's plan in a material form. There is no suggestion that either respondent will engage in any further infringing conduct. Nor is there any evidence that Jennings has suffered a diminution in its revenue by reason of this transactional act of infringement. Moreover, the evidence demonstrates that Jennings would not have derived any profit from the project as the respondents would not have either paid a licence fee to or contracted with Jennings for the design and construction of their home. Nevertheless, the fact that the respondents would not have contracted with Jennings is not an answer to the Jennings' claim for damages suffered as a result of the infringement. It is necessary to formulate the damages referable to the act of infringement by attempting to disaggregate the bundle of services Jennings supplies to a client so as to isolate the best estimate of damages possible on the evidence available as a measure of the appellant's loss directly related to infringement. In undertaking that exercise, it is not appropriate to bring into account the cost of the additions to the Bogdan plan not reflected in the Cortona 290 . Jennings says that the direct cost of design and construction of a Cortona 290 in January 2004 was $118,912.00. A margin of 25% based on those foundation costs would amount to $29,728.00. Jennings, of course, says that its 25% margin is struck on the gross turnover value excluding GST which in respect of the Cortona 290 excluding the Bogdan additions seems to be $164,076.00 representing a margin of $41,019.00 on the preferred method adopted by Jennings. That method of calculating a margin on the turnover value excluding GST is a calculation of its design and construction profit. Damages ought not to be calculated on that footing. An examination of these approaches to the calculation of profit is simply an indication of the net loss Jennings might have derived had it undertaken the project (leaving aside the variations for this purpose). One way of forming a view of the contribution of the copyright in the plan to that profit is to appreciate the aggregation of services which give rise to the profit and to then disaggregate those services and apportion some part of the profit to the use of the plan as an analogue of loss suffered by Jennings by reason of the use by Mr Bogdan of the Jennings plan as joint author with Mr Florien Bogdan. The profit calculation is simply a base starting point. Doing the best I can on the available evidence which is very limited, I estimate the contribution of the copyright in the plan at about 10%. The vast majority of the profit is, no doubt, referable to the quantities of materials supplied and the construction, supervision and completion of the home itself. On that footing, the damages would range between $2,972.00 and $4,101.00. It seems to me that the appropriate amount is the average of the two namely, $3,536.00. There is no basis for an award of exemplary damages. Accordingly, the orders will be these. The appeal as against Mrs Bogdan is dismissed. The appeal as against Mr Bogdan is allowed. The plaintiff in the Court below is awarded damages of $3,536.00. The appellant will pay the costs of Mrs Bogdan of and incidental to the appeal to this Court and the costs of Mrs Bogdan of and incidental to the proceedings in the Court below. The respondent, Mr Bogdan, will pay the appellant's costs of and incidental to the appeal to this Court and the costs of the appellant of and incidental to the proceedings in the Court below. I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

consideration of an appeal from the magistrates court of queensland exercising federal jurisdiction in relation to relief arising out of the contended infringement by the respondents of the copyright subsisting in the appellant's house plan consideration of the extent to which objective similarity in the absence of direct evidence of actual use of a plan might give rise to an inference of use and reproduction of a substantial part of the work in which copyright is said to subsist consideration of the approach to damages intellectual property

Council approval had been granted for an eight-lot subdivision for rural residential use. Prior to the events with which this case is concerned two lots had been sold. The remaining six lots, amounting to 6.828 hectares, needed road building, water supply etc before separate titles could be issued. The land was mortgaged to the respondent to secure the sum of $100,000 and interest thereon. 2 Mr Upton defaulted under the mortgage. After an unsuccessful auction where no bids were received and a further 15 months in which the land was on the market for about $80,000, the respondent sold the land to a Mr William Patmore for $75,000. This was the only offer received over that period. Some four months earlier Mr Upton had sold Lot 2 of the subdivision to the same Mr Patmore for $32,000 less the cost of some water supply which Mr Patmore was to arrange himself. This contract was conditional on the issue of a title. First, the respondent breached its duty as mortgagee. The respondent sold the land for manifestly less than its market value and failed to sell it as separate lots, either by allowing him to subdivide or by subdividing itself. 4 Secondly, the respondent breached the duty imposed on it by s 81(2)(iii) of the Lands Titles Act 1980 (Tas) in that it improperly or irregularly exercised its power of sale. 5 Thirdly, the respondent engaged in misleading and deceptive conduct, contrary to the Trade Practices Act 1974 (Cth), s 52. The respondent, knowing there had been the earlier sale of the lot to Mr Patmore, failed to advise Mr Upton of its intention to sell, and of the sale when it took place, and thus deprived him of the opportunity of subdivision and sale. Also, the respondent led him to believe it would allow him to subdivide and sell the land or re-finance the loan. 6 Fourthly, the respondent engaged in unconscionable conduct within the meaning of the general law or ss 51AA or 51AC of the Trade Practices Act . The respondent acted unconscionably because, when it appeared that the property could be sold for less than the indebtedness, especially in the light of the sale of Lot 2, it failed to tell Mr Upton of its consideration of an offer to sell to Mr Patmore and thus deprived Mr Upton of an opportunity to purchase. 7 As to damage suffered, Mr Upton says he has been deprived of the "commercial opportunity" to sell land in separate lots. He says the sale price was less than the amount owing under the mortgage. The land at the time the sale to Mr Patmore was completed, was valued at $600,000 if sold in separate lots. It is common ground that he has remained in default since. On 17 August 2001 the respondent served on him a notice of demand and on 19 September 2001 a notice of intention to sell under the mortgage. 9 On 15 October 2001 the respondent obtained a valuation from Mr Russell Cripps of Saunders and Pitt which valued the land at $75,108. 10 Mr Cripps notes the valuation was for mortgage security purposes. The date of inspection was 10 October 2001. After referring to the subdivision and describing the land and existing services, he deals with some market evidence of comparable sales in the area and gives valuations on three bases. 11 The first is as a single lot without subdivision; at $11,000 per hectare the figure is $75,108. He then values the land on lot potential and notes that, on a historical rule of thumb, the englobo value of blocks is about one third of the gross realisable price. Taking that gross realisable price from the comparable sales already mentioned as around $30,000, the average would be about $10,000 per lot. On this method one arrives at $60,000. 12 Finally Mr Cripps values the land on the basis of a hypothetical development. He assesses individual prices against each lot to arrive at a gross sales income, and then deducts all the costs which a developer would incur. Starting with gross realisation of $207,000, he deducted GST, selling costs, an allowance of 40 per cent for profit and risk, development costs, interest for six months at 7 per cent and a total period for the development at selling of 12 months. The net result is $39,308. 13 Mr Cripps notes that demand for building blocks in the Old Beach to Brighton district had improved slightly over the last nine months or so, although the selling rate of about 1.5 blocks per month was well below average long term selling rates. He thought the most likely purchaser of the property would be one whose prime expectation was using the land for a home site or running a few livestock. He concludes that subdivision of the land as proposed "does not appear to be feasible". 14 Thereafter the respondent instructed Roberts Limited to offer the land for sale by public auction with a reserve price of $75,000. The auction was duly advertised. There were a number of advertisements in the Mercury . No complaint is made in this case of any inadequacy of advertising. The auction took place on 21 December 2001 at the Glenorchy offices of Roberts Limited. No bids were received. Apparently Mr Upton was the only person present. The land remained on the books of Roberts Limited for sale, and in the following February the respondent instructed another agent, McGregor First National, as a co-agent with Roberts for sale at $80,000. 15 On 28 October 2002 the respondent obtained in the Supreme Court of Tasmania judgment in default of appearance against Mr Upton for $112,801.90. 16 In November 2002 Mr Upton entered into a contract for the sale of Lot 2 on the subdivision to Mr Patmore and Glynis May Smith. The purchase price was $32,000 payable by a deposit of $3000 "to Connect Credit Union as stake holder". The contract completion date was on "issue of separate titles". There was apparently some side arrangement for Mr Patmore to carry out some water supply works on the land and for a deduction to be made from the contract price. Mr Patmore paid the $3000 deposit. Mr Upton then paid it into his own account at Connect Credit Union, and, it would seem, mingled it with his own monies. 17 There is some dispute as to when the respondent became aware of this sale of Lot 2, but nothing turns on this, since on any view the respondent was aware of it before the sale of the whole of the six lots to Mr Patmore. Mr Upton says that on 6 December 2002 he telephoned Mr Philip Kitto, who is the Lending Manager of the respondent, stationed in Launceston. Mr Upton says he told Mr Kitto that he had signed a contract for Lot 2. Mr Kitto says he has no recollection of any conversation with Mr Upton on this date. 18 At this point I should note that Mr Kitto, who was responsible for the administration of something like 600 mortgages, did not as a practice keep notes of every telephone conversation. Not infrequently in his evidence he said that he does not recall what Mr Upton asserts to be conversations. In cross-examination he admitted that some matters "could have happened". However, I do not treat that circumstance as establishing that what Mr Upton says as conversations should be accepted. I did not find Mr Upton a satisfactory witness. He tended to be argumentative and evasive. His evidence about allegedly obtaining credit approval from Connect Credit Union turned out to be unsupported by evidence which he claimed he would produce. So, as I say, the mere fact that Mr Kitto says he does not remember anything happening does not lead me to accept Mr Upton's assertion that it did. 19 On 9 December 2002 Mr Upton telephoned Mr Kitto requesting a pay-out figure. Mr Kitto faxed back a figure of $123,033.94. Mr Upton says that also on that date Mr Kitto telephoned him to advise him of the pay out figure, and suggested that Mr Upton should "come back with an offer". Mr Kitto denies that he said this, and I am positively satisfied he did not. In the evening of that day Mr Upton was served with a bankruptcy notice founded on the judgment. 20 On 10 December Mr Upton telephoned Mr Kitto and told him about the service of the bankruptcy notice. He sent a fax which confirmed the morning's phone call. In the fax he stated that his only assets were his land and that he had been doing it "pretty tough" for the last two years. He related some problems he had with his own investments in solicitors' mortgage funds. You are aware you have no offers on the land even at $80,000 and you would not receive more monies from me as my assets are my land and there are other creditors. I ask you to be patient while I re-finance. My offer will be substantially more than $80,000 to pay you out. In the following month that application was dismissed. 22 On 26 January Mr Patmore applied to the Brighton Council, with Mr Upton's consent, to obtain a subdivision of Lot 2 only. On 28 February, Mr Patmore called on Mr Milne of the respondent and told him about the purchase of Lot 2 from Mr Upton. On 28 February, Mr Milne sent a memorandum to Mr Kitto concerning this discussion. 23 On 4 March Mr Upton sent a fax to Mr Kitto saying all but one condition of approval for refinancing have been satisfied; that condition related to a valuation he would need to obtain and he would contact Mr Kitto once approval was unconditional. 24 On 11 March 2003 the agent McGregor First National Real Estate faxed Mr Kitto an incomplete copy of a contract for the purchase of the land by Mr Patmore for $75,000. 25 That contract was executed by Mr Stearnes on behalf of the respondent on 12 March. It was subject to a lending institution making available to the purchaser a loan of $150,000 within 14 days of the date. The condition was satisfied within the time stipulated. 26 Mr Upton says that on 17 March he telephoned Mr Kitto saying he had heard about the possible sale of the whole of his land to Mr Patmore and that Mr Kitto told him that a contract had been received, that it was conditional and not yet signed, and that he and Mr Kitto would contact Mr Upton before it was to be signed and it would only be signed if the respondent intended to proceed with the creditor's petition. Mr Kitto has no recollection of any conversation to this effect and I am not satisfied it occurred. 27 On 20 March Brighton Council approved the subdivision of the single Lot 2 subdivision. Mr Patmore obtained building approval and started building on the lot. 28 On 24 March Mr Upton telephoned Mr Kitto. He says that he told Mr Kitto he had managed to final approval from Connect Credit Union to refinance the balance of his loan with the respondent. He asked Mr Kitto "what amount (he) should offer to resolve (his) indebtedness" and Mr Kitto said that he should "put in an offer higher than Patmore's to make it worthwhile". 29 Mr Kitto's version is that they discussed Mr Upton making an offer to pay off the mortgage debt. Mr Kitto made it clear that this was on the basis that if Mr Upton made an offer it would only be to pay off the debt rather than obtain a discharge of the mortgage and clear title as the respondent had already signed a contract for the sale of the whole of land to Mr Patmore. Mr Kitto does not accept that he told Mr Upton he should "put in an offer higher than Patmore's". My intentions were always sound, however, due to circumstances which were partly my own making and partly unforeseen, I have been experiencing severe financial difficulty. Anyway, I do appreciate your manner in the handling of this account. 31 Mr Upton says he spoke to Mr Kitto on 26 March. Mr Kitto told him that he did not know if the respondent could accept a contract between the respondent and Patmore when a contract between Upton and Patmore already existed. Mr Kitto did not tell him that the respondent had signed the contract with Mr Patmore. Mr Upton says that he told Mr Kitto that he had taken more contracts in relation to the subdivision and Mr Kitto said, "Good". 32 Mr Kitto does not deal specifically with the alleged conversation of the 26 th . However Mr Upton says that on 27 March he telephoned Mr Kitto and told him that he had advised Mr Patmore that his one lot subdivision had been approved and asked whether the respondent would approve of proceeding with his sale of Lot 2 to Mr Patmore provided the proceeds of the sale were paid to the respondent and that the respondent and Mr Upton could reach agreement on the outstanding balance. Mr Upton says that Mr Kitto agreed. Mr Kitto has no recollection of this conversation but denies ever discussing with Mr Upton the possibility of the Lot 2 contract proceeding, let alone agreeing to it. 33 On 1 April Mr Upton telephoned Mr Kitto. Mr Kitto says they discussed the contract for Lot 2. Mr Upton then sent a fax dated 1 April which, according to his affidavit, "confirmed" the agreement he claims was reached on 27 March. Today being April Fool's Day I say it will be very foolish if we don't take advantage of the situation and get it resolved quickly. Bill's contract with me is sound. The only requirement is for water and Bill and I have already agreed to install it together. I understand why Bill approached you. At the last council meeting it was told very clearly that the Manager of Planning was to get off my back. Peter Binny, my surveyor, is talking to Bill and Bill should phone you shortly. All the proceeds of the sale are to go to you, enclosed the contract between Bill and myself. Mr Kitto has no recollection of this. He had no authority to accept or reject any such offer and he has no recollection of having referred that offer to anyone else within the respondent. 35 On 2 April Mr Upton sent Mr Kitto a fax stating he was prepared to increase his offer to "pay out the mortgage" to $100,000. He also faxed a copy of his caveat which he "didn't want to lodge but I'm uncertain of what's going on". 36 On 3 April Mr Upton's then solicitor received a copy of the signed contract between the respondent and Mr Patmore. Mr Upton says that "until then I had believed Mr Kittto to be truthful when he told me that he would contact me before (the respondent) signed the contract, if they signed it at all". I am satisfied Mr Kitto made no such promise. 37 Mr Upton says that on 7 April he telephoned Mr Kitto, having cancelled an appointment to meet with him in Launceston, and that Mr Kitto told him that the respondent's contract with Mr Patmore was "possibly signed by Mr Stearnes" when Mr Kitto was away. Mr Patmore asked if his offer of $100,000 was acceptable, and Mr Kitto said he would have to check with his CEO and would send Mr Upton an update of the pay-out figure. 38 Mr Kitto believes that Mr Upton did telephone him on the 7 th as on the same day he sent Mr Upton a fax advising a pay-out figure of $124,713.08. This was the full amount of principal, interest and costs without any deduction. Mr Kitto denies saying anything about Mr Stearnes signing the contract while he (Mr Kitto) was away. He has no recollection of discussing an offer of $100,000, and certainly not in any context of Mr Upton receiving a discharge of mortgage for that amount. Mr Kitto's belief was that the respondent was unable to accept any sum of money from Mr Upton in return for a discharge of the mortgage so long as the contract between the respondent and Mr Patmore remained on foot. 39 Mr Upton says Mr Kitto's fax of the 7 th advised him of the amount owing to the respondent "on the assumption 'that no further legal proceedings are necessary'". Mr Upton says he took this to mean "that I would be allowed time to pay my debt and continue with my subdivision and complete my sale to Patmore". Such a construction is absurd. Mr Kitto was simply stating the full amount owing under the mortgage to date and making the obvious point that any further proceedings would increase the amount owing. 40 Mr Upton says that after receiving the fax of the 7 th he telephoned Mr Kitto and they both agreed that the payment of the pay-out figure in full would "discharge my mortgage". I do not accept that any such agreement was made. I am arranging a bank guarantee for $124,713.08 as security to finalise pay-out of mortgage B929135. Mr Kitto told him that the respondent "would make a formal approach to Bill Patmore to walk away from the contract to buy all of my land". It is also possible that he explained again to Mr Upton that the respondent could not give him a discharge of the mortgage irrespective of any amount he might offer because of the contract between the respondent and Mr Patmore. Mr Kitto denies that he ever told Mr Upton that the respondent would make a formal approach to Mr Patmore to walk away from the contract. 43 On 11 April Mr Upton sent Mr Kitto a fax saying he was "ready to settle" the mortgage loan on 14 April and the amount required was $124,713.08. 44 Mr Upton says that on 14 April he telephoned Mr Kitto and told him that he was ready to settle when the respondent was. Mr Upton says Mr Kitto told him that he would talk to his lawyer and "give me an update of the pay-out figure". Mr Kitto has no recollection of the conversation on this day. However Mr Kitto denies he ever told Mr Upton on that date or on any date after 13 March that he would recommend that the respondent should accept Mr Upton's offer to pay out the mortgage. 45 On 1 April the respondent had requested Mr Cripps to provide a second valuation of the land "as a matter of urgency, as this company has signed a contract for the sale of the property as mortgagee in possession". His valuation as at 16 April resulted in figures of: single lot, $75,108, six lot potential $72,000, hypothetical development analysis $72,000. He assessed the current market value at $75,000. 46 Mr Cripps noted that the demand for vacant building blocks in the area had improved gradually over the last 12 months, although the selling rate of about 1.75 blocks per months was still well below long term selling rates. He thought that since his previous valuation in October 2001 subdivision of the land now appeared to be feasible at his level of assessed market value although it was a "line ball". It should be noted that it has not been suggested in this case that Mr Cripps had knowledge of the price for the sale of the land to Mr Patmore. 47 Mr Upton says there were various conversations from this time onwards with Mr Kitto during which Mr Kitto said he would recommend to his CEO that Mr Upton's pay-out would be accepted. It is not necessary to go into any further detail. I accept that Mr Kitto took the consistent position that any settlement would not have been on the basis that the respondent would hand over the title to Mr Upton because there was the contract with Mr Patmore. 48 Settlement of the Patmore contract was delayed by litigation over applications initiated by the respondent (on 6 June 2003) and Mr Patmore (on 19 December 2003) for the removal of Mr Upton's caveat. A contested hearing took place in the Supreme Court in March 2004 and on 27 July 2004 Underwood J delivered a judgment ordering that the caveat be removed: Patmore v Upton [2004] TASSC 77. 49 On 6 August 2004 the contract between the respondent and Mr Patmore for the sale of the whole of the land was completed. The taking of reasonable precautions to obtain a proper price is part of the duty to act in good faith: Forsyth v Blundell [1973] HCA 20 ; (1973) 129 CLR 477. 51 I am satisfied that the respondent took all reasonable steps. The land was put up at a properly advertised auction, and then remained on the market for some 15 months, during which time it only attracted one offer, for which it was sold. I am satisfied that the price was a reasonable price, and in fact was at or about market value at the time. I reject valuation evidence given on behalf of Mr Upton by Mr Daryll Timms. He valued the land at 27 November 2000 at $175,000 "for security purposes" but on the basis that "a six lot Council approved development would be completed by Mr Upton himself". 52 It is not quite clear what is meant by this last-mentioned basis. If it means that a hypothetical purchaser was to buy on the basis that Mr Upton himself, and nobody else, would carry out works at some unspecified price, it is quite unreal. 53 It will be recalled that Mr Cripps made an allowance of 40 per cent for profit and risk. Mr Timms made only an allowance of 20 per cent for profit, because he said once the subdivision development had been approved by the Council it was "a risk-free investment". This seems to me to be an astonishing proposition. The subdivision or development of residential land is a notoriously risky field of commercial activity; one need look no further than the predicament that Mr Upton himself finds himself in to see that this is so. 54 Moreover, as counsel for the respondent put, the best available evidence of the true market value of the land was that it was actually put on the market, properly advertised and marketed and received only one genuine offer over 15 months. Mr Upton was aware that the respondent had the land on the market for sale at about $80,000, and made no protest. 55 There was no obligation on the respondent either to subdivide the land or allow Mr Upton to subdivide it. While the respondent had no doubt a power to do so if commercially desirable, a mortgagee is under no obligation to spend further money on matters which might theoretically improve the value of the mortgaged property. The aphorism about sending good money after bad springs to mind. 56 There is no evidence to base a finding that the respondent acted otherwise than in good faith. If he elects to keep them informed of the progress of the negotiations for sale, he does not thereby limit his freedom of action... It is not a breach of the mortgagee's duty to refuse to negotiate with the mortgagor, even if the latter is making the highest offer... A mortgagee may sell when he considers it appropriate. As I understand Mr Upton's case in final submissions, it is not really put that that respondent, through Mr Kitto, gave any representations or promises to Mr Upton. The attack seems to be on the basis that, as counsel put it, Mr Kitto was "uninterested in the mortgagor" and was "elegantly obdurate", "intransigent", and "an utter brick wall". This characterisation of Mr Kitto's conduct does not sit too well with the thanks that Mr Upton himself volunteered in the fax that I have already quoted. 58 But in any event there is no obligation on a mortgagee, whether at law or in equity, or as a matter of conscience, to respond to propositions on behalf of a mortgagor, still less where such propositions involve the acceptance of substantially less than the admitted debt. 61 The respondent was not required to have any regard to the earlier sale of Lot 2 to Mr Patmore. Mr Upton could not complete that contract without the respondent's consent, which he never sought. 62 In any event, as is submitted by the respondent, even if the respondent had told Mr Upton of its intent to enter into the contract in March 2003, there is no evidence that, practically speaking, Mr Upton could have done anything to alter matters. One can reasonably infer from events up to date that he was not able to get together the funds to pay out the judgment and mortgage debt in full, which was his legal obligation. So learning of the proposed sale to Mr Patmore would have made no difference. 63 Mr Upton says that he would have "accelerated arrangements in train for the longer term financing of the respondent's mortgage" --- such arrangements being "to pay either a discounted sum, which I had always been led to believe by Mr Kitto could be negotiated, or if not so agreed the whole of the judgment debt then owed". There is no basis in the evidence for thinking that the respondent held out any promise that a discounted sum would be acceptable, nor was there any obligation on the respondent to do so, nor did it promise to give Mr Upton a right of first refusal. 64 The simple fact is that the respondent had, in good faith, entered into the contract with Mr Patmore and any dealings thereafter with Mr Upton could only be on the basis of him paying out the balance of the mortgage. Underlying this case is the harsh reality that prices and values have greatly increased since March 2003. It is misfortune for Mr Upton that he was unable to meet the mortgage debt and his land was sold. That is but the fortune of the market and does not arise from any legal or moral misconduct of the respondent. 66 The application will be dismissed. He referred to a number of authorities, including Fountain Meat Sales Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401 where Woodward J said that such an order was appropriate where an action has been commenced or continued in circumstances where the party, properly advised, should have known that he had no chance of success. It is not necessary to show that the claim was brought for some collateral purpose or is an abuse of process. 68 In my opinion this was a hopeless case, and should have been recognised as such from the outset. Given the initial auction and the time the property was on the market, there was no arguable basis for contending that the sale to Mr Patmore was improper. On that premise, the respondent could not have been expected to act other than in the way it did. At the heart of Mr Upton's case is, I suspect, a belief that notwithstanding he was a mortgagor in default he had some kind of right of first refusal before the mortgagee could sell. This is a misconception. There should be an award of indemnity costs.

sale by mortgagee alleged failure to consult with mortgagee sale of subdivided land in one parcel alleged sale at undervalue mortgage

That Application identifies the Applicants as being Terry Patrick Sharples, First Applicant, and The Fishing Party, as being the Second Applicant. There are a number of Respondents, including the Australian Electoral Commission as the First Respondent and the Australian Fishing & Lifestyle Party as the Second Respondent. 2 The Application seeks ( inter alia ) a declaration that the registration of the Australian Fishing & Lifestyle Party pursuant to the Commonwealth Electoral Act 1918 (Cth) was " induced or procured by fraud or misleading information . The need to proceed by way of Statement of Claim has previously been brought to the attention of the Applicants, as have the terms of O 4, r 6(1A). 6 The terms of O 4, r 14 have also been brought to the attention of the Second Applicant. On that occasion the need for compliance with O 4, r 14 was again affirmed and the indulgence sought by the Second Applicant to have Mr Smith appear for it was refused: Sharples v Australian Electoral Commission [2007] FCA 2102. Leave to appeal that decision was sought and refused: Sharples v Australian Electoral Commission (No 2) [2007] FCA 2103. 7 Directions were made as to the future conduct of the proceedings on 12 December 2007 and permitted the Second Applicant an opportunity to comply with O 4, r 14, it being envisaged that if the Second Applicant wished to " carry on " the proceedings it could do so by way of a Statement of Claim naming it as a party and by retaining a solicitor for that purpose. No Statement of Claim has been filed in accordance with that direction. 8 On 12 December 2007 the proceedings were stood over for further directions on 8 February 2008. The party has already presented before Justice Flick [on] 11 December 2007 in relation to its finances with an Affidavit from the Party Agent and evidence of the Federal Party's only bank account which depicted a balance at that time of $677.00. The party is an unincorporated voluntary non-profit organisation registered as a federal political party to contest federal elections. The Party has surely shown that it is not in a current position to employ or pay for any legal representation in this matter that it sees as a National public interest case and Flick J has refused leave for the party to have a non solicitor represent them. The seriousness of the case is that the party is claiming that a political party AFLP obtained party registration by fraud or misrepresentation and has now contested the 2007 Federal Election that if exposed may bring the 2007 Federal Senate Elections of Qld, NSW and SA into disrepute. If further evidence that pro bono legal assistance is required, then the party can provide the necessary statements or documents. There is a hearing set down for 8 February in the ACT Federal Court to which The Fishing Party wishes to proceed with if it can receive legal assistance. The Notice of Motion was accompanied by a letter and an Affidavit which he requested not be made available to the other parties to the proceeding. The letter stated that for " health reasons " he would not be able to attend on 8 February 2008. Given the request that the Affidavit not be made available to the other parties, it was not read and as events unfolded on 8 February 2008 it was not necessary to do so. 11 On 8 February 2008 the Court was informed that Mr Sharples sought to discontinue the proceedings provided that he was not thereby exposed to an order for the payment of costs. The Respondents were content to embrace that proposal. 14 The Court was, however, informed of discussions between Mr Sharples and Ms Dowsett of the Australian Government Solicitor as well as a proposal by Mr Sharples for him to discontinue the proceedings. The Second Respondent has to date not taken any active part in the proceedings. Ms Dowsett represents the First and Seventh Respondents. 15 Order 22 of the Federal Court Rules governs the withdrawal and discontinuance of proceedings. The subject of this exchange was Mr Sharples' proposal to discontinue the proceedings with each side bearing its own costs beyond any orders already made by this Court. 18 There thus being a desire on the part of Mr Sharples to discontinue the proceedings and concurrence on the part of the Respondents to the course proposed, it was considered only appropriate to make orders giving effect to the agreement of those parties. Notwithstanding the non-appearance, it is appropriate to address the request made in case it be thought by The Fishing Party (or other interested persons) that the request has not been considered. It is a power expressed in " wide terms ": Taylor v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 319. The decision whether to issue a referral certificate does not depend necessarily upon any assessment of the strength of the case. Indeed as O 80 r 1(4) makes clear, a referral under O 80 is not an indication that the Court has formed any opinion on the merits of a litigant's case. Where a case is patently hopeless then that might form a basis for refusing an O 80 certificate. The 'interests of justice' is a wide term. It can encompass a circumstance in which, regardless of the merits of his appeal, the significance of the outcome to an appellant and perhaps to third parties such as family members is such that the appellant should be afforded every opportunity to properly present his or her case and should have legal representation for that purpose. That does not mean that if legal representation is unavailable the litigation must come to a halt. It may be that, if in the end, no pro bono practitioner is found who is willing to act then the appellant would have to represent himself. 22 No matter how wide the discretionary power may be, it is considered that it is a power confined by reference to the requirement that it be a power to be exercised " in relation to a proceeding before the Court ", namely a " proceeding " which has been properly commenced. Order 4, r 14 expressly provides that, without the leave of the Court, the Second Applicant " may not ... commence ... any proceeding otherwise than by a solicitor . " The orders of Spender J made clear that The Fishing Party was " to prosecute the application only in accordance with O 4, r 14 ". Leave subsequently sought to have Mr Smith appear for the Party was refused. Although the definition of the term " proceeding " is further defined by O 4, r 4, and is a " very wide definition " ( Fiorentino v Irons (1997) 79 FCR 327 at 330), the width of the definition would not embrace a " proceeding " which the Rules expressly prohibit being " commenced ", at least in the manner pursued to date by the Second Applicant. 23 No power to make a referral exists prior to the commencement of proceedings, be it at the request of an individual or a corporation, whether or not represented by a solicitor. It is at that point of a proceeding being commenced in the Court that the interest of the Court "in the administration of justice " arises. 24 Even if O 80, r 4(1) is not to be so construed, and even if it be concluded that the Court does have power to make a referral at the request of the Second Applicant, it is nevertheless considered that the power should not be exercised in the present case. Thus, even if the proceedings had been properly " commenced " by The Fishing Party, or even had the request been made by the First Applicant, it would have been refused. " But that assertion falls short of establishing that The Fishing Party is unable to raise such monies as may be necessary to secure legal assistance. Whether the members of The Fishing Party have been approached with a view to securing such monies as may be necessary to pursue the proceedings, and their response to any approach, has been left to speculation. 26 Even if funds were not available, the power would still not have been exercised in favour of making a referral. The Commonwealth Electoral Act 1918 (Cth) plays a central role in the registration of political parties and, accordingly, a central role in the democratic processes of the Commonwealth. The First Respondent to the proceedings, the Australian Electoral Commission, is established pursuant to s 6(1) of the 1918 Act. Proceedings which seek to agitate the manner in which that legislation is being administered are thus to be approached with a proper sense of the objects and purposes of the Act itself. 27 The case sought to be advanced by the Applicants is that the Australian Fishing & Lifestyle Party secured its registration as a political party by means described as " fraudulent " and by using " misleading information . The evidence as filed to date is more characterised by broadly expressed conclusions and allegations than by any exposition of facts from which the Court could make its own findings. 28 Now is not the occasion, of course, to undertake a detailed review of the evidence and to make any findings of fact, no matter how tentatively they may be expressed. And no attempt has been made to form any conclusion as to the strengths or weaknesses of the case sought to be advanced, either as to its legal merits or the factual basis upon which submissions may ultimately be made. For present purposes it is only necessary to form some view as to how the case could possibly be advanced. 29 The allegations being made are serious. And it may well be that the Court would be assisted by the factual and legal contentions sought to be advanced by the Applicants being presented by a legal practitioner. The resolution of the contentions being advanced will involve, if the proceedings were otherwise to proceed, some legal and factual complexity. Indeed, when previously addressing O 4, r 14, one consideration taken into account was the positive input which it was considered a legal practitioner could bring to the proceedings, including a disciplined consideration as to the allegation of fraud: Sharples v Australian Electoral Commission [2007] FCA 2102 at [10] --- [11]. Order 80, r 4(1) retains unto the Court a discretion, " The Court or a Judge may ..." make a referral. Assuming the Court had power to make a referral in the present proceedings, a referral would not be made in the exercise of the discretion conferred. Factors which have been considered when exercising the discretion have included considerable reservation as to the utility of any relief which may ultimately be granted and also considerable reservation as to the ability of the Applicants to make out necessary findings of facts. Also taken into account is whether the present proceedings involve anything more than an examination of the conduct of two groups of members of rival bodies. The evidence would likely ultimately address the conduct of those two rival groups and whether or not there has been conduct amounting to fraud or misleading conduct. If that be correct, the present proceedings may be more concerned with the private interests of the group members than with more broadly expressed interests of the public generally. Nor was any Statement of Claim filed on its behalf and no request made for any extension of time within which to do so. 32 Also as stated, it is considered that the proceedings were not properly " commenced " by The Fishing Party and, even if that not be so, O 4, r 14 provides that it cannot " carry on " the proceedings otherwise than by a solicitor, leave for Mr Smith to appear having been refused. 33 In such circumstances it is considered appropriate to make an order dismissing the proceedings generally. 34 The order dismissing the present proceedings, it should be noted, does not preclude The Fishing Party from commencing any such future proceeding as it sees fit which complies with the Federal Court Rules and O 4, r 14 in particular. 35 In embracing the proposal that Mr Sharples discontinue his proceedings, the only order as to costs sought to be preserved on 8 February 2008 by the Respondents represented by Ms Dowsett was that made on 11 December 2007. That was an order not made against Mr Sharples but rather an order that The Fishing Party pay costs of and incidental to the hearing of its Motion seeking to have Mr Smith appear. No other submissions were made as to costs by those Respondents on 8 February 2008. It was thus assumed that those Respondents, when seeking an order that the proceedings be dismissed generally, did not intend to recover any further or additional costs against The Fishing Party by reason of the dismissal of its proceedings. Leave be granted to the First Applicant, Terry Patrick Sharples, to discontinue the proceedings. 2. There be no order as to costs other than the order as to costs made on 11 December 2007. 3. The proceedings be otherwise dismissed.

federal court rules 1979 (cth) o 80 request by party for referral to legal practitioner referral refused held that order 80 confined to proceedings before the court held that order 80 does not extend to making a referral prior to commencement of proceedings proceedings not properly "commenced" or "carried on" practice and procedure

2 The photo boxes are used for storing photographs. They are rectangular wooden boxes with hinged lids. Inside there are a number of bearers from which hang plastic sleeves in which photographs may be stored, as in a filing cabinet. On three sides of the box and on its lid there are windows in which selected photos can be displayed. 3 The photo boxes come in three sizes which hold respectively five, six and 13 bearers with plastic sleeves, referred to by the parties as "albums". The following description concerns the medium size or six album box. The small and large size boxes and packaging have some different features which however need not be discussed for present purposes. 4 Both appellant and respondents have marketed their photo boxes in cardboard boxes of the same dimensions, approximately 28 cm long, 24 cm wide and 22 cm high. 5 The dispute does not concern the photo boxes themselves (which, apart from the photographs displayed, are identical) but a label which the second respondent Blue Boss Pty Ltd, an importer wholesaler and retailer of gift ware, affixed to the cardboard boxes in which its photo boxes were marketed. The first respondent, Mr Harry Zheng, is a director of Blue Boss. Immediately to the left of the word "wooden" there appeared the word "memento" in the same font as in the appellant's label (see [11] below). However, the respondents marketed their product with the word "memento" covered. At first the covering was a white paper strip through which the word could be discerned fairly easily. Later a black strip was used which effectively obscured the word. 8 The respondents' label is obviously stuck on. The label measures 18 cm x 15 cm, leaving margins of 3-6 cm of bare white cardboard. The smaller label was only affixed on one side. Apart from the labels mentioned, the respondents' cardboard box was of bare white cardboard. 13 On the other two smaller sides there is a photograph of the wooden box with lid closed. The same wedding photograph is displayed however there is no separate photograph as shown in [11] and there are no sprinkled nuts. The pull out photo folders are hidden within the box and can hold up to 120 extra photos. 15 All sides of the appellant's box have a glossy finish, as does the top. Two sides are a pale pink and the other two sides white. On the top the background is a chocolate brown with the word "memento" in a lighter brown and across that, in white, the words "memento wooden photo box with 6 albums". 16 Any intellectual property rights in the photo boxes themselves, or the photographs appearing on the labels, are not in issue in these proceedings. 17 In the Federal Magistrates Court Riley FM dismissed all the appellant's claims: Woodtree Pty Ltd v Zheng [2007] FMCA 457. In a subsequent ruling her Honour awarded the respondents costs on an indemnity basis from 2 June 2006, the date of a Calderbank offer: Woodtree Pty Ltd v Zheng (No2) [2007] FMCA 989. 18 The appellant now appeals from those judgments. 21 The appellant's case is that its label is a drawing. It is submitted that the words and the placement of the photograph were part of an overall design which constituted a "drawing". As already mentioned, no copyright is asserted in the photograph itself. However, it is said that the "drawing" consists of a number of visual elements selected and arranged by the appellant. These elements are the digitised photograph of the box and a series of words in specific fonts, colours and sizes. These elements, so the argument goes, have been carefully arranged in a spatial sense, with each element assuming a specific position that gives the overall arrangement a particular visual effect. 22 In dealing with this issue the learned Magistrate discussed Lott v JBW & Friends Pty Ltd (2000) 76 SASR 105. The work there in question was a graphic bar with the words "Opera in the Outback". The report does not contain a reproduction. Mullighan J held that it was a "drawing". Having perused the graphic ... I do not regard it as so simple as to deny copyright. ... 24 The same point was made by Mr Minahan, counsel for the respondents, in his written submissions. The submissions, he said, involved the use of a computer and selection of typeface and decisions about layout and presentation including headings and indentation. The same could be said for a newspaper. However neither the submissions nor a newspaper would be regarded as a drawing. 3. a sketch, plan, or design, esp one made with pen, pencil, or crayon. The statutory definition, particularly by its inclusion of maps, makes it clear that for the purposes of the Act something may be a drawing notwithstanding that it is coloured. However, the essence of a drawing remains the concept of a representation of some object by a pictorial line. 28 In the present case the work in question consists substantially of a photograph, which is not in ordinary speech a drawing and which the statute specifically treats as something distinct from a drawing. The only other visual item is the text. Text is not a drawing. I do not think that by adding a non-drawing to a non-drawing one can end up with a drawing, however much skill goes into the placement and arrangement. 29 Certainly for something to be a "drawing" for copyright purposes no great complexity or (as the statute tells us) artistic quality is required. In Millar & Lang Ltd v Polak [1908] 1 Ch 433 the works held to be drawings included words such as "Greetings", "Friends ever". "Good luck", "Lest we forget", and "For old times sake" in a distinctive form within an ornamental oval or circular scroll. In Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111 the devices held by Pincus J to be drawings were based on the letters R and B but, as is apparent from the report at 112, were quite stylised. As his Honour said at 114, they were "by no means random and were plainly drawn with care, to obtain an effect". Clearly a letter or letters of the alphabet can provide the subject matter for a drawing. One thinks of the illuminated manuscripts of medieval works such as the Book of Kells. However, in the present case the text is fulfilling a semiotic function. It is communicating to the reader the message that within the cardboard box will be found a wooden photo box with 6 albums which hold 120 10 x 15 cm photos. The pictorial image of that box is conveyed by a photograph, which is not a drawing. 30 Mr Golvan SC for the appellant sought leave to amend its statement of claim to raise an allegation that its label was a "literary work". The appellant says its label is a "compilation". It is discussed at [34]-[37] of the judgment. Except in the most exceptional circumstances it would contrary to all principle to allow a party, after a case has been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so. The notion of compilation involves a collecting and putting together or arranging or organising of disparate data. That is not the case with the appellant's label. It is simply a photograph and a description of an object. It conveys the one message. Section 52 prohibits conduct in trade or commerce which is misleading or deceptive or likely to mislead or deceive. More specifically, s 53(c) and (d) prohibits representations that goods or a corporation have sponsorship or approval which they do not have. 34 In the court below, concentration was very much on the passing off claim. However, as the Full Court has recently pointed out in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 at [96]-[99], the degree of overlap between the two causes of action should not obscure the important differences between them. The law of passing off protests goodwill as a species of property: Boehringer Ingelheim Ltd v Vetplus Ltd (2007) 73 IPR 593 at [37] per Jacob LJ, citing a passage from the judgment of Millett LJ in Harrods Ltd v Harrodian School Ltd (1996) 35 IPR 355 at 366. However claims under the Trade Practices Act it is not necessary for a plaintiff to establish an exclusive reputation, or indeed any reputation at all. The question is rather whether consumers are likely to be misled or deceived by the defendant's conduct. 35 In the present case much of the debate concerning the nature of the appellant's reputation and when it was established becomes irrelevant once concentration is focussed on the respondents' conduct. 36 Her Honour made the following findings relating to the trade practices issues. 37 The appellant's photo boxes were sold in 500 retail stores throughout Australia and New Zealand including Priceline, The Reject Shop and The Warehouse. The appellant first imported them in July 2005. Photo boxes in packaging mentioned above were first imported on 26 October 2005 and reached retail outlets in Melbourne four or five days later and interstate outlets within a week. 38 Between those dates and 29 March 2006, two days before the commencement of proceedings, the appellant had sold the following quantities of different sizes. In late 2005 it bought 54 photo boxes of the types in issue. 40 A witness attended a shop called Stuff and Nonsense at Victoria Gardens on 3 May 2006. The witness observed the respondents' photo boxes being sold for $10 or $20 less than the appellant's. That is for $20, $30 and $50 for small, medium and large sizes as against $30, $40 and $60 or $70 for the respective sizes of the appellant's boxes. The appellant's and respondents' boxes were sold side by side at Stuff and Nonsense as well as in the respondents' store in Eastland. 41 The learned Magistrate found that at least one example of each type of photo box was displayed out of its carton in retail outlets. Her Honour noted at [95] that it was likely that photo boxes would have been displayed out of their cartons as consumers would want to see the box before buying it and to look inside and see how the albums can be removed and how the photo box actually worked. Thus it was to be expected that retailers would display an example of each photo box in a way that would facilitate the consumer's inspection of the product. 42 Her Honour also found that almost invariably there would be photo boxes inside their cartons or indeed empty cartons stored on the shelves or tables of retail outlets near the examples on display, primarily for the purposes of storage and to be readily accessible for purchase. Those cartons would be visible to consumers at the time of making their choice of photo box. 43 Neither parties' photo boxes bore the "memento" mark. When removed from their cardboard box the parties' photo boxes were virtually indistinguishable. 44 Mr Zheng's evidence as to how he came to market the photo boxes was as follows. He bought a line of photo boxes from the appellant in October 2005. The cartons had a similar overall layout to the ones mentioned above, except that they had no writing in the lower left corner and photographs of three photo boxes on the front and rear panels rather than one. Mr Zheng said that numerous other companies were selling photo boxes of various shapes and designs in mid 2005 in Australia. 45 Mr Zheng decided to import photo boxes himself rather than going through a wholesaler such as the appellant. He contacted his Chinese supplier who asked him to provide an example of exactly the type of photo box he wanted, as many different types were available. Mr Zheng provided a copy of the appellant's "memento" packaging. He told the supplier to prepare packaging for his company and take photographs for that purpose. He told the supplier to ensure the respondents' packaging was different to the appellant's packaging. He told the supplier to include the words "a wooden photo box with six albums and 120 photos 10 x 15 cms (4\x 6\)". The word "memento" was mistakenly included on the respondents' packaging. He did not ask for it to be included. He ordered a total of 3000 photo boxes. 46 When the photo boxes arrived in Australia Mr Zheng instructed his staff to put plain white stickers are the word "memento". The respondents did not offer for sale any photo boxes with the word "memento" uncovered and all of their boxes bore the Better Homeware brand rather than the Unigroup brand. Later in response to demands from the appellant, the respondents covered the whole of the large stickers with white paper and later still black paper. 47 The respondents sold 676 units with the word "memento" covered by the white stickers. It still had 1700 units in their warehouse. All photo boxes sold by the respondents had the Better Homeware brand on them. 48 The learned Magistrate accepted Mr Zheng's evidence except in relation to the instructions that he gave his supplier for the packaging. Her Honour found that there was likely to have been a fax cover sheet which contained instructions for the supply in relation to the design of the photo boxes themselves and the packaging. She inferred from the respondents' failure to discover the fax cover sheet and the contract that those documents would not have assisted their case. She did not accept that Mr Zheng asked his supplier to make the packaging very different to the appellant's. It would have been easy to ask the supplier to provide a proof of the design for packaging to enable him to check it. If Mr Zheng had done so it would have been obviously that the design was very similar to the applicant's and included the word "memento". 49 In the circumstances her Honour found that Mr Zheng chose not to ask for a preview of the packaging because he had given precise instructions about it and knew exactly how it would look. Her Honour found that Mr Zheng did not instruct his supplier not to use the word "memento". 50 In finding against the appellant on the trade practices issues the learned Magistrate reasoned as follows (at [136]). Photo boxes were generally displayed outside their cartons. When seen without their cartons the appellant's and respondents' photo boxes were very different. The face papers gave a different overall impression and showed different branding. Consumers would see the Unigift brand and the Better Homeware brand before they turned their attention to the cartons. While they might wonder whether there was a connection between the respondents' product and the appellant's, at that stage they would mostly be concentrating on the price and deciding whether it was worth paying an extra $10 or $20 for the more polished and professional cartons offered by the appellant. Her Honour did not think that the consumers would have any significant interest in the brand or origin of photo boxes. Her Honour said there was nothing to indicate that the appellant's product, as opposed to its cartons, was superior to the respondents'. Her Honour thought that the attempted concealment of the word "memento" would signal to the consumers that there would have been some sort of printing error and that the respondents' product was not a "memento" version of a photo box. 51 Her Honour concluded at [141] that there was "not even a remote chance" that the reasonable consumer of photo boxes and gift ware in the medium to discount sector of the market might be led to believe by the design of the respondents' packaging that the respondents had any sort of affiliation with the appellant. 52 While the learned Magistrate conducted a detailed and thoughtful review of the evidence, I am compelled to a different conclusion. There seem to me to be five critical factors. First, the products were often marketed at retail outlets side by side. Secondly, the photo boxes themselves were identical (apart from photographs displayed). Thirdly, the general get-up of the packaging was strikingly similar in content, type face and layout. Fourthly, the overall impression was that the respondents' packaging, and in particular the stuck on labelling, appeared cheaper and less sophisticated than the appellant's. Fifthly, the respondents' retail price was substantially less. 53 In my view, many potential purchasers in this setting would be likely to infer that both boxes came from the same source. They would not be likely to pay too much attention to the Unigift or Better Homeware brand. It is a very common marketing practice to use different brand names for products clearly made by the same manufacturer. That being so, a substantial number of consumers would be likely to think that the same manufacturer was giving the consumer a choice: you can buy the same photo box but with cheaper packaging for a lesser price. This would be attractive for somebody who thought they might simply get the photo box and use their own wrapping paper to make a gift. The cost of the wrapping paper would in all probability be significantly less than the price differential between the photo boxes. 54 So whether or not the appellant had a prior reputation of any and what extent, the fact remains that by using the very similar get-up in the way these products were marketed the respondents were likely to mislead and deceive consumers into thinking that their products and the appellant's products came from the same source. 55 Moreover, the learned Magistrate's findings support a conclusion that this was a case of deliberate copying. I would apply the principle in Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51 ; (1937) 58 CLR 641 at 657. The appellant claims the gross profit on an equivalent number of sales it says it has lost. 57 There were 676 such sales by the respondents. The lowest profit margin for the appellant, being that on its small photo boxes, was $5.45. The resultant figure is $3684.20. 58 Mr Minahan argues that not every sale the respondents made was a sale lost to the appellant. It can be inferred, he says, that consumers bought the respondents' boxes because they were cheaper. There was evidence from the appellant's director Mr Leo Norich that consumers buy photo boxes based on product, price and packaging in that order. 59 In my view, the appellant's approach is a realistic one. The competing products were presented side by side to consumers. As already noted, the effect of the offending packaging was likely to induce consumers into thinking that they were getting the same product from the same source but would be saving money by not having to pay for more elaborate packaging, which they did not need. The misleading and deceptive conduct only has to be one among a number of causes which contributes to a consumer decision harmful to a plaintiff. The statutory purpose would be defeated if the remedy under s 82 were restricted to loss of which the contravening conduct was the sole cause. It is a modest claim because it assumes that all sales lost were of the small box, which had the lowest margin. It would be an artificial exercise to attempt to calculate some proportion of that profit which represented savings of fixed costs. This case was properly brought in the Federal Magistrates Court, a jurisdiction which is expected to operate as informally as possible: Federal Magistrates Act 1999 (Cth) ss 3(2)(a) and 42 . In a case of this nature parties should not feel they have to engage forensic accountants and similar experts. In lieu thereof there will be judgment for the appellant against the respondents (the liability of the first respondent under s 79(1)(c) of the Trade Practices Act was not in dispute). The amount of that judgment will be $3684.20 plus appropriate interest under s 51A of the Federal Court of Australia Act 1976 (Cth). 62 There remain the questions of costs. As already mentioned, the learned Magistrate made an order for indemnity costs. (The time for compliance with this offer was extended on two occasions). 63 I direct that the appellant within seven days file written submissions as to interest and costs and that the respondent file answering submissions within seven days thereafter.

packaging for photoboxes labels containing photograph and descriptive text whether "drawing" or "compilation" similar get-up of packaging for identical products sold by trade rivals displayed side by side at retail outlets whether misleading and deceptive whether gross profit on equivalent sales lost an appropriate measure of damage "drawing" "compilation" copyright trade practices words and phrases

2 Helimount Pty Limited (in Liquidation) (Helimount) was wound up in insolvency by order of the Court made on 26 July 2006. As that order was made by the Registrar, it was reviewable. The Registrar's decision was affirmed upon review by Besanko J: Web Wealth Pty Ltd v Helimount Pty Ltd [2006] FCA 1376. Hugh Martin (the liquidator) is the liquidator of Helimount. The winding up order was made on the application of Web Wealth Proprietary Limited (Web Wealth), based on the failure of Helimount to pay a debt which was the subject of a statutory demand dated 28 November 2005. At that time, the sole director and sole shareholder of Helimount was Domenico Callipari. It is not necessary to refer to the matters raised by Helimount in opposition to the winding up order. They are not now relevant. 3 The debt arose in the following way. On 24 January 2005, Web Wealth of the one part and Helimount and Mr Callipari of the other part entered into a Deed under which Web Wealth advanced to Helimount $630,000 upon the terms more specifically contained in the Deed. The advance was originally proposed to be $600,000, but was increased shortly before it was due to be advanced to $630,000. There is no issue that the sum was duly advanced, and has not been repaid. 4 What is presently in issue is whether Web Wealth is a secured or unsecured creditor of Helimount for the purposes of its winding up. Web Wealth asserts that it is a secured creditor. Mr Callipari disputes that. He claims in the winding up to be a substantial unsecured creditor of Helimount. 5 The issue is important because there is presently a balance of $523,667 held by the liquidator. The liquidator has realised the assets of Helimount totalling $2,246,311 (including accrued rent and interest). With the agreement of the present parties, the liquidator has made payments to discharge a secured creditor and for other expenses totalling $1,722,643. The balance of $523,667 is available to the creditors of Helimount (subject to further liquidator's expenses). The real contest is as between Web Wealth on the one hand claiming to be a secured creditor in respect of its advance of $630,000 and accrued interest, so that it is claiming the full amount of the balance as a priority creditor (it did not claim to rank equally with the secured creditor referred to), and Mr Callipari on the other hand claiming that he should be treated as an unsecured creditor equally with Web Wealth and the other unsecured creditors in participating in the disposition of that balance. 6 The liquidator has applied to the Court under r 2.2 of the Federal Court (Corporations) Rules 2000 (Cth) for a determination as to the status of Web Wealth, that is whether it is a secured or unsecured creditor of Helimount, and for a determination as to the nature of its security. 7 Web Wealth claims that, at the time it advanced the $630,000 it did so on the basis that Helimount would deposit as security for the debt and its repayment two certificates of title over land of which it was the registered proprietor, and so it was granted an equitable mortgage over that land to secure its debt and interest. It also claims that the Deed itself amounted to an agreement to give a legal mortgage to secure the advance, and so operates as an equitable mortgage. Mr Callipari contends that there is no equitable mortgage, and that the certificates of title which were deposited by Helimount in the circumstances set out below were to be held by the person to whom he deposited them as security for the potential advance of funds from another potential lender to repay what was intended as a short-term unsecured advance of funds by Web Wealth. That real estate includes the land in the two certificates of title referred to. By agreement between the parties, the liquidator was authorised to sell that land. It is also agreed that, if the advance by Web Wealth was secured by equitable mortgage, the amount now held by the liquidator would be held on behalf of Web Wealth as the proceeds of the sale of the security. 10 Adrian Stirn conducts a business under the name Adrian Stirn Finance Services as a finance broker. His business was in essence to provide housing finance. On about 14 January 2005, Mr Callipari on behalf of Helimount visited him to see if he could arrange funding for a short term advance of $600,000. He needed that money to avoid the threatened sale by another financial institution of property apparently in the name of a relative of Mr Callipari. 11 Mr Stirn said that he did not conduct that sort of business, and did not lend money in those circumstances. He contacted Konstantinos Pappas, a fellow finance broker, to see if Mr Pappas could arrange such a large loan in a very short period of time. There is a dispute as to what transpired in relation to security. I shall refer to that shortly. 12 Helimount at the time was registered as the proprietor of several properties, including the land in Certificate of Title Register Book volume 9593 folio 463 situate at Lot 2 Cureton Avenue, Mildura and the land in Certificate of Title Register Book volume 9983 folio 505 situate at 162 Eighth Street, Mildura. However, on the same day, Mr Pappas then made some private inquiries and contacted Mr Stirn to indicate that he could arrange finance of about that sum to be provided on a short term basis and asked Mr Stirn to arrange for North Adelaide Conveyancing (Alexandros Dianos) to prepare the appropriate documents. 13 A "Deed of Loan Agreement" was duly and promptly prepared and sent by facsimile to Mr Stirn on the same day. It was expressed as being between Web Wealth as the lender and Helimount and Mr Callipari as the borrower. Nothing has been made by Web Wealth or by Mr Callipari of the recording of Helimount and Mr Callipari as "the Borrower" or of "the Borrower" being the registered proprietor of the two pieces of land. I do not need to discuss that feature of the Deed further. The Lender is the owner of SIX HUNDRED THOUSAND DOLLARS ($600,000). The Lender HAS AGREED TO LOAN the sum of SIX HUNDRED & THIRTY THOUSAND DOLLARS ($630,000) (hereinafter called 'the principal') to the Borrower being the Registered Proprietor of the whole of the land in Certificates of Title REGISTER BOOK VOLUME 9593 FOLIO 463 and VOLUME 9983 FOLIO 505 commonly known as LOT 2 CURETON AVENUE MILDURA and 1/162 EIGHT STREET, MILDURA respectively in the State of Victoria (Australia) over which land the said sum has been secured by way of 1 st Registered Memorandum of Mortgage of even date between the parties hereto and on the terms specified in this Deed and the terms in the said Mortgage. The parties have agreed that the Lender will loan the Principal to the Borrower for a period at the Lender's absolute discretion PROVIDED THAT it is not less than two (2) calendar months and can be rolled over calendar monthly if the Borrower is NOT in Default under the terms of this Agreement and the said Mortgage. The Borrower hereby agrees to pay interest as per the Memorandum of Mortgage being at the ' Reduced Rate' of Six Percent per calendar month (6.00% pcm) where it is paid as scheduled and at the ' Normal Rate ' of Ten Percent per calendar month (10.00% pcm) where it is paid after the due date. The Borrower hereby agrees to pay interest calendar monthly in arrears directly to the Mortgagee in the amount of $36,000.00 ('Reduced') PROVIDED THAT IT IS RECEIVED on or before the 13 th day of the calendar month during the term of the Loan AND in the amount of $60,000.00 ('Normal') WHERE IT IS RECEIVED after the 13 th day of the calendar month during the term of the Loan. The parties have agreed that the loan of the Principal from the Lender to the Borrower will be repaid in full together with all interest that is due and payable, at that time by the Borrower to the Lender on the expiration of the 'term' of this Agreement and the said Memorandum of Mortgage. The Borrower HEREBY UNRESERVEDLY DECLARES THAT this Loan is strictly for Commercial Purposes only and fully understands that it will not have protection pursuant to any Consumer Credit Legislation that may normally apply to such a Loan. The Borrower HEREBY ALSO DECLARES THAT the Lender and/or it's legal representatives recommended that they should seek independent legal advice regarding this transaction. The Borrower agrees to pay all costs, stamp duty and disbursements associated with this transaction. 14 Recital B to the Deed of Loan Agreement refers specifically to Helimount or more accurately "the Borrower" being the registered proprietor of land in Certificates of Title Register Book Volume 9593 Folio 463 and Volume 9953 Folio 505 in Mildura in Victoria. Helimount was the registered proprietor of that land. 15 There are some handwritten changes to the Deed included in the text set out above. Recital B inserted after the word 'SIX HUNDRED' the words '& THIRTY' and para 8 was also handwritten. Those alterations were in the handwriting of Mr Stirn. Mr Stirn also, in relation to the change to Recital B, noted in his own writing that Mr Callipari was to sign the alteration which he did. Mr Callipari also signed the bottom of p 1 of that document. The addition by para 8 was written by Mr Stirn after the document was executed and after the funds had been advanced. It was not initialled by Mr Callipari. Again, nothing has been made of that change, or that it was made after the Deed was signed and after the funds had been advanced. 16 The changes arose from a conversation between Mr Stirn and Mr Callipari on about 20 January 2005. Whilst the funds were being assembled by Mr Pappas, Mr Callipari contacted Mr Stirn again and asked if the loan could be increased to $630,000. After a telephone conversation between Mr Pappas and Mr Stirn, it was agreed that the loan would be duly increased. Mr Stirn made the handwritten alteration against the Recital B and faxed that page to Mr Callipari to be initialled and signed by Mr Callipari. He duly returned the initialled and signed changes. Although the amount of the loan had been increased by $30,000, the terms for repayment of interest in cl 3 of the loan agreement were not altered. I accept Mr Stirn's evidence that that was through oversight on his part. 17 On about 24 January 2005, the funds became available. Mr Callipari again attended Mr Stern's office and was handed a combination of cheques payable to Helimount and some cash totalling $630,000. It appears that Mr Pappas had arranged for the advance of those funds from a number of sources. It was accepted during the course of the proceedings that the debt was owed by Helimount to Web Wealth, and that those sources had provided the funds to Web Wealth and that Web Wealth had on-lent them to Helimount. The fact that the payments were made payable to Helimount was simply to facilitate the prompt provision of the funds to Helimount. That in turn depends upon the effect of a conversation between him and Mr Stirn earlier on that day. 19 I have heard the evidence of Mr Stirn and Mr Pappas as to their communications on that day by telephone, and in the presence of Mr Callipari. I have also heard the evidence of Mr Stirn and Mr Callipari as to their respective communications on that day. There is much in common on the whole of the evidence of those communications. Mr Stirn was extensively cross-examined. He did not diverge in any significant way from his evidence in chief. He explained that Mr Callipari, when he first contacted Mr Stirn, indicated that he had approved borrowing from an existing significant financial institution (and he produced an approval letter for that borrowing), but that the process of settling that finance had been taking too long and he did not have the time to wait for it to be completed. That was the context in which he sought a short-term loan. 20 In my view, the evidence of Mr Stirn and Mr Pappas, to the limited extent that it disagrees with the evidence of Mr Callipari, should be preferred to that of Mr Callipari. There are several reasons for that. The first is that I found Mr Stirn and Mr Pappas to be impressive witnesses, whose evidence was given in a straightforward way and without any attempt to gloss over matters or, alternatively, to emphasise matters which they might have been expected to have glossed over or alternatively highlighted were they trying to present a version of events favourable to their case. Secondly, their evidence is inherently both consistent and coherent. Thirdly, their evidence is inherently likely. That is, it is likely that a short term advance of substantial funds by a finance broker would have been the subject of security. Even at the apparently usurious interest rates which were agreed (I use that description even though the liquidator said he had seen short term loans at considerably higher interest rates than those expressed), it is unlikely that such a large amount of funds would have been advanced where the money was required urgently without an inquiry about the availability of security and the taking of it if available. I am fortified in that conclusion by Mr Pappas' evidence as to what he conveyed to those who provided the funds to Web Wealth, which were then advanced to Helimount, and by the fact that Mr Stirn was himself one of the providers of funds to Web Wealth for that purpose, as I regarded Mr Stirn as a straightforward witness whose business did not involve dealing in such short term commercial loans and who would have proceeded only if his contribution to the loan funds was secured. 21 The alternative suggestion that Mr Callipari provided the certificates of title to Mr Stirn to hold on his behalf only to secure a grant of longer term finance, which Mr Callipari planned to seek on behalf of Helimount, and which Mr Stirn suggested might be sought through another of his contacts Club Financial Services (David Garner) is an unlikely one. There is no apparent reason why a refinancing by Helimount in a month or two after the subject advance of funds could not also be secured by the mortgage of the same land upon settlement and repayment of Web Wealth's advance. 22 I do not think that the evidence of Mr Pappas or of Mr Stirn is less credible by reason of the correspondence between the solicitors for Web Wealth and the liquidator of Helimount upon which he was cross-examined. There are, in that correspondence, assertions on behalf of Web Wealth that it did not cause mortgages of the two titles to be prepared due to the legal costs, the stamp duty costs, and the practical difficulty of doing so. The correspondence on occasions does not positively assert an agreement to provide security. Mr Pappas' affidavit of 31 May 2007 was also laconic on the topic. Mr Pappas did not recall giving instructions to send each of those letters in their precise terms, but accepted they reflected the thrust of his instructions. Looked at in that light, in my view the letters do not provide any basis for doubting the reliability of his general evidence that no mortgages were registered because the loan was intended to be short term only, because no new lender would be prepared to advance funds secured by the two pieces of land without at least holding the titles, and having regard to the steps and costs involved in arranging such mortgages. 23 I note also that the various affidavits filed on behalf of Web Wealth in support of its application to wind up Helimount do not assert any security. Given their purpose, to satisfy the statutory requirements for a winding up order, the absence of a reference to the claimed security is not surprising. Nor do I think it is significant. Clearly, soon after the winding up, the claim of Web Wealth to be a secured creditor of Helimount was raised with its liquidator. 24 The letter from the solicitors for Web Wealth to Helimount of 28 November 2005 also does not refer to an agreement to provide security. In its terms and its temporal context, I do not think that is significant: that letter followed the discussion on 1 September 2005 referred to in [26] below, when efforts were being made to agree a figure which Web Wealth would accept from Helimount in final discharge of its debt including accrued interest. Also, preferring the evidence of Mr Stirn and Mr Pappas on this topic, I consider that Mr Callipari's evidence is inconsistent with Recital B in the Deed and does not lie comfortably with his preparedness to sign the Deed on about 14 January 2005 and to initial the change to Recital B subsequently on about 20 January 2005 without deleting the reference to the mortgage and the land in Recital B. 25 Mr Callipari's evidence-in-chief is contained in the several affidavits filed on his behalf. As noted above, he agreed that he gave the two certificates of title to Mr Stirn on about 14 January 2005, although he says he did so at their first rather than their second meeting on that day. I think that is unlikely, because (as I have found) Mr Stirn initially indicated only that he would make inquiries about a possible source of funds as he (Mr Stirn) did not generally provide funds of that nature. More importantly, he says in his first affidavit that, at the time the agreement with Web Wealth was reached to advance $630,000 to Helimount, Mr Stirn expressly said that the advance "would be for one or two months duration at most, and that he would procure an alternative arrangement, with interest at a commercial lending rate of 8% per annum". Mr Callipari claims that he accepted the Web Wealth loan in its terms on that express representation by Mr Stirn. He expressly describes Mr Stirn as the agent of Web Wealth at the time of that agreement. In his affidavit of 24 July 2007, Mr Callipari makes similar assertions. He adds that he told Mr Stirn he needed urgent temporary finance, that Mr Stirn asked whether security was offered to support the proposed loan of $600,000 (as noted above, it was subsequently increased to $630,000) and that Mr Callipari said he could provide two certificates of title to secure the loan if necessary. In a subsequent affidavit of 16 August 2007, Mr Callipari said that he told Mr Stirn "that I would leave the titles with him as a sign of goodwill and trust that I would go ahead with the long term loan" and that Mr Stirn agreed to accept them only on that basis. 26 I regard it as quite improbable that Mr Stirn made the representation that he would secure long term finance in the terms claimed by Mr Callipari. It was not the nature of Mr Stirn's business to do so. It would have been commercially asinine to have made such a representation on the limited information Mr Stirn had. There is an air of unreality about the claim that Mr Stirn insisted on a two month term for the Web Wealth loan. The reality, as Mr Callipari agreed in cross-examination, was that Helimount wanted a short term loan to tide it over until a more permanent arrangement was in place, and Mr Callipari had the confident expectation that it would be realised. He claimed in cross-examination, in the face of Mr Stirn asking for security for the proposed Web Wealth loan, that he offered the security in the terms set out above but that the matter was taken no further. That is quite improbable. His explanation for having signed the Deed of Agreement, and subsequently the amended page, which refer expressly to the security to be granted by the mortgage over the two titles was simply that he did not notice that part of the document. That, too, I find quite improbable. At no time has he asked for the return of the two titles until the winding up proceedings against Helimount were instituted. In particular, at no time during 2005, after it was clear that Mr Stirn had not arranged on Helimount's behalf the long term finance which it sought, did Mr Callipari ask for the two titles to be returned. He would have been expected to do so by about June 2005 if, as he now says, those titles were not held to secure the Web Wealth loan. 28 That is not to conclude that Mr Callipari was deliberately misleading the Court. With the passage of time, events which were clearly understood may become clouded and reconstruction may follow. That reconstruction, subconsciously, may lead to a view of events which in truth does not reflect what actually happened. That may be the explanation for Mr Callipari's evidence. 29 Accordingly, I find that when Mr Callipari first approached Mr Stirn on 14 January 2005, in his presence, Mr Stirn rang Mr Pappas to see if Mr Pappas could arrange in the short term a loan for $600,000. I find that in that conversation Mr Pappas asked Mr Stirn what sort of security might be available and that Mr Stirn raised that matter with Mr Callipari, and that Mr Callipari told Mr Stirn (who by telephone passed that onto Mr Pappas at the time) that he had two freehold titles worth $500,000 and $400,000 respectively available, and a portfolio of real estate valued at approximately $7,000,000. I also find that, later that day, Mr Pappas telephoned Mr Stirn to indicate that Web Wealth could make available $600,000 on a short term loan, provided a first mortgage was given over those two titles, and requested Mr Stirn to engage North Adelaide Conveyancing (Mr Dianos) to prepare the necessary documents. I further find that Mr Stirn told Mr Callipari that funds would be advanced on that basis and Mr Callipari on behalf of Helimount then agreed to that proposal. I need not refer to the discussions about the interest terms of the advance, as there was no dispute about what was agreed. 30 Mr Stirn also told Mr Callipari that a mortgage would need to be prepared and that there would be a little delay because the land was in Victoria and the mortgage would need to be registered in Victoria. Mr Callipari said he was anxious to secure the loan quickly, and did not wish to wait for the time it would take to arrange registration of the two mortgages. Mr Stirn then passed that message onto Mr Pappas. Mr Pappas then discussed with Mr Stirn by telephone Mr Stirn's knowledge of Mr Callipari and Helimount and told Mr Stirn in the light of what he was told in that discussion that it would be sufficient if Mr Callipari deposited Helimount's two certificates of title with Mr Stirn as security for the advance. Mr Stirn then conveyed that to Mr Callipari. It was upon that conversation that Mr Callipari then signed the loan agreement and delivered the two certificates of title to Mr Stirn on about 14 January 2005. It was the intention of Mr Callipari on behalf of Helimount at that point that the two certificates of title were provided by way of security for repayment of the proposed short term loan by Web Wealth. It is also consistent with that conclusion that the two certificates of title produced by Mr Callipari on 14 January 2005 were faxed by copy to Mr Dianos so that they could be incorporated into the original agreement. 31 I also find that subsequently, on 20 January 2005 or thereabouts, when Mr Callipari contacted Mr Stirn seeking an extra $30,000, and Mr Stirn after discussing with Mr Pappas informed him that the additional funds were available, Mr Stirn then made the handwritten notations on the first page of the signed Deed against Recital B and sent it by facsimile to Mr Callipari for his signature. Mr Callipari then signed it and returned it with additional initials and signature as requested. Mr Stirn then told Mr Pappas that he held the signed Deed and the certificates of title. Mr Pappas then on 24 January 2005 attended Mr Stirn's office to look at the signed Deed and the two titles, and handed over to Mr Stirn a tranche of cheques drawn as bank cheques payable to Helimount plus $7,000 cash to make up the amount of the proposed advance. On the same day, Mr Callipari on behalf of Helimount collected the cheques and the $7000 cash upon the terms of the Deed. 32 It is clear enough that Mr Callipari said that he wanted the funds only for a short term loan. He proposed to seek longer term and more substantial borrowing. At Mr Stirn's suggestion, he initially applied to Club Financial Services and alternatively to Bankwest (through the agency of Club Financial Services) for $1.2 m to repay Web Wealth and for additional funds. Mr Stirn assisted Mr Callipari by referring him to David Garner of Club Financial Services and also assisted him with the completion of the documents required by Club Financial Services. However, there is no obvious reason why Mr Callipari needed to have given to Mr Stirn the two certificates of title to hold on his behalf only to support finance from Bankwest or from Club Financial Services when and if it was approved. He could have held them himself until that later finance was approved. As I have said, that is a further reason why Mr Callipari's version of events is inherently unlikely. 33 The main objective factor tending to suggest that Mr Callipari did not provide the two certificates of title to secure by way of equitable mortgage the advance to Web Wealth is that Web Wealth did not arrange for a caveat to be placed on either of the Certificates of Title to notify any other potential lenders to Helimount of its interest in the properties as mortgagee and to prevent further dealings with the properties without notice to Web Wealth. I was for a time concerned that that action had not been taken. I got the distinct overall impression from the evidence of each of Mr Stirn, Mr Callipari and Mr Pappas that the arrangement between Web Wealth and Helimount was a relatively informal one. Although Mr Pappas and Ms Stirn did not previously know Mr Callipari, they knew the contacts by which he had been introduced to Mr Stirn and made inquiries of them. There was in the circumstances an element of trust that Mr Callipari through Helimount would not otherwise dispose of the land, and they were aware that in a practical sense another substantial lending institution would not advance funds to Helimount without requiring production of the Certificates of Title. There was nevertheless a degree of ingenuousness or commercial naivety in holding those certificates of title without arranging for registration of a caveat. 34 It was after the short-term loan of $630,000 had been made that, in February 2005, Mr Stirn introduced Mr Callipari to Club Financial Services (David Garner) to assist Mr Callipari in endeavouring to secure finance from another financial institution. By then, Mr Stirn had been given the duplicate certificates of title. On 3 February 2005, Mr Callipari for Helimount signed a "generic application form" for Club Financial Services for submission to potential lenders, after Mr Stirn had spoken to Mr Garner. That tends to confirm the sequence of events as described by Mr Stirn. 35 Subsequently, after Helimount did not repay to Web Wealth the advance or any interest other than the first interest payment, and after discussions with Mr Pappas, Mr Pappas and Mr Stirn decided that they would instruct solicitors to take recovery proceedings. I accept that at the time those instructions were given in late 2005, Mr Stirn handed the certificates of title to the solicitors then instructed. 36 Mr Pappas confirmed that general sequence of events so far as they directly concerned him. He also gave evidence of a meeting at the Hendon Hotel after the default in performance became apparent. It took place on 1 September 2005. Mr Stirn, Mr Callipari and Mr Pappas and a relative of Mr Callipari were present. Apart from Mr Callipari explaining his to then unsuccessful attempts to secure more permanent finance and his dissatisfaction with those who had endeavoured to secure that finance on his or Helimount's behalf, he also complained about some delay in receiving the $630,000. As I noted above, it was made up of a tranche of cheques and a little cash. Certain of the cheques required special clearance and were not met initially upon presentation after they were first handed to Mr Callipari on 24 January 2005. He complained about that. There was also discussion about fixing a total sum (including interest) which the lenders through Web Wealth would accept in settlement of the advance plus interest. The interest component was substantially discounted when a proposed figure was put forward and agreed upon, but it was not paid in any event. 37 In the course of that conversation, I find that Mr Callipari acknowledged that Mr Stirn held the two Certificates of Title so that, if Helimount did not repay the loan, the properties could be sold out. Mr Pappas said he was not sure that in that conversation Mr Stirn used the word "security", or whether Mr Callipari used that word, but he did say that Mr Callipari acknowledged that Web Wealth or "you" hold the titles. In that context, Mr Callipari made the comment that the debt plus accumulated interest now exceeded the value of the land covered in the titles which were held. He would not have said that unless he appreciated that the titles were held as security for the advance by Web Wealth. Mr Pappas in response made the point that the two titles could be sold and any extra funds outstanding could be pursued by the winding up of Helimount. Rather, I have found, Mr Callipari on behalf of Helimount deposited the two titles with Mr Stirn to be held as security for repayment of the Web Wealth loan of $630,000 to Helimount. 41 In Theodore v Mistford Pty Ltd [2005] HCA 45 ; (2005) 221 CLR 612, the High Court (Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ) recognised and reinforced that an equitable mortgage can be effected by the deposit of title deeds if they were deposited with intent that the land to which they relate be security for payment of a debt. As in that case (discussed at 621, [24]), this is not a case where I need to consider whether to presume an intention to create a security from the relationship of debtor and creditor and the delivery of title deeds: see Bank of New South Wales v O'Connor (1889) 14 App Cas 273 at 282 --- 283; In re Wallis & Simmonds (Builders) Ltd [1974] 1 WLR 391 at 395. I have found that an intention to create the security existed. 42 I also conclude that, when Mr Stirn was handed the two titles by Mr Callipari, he received them as the agent of Web Wealth. He was given the title deeds precisely because Mr Stirn, on behalf of Web Wealth, and after the issue was raised by Mr Pappas in his discussion with Mr Stirn, asked what security would be available to support the proposed advance by Web Wealth. In part, because that security was proffered, Mr Stirn on behalf of Web Wealth indicated the short term finance acquired would be available. Mr Pappas did not speak to Mr Callipari at all on the day the agreement to make the loan was reached; Mr Stirn was the agent of Web Wealth in all those dealings. He was its agent in the discussions once he had been informed by Web Wealth through Mr Pappas that the requested funds may be available, including agreeing orally to advance the funds and the terms upon which they would be advanced and in obtaining the titles and in arranging for the Deed of Arrangement to be drawn up and signed. 43 Consequently, in my judgment, there was an equitable mortgage of the land the subject of the two certificates of title by Helimount to secure the repayment of the advance by Web Wealth of $630,000. 44 My attention was drawn to Arnick Holdings Limited and Ankar Pty Ltd v Australian Bank Ltd (unreported, Supreme Court of New South Wales (Equity Division), Bryson J, 4 December 1987) by counsel for Mr Callipari. That case turned on the findings of Bryson J on the evidence. Given my findings of fact, I do not think it assists me in the resolution of this case. 45 Finally, counsel for Mr Callipari submitted in the alternative that Web Wealth has acted in a manner by which it unequivocally surrendered its security. The question was asked rhetorically; if Web Wealth held security why did it not raise the issue earlier than it did? I have considered that question when making my findings of fact. I do not consider that there is anything which indicates that Web Wealth surrendered its security, or acted in a way which amounts to a waiver of its rights to enforce the security or to an election to surrender it or not to enforce it. I think they are appropriate. I accordingly declare that Web Wealth Pty Ltd has an interest in the fund comprising the proceeds of sale of the land described in Certificates of Title Register Book Volume 9983 Folio 505 and Volume 9593 Folio 463 ("the properties") corresponding to the equitable mortgage in its favour created by the deposit of duplicate certificates of title by Helimount Pty Ltd in January 2005. I also order that the liquidator pay to Web Wealth Pty Ltd such sum as represents the proceeds of sale of the properties less the costs and disbursements of the liquidator in realising the properties. I will give him that opportunity. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

whether equitable mortgage granted over land where certificates of title deposited with lender where mortgage not registered whether lender acted in a way that surrendered its security mortgages

The Code reproduced the Companies Act 1981 (Cth). On and from 1 January 1991, the Australian Securities Commission was taken to have registered Mr Gould as a liquidator under the Corporations Law 1989 (the Law): see s 1278 of the Law. Later Mr Gould became registered as a liquidator under s 1280 of the Corporations Act 2001 (Cth) (the Act). On 26 August 2004, on the application of the Australian Securities and Investments Commission (ASIC), the Companies Auditors and Liquidators Disciplinary Board (CALDB or the Board) determined that Mr Gould had failed to carry out or perform adequately and properly the duties of a liquidator, and the duties or functions required by an Australian law to be carried out or performed by a registered liquidator. Paragraph (d)(ii) refers to the duties or functions of other offices that, under Australian law, may only be carried out or performed by a registered liquidator. The offices of the latter class that are of present relevance are those of an administrator and of an administrator of a deed of company arrangement (DOCA), in each case under Pt 5.3A of the Law (or of the Act). Only a registered liquidator may consent to be appointed, and act, as: liquidator of a company (s 532(1) of the Act); administrator of a company under Pt 5.3A of the Act (s 448B of the Act); administrator of a deed of company arrangement under Pt 5.3A of the Act (s 448B of the Act). The Act commenced on 15 July 2001. All or nearly all of the conduct of Mr Gould that is in question preceded that date. It is therefore the provisions of the Law that are relevant. Nothing turns on this, however, because there is no material difference between the relevant provisions of the Law and those of the Act. The Board deferred consideration of the orders to be made consequential upon its determination. The Board's determination related to Mr Gould's conduct as administrator of, relevantly, Trinbay Pty Limited (subject to deed of company arrangement) (Trinbay) and Sisterella Pty Limited (subject to deed of company arrangement) (Sisterella), and as liquidator of, relevantly, Popwing Pty Limited (in liquidation) (Popwing). As is evident, each of Trinbay and Sisterella was the subject of a DOCA, while Popwing was the subject of a creditors' winding up. (The Board's determination also related to Cresvale Securities Limited and Marble Engineering Products Pty Ltd, which are not presently relevant. ) The proceeding before the Board, and the Board's reasons for its determination, were structured by reference to "Contentions" that appeared in a statement of facts and contentions of ASIC. In its determination of 26 August 2004, the Board designated the various contentions as "Not established", "Withdrawn", "Established" or "Not accepted". On 22 December 2004, the day immediately following the date of the Board's orders, Mr Gould applied to the Administrative Appeals Tribunal (AAT or the Tribunal) for review of the Board's decision. The parties informed me that the Tribunal stayed the operation of the suspension order upon Mr Gould's giving certain undertakings to the Tribunal, and that the stay is still in place pending the determination of these proceedings. Before the AAT, ASIC again filed a statement of facts and contentions (SOFAC). It was dated and filed on 15 March 2005 and had numerous annexures (in quoting from the SOFAC in these reasons, I will omit reference to the annexures). Mr Gould filed a responsive statement of facts and contentions dated 19 February 2008. In its SOFAC, ASIC continued to use the numbering that it had used in its statement of facts and contentions before the Board. The argument before the AAT took place by reference to the numbered Contentions in the SOFAC. For example, there was a contention that Mr Gould had failed to "cap" his remuneration in accordance with guidelines of the Insolvency Practitioners Association of Australia (IPAA) which found expression in Contentions 2.6 in respect of Trinbay, 4.4 in respect of Sisterella, and 6.3 in respect of Popwing. On 12 September 2008, the Tribunal: On 10 October 2008 Mr Gould filed a Notice of Appeal in this Court (NSD 1590 of 2008), purporting to appeal from the Tribunal's decision on questions of law pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) (the Appeal Proceeding). By the time of the hearing, Mr Gould's appeal document was a Further Amended Supplementary Notice of Appeal (FASNA) that was filed in Court on 11 December 2008. The FASNA raised 28 purported questions of law which were grouped by reference to the Contentions to which they related. The FASNA also set out Mr Gould's "Grounds" and seven findings of fact that he asked the Court to make. On the hearing, however, counsel for Mr Gould said that his client pressed only for the first of those findings. ASIC filed a Notice of Contention challenging the Tribunal's dismissals of its Contentions 2.1, 2.11, 6.6 and 6.7A. The Notice of Contention purported to raise questions of law, and, like the FASNA, associated them with particular Contentions in the SOFAC. On 13 November 2008 Mr Gould commenced a separate proceeding in the Court (NSD 1778 of 2008) applying for an order of review and relief in respect of the Tribunal's decision under s 39B of the Judiciary Act 1903 (Cth) (Judiciary Act) (the Review Proceeding) . By consent, I made an order extending the time for the filing of that application to that date. By the time of the hearing, the application in the Review Proceeding was expressed in an amended application that was filed on 10 December 2008. The grounds of review relied on in the amended application were also grouped by reference to the Contentions which were the focus of the purported questions of law raised in the FASNA. In both the Appeal Proceeding and the Review Proceeding, the only active respondent was ASIC. The other respondents submitted to such order as the Court might make, save as to costs. It was explained to me that the purpose of the Review Proceeding was to overcome any problem that might arise if I were to take the view that a purported question of law stated in the FASNA was not a question of law on which the Appeal Proceeding was brought, within the meaning and for the purposes of s 44 of the AAT Act. ASIC did not submit that any of the 28 purported questions of law raised in the FASNA were not truly questions of law on which the Appeal Proceeding was brought. ASIC also did not submit that the Court lacked jurisdiction to entertain the application for relief under s 39B of the Judiciary Act . However, Mr Gould complained that certain purported questions raised in the Notice of Contention were not questions of law. The existence of questions of law goes to the Court's jurisdiction. It will be necessary to return to this issue and the question whether the Review Proceeding overcomes any difficulty in this respect. I have decided to indicate my proposed answers to the questions posed, but not to record my answers to them until the parties had the opportunity to read these reasons and to make submissions on the issues to which I have just referred (see [372] ff below). Before this Court, counsel structured their submissions around grouped Contentions and the associated questions of law, and I will structure my reasons similarly under "CONSIDERATION" below. I will describe the relevant Contentions in the SOFAC and the AAT's reasons in relation to them under "CONSIDERATION" below. The Contentions fall into the following categories: those that the AAT found to be established and that Mr Gould submits on substantive grounds it should not have found established (Contentions 2.6, 2.9, 4.4, 4.6, 6.3, 6.5); those that Mr Gould submits the AAT had no jurisdiction to entertain or ought not to have entertained (Contentions 2.1, 6.5, 6.6 and 6.7A); those that the AAT dismissed and that ASIC contends in its Notice of Contention the AAT should have found established (Contention 2.11 and, again, Contentions 2.1, 6.6 and 6.7A). On 11 August 2000 two of them signed a "circular resolution" appointing Mr Gould as administrator of the company under Pt 5.3A of the Law. The third director signed the resolution on 11 September 2000. On 3 October 2000 Mr Gould provided a written consent to act as administrator of Trinbay: see s 448A of the Law, and on 4 October 2000 he lodged with ASIC a Form 505 signed by him stating that he had been appointed. On 31 October 2000, at the second meeting of Trinbay's creditors, it was resolved that the company execute a DOCA and a resolution was passed relating to Mr Gould's remuneration. I will discuss the Trinbay remuneration resolution in Part A below. On 20 November 2000 the DOCA was executed by Trinbay and Mr Gould. By cl 3.1 of the DOCA Mr Gould was appointed, and agreed to act, as administrator of the DOCA. Clause 4 provided for Mr Gould's remuneration as administrator of the DOCA. It will be noted that all of the events recounted above preceded the commencement of the Act on 15 July 2001, and occurred at a time when the Law was in force. Mr Gould was appointed as administrator of Sisterella on 11 August 1998. The second meeting of Sisterella's creditors was held on 4 September 1998 when the creditors resolved that the company should execute a DOCA, and passed a resolution relating to Mr Gould's remuneration as administrator. I will discuss the Sisterella remuneration resolution in Part A below. On 25 September 1998 Sisterella and Mr Gould executed a DOCA. Clause 3.1 of the DOCA provided that Mr Gould was appointed, and agreed to act, as administrator of the DOCA. Clause 4 of the DOCA provided for his remuneration as administrator of the DOCA. It will be noted that all of the events recounted above preceded the commencement of the Act on 15 July 2001, and occurred at a time when the Law was in force. It will be noted that all of the events recounted above preceded the commencement of the Act on 15 July 2001 and occurred when the Law was in force. Contentions 2.6 and 4.4 were that Mr Gould "failed to cap his remuneration as administrator in accordance with IPAA Guidelines". Contention 6.3 was also that Mr Gould "failed to cap his remuneration as liquidator in accordance with IPAA Guidelines". In the cases of Sisterella and Popwing, ASIC relied on the Capping provision in the IPAA Guide published by the IPAA in 1997 (the Guide). In the case of Trinbay, however, ASIC relied on the Capping provision of the IPAA's Statement of Best Practice --- Remuneration: 1 July 2000 that had effect from 1 July 2000 (the Statement). The terms of the two Capping provisions are set out below. The creditors' resolution related to the remuneration of the liquidator as liquidator generally. It is only the creditors' remuneration resolution of which ASIC complained and with which I am concerned. Trinbay's creditors resolved on 31 October 2000 "that the remuneration of the Administrator be calculated at the [IPAA] rates". In none of the three resolutions was there a statement of a cap or upper limit. Contention 6.3 (Popwing) attracted para (i) of s 1292(2)(d) , whereas Contentions 2.6 (Trinbay) and Contention 4.4 (Sisterella) attracted para (ii) of s 1292(2)(d) (see [4] above). The Law did not specify that a cap was required. In Dean-Willcocks v Companies Auditors and Liquidators Disciplinary Board & Anor (2006) 59 ACSR 698 ; [2006] FCA 1438 ( Dean-Willcocks ), however, Tamberlin J accepted that in determining whether a registered liquidator has failed to carry out or perform "adequately and properly" any duties or functions required by Australian law to be carried out or performed by a registered liquidator for the purposes of s 1292(2)(d)(ii) , it was permissible to test performance of the registered liquidator in the office of administrator against professional standards and codes (at [21]-[34]). Moreover, his Honour held that the concept of the performance of the function of an administrator was wide enough to include the acceptance of appointment to that office (at [32]). Tamberlin J's views must apply a fortiori to s 1292(2)(d)(i) and the office of a liquidator --- a fortiori because an argument, based on the presence of the words "required by an Australian law to be carried out or performed by a registered liquidator" in para (ii) of s 1292(2)(d) , that subsection (2) refers only to legislative prescriptions (an argument rejected by his Honour) is not available in respect of para (i). ASIC's proposition was that by not including a cap or upper limit, Mr Gould had fallen short of a professional standard which was stated in the Capping provisions of the Guide and the Statement. Before the Tribunal ASIC relied on the tender of those documents unsupported by any expert testimony. The Guide included certain Classifications by reference to insolvency experience and Hourly Rates chargeable in respect of persons falling within the various classes. The 'Guidelines' section of the Guide, which took the form of a covering letter to IPAA's members, stated that the Guide consisted of four documents, namely, Guidelines, Explanatory Notes, Rates and Classifications, and that the four should not be read or used in isolation from one another. The Guidelines also stressed that creditors and courts were the final arbiters on the quantum of fees charged by a member, and that the Guide must not be taken by practitioners as an indication of the rates to be used in every instance. The Explanatory Notes observed that the IPAA had first issued a recommended scale in July 1982 which had been revised in 1991. If an amount is not specified or the amount specified is exceeded, it will be necessary for Practitioners to convene a further meeting in order to seek approval for a specified amount or for the additional amount. On 18 June 1999 the IPAA wrote to its members enclosing an updated "Guide to Fees" to have effect from 1 July 1999. This document was not in the Appeal Book and there is a suggestion that it did not alter the Hourly Rates (see [62] below). The IPAA's letter stated that the Guide continued to consist of the same four documents or sections, and again cautioned against using the Guide in every instance. The year 2000 saw a change in the IPAA's policy. On 31 March 2000 the IPAA distributed to its members a document headed "Best Practice Remuneration Charging --- Moving Away From the Scale Guide to Hourly Rates" (Best Practice document), which had been prepared by an IPAA Working Party on Fees for and on behalf of the IPAA National Committee. This Best Practice document stated that it was no longer appropriate for the IPAA to publish the Guide, and that from 1 July 2000 the Guide would be replaced by a Statement of Best Practice, although the Guide might continue to apply for transitional purposes (p 3). The Best Practice document referred to competition law and other considerations that had led to the abandonment of the IPAA's scales of hourly rates. This statement acknowledged that there would or might be circumstances in which it would not be appropriate to include an estimate of the expected level of remuneration. The Best Practice document stated (p 8) that where the administrator seeks to be remunerated by an hourly rate, he or she "is to ensure that creditors are informed as to the amount per hour sought by the Administrator for his/her services and those of the Administrator's staff". The Best Practice document stated (p 9) that where remuneration was to be calculated by reference to a scale of hourly rates, the administrator should ensure that a copy of the scale was sent to creditors prior to any meeting at which the question of remuneration was to be considered by them. Observing that the Guide's Hourly Rates would not be adjusted in the future and that they had not been changed since 1 December 1997, the Best Practice document remarked that they would cease to be realistic or competitive in the future. The Statement characterised the change as being from the IPAA scale to hourly rates determined in accordance with a firm's own internal cost structures having regard to the complexity and demands of each appointment. The Statement said (p 2) that in most cases it is necessary to set out the basis of fees and hourly rates in a document of appointment, a resolution of creditors, or a formal application to a court. The Statement contained the IPAA's recommendation that in most insolvency appointments, the fixing of fees be upon the basis of time spent at the level appropriate to the work performed. Where remuneration is approved prospectively, an upper limit must be included in the resolution of Creditors or Committee of Inspection. Unlike the Statement, however, the Guide had not included an explicit definition of "Capping" or a requirement that the "basis" of the remuneration be shown. It will be noted that the word "Capping" is not used in the text of the Statement's Capping provision, although it is the heading to that provision. There is therefore a question whether the "upper limit" referred to in the text is the same thing as the definition of capping, namely a broad estimate of the cost of a phase that could be relied on by creditors, or whether an arbitrary ceiling was permitted. The Statement recognised (p 3) that in case of pre-1 July 2000 appointments, remuneration might have been agreed based on the former IPAA Scale, and that such an agreement should continue unless varied in the normal course of the administration. Given the uniqueness of each Appointment, the IPAA has no desire to introduce practices that are purely mechanical or prescriptive . In the case of Trinbay, therefore, ASIC relied on the Capping provision of the Statement. On 14 December 2007, the IPAA (now called the IPA) approved a new Code of Professional Practice which contained provisions relating to remuneration but these are not of present relevance. Before the Tribunal Mr Gould adopted written statements that he had made dated 6 February 2008 and 6 March 2008. The statement dated 6 February 2008 contained the following: At the time, it was widely accepted amongst competent fellow professionals that the IPAA guidelines were just that --- guidelines. The extent to which they could or should be followed would all depend upon the actual circumstances of the case in question. I was not aware at the time of anyone in the profession stating that the IPAA guidelines were mandatory in every case and that a failure to follow strictly the IPAA guidelines in every case would amount to a failure to perform adequately and properly the duties of a liquidator or administrator. My approach was to follow the guidelines when I thought it was reasonably practicable and subject to the particular circumstances at hand. I acted on the assumption at the time that it was acceptable to obtain creditors' consent to merely the 'basis' of the remuneration such as the hourly rates at an early stage (such as at the first or second creditors meeting) without providing an estimate of future fees if it was not reasonably practicable to provide such an estimate upon which creditors could rely. In my view this practice is more beneficial for creditors than if the guidelines were interpreted to mean that no early resolution of consent simply to the `basis' of time costing can be made until the practitioner is in a position to estimate his fees. If there was such a prohibition on such resolutions at an early stage, creditors in effect would be unable to control an external administrator's fees at the early stages. The creditors may face an external administrator's claim for fees on a basis which is unacceptable to them. In addition, the liquidator may find his intended charge-out rate is unacceptable after his first period of work. For example, the guidelines refer to it being necessary in most cases to set out the 'basis' of fees and the hourly rate in a document of appointment or resolution of creditors. There is no mention of any mandatory requirement that such document or resolution must also include a cap or estimate of future fees. Such a cap or estimate may be impossible in a resolution or document of appointment as the administrator may know nothing about the matter at that stage. The IPAA also advises its members that it is acceptable to say to creditors "I charge IPAA rates" without making it a mandatory requirement also to tell creditors what the estimate is for future fees. If it is acceptable to tell creditors that an administrator charges IPAA rates without an estimate, it ought to be acceptable for the creditors, if they wish, to resolve to accept those rates as a 'basis' going forward. This provides certainty to all concerned. At the time, it was widely accepted amongst competent fellow professionals that it was acceptable (indeed desirable) professional conduct to permit creditors, if they wished, to pass at the early stages of an external administration, a resolution which merely set out the 'basis' of fees and hourly rates without necessarily also including in the resolution an estimate of future fees. This was common at the time. I never heard of it being suggested that this practice was contrary to the guidelines or was unprofessional conduct, although I did speak to some practitioners who suggested that it was also appropriate (for abundant caution) to give a figure as a 'best guess'. The reason I did not include a cap, being an estimate of fees upon which creditors could rely, in the resolution [was] because the resolution only set out the 'basis' of my fees and on 4 September 1998, being only some three weeks after my appointment, it was not reasonably practicable to provide such an estimate. It was not reasonably practicable at that time to predict with reasonable accuracy the scope and nature of the administration and as a result my fees. I do not find this concession particularly cogent, because Mr Gould explained elsewhere the significance that he attached to the IPAA documents. It is odd that ASIC led no expert evidence before the Tribunal. The Tribunal had before it only the bare IPAA documents, the remuneration resolutions, and Mr Gould's testimony. However, it should be noted that the Tribunal also thought that it was necessary to give due consideration and weight to the decision of the Board as a specialist panel. The Tribunal found it "helpful ... for ease of reference" to extract the sections relevant to "Capping" from the Statement, and not from the Guide (at [118]). In addressing 1(a) the Tribunal noted (at [123]) that the word "should" appeared in the Statement 17 times, while the word "must" appeared in it only three times, all within the section on "Capping". The Tribunal concluded that the use of the word "must" and the expression "it will be necessary" in the section on "Capping" gave the principles to which they referred the force of "a professional standard, rather than merely a principle of best practice" (at [125]). In relation to (1)(b), the Tribunal referred (at [126]ff) to s 449E of the Act, and concluded that a professional standard that obliged an administrator to comply with certain principles relating to the fixing of his or her remuneration was an aspect of the duty or function of an administrator. It may be noted that s 449E(1) of the Law (rather than the Act as referred to by the Tribunal), which was relevant to the administrations of Trinbay and Sisterella, provided, relevantly, that the administrator of a company under administration was entitled to such remuneration as was fixed by a resolution of the company's creditors passed at a meeting convened under s 439A. In respect of a voluntary winding up, such as that of Popwing, s 499(3) of the Law provided, relevantly, that the creditors might fix the remuneration to be paid to the liquidator. an hourly rate) and a specified amount (e.g. the fee calculated on that basis in respect of a phase of work). That expectation then flows into the second sentence, which by its use of the word "must" establishes a professional standard that applies to both the basis and the amount of the fee. The Tribunal then said (at [132]) that the second sentence of the first paragraph meant that if the approval was sought to determine a fee in advance, a broad estimate on which creditors might rely must be included in the resolution, and that if this was not possible prospective approval was not allowed. The Tribunal considered (at [133]) that the second paragraph of the section, by its use of the expression "it will be necessary", also set a professional standard. As there is always an amount specified in a resolution that retrospectively approves a fee, that can only be a reference to a situation in which the basis of a fee is approved prospectively, but not its amount. In such circumstances, the paragraph says that approval of a specified amount must be sought retrospectively. In other words, a resolution that fixes only the basis of an administrator's fee is not a resolution that approves the amount of the fee, which must still be approved retrospectively. The Tribunal thought that this question was resolved by the fact that according to the evidence no other approval was sought or given. It was clear, therefore, according to the Tribunal, that the original resolution was intended to determine the amount of the fee, and that Mr Gould had failed to comply with the requirement that a broad estimate on which creditors might rely be included in the resolution. The Tribunal therefore concluded (at [137]) that Contention 2.6 (Trinbay) was established. The Tribunal considered (at [138]) that the circumstances relating to Sisterella were "essentially the same as those in Contention 2.6", with the result that Contention 4.4 relating to Sisterella was also established. However, the Tribunal's close textual analysis of the Capping provision of the Statement cannot be assumed to be applicable to that of the Guide. In relation to Contention 6.3, the Tribunal thought (at [139]) that the circumstances were "also essentially the same as those in Contention 2.6" except for the fact that Popwing was in liquidation rather than in administration. Again, the close textual analysis of the Capping provision of the Statement cannot be assumed to be applicable to that of the Guide. There was an additional submission by Mr Gould in relation to Popwing. This was that because the total estimated realisable assets in the liquidation had been reported to creditors and was less than any reasonable estimate of Mr Gould's future fees, a cap was effectively in place (at [139]). The Tribunal noted Mr Gould's submission that the Statement's indication that the IPAA "has no desire to introduce practices that are purely mechanical or prescriptive" supported the taking of a pragmatic approach to the capping requirement (at [140]). First, compliance achieved by that path is indirect, opaque and accidental, rather than direct, open and intended. Second, it raises the question of where the line is to be drawn between accidental non-compliance that is acceptable and accidental non-compliance that is not acceptable. Creditors need a cap to be explicit so that they can focus on it in its own right and deliberately decide whether to approve it or not. The Tribunal concluded (at [143]) that Contention 6.3 relating to Popwing was also established. In the result, according to the Tribunal (at [144]), Mr Gould had failed to carry out or perform adequately and properly the duties of a liquidator or an administrator, and infringed ss 1292(2)(d)(i) and (ii) of the Act. In the cases of Sisterella and Popwing, the remuneration resolutions were passed well before the Statement took effect on 1 July 2000. It was only the Trinbay remuneration resolution that was passed after that date. In the case of Sisterella, Contention 4.4 was that Mr Gould "failed to cap his remuneration as administrator in accordance with IPAA guidelines". In the case of Popwing, Contention 6.3 was expressed identically except that the word "liquidator" replaced the word "administrator". The "Capping" provision of the Guide was set out at [54] above. I agree with the Tribunal's statement (made in relation to the Statement) that the expressions "upper limit" and "cap" are synonymous. Accordingly, Contentions 4.4 and 6.3 fit the Guide well enough, and should be understood to refer to a failure to include an upper limit in the remuneration resolutions. The definition of "Capping" and the "Capping" provision of the Statement were set out at [65] and [67] above. As noted at [67], the word "Capping" is not used in the Capping provision although that word constitutes its heading. If it were not for the definition and heading, my first impression based on the express terms of the Capping provision alone would have been that the "upper limit" meant simply, and without qualification, a "cap" or "ceiling", including one fixed arbitrarily. But arguably the upper limit referred to in the Capping provision of the Statement includes the further feature that the amount fixed must be a broad estimate of any phase of the work approved by the creditors. In contrast, there was no suggestion in the express terms of the Capping provision of the Guide that the upper limit must be such an estimate: at least so far as the express terms of that provision go, the upper limit signified any amount selected by the registered liquidator above which there was no approval in place. None of the remuneration resolutions included a cap or upper limit according to any meaning that those terms might bear. Mr Gould's submissions raise three issues. First, did ASIC prove the existence of a "professional standard" that made it mandatory for a cap to be included in certain circumstances? Second, if so, did those circumstances, on the proper construction of the Capping provisions and the remuneration resolutions, exist in the present cases? Third, what, if any, was the effect of the evidence led by Mr Gould? I will address these issues in turn. Moreover, CALDB relied on evidence of an expert (Mr Lombe). The words "or is otherwise not a fit and proper person to remain registered as a liquidator" provide an alternative to the criteria that precede in subparas (i) and (ii). Paragraph (d) must, however, be read as a whole. The word "otherwise" shows that the provision takes it for granted that a failure of the kind described in (1) will, without more, demonstrate that the person is not a fit and proper person to remain registered as a liquidator. Consistently with this understanding, the expression "the duties of a liquidator" directs attention, not to a specific duty or even to two or more specific duties, but to the duties in general of a liquidator. Of course, whether a registered liquidator has failed to perform adequately and properly the duties in general of a liquidator will be decided by reference to his or her failure to perform specific duties. Both limbs (1) and (2) call for an exercise of assessment, evaluation and judgment in relation to the registered liquidator's conduct. It is not enough, for example, in a mechanical and arithmetical way, simply to seek to identify a minimum of two failures to perform adequately and properly particular duties. Whether the Capping provisions in the Guide and the Statement were "professional standards" of the kind to which Tamberlin J was referring in Dean-Willcocks , depends on whether they purported to establish levels of "adequate" and "proper" performance that a registered liquidator must attain at peril of enlivening criterion (1) or criterion (2) above --- a serious matter. I do not think that they did. Two considerations lead me to this conclusion. First, neither Capping provision was contained in a document that purported to lay down standards of professional conduct of that kind. Second, the ambiguous and loose language of the Capping provisions themselves is not what one would expect of such a standard. The Guide purported to provide guidance, and stated that it was not to be used in every instance. These features characterised the Guide as a whole. There is no reason to exclude from them the Capping provision. I turn now to the language of the Guide's Capping provision. The expression "approved prospectively" occurred in the Capping provision of the Guide (and of the Statement). The expression gave rise to debate on the hearing. I agree with ASIC that there was an approval of remuneration prospectively in the remuneration resolutions in the present three cases. I reach this view as a matter of construction of those resolutions and without reference to the absence of any subsequent approval. Accordingly, the obligation to include an upper limit was enlivened. There are, however, other problems with the terms of the Capping provisions. Assume that remuneration was approved in advance in the form of a lump sum. What, in those circumstances, is the significance of the associated obligation to include an "upper limit"? Is the "specified amount" requirement of the Guide's Capping provision satisfied by the statement of an amount per hour? What is the connection between the first part of the first sentence and the second part: between the exhortation to include a specified amount and the obligation, in those cases where remuneration is approved prospectively, to include an upper limit? The second sentence begins by assuming that an amount may not be specified or that an amount specified may be exceeded. Does this mean that it is contemplated that an upper limit also may not be included, notwithstanding the use of the word "must"? No doubt a professional standard of the kind contemplated by Tamberlin J in Dean-Willcocks may be attended by ambiguity. Moreover, as indicated above, I accept that in the present cases remuneration was approved prospectively. However, the loose language and uncertainty of the Capping provision of the Guide suggests that it was not intended by the IPAA to be a professional standard in the sense described. The Statement likewise does not establish a professional standard in that sense. First, it is a Statement of "Best Practice", not of a minimum required. As the "Conclusion" makes clear, the Statement was not intended to be prescriptive (see [69] above). Secondly, there are again certain ambiguities touching the Capping provision. I referred to two of these at [67] and [107] above. Whereas the Capping provision in the Guide predicated a "resolution for remuneration", that in the Statement predicates a "resolution for approval of remuneration". As in the Guide, it is unclear what the "specified amount" is to be a specified amount of. As in the case of the Guide, it is unclear whether the second paragraph signifies that an upper limit need not be included, notwithstanding the use of the word "must". The ambiguities support the view that, as in the case of the Guide, the IPAA did not intend the Capping provision of the Statement to be a professional standard in the sense described. Mr Gould did not include an upper limit as required by the Capping provision of the Guide or the Statement. He also calls in aid a professional standard. This is a Code of Professional Conduct --- Professional Statement F.6 issued in September 1997 jointly by the Australian Society of Certified Practising Accountants and the Institute of Chartered Accountants in Australia. His evidence in cross-examination before the Tribunal was that the "overarching consideration" was that a cap must be an amount that creditors could reasonably rely on, and that in the case of these three companies there were a number of imponderables, including the effect of litigation that might continue or commence, that made it impossible for Mr Gould to give a reliable estimate. At one stage Mr Gould said that while he could not have given a "hard and fast cap" he could have given an estimate expressed to be subject to a warning that it might be unreliable because of the uncertainty and possible "blow out" associated with litigation. Mr Gould also said that he preferred to work at hourly rates and came from a culture in which a registered liquidator charged for his or her time on an hourly basis. Mr Gould denied that he could have included a non-misleading cap, but the Tribunal did not find his evidence satisfactory and referred to inconsistencies in it. No error of law is shown in the Tribunal's failing to be persuaded by Mr Gould's evidence that to state a cap would have been misleading. Contention 2.9 related to Trinbay and Contention 4.6 to Sisterella. Both companies were the subject of DOCAs and it follows that it was para (ii) rather than para (i) of s 1292(2)(d) that was applicable. (2) Until a deed of company arrangement terminates, the company must set out, in every public document, and in every negotiable instrument, of the company, after the company's name where it first appears, the expression ("subject to deed of company arrangement"). (3) An offence based on sub-section (1) or (2) is an offence of strict liability. (ii) Mr Gould wrote a letter dated 19 February 2001 to Mr Nick Murray of Jigsaw Entertainment Pty Limited (Jigsaw) showing "Trinbay Pty Ltd (Administrator Appointed)" rather than "Trinbay Pty Ltd (subject to deed of company arrangement)". (iii) Mr Gould wrote a letter dated 2 April 2003 to the Australian Taxation Office (ATO) showing in two places "Trinbay Pty Ltd (Administrator Appointed)" rather than "Trinbay Pty Ltd (subject to deed of company arrangement)". (ii) Items of correspondence referring to the company as "Sisterella Pty Limited (Administrator Appointed)" rather than "Sisterella Pty Limited (subject to deed of company arrangement)". The Tribunal recorded (at [150]) that in relation to Sisterella "the items of correspondence" on which ASIC relied were: The Tribunal noted that in his oral evidence, Mr Gould said that he did not have any separate company letterhead made up, and that he corresponded in relation to each company on his own letterhead. The Tribunal also noted (at [152]) that before the Board, Mr Gould had admitted that some correspondence was incorrectly titled "Trinbay Pty Limited (Administrator Appointed)" rather than "Trinbay Pty Limited (subject to deed of company arrangement)". Mr Gould submitted to the Tribunal that neither bank account was a public document but a document of the bank, and that no actual cheques had been relied upon. He submitted that the letters to which ASIC pointed were his own and did not purport to have been written on behalf of either company and were not part of a process of a business transaction or contract. The Tribunal accepted Mr Gould's submission in relation to the cheques, saying that in order to establish the statutory offence, which was one of strict liability, at least one cheque bearing the incorrect description would need to be in evidence (at [154]). The Tribunal concluded (at [155]), however, that each of the letters was a "business letter" within para (c) of s 88(A)(1). The Tribunal said that although Mr Gould "ostensibly signed them as administrator, as a matter of substantive content they purported to be written on behalf of the company, relating directly to its dealings and tax liabilities" (at [156]). Paragraphs [157] --- [159] of the Tribunal's reasons were as follows: The applicant contended that, being signed by the applicant as administrator, they did not "purport" to be "signed by or on behalf of the company". That presupposes that the two capacities are mutually exclusive, in that a person signing a document as administrator cannot also be signing or issuing it on behalf of the corporation. No authority for that proposition was cited and we do not think it is self-evidently sound. In any event we consider that in substance they purported to be issued on behalf of the respective companies. The applicant's oral evidence referred to above did not relate specifically to the documents in question, but provides some general confirmation that at least on some occasions the applicant incorrectly titled some correspondence. The Tribunal therefore concluded (at [160]) that except in relation to the bank accounts and cheques, Contentions 2.9 and 4.6 were made out, and that by contravening s 450E(2) Mr Gould had failed to carry out or perform adequately and properly the duties described in s 1292(2)(d)(ii) of the Act. The Tribunal added: "At the same time, we do not consider the failure to be a serious one". It is only Mr Gould's appeal relating to the letters that needs to be considered. Subsections (1) and (2) of s 450E create offences of strict liability by the company under administration or the company subject to a DOCA as the case may be. Mr Gould did not suggest, however, that an administrator's conduct would not fall within s 1292(2)(d)(ii) if he or she caused the company to contravene s 450E(1) or (2) in respect of business letters of the company. All of the letters were written after the relevant DOCA had been executed. It may be accepted immediately that they erroneously stated "(administrator appointed)" and should have stated "(subject to deed of company arrangement)". This, however, does not dictate the answers to be given to Questions 9 to 11 above. The answer turned on the question whether examination papers fell within s 88A of the Act. However, it does seem to me that the exercise in statutory interpretation is to look to see what is ejusdem generis with business letter, statement of account, invoice, receipt etc. All these documents are documents used in trade or commerce. An examination paper or a book or other writings which are intellectual property would seem to me to be in a different class. He said that if the document was non-contractual, the ACN number did not have to appear, because the purpose of s 219 appeared to be to make it clear that when a person was dealing with a company, exactly which company in perhaps a group of similarly named companies or companies using similar trading names, was the one with which the person was dealing. In my opinion, the purpose of s 450E(2) is generally similar: to make it clear to persons who are having or are contemplating having business dealings with the company or extending credit to it, that they are or will be dealing with a company that is subject to a DOCA. All five letters concerned were addressed to creditors of the particular company, Sisterella or Trinbay, that was subject to a DOCA. The letter to Mr Murray of Jigsaw, a creditor of Trinbay, discussed the Trinbay DOCA. The letter to the ATO was dated some two years and four months after the date of the Trinbay DOCA. The letter informed the ATO that Mr Gould had not been able to procure litigation funding, that there was no prospect of recovery of funds, that the administration had been concluded, and that it was likely that Trinbay would be deregistered. In view of the lapse of time and the content of the letter, the ATO must have known that Mr Gould was a DOCA administrator. The letter to Ms Platford of Gilbert and Tobin, who represented a creditor of Sisterella, namely, RG Capital Theatrical Productions Pty Ltd, said that the letter was enclosing a copy of the Sisterella DOCA as Ms Platford had previously requested. The letter to Mr Selinger referred to "the terms of the Administration agreed to by creditors", and a summons served on him and Mr Jacobsen by the ATO "concerning the non-payment of Group Tax". Mr Selinger and Mr Jacobsen were present at the meeting of creditors on 4 September 1998 at which the resolution that Sisterella should execute a DOCA was passed. In all of these circumstances and as a director of Sisterella, Mr Selinger must have known that Sisterella was subject to a DOCA. Finally, the letter to Hardy referred to a fax from that company dated 10 November 2000 advised that there had been no correspondence of substance concerning Sisterella since 1998, and further advised that there was "no likelihood of any further dividend being paid by the company". The letter was written more than two years after Sisterella executed the DOCA on 25 September 1998. I infer from the lapse of time and the content of the letter that Hardy understood that Sisterella had executed a DOCA. The fact that the creditors to whom the letters were addressed knew that the company was the subject of a DOCA, as I infer that they did, does not, of course, require a conclusion that the letters were not "business letters". It is, however, relevant to the proper characterisation of the letters. All five letters were addressed to pre-existing creditors who were not having or contemplating having business dealings with the company, and related to the progress of what they must have understood was a DOCA administration. The ATO had never had business dealings with Trinbay and the business dealings that the other creditors may have had with Trinbay or Sisterella had long since ended. In my opinion the letters were not "business letters" of either Trinbay or Sisterella. A cheque drawn by Mr Gould on his office account would not be a negotiable instrument "of" the company. Similarly, a letter written by Mr Gould on his letterhead would not ordinarily be a document "of" the company, although it might relate to the company. The relevant expression used in s 450E(2)(d) is "... of, or purporting to be signed or issued by or on behalf of". The same observations, however, apply. The letters were all on the letterhead of "Vanda R Gould ... Chartered Accountant" and were signed by Mr Gould above the word "Administrator". They were all addressed to creditors and informed them in relation to aspects of the administration. In each case, the letterhead and the manner of signature by Mr Gould showed that he was the writer, not the company through him. A letter on the company's letterhead on which the form of signature was the name of the company with a subscription by Mr Gould as administrator would clearly be different. I need not discuss intermediate hypothetical sets of circumstances. In my opinion the letters were not letters "of" the company concerned (Sisterella or Trinbay, as the case may be) and did not purport to be signed or issued by or on behalf of the company. The fact that Mr Gould designated himself in the letters as "Administrator" does not persuade me against this conclusion. Mr Gould was thereby merely informing the addressee of the capacity in which he, Mr Gould, was entitled to write and of the reason why the addressee should regard the information conveyed by the letter as reliable. Question 10: No. Question 11: Yes. 200002 was presented in the sum of $120. There was no payment voucher kept on file which detailed what this payment related to, however in Mr Gould's Form 524 for the period 4 November 1998 to 4 May 1999 the payment of $120 was described as a payment to the "Australian Securities & Investments Commission" and its nature was "Lodgement Fees". A late lodgement fee is not an "expense properly incurred" within the meaning of section 556(1)(a). Contention 6.5 assumed that Mr Gould was required to lodge within seven days of the passing of the creditors' resolution for a voluntary winding up, that is, by 11 November 1998, a Notification of the Resolution to Wind Up a Company (Form 205) and the Directors' Report as to Affairs (Form 507). The Tribunal noted (at [207]) that Mr Gould did not dispute that it was his responsibility to lodge the forms on time, and did not claim that the creditors had done anything to cause them to be lodged late. There was no discussion of the legislative provisions or factual circumstances that made Mr Gould, as liquidator, responsible to lodge the Form 205 and the Form 507. Reference may be made in passing to s 491(2) and ss 497(5) and (7) of the Law. It was not contested before me that Mr Gould was responsible to lodge both Forms with ASIC ("lodge" is the word that was used in all of the relevant provisions of the Law and was defined in s 9 of the Law to mean, relevantly, to lodge with ASIC). I proceed accordingly. Evidence was led by Mr Gould that the two documents were posted in the Sydney Central Business District (CBD) to ASIC's offices also within the CBD on 9 November 1998, and that the scheduled delivery date in such a case was the next business day after posting. That was 10 November 1998 --- the day prior to the last day for lodgement. On 26 November 1998 ASIC issued to Mr Gould two invoices, each for sixty dollars, in respect of late fees on lodgement of the documents. Each invoice stated "Lodged On: 12/11/1998". Each invoice also stated the same lodgement number --- 14036591. The same lodgement number suggests that they were received at ASIC together. Please be advised that the documents were signed on 4 November 1998 and were sent by mail on 9 November 1998 so that they would reach to [sic] your office by the due date. The letter is equally open to the interpretation that he regarded the late fees as expenses of the liquidation and was seeking the waiver for the benefit of creditors. ASIC has formed this view based on an interpretation of s 1274(8) of the Corporations Law and also supported by the Full Federal Court decision of Angus Fire Armour (Aust) Pty Ltd v Collector of Customs [1988] FCA 339 ; (1988) 19 FCR 477. Accordingly, in this matter the documents attracting the late fees, were lodged on 12 November, 1998. I will refer to the letter as the "Steinkellner letter". The Appeal Book contains a copy of the Form 507 (and annexed Form 507A) from ASIC's records, but no copy of the Form 502. The Form 507 bore a stamped imprint "IPC 12 NOV 1998" but nothing was made of this in the Tribunal's reasons for decision or in the parties' submissions to this Court. Mr Gould's account (Form 524) under s 539(1) of the Law for the period 4 November 1998 to 4 May 1999 and a bank statement in respect of the account of Trinbay in liquidation shows that he paid the total of $120.00 on 5 February 1999 out of the liquidation account and charged the amount as an expense of the liquidation. His case is that he was entitled to do so. Section 556(1) of the Law provided that subject to Div 6 of Pt 5.6 of the Law, in the winding up of a company the debts and claims listed in the subsection must be paid in priority to all other unsecured debts and claims. The expression "relevant authority" was defined in s 556(2) to mean, in relation to a company, relevantly, a liquidator of the company. This in my experience is a most unusual occurrence and I have not struck it happening before. It remains a possibility that ASIC failed to log correctly the actual date of delivery. Based upon my experience in the industry I say it is standard practice in the industry, and regarded as acceptable conduct by fellow competent professionals at the time, to post forms that are required to be lodged. I know of no guideline or statement for the industry that requires all such forms to be hand delivered by the liquidator or his staff or to be delivered by some other method. The issue would also not arise if ASIC waived the late fee in the case of the post going astray. The company stills [sic] owes me outstanding fees which it has never been in a position to pay. He insisted that neither he nor his staff were to blame, although he accepted that the ultimate responsibility for lodgement on time rested with him as the liquidator. Mr Gould also said that although he debited the account of Popwing in liquidation with the late fees, ultimately he bore them personally because the company did not have the funds with which to pay the fees. Mr Gould's position as it emerged in cross-examination was that he accepted that a liquidator should personally bear a fine or late fee if it was incurred by reason of the conduct of the liquidator or his or her staff. The Tribunal first dealt with Mr Gould's argument that there was no proof that the documents had in fact been lodged late. The Tribunal thought that there was such evidence in the form of the two invoices and the Steinkellner letter. The Tribunal said that if it were bound by the laws of evidence, which it was not, those documents would be admissible as business records under s 48(4) of the Evidence Act 1995 (Cth) (an erroneous reference --- apparently the Tribunal intended to refer to s 69). The Tribunal described the invoices and the Steinkellner letter as "contemporaneous documents of probative value" (at [217]). The Tribunal added that the Forms were lodged a decade ago and that it would be unreasonable to expect ASIC to adduce direct evidence, such as its documents receipt log or the documents themselves. The Tribunal observed that in the normal course of commercial and government business, the original documents might well have been archived long ago and might be difficult, if not impossible, to retrieve. The Tribunal rejected a submission made by Mr Gould in reliance on Ah Toy v Registrar of Companies (1986) 10 FCR 356. In that case, at 381, a Full Court of this Court accepted that circumstances could arise in which it would be accurate to characterise a debit to an estate of penalty fees as a "fraud on the creditors", but considered that that would be so only where the penalty fees had been incurred at "as a result of the neglect or omission of the liquidator" (at 381). In the case before their Honours there was no evidence as to the circumstances under which the penalty fees had become payable: the fault may have lain with the liquidator or with another party or "may have been caused by circumstances outside the control of the liquidator and his agents" (at 381). Their Honours observed that a finding of fraud, especially against a professional person in relation to his or her professional activities, should be made only upon the basis of clear evidence and after the person concerned has had the opportunity to deal with the matter. The Tribunal distinguished Ah Toy . It considered that the Full Court was directing its attention to the trial judge's finding that the liquidator's charging the company's estate with a total of $127 for late filing fees was "most reprehensible" and "a fraud on the creditors, small but important, as indicating serious impropriety" (at 380). That would depend on whose fault it was that the documents were lodged late. In this case it can only have been the applicant's. The Tribunal recorded Mr Gould's evidence that it was widely regarded as competent practice to mail forms to ASIC, that it was extraordinary for that course to fail and that he had not known of a prior occasion when the mail had "failed". The Tribunal also noted Mr Gould's evidence that to require a different mode of delivery in all cases would increase the cost to creditors, for no real benefit in nearly all cases. The Tribunal, however, saw the question as being not one of requiring a different mode of delivery, but one of ensuring a sufficient margin of time to allow for any risk of mail delays. This was necessary, according to the Tribunal, in order for a liquidator "to perform the work with reasonable care and skill and in an efficient and economical way" (at [222]), citing Adsett v Berlouis (1992) 37 FCR 201 ( Adsett ) at 212. The Tribunal concluded that the late lodgement was the fault of Mr Gould or his staff. It described that fault as not a serious one, but said that the gravamen of Contention 6.5 was not the late posting but the charging of the late fee as an expense of the liquidation (at [223]). A separate submission made by Mr Gould was, according the Tribunal, based on Mr Gould's right of lien. There were inadequate funds in the liquidation to pay all of Mr Gould's remuneration and expenses, and he was owed many thousands of dollars in fees. His argument was that since the entire fund at the time was payable to him, the $120 was, in effect, paid to him because he would have been entitled at the time to transfer the entire fund to himself for work performed. It followed, according to Mr Gould's submission, that his choice to pay $120 of the funds to ASIC rather than to himself could not be properly the subject of criticism. The Tribunal noted that Mr Gould's lien argument was not raised prior to the hearing (at [225]). The Tribunal assumed that Mr Gould was entitled to a lien. The Tribunal noted (at [226]) that liens are of different kinds, the incidents of which are different, and that Mr Gould had made no submissions about the incidents of the particular lien that he claimed. Nor, according to the Tribunal did he claim that by using the company's funds at that stage of the liquidation, he was doing no more than exercising his rights under the lien. His submissions seemed to the Tribunal to be directed at negating any possible inference of fraud or malfeasance, rather than establishing that he had a legal right to pay the late fees out of the creditors' funds. The Tribunal said (at [227]) that it did not think the facts warranted a finding of fraud, but nor did it think that Mr Gould was justified in treating the expense as a reasonable expense of the liquidation or as otherwise proper. Indeed, the Tribunal thought that the reasoning in Ah Toy strongly suggested the opposite. The Tribunal also cited various passages from Adsett , and implied that the expenditure on the late fees was not "reasonable", was not "prudently and reasonably incurred", and was not incurred "conformably with the duty to perform the work with reasonable care and skill and in an efficient and economical way" (at [228]). His endeavours to obtain waiver of the fees suggest that he knew that he was personally responsible for them. And describing the payment as "Lodgement fees" in the May 1999 Form 524 was disingenuous at best. The applicant plainly knew he had something to hide and tried to hide it. In relation to Mr Gould's use of the expression "Lodgement fees" in the form 524 for the period 4 November 1998 to 4 May 1999, it was not put to Mr Gould that he had chosen that expression rather than, for example, "Late fees", in order to hide the true character of the payments. In the absence of Mr Gould's being given an opportunity to deal with such a serious allegation, the Tribunal should not have made the finding that Mr Gould deliberately chose the description Lodgement fees in order to conceal the fact that he was treating late fees as an expense of the liquidation. The finding of deliberate concealment was one of fraud, notwithstanding the Tribunal's express disavowal of any finding of fraud in the opening sentence. In the present respect, the Tribunal failed to accord Mr Gould the procedural fairness to which he was entitled. As it happens, the Tribunal's gratuitous finding of fraudulent concealment does not affect the result, for the reasons given below. (2) If so, must Mr Gould bear responsibility for the associated late fees? (3) If so, what is the effect, if any, of the fact that Popwing was so insolvent that some thousands of dollars of Mr Gould's fees as liquidator were not able to be paid to him out of the funds of the company and that he had a lien over those funds for his fees? (1) Was the Tribunal entitled to find that ASIC received the two forms on 12 November 1998 --- one day outside the seven day time limit? While both the invoices and the Steinkellner letter were business records within s 69(1) of the Evidence Act , there may be a question whether the representation as to date of lodgement contained in them satisfied s 69(2) of that Act. Evidence was not led to show how either the person who prepared the invoices or Mr Steinkellner learned that the documents had been received by ASIC on 12 November 1998. No doubt they obtained that information from another officer or from a business record within ASIC. Whether s 69(2) was satisfied does not matter because s 33(1)(c) of the AAT Act permitted the Tribunal to inform itself as to the date of receipt from the two invoices and the Steinkellner letter. The verb "to lodge", in its relevant sense, means "to place, deposit" ( OED ) or "to put or deposit" or "to lay (information, a complaint, etc.) before a court or the like" ( Macquarie ). The shorter OED gives the example: "To deposit in court or with an official a formal statement of (an information, complaint, objection, etc.)". Mr Gould did not lodge the documents with ASIC before they were received by ASIC, even if he can be said to have lodged them then. Lodgement with ASIC is a physical event that takes place at the premises of ASIC. The posting of a document to ASIC is not a lodgement of the document with ASIC. Apparently ASIC's practice is to accept documents that are posted to it and received by it as being "lodged" on the date of receipt. This practice does not, however, resolve the question whether Mr Gould was entitled to treat the late fees as expenses of the liquidation. If Mr Gould chose to lodge through an agent, whoever that agent might be, any late lodgement by the agent at the premises of ASIC was a late lodgement there by Mr Gould. Lodgement is not effected by delivery by Mr Gould to his agent. It is arguable that Mr Gould did not "lodge" the documents through the agency of Australia Post at all, even at the time when ASIC received them. I infer that the envelope enclosing the documents was delivered by Australia Post with other mail addressed to ASIC, or was held by Australia Post in a post office box for collection by ASIC. It may be a concession by ASIC not to insist upon a physical depositing by Mr Gould or his agent at the appropriate place within the offices of ASIC during normal business hours. Even on the assumption favourable to Mr Gould that he was entitled to use Australia Post as his agent to lodge the documents and that delivery by Australia Post to ASIC was "lodgement", he failed to lodge them in time, bore responsibility for their lateness, and was not entitled to charge the late fees as an expense of the liquidation. Mr Gould submitted that the suggestion that a liquidator or the liquidator's staff must lodge documents personally at the office of ASIC is impracticable and would work to the disadvantage of creditors. This misses the point. It may be accepted that such a practice would result in a liquidator charging additional fees to the liquidation and that this would be to no good purpose in most cases. If other liquidators followed the practice of posting, it may be assumed that because of their lower costs they would be in a better position to gain work than a liquidator whose staff attended at ASIC's office to lodge. They would have to accept, however, that on those occasions when postal delays resulted in late lodgement, the consequential late fee would be a business expense that they would have to bear. Let it be assumed that postage delays are so infrequent that, generally speaking, liquidators reasonably follow the practice of posting documents to ASIC, and that they and the company's creditors have an interest in their doing so. Nonetheless, when there is a postage delay that results in a document being received by ASIC out of time, it is the liquidator who must pay the late fee. This is not because posting was an unreasonable risk for the liquidator to take, but because the statutory obligation is to "lodge" the document with ASIC. Mr Gould stated that Popwing was an Unfunded Liquidation and had insufficient funds to pay for the convening of meetings of creditors. Hence, in truth, there were no funds in the liquidation at all. However, I did keep some of the funds owed to me in the bank account to meet necessary and required disbursements, such as future filing fees or legal fees. This was for good order, not because the monies were not properly payable to me. Upon Sisterella's being placed into administration, Popwing's only asset was the amount of any dividend it might derive from that administration. It transpired that it did receive such a dividend in the sum of $6,953. Mr Gould negotiated for a related party to pay $7,500 into Popwing's account on 5 November 1998 to cover "the very initial costs of the liquidation and of putting the company into liquidation" (para 160). That was the deposit with which the bank account of Popwing Pty Ltd (in liquidation) was opened. There was a credit balance of $7,950.39 in that account on 5 February 1999 out of which the late fees of $120 were paid to ASIC on that date. In his statement Mr Gould said that of the $7,500, a sum of $5,000 was for pre-liquidation fees and that the balance of $2,500 was for post-liquidation fees for which that sum would be grossly inadequate (para 160). Mr Gould also said that the sum of $7,500 "was not an asset of the company, but was a contribution by a third party to enable [Mr Gould] to commence the liquidation" (para 162). Mr Gould said that if he had been asked at the time of his appointment, he would have estimated his fees at $20,000 (para 166). Mr Gould's first invoice for his fees as disbursements in the liquidation was dated 10 May 1999 and was for $8,129.57. Mr Gould's total rendered fees and expenses were $21,152.47 to August 2002 (para 170). He asserted that he lost over $7,330 on the Popwing liquidation up to August 2002. Mr Gould said that he accepted appointment as liquidator of Popwing "out of a sense of public service and for the benefit of the parties" because it was more efficient for him to undertake the work because (a) he was the DOCA administrator of Sisterella, and (b) he expected, as it transpired wrongly, that the work involved would be minimal (para 161). While this has been accepted as the general position, Young J stated in Re Biposo Pty Ltd (No 4) [Unreported, Supreme Court, NSW, 12 December 1995] that it is an over-simplification to say that there was a lien over all of the moneys which liquidators have in their possession. His Honour went on to say that that is the normal situation, but the lien only arose if a court of equity felt that it was conscionable that there be a lien. That submission was raised for the first time in six lines in Mr Gould's written submissions before the Tribunal (para 161). While the Tribunal did not deal with the submission at length, it made it clear that the reason why the lien submission was not accepted was that the late fees were not a proper expense of the liquidation. I agree that they were not and that any lien that Mr Gould had did not extend to cover the $120. Moreover, when Mr Gould paid the $120 out of Popwing's liquidation account on 5 February 1999, he was not appropriating to himself money in part payment of fees then due to him. That he was not doing so is shown by the fact that neither in his later invoice nor elsewhere did he give credit for the sum of $120 as a payment of his fees. Nor was he preserving the fund as security for whatever fees might ultimately prove to be payable to him. At that time he was simply using money that he held for company purposes to pay $120 that he was personally liable to pay. His doing so cannot be justified retrospectively by a reconstruction of events or by an argument based on some concept of economic equivalence. Lengthy particulars were given. They referred to ss 539(1) and 1308(4), (5) and (6) of the Law, then asserted over eight detailed paragraphs that statements in eight Forms 524 lodged by Mr Gould covering eight successive six month periods (over all from 4 November 1998 to 4 November 2002) in relation to the liquidation of Popwing were false or misleading in material particulars. Contention 6.7A was therefore closely related to Contention 6.6. Indeed, it seems to have been treated as an aspect of Contention 6.6 with which it stood or fell. In each case, section 6b of the Form 524 stated under the heading "statement of position in winding up" that the estimated amount available for unsecured creditors was $1,246,306, whereas it was not disputed that "nil" should have been shown. Further down in the same section in a table headed "details of creditors' claims" against "as per statement of affairs", five creditors (not identified) were said to be owed $1,246,306. Therefore, on its face section 6b suggested that there were five creditors of Popwing and that they would each receive 100 cents in the dollar. The Tribunal concluded (at [244]) that Contentions 6.6 and 6.7A were not established and that no contravention of s 1308(4) was made out because the creditors who would have had an interest in the Forms 524 knew the relevant facts and could not have been misled. This conclusion was the subject of ASIC's Notice of Contention which is addressed below. In the FASNA, Mr Gould raises the question whether the Tribunal was required to dismiss Contentions 6.6 and 6.7A on pleading and evidentiary grounds. Because Contentions 6.6 and 6.7A also feature in the Notice of Contention discussed below, I will give a detailed account of the Tribunal's treatment of them. The AAT recorded that Mr Gould had taken the position that he was unable to reply to ASIC's contentions as the particulars did not specify the "reasonable steps" that he had been allegedly required to take in order to ensure that the Forms 524 contained no false or misleading information. In his statement that was before the Tribunal, Mr Gould said that his practice was to have Ms Tse or Ms Cheng present to him Forms 524 along with their workings and other papers which he would review and discuss with them. He added that on the basis of his experience it was standard industry practice for administrators or liquidators to delegate the task of completing Forms 524, maintaining cash books, and performing bank reconciliations to their staff, and only to review their work. He said that such a practice was widely regarded by competent fellow professionals as constituting acceptable or competent professional conduct, and that in most cases any greater level of supervision would result in needless duplication of work and greater fees being incurred. Before the Board, Mr Gould conceded that he had been at fault for not having picked up the error but before the Tribunal he denied that the reason was that he was not paying attention to the Forms 524. In cross-examination before the Tribunal Mr Gould tacitly adopted evidence that he had given before the Board that he had instructed Ms Tse to keep the cost of all work to a minimum and that he had been "too heavy" in terms of saying to her "[l]isten I want you to do the absolute minimum to basically, you know, we need to comply, but do it in a most cost-effective way". The Tribunal did not accept that the error would have been obvious (by reason of the identicality of the two figures of $1,246,306) to all readers, but accepted that it would have been obvious to the experienced reader. The Tribunal noted, however, that the circumstances of the Popwing liquidation showed that all of the creditors would have appreciated that there was an error. The reason was that there were only five creditors, three of whom (a majority in a number and in value) were controlled by Kevin Jacobsen, and the other two of whom were related parties. Mr Jacobsen was the sole director of Popwing. The Tribunal found that at the time of the creditors' meeting on 4 November 1998, the creditors controlled by or associated with Mr Jacobsen were informed and fully understood that no funds would come into the liquidation, with the exception of a possible distribution of $6,953, perhaps years later. Indeed, in view of the lack of funds, Mr Gould negotiated for Mr Jacobsen or his interests to pay $7,500 into Popwing's bank account on 5 November 1998 to cover the initial costs of the liquidation. Noting that there were no authorities on the construction of s 1308(4), the Tribunal referred to authorities on s 52 of the Trade Practices Act 1974 (Cth) (TPA Act), to the effect that in deciding whether a statement is misleading or deceptive, the Court will have regard to the persons to whom the statement is directed. The Tribunal referred to Parkdale Custom Built Furniture Pty Limited v Puxu Pty Limited [1982] HCA 44 ; (1982) 149 CLR 191 at 199, and Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Incorporated [1992] FCA 630 ; (1992) 38 FCR 1 at 49-50 per Hill J. He had in fact advanced $7,500 of his own money to enable the liquidation to begin, as the company had insufficient funds for that purpose. The penalty was "five penalty units", and the meaning of a penalty unit depended on whether the offence was committed before the Act commenced on 15 July 2001, or on or after that date. The offence provided for in s 1308(4) was not declared to be an offence of strict liability: cf contravention of s 450E of the Law referred to at [127] and [140] above. The failure to take reasonable steps to ensure that the statement was not false or misleading is an essential element of the offence. Contention 6.6 is deficient for failing to allege and particularise the failure to take reasonable steps. If Contention 6.6 and the particulars that ASIC gave of it had been an information for criminal purposes, it would have been quashed as insufficient in law and invalid: see, for example, John L Pty Ltd v Attorney-General (NSW) [1987] HCA 42 ; (1987) 163 CLR 508 at 519-520. The question is whether, notwithstanding its deficiency, Contention 6.6 is saved by reason of other considerations. It seems, in view of the seriousness of the consequences, that the failure to take "reasonable steps" in the s 1308(4) offence, would have to be unreasonable or blameworthy, as distinct from merely at a level that would give rise to a breach of the common law duty of care: compare Vines v Australian Securities & Investments Commission [2007] NSWCA 75 ; (2007) 62 ACSR 1 at [142] - [152] per Spigelman CJ. In his statement of facts and contentions in response, Mr Gould stated (at para 21) in relation to Contention 6.6 that the material allegations of fact pleaded did not disclose or make out a contravention of s 1308(4) and that Contention 6.6 was therefore "deficient, embarrassing and liable to be struck out at the hearing". Mr Gould also denied that he had contravened s 1308(4). In his statement Mr Gould said (at para 177), after referring to the reference in s 1308(4) to the omission to take reasonable steps, that his staff, who were qualified beyond industry standards and practice, had filled out the Forms 524. Hence, I cannot respond to the charge. ... [T]he statement of charges [in] disciplinary proceedings should be made with precision and put the defendant fairly on notice of the case which he has to meet. He pointed out that before the Board, ASIC had relied upon an expert, Mr Watson, who had dealt with Contention 6.6 in its earlier form, but that ASIC did not call Mr Watson before the Tribunal, so that the Tribunal would not have any expert evidence as to what was reasonable for a practitioner, in the circumstances of Mr Gould, to do when signing and lodging Forms 524. Counsel told the Tribunal that what was a reasonable level of delegation and a reasonable level of review was not to be the subject of any expert evidence to be called by ASIC. After the opening by counsel for Mr Gould, ASIC applied to amend parts of the SOFAC, but did not seek to introduce any new particulars of Contention 6.6 or make any submissions in response to the opening by counsel for Mr Gould in that respect. In final submissions ASIC sought leave to amend Contention 6.6 by including an allegation of a failure to take reasonable steps and a particular to the effect that Mr Gould had failed to check para 6b of the Forms 524 before lodging them. Counsel for ASIC submitted to the Tribunal that in substance the proposed amendments to Contention 6.6 and associated particulars repeated what had been put to Mr Gould in cross-examination before the Board so that there was no prejudice to him if the amendments were allowed. Counsel for Mr Gould, on the other hand, submitted that it would be unjust for the amendments to be allowed because he had not considered them or the question what evidence should be led in chief, both lay and expert, directed to them. Counsel for Mr Gould submitted to the Tribunal that the earlier cross-examination of his client before the Board could not operate as notice of a charge where there was no notice of the true case being run and the SOFAC was cast differently. So in our view, the amendment should not be allowed. Contention 6.6 and the particulars of it therefore remained unamended. As counsel for Mr Gould submits to this Court, the Tribunal may have thought it unnecessary to dismiss Contention 6.6 on the ground that it had not been properly pleaded, as the Tribunal ultimately dismissed the Contention on the basis that there was no misleading statement. Counsel for ASIC submits that the role of the SOFAC was to afford procedural fairness to Mr Gould and that what procedural fairness requires does not involve a fixed body of rules to be applied at a formulaic manner. 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. Counsel for ASIC draws attention to the fact that before the Board, Mr Gould had been cross-examined on the very matters on which he was cross-examined before the Tribunal in relation to a failure to check the Forms 524 with sufficient care. He had been asked why he did not check the content of section 6b in the Forms 524 before signing them and he replied that he assumed that his staff member who prepared them for his signature had carried out an appropriate examination of the position. He was asked to agree that it would have been very easy for him to cast his eye over the figures to ensure that there were no glaring mistakes and he agreed that with the benefit of hindsight this would have been possible, and that he was at fault for not having picked up the mistake. Counsel for ASIC points out that when ASIC applied to amend Contention 6.6 and the particulars of it before the Tribunal, ASIC made it clear that it was not accepting that amendment was required. Counsel further submits that the fact that the Tribunal permitted ASIC to "rely on the error in relation to the amount available for creditors" suggests that the Tribunal agreed that amendment was not necessary. Finally, counsel for ASIC draws attention to the fact that counsel for Mr Gould had not objected to the cross-examination of Mr Gould in relation to his failure to detect the mistake, and to the fact that the written submissions of counsel for Mr Gould before the Tribunal addressed the issue. Mr Gould states that he was substantially relying upon his qualified, professional, experienced staff to ensure the entry was accurate. That staff member also understood that this was the case. This claim, if permitted to be raised over objection, should not form the basis of a finding of criminal negligence. This is a rule of procedural fairness which can, and should here, apply in the AAT [Mr Gould referred to Dolan v Australian and Overseas Telecommunications Corp [1993] FCA 202 ; (1993) 114 ALR 231 at 233-234]. This is because ASIC, as a matter of fairness, was required to put any allegation of criminal conduct not apparent on the SOFAC squarely to Mr Gould in cross-examination to our end to deal with it. One of the particulars was a failure to supervise Ms Winnie Tse in the preparation of the Forms 524. This may suggest an obligation to supervise down to the time of her presentation of a Form 524 to Mr Gould for his signature. In the light of Contention 6.7A, Contention 6.6 might reasonably have been understood as assuming reasonable steps in the form of staff supervision of that kind. The cross-examination of Mr Gould before the Board was directed to showing that the mistake was there plainly for him to see and that if he had checked the Forms 524 before signing them, he would have observed the error. Mr Gould might reasonably have understood, on the basis of his cross-examination, that the reasonable steps asserted by ASIC were limited to a careful reading of the Forms 524 presented to him for signature. There were other possible candidate sets of reasonable steps in addition to the two already mentioned. Examples are ensuring that Ms Tse was appropriately qualified and experienced, checking her general methodology, ensuring that she was following correct procedures in the particular case, and providing her with training. Mr Gould might have responded differently depending on the formulation of Contention 6.6 and the particulars of it. For example, Mr Gould may have called an expert witness to give evidence concerning the practicalities touching delegation and supervision, preparation of statutory forms, training of staff, and the reading of statutory forms before signature. Mr Gould himself might have given evidence concerning his office procedures and the steps that he took within his office by way of supervision and checking. Contention 6.6 did not adequately inform Mr Gould of the case brought against him and on this ground, apart from any other, Contentions 6.6 and 6.7A should have been dismissed. Mr Gould submits that this question is one of judgment, not a pure question of law, and that the answer must be informed by evidence of accepted proper practice: Mr Gould refers to Re Vouris; Epromotions Australia Pty Ltd and Relectronic-Remech Pty Ltd (in liq) [2003] NSWSC 702 ; (2003) 47 ACSR 155 at [101] and [103] Goodman v Australian Securities and Investments Commission (2004) 50 ACSR 1 at [26]; Dean-Willcocks at [24]-[26]; Albarran v Companies Auditors and Liquidators Disciplinary Board [2007] HCA 23 ; (2007) 231 CLR 350 at [18] , [20] and [24]. At the commencement of the hearing the Tribunal disavowed knowledge of accepted practice in the sense that both members of the Tribunal said that they did not have any experience as a liquidator. Yet they were confronted with a question as to what was an adequate and proper performance of the duties of a liquidator. In order to answer that question, the Tribunal needed to have evidence of the circumstances in which registered liquidators perform their duties and of the professional standards that they recognise as the measure of proper and adequate performance. In other words, the Tribunal had to act on expert evidence. In my opinion it was not open to the Tribunal to conclude that Mr Gould had failed to carry out or perform adequately and properly the duties of a liquidator in respect of the mistake referred to in the Forms 524 without any expert evidence, unless it is to be said that there is necessarily such a failure wherever there is a mistake in any statement of a monetary figure made in one of those forms which a reading by the signatory would detect. In my opinion that cannot be said to be so. It is easy to think that there could not be any justification for a registered liquidator's signing without checking, and instead relying on his or her staff. As a non-expert, at first blush I am disposed to that view, influenced perhaps by the circumstances of the present case and by the fact that before the Board Mr Gould had recognised the error in the Forms 524 as obvious. With respect, the Tribunal may also have been influenced by this consideration. Expert evidence, however, may provide facts of which the non-expert is unaware, such as the level of detail encountered in Forms 524; whether generally speaking checking the figures in a Form 524 itself would serve any useful purpose; whether much depends on the level, qualifications and experience of the staff involved; whether much depends on the antecedent checks that are implemented within the office of the particular registered liquidator. The point is simply that the expert knows things about liquidation practice and procedure that are beyond the knowledge of the non-expert, but form the background against which the judgment of what is "proper" and "adequate" performance must be made. Minutes signed by all three directors and dated 11 September 2000 that he had been appointed as Administrator. 2.1.3 The Form 505 lodged with ASIC was received on 4 October 2000 with an effective date of 3 October 2000. 2.1.4 Further review of the file revealed correspondence between Ms Christine Shean of Mr Vanda Gould's office and Mr Robert Kaufmann dated 12 September 2000 in which Ms Shean advises that " Vanda asked me to mention to you that the 7-day period to call a creditors' meeting does not start until he consents to act and he will not consent until he has seen the books, etc . 2.1.6 A copy of the consent was unable to be located in the file. However, based on the Form 505 lodged, the appointment took effect on 3 October 2000. Mr Gould should have advised the directors of this prior to the resolution or alternatively advised them after receipt of the resolution, a further resolution appointing him to act as Administrator would need to be made after he consented in writing to the appointment. In March 2005 ASIC filed its SOFAC in the Tribunal. In its SOFAC, ASIC included Contentions 2.1, 6.5, 6.6 and 6.7A incorporating the amendments that had previously been disallowed by the Board (see below). Mr Gould applied to the Tribunal for an order staying or refusing to deal with those Contentions or a determination that it had no jurisdiction to deal with them. On 2 November 2007 the AAT dismissed that application: see Re Gould and Companies Auditors and Liquidators Disciplinary Board [2007] AATA 1914. On 10 June 2004, the Board rejected ASIC's application to amend, for reasons which it then gave. In substance, the Board regarded the proposed amended Contention 2.1 as a new contention, and thought that Mr Gould may have conducted his case before the Board differently if he had been confronted with it from the outset. Following the Board's giving its ruling, ASIC withdrew Contention 2.1. Accordingly, in the Board's formal Determination, the Board included in its findings in relation to the respective Contentions, that Contention 2.1 had been "Withdrawn". Mr Gould contended that that provision did not apply to him and that the Contentions were misconceived. The reason is that Contentions 6.4 to 6.7A related to Popwing which was in voluntary liquidation and in these circumstances it was para (i) rather than para (ii) that applied. After the conclusion of the hearing of submissions, by a letter dated 8 July 2004 the Board invited submissions from the parties as to whether s 1292(2)(d)(ii) applied. In the final paragraph of its written submission in response, ASIC applied to amend Contentions 6.4 and 6.7A in order to rely on s 1292(2)(d)(i) in the alternative to s 1292(2)(d)(ii). The Board (at paras 7.1 to 7.10 of its reasons) rejected ASIC's application on the basis that it was plain that ASIC had deliberately framed its Contentions as it had done, being aware of the difference between paras (i) and (ii). The Board thought that Mr Gould may have presented his case differently if ASIC had formulated its case differently. Finally, the Board said that it was in the public interest that proceedings be dealt with expeditiously and on the basis of contentions clearly articulated, and that it would be neither fair to Mr Gould nor in the public interest to permit a change at such a late stage after the case was closed (para 7.8). The Board said (at paras 7.10 and 38) that the contentions in question could not be made under para (ii) of s 1292(2)(d) because that paragraph did not relate to Mr Gould's duties as a liquidator --- para (i) did. The Board said that the contentions as formulated could not be accepted for consideration. Accordingly, in its formal Determination the Board recorded its decision in respect of Contentions 6.5, 6.6 and 6.7A, as "Not accepted". The Tribunal said (at [30]) that its role was to determine the correct or preferable decision on the material before the Tribunal, not on the material that was before the primary decision-maker, and that the Tribunal was required to review the primary decision, not the reasons given for it, citing Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179 ; (1979) 24 ALR 577 ( Drake ) at 589, 599. The Tribunal saw the issue between the parties as being whether there was a statutory provision to the contrary of the view that effective exercise of the Tribunal's review power normally required it to be free to consider the application of any of the criteria on which the proper exercise of the statutory power might depend: the Tribunal cited Sleiman and Australian Securities and Investments Commission [2007] AATA 1383 ( Sleiman ) at [9]. Sleiman was also concerned with an application by ASIC to the CALDB in relation to a registered liquidator. In that case, as in the present one, s 1317B of the Law (s 1317B of the Act is in the same terms) permitted an application to be made to the Tribunal for review of a decision made under the Act by the Board. The Tribunal thought that Mr Gould's submission sought to read too much into the word "on" in the expression "on an application by ASIC" in s 1292(2). The Tribunal stated (at [34]) that to confine the review before it to the grounds contained in the original application (as amended) would be a significant departure from the usual pattern of merits review under the AAT Act as analysed in Drake and succeeding cases. Mr Gould submits that Sleiman and a case relied on in it, Re Wharton and Australian Securities and Investments Commission [2002] AATA 443 ; (2002) 69 ALD 419 , were either wrongly decided or should be distinguished. Mr Gould submits that the Board's decision that it was satisfied of the existence of the ground set out in s 1292(2)(d) was itself a reviewable decision, similar to the decision in Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 ( Bond ) that the licensees were no longer fit and proper persons to hold broadcasting licences under s 88 of the Broadcasting Act 1942 (Cth). Counsel for Mr Gould refers to passages in the various judgments in Bond in which it was recognised that the Australian Broadcasting Tribunal's "finding" that licensees were no longer fit and proper persons to hold their licences was itself a decision under an enactment because, although it was also a step on the way to the ultimate decision whether to revoke or suspend the licence or to impose conditions, it was a decision on a matter of substance for which the statute provided as an essential preliminary to the ultimate decision: see Mason CJ at 337, 339; Brennan J at 365; Deane J at 369; Toohey and Gaudron JJ at 377. The Tribunal stated (at [31]) that it was not contested that the decision under review before the Tribunal was the Board's decision to make a suspension order as allowed for by the concluding words of s 1292(2). The Tribunal said that the reaching of a state of satisfaction that the grounds for the making of that order were made out was a step along the way to the ultimate decision and was not itself reviewable. The Tribunal also referred to Bond at 336-338 per Mason CJ. However, Mason CJ qualified his description of the position that "ordinarily" prevailed as mentioned above. Section 1317B(1) of the Law (and of the Act) provided that application might be made to the Tribunal for review of, relevantly, a decision made under the Law (or the Act) by the Board. It is at least clear that the Board's decision to suspend Mr Gould's registration as a liquidator was a decision made under an enactment (cf s 1292(2) of the Law and of the Act) and was reviewable by the Tribunal. I will assume, by reference to the passages from Bond referred to above, that the Board's being satisfied of any of the states of affairs referred to in s 1292(2)(d) is also a decision made under the statute, and that the Tribunal erred in stating otherwise. Nonetheless, I do not see how this avails Mr Gould, because Contentions 2.1, 6.5, 6.6 and 6.7A were relied on by ASIC as supporting that essential intermediate decision, as well as the ultimate decision to suspend Mr Gould's registration. The same principles must govern the question whether it was permissible for the Tribunal to entertain those Contentions, regardless of whether the Tribunal was reviewing the ultimate decision to suspend or the essential intermediate decision in the nature of the making of a finding. I do not think that there is merit in Mr Gould's first submission. Mr Gould secondly submits that an assumption by the Tribunal of jurisdiction over charges that were not previously the subject of a Board determination deprives a member of the profession of his or her right to have a "merits review": appeals from the Tribunal are on questions of law only (see s 44(1) of the AAT Act). Underlying this assumption is the erroneous assumption that the expression "merits review" refers to a review of the merits of the reasoning of the primary decision-maker. As noted earlier, an applicant to the Tribunal is not entitled to that. He or she is entitled to a review of the merits of the primary decision itself. In Shi v Migration Agents Registration Authority [2008] HCA 31 ; (2008) 235 CLR 286 the High Court held that the Tribunal was entitled to take into account facts and circumstances that had arisen since the primary decision. This approach was said to be consistent with s 43(1) of the AAT Act. It supports the view that the Tribunal's role and the Tribunal proceeding were independent of the Board's role and the Board proceeding. Once this fact is fully appreciated, any force that Mr Gould's present submission might be thought to have disappears. In my view there is no substance in Mr Gould's second submission either. Question 23 (set out at [260] above) should also be answered "yes". Further or in the alternative, Mr Gould submits that under s 39B of the Judiciary Act , this Court may order that the Tribunal be restrained or prohibited from dealing with charges or quash any order made where it would be unfair or oppressive or amount to an abuse of the power to discipline contained in the statute, if the charges were dealt with or the order remained; Calveley . In support of his submission that the facts enliven the principles referred to above, Mr Gould submits as follows. First, the Board found in respect of the then proposed amended Contention 2.1, that ASIC was in possession of all the facts that would have enabled them to formulate and include that contention from the outset but it failed to do so. Similarly, in relation to Contentions 6.5, 6.6 and 6.7A, the Board found that the way in which the charges were originally formulated by ASIC was deliberate and the result of careful thought. Mr Gould submits that these findings by the Board enliven the first principle referred to above. If ASIC had acted with reasonable promptness and diligence it could and should have formulated Contentions 2.1, 6.5, 6.6 and 6.7A as it wished well before the hearing before the Board so that they could have been dealt with at that time. Mr Gould submits that he is prejudiced because he is denied his right to have his conduct judged in the first instance by his peers who would be familiar with industry practice. This prejudice is highlighted by the fact that ASIC chose not to call any expert evidence of such practice before the Tribunal. The next factual matter on which Mr Gould relies is that in respect of Contention 2.1, the answers given by Mr Gould at the hearing before the Board when he had no notice of the allegation and did not have access to his file, were later used by ASIC to impugn his credit. According to Mr Gould's submission, it is no answer to say that he was able before the Tribunal to supplement the evidence he had given before the Board. It was oppressive for ASIC to use before the Tribunal answers he had given under cross-examination before the Board in respect of an allegation of misconduct about which he had lacked notice, in order to support a fresh charge before the Tribunal. Natural justice requires that notice be given of an allegation of professional misconduct before a defendant is required to answer questions under cross-examination in disciplinary proceedings, according to Mr Gould's submissions. The third factual matter is that of delay. The circumstances the subject of Contention 2.1 occurred in October 2000, those in respect of Contention 6.5 in February 1999 and those in respect of Contention 6.6 and 6.7A occurred in May 1999 and May 2000. Mr Gould submits that the delay of some 8 to 10 years should have led the Tribunal to stay the proceeding before it. In rejecting a similar submission, the Tribunal referred (at [47]) to the prosecution of World War II war crimes committed some 30 years earlier. Mr Gould submits that those circumstances are distinguishable because of the common difficulty in locating the defendant, and the different public interest involved. The aim of a disciplinary proceeding is to protect the public rather than to punish, and is ultimately based upon an inquiry as to present fitness to practise: Herron v McGregor (1986) 6 NSWLR 246 at 258 per McHugh JA. Before the Tribunal, Mr Gould was entitled, so he submits, to the benefit of the Board's finding that to require him to face the new charges would cause him irremediable prejudice and be unfair. Moreover, following the making of the Board's orders, the second principle referred to above was enlivened so that ASIC was prevented from seeking to renew the charges in any fresh proceeding before the Board or elsewhere. Mr Gould addresses an argument relied on by ASIC before the Tribunal and accepted by it, namely, that because it was Mr Gould who chose to apply to the Tribunal for review of the Board's decision, ASIC should not be prevented from re-agitating the charges rejected by the Board. Mr Gould submits that the Tribunal should have followed the approach of the United States Supreme Court in Green v United States [1957] USSC 146 ; 355 US 184 (1957). In that case, the defendant faced alternative charges of first and second degree murder. The jury returned a verdict of guilty on the charge of second degree murder and did not return a verdict on the first charge. The defendant successfully appealed and the Court of Appeal ordered a retrial. At the retrial, the defendant was again charged with first degree murder. The trial judge ruled that the rule against double jeopardy did not apply. The defendant was convicted of first degree murder. He appealed. The State, with all its resources and power, should not be allowed to make repeated attempts to convict an individual for an alleged offense, thereby subjecting him to embarrassment, expense and ordeal and compelling him to live in a continuing state of anxiety and insecurity, as well as enhancing the possibility that, even though innocent, he may be found guilty. If Green had only appealed his conviction of arson and that conviction had been set aside, surely no one would claim that he could have been tried a second time for the first degree murder by reasoning that his initial jeopardy on that charge continued until every offense alleged in the indictment had been finally adjudicated. Or, stated in the terms of this case, he must be willing to barter his constitutional protection against a second prosecution for an offense punishable by death as the price of a successful appeal from an erroneous conviction of another offense for which he has been sentenced to five to twenty years' imprisonment. As the Court of Appeal said in its first opinion in this case, a defendant faced with such a 'choice' takes a 'desperate chance' in securing the reversal of the erroneous conviction. The law should not, and in our judgment does not, place the defendant in such an incredible dilemma. ASIC submits that there was no oppressive conduct or unfair dealing by it in relation to Contentions 2.1, 6.5, 6.6 and 6.7A. ASIC relies on a point made by the Tribunal in rejecting Mr Gould's interlocutory application, namely, that situation before the Tribunal was materially different from that which had been before the Board. Before the Board, the application to amend was made at the end of a proceeding. Before the Tribunal, ASIC was giving notice through its SOFAC of allegations at the outset of a new proceeding. Further, the Tribunal found (at [46]) that the Contentions in question were not completely novel. In the hearing before the Board, Mr Gould had responded to Contentions 6.4, 6.5, 6.6 and 6.7. In his submissions to the Board, Mr Gould raised the distinction between paras (i) and (ii) of s 1292(2)(d), and dealt substantively with Contentions 6.5, 6.6, 6.7 and 6.7A. His submissions did not distinguish between paras (i) and (ii). ASIC submits that the Tribunal's statement that the new Contentions were not completely novel is not surprising bearing in mind that the amendment that was made to Contentions 6.5, 6.6 and 6.7A was only to rely on para (i) in addition or in the alternative to para (ii). That is to say, according to ASIC's submission, the "oppression" of which Mr Gould complains is that in the proceeding before the Tribunal, ASIC amended Contentions 6.5, 6.6 and 6.7A to allege that Mr Gould failed to perform adequately and properly the duties of a liquidator, rather than those required by an Australian law to be carried out or performed by a registered liquidator. In relation to Contention 2.1, ASIC submits that there was no prejudice or oppression. I set out the original form of Contention 2.1 and that which ASIC sought to have substituted, at [264] and [266] above. The facts and circumstances underlying the previous Contention 2.1 that was before the Board and those underlying the newly formulated Contention 2.1 were the same, as the cross-examination of Mr Gould demonstrates. ASIC points out that although Mr Gould complains of unfairness and oppression, his submissions do not point to any particular changes made or to unfairness or oppression arising from the making of those changes. Finally, ASIC submits that Mr Gould's argument that it is unfair that he was denied a merits review after an adverse finding by the primary decision maker could also be said in relation to the facts in Shi . A person in Mr Shi's position could be found by the Tribunal to be unfit based on new facts that emerged after the original decision was made. According to the High Court, however, the fact that there might be no merits review on the new facts as found by the Tribunal was not an impediment to the Tribunal's acting on those new facts. The proceeding before the Tribunal was a new and independent proceeding in which the Tribunal was required, for the protection of the public, to arrive at the correct or preferred decision on the evidence before it. The question of the reformulated Contentions 2.1, 6.5, 6.6 and 6.7A arose and was dealt with at the outset of the Tribunal proceeding, and in this important respect the circumstances are quite different from those on the basis of which the Board had refused ASIC leave to amend. Before the Tribunal, but not before the Board, Mr Gould had the opportunity of preparing for the hearing and adducing evidence, expert and non-expert, in answer to the Contentions as amended. There was no trial of Contentions 2.1, 6.5, 6.6 or 6.7A on their merits before the Board. As a consequence of the Board's refusal of leave to amend, Contention 2.1 was "Withdrawn" and Contentions 6.5, 6.6 and 6.7A was "Not accepted". The United States case of Green v United States is distinguishable. The primary objective of the sanctions for which s 1292(2) provided was to protect the public where a person was shown not to be a fit and proper person to remain registered as a liquidator and as such to perform the duties of a liquidator or administrator. The criminal sanction for first degree murder is quite different in that the right of the accused to be treated fairly assumes the greatest importance. In the case of the disciplinary proceedings against Mr Gould, the protection of public was the dominant consideration. This factor also tells against other submissions made by Mr Gould, such as his submission asserting delay and oppression. Question 24 (set out at [260] above) should be answered "no". Since writing the above, I have become aware of the following authorities (not referred to by counsel) none of which are inconsistent with the views that I have expressed above, and in which there are some passages generally supportive of them: Walton v Gardiner (1993) 177 CLR 378 esp at 396-398, 420; Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630 at 634, 635 636; Re Barings plc (No 2) [1999] 1 All ER 311 at 318h, 327 c---e, 331 b---d, 339e. See too Joshua Kulawec, Double jeopardy in the regulatory state", Reform , Issue 78, Autumn 2001, 1---4. (ii) he last charged for his services on 29 August 2002 (par. ASIC considers that as of 2 April 2003, if not earlier, Mr Gould should have determined that it is no longer practicable to implement the DCA. ASIC therefore contends that Mr Gould should have convened a meeting of creditors pursuant to section 445F of the Law for the purpose of passing a resolution under section 445C(b) of the Law to terminate the DCA. Whether the Tribunal erred in finding that the said resolution did operate prospectively. In relation to Contention 2.1, the Notice of Contention asserts that the Tribunal erred in "finding that the resolution of [Trinbay] appointing [Mr Gould] as voluntary administrator could and did operate on a prospective or nunc pro tunc basis". The Notice of Contention asserts that it was implicit in the Tribunal's finding that a final distribution was in fact made but there was no evidence from which the Tribunal could have made such a finding. Finding that the form 524's [sic] were not misleading. I referred earlier to the factual circumstances surrounding Mr Gould's appointment as administrator of Trinbay and set out the provision of ss 436A and 448A. The Tribunal noted (at [94]) that it was not disputed that: ASIC's case was that as Mr Gould had not consented in writing to appointment prior to the resolution of 11 September 2000 his appointment was invalid. Its contention was that a registered liquidator performing his duties adequately and properly would have ensured that the resolution of appointment was made after his written consent, and that this was something that Mr Gould failed to do. It was common ground before the Tribunal that the process and validity of appointment were of fundamental importance. The Law stipulated that the administration began when an administrator "was appointed" (s 435C) and required that the administrator convene the first meeting of creditors within five business days after the administration began (s 436E). That importance of identifying the time when an administrator was appointed is obvious. Mr Gould admitted in evidence before the Board that he knew that his consent had to precede the execution of the resolution of appointment. Before the Tribunal, however, Mr Gould denied that he had been aware that he could not be appointed by the resolution of 11 September because s 448A had not been complied with at that time. He had argued that the resolution had been prospective as regards consent and had advanced a number of other speculative theories in justification of his conduct. It referred to Ascot Investment and Management v Livestock Genetics (1999) 205 LSJS 247 ( Ascot ) and Re Anderson and Companies Auditors and Liquidators Disciplinary Board [2007] AATA 1540 ( Anderson ). The Tribunal noted that in Ascot Smith DCJ held that an administrator's written consent to the beginning of a proceeding against a company in administration could operate nunc pro tunc . Section 440D of the Law provided that during the administration of a company, a proceeding in a court against the company or in relation to any of its property could not be begun or proceeded with, except with the administrator's written consent or with the leave of the Court. The Tribunal said (at [100]) that Smith DCJ had held that s 440D did not "invalidate that part of the proceedings that had unfolded before the date of consent". In Anderson the Tribunal reviewed a decision under s 1292(2)(d)(ii) of the Act. It was alleged that an administrator had not complied s 439A(4) of the Act. The administrator had been appointed on 12 February 2004 but had not consented to act until four days later. Although the point was not argued, neither ASIC, nor the Board nor the Tribunal expressed any doubt about the validity of the appointment. The Tribunal noted (at [102]) that ASIC did not dispute the correctness or applicability of Ascot or Anderson . The Tribunal concluded that there was no legal impediment to the adoption of an appointment resolution that operated conditionally on the appointee's consenting to the appointment. The Tribunal entered a caveat: the consent must be given within a timeframe that was appropriate to the procedure in question, but the Tribunal saw no difficulty in this respect in the present case in which the lapse of time was of only some three weeks. The Tribunal regarded Mr Gould's efforts to obtain a further resolution after he signed the consent on 3 October 2000 as steps taken for more abundant precaution and for the avoidance of doubt. The Tribunal was not troubled by inconsistencies between answers that Mr Gould gave before the Board and before the Tribunal, thinking that they were explicable. Concluding that Mr Gould was validly appointed as administrator of Trinbay, the Tribunal decided that Contention 2.1 failed. . Regulation 5.3A.06 of the Corporations Regulations provided that for the purposes of s 444A(5) of the Law, the prescribed provisions were those set out in Schedule 8A to the Regulations. Clause 3 within Schedule 8A was to the effect set out above. ASIC noted (at [193]) that Mr Gould last charged for his services in respect of Trinbay on 29 August 2002 and that on 2 April 2003 he wrote to the ATO advising that "[a]s no litigation funding could be achieved to litigate... the administration has now been concluded and it is likely that the company will be struck off". ASIC submitted that as at 2 April 2003, if not earlier, Mr Gould had determined that it was no longer practicable to implement the DOCA and that for this reason he should have convened a meeting of creditors under s 445F of the Law for the purpose of their passing a resolution under s 445C(b) to terminate the DOCA. Mr Gould gave evidence before the Tribunal to the effect that he exercised his discretion under the DOCA in a different way from that reflected in his letter of 2 April 2003, and concluded that the interests of creditors would be better served by keeping the DOCA on foot. Perhaps understandably, ASIC attacked Mr Gould's credit in this respect. The Tribunal noted (at [195]) that Mr Gould had contended that it was never "impracticable to implement" the DOCA in any event. The Tribunal observed (at [196]) that cl 5.3 of the DOCA provided that if Mr Gould as DOCA administrator decided to abandon all legal proceedings, any unspent money was to be made available on a final distribution under cl 9.1. Mr Gould submitted that by cl 18.1 (coupled with the definition of "Termination Date") the DOCA terminated thirty days after the final distribution in accordance with its terms and as permitted by s 445C of the Law. Such a termination would come about without any need or obligation to convene a meeting of creditors. Rather, relying on s 445C(c) of the Law, the Tribunal accepted that under the terms of the DOCA if Mr Gould decided to abandon all legal proceedings, the DOCA terminated thirty days after the final distribution without the need for a meeting of creditors. Consequently, so the Tribunal held, Mr Gould was not under an obligation to convene a meeting. For this reason the Tribunal found Contention 2.11 not established. Of course, Mr Gould could not be appointed to the office of administrator unless and until he consented. The terms of the resolution do not identify the point of time at which the appointment was intended to take effect. The passive subjunctive "be appointed" is open ended, as distinct from, for example, the passive present "is hereby appointed". In his submissions, counsel for ASIC refers to "a prospective or nunc pro tunc basis as regards the appointee's consent", as if the two were synonymous, but they are not. It is the resolution that may be prospective and the consent that may operate nunc pro tunc . I do not think that the resolution, properly construed, purported to appoint Mr Gould as administrator then and there and without his consent. It is unlikely that the directors intended that the resolution have that effect, and an improbable construction is to be avoided if possible. Rather, on its proper construction the resolution was to have a continuing but latent and contingent operation to be enlivened and to have present effect only once Mr Gould accepted the appointment by doing whatever was necessary for that purpose. What was necessary for that purpose was for him to consent in writing to the appointment. I do not see any basis for criticism of Mr Gould's letter of 27 September 2000 which made it clear that he had not yet accepted appointment as administrator although he could see no reason for not doing so in the near future provided certain matters were resolved. If my construction of the resolution is correct, Mr Gould was not appointed as administrator until he consented in writing to the appointment. Immediately he consented in writing, the prospective appointment became a present appointment. Logically, Mr Gould's consenting in writing immediately preceded that event. Paragraph (b) of s 448A creates no difficulty for the construction suggested. There will be cases where there is a lapse of time between the signing of the consent on the one hand and the passing of the resolution by the board of directors and issue of the written appointment by the company under s 448A on the other hand. Paragraph (b) makes it clear that in such a case at the time when the appointment takes effect the appointee must not have withdrawn his or her consent. Similarly, it is not to the point to say, as ASIC submits, that on the construction suggested, the board of a presently insolvent company could pass a resolution appointing an administrator not to take effect until the registered liquidator consents. There is no obligation on the board of a presently insolvent company to resolve to appoint an administrator at all or to do so at any particular stage of an insolvency. As the Tribunal acknowledged, there may be a problem where the lapse of time between the passing of the resolution and the giving of the written consent is too great, but that was not the present case. (There could also be a problem where the written consent was given first and there was a great lapse of time before the resolution was passed. ) I do not gain particular assistance from Ascot , which concerned a different statutory provision, s 440D(1) of the Law, nor from Anderson , in which the Tribunal was not called upon to address the present issue. ASIC relies on certain aspects of the testimony of Mr Gould as to his understanding. I do not find it necessary to discuss the detail of his evidence or the submissions that ASIC has made on the basis of it. If, contrary to my construction, the appointment took effect on 11 September 2000 and Mr Gould acted as administrator thereafter and before giving his written consent, Mr Gould's conduct would have been inconsistent with s 448A(1) of the Law. That, however, was not the position. Upon my construction of the documents the appointment was to take effect once Mr Gould accepted office, and it is quite plain from his letter of 27 September 2000 that he regarded himself as not appointed until he consented. In the result, for the reasons that I have given above, I agree with the Tribunal that Contention 2.1 was not made out. I set out s 445C of the Law at [340] above. ASIC's case was that Mr Gould was obliged to exercise the power given him by s 445F(1)(a) to convene a meeting of Trinbay's creditors in order that they might pass a resolution terminating the DOCA for the purposes of s 445C(b). ASIC contended that cl 3 of the prescribed provisions, which was included in the DOCA by cl 8.1, obliged him to do so. Certainly on its face cl 3 of the prescribed provisions obliged Mr Gould to summon a meeting of creditors if he determined that it was no longer practicable or desirable either to continue on the business of the company or to implement the DOCA. I agree with ASIC that Mr Gould's letter dated 2 April 2003 to the ATO advising that there was no prospect of recovery of any funds and that the ATO should note in its records that no further returns would be lodged by Trinbay as the administration had been concluded and it was likely that Trinbay would be deregistered, showed that at that time Mr Gould had determined that it was no longer practicable or desirable either to continue to carry on Trinbay's business or to implement the DOCA. Notwithstanding the apparent operation in these circumstances of cl 3 of the prescribed provisions, however, it was not necessary for Mr Gould to summon the meeting of creditors so that they could resolve to terminate the DOCA if the DOCA had already terminated. To summon a meeting of creditors in that situation would be futile. Clause 18.1 of the DOCA provided that the DOCA was to terminate on the "Termination Date". The expression "Final Distribution" was defined in the same clause to mean, relevantly, the first and final dividend payment made under cl 9.1 of the DOCA. Apparently there could not be a "Final Distribution" because there was no property available to pay it. I agree with ASIC that, at least so far as the Appeal Book reveals, there was no evidence before the Tribunal from which it could have inferred that there was a Final Distribution. In its reasons, the Tribunal does not refer to any evidence that a Final Distribution was made for the purposes of cl 9.1 of the DOCA. At [198] of its reasons, the Tribunal seems to have accepted that the bare theoretical alternative that the DOCA may have terminated 30 days after the making of a Final Distribution was sufficient in itself to eliminate the obligation on Mr Gould to summon a meeting of creditors. I disagree. Clause 3 of the prescribed provisions made it mandatory for Mr Gould to summon a meeting of creditors for the purpose of their passing a resolution under s 445C(b) of the Law, and the onus rested on Mr Gould to prove that the DOCA had already terminated. He did not discharge that onus. Question (2) in the Notice of Contention should be answered "yes". In his submissions, counsel for Mr Gould argues that ASIC has not raised a question of law in respect of Contention 2.11. Whether Question (2) in the Notice of Contention is a question of law, a question of fact or a mixed question of fact and law can be left for the time being --- see [372] ff below. I think that the word "false" in the provision means simply not true to, or in conformity with, the facts. The severity of the provision so understood is ameliorated by the condition of the person's not "having taken reasonable steps to ensure that the statement was not false ...". There are decided cases on the expression "false or misleading" to which I was not referred: see, for example, Versteeg v R (1988) 14 ACLR 1 at 17; Construction Forestry, Mining and Energy Union v Hadgkiss [2007] FCAFC 197 ; (2007) 248 ALR 169 at [18] , [29] --- [35]; Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd [2005] NSWSC 1235 ; (2005) 226 ALR 510 at [147] --- [152]; Re Robert Kent Black, Magistrate of the Magistrates Court at Perth; Ex parte Commonwealth Director of Public Prosecutions [2009] WASC 41 at [55] - [59]. These cases show that whether "false" means intentionally false or merely false as a matter of objective fact depends on context. In my opinion, the presence in s 1308(4) of the words "without having taken reasonable steps to ensure that the statement was not false or misleading" shows that the word "false" in that subsection means simply false as a matter of objective fact. It would not be sensible for it to mean "intentionally false" in the light of the presence of those words. I agree with counsel for Mr Gould that even still it is necessary to take into account the context and readership. Counsel gives the illustration of a date appearing under a signature on a Form 524 being "19/8/1008" rather than "19/8/2008". Does the document convey a representation that it was signed one thousand years ago? I think not. The mistake would be obvious to the whole world. It would not be obvious to the whole world what statement was in fact being made, but it would be obvious to the whole world that it was not that the document was signed on 19 August 1008. The representation in the present case that the "estimated amount available for unsecured creditors" was $1,246,306 is of a different kind. It would not be obvious to the whole world that that representation was false. It may be that a reader would think that that statement was true but that the statement that the claims of five creditors totalled $1,246,306 was false, or that neither statement was false. In my opinion the Forms 524 contained a statement that was false in a material particular, namely, that the estimated amount available for unsecured creditors was $1,246,306. A statement in a Form 524 of the estimated amount available for unsecured creditors was a material statement and the falsity in this case ($1,246,306 rather than "nil") was also material. The Tribunal erred in failing to consider whether the Forms 524 contained information that was "false" in a material particular and whether Mr Gould had failed to take reasonable steps to ensure that it was not false. For the above reasons, Question 3(a) in the Notice of Contention should be answered "yes". As counsel for Mr Gould observed, ASIC made no submission relevant to Question 3(b) in the Notice of Contention, that is to say, the question whether the Tribunal erred in finding that the Forms 524 were not misleading. Therefore, Question 3(b) should be answered: "Inappropriate to answer". Counsel for Mr Gould raised the same issue in respect of the Notice of Contention. The issue referred to goes to the jurisdiction of the Court. The parties seem to have assumed that the bringing of the Review Proceeding necessarily overcame the difficulty. While I have indicated the answers which I am disposed to give to the questions raised in the FASNA if those questions do, indeed, fall within s 44(1) of the AAT Act, I propose to give the parties an opportunity to consider whether they do and to make submissions on the matter. However, the possibility of framing amended questions should also not be overlooked. At this stage, therefore, I will simply publish my reasons for judgment and list the proceeding for a date for directions relating to the hearing of any submissions to be made. On any view, it seems that the matter must be remitted to the Tribunal. The question of costs also remains to be dealt with. I certify that the preceding three hundred and seventy-five (375) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

appeal from administrative appeals tribunal (aat) on questions of law and application under s 39b of judiciary act 1903 (cth) for relief in respect of aat's decision aat affirmed decision companies auditors and liquidators disciplinary board (board) suspending registration of applicant (g) as a liquidator for three months board had found that g had failed to carry out "adequately and properly" duties as liquidator and as administrator of certain companies, so that the power given by s 1292(2)(d) of corporations law (law) and of corporations act 2001 (cth) (act) was enlivened proceeding before board and later before aat had proceeded on contentions as formulated by australia securities and investments commission (asic) each of board and aat found some contentions established and others not established (1) whether g had failed to satisfy a "professional standard" by failing to include a "cap" or "upper limit" in his remuneration submitted to creditors for approval at time of his appointment status of guidance and statement of best practice issued by insolvency practitioners association of australia (ipaa) whether those documents, standing alone and unsupported by expert evidence, established a professional standard in relevant sense (2) whether contravention of s 450e(2) established by g's writing on his chartered accountant's letterhead to creditors informing them of progress of administration under deed of company arrangement (doca) letters referred to company "in administration" rather than "subject to deed of company arrangement" whether the letters were "business letters" for purposes of s 88a(1)(c) of law (and of act) whether letters were signed or issued by or on behalf of companies subject to doca (3) whether g was entitled to charge as an expense of liquidation a late fee that he had been charged by asic for lodging documents later than the last day of period allowed for lodgement liquidator's lien effect of fact that g was owed thousands of dollars for remuneration that would never be paid (4) whether g had contravened s 539(1) of law (and of act) by including a wrong monetary amount in his forms 524 (six-monthly accounts) forms 524 showed amount available for unsecured creditors as $1,246,306 (which was also shown as the amount owing to them) rather than "nil" difference between a statement that is "misleading" and one that is "false" whether failure to supervise staff properly and adequately established (5) whether aat should have entertained certain amended contentions where asic had been refused leave to amend them by board double jeopardy nature of hearing before aat (6) nature of requirement that registered liquidator consent in writing to be appointed as administrator before being appointed or acting as administrator whether resolution can have a latent or contingent operation to be enlivened once the registered liquidator gives the consent in writing. appeal from administrative appeals tribunal (aat) on questions of law and application under s 39b of judiciary act 1903 (cth) for relief in respect of aat's decision aat affirmed decision companies auditors and liquidators disciplinary board (board) suspending registration of applicant (g) as a liquidator for three months board had found that g had failed to carry out "adequately and properly" duties as liquidator and as administrator of certain companies, so that the power given by s 1292(2)(d) of corporations law (law) and of corporations act 2001 (cth) (act) was enlivened proceeding before board and later before aat had proceeded on contentions as formulated by australia securities and investments commission (asic) each of board and aat found some contentions established and others not established (1) whether g had failed to satisfy a "professional standard" by failing to include a "cap" or "upper limit" in his remuneration submitted to creditors for approval at time of his appointment status of guidance and statement of best practice issued by insolvency practitioners association of australia (ipaa) whether those documents, standing alone and unsupported by expert evidence, established a professional standard in relevant sense (2) whether contravention of s 450e(2) established by g's writing on his chartered accountant's letterhead to creditors informing them of progress of administration under deed of company arrangement (doca) letters referred to company "in administration" rather than "subject to deed of company arrangement" whether the letters were "business letters" for purposes of s 88a(1)(c) of law (and of act) whether letters were signed or issued by or on behalf of companies subject to doca (3) whether g was entitled to charge as an expense of liquidation a late fee that he had been charged by asic for lodging documents later than the last day of period allowed for lodgement liquidator's lien effect of fact that g was owed thousands of dollars for remuneration that would never be paid (4) whether g had contravened s 539(1) of law (and of act) by including a wrong monetary amount in his forms 524 (six-monthly accounts) forms 524 showed amount available for unsecured creditors as $1,246,306 (which was also shown as the amount owing to them) rather than "nil" difference between a statement that is "misleading" and one that is "false" whether failure to supervise staff properly and adequately established (5) whether aat should have entertained certain amended contentions where asic had been refused leave to amend them by board double jeopardy nature of hearing before aat (6) nature of requirement that registered liquidator consent in writing to be appointed as administrator before being appointed or acting as administrator whether resolution can have a latent or contingent operation to be enlivened once the registered liquidator gives the consent in writing. administrative law corporations

Until recently, it held a patent for the compound venlafaxine hydrochloride, which is the active ingredient in an anti-depressant medicine marketed under the name Efexor-XR. Although the compound patent has expired, Wyeth continues to hold a method patent for venlafaxine in relation to the blood plasma concentration of that ingredient in the period of about 4 to 8 hours after administration of the drug. Until early March this year, Efexor-XR was the only brand of venlafaxine registered by the Australian Register of Therapeutic Goods ("ARTG"). However, towards the end of last year, Wyeth apparently suspected that other companies had applied to the ARTG to register medicines containing venlafaxine. Wyeth therefore requested the Department of Health and Ageing ("the Department") to provide it with information under the Freedom of Information Act 1982 (Cth) (the " FOI Act ") in relation to those applications. Wyeth's request under the FOI Act was denied in December 2008 but the information supplied in answer to the request suggested that five applications to the ARTG were made to register medicines containing venlafaxine. Wyeth was not provided with the names of the applicants. In January 2009, Wyeth filed an application in the Federal Court seeking preliminary discovery from the Department pursuant to O 15A of the Federal Court Rules of the names of the persons who have applied to the ARTG and for documentary information relating to those applications. The application to the Court seeks identity discovery under O 15A r 3 and information discovery under O 15A r 6. Registration of the competitors' products with the Therapeutic Goods Administration ("TGA"), the body which maintains the register of products comprised in the ARTG, is a step towards the listing of those products under the Pharmaceutical Benefits Scheme ("PBS") as generic listings for venlafaxine. As is well known, listing of medicines on the PBS enables Australian residents to purchase the listed product on a subsidised basis. The evidence before me indicates that the next date for possible listing of the competitors' products on the PBS is 1 August 2009. It was common ground between the parties that in order for listing on the PBS to occur on 1 August 2009, registration on the ARTG would have to occur on or before 15 May 2009. Once registration on the ARTG occurs, Wyeth will learn the identity of the applicants and will be in a position to seek information discovery directly from them, rather than from the Department. When the matter came before me for directions in February, I was persuaded that there was utility in listing the matter for hearing urgently and I did so. The urgency arises out of Wyeth's fear that the applications to the TGA will result in the marketing of those products which will infringe Wyeth's method patent. Under the relevant provisions of the National Health Act 1953 (Cth), the effect of a listing of the generics on the PBS will be to apply a 12.5% price reduction to the generics and to the three varieties of Efexor-XR marketed by Wyeth. It is the prospect of this price reduction, and the administrative processes involved in implementing it, which underlies Wyeth's desire for early resolution of the question of whether the marketing of the generics would constitute an infringement of Wyeth's method patent. Thus, Wyeth seeks to obtain preliminary discovery at the earliest possible date, in order to provide the foundation for injunctive proceedings, including a claim for interlocutory injunctive relief. Mr J Gleeson SC, who appeared for Wyeth, informed me at the hearing of the application that I need only determine the claim for identity discovery under O 15A r 3. This is because, if I were to make that order, his client could approach the four sponsors of the generics to obtain documents from them informally. The fifth sponsor of a venlaxafine generic product was registered on the ARTG on or about 6 March 2009. That sponsor was identified on the ARTG as Sigma Pharmaceuticals (Australia) Pty Ltd and the product is names Evelexa XR. I was provided with helpful written and oral submissions by the parties. The submissions cover a number of issues which arise on the application. The principal issues are whether the evidence filed by Wyeth establishes that it has sufficient prospect of success in any proceeding against the sponsors and whether it is in the interests of justice to make an order for identity discovery. The question of whether it is in the interests of justice to make an order turns upon two different types of considerations. The first is concerned with the prejudice claimed by Wyeth to flow from any delay in providing it with the names of the relevant sponsors. Wyeth produced a timetable of steps which are necessary for it to undertake to obtain information discovery and interlocutory injunctive relief. The timetable compares the position Wyeth will be in if it obtains identity discovery now as against the position it will be in if it has to wait until 15 May 2009 to ascertain the names of the sponsors. The second aspect of the interests of justice arises from the submission made by the Department that there is a strong public interest in the TGA not being required to give either identity discovery or information discovery concerning applicants for registration on the ARTG. That public interest was concerned not so much with the preservation of confidentiality but, rather, the public interest in the ability of the TGA to fulfil its statutory function. The jurisdictional facts are that the applicant (1) has made reasonable inquiries; (2) is unable to ascertain the description of the person; (3) is unable to do so for the purpose of commencing a proceeding in the Court and (4) that the person to whom the application is directed has, or is likely to have, possession of a document or thing, tending to assist in ascertaining the identity of the person. The considerations which are to inform the exercise of the discretion were stated by a Full Court in Hooper v Kirella Pty Ltd [1999] FCA 1584 ; (1999) 96 FCR 1. See also Apache Northwest Pty Ltd v Newcrest Mining Ltd [2009] FCAFC 39 in relation to the principles applicable under O 15A r 6. Two of the considerations referred to in Hooper are critical to the determination of the present application. The prospects of success are a material factor in the exercise of the discretion: Hooper at [33]. The second consideration is that an applicant must show that the order is necessary in the interests of justice. Their Honours said that this means that an applicant must show that the making of the order is necessary to provide that person with an effective remedy in respect of the actionable wrong of which he or she complains: Hooper at [34]. The first was whether Wyeth had made reasonable inquiries. The second was whether the "proceeding" to which O 15A r 3 refers is final or interlocutory, it being contended by the Department that Wyeth's purpose is to commence a proceeding for interlocutory relief, which is not contemplated by the Rule. These issues can be disposed of quite briefly. There was some force in Mr Howe's submission that Wyeth has not adduced any evidence of inquiries made overseas as to the identities of the sponsors. Wyeth acknowledged that TGA applications are often preceded by similar applications made in other jurisdictions. Nevertheless, I am prepared to proceed on the basis that inquiries in those jurisdictions would not be conclusive. I accept that the "proceeding" to which O 15A r 3 refers is a proceeding for final relief. But the proceeding which Wyeth would seek to commence against the sponsors would be such a proceeding, albeit that it would include a claim for urgent interlocutory relief. The relevance of the claim for interlocutory relief is that it is a factor to be taken into account in determining whether it is in the interests of justice to make an order for identity discovery now rather than awaiting the potential listing on the ARTG on 15 May 2009. But in stating that a material factor in the exercise of the discretion is the prospect of success in the proceedings, the Full Court in Hooper specified, as one of the elements of the claim for identity discovery, that an applicant provide evidence in support of its claim for final relief. It seems to me to follow that the Court should approach an application along the same lines as that which applies to a claim for interlocutory injunctive relief. Whilst an applicant under O 15A is not required to establish a serious question to be tried, the applicant's prospects of success are not to be considered in isolation from the element of the interests of justice. The strength or otherwise of the prospects will bear upon the question of where the interests of justice lie: Hexal Australia Pty Limited v Roche Therapeutics Inc (2005) 66 IPR 325 at [18]. Senior counsel for the Department placed considerable emphasis upon the decision of French J in Viskase Corporation v Cryovac Inc [2000] FCA 1695. There, his Honour was dealing with an application for information discovery under O 15A r 6. He said at [24] that the rule should not be permitted to authorise information discovery except for good cause shown in terms of the conditions. To allow the remedy in this case based upon formulaic recitations of wide application would set the threshold for pre-action discovery so low that there would be few cases in which a person wishing to challenge a patent could not obtain discovery of the kind which is sought here. His Honour expressed the view at [23] that the evidence which was required to satisfy the first element of O 15A r 6, namely reasonable cause to believe that an applicant has the right to obtain relief against the prospective respondent, was an opinion expressed as a conclusion stated in terms of the rule. His Honour considered that the conclusionary statement was insufficient to meet the requirements of O 15A r 6(a). I do not think it follows that his Honour's observations establish that a high threshold must be satisfied before an order will be made under O 15A r 3. It is true that French J said at [24] that if an order were made in that case it would establish a very low threshold for the application of the rule. But, in my opinion, that was because of the slender basis of the evidence in support of the "reasonable cause to believe". In my view the decision in Viskase does not establish a gloss on the principles stated in Hooper . Whilst good cause must be shown, each case must turn on its own facts and the prospects of success are to be weighed in the balance of the interests of justice. The process usually requires lodgement of a category 1 application which includes information in respect of five specified modules. Of particular significance is s 4.3.1 of the Australian Regulatory Guidelines for Prescription Medicines ("ARGPM"), under which the sponsor of a generic product must demonstrate that it is "essentially similar" to an existing innovator product. Section 4.3.1 of the ARGPM is based upon guidelines prescribed by the European Union for registration of prescription medicines. Those guidelines state that a product is essentially similar to another product if Section 4.3.1 of the ARGPM goes on to say that applications for essentially similar medicines can be made in Australia under a number of different circumstances. Provided that the essentially similar product has a sufficiently similar plasma concentration/time profile to a leading brand in Australia, the two products may be considered bioequivalent. This is Ms James' working hypothesis and it is the basis of her opinion that the supply of the sponsors' generic products would be likely to infringe claim 1 of the method patent. However, there are three factors which seem to me to indicate that the working hypothesis gives rise to nothing more than a possibility of success at a final hearing. First, s 26B(1)(a) of the Therapeutic Goods Act 1989 (Cth) requires a sponsor of a generic product to certify that the sponsor, acting in good faith, believes on reasonable grounds that the generic will not, if marketed, infringe a valid patent claim. Serious penalties attach to the making of a false certificate. In my view it follows that Wyeth's working hypothesis falls to be tested against the seriousness of the consequences which would follow from the giving of a false certificate under s 26B of the Therapeutic Goods Act . In the absence of evidence from Wyeth pointing toward a real basis for finding that the certificate under s 26B would be false, I am entitled to infer that the proposed proceedings, if not speculative in nature, would require further evidence to demonstrate any real prospect of success. Second, the drawing of this inference is supported by the fact that there was no medical evidence over and above Ms James' hypothesis to support the proposition that the pharmacology of venlafaxine hydrochloride is such that it lends itself to only one possible method of achieving the same time/peak blood concentration as is produced in Efexor-XR. Third, the evidence of Wyeth's solicitor, Mr Muratore, shows that Ms James' working hypothesis is a provisional one which depends upon the examination of a large volume of documentary material in the possession of the sponsors and/or the Therapeutic Goods Authority . Upon receipt of that information it will be necessary to review a potentially large volume of information ..., to present relevant documents identified by the review to a suitably qualified expert or experts and to prepare expert evidence supporting the application. Indeed, in my view, they support it. This is because s 26C provides that if a patentee wishes to bring proceedings for infringement against a person who has given a certificate under s 26B(1) , the person intending to bring the proceedings must give a certificate to the Secretary of the Department that, inter alia , the proceedings are to be commenced in good faith and have reasonable prospects of success. Section 26D is of no assistance to Wyeth because that section only applies where a patentee seeks interlocutory injunctive relief against the sponsor of a generic who gives a certificate under s 26B(1)(b)(iii). That form of certificate is an alternative to that prescribed by s 26B(1)(a). It is a certificate that the applicant has given notice to the patentee of the application for registration or listing of the generic goods. There is no suggestion that such a certificate has been given in the present case. Indeed, it is to be inferred that it has not because Wyeth is unaware of the identity of the sponsors. It follows from this proposition that, to prevent Wyeth from suffering irreparable harm, its application for interlocutory injunctive relief would need to be heard and determined by mid June 2009. The reasons for this are explained in an affidavit of a solicitor for Wyeth, Ms Lisa Taliadoros. She explains that the administrative processes involved in the implementation of a 12.5% price reduction under the National Health Act may be commenced by the Department as early as six weeks before the PBS listing date. She also states that once these processes are in train, it may not be possible to reverse them. Wyeth also relied on the evidence of Mr M Nobes, the Director, Corporate Affairs and Health Strategy (Australia and New Zealand) for Wyeth Australia Pty Limited. Mr Nobes' evidence is that in practice it is necessary for the patent holder or innovator to reduce the price which it charges to wholesalers or pharmacists one month prior to the PBS listing of the generic. As Mr Nobes observes, the same approach is reflected in a request from the Acting First Assistant Secretary of the Pharmaceutical Benefits Section of the Department, addressed to Wyeth, encouraging it to give effect to the price reduction in a way that minimised the potential for any disruption to continuation of supply to patients. To quote the Acting Secretary, Wyeth should "consider making arrangements that support a seamless transfer". Notwithstanding this, the Department has given evidence that it could give effect to an injunction as late as 31 July 2009, preventing a listing of the generics on the PBS on the following day, 1 August 2009. However, the Department concedes that if an injunction were to be issued on 31 July, a substantial number of administrative steps would have to be unwound to ensure that the correct price applied to Efexor-XR. These steps would include facsimiles to all pharmacies across Australia about the alteration in the price of the product. I am therefore inclined to accept Mr Nobes' opinion that Wyeth will need to implement a 12.5% price reduction in Efexor-XR approximately one month before the anticipated PBS listing of the generics on 1 August 2009. It follows that Wyeth would need to have any claim for interlocutory relief determined by no later than 1 July 2009 to avoid passing on a reduction of 12.5% in the price of Efexor-XR. If Wyeth were ultimately successful at a final hearing of its claim of patent infringement, a question would arise as to whether it could recover damages from the sponsors for the loss suffered by Wyeth for the price reduction, which it ought not to have borne, between 1 July 2009 and the date on which interlocutory relief was granted. Moreover, once a generic is listed on the PBS, thereby triggering a 12.5% price reduction in Efexor-XR, the responsible Minister retains a discretion whether to reverse the price reduction even if an injunction were subsequently granted restraining the supply of the generic product: National Health Act , s 99ACE. Furthermore, once a generic is released into the market for PBS products, it would be likely to have the effect of reducing Wyeth's market share. As Gyles J observed in GenRx Pty Limited v Sanofi---Aventis [2007] FCA 1485 ; (2007) 73 IPR 502 at [15] . Wyeth submitted that any doubts which may exist in its ability to recover its losses at a final hearing point toward an order being made in the interests of justice for identity discovery at the earliest possible date. The observations of Jessup J in Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1498 at [71] --- [73] recognise the difficulties which may arise in restoring a patentee to the position it occupies as the only supplier of the product in the event that the patent holder succeeds at the final hearing but is denied interlocutory relief. Nevertheless, I have come to the view that it is not in the interests of justice to order identity discovery on this application. There are two reasons for this. First, I am not satisfied on the evidence before me that Wyeth has good prospects of success at a final hearing. The most that can be said is that it has a provisional working hypothesis which would need to be supplemented by further evidence, including expert evidence, to determine the strength of Wyeth's case. Moreover, there are a number of factors which suggest that the hypothesis is not correct, or, at least, that those factors cannot be displaced in the absence of further evidence. I referred to them at [38] to [42]. Second, the assumption which underlies Wyeth's claim for identity discovery is that if I were to make an order now, it would be in a position to have a claim for interlocutory relief determined by 20 July 2009. This is the date which is shown in Wyeth's chronology of steps required for it to obtain information discovery and, thereafter, to have heard and determined a claim for interlocutory relief. The corresponding date shown on the chronology, upon the assumption that Wyeth has to wait for ARTG listing on 15 May 2009, is 2 September 2009. In my view, is plain that the assumptions upon which Wyeth relies are subject to the ordinary vicissitudes of litigation. This is recognised, at least in part, in the notes to the chronology which state that actual timing of certain steps will depend upon court commitments. It will also depend upon the extent of cooperation between the parties and the availability and other commitments of expert witnesses. Accordingly, I cannot be confident that the Court would be in a position to give judgment on a contested claim for interlocutory relief prior to the anticipated PBS listing of the generics on 1 August 2009. It follows that in my view, the commercial inconveniences and possible difficulties in restoring Wyeth to the status quo will arise in any event. Of course, the shorter the gap between the PBS listing of the generics and the date on which the Court can hear any claim for interlocutory relief, the better will be the prospect of minimising the prejudice asserted by Wyeth. But I do not see that the six week delay which will follow from the deferral of the date on which Wyeth will ascertain the identity of the sponsors is so significant as to sway the interests of justice in Wyeth's favour. Since Wyeth will learn the names of the sponsors on or before 15 May 2009, I do not see the need to leave the present proceedings on foot. Any claim for information discovery against the sponsors could be pursued in separate proceedings. However, I will hear the parties briefly on whether I ought now to order that these proceedings be dismissed.

preliminary discovery o 15a r 3 of federal court rules application for identity discovery reasonable inquiries made "proceeding" to which o 15a r 3 refers is a proceeding for final relief applicant's prospects of success applicant's case amounted to a "working hypothesis" but only gave rise to a possibility of success at final hearing whether in interests of justice to make order whether applicant would be exposed to irreparable harm if no interlocutory injunctive relief granted due to operation of price reduction provisions in national health act 1953 (cth) applicant would gain access to the information the subject of the application within six weeks of hearing regardless of outcome commercial inconveniences and possible difficulties in restoring applicant to status quo if order not made would arise in any event application dismissed. practice and procedure

2 At the heart of their dispute is the question of whether the Health Plus trade mark is deceptively similar to the trade mark INNER HEALTH PLUS that was used in Australia before the priority date for registration of the Health Plus mark. 3 The INNER HEALTH PLUS mark is owned by Health World Limited ("Health World") which manufactures and supplies a range of natural medicine products. 4 In 1999 Health World started to develop a probiotic capsule containing acidophilus and other ingredients which encourage the growth of healthy bacteria that are beneficial for the digestive system. Health World launched the probiotic capsule product to the Australian market in May 2000 under the name Inner Health Plus. 5 About nine years earlier, in March 1991, Health World had commenced to manufacture and supply a probiotic powder called Inner Health Powder. At about that time, Health World applied for, and subsequently obtained, registration of the trademark INNER HEALTH. It successfully marketed the Inner Health powder from 1991 but commenced to develop the Inner Health Plus capsules in 1999 when sales of Inner Health powder fell below $1 million per annum. The development of the Inner Health Plus product and the style and emphasis of its packaging and marketing are important because Shin-Sun Australia Pty Ltd ("Shin-Sun") contends that Inner Health Plus is a line extension of the Inner Health product. 6 Health World applied to register the INNER HEALTH PLUS trade mark on 12 September 2001. However, four months earlier, on 7 May 2001, Shin-Sun applied for registration of the Health Plus mark. 7 The priority date for registration of the Health Plus trade mark is 7 May 2001. As at that date, the provisions of the Trade Marks Act 1995 (Cth) dealing with opposition to the registration of a mark on the ground of deceptive similarity were in different terms from those currently in force, but the provisions were amended after the date of commencement of these proceedings. 8 The relevant provision is s 60. As at 7 May 2001, s 60 contained four pre-requisites for opposition. The first of these was that the application mark must be substantially identical with or deceptively similar to a trade mark which existed before the priority date of the application mark. 9 In December 2001 Health World filed notice of opposition to the Health Plus trade mark relying inter alia on the ground contained in s 60. The Registrar of Trade Marks dismissed the opposition but Health World appealed to the Federal Court under s 56 of the Act. The appeal was heard by Cooper J. His Honour determined the appeal adversely to Health World: see Health World Limited v Shin-Sun Australia Pty Ltd (2005) 64 IPR 495. 10 The present proceedings are, of course, not an appeal from Cooper J. Nor is Health World estopped from asserting that the Health Plus mark was deceptively similar to the Inner Health Plus trade mark at 7 May 2001, even though Cooper J found on the balance of probabilities that the Health Plus mark was not deceptively similar to the Inner Health Plus mark as at that date: see Health World v Shin-Sun (per Cooper J) at [6], [41]; Health World Limited v Shin-Sun Australia Pty Ltd [2006] FCA 647. In the first, Health World seeks expungement of the Health Plus mark under ss 88(2)(a) and (c) of the Act. This proceeding is sometimes referred to as the rectification proceeding. 12 Section 88(2)(a) provides that an application for cancellation or removal of a mark may be made on any of the grounds on which the registration of the trade mark could have been opposed under the Act. The grounds on which Health World relies in the rectification proceeding are those contained in ss 42 , 59 and 60 . 13 One of the issues in the rectification proceeding is whether s 60 applies in the form in which it stood as at 7 May 2001 or whether it applies in its terms as subsequently amended. 14 The s 42 ground is that the use of the Health Plus trade mark would have been contrary to law at 7 May 2001 because it would have amounted, inter alia , to misleading or deceptive conduct under s 52 of the Trade Practices Act 1974 (Cth). 15 Under the s 59 ground, Health World claims that, as at 7 May 2001, Shin-Sun did not intend to use or authorise the use of the Health Plus trade mark in relation to the goods specified in the trade mark application. 16 The s 59 ground is raised, inter alia, because of the apparent failure of Shin-Sun and the persons who conduct the business of that company and an associated company, Nature's Hive Pty Ltd, to distinguish between the separate identities of those corporations. 17 I will deal with this issue in some detail below. It is sufficient to say by way of introduction that the evidence establishes that Shin-Sun's name does not appear on the products on which the Health Plus mark has been used. Rather, the name which appears on them is that of Nature's Hive. 18 Section 88(2)(c) provides that rectification may be sought on the ground that, by reason of the circumstances applying at the time of the application for rectification, the use of the registered trade mark is likely to deceive or cause confusion. 19 Health World contends that the s 88(2)(c) ground is enlivened because at the date of commencement of the rectification proceeding, the Health Plus trade mark was being used to identify the goods of Nature's Hive, not those of Shin-Sun. 20 Health World also claims in the rectification proceeding that Shin-Sun has passed off its pharmaceutical products, under the Health Plus label, as those of Health World. The same conduct is relied upon by Health World as giving rise to a claim for damages for misleading and deceptive conduct under the Trade Practices Act . 22 In the second proceeding, commenced on 25 July 2006, Health World seeks removal of the Health Plus trade mark from the register on the ground of non-use. Health World relies on the grounds stated in s 92(4)(a) and s 92(4)(b) of the Act. This proceeding is sometimes referred to as Health World's non-use proceeding. 24 This ground arises because Shin-Sun apparently decided to interrupt its marketing of Health Plus products for a substantial period during which Shin-Sun was subject to legal proceedings brought against it by Health World. 25 Shin-Sun (or Nature's Hive) did not launch the Health Plus range of products into the Australian market until August 2004, which was after the expiration of the three year period specified in s 92(4)(b). However, Shin-Sun relies upon an export transaction that occurred in September 2001. 26 In the third proceeding, Shin-Sun brings its own non-use application against Health World relying on the grounds stated in s 92(4)(a) and s 92(4)(b). This proceeding is sometimes referred to as Shin-Sun's non-use proceeding. 27 Shin-Sun's non-use proceeding is based upon the contention that Health World has only ever used the Inner Health Plus trade mark for probiotic products in capsule form containing acidophilus and other specified ingredients. 28 Thus, Shin-Sun's non-use proceeding is for partial removal of the Inner Health Plus mark, by restricting it to probiotic capsules containing acidophilus and the specified ingredients. The rectification proceeding was commenced on 13 February 2006. Health World's non-use application was commenced on 25 July 2006. Shin-Sun's non-use application was commenced on 15 September 2006. Thus in the absence of a clear legislative intention to the contrary, the provisions of the Act apply as they stood prior to the 2006 amendments. The relevant provisions are set out below, in their pre-amendment form. 32 Section 7 of the Act deals with the use of a trade mark. 35 Section 9(1)(c)(ii) provides that a trade mark is taken to be applied in relation to goods if it is used in an invoice or other specified commercial documents, and the goods were delivered following a request or order made by referring to the trade mark as so used. 40 The operation of s 88(1) is subject to s 88(2). That subsection states the grounds on which an application for rectification may be made. When Inner Health Plus capsules were introduced in May 2000, they differed from Inner Health Plus powder in the following respects. • Inner Health was supplied in a powder in bottles. • Inner Health powder only contained acidophilus bacteria whereas Inner Health Plus capsules also contained bifidobacterium and a complex marketed under the trade mark Probioplex. • Inner Health Plus capsules contained significantly more bacteria than Inner Health powder. One Inner Health Plus capsule contained 10 billion acidophilus bacteria whereas the daily dose of Inner Health powder contained 2.5 billion bacteria. 46 Since 2000, Health World has continued to market and promote the Inner Health powder, although not to the same extent as Inner Health Plus capsules. 47 In 2003, Health World upgraded the formulation of Inner Health powder. From that time, the daily dose contained 7.5 billion acidophilus bacteria and 7.5 billion bifidobacterium organisms as well as Probioplex. 48 At the same time, the concentration of Inner Health Plus was also upgraded. It contained 12.5 billion acidophilus bacteria and 12.5 billion bifidobacterium organisms. It continued to contain Probioplex. 49 Health World also manufactures and supplies a dairy free version of Inner Health powder and Inner Health capsules. Those products do not contain Probioplex. 50 A presentation document used by Health World until about 2003 contains a photograph of the bottles in which Inner Health Powder, Inner Health Plus capsules and Inner Health Plus Dairy Free are supplied. The photos in the document depict each of the products substantially in the form in which they have been supplied at all times relevant to the disposition of these proceedings. I will refer to them and set out words which may be difficult to read in the reproduction of the exhibit. 52 Each of the bottles has a blue cap and is of similar size and appearance. The words "Ethical Nutrients" on the Inner Health powder is in white letters on a blue background. Ethical Nutrients is another brand used by Health World for its natural medicine products. 53 The words Inner Health Powder are in blue on a white background. The shade of blue is almost identical to the shade of blue on the Inner Health powder. However, the word "Plus" appears in orange. 55 The words "High Potency Probiotic capsules" are in a similar shade of blue. The words underneath are in white on an orange background. 57 The form on the bottle in which the Inner Health Plus capsules were supplied as at 7 May 2001 was in evidence. It was Exhibit A. It contains no material differences from the form of the bottle depicted in Exhibit B and reproduced above, or from the currently marketed version, as comprised in Exhibit GRJ21. 58 The words "Inner Health" on the Inner Health Plus Dairy Free are in the same shade of blue as the non-dairy free bottle. The words "Plus" and "Dairy Free" are in the same shade of orange as the word "Plus" on the non-dairy free bottle. 59 The balance of the Inner Health Plus Dairy Free label is in similar style and colour to the non-dairy free bottle. The differences reflect the absence of Probioplex and the separate TGA listing number for the dairy free version. The directors of the company are Mr James Shin and his wife, Mrs Anna Shin. Mr and Mrs Shin are the sole shareholders of the company. 61 Ms Theresa Shin is the general manager of Shin-Sun. She is the daughter of Mr James Shin and Mrs Anna Shin. She has held this position since 2000. 62 Shin-Sun's principal place of business is at 226 Burwood Road, Burwood, which is a retail outlet. It is also the principal place of business of Nature's Hive. The retail outlet is known as Shin-Sun Natural Health Products. 63 Ms Shin describes the companies Shin-Sun and Nature's Hive as family businesses, managed principally by her and her parents. She is the General Manager of both companies but they have different shareholders. 64 Nature's Hive was incorporated in 1995. Mr and Mrs Shin are directors but they were appointed only as at May 2006 and July 2006 respectively. Ms Theresa Shin owns twenty of the twenty-one issued shares. Her uncle owns the remaining share. 65 Nature's Hive operated a store in Chatswood from 1996 to 1999. Ms Shin's evidence is that Nature's Hive ceased to trade in May 1999, except for its role as sponsor of listings for Health Plus products under the Therapeutic Goods Act 1989 (Cth). 66 Nature's Hive did not have a bank account from May 1999 to December 2006. In December 2006 it commenced to operate a retail outlet in Pitt Street, Sydney under the name Health Plus. The stylised lotus flower or fleur-de-lis appears on all of the Health Plus labels. 70 Significantly, Shin-Sun's name does not appear, and has not ever appeared on the packaging or livery of Health Plus products. Instead, most of the products show the name of Nature's Hive. 71 In some cases the name of MediPlus Australia appears on the packaging. This is a business name owned by Shin-Sun, but Ms Shin acknowledged that this was a reference to Nature's Hive, not to Shin-Sun. 72 An example of the packaging in which the Health Plus product, Evening Primrose Oil is supplied was Exhibit TSS5 to Ms Shin's affidavit. A copy showing the front and back of the product is reproduced below. They are the grounds raised by ss 42 and 60 of the Act and the claims under the Trade Practices Act and for passing off. 74 As the pre-amendment form of s 60 applies there is a threshold question of whether the Health Plus mark is deceptively similar to the Inner Health Plus mark. Section 60(a) as it stood at 7 May 2001 called for that question to be determined by a comparison of the impugned mark with the existing mark that "had acquired a reputation in Australia. 76 The relevant date for determining the reputation of the Inner Health Plus mark in the claims under ss 52 and 53 of the Trade Practices Act , and for passing off, is the date on which Shin-Sun (or Nature's Hive) commenced the use of the Health Plus mark: see Thai World Imports v Shuey Sing (1989) 17 IPR 289 at 302. 77 Shin-Sun contends that the relevant date for the purpose is September 2001 when it claims to have sold goods under the Health Plus mark in an export transaction to Taiwan. 78 Health World contends that the relevant date for the purposes of the claims under the Trade Practices Act and for passing-off is August 2004 when the Health Plus range was launched in the Australian market. 79 In my view Health World's submission is correct, but I do not consider that anything turns on the difference between the two dates. 81 Health World relies upon the evidence of its sales, promotion and marketing of Inner Health Plus capsules to make good the proposition that its reputation in the capsules is, and was, separate and distinct from the reputation of Inner Health Powder. 82 This evidence was given for the most part by Mr Graeme Joiner, Health World's Director of Sales and Marketing. Mr Joiner's evidence was supplemented by that of Ms Erika Mikl, Health World's National Education Manager and by a variety of other evidence including that of pharmacists and other retailers of natural medicines. Evidence was also given by Health World's advertising agent. 83 Health World's evidence establishes that it commenced marketing and taking orders for Inner Health Plus capsules in March 2000. It commenced supplying the capsules in May 2000 when listing was obtained under the Therapeutic Goods Act . Sales of more than $172,000 were achieved in the financial year ending 30 June 2000 and sales for the year ending 30 June 2001 were $464,000. Sales increased rapidly in the period from 2002 to 2004, rising to nearly $6 million for the financial year ending 30 June 2004. 85 Commencing in March 2000, Health World embarked upon a promotional campaign directed at retail pharmacies and health food stores throughout Australia. The campaign consisted of brochures and point of sale material. These materials were delivered to pharmacies and health food stores which are the major outlets for the sale of Inner Health Plus capsules. 86 It is important to note that from the outset of the campaign in March 2000, the brochures sought to build upon the existing reputation of Inner Health powder. 88 The emphasis upon the reputation of the existing product, ie. Inner Health powder, is reinforced on the second page of the brochure. It states, under the slogan "The First and Still the Best! The bottles represented are substantially the same as those depicted in the "Inner Health range" reproduced at [50] above, except that it does not include a bottle of the Inner Health powder. 91 Marketing and promotion of the Inner Health Plus capsules has continued in much the same form since 2000, though the promotional material is regularly updated. The point of sale material includes a plush soft toy in the form of a blue bug. The toy is known as "the blue bug". 92 The blue bug is a prominent feature of the promotional material for Inner Health Plus which emphasises the beneficial qualities for intestinal health of good bacteria contained in the product. It appears on the cover of the brochure GRJ1 referred to above and in other material including television advertisements. 93 It should be noted that the very same blue bug appeared in promotional and advertising material for Inner Health powder displayed in the marketplace before the launch of Inner Health Plus. 95 Accordingly, I reject Health World's submission that its reputation in the Inner Health Plus capsules is, and was as at 7 May 2001, separate and distinct from its reputation in the Inner Health Powder. 96 Indeed, the entire thrust of Health World's launch of the Inner Health Plus capsules was to take advantage of the reputation of the Inner Health Powder and the goodwill attaching to it. This is graphically revealed in Mr Joiner's evidence in the proceedings before Cooper J, as put to Mr Joiner by counsel for Shin Sun in cross-examination in the present proceedings. I believed that the fact that Inner Health was an established product in its field gave Health World an excellent opportunity to introduce a new type of probiotic product similar to the existing Inner Health product but in an improved version which could be launched onto the market. My plan was to take advantage of the goodwill which had already been built up in the Inner Health brand. In any event, its accuracy is fully supported by the promotional and advertising material referred to above. 98 It is true that when Inner Health Plus capsules were introduced they contained bifidobacteria which were not an ingredient of Inner Health powder at that time. But that does not distinguish the reputation of Inner Health Plus from its predecessor. 99 All of the significant differences between Inner Health Plus and Inner Health to which Mr Joiner and Ms Mikl referred merely serve to emphasise the connection between the reputation of the products. Both emphasise the benefits for intestinal well-being of acidophilus and other healthy bacteria. 100 The get-up of the bottles, similarly coloured and labelled, but with the word "Plus" in orange on the Inner Health Plus bottle also emphasises the connection between the products. It conveys the fundamental message that Mr Joiner sought to achieve, namely the added strength and convenience of Inner Health Plus capsules. 101 I accept that consumers of Inner Health Plus capsules ask for the product by name and that most have not previously taken Inner Health powder. But I do not accept that this distinguishes the reputation of Inner Health Plus capsules from Inner Health powder or the essential message of internal well-being that underlies the trade marks and the get-up of the goods. 102 The position is the same regardless of whether the question of reputation is considered as at 7 May 2001 or August 2004. Sales of Inner Health Plus had increased dramatically by 2004 and continued to increase thereafter. There were some changes in the formulation of the product and some minor alterations to the labelling. However, the essential message and reputation of Inner Health Plus remained constant; it was part of the Inner Health range and offered greater strength and convenience for beneficial intestinal well-being. For the reasons I set out above at [30]-[31], none of the 2006 amendments apply to these proceedings because all three actions were commenced prior to 23 October 2006. Nonetheless, I will set out the submissions of the parties. 104 Counsel for Shin-Sun, Ms Shin and Nature's Hive submitted that, as a matter of construction of s 88(2)(a), s 60 applies in its pre-amendment form. Counsel pointed out that s 88(2)(a) in its current form enlivens the power to order rectification of the register on "any of the grounds on which registration of the trade mark could have been opposed under this Act. " (Emphasis added). One of the grounds on which the registration of Health Plus could have been, and was, opposed was s 60. The amendments were not in force when the Health Plus trade mark application was filed on 7 May 2001. Accordingly, counsel for Shin-Sun argued that s 60 must apply in the form in which it stood in May 2001 because that was the ground on which the registration of the trade mark could have been opposed. 105 However, Health World draws attention to the fact that the Amendment Act contains no transitional provision for the application of the amendment made to s 60 by Item 31. This is to be contrasted with other provisions such as Item 26 and Item 30. 106 Health World also draws attention to the words "under this Act" in s 88(2)(a). Health World submits that these words have the effect of engaging the operation of the amended form of s 60 to the present application. 107 I reject Health World's submission for the three reasons set out below. Facts subsequent to the date of registration will be irrelevant. 110 Second, this approach to construction is consistent with the scheme of the Act as discussed by a Full Court in Lomas v Winton Shire Council [2003] AIPC 91-839 at [18]. The Full Court there observed that opposition proceedings are quasi-summary and an unsuccessful opponent will have the opportunity to bring an expungement application if the opposition proceeding fails: see also the authorities to which I referred in Health World Limited v Shin-Sun Australia Pty Limited [2006] FCA 647 at [27] , [36], [40], and [41]. 111 In light of these authorities, it would seem to me to be wrong to suggest that the Act contemplates that an expungement application may be brought upon the basis of a ground of opposition expressed in different terms from those that were applicable when the opposition was, or could have been, brought. 112 Third, the approach suggested by Health World is contrary to established principles of construction of statutes. In particular, express words or necessary implication are required to take away rights, privileges, obligations or liabilities acquired or incurred under a repealed Act: s 8 of the Acts Interpretation Act 1901 (Cth). 113 Moreover, the general rule of the common law is that, subject to any contrary intention appearing with reasonable certainty, a statute changing the law is not to be understood as applying to facts that have already occurred so as to confer or otherwise affect rights or liabilities which the law has defined by reference to past events: Maxwell v Murphy [1957] HCA 7 ; (1957) 96 CLR 261 at 267 per Dixon CJ. 114 As Fullagar J stated in Fisher v Hebburn Limited [1960] HCA 80 ; (1960) 105 CLR 188 at 194, a statute is, prima facie , to be construed as not attaching new legal consequences to facts or events which occurred before the commencement of the statute. 115 In my view, Shin-Sun's approach to statutory construction is correct, although more accurately it ought to be based on s 88(2)(a) as it stood when the rectification proceeding was commenced on 13 February 2006. On that date, s 88(2)(a) enlivened the power to order rectification of the register on "any of the grounds on which registration of the trade mark could have been opposed under Division 2 of Part 5". The pre-amendment form of s 88(2)(a) still requires s 60 to be applied as it stood when the trade mark was filed on 7 May 2001. The significance of applying the pre-amendment form rather than current form of s 88(2)(a) is that Health World is precluded from relying on the 'contrary to law' ground under s 42 (that provision not being found in Division 2 of Part 5). 116 For all these reasons, it follows, in my opinion, that the ground of opposition based upon deceptive similarity is to be determined under s 60 in its pre-amended form. 118 The expression "an aggrieved person" is to be given a wide interpretation: see In the Matter of Powell's Trade Mark (1893) 10 RPC 195 at 201 (C.A. UK); (1894) 11 RPC 4 at 7-8 (HL); see also Continental Liqueurs at 427. 119 An aggrieved person is one who has a real interest in having a trade mark removed from the Register, or one who would be appreciably disadvantaged in a legal or practical sense if the trade mark remained on the Register: Continental Liqueurs at 427; Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 at 193-194; Kraft Foods Inc v Gaines Pet Foods Corporation (1996) 65 FCR 104 at 112-113. 120 It is not sufficient that an applicant for rectification of the Register is in the same trade as the registered owner of the mark; what is required is that the applicant have a desire to use the mark, or be likely to be hampered in some other way by the registration of the mark that the applicant seeks to have expunged: Shanahan at [14.90]. 121 I do not consider that Health World has any genuine desire to use the HEALTH PLUS mark. It is true that Health World has filed an application No 1121282 for the series trade mark "HEALTH PLUS" including a number of variations. That application was filed on 28 June 2006, approximately six months after Health World commenced the rectification proceeding, and three days after it commenced the Health World non-use proceeding. 122 However, Health World did not give evidence of any intention to use the HEALTH PLUS trade mark. Mr Joiner's evidence did not rise above a general assertion that he had occasionally discussed with Health World's Managing Director, Mr Gee, proposals to develop and release "new products" using the Inner Health Plus brand. 123 Mr Gee's evidence was to the same effect, although he also asserted a belief that Health World will use the INNER HEALTH PLUS trade mark for new natural medicine products when a new product is developed. 124 The whole tenor of this evidence is therefore inconsistent with any intention of Health World to use the HEALTH PLUS trade mark, other than as part of its existing INNER HEALTH PLUS mark. 125 If I were of the view that the Health Plus trade mark was deceptively similar to the Inner Health Plus trade mark, I would be satisfied that Health World is an aggrieved person: Campomar Sociedad, Limitada v Nike International Limited (1998) 85 FCR 331 at 364; reversed by the High Court but not on the "aggrieved person" issue in [2000] HCA 12 ; (2000) 202 CLR 45. 126 However, for reasons set out below, in my opinion, Health Plus is not deceptively similar to INNER HEALTH PLUS. 127 Accordingly, subject to what I say below about the s 59 ground (which Health World relies upon under s 88(2)(a)) and the s 88(2)(c) ground, I do not consider that Health World is an aggrieved person. 129 Section 10 of the Act defines the expression "deceptively similar". The opposed mark must so nearly resemble the other mark that it is likely to deceive or cause confusion. The authorities dealing with the question of whether one trade mark is deceptively similar to another were reviewed by a Full Court of this Court in Crazy Ron's Communications Pty Limited v Mobileworld Communications Pty Limited (2004) 61 IPR 212 at [72]ff. 130 The Full Court in Crazy Ron's distilled five legal principles from the many authorities which have dealt with this subject. Their Honours were dealing with the question of deceptive similarity in the context of trade mark infringement but the same principles apply to the test of deceptive similarity in s 60 as it stood in May 2001. 131 It is unnecessary to set out the five principles stated in Crazy Ron's . It is sufficient to say that the marks are not to be judged by a side by side comparison; they are to be considered by their look and sound, with due allowance for imperfect recollection. The goods to which the marks are to be applied must be considered together with all the surrounding circumstances. 132 These principles are well established. They were stated by Dixon and McTiernan JJ more than 50 years ago in Australian Woollen Mills Limited v FS Walton & Co Limited [1937] HCA 51 ; (1937) 58 CLR 641 at 658 and reiterated by the High Court in other authorities. It depends on a combination of visual impression and judicial estimation of the effect likely to be produced in the course of the ordinary conduct of affairs. Thus, the comparison which is to be made for the purposes of s 60 is between the unregistered mark Inner Health Plus and the Health Plus registered trade mark. 135 In my opinion the Health Plus trade mark was not deceptively similar to the Inner Health Plus mark for the reasons set out below. 136 The two marks convey different ideas and concepts. Health Plus conveys, to the ordinary person, an impression of enhanced health and well-being. It is directed at the idea of overall or general health. It is not concerned with specific aspects of bodily health such as internal health. 137 By contrast, the Inner Health Plus trade mark conveys the impression that it is concerned with a specific aspect of bodily health, namely internal health. 138 Visually, the marks are very different. The impression that the person of ordinary intelligence and memory would have of the Inner Health Plus mark is that of the dominant name and phrase, Inner Health. This appears on the bottle in the same shade of blue as the cap and in a similar shade of blue to the words, "High Potency Probiotic Capsules". 139 The word "Plus" on the bottle, in bold orange colour, emphasises the enhancement that the product brings to the internal health of the consumer. 140 No such impression is created by the look or appearance of the trade mark Health Plus . As I have said, it is concerned with general health and well-being. 141 The same differences are created by an aural comparison. Here, stress and pronunciation would usually given to the first syllable of the word or mark: see for example Aldi Stores Limited Partnership v Frito-Lay Trading GmbH (2001) 54 IPR 344 at [32], [157] --- [164]. 142 Thus, an aural comparison of the marks by the person of ordinary intelligence and memory would bear out the impression that Health Plus is concerned with enhanced general health whereas Inner Health Plus invokes improved internal health. 143 I reject Health World's submission that the Health Plus mark should be characterised as two words, at least in a visual sense. Although the word " Plus " is italicised, the usual impression is plainly of one word. 144 It is possible that the word "Health Plus " would be heard and remembered as one word. But I do not consider that anything turns on this because in an aural comparison, the over-riding consideration is the absence of the word "Inner" from the word or words "Health Plus ". 145 I do not consider that the Health Plus mark captures one of the essential features of the Inner Health Plus mark: c.f. Saville Perfumery Limited v June Perfect Limited (1941) 58 RPC 147; de Cordova v Vick Chemical Co (1951) 68 RPC 103 at 105-106. 146 Those authorities, as well as authorities of Full Courts in CA Henschke & Co v Rosemount Estates Pty Limited (2000) 52 IPR 42 and Registrar of Trade Marks v Woolworths Limited [1999] FCA 1020 ; (1999) 93 FCR 365, were discussed by the Full Court in Crazy Ron's at [80] --- [90]. 147 The effect of those authorities is that the enquiry is not as wide as would be undertaken in a passing off action or in a proceeding under s 52 of the Trade Practices Act . Rather, the search is to be concentrated on ascertaining the essential element of the mark and the impression taken away by one who looks at it and how it sounds when pronounced: Crazy Ron's at [86], [88]. 148 The essential element of the Inner Health Plus mark is not found in the words "Health Plus". Rather, as I have already said, the idea or essential feature of Inner Health Plus is that it is concerned with internal health. Health Plus embraces a different concept. 149 To the extent that any notoriety of Inner Health Plus is to be taken into account, consumers must be taken to be familiar with it as an improved and more convenient version of Inner Health powder: Crazy Ron's at [90]. 150 Nor do I accept that the letter of 4 April 2007 from Shin-Sun's solicitors constitutes an admission that the marks are deceptively similar. It is well settled that the issue of deceptive similarity is for the Court itself to decide: Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Limited (1986) 12 FCR 477 at 487-488, referred to by Cooper J in Health World v Shin-Sun (2005) at [33]. 151 Furthermore, there is no tangible danger of deception or confusion: Crazy Ron's at [76]. The Inner Health Plus product and the goods encompassed by the Health Plus trade mark have their own separate attributes. They may be recommended by health professionals. Their purchase is likely to be a considered decision after close appraisal and consideration. Health professionals are usually careful to listen and ensure that their customers select the correct product. It is therefore unnecessary for me to consider that test. 153 Under the amended form of the section it would be necessary to consider that question because a finding of deceptive similarity is no longer a pre-requisite. However, even if the amended form of the section applies, Health World would not succeed in its application for rectification on this ground. 154 Section 60(a) as amended would be enlivened because Inner Health Plus had acquired the necessary reputation. But the causal link required under s 60(b) would not be made out. This is because the reputation of Inner Health Plus was that of a more potent and convenient form of Inner Health powder. Health World's case under s 42(b) is that the use of the Health Plus trade mark in trade or commerce, as at 7 May 2001, would have amounted to a contravention of ss 52 , 53 (a), (c) and (d) of the Trade Practices Act . Health World contends that these contraventions would have come about by reason of its reputation in the then unregistered mark, Inner Health Plus. 156 As Cooper J said in Health World v Shin Sun (2005) at [44], a contravention of the Trade Practices Act would be sufficient to constitute a contravention of law so as to enliven the operation of s 42(b) of the Act; the question is whether the use would be contrary to law. 157 For the reasons set out above, having regard in particular to the specific reputation of Inner Health Plus, I am satisfied that there would be no contravention of the applicable provisions of the Trade Practices Act . 159 Shin-Sun admits that it did not intend to assign the trade mark to a body corporate for use by the body corporate in Australia: s 59(b). 160 In my view, the intention, or lack thereof, to which s 59 is directed, is a "real and definite intention" of the applicant for registration, to use the mark publicly as a trade mark, although it is not necessary that the intention be immediate or within a limited time: Ritz Hotel at 202-203. 161 The subjective nature of the intention, the presumption of intention flowing from the application for registration and the onus on an opponent usually make it difficult for an opposition, or an application for rectification, to succeed on this ground: see Shanahan at [2.120], [11.110]; Dufty A & Lahore J, Lahore, Patents Trade Marks & Related Rights (LexisNexis Butterworths, 2006) at [55,580]. 162 However, there is authority for the proposition that where an applicant for registration has been put on notice that its intention to use the mark was in issue, and has not responded to the opponent's evidence, a finding of lack of intention may be made: Philip Morris Products SA v Sean Ngu [2002] ATMO 96 ; Tommy Hilfiger Licensing Inc v Tan (2002) 60 IPR 137; Shanahan at [11.110]. 163 The principle which underlies these authorities seems to me to be that the evidentiary onus shifts to the applicant for registration where an opponent makes a prima facie case of lack of intention to use the mark. 164 Shin-Sun was on notice that its intention to use the mark was in issue from 21 July 2006 when the Statement of Claim in the rectification proceeding was amended. This was pleaded in [20] of the Amended Statement of Claim, and was particularised in the Second Further Amended Statement of Claim on 21 August 2007 upon the basis that the Health Plus mark was not used until a date well after 7 May 2001. 165 Shin-Sun's defence to the s 59 ground asserted a positive intention to use the Health Plus mark and to authorise others to use the mark. 166 In her affidavit sworn 20 December 2006, Ms Shin sought to address the case of absence of intention. She met the claim made in Health World's pleading by stating that Shin-Sun delayed the launch of the Health Plus range because of the litigation between the parties. She was not cross-examined on this. 167 Nevertheless, other matters were put to her in cross-examination in an attempt to make good Health World's claim of absence of intention. In particular, it was put to Ms Shin, and she accepted, that her father makes the final decisions on behalf of Shin-Sun on all relevant matters. 168 It is plain that Mr Shin is, and was, the controlling mind of Shin-Sun and that he was the proper person to give evidence of the company's intention. Nevertheless, he was not called until the last minute, only after I gave leave to reopen. Even then, his evidence was quite limited and did not disclose a positive intention on the part of Shin-Sun to use the Health Plus trade mark on goods in class 5. 169 Indeed, the effect of Mr Shin's evidence was that "we wanted to widen our business" to use the mark on any products which Shin-Sun might make. This does not satisfy the test stated in the authorities to which McLelland J referred in the Ritz Hotel case at 202-203. 170 Ms Shin, in her affidavit of 20 December 2006, stated that Shin-Sun conceived the Health Plus mark and that she had taken certain steps on behalf of that company which were consistent with an intention, as at 7 May 2001, for Shin-Sun to use the mark. 171 However, the overall effect of her evidence was that she failed to distinguish between the two separate corporate entities, Shin-Sun and Nature's Hive. I cannot be satisfied, and I find that she did not pay attention to which corporation she was representing when she took the steps that she relies upon to support the assertion that Shin-Sun intended to use the mark. 172 In my opinion, Shin-Sun has failed to discharge the evidentiary onus of satisfying the Court that it had a sufficiently clear and definite intention that Shin-Sun proposed to use the mark on goods within class 5 so as to establish a connection in the course of trade between Shin-Sun and the goods. 173 Indeed, as Ms Shin acknowledged, "we just wanted a Western name" on the packaging. The packaging was to be connected with Nature's Hive. Insofar as any intention is disclosed, it was an intention that there be a connection in the course of trade between Nature's Hive and the goods, rather than a connection with Shin-Sun. However, I have a discretion under the Act to decide that the Health Plus trade mark should not be removed from the Register. I will return to the question of whether registration of the Health Plus mark should be expunged on the s 88(2)(a) and s 59 ground when I deal with the question of discretion under ss 88 and 89. It provides a ground for expungement of a mark if, in the circumstances which prevail at the time of the application for rectification, the use of the mark is likely to deceive or cause confusion. 176 Section 88(2)(c) is therefore concerned with reasons which were not available as a ground for rejection or opposition; it deals with circumstances that arose after registration: Shanahan at [14.250]. 177 In Australian Co-operative Foods v Norco Co-operative [1999] NSWSC 274 ; (1999) 46 NSWLR 267 at [84] --- [86], Bryson J took a wide view of the operation of s 88(2)(c). His Honour proceeded on the basis that the ground is available if the use of the mark is likely to deceive or cause confusion for any reason. 178 In Norco , Bryson J was of the view that there was no likelihood of deception because the packaging of the goods accurately identified the source of the goods and the registered owner of the trade mark: Norco at [84]. 179 In the present case, Health World points to the evidence which discloses that at the date of the commencement of the rectification proceedings, the Health Plus trade mark was used to identify the goods as those of Nature's Hive, and not those of Shin-Sun. I will deal with this below. 180 This would give rise to the likelihood of deception or cause confusion because of the failure to identify the registered owner as the source of the goods. 181 It is possible that the observations of the High Court in Nike at [61], suggest a more restrictive approach to the construction of s 88(2)(c). In Nike (2000), their Honours were concerned with the provisions of s 28 of the Trade Marks Act 1955 (Cth), which was in different terms but it is part of the legislative history of s 88(2)(c) which is discussed in Shanahan at [14.230]ff. 182 Pending consideration of s 88(2)(c) by a Full Court, or by the High Court, it seems to me that I should follow the approach adopted by Bryson J in Norco . On that basis the s 88(2)(c) ground is enlivened by the failure to distinguish the Health Plus products as goods of Shin-Sun. 184 In summary, the effect of the evidence was that Shin-Sun's name has never appeared on the packaging and Nature's Hive procured the manufacture of the products. 185 The function of a trade mark is to give an indication to a purchaser as to the manufacture or quality of the goods and an indication of the trade source from which the goods come or through which they pass on their way to market: Aristoc Limited v Rysta Limited (1944) 62 RPC 65 at 74, 79. 186 Here, whatever the subjective intentions of the Shin family may have been, the public face of the Health Plus trade mark was that of Nature's Hive. It was the only name that appeared publicly as part of the "badge of origin" of the product. 187 In Pioneer Kabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56 ; (1977) 137 CLR 670 at 686, Aickin J recognised that a mark may be used to indicate a connection with an unidentified person. His Honour said that in those circumstances it must indicate a connection with both the proprietor and the user. 188 In my opinion, that requirement is not satisfied as a matter of fact because the evidence does not demonstrate any connection between the actual use of the mark and the registered proprietor, Shin-Sun. 189 Nevertheless, Shin-Sun contends that s 88(2)(c) is not enlivened because Nature's Hive's use of the mark was under the control of Shin-Sun so that Nature's Hive was an "authorised user" within the meaning of s 8(1) of the Act. Section 8(4) refers to the exercise by the owner of financial control over the other person's trading activities. 191 However, s 8(3) and s 8(4) do not limit the meaning of the expression "under the control of" the owner of the trade mark in s 8(1): see s 8(5). It is therefore necessary to deal with the question of whether Shin-Sun exercised quality or financial control over Nature's Hive's use of the mark, or whether it controlled the use in the broad sense referred to by Aickin J in Pioneer at 683. 192 There is no evidence before me that Shin-Sun has exercised quality control over the Health Plus products manufactured for Nature's Hive and supplied under Nature's Hive's packaging. 193 Indeed, in my view, the evidence establishes that Nature's Hive has the relevant obligations of quality control under the Therapeutic Goods Act . Nature's Hive is the sponsor and the certificate of listing for the goods imposes the obligation of quality control on Nature's Hive. 194 Ms Shin accepted in cross-examination that the conditions on the certificate of listing were binding on Nature's Hive. I reject Ms Shin's evidence that the conditions were also binding on Shin-Sun. There was no evidence to support such a finding. 195 The only written agreements dealing with the manufacture of the goods were the Good Manufacturing Practice Agreements which are entered into by Nature's Hive. There are no written agreements between Nature's Hive and Shin-Sun relating to the manufacture of the goods or covering any other topic. 196 There was nothing to suggest that Shin-Sun exercised quality control in the way in which the executors of the estate of Cyril Henschke exercised control over the Henschke partnership: Henschke at [67]. 197 Nor did Shin-Sun exercise "financial control" over Nature's Hive's trading activities within the meaning of s 8(4). This is because, in my view, the financial control to which the subsection is directed is a legally enforceable power of control which did not exist between Shin-Sun and Nature's Hive. 198 Ms Shin's evidence was that Nature's Hive did not have a bank account. I accept this evidence but it does not follow that Shin-Sun exercised financial control within the meaning of s 8(4). What that subsection requires is evidence of the exercise of financial control over trading activities, perhaps in the way in which a parent company may exercise control over a wholly owned subsidiary. Here, there was no such relationship and any control by Shin-Sun was revocable: Henschke at [69]. 199 Nature's Hive and Shin-Sun have different shareholders. They have common directors but that has only been the position since July 2006. Of course, in a practical sense, it may be unlikely that Ms Shin would remove her parents as directors of Nature's Hive. But that is not an answer to the separate corporate identity of Shin-Sun and the power of Ms Shin as the majority shareholder to revoke any exercise of control flowing from common directorships. 200 The "control" which is contemplated by s 8(5) would seem to be as wide as the "connection in the course of trade" to which Aickin J referred in Pioneer at 683. His Honour said that the connection may be slight, such as selection or quality control or control of the user in the sense in which a parent company controls a subsidiary: see also Henschke at [70]. 201 However, Aickin J observed in Pioneer at 683 that it is essential that the user maintains the connection of the registered proprietor with the goods. That connection is not established on the facts of the present case. 202 It follows in my view that Nature's Hive was not an authorised user of the mark. It also follows that the use of the Health Plus trade mark was likely to deceive or cause confusion within the meaning of s 88(2)(c) of the Act. However, in EOS Australia Pty Ltd v Expo Tomei Pty Ltd (1998) 42 IPR 277 at 287, Branson J expressed the view that the terms of s 89 suggest that s 88(1) does not vest a true discretion in the Court. 204 In my opinion, there is force in Branson J's view because s 88(1) is subject to s 89, and s 89 confers a discretion, to be exercised in limited circumstances, not to grant an application for rectification. Nevertheless, this approach has not been taken in other courts: see eg. Toddler Kindy Gymbaroo Pty Ltd v Gymbaree Pty Ltd [2000] FCA 618 ; (2000) 100 FCR 166 at [97] ; Mayne Industries Pty Limited v Advanced Engineering Group Pty Limited [2008] FCA 27 at [75] . 205 Lahore observes at [57,155] that s 89 may be seen as codifying the case law on blameworthy conduct; accordingly, it deals with the circumstances in which a particular discretion may be exercised without detracting from the general discretion found in s 88(1). I propose to proceed on that basis. 206 Dealing first with s 89, I do not consider that Shin-Sun has made out a case for the exercise of the discretion conferred by that section. I am not satisfied of this because the likelihood of deception has come about as a consequence of Shin-Sun's registration as proprietor of the mark and Shin-Sun's apparent consent to the use of the mark by Nature's Hive in the manner described above. 207 As to the exercise of discretion under s 88(1), the guiding principles would seem to be those that were referred to in the authorities under the 1955 Act. The principal factors would therefore seem to be the public interest and the respective contributions made by the parties to the proceedings in creating the likelihood that the use of the registered mark would deceive or cause confusion: New South Wales Dairy Corporation v Murray Goulburn Co-operative Limited [1990] HCA 60 ; (1990) 171 CLR 363 at 391 per Brennan J. 208 In my view, these factors point against the exercise of the discretion so that even if I may withhold relief under s 88(1), I would not exercise my discretion to do so. In short, it seems to me that the public interest is better served by expunging a mark that has become deceptive in the circumstances of this case. 210 As I said above, I do not consider that Health World has any genuine desire to use the Health Plus mark. Accordingly, I am not satisfied that it has a real interest in having the Health Plus mark removed. Nor would it be appreciably disadvantaged in a legal or practical sense if the mark remains on the register. 212 No question arises of the knowing involvement of Ms Shin in any contravention. Rather it was Nature's Hive that used the mark during the period and at all other times. 214 The reasons for this may be summarised as follows. 215 First, it is Nature's Hive, not Shin-Sun, whose name is referred to on the packaging of the Health Plus products. 216 Second, Nature's Hive is the sponsor of the Health Plus products under the Therapeutic Goods Act . 217 Third, Nature's Hive procured the manufacture of all Health Plus products by entering into the Good Manufacturing Practice Agreements with the manufacturers. 218 Fourth, Nature's Hive is referred to in the advertising and promotion of the Health Plus products. 219 Fifth, the evidence does not show any connection between the Health Plus goods and Shin-Sun. I make this finding notwithstanding Ms Shin's assertions, because, as set out above, I do not consider that she distinguished between the activities of Shin-Sun and Nature's Hive. 220 Sixth, as I have already said, Shin-Sun does not exercise control over Nature's Hive in the sense referred to in the relevant authorities. 221 I reject Shin-Sun's submission that the export transaction to Taiwan in September 2001 constituted a use of the mark within the three year period. This is because the invoice referred to "MediPlus Australia --- Nature's Hive Pty Limited" and Ms Shin conceded that the invoice indicated that MediPlus Australia was a business that was being carried on by Nature's Hive. 222 I do not accept that the other invoices that were referred to by Shin-Sun may be taken to constitute a trade mark that is "applied in relation to" goods in accordance with s 9(1)(c)(ii). This is because it was not established that goods were delivered following a request or order made by a person referring to Shin-Sun's trade mark as provided in that subsection. The discretion is conferred so as to give the Court a sufficient degree of flexibility to give effect to public interest considerations: Ritz Hotel at 221-225. 224 In Henschke , the Full Court declined to interfere with the primary judge's exercise of discretion in a manner favourable to the registered proprietor under s 101(3). However, I do not consider that the approach taken in that case assists Shin-Sun because the primary judge found that there was no public interest adversely affected by the use of the mark: see at [72]. 225 In my view, Henschke was concerned with a very distinctive family business where the members of the family who were using the mark were the persons who gave the mark its value. That was why the primary judge could see no useful purpose to be served by removing the mark so as to compel a fresh application to be made by the "Henschke interests. 228 For reasons set out above, I do not consider that Health World is a person aggrieved. 229 The amendment to s 92 which came into effect on 23 October 2006 gives standing to "a person" but there is nothing in the amendment to suggest that it applies retrospectively. 230 It follows that Health World's non-use application fails on the ground that Health World does not have standing to bring the application. 232 In order to succeed under s 92(4)(a), Shin-Sun must establish that on the day on which the application for the INNER HEALTH PLUS trade mark was filed for registration, Health World did not intend in good faith to use the mark in Australia in relation to the goods for which the application was made. 233 In the present proceedings I have sworn evidence from Mr Gee and Mr Joiner that at the relevant date, Health World did intend to use the INNER HEALTH PLUS trade mark in relation to all of the goods for which it was registered. 234 It is true that their evidence sworn in these proceedings disclosed no present intention to use the Inner Health Plus trade mark for any other products outside the narrow range of the probiotic product sold under the Inner Health Plus and Inner Health Plus Dairy Free labels. Moreover, their evidence as to future intention did not extend beyond a vague generalisation as to the possibility of use on an unspecified type of product. 235 However, the s 92(4)(a) ground looks at the question of intention at the time of the application for registration. As I have said previously, it is difficult to make out this ground. 236 In my view, there is no reason why I should refuse to accept the sworn evidence of Mr Gee and Mr Joiner as to Health World's intentions at the time of the application. Shin-Sun has not discharged its onus of proving otherwise. 237 The s 92(4)(b) ground is made out because Health World accepts that during the three year period, and indeed to the date of the hearing, Health World had used the INNER HEALTH PLUS mark only on the probiotic products which were in evidence in these proceedings. 238 I do not consider that I should exercise my discretion to decline to make an order because the public interest does not favour the continuation of a statutory monopoly on the evidence before me. Health World has not used the mark in relation to other goods for the "non-use" period and the evidence of Mr Joiner and Mr Gee consisted of generalised assertions and beliefs as to proposals to release new, but unidentified products under the Inner health Plus brand. 239 However, in order for Shin-Sun to have standing, s 92(1) in the form in which it stood on the date of filing of Shin-Sun's non-use application required that Shin-Sun be a person aggrieved. 240 In my opinion Shin-Sun does not satisfy the test stated within the authorities referred to above. Shin-Sun does not suggest that it intends to use the INNER HEALTH PLUS mark to identify any of its goods. Nor has Shin-Sun established that if Health World were to use the Inner Health Plus mark to identify goods in class 5, other than probiotic products, the mark would be deceptively similar to the Health Plus mark. 241 It follows in my view that Shin-Sun does not have a real interest in partial removal of the Inner Health Plus mark and it is not appreciably disadvantaged in a legal or practical sense if the mark remains on the register in its present terms. I propose to make orders in those terms but if the parties consider that more extensive orders should be made to reflect my reasons, they should bring in short minutes of order. 243 I will therefore stand the proceedings over to a date to be fixed for the making of final orders. I will also hear short argument on that date on the question of costs. There is no reason why costs should not follow the event. However, more draconian costs orders may be required in the rectification proceeding bearing in mind that Health World failed on the same matters on which it was unsuccessful before Cooper J.

trade marks rectification proceedings expungement proceedings statute applies as it stood at the time of commencement of proceedings no deceptive similarity between inner health plus and health plus applicant in each proceeding lacked standing as 'a person aggrieved' registered proprietor of health plus mark failed to demonstrate intention to use or actual use use of health plus mark by a company with the same directors as the registered proprietor does not amount to authorised use no relevant control discretionary principles intellectual property

The applicant prepare a bill of costs in respect of the motion, notice of which was filed on 4 August 2004, and such bill of costs be taxed by Registrar Bardsley at 10.15 am on 13 February 2006. The first and second respondents pay forthwith the applicant's costs of and incidental to the motion, notice of which was filed on 4 August 2004, on an indemnity basis, to be taxed pursuant to paragraph 1 hereof. If the first and second respondents do not pay the applicant's taxed costs within 14 days from the date of service upon them of a certificate of taxation, then the applicant have leave to enter judgment against the first and second respondents for $334,000 and interest thereon. The motion, notice of which was filed on 4 August 2004, be otherwise dismissed. In support of his motion, Mr Armitage relied on his affidavit sworn on 16 May 2006 (which referred to his earlier affidavits, the affidavits of the third and fourth respondents and Ms Saldaneri). After the hearing, he filed a further affidavit sworn on 20 June 2006, and written submissions, both of which were filed pursuant to orders made on 15 June 2006. In opposition to the motion, the applicant relied on the affidavits of Anna Maria Krycer affirmed on 30 May 2006 and 9 June 2006, the affidavit of Ayten Demirovski affirmed on 30 May 2006, and on written submissions filed before and (pursuant to order) after the hearing. The applicant's motion was based on what she claimed was a substantial history of delay by the first and second respondents. 4 Mr Armitage sought to appeal against the 3 February 2006 orders by way of a notice of appeal filed on 24 February 2006. His Honour made orders adjourning the date for settling the index until the Court dealt with any application for leave to appeal and, subsequently, he adjourned Mr Armitage's application for an extension of time, indicating that he considered that it might be appropriate for Mr Armitage to make an application in this proceeding pursuant to O 35 r 7 of the Federal Court Rules 1979 ("the Rules"). Mr Armitage's motion was filed following this indication. 6 In Wu , I considered (at [6]-[25]) the extensive history of delay and non-compliance with the Court's orders by the first and second respondents. I found (at [52]-[53]) that the first and second respondents had failed to defend the proceeding with due diligence and were in default for the purposes of O 35A r 2(2)(h) of the Rules. • Ms Wu applied twice by motion for orders that the respondents, including Mr Armitage, provide their lists of documents and the respondents, including Mr Armitage, breached orders of 8 October 2003 and 16 December 2003 for the provision of these lists ([10]-[13]). From September 2003 until 14 April 2004, Mr Armitage and the other respondents retained a solicitor (Mr Joseph Guss) ([8] and [15]). • Mr Armitage failed to make documents available for inspection, despite orders by the Court on 8 October 2003, 16 December 2003 and 9 June 2004 ([10]-[17]). Following an order for further discovery on 4 March 2004, Mr Armitage filed an affidavit stating that the first respondent's accounts and statutory records were "mistakenly removed by a waste paper removalist with various other papers and records" and that he was unable to locate his file in respect of Ms Wu's application for an Australian visa and her alleged investment in the first respondent ([14]). • After 14 April 2004, Ms Wu's solicitor's attempted to contact the respondents, including Mr Armitage directly. By a letter dated 21 April 2004, Mr Armitage informed Ms Wu's solicitors that he was "unable to facilitate" the inspection of the discovered documents because they were "located at the office of Joseph Guss" ([15]). • On the first occasion when Ms Wu's motion for default judgment came on for hearing, counsel appeared for Mr Armitage. Counsel advised that she was instructed by solicitors who expected to act in the matter. This expectation was not fulfilled ([17]). • On the second occasion when Ms Wu's motion for default judgment came on for hearing, different counsel appeared for Mr Armitage. Counsel advised that he was instructed by solicitors, who subsequently advised the Court that they were no longer retained to act for Mr Armitage (or any other respondent) in the proceeding ([19]). • Although it was made clear in court on 13 October 2004 that it was open to the respondents to serve a subpoena on their previous solicitor (Mr Guss) to produce the discovered documents to the Court the respondents did not take steps to do this until 3 December 2004 ([19] and [21]). • On 3 December 2004, George Liberogiannis and Associates went on record as solicitor for the Armitages, including Barry Armitage. Mr Liberogiannis did not, however, appear on the return of the subpoena. The subpoena was not discharged against Mr Guss until 16 February 2005 ([21]-[22]). • At the adjourned hearing of the motion for default judgment on 27 April 2005, Mr Liberogiannis sought leave to withdraw as the solicitor on the record. His evidence was that Barry Armitage and his son had failed to keep appointments with counsel and to provide him with instructions for the conduct of the matter, notwithstanding his numerous calls to their cell phones and place of residence. His firm filed a notice of ceasing to act for Barry Armitage and his son on 28 April 2005 ([24]). 7 Notwithstanding this, for the reasons stated in Wu at [54] and following, I declined to make orders in terms of the motion for default judgment. If Barry Armitage's evidence is accepted, there is nothing more the respondents can do to facilitate inspection of documents. Although Mr Guss did not produce all of the documents the subject of the subpoena, Barry Armitage has affirmed that the remaining documents remain in Mr Guss' custody. Ultimately, the credibility (or lack thereof) of Barry Armitage's claims regarding these and like matters will be an issue for trial: see Australian Finance Group Ltd v Accent Financial Group Pty Ltd [2005] FCA 66 at [33] per Nicholson J. Whether he is believed or not is likely to have other consequences for this litigation. These circumstances include the ill health of Barry Armitage and of a family member and the disturbance caused by changes in legal representation. Moreover, although the respondents have needed repeated prompting by Ms Wu's solicitor, they have filed their defence, various affidavits responding to Ms Wu's claims and lists of discoverable documents. They have mostly participated in court hearings and they were represented at the mediation by their solicitor. Barry Armitage ultimately took steps to have a subpoena issued to Mr Guss, in order that Ms Wu have access to the first and second respondents' discovered documents. 9 I ultimately held (at [60]) that Mr Armitage and the first respondent should pay costs on an indemnity basis because they had repeatedly failed to comply with the orders of this Court; and Ms Wu's motion for default judgment was precipitated by these recurring breaches. Further, I noted that their conduct had delayed the hearing of the motion and increased the costs associated with it. In this regard, I referred to the last minute and short-term retainer of legal representatives, the failure to take steps promptly to have a subpoena issued to Mr Guss, and the failure to cooperate with their own legal advisers or to attend court. Mr Armitage's lengthy affidavit of 16 May 2006 deposes to matters of fact. It also contains what are in truth submissions on his motion. He had not previously seen some of these documents. • Prior to the hearing on 27 April 2005, Mr Armitage had no knowledge of the affidavit of Anna Maria Krycer of 12 April 2005; that Mr Lieberogiannis intended to seek leave to withdraw from the proceeding; and that he would be unrepresented at that hearing. He claimed that he was denied an opportunity to respond to Ms Krycer's affidavit and Mr Lieberogiannis' evidence. • After receiving a copy of the 27 April 2005 order (granting leave to Mr Lieberogiannis to cease to act) Mr Armitage asked Registry "what was happening with the proceedings" and was told that "no other date had been appointed, and that it appeared that there was no further action or procedure contemplated". He returned to the Registry on two further occasions. He assumed the action was not proceeding. • When the respondents retained Mr Guss, they gave Mr Guss all relevant documents and did not retain any copies. In early April 2004, there was a dispute between Mr Guss and Mr Armitage (and other respondents), as a consequence of which Mr Guss ceased to act for them. Mr Guss claimed a lien over the respondents' documents. Mr Armitage photocopied the documents on the Court file. • After Mr Guss ceased to act, the respondents decided to draft instructions, affidavits and other documents needed in the proceeding and to engage counsel "to finalise documents and make any necessary Court appearances". Ultimately, a barrister's clerk "agreed to arrange for solicitors (not then known to the Respondents) to provide the 'Back Sheets' required to brief counsel". Mr Baker agreed to supervise the work and retain the documents relevant to the proceeding. Mr Baker therefore held all relevant documents and the respondents retained no copies. • Mr Armitage and his son (the third respondent) attended Mr Baker's chambers frequently, "often on two occasions a week". They did not attend Mr Baker's chambers on 26 April 2005 because their car "broke down in the countryside" and they did not contact Mr Baker because "we were in an area of poor mobile telephone reception". • Mr Armitage did not find out about the 27 April hearing until after the scheduled time of the hearing. He added that "[w]e immediately tried to contact Mr Baker and he told us we should speak to Mr Liberogiannis". • Mr Armitage and his son made unsuccessful attempts to contact Mr Liberogiannis, whom he ultimately met "by chance" early this year. • Hereafter, the respondents intended to act on their own behalf and "to retain full control and ensure that all matters requiring attention are dealt with promptly". • Mr Armitage had severe health problems and associated difficulties, including inability to give "sustained personal attention to ... this litigation". • Mr Armitage resigned as director of the first respondent because it could be insolvent. • Mr Armitage did not intentionally avoid service of the documents initiating this proceeding. • Mr Armitage did not attend court because of his health, the fact he had legal representation, and because Ms Wu, through her solicitors, had threatened him. • Mr Armitage did not become aware of Ms Wu's desire to inspect the discovered documents until he received a letter dated 20 April 2004 from her solicitors. He responded the next day. • Mr Armitage did not become aware until late November or early December 2004 that the Court had indicated that it would give leave to issue a subpoena to Mr Guss to obtain the documents for Ms Wu's inspection. He claimed that Mr Guss still held relevant documents. • Mr Armitage did not know that Mr Liberogiannis had failed to attend on the return of the subpoena. He did not knowingly breach any order of the Court. He "should not be held responsible for ... delays ... during the time" when Mr Guss and Mr Liberogiannis acted for him. He also expanded on his claim that the initiating application and statement of claim in the proceeding were "based on a serious fraud and constitutes an abuse of the processes of this ... Court". He asserted that Ms Wu had made fraudulent claims in relation to her migration objective and investment claims. He responded to Ms Wu's claims against him at some length and alleged that her former and present solicitors had acted improperly in various ways. It is unnecessary to set out the details of these various allegations here. 12 In his affidavit of 16 May 2006, Mr Armitage further contended that the costs order of 3 February 2006 was unjust. This was because the primary matter in dispute had been the production of documents, over which he had no control. Also, so he said, Ms Wu's claims were fraudulent and, if he were required to meet the costs order before the determination of the proceeding, he would be prevented from defending himself. Mr Armitage specifically noted that paragraphs 36 and 38 of the statement of claim alleged that he acted dishonesty. 13 At the hearing of the motion, Mr Armitage said that he was unable to meet the costs order. He subsequently supported this claim by his affidavit filed on 20 June 2006, which attached what he described as "a true and complete statement of [his] means". According to this statement, Mr Armitage is in receipt of a disability support pension and has no property that would enable him to meet the costs order of 3 February 2006. 14 Also at the hearing, Mr Armitage denied that his allegations of fraud against Ms Wu and her solicitors were scandalous and foreshadowed that he would seek to amend his pleadings or issue a cross claim. Mr Armitage said that he did not received the notice of hearing concerning the delivery of judgment, which was sent registered mail by the Court, until 15 --- 30 minutes after judgment had been delivered. Mr Armitage also said that he spoke to my associate subsequently and that my associate said that a copy of the judgment would be posted to him. The Court file indicates that this was done although Mr Armitage said that he never received a copy of the judgment from my Chambers. Mr Armitage said he subsequently asked for a copy of the judgment at the Court Registry but that the copy given him had a part of each page missing. He had to ask the Registry for another copy. He attributed the fact that he did not receive the copy sent by the Court to the fact that he changed his residence about this time. Mr Armitage said that he should not be held accountable for his solicitors' dilatory conduct because he did not know the lawyers well and he was not "getting the priority service that may have been required". In any event, he had a reasonable expectation that his lawyers would do the right thing by him. He thought it unfair that Mr Liberogiannis had withdrawn as he did. In reply, Mr Armitage stated that until he read the judgment he "thought everything was under control and being handled adequately". 15 In written submissions filed after the hearing, Mr Armitage submitted that the evidence that Mr Liberogiannis gave at the hearing on 27 April 2005 was "inaccurate misleading and incomplete at least insofar as it relates to the extent of conference contact" between him and Mr Armitage and his son. 16 In her affidavit of 9 June 2006, Ms Krycer stated that a registrar conducted a hearing for the taxation of the costs of Ms Wu's motion on 21 March 2006 and that, at the hearing, Mr Armitage appeared and objected to the bill of costs. Ms Krycer said that, after Mr Armitage served a list of objections, there was a further hearing, which she and Mr Armitage attended, and the registrar had taxed the costs. She said that Mr Armitage filed a notice of motion and a statement of objections for reconsideration on 13 April 2006. The registrar gave his decision and reasons on reconsideration on 4 May 2006. Ms Krycer said that a certificate of cost was served on Mr Armitage by letter dated 31 May 2006. Ms Krycer also gave evidence concerning Mr Armitage's notice of appeal and related matters. 17 Counsel for Ms Wu opposed Mr Armitage's motion, noting that Mr Armitage was represented by counsel on the hearing of Ms Wu's motion on two occasions when the motion was part heard. It was only on the third and final occasion, when the hearing of the motion was completed, that Mr Armitage's solicitor obtained leave to withdraw. Counsel submitted that the relevant principles were contained in Australian Competition and Consumer Commission v Black on White Pty Ltd [2004] FCA 363 (" Black on White ") and Microsoft Corporation v Crosslink Marketing Group [2005] FCA 1817 at [21] . He argued that there were no exceptional circumstances in this case that would justify setting aside the orders in question. In this regard, he pointed out that Mr Armitage was heard, through his counsel, on the motion on two occasions and the affidavit material on which he relied was before the Court. The fact that his solicitor "went off the record" on 27 April 2005 "did not make any difference to the Orders". Further, counsel submitted that, having regard to the contents of Mr Armitage's affidavit of 16 May 2006, it is not reasonably probable that he would have obtained orders other than the orders made on 3 February 2006 had that affidavit been before the Court. Finally, Mr Armitage's affidavit did not, so counsel submitted, establish fraudulent conduct and satisfy the requisite tests for setting aside on the ground of fraud. 18 In oral submissions, counsel contended that Mr Armitage essentially sought to blame his solicitors and that this was no answer to the orders made. Further, counsel submitted that Mr Armitage had not adequately explained why he was not present at the hearing on 27 April 2005. Counsel submitted that his explanation was implausible and that the Court should so hold, having regard to Mr Armitage's affidavit of 16 May 2006. Counsel further submitted that it would be unfair if Ms Wu were to lose the benefit of the order because she had taken "significant steps ... since 3 February 2006 to have the costs taxed". Counsel argued too that Ms Wu should not lose the benefit of a self-executing order because it has been and continues to be "enormously difficult for [her] to progress this matter". Counsel said that Ms Wu's hardship was especially relevant "in circumstances where Mr Armitage now represents himself and incurs no costs while [she] continues to do so". 19 In written submissions dated 21 June 2006, Ms Wu submitted that the evidence of Mr Liberogiannis showed his communication, and attempted communication, with Mr Armitage and his son. The submissions noted that Mr Liberogiannis gave evidence that he had gone to the residence of Mr Armitage, which was also his address for service at the relevant time; and that, at that residence, Mr Liberogiannis spoke to someone but she denied any knowledge of Mr Armitage and his son. The submissions also noted that Mr Liberogiannis said that he made six attempts to speak by telephone with Mr Armitage between 21 and 27 April 2005. Ms Wu contended that the delay and non-compliance with orders on the respondents' part had "very significantly increased the costs" of her motion. 20 In written and oral submissions, counsel for Ms Wu argued that, pursuant to O 14, r 8 of the Rules, paragraphs 63, 64, 103-106 and 128-135 of Mr Armitage's affidavit of 16 May 2006 should be struck out or taken off the file, on the ground that they were scandalous. "[A]n order made in the course of an action or suit which does not conclude the rights of the parties inter se, although it may, of course conclude the fate of the particular application in which it is made, is interlocutory only": Hall v Nominal Defendant [1966] HCA 36 ; (1966) 117 CLR 423 at 440 per Taylor J. It is open to Mr Armitage to call in aid O 35 r 7(2)(c). 23 Secondly, I accept that Mr Armitage was not in court when the relevant orders were made on 3 February 2006 and that he was absent from a part of the hearing of Ms Wu's motion. That is, Mr Armitage was represented by his counsel at the hearing of the motion on 23 August and 13 October 2004, but was effectively unrepresented at the hearing on 27 April 2005, when his solicitor successfully obtained leave to withdraw. Accordingly, it is open to Mr Armitage to call in aid O 35 r 7(2)(a). 24 Thirdly, although Mr Armitage sought also to rely on O 35 r 7(2)(b), he has not adduced sufficient evidence to make out a case that the order was obtained by fraud. Plainly, any allegation of fraud is extremely serious. Before an order can be set aside on the ground of fraud, there must be sufficient evidence of the facts that establish the alleged fraudulent conduct and the part played by the party having the benefit the order. The fraudulent conduct must be "directly material" to the order and the evidence of the fraud must be evidence that was not available and could not have been discovered with reasonable and proper diligence before the order under challenge was made: see Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (No 2) (1992) 37 FCR 234 at 242. Mr Armitage's affidavit of 16 May 2006 did not satisfy these requirements. Accordingly, it is not open to him to rely on O 35 r 7(2)(b). 25 Some care must be taken in dealing with the authorities that concern the setting aside of judgment or orders. The force of judicial observations in this area depends on the circumstances in which application to set aside is made, including whether the judgment or order has been entered or is final or interlocutory. For present purposes, it suffices to refer to the observations of the Full Court in Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543 at 552 that the jurisdiction to set aside orders made after they have been entered is "exceptional": see also Black on White at [14]-[16]. 26 In substance, Mr Armitage's case is that he was not heard on 27 April 2005 for no fault on his part, because (1) he did not know that his solicitor was intending to seek leave to withdraw and that he would be unrepresented at the hearing; (2) he did not know the precise nature of Ms Wu's motion, partly because he did not know the contents of Ms Krycer's affidavit of 12 April 2005; and (3) having regard to the circumstances of the case including the nature and effect of the orders under challenge, the justice of the case demands that the orders be set aside. 27 As I have said, Mr Armitage was represented by counsel on earlier hearing of Ms Wu's motion on 23 August and 13 October 2004. It was only at the hearing of 27 April 2005 that counsel did not appear for him. The uncontradicted evidence of Mr Liberogiannis established that, in the days immediately prior to 27 April 2005, Mr Liberogiannis had made many attempts to contact Mr Armitage for instructions and that he had not been able to do so. Mr Liberogiannnis did not say that he had done more than leave messages, via mobile phone numbers, stating he was intending to seek leave to withdraw. Mr Armitage has given sworn evidence that he did not know that this was his solicitor's intention. He has also given evidence that he and his son had retained counsel generally to appear on their behalf in court. 28 Mr Armitage conceded that he knew that a hearing was likely "fairly soon"; that is around the 27 April date. Further, Mr Armitage's evidence was to the effect that he met frequently with counsel retained to run his defence to Ms Wu's action but that he did not meet with him in the days immediately prior to 27 April 2005. Notwithstanding that his explanation about his failure to meet with his lawyers prior to the hearing was less than satisfactory, I accept that he did not in fact attend any conference with counsel in the days immediately anterior to the 27 April hearing; and nor did he consult his solicitor. It may be said that, having regard to his failure to meet with his lawyers around this time, Mr Armitage should have realised that they would be unable to represent him in court. However, Mr Armitage was not the subject of cross examination and his evidence was uncontradicted. On the evidence before me, I accept that Mr Armitage did not in fact know that Mr Liberogiannis would seek leave to withdraw and that he would be unrepresented on 27 April 2005. Further, I accept that he did not read the affidavit of Ms Krycer of 12 April 2005, as he claims. Amongst other things, this affidavit dealt with procedural events in the proceeding from February 2005 and Ms Wu's proposed costs application against Mr Armitage and his son. 29 There are four other matters that militate in favour of the application that Mr Armitage now makes. Mr Armitage has admitted that he negotiated with Ms Wu, assisted by Ms Minnie Xia, concerning a proposal to invest some $175,000. According to the defence, the terms of Ms Wu's loan included she had the option of withdrawing her investment by giving 3 months' notice at any time for up to 2 years from the date of her contribution; and she did not exercise the option. He has denied the false representations as alleged by her and claimed that communications with Ms Wu were entirely through Ms Xia, who advised Mr Armitage that they had arranged to take all documents to a Chinese speaking lawyer in Melbourne and that they had visited this lawyer. Further, in his affidavits, including his affidavit of 16 May 2006, Mr Armitage has denied the claims made by Ms Wu and contested the filed affaidavits of Ms Wu and Ms Xia. 31 While financial hardship is not of itself a weighty factor, courts are generally reluctant to preclude litigants from having a proper opportunity to present their cases: see, for example, Fancourt v Mercantile Credits Ltd [1983] HCA 25 ; (1983) 154 CLR 87 at 99; and Webster v Lampard [1993] HCA 57 ; (1993) 177 CLR 598. I would be reluctant by my orders effectively to prevent Mr Armitage from advancing his defence, especially where he was absent from the court at the final stages of the hearing before the orders were made. 32 There are, plainly enough, numerous matters that militate against Mr Armitage's application to set aside the orders of 3 February 2006. In so doing he has added to her costs burden. As I have already said, through their lawyers, Mr Armitage and the first respondent repeatedly failed to comply with the orders of this Court; and Ms Wu's motion was precipitated by these recurring breaches. Further, costs were unnecessarily incurred by Ms Wu because these respondents failed, whether through their then legal advisers or otherwise, to take steps promptly to have a subpoena issued to Mr Guss. 34 Mr Armitage stated on oath that the respondents made the arrangements that led to the retainer of legal representatives, who knew little or nothing of their case and took little or no responsibility for its ongoing conduct. This impeded the proper conduct of the litigation, as Mr Armitage apparently concedes. Parties to litigation such as Mr Armitage are obliged to take steps to keep themselves informed of the conduct of the litigation by their appointed legal representatives. They cannot escape their responsibility as parties with respect to the conduct of the litigation by hiding behind a poorly instructed lawyer retained briefly or at the last minute. Nor can they excuse themselves by relying on a series of "unfortunate events", as Mr Armitage sought to do. If it were otherwise, case management would prove virtually impossible: compare KM & A Chadwick Pty Ltd v Yeung [1995] FCA 354 (" KM & A Chadwick ") at [15] per Tamberlin J. 35 Ms Wu has, moreover, proceeded to the taxation contemplated by the orders in question, as indeed she was entitled to do. In so doing she has incurred further costs. In this regard, I note, however, that Mr Armitage has been most assiduous in contesting the taxation. His notice of appeal, which was filed on 24 February 2006, preceded the taxation hearings. 36 I am satisfied, however, that, taken as a whole, the circumstances are such as to justify me setting aside pars [2] and [3] the orders made on 3 February 2006: compare KM & A Chadwick . 37 I would set aside par [3] of my orders principally because it was made in Mr Armitage's absence from the final stages of the hearing of Ms Wu's motion and costs application and will apparently operate to prevent Mr Armitage, who swears that he is impecunious, from advancing his defence. Having regard to the serious nature of some of the claims made against him and to the fact that he has apparently an arguable defence, it would not be in the interests of justice to make an order with such a result. That Ms Wu will suffer some inconvenience or hardship as a result is unavoidable. It is impossible to reconcile Ms Wu's interest in having the benefit of the orders previously with Mr Armitage's interest in having an opportunity to advance his defence. 38 For essentially the same reasons, I would also set aside par [2] of the 3 February orders. For the reasons set out below, I would order instead that, after judgment in this proceeding, Mr Armitage pay, on an indemnity basis, costs in the amount of $26,666.02 in respect of Ms Wu's motion. Further, I would order that Mr Armitage pay Ms Wu's costs of his motion. As will be seen below, although Mr Armitage has been partially successful in his motion, the need for such a motion arose from his failure to keep himself informed of the conduct of the proceeding on his behalf. 39 Mr Armitage has submitted that he ought not be ordered to pay the costs of Ms Wu's motion on an indemnity basis, principally because until he received my reasons for judgment in February this year, he was not aware that he had breached orders and been dilatory in the conduct of his case. 40 It may be recalled that Ms Wu established that her motion for default judgment had been properly brought and that the first and second respondents had failed to defend the proceeding with due diligence and were in default for the purposes of O 35A r 2(2)(h) of the Rules. Ms Wu did not receive the relief she sought in her motion because, in the time that had elapsed since she first brought her motion, the respondents had either remedied their defaults or explained why they could not do so. Ms Wu is, however, to be regarded as having succeeded in substance because the defaults were not remedied until she brought her motion. 41 The power of the Court to make an order for costs derives from s 43 of the Federal Court of Australia Act 1976 (Cth). Costs ordinarily follow the event and are awarded on a party-party basis, unless there are particular or special circumstances which warrant the Court departing from this practice and making some other order: see Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 (" Colgate-Palmolive ") at 232-233 per Sheppard J and Ruddock v Vadarlis [2001] FCA 1865 ; (2001) 115 FCR 229 at 234 per Black CJ and French J. Since Ms Wu was in substance successful, she was and remains entitled to an order for costs. She continues to submit that an indemnity costs order is appropriate. 42 Whilst the Court has power to make an order for costs on an indemnity basis, the question is whether the Court should so exercise its discretion in the particular case. A court may award indemnity costs in respect of misconduct which causes loss of time to the Court and to other parties: Tetijo Holdings Ltd v Keeprite Australia Pty Ltd (Fed C of A, French J, WAG 55 of 1988, 3 May 1991, unreported) referred to with approval in Colgate-Palmolive at 233; Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 at [7] per Harper J. As Mason P, with whom Meagher and Clarke JJA agreed, said in Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 616, "the court requires some evidence of unreasonable conduct, albeit that it need not rise as high as vexation" before departing from the usual party and party costs order. The procedural history provides sufficient evidence of unreasonable conduct on the part of Mr Armitage, through his legal representatives or personally, to continue to justify an indemnity costs order on Ms Wu's motion. 43 In my reasons of 3 February 2006, I found that not only had Ms Wu properly brought her motion but also that by their conduct (e.g., the last minute and short-term retainer of legal representatives, the failure to take steps promptly to have a subpoena issued to Mr Guss, the failure to cooperate with their own legal advisers and/or to attend court) the first and second respondents had delayed the hearing of the motion and increased the costs associated with it. Mr Armitage did not dispute that his case had been run in an unsatisfactory manner. He conceded that the respondents' arrangements for legal representation had hindered the progress of the litigation, which included the motion. 44 Mr Armitage blamed his lawyers, his lack of financial means and his ill health. As I have said, however, a party is responsible for taking steps to ensure that he is kept informed of what is done, or not done, in his name in the course of litigation. Lack of finance does not diminish this particular responsibility. Mr Armitage's ill health may have made his task more difficult but, in the course of this year, Mr Armitage has shown that he is well able to represent his interests in the court system. Further, Mr Armitage is not acting alone. The third respondent, who is his son, has, on Mr Armitage's own account, been assisting him in the conduct of the case. 45 Mr Armitage is now an unrepresented litigant and has been so since Mr Liberoginnias ceased to represent him on 27 April 2005. Prior to that date, he had legal representation. Like many unrepresented litigants, he is impecunious. Generally speaking, courts are more reluctant to make orders for indemnity costs against litigants in person than against legally represented litigants, although, in an appropriate case, they will make such an order: see Bhagat v Global Custodians Ltd [2002] FCA 223 at [57] and [60] per O'Loughlin, Whitlam and Marshall JJ. Further, impecuniosity is generally not a sufficient reason to deprive a party otherwise entitled to a costs order of the benefit of such an order: compare Selliah v Minister for Immigration and Multicultural and Indigenous Affairs [1998] FCA 469 per Nicholson J. 46 It is plain enough that the conduct of the litigation by Mr Armitage and those representing him in relation to the motion has been most unsatisfactory and increased Ms Wu's costs with regard to it. This justifies an award of indemnity costs on the motion in Ms Wu's favour; and no countervailing reason has been shown for not making such an order. 47 Order 62 rule 3(2) permits the Court to order that costs be paid forthwith notwithstanding that the proceeding has not concluded. Weinberg J reviewed the authorities in McKellar v Container Terminal Management Services Ltd [1999] FCA 1639 , concluding at [38] that "[t]he discretion which is vested in the Court to order that a party's costs be taxed and paid forthwith should be exercised only where the interests of justice in the particular case require that there be a departure from the general practice". See also Life Airbag Company of Australia Pty Ltd v Life Airbag Company (New Zealand) Ltd [1998] FCA 545 per Branson J. In Courtney v Medtel Pty Ltd (No 3) [2004] FCA 347 at [21] , Sackville J said that that "[i]t appears to be broadly accepted that some reason must be shown to depart from what Lehane J in Vasyli described as the 'clear practice of the Court'". At [22] his Honour referred to the variety of circumstances that had thus far been regarded as justifying departure from the general rule. 48 The interests of justice must of course depend on the circumstances of each case. Prior to 3 February 2006, the history of this motion apparently demonstrated a course of conduct on Mr Armitage's part deliberately designed to impede the progress of the litigation. I refer, amongst other things, to legal advisers that were poorly instructed and retained only briefly, the history of the subpoena to Mr Guss, and the failures by Mr Armitage or his representatives to appear as required. This led me to depart from the usual position. By his affidavit of 16 May 2006, Mr Armitage has sought to explain these matters. Whilst his explanations are not entirely satisfactory, for present purposes, I do not find that his conduct was deliberately obstructive. Further, if required to pay indemnity costs forthwith, his evidence is that he may lose the chance to present his defence to the serious allegations made against him. Further, the present case is not complex and, despite its unfortunate history, might be brought on for hearing reasonably speedily. I would not therefore order that Mr Armitage pay the indemnity costs "forthwith". 49 Ms Wu has, however, proceeded to have the costs referrable to her motion taxed, as she was entitled to do under my order of 3 February 2006. She has expended time, effort and money in so doing. Since I would make an order for indemnity costs in her favour, she should not lose the benefit of this entirely. I would therefore order indemnity costs in her favour in the sum of $26,666.02. This was the amount fixed as her indemnity costs under a certificate of taxation of 4 May 2006 that issued after her solicitors prepared a bill of costs and proceeded to taxation pursuant to paragraph [1] of the orders of 3 February 2006. I would also order that the taxation that has been had under Order 62 of the Rules stand as the taxation of Ms Wu's indemnity costs under the costs orders that I propose to make in respect of her motion. Pursuant to O 3 r 3 of the Rules, I would, however, order that the time referred to in O 62 r 45(3) be extended to a date to be fixed after the determination of the proceeding. Further, I would order that, pursuant to O 62 r 45(6) and O 35 r 8, there be no interest calculated on the award of costs from 4 May 2006 until a date to be fixed after the determination of the proceeding. 50 The parties did not seek to distinguish the second respondent's position from that of the first respondent, which was unrepresented at the hearing of this motion. 51 As indicated above, counsel for Ms Wu argued that, pursuant to O 14 r 8 of the Rules, certain paragraphs of Mr Armitage's affidavit of 16 May 2006 should be struck out or taken off the file, on the ground that they were scandalous. These paragraphs allege serious improprieties against Ms Wu and her solicitors, past and present. These allegations are not reflected in the current pleadings and are, for this reason, irrelevant to the case as it presently stands. 52 I would order that paragraphs 63, 65, 103-106 and 128-135, as well as that part of paragraph 64 that refers to threats and intimidation, in the affidavit of Mr Armitage of 16 May 2006 be struck out unless Mr Armitage seeks leave, within 28 days, to file and serve an amended defence and/or cross claim to reflect the allegations in his affidavit. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

application to set aside interlocutory orders orders set aside where the party against whom orders made did not personally attend the final stage of hearing of interlocutory application and deposes that unaware that his solicitor would seek leave to withdraw fresh orders for indemnity costs in the amount previously taxed not payable forthwith litigant's responsibility to take steps to ensure kept informed of progress of litigation impecuniosity and ill health insufficient excuses for failure to discharge such responsibility practice and procedure

A statement of claim was filed on the same day. Both the application and the statement of claim were subsequently amended. On 6 November 2006 I ordered that the applicant's further amended statement of claim be struck out but granted leave to replead on or before 30 November 2006: see [2006] FCA 1441. I expressed some scepticism as to whether a case under the former s 298K of the Workplace Relations Act 1996 (Cth) ("the Act ") could be pleaded conformably with the reasons which I gave for striking out the pleading: see [2006] FCA 1441 at [34] . Not deterred the applicant filed a further amended application and a second further amended statement of claim on 30 November 2006. By notice of motion dated 18 December 2006, which was filed on 17 January 2007, the respondent seeks an order striking out the proceeding, or alternatively, the second further amended statement of claim. 2 The amended application sought the imposition of penalties on the respondent and orders for compensation, injunctions and declarations with respect to alleged contraventions of s 298K of the Act . 3 The further amended statement of claim was struck out because it did not plead facts sufficient to establish any contravention of s 298K before that provision was repealed on 27 March 2006. Specifically, it was held that the facts pleaded did not establish that when, in December 2005 and February 2006, the respondent announced a decision to transfer four Airbuses to Jetstar late in 2006 and early in 2007 and that those aircraft would not be crewed by its employees, it had thereby injured or prejudicially changed the position of particular employees or threatened to do either or both of these things. 4 The further amended application retains the claim for relief arising from the alleged contraventions of s 298K. In the alternative, equivalent relief is sought for alleged contraventions of s 792 of the amended Act . 5 The second further amended statement of claim ("the amended pleading") retains the same basic allegations which were contained in its predecessor. In particular, the relevant decision continues to be identified, in para 19A, as a decision that Jetstar would commence international operations by early 2007 and that the respondent would provide Jetstar with the four Airbuses but would not permit those aircraft to be crewed by its employees. That decision is said to have been made in December 2005 and announced at various times in December 2005 and February 2006. These acts were the respondent's decision that Jetstar would upgrade its air operator certificate so that it could operate wide bodied long haul jet aircraft (para 19), the respondent's decision to purchase 115 Boeing B787 aircraft of which 10 were to be allocated to Jetstar (para 19) and the respondent's decision not to permit the applicant to participate in those negotiations (para 22). • The addition of paras 25I to 25L which allege that, in furtherance of the decision, three identified aircraft had been (and, in one case, was proposed to be) transferred to Jetstar and that the respondent had not permitted those aircraft that had been transferred to be flown by its employees. The alleged transfers occurred on 14 October 2006, 30 October 2006 and 13 November 2006. The fourth transfer was proposed to occur on or about 17 February 2007. • Additional claims are made of lost or diminished expectations relating to annual leave and long service leave (paras 28EA, 28F(d), 28I(ca) and 28LA). • New paragraphs 29 to 31 allege that, as a consequence of the December 2005 decision, some of the respondent's pilots have had their flying hours and remuneration reduced, some pilots have been required, involuntarily, to take annual leave and some pilots employed by the respondent were advised, on or about 21 November 2006, that they might be required to take long service leave if offers of additional leave were not taken up. • Para 31B is amended to plead that, in addition to the making and communication of the decision, its implementation constitutes an injury or alteration to prejudice or a threat to do either or both of these things. 8 The relevant legislation is set out in my earlier reasons: see [2006] FCA 1441 at [4] to [7]. • Some conduct by the respondent which is said to be directed to the implementation of the December 2005 decision such as the transfer of the aircraft and the loss of remuneration and leave entitlements occurred after 27 March 2006 and yet is relied on to support alleged contraventions of s 298K. • The amended pleading is incomprehensible and embarrassing. This is because, in para 31B, the applicant contends that the making and communication of the 2005 decision (which occurred before 27 March 2006) and the steps taken to implement it (which occurred after 27 March 2006) constituted the relevant injury and/or alteration to prejudice. A reason (the pre 27 March 2006 requirement) for the respondent's impugned conduct is said to be that the pilots were entitled to the benefit of the enterprise bargaining agreement (para 32). Although para 32 covers conduct occurring both before and after 27 March 2006, para 32A pleads that "in the premises" the respondent has contravened s 298K. Paragraph 32B then pleads, in the alternative, that the sole or dominant reason (the post 27 March 2006 requirement) for the respondent's impugned conduct was that the pilots had the benefit of the enterprise bargaining agreement. Paragraph 32C pleads that "in the premises" the respondent has, since 27 March 2006, contravened s 792(1) of the amended Act . The respondent complains that, by pleading its case in this way, the applicant has merged the separate causes of action provided for in ss 298K and 792 thereby creating confusion such that the respondent is unable to comprehend the case it is called upon to meet or plead to it. Most of the steps which it is said were taken as part of the implementation process were alleged to have occurred prior to 27 March 2006. • The negotiations in December 2005 and 2006 with the Jetstar pilots' counsel to introduce terms and conditions of employment which would apply to Jetstar pilots involved in long haul flying: para 21. • The respondent's refusal to permit the applicant to participate in those negotiations: para 20. • The respondent's refusal, on or about 10 February 2006, to entertain negotiations with the applicant for alternative terms and conditions of employment upon which the Airbus fleet pilots would carry out the work on the four aircraft allocated to Jetstar: para 25A. • The variation, on or about 10 March 2006, of the Jetstar agreement as a consequence of agreement reached in negotiations: paras 23 and 24. 11 It was contended that these amendments overcame the failure to identify prejudicial action, which had occurred prior to 27 March 2006, and which could be relied on to support the alleged contravention of s 298K. It was further submitted that all of the conduct which was said to have been engaged in in order to implement the decision could be relied on to make good the cause of action based on s 792. 13 Insofar as the applicant seeks to plead a case founded on s 298K it must establish injury and/or conduct to prejudice for a proscribed reason which occurred prior to 27 March 2006. The amended pleading does not overcome any of the deficiencies identified in its predecessor. Such changes as are made do not establish the occurrence of any "injury", and alteration to prejudice or "threat" which occurred prior to 27 March 2006. The conduct referred to in paras 19 and 22 which is now said to have been undertaken in furtherance of the December 2005 decision could not, for the reasons which I gave in explaining my earlier decision, amount to an "injury", alteration to prejudice or a threat to do either or both of those things. Conduct which occurred after 27 March 2006 may or may not support a case asserting contravention of s 792. It cannot be relied on to establish a contravention of s 298K. 14 It is by no means clear, in the amended pleading, that the applicant is alleging that all of the conduct, on which it relied in argument, was taken for the purpose of implementing the December 2005 decision. Some of the conduct (for example that alleged in paras 19, 21 and 22) is said to have been taken "in furtherance" of the decision. Other conduct which is relied on (for example that identified in paras 20, 23 and 24) is not said to be taken "in furtherance" of the decision or in order to implement it. The draftsmen of any defence is left to guess at what is comprehended by "implementation" in para 31B. 15 There is a further difficulty. It relates to the use of the words "in the premises" in paras 31B and 32C. The phrase "in the premises" is normally used in pleadings for the purpose of calling up and relying on the allegations which are contained in paragraphs preceding that in which the phrase is used. In para 31B the phrase picks up all of the conduct of the respondent, both pre and post 27 March 2006, in relation, inter alia, to the alleged implementation of the decision. This is done for the purposes of establishing the existence of injury, alteration of position or threats to do these things. In para 32 it is alleged that a reason for the respondent so acting was the pilots' entitlement to the benefit of industrial instruments. The pleadings in paras 31B and 32 lay the foundation for the allegation, in para 32A, that "[i]n the premises" the respondent has contravened s 298K. Reliance is thus placed, in part, on post 27 March 2006 conduct for the purpose of establishing a cause of action under s 298K. For reasons which I gave in striking-out the previous version of the statement of claims such conduct cannot be relied on to support a claim under s 298K. 16 In para 32B it is alleged, in the alternative, that the sole or dominant reason for the respondent's conduct was and is the pilots' entitlement to the benefit of the industrial instruments. Again, no distinction is drawn between pre and post 27 March 2006 conduct. Yet, in para 32C it is said that "[i]n the premises" the respondent has, since 27 March 2006, contravened s 792(1). The language employed is thus apt to pick up both pre and post 27 March 2006 conduct although it is only alleged that any contravention of s 792 occurred after that date. 17 In my view the amended pleading is embarrassing. It is evident that the applicant now wishes to mount a discrete case alleging contraventions of s 792. It seeks to do this by relying on the same allegations as are relied on in relation to its s 298K case save that the conduct is alleged to have been engaged in for the sole or dominant reason that the pilots enjoyed the benefit of two enterprise bargaining agreements. Yet para 31B of the pleading relies, indiscriminately, on both pre and post 27 March 2006 conduct and such conduct is then relied on, in paras 32A and 32C to allege injury and alteration to prejudice for the purposes, respectively, of ss 298K and 792 . 18 There is plainly a need for the applicant to identify, with precision, what conduct, on the part of the respondent, it alleges gave rise to a contravention of s 792 and to identify when that conduct occurred. This is necessary because s 792(4) stipulates that s 792 will not be contravened by conduct that occurs after its commencement (on 27 March 2006) unless that conduct is engaged in for the sole or dominant reason that the employees had the benefit of a particular industrial instrument. Such precision is also necessary because, under s 809 , it is presumed that the employer's conduct occurred for the reason alleged. 19 The amended pleading should be struck out. 20 The respondent has sought its costs of the strike-out application. The applicant has reserved its argument on costs pending the outcome of the application and it having the opportunity to examine the Court's reasons. I will hear the parties on costs and the question of whether leave to further amend the statement of claim should be given. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY .

pleadings whether claims properly pleaded further amended statement of claim previously struck out leave granted to replead respondent seeking to strike out second amended statement of claim pleading embarrassing motion successful conduct by employer respondent's decision to provide jetstar with four qantas airbuses, but not permitting those aircraft to be crewed by its qantas employees applicant has failed to plead facts establishing a breach of s 298k workplace relations act 1996 (cth) s 298k repealed on 27 march 2006 and superseded by s 792 of the amended act applicant has failed to plead a cause of action under s 792 of the amended act practice and procedure industrial law

2 The appellant was granted a Student (Temporary) (Class TU) Sub Class 573 (Higher Education Sector) visa (the visa) on 15 July 2003. The delegate of the first respondent cancelled the visa on 23 March 2005 for breach of Condition 8101 imposed upon the visa, namely that the appellant must not engage in work in Australia. The appellant contravened that condition. In the circumstances, the delegate had a discretion as to whether to cancel the visa, and exercised that discretion to do so. The delegate's decision was affirmed by the Tribunal. An application to the Federal Magistrates Court to set aside the decision of the Tribunal for jurisdictional error was dismissed on 8 February 2007. 3 I will not repeat the detailed background to the present appeal or the reasons for decision of the Tribunal or of the Federal Magistrate. They set out in the reasons for decision referred to in [1]. I gave leave to the appellant to appeal out of time from the decision of the Federal Magistrate in the limited terms referred to because I considered that it was reasonably arguable by the appellant that the exercise of the discretion whether or not to cancel the visa involved jurisdictional error on the part of the Tribunal. In the other respects upon which the appellant proposed to appeal, I did not think he had any prospect of establishing jurisdictional error. The arguable grounds of jurisdictional error depended upon it being established that the Tribunal, in the exercise of its discretion, had not complied with Migration Series Instruction 368 (MSI 368), as in force at the relevant time. Those matters emerged in the course of the hearing on the application for leave to appeal out of time, and were not addressed in detail in the decision of the Federal Magistrate. 5 In the light of those reasons for decision, the parties were prepared for the appeal itself to be determined upon written submissions. I set a timetable for those written submissions. The appellant has not provided further written submissions, but has relied upon the material he provided in support of his application for leave to appeal out of time. The first respondent has filed further written submissions. The appellant has not responded to them. 6 As a result of the further submissions, in my view two issues need to be addressed. 8 MSI 368 as then in force does not on its face constitute directions given by the Minister under s 499 of the Act, so that s 499(2A) does not operate to oblige the Tribunal to have complied with it. The first respondent contends, and I accept, that MSI 368 is merely a departmental document without statutory foundation. I also accept the first respondent's submission that MSI 368 is not a document issued by a delegate of the Minister under s 496 of the Act. There is nothing on its face to indicate to the contrary. Consequently, there was no statutory obligation upon the Tribunal to comply with the directions contained in MSI 368 when the decision to cancel the visa was made. The decision of Gray J in Sandoval v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 71 concerning MSI 316 is therefore distinguishable: see in particular at [62]. In El Ess v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1038 ; (2004) 142 FCR 43 Gray J decided that prescriptions under Policy Advice Manual 3 did not constitute a direction pursuant to s 499 of the Act, but merely contained non-binding guidelines to a decision-maker and the Tribunal, so that the prescriptions in the Policy Advice Manual 3 guidelines could not be relevant considerations which the decision-maker was bound to have taken into account: see at 55, [45]. His Honour described that document as containing "procedural and policy guidelines" as indicated by its own terms. 9 The terms of MSI 368 are somewhat different from those considered by Gray J in El Ess. It is introduced as covering "grounds and procedures for cancellation", including under s 116 , and setting out "general principles of visa cancellation; how the grounds for cancellation are interpreted from a policy and legal viewpoint" in cl 1.1.2. It contains a series of instructions or directions as to procedures to be followed to accord with the Act and the Regulations, including tables of procedural steps, suggested forms of notification and the like. 10 Having regard to those matters, and the terms of MSI 368 generally, I accept the submission that it does not prescribe matters in cl 17.2.1 which the Tribunal was obliged to take into account when considering how to exercise the discretion as to whether to cancel the visa, once the breach of Condition 8101 had been made out. Consequently, it is appropriate to follow the approach of Gray J in El Ess [2004] FCA 1038 ; 142 FCR 43 in concluding that it does not prescribe relevant matters which the Tribunal was obliged to take into account in exercising its discretion, so that any failure on the part of the Tribunal to have done so would demonstrate jurisdictional error on its part. I do so because that decision seems to me to be directly on point. It is a decision of a judge of the Court which has apparently stood unchallenged for some time. I have received no submission that the decision is plainly wrong. See generally Cooper v Commissioner of Taxation [2004] FCA 1063 ; (2004) 139 FCR 205 at 211-212, [46] . 11 I am aware that the relevant terms of MSI 316 appear to be in the same or substantially the same terms as MSI 368, so at first glance the decision in Sandoval may also seem to apply directly to the present situation. However, without endeavouring to confirm the correctness of the observation, the significantly different set in that case was that it was based upon the fact that MSI 316 was an instrument with which the decision-maker had to comply because it had the status of an instrument made under s 499: see Sandoval 194 ALR at [62]. I have concluded that MSI 368 does not have that statutory status. Nor, in the light of that conclusion, is the Tribunal's approach to the exercise of its discretion shown to have been the consequence of any misunderstanding of the applicable law. 12 It was not argued by the appellant that, independently of MSI 368, there should be implied into the discretion contained in s 116 of the Act an obligation on the part of the decision-maker to take into account the extent of non-compliance with Condition 8101 or the circumstances in which the ground for cancellation arose. I have not therefore had the benefit of argument on that contention, and the first respondent has not had an opportunity to address it. It would not be appropriate, in those circumstances, to determine that by implication from s 116 in its context and terms those two matters were matters to which, as a matter of law, the Tribunal was obliged to take into account, at least in the way the appellant now contends. 13 The two particular matters which, in my earlier reasons, I identified as possibly matters where the Tribunal had failed to have regard to matters identified in MSI 368 were the extent of non-compliance with Condition 8101, and the circumstances in which the ground for cancellation arose. I discussed those matters in [39] of the earlier reasons. 14 There is a clear line to be drawn between a failure on the part of an administrative decision-maker to have regard to matters which it is required to have regard to, and a failure on its part to consider those matters in a way with which the Court may as a matter of fact disagree. It is only in the former case that jurisdictional error will be made out: see Plaintiff S157/2002 v Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476. Although that line is clear, it is sometimes difficult to determine on which side of the line the processes of reasoning of the administrative decision-maker fall. 15 In this matter, having regard to the Tribunal's reasons on those two aspects which are set out at length in [19] --- [21] of my earlier reasons, I have come to the view that in any event its reasons would not disclose jurisdictional error on its part even if MSI 368 did impose the consideration of those matters as mandatory relevant matters to be considered by the Tribunal, or even if by implication from the Act itself including s 116 , the Tribunal was obliged to consider them. It has said it has done so. It is possible to criticise the reasoning of the Tribunal, as I addressed in [39] of my earlier reasons. One may have expected the Tribunal to have made findings as to whether the applicant was in fact paid for the work he was undertaking, or whether he was doing it out of interest and for training. One might have expected the Tribunal to have made a finding as to the extent to which he was working and being paid. Those two matters emerge from the example which is given in cl 17.2.1 of MSI 368 in relation to the extent of non-compliance with conditions subject to which the visa was granted. The Tribunal may also have been expected to indicate whether it accepted the appellant's evidence as to the claimed reduction of funding support from his parents as relevant to those matters. I do not think the Tribunal has made such findings. But it is not for the Court to substitute its judgment as a matter of common sense as to the factual matters which may be relevant to the topics upon which the exercise of the discretion should be based. The matters upon which the Tribunal made findings on those topics were clearly regarded by it as relevant. And unless specific factual issues are dictated by the legislation or by instruments under the legislation, either expressly or by necessary implication, the failure to address such specific factual issues will not of itself demonstrate jurisdictional error. I have not accepted that they were. 16 Accordingly, in my view, the Tribunal's reasons do not in any event demonstrate jurisdictional error on its part, even if MSI 368 was taken to have prescribed matters which the Tribunal was obliged to have regard to. Its reasons demonstrate, in my view, that the Tribunal did have regard to those matters, but not in a way which I might have done so. That is not sufficient to authorise or warrant the Court's intervention in this matter. 17 The appeal is therefore dismissed. I see no reason why costs should not follow the event. The appellant should pay the costs of the first respondent on the appeal and on the application for leave to appeal out of time. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

exercise of discretion under s 116(1) of the migration act 1958 (cth) whether migration review tribunal obliged to comply with migration series instruction 368 migration

The leases are said to cover phosphate reserves that may allow mining to continue for a further five years. On 27 April 2007 the Minister for Environment and Water Resources (the Minister) made a decision under s 133 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act) refusing approval for the proposed expansion by Phosphate of its mining activities. The expanded activities involved surface mining, transport and off-site processing of phosphate at nine locations on the Island. 2 It appears from the Minister's reasons for his decision that Phosphate's proposal was referred to the Department of the Environment and Water Resources on 1 November 2001 for a decision on whether it required assessment and approval under the EPBC Act. A number of steps followed leading to the Minister's decision, on 27 April 2007, not to approve the taking of the action under s 133 of the EPBC Act. Phosphate was advised of the decision on 30 April 2007. 3 On 9 May 2007 the managing director of Phosphate wrote to the Minister seeking reasons for his decision. The Minister provided a Statement of Reasons for Decision under s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) by letter to the managing director dated 14 June 2007, which appears to have been received on 21 June 2007. 4 On 13 July 2007 Phosphate instituted proceedings against the Minister seeking an order for review of his decision under the ADJR Act. The application attached a copy of the Minister's Reasons for Decision. Filed with the application was a nine page statement of claim together with three annexures. 5 At a directions hearing on 9 August 2007 counsel for Phosphate sought directions that the application proceed on pleadings, rather than by affidavit and that the Minister give discovery. An order was made at the time that, by 31 August 2007, the Minister file and serve an indexed and paginated bundle of documents, being copies of the documents listed at [28] of his Statement of Reasons. Six volumes of documents were filed pursuant to that order. The parties were given liberty to file and serve short written submissions by 13 September 2007 on the further interlocutory directions they proposed. The matter was listed today for a ruling on those submissions and for further directions. 3.3 The respondent took irrelevant considerations into account in the exercise of the power. 3.4 The exercise of the power by the respondent was so unreasonable that no reasonable person could have so exercised the power or was otherwise an improper exercise of the power. Many of these steps seem to replicate what is set out in the Minister's reasons for decision. 8 There are a number of paragraphs stating what are said to be the Minister's duties under the Act, followed by allegations that he erred in law ([15]), failed to take relevant considerations into account ([16]) and took into account irrelevant considerations ([17]). Wednesbury unreasonableness and breach of the rules of natural justice were raised ([18] and [19]). 9 Under the error of law ground it is said that the Minister made findings of fact not supported by evidence. These are set out in Annexure 1. It should be noted that there is no ground under s 5 of the ADJR Act which explicitly authorises judicial review on the basis of findings of fact "not supported by the evidence". That ground appears to be wider than the "no evidence" ground in s 5(1)(h). In this case, however, the relevant particular appears to be relied upon to support a finding that the Minister erred in law. In Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321, Mason CJ discussed the relationship between error of law contemplated by s 5(1)(f) of the ADJR Act and the "no evidence" ground referred to in s 5(1)(h) as elucidated in s 5(3). Within the area of operation of par (a) it is enough to show an absence of evidence or material from which the decision-maker could reasonably be satisfied that the particular matter was established, that being a lesser burden than that of showing an absence of evidence (or material) to support the decision. It is, however, too early in the proceedings to make any definitive observation in that regard. 10 It is, as counsel for the applicant suggests, open to the Court to give directions that the matter proceed on pleadings. I am not however convinced that this is a necessary course. The judicial review challenge is based upon the Minister's findings. Much of the statement of claim would not appear to be contentious as to background facts. It asserts legal duties and errors but a defence would not sharpen the issues in that respect. The question whether there was or was not evidence to support the findings referred to in Annexure 1 is not a question the resolution of which will be assisted by the filing of a defence. I am prepared to let the applicant's statement of claim stand as a statement of its case. Otherwise, in my opinion, the matter should proceed by way of affidavit and written submissions which may include the provision by the respondent of schedules identifying, in answer to Annexure 1, the evidence said to be supportive of the findings of fact there mentioned and in respect of Annexure 2, the material, if any, relied upon to show that the relevant matters there listed were, if mandatory relevant considerations, taken into account. 11 On the matter of discovery, having regard to the materials which have been disclosed, namely those set out in the Minister's reasons for decision, I see no utility in making any order for general discovery. Documentary material relevant to show what he did and read as his ""consideration" in a real sense and undertaking an active intellectual process" of the material in the documents listed in [28] of the reasons. 2. Documentary material evidencing the time spent reading the documents. 3. If he relied upon information or summaries provided to him by his department, the documents containing the information or summaries provided. These documents occupy six lever arch volumes. Phosphate says that it does not accept that the documents so filed are all of the documents listed at [28] of the reasons. As to that, counsel for the respondent submits that the only documents excluded from those filed pursuant to the order made on 9 August 2007 are the six letters between the Minister and other Commonwealth Ministers marked "Cabinet in Confidence". In relation to those letters it is said that they attract public interest immunity as Cabinet documents. On the face of it communications between ministers do not become Cabinet documents simply because they are communications between ministers or marked "Cabinet in Confidence". The order that was made on 9 August 2007 did not allow for the omission of any documents listed at [28]. If there is to be a claim for public interest immunity in respect of these documents, then that should be supported by affidavit. It appears, however, from the submissions made on behalf of the Minister that the position in relation to those documents is presently under consideration. 13 Given the volume of documents attached to the departmental briefs put before the minister, there may be a reasonable basis for the proposition that the Minister did not read every portion of each of them. There may be a question whether they were adequately dealt with in the departmental briefs. That however is not a basis for further discovery. Assuming that the list of documents contained in [28] is comprehensive, then the question whether the Minister has had regard to particular relevant facts can be assessed by reference to his written reasons and the material that was available to him. The proposition that a decision-maker is required to consider relevant factors "in a real sense" and to undertake "an active intellectual process" does not justify a forensic factual inquiry into how long the Minister took or what he thought while he was thinking about his decision. If the Minister's reasons are relied upon, as appears to be the case, by the applicant then his decision will stand or fall according to those reasons in the light of the materials before the Minister. If the discovery sought by Phosphate in this case were justified it could also justify interrogating the Minister about the time he spent on the file and his thought processes. In my opinion it has not been demonstrated that that course of action is either necessary or desirable having regard to the nature of judicial review. If it can be shown that there was some document referred to in [28] of the Minister's reasons which has not been disclosed, then particular discovery of that document may be sought. 14 In my opinion therefore the proceedings should continue on affidavit (to the extent that that may be necessary) and the statement of claim may stand as a statement of Phosphate's case. The contentions of the parties on each of the grounds raised by Phosphate may adequately be identified by their written submissions perhaps with the assistance of schedules of the kind that I have mentioned already. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French J.

judicial review practice and procedure judicial review of ministerial decision statement of claim filed with application whether proceedings should continue on pleadings whether discovery should be ordered relevant to whether minister considered relevant factors in "a real sense" and undertook "active intellectual process" pleadings unwarranted statement of claim to stand as statement of case discovery declined subject to justification for particular discovery administrative law