mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: KGL Health Pty Ltd v Mechtler [2007] FCA 1410
Outcome: cited
In relation to the absence of the lawyer's certificate, it is said that that is of no remaining significance as the cross-claim was filed by a solicitor on behalf of Meribal, thus, carrying with it the same assurance. Such a serious misstatement can hardly be swept aside in that fashion but, in any event, there is no explanation as to how, on the basis of the normal solicitor's assurance, a claim could be valued fully without discount to reflect the chances of failure and for costs ( KGL Health Pty Ltd v Mechtler [2007] FCA 1410). Counsel for Vatera points out that the only particularised claim at that time was $270,000. 15 In addition to the difficulties with the report, the DOCA is in an unsatisfactory form. It appears to be a boilerplate that is not well adapted for the particular proposal plus a home grown addition. The result is not acceptable. Upon execution of the DOCA, control of Meribal (including its assets and business) reverted to the director (cl 8.1). Trading is not prohibited. Meribal and the directors undertook to pay all taxes and statutory obligations due for payment by the company thereafter. There is no committee of creditors. There is a moratorium during the term of the DOCA in relation to any action by a creditor. A creditor is any person having a claim against Meribal whose claim is admitted by the Administrators. The Corporations Act procedures for making claims to liquidators are incorporated by reference. The DOCA bars creditors who do not prove. 16 The boilerplate clause concerning priority of distributions is as follows:
Case: Khoury v Zambena Pty Ltd (1997) 23 ACSR 344 ; (1997) 15 ACLC 620
Outcome: cited
Counsel for the first and second defendants has referred me to a number of authorities which recognise that the time pressures imposed by the Act in relation to administration make it inevitable that investigations and reports by administrators will be less than complete. They also support the proposition that deeds are not to be lightly set aside, stressing the need for materiality of misleading statements in the sense outlined in s 445D(1)(a)(ii) Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd (2005) 226 ALR 510 ; Khoury v Zambena Pty Ltd (1997) 23 ACSR 344 ; (1997) 15 ACLC 620 affirmed in Joseph Khoury &amp; Sons v Zambena Pty Ltd [1999] NSWCA 402 ; (1999) 217 ALR 527 ; Deputy Commissioner of Taxation v Comcorp Australia Ltd (1996) 70 FCR 356 ; Deputy Commissioner of Taxation v Pddam Pty Ltd (1996) 19 ACSR 498 ; (1996) 14 ACLC 659 ; and Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99 ; (2000) 156 FLR 453; (2000) 34 ACSR 391.
Case: Joseph Khoury &amp; Sons v Zambena Pty Ltd [1999] NSWCA 402 ; (1999) 217 ALR 527
Outcome: cited
Counsel for the first and second defendants has referred me to a number of authorities which recognise that the time pressures imposed by the Act in relation to administration make it inevitable that investigations and reports by administrators will be less than complete. They also support the proposition that deeds are not to be lightly set aside, stressing the need for materiality of misleading statements in the sense outlined in s 445D(1)(a)(ii) Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd (2005) 226 ALR 510 ; Khoury v Zambena Pty Ltd (1997) 23 ACSR 344 ; (1997) 15 ACLC 620 affirmed in Joseph Khoury &amp; Sons v Zambena Pty Ltd [1999] NSWCA 402 ; (1999) 217 ALR 527 ; Deputy Commissioner of Taxation v Comcorp Australia Ltd (1996) 70 FCR 356 ; Deputy Commissioner of Taxation v Pddam Pty Ltd (1996) 19 ACSR 498 ; (1996) 14 ACLC 659 ; and Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99 ; (2000) 156 FLR 453; (2000) 34 ACSR 391.
Case: The State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146
Outcome: applied
The leading case in this area of law is the decision of the High Court of Australia in The State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146. In that case, the trial judge accepted an explanation by the respondents to the substantive proceedings for the delay in making application for leave to amend the defence, however refused the application to amend the defence on the basis, inter alia , that the amendments would jeopardise the hearing dates, and would have the result that the matter would be unlikely to be relisted until the following year. In allowing the respondent's appeal, Dawson, Gaudron and McHugh JJ held: "Sali v SPC Ltd was a case concerning the refusal of an adjournment in relation to which the proper principles of case management may have a particular relevance. However, nothing in that case suggests that those principles might be employed, except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable. Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim." (at 154) 16 Later in their judgment, their Honours continued: "Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties." (at 155) 17 Kirby J in JL Holdings Pty Ltd [1997] HCA 1 ; 189 CLR 146 also observed : "Among considerations which may tend to favour the extension of an indulgence to a paty applying for it are the following : that this is the only way in which the true issues and the real merits, factual and legal, can be litigated and artificiality avoided; that the oversight which occurred is adequately explained....; that any fault is that of the party's legal representatives; that the oversight was wholly accident; that it was simply the product of unavoidable human error.... Departures from a court ordered timetable, whilst relevant, are not decisive. Such orders are servants of justice. They are designed to enhance its achievement in a way that an inflexible application of rigid rules could prevent. Efficiency in the dispatch of court lists can sometimes be purchased at too high a price...." (at 169-170).
Case: Jarrett v Westpac Banking Corporation [1999] FCA 425
Outcome: cited
In addition to this authority, relevant decisions in relation to this application include the following : 1. In Jarrett v Westpac Banking Corporation [1999] FCA 425 , the Full Court held that the withdrawal of, or change of, legal representation shortly before a hearing will not necessarily or routinely give rise to a situation where the Court should permit the trial dates to be vacated (particularly Mansfield J at [87]). In that case, however, the Court allowed an appeal from a single judge refusing an adjournment, in circumstances where the respondents would have had no legal representation at the trial if the trial had proceeded 2. in Robinson v Aware Industries Ltd (unreported Weinberg J, 1 October 1998) Weinberg J noted that it was common ground between the parties in that case that, given the fact that the new solicitors and counsel for the applicant had only just been retained, it would be inappropriate and unfair to the applicant, as well as the respondents, to require the trial to proceed. His Honour ordered that the existing trial dates be vacated and a new trial date be fixed. However his Honour also ordered that, in the circumstances, the applicant pay the costs thrown away by reason of the need to vacate the trial date, on an indemnity basis 3. in Business in Focus (Aust) Pty Ltd v Begun Property Pty Ltd [2006] FCA 264 , in view of the prejudice the respondents would have suffered in this case if the trial had proceeded because of engagement of new solicitors shortly before the trial after a period of inactivity by their previous legal advisors, I ordered that the trial dates be vacated and any costs thrown away by the respondents as a result of the vacation of the trial date be borne by the applicants 4. in Menzies v CRCI Pty Ltd [2007] NSWCA 118 , where the application for vacation of the trial was made on the first day of the trial, the Court of Appeal of New South Wales held that: "where an amendment would require vacation of a trial hearing date which was set to take place within a few days, generally there is prejudice through prolongation of the litigation that is not entirely met by costs, and the imposition of that prejudice on the other party needs to be justified by the strength of the case made for the indulgence by the party applying for it." (at [27])
Case: Robinson v Aware Industries Ltd (unreported, Weinberg J, 1 October 1998)
Outcome: cited
In addition to this authority, relevant decisions in relation to this application include the following : 1. In Jarrett v Westpac Banking Corporation [1999] FCA 425 , the Full Court held that the withdrawal of, or change of, legal representation shortly before a hearing will not necessarily or routinely give rise to a situation where the Court should permit the trial dates to be vacated (particularly Mansfield J at [87]). In that case, however, the Court allowed an appeal from a single judge refusing an adjournment, in circumstances where the respondents would have had no legal representation at the trial if the trial had proceeded 2. in Robinson v Aware Industries Ltd (unreported Weinberg J, 1 October 1998) Weinberg J noted that it was common ground between the parties in that case that, given the fact that the new solicitors and counsel for the applicant had only just been retained, it would be inappropriate and unfair to the applicant, as well as the respondents, to require the trial to proceed. His Honour ordered that the existing trial dates be vacated and a new trial date be fixed. However his Honour also ordered that, in the circumstances, the applicant pay the costs thrown away by reason of the need to vacate the trial date, on an indemnity basis 3. in Business in Focus (Aust) Pty Ltd v Begun Property Pty Ltd [2006] FCA 264 , in view of the prejudice the respondents would have suffered in this case if the trial had proceeded because of engagement of new solicitors shortly before the trial after a period of inactivity by their previous legal advisors, I ordered that the trial dates be vacated and any costs thrown away by the respondents as a result of the vacation of the trial date be borne by the applicants 4. in Menzies v CRCI Pty Ltd [2007] NSWCA 118 , where the application for vacation of the trial was made on the first day of the trial, the Court of Appeal of New South Wales held that: "where an amendment would require vacation of a trial hearing date which was set to take place within a few days, generally there is prejudice through prolongation of the litigation that is not entirely met by costs, and the imposition of that prejudice on the other party needs to be justified by the strength of the case made for the indulgence by the party applying for it." (at [27])
Case: Business in Focus (Aust) Pty Ltd v Began Property Pty Ltd [2006] FCA 264
Outcome: cited
In addition to this authority, relevant decisions in relation to this application include the following : 1. In Jarrett v Westpac Banking Corporation [1999] FCA 425 , the Full Court held that the withdrawal of, or change of, legal representation shortly before a hearing will not necessarily or routinely give rise to a situation where the Court should permit the trial dates to be vacated (particularly Mansfield J at [87]). In that case, however, the Court allowed an appeal from a single judge refusing an adjournment, in circumstances where the respondents would have had no legal representation at the trial if the trial had proceeded 2. in Robinson v Aware Industries Ltd (unreported Weinberg J, 1 October 1998) Weinberg J noted that it was common ground between the parties in that case that, given the fact that the new solicitors and counsel for the applicant had only just been retained, it would be inappropriate and unfair to the applicant, as well as the respondents, to require the trial to proceed. His Honour ordered that the existing trial dates be vacated and a new trial date be fixed. However his Honour also ordered that, in the circumstances, the applicant pay the costs thrown away by reason of the need to vacate the trial date, on an indemnity basis 3. in Business in Focus (Aust) Pty Ltd v Begun Property Pty Ltd [2006] FCA 264 , in view of the prejudice the respondents would have suffered in this case if the trial had proceeded because of engagement of new solicitors shortly before the trial after a period of inactivity by their previous legal advisors, I ordered that the trial dates be vacated and any costs thrown away by the respondents as a result of the vacation of the trial date be borne by the applicants 4. in Menzies v CRCI Pty Ltd [2007] NSWCA 118 , where the application for vacation of the trial was made on the first day of the trial, the Court of Appeal of New South Wales held that: "where an amendment would require vacation of a trial hearing date which was set to take place within a few days, generally there is prejudice through prolongation of the litigation that is not entirely met by costs, and the imposition of that prejudice on the other party needs to be justified by the strength of the case made for the indulgence by the party applying for it." (at [27])
Case: Menzies v CRCI Pty Ltd [2007] NSWCA 118
Outcome: cited
In addition to this authority, relevant decisions in relation to this application include the following : 1. In Jarrett v Westpac Banking Corporation [1999] FCA 425 , the Full Court held that the withdrawal of, or change of, legal representation shortly before a hearing will not necessarily or routinely give rise to a situation where the Court should permit the trial dates to be vacated (particularly Mansfield J at [87]). In that case, however, the Court allowed an appeal from a single judge refusing an adjournment, in circumstances where the respondents would have had no legal representation at the trial if the trial had proceeded 2. in Robinson v Aware Industries Ltd (unreported Weinberg J, 1 October 1998) Weinberg J noted that it was common ground between the parties in that case that, given the fact that the new solicitors and counsel for the applicant had only just been retained, it would be inappropriate and unfair to the applicant, as well as the respondents, to require the trial to proceed. His Honour ordered that the existing trial dates be vacated and a new trial date be fixed. However his Honour also ordered that, in the circumstances, the applicant pay the costs thrown away by reason of the need to vacate the trial date, on an indemnity basis 3. in Business in Focus (Aust) Pty Ltd v Begun Property Pty Ltd [2006] FCA 264 , in view of the prejudice the respondents would have suffered in this case if the trial had proceeded because of engagement of new solicitors shortly before the trial after a period of inactivity by their previous legal advisors, I ordered that the trial dates be vacated and any costs thrown away by the respondents as a result of the vacation of the trial date be borne by the applicants 4. in Menzies v CRCI Pty Ltd [2007] NSWCA 118 , where the application for vacation of the trial was made on the first day of the trial, the Court of Appeal of New South Wales held that: "where an amendment would require vacation of a trial hearing date which was set to take place within a few days, generally there is prejudice through prolongation of the litigation that is not entirely met by costs, and the imposition of that prejudice on the other party needs to be justified by the strength of the case made for the indulgence by the party applying for it." (at [27])
Case: Cubic Transportation Systems Inc v State of New South Wales [2002] NSWSC 656
Outcome: referred to
Eden refers to Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 ( Hughes ) and Cubic Transportation Systems Inc v State of New South Wales [2002] NSWSC 656 ( Cubic Transportation ). The facts of Hughes were vastly different from those of the present case. In Hughes , there were two competing tenderers, the applicant in the proceeding being the unsuccessful one. Finn J held that in the circumstances of the case, there was an implied contract that might be called a "process contract", according to which Airservices Australia incurred implied contractual obligations in favour of the tenderers, including an implied obligation to conduct its evaluation fairly and in a manner that would ensure equal opportunity as between them. Cubic Transportation also concerned competing tenderers.
Case: Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151
Outcome: distinguished
Eden refers to Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 ( Hughes ) and Cubic Transportation Systems Inc v State of New South Wales [2002] NSWSC 656 ( Cubic Transportation ). The facts of Hughes were vastly different from those of the present case. In Hughes , there were two competing tenderers, the applicant in the proceeding being the unsuccessful one. Finn J held that in the circumstances of the case, there was an implied contract that might be called a "process contract", according to which Airservices Australia incurred implied contractual obligations in favour of the tenderers, including an implied obligation to conduct its evaluation fairly and in a manner that would ensure equal opportunity as between them. Cubic Transportation also concerned competing tenderers.
Case: Australian Securities and Investment Commission v Tasman Investment Management Ltd (2006) 202 FLR 343
Outcome: related
The next problem was the failure to comply with the requirements of the Corporations Law applicable at the time. The proposal was undoubtedly a "managed investment scheme" as defined in s 9 of the Corporations Law . Whilst this case has concentrated upon three investors, more than 20 investors contributed approximately $4 million in total. Prima facie, registration was required (s 601ED(1)). It could not be established that all of the issues of interests did not need disclosure to investors under Pt 6D.2 when made (see s 706 and s 708). Registration would have required the production to ASIC of documents that did not exist and a responsible entity to operate the scheme being a public company that held a dealer's licence to operate a managed investment scheme. The responsible entity would be subject to a number of statutory obligations. There was no responsible entity. These breaches were admitted in collateral proceedings in the Supreme Court of New South Wales and formed the basis of orders made in those proceedings ( Australian Securities and Investments Commission v Tasman Investment Management Ltd (2004) 183 FLR 294; Australian Securities and Investment Commission v Tasman Investment Management Ltd (2006) 202 FLR 343). It follows that Tosich had none of the protections provided for by the Corporations Law flowing from registration and the existence of a responsible entity. The proposal should not have been made to Tosich (or others) at all by a responsible financial planner.
Case: Australian Securities and Investments Commission v Tasman Investment Management Ltd (2004) 183 FLR 294
Outcome: related
The next problem was the failure to comply with the requirements of the Corporations Law applicable at the time. The proposal was undoubtedly a "managed investment scheme" as defined in s 9 of the Corporations Law . Whilst this case has concentrated upon three investors, more than 20 investors contributed approximately $4 million in total. Prima facie, registration was required (s 601ED(1)). It could not be established that all of the issues of interests did not need disclosure to investors under Pt 6D.2 when made (see s 706 and s 708). Registration would have required the production to ASIC of documents that did not exist and a responsible entity to operate the scheme being a public company that held a dealer's licence to operate a managed investment scheme. The responsible entity would be subject to a number of statutory obligations. There was no responsible entity. These breaches were admitted in collateral proceedings in the Supreme Court of New South Wales and formed the basis of orders made in those proceedings ( Australian Securities and Investments Commission v Tasman Investment Management Ltd (2004) 183 FLR 294; Australian Securities and Investment Commission v Tasman Investment Management Ltd (2006) 202 FLR 343). It follows that Tosich had none of the protections provided for by the Corporations Law flowing from registration and the existence of a responsible entity. The proposal should not have been made to Tosich (or others) at all by a responsible financial planner.
Case: Alexander Stenhouse Ltd v Austcan Investments Pty Ltd [1993] HCA 22 ; (1993) 112 ALR 353 
Outcome: cited
Some basic propositions about s 21 should be borne in mind before approaching the detail of the issue. (1) "Knows" and "known" are strong words. They mean considerably more than "believes" or "suspects" or even "strongly suspects" (per McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25 ; (2003) 214 CLR 514 at 531; see also Commercial Union Assurance Co of Australia Ltd v Beard (1999) 47 NSWLR 735; (2000) 11 ANZ Ins Cas 61-458 per Davies A-JA at 75259). (2) The "matter" must be known to the insured. (3) On one alternative, the "matter" must also be known to be relevant to the decision of the particular insurer whether to accept risk, and, if so, on what terms in this case, on the basis put forward, by Macquarie Underwriting. As Gummow and Hayne JJ said in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [70] : "Under the Act, attention is shifted from the prudent insurer to the particular insurer." Although their Honours were in dissent in the result, this statement is obviously correct. (See also Twenty-First Maylux Pty Ltd v Mercantile Mutual Insurance (Aust) Ltd [1990] VR 919 ; (1989) 92 ALR 661.) (4) Relevance to the acceptance of the risk in the sense of the particular insurance hazard is required (McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [32] ). (5) In the other alternative, it must be found that a reasonable person in the circumstances could be expected to know that the matter was relevant to the decision of the particular insurer. There is some debate about the meaning of the words "the circumstances". Although they plainly mean the circumstances of the particular case, the debate is said to be between subjective and extrinsic circumstances (see the discussion in Mann P, Annotated Insurance Contracts Act (4 th ed, Lawbook Co, 2003), para 21.10.8). (6) There is a debate as to whether an insured can "know" a matter by its agent cf McHugh, Kirby and Callinan JJ at [30] with Gummow and Hayne JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [82] [89]. Pending further clarification by the High Court, the wider view should be taken following Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543 per Powell JA at 610 611 (agreed with by Priestley JA and Clarke JA). (7) The obligation applies to renewal of a contract (s 11(9)(b)) ( Alexander Stenhouse Ltd v Austcan Investments Pty Ltd [1993] HCA 22 ; (1993) 112 ALR 353).