mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553
Outcome: cited
principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J's review of the authorities in Clements at 522-526 [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a 'crime or fraud': R v Cox and Railton (1884) 14 QBD 153 (' R v Cox' ) at 165; a 'criminal or unlawful proceeding': Bullivant v Attorney-General (Vic) [1901] AC 196 (' Bullivant' ) at 201; 'any unlawful or wicked act': Annesley v Anglesea (1743) 17 St Tr 1139 at 1229; and 'all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances': Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. In Kearney , the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a 'deliberate abuse of statutory power' to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that 'legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.' Some authorities have expressed the principle as applicable to prevent a 'fraud on justice' in a broad sense. The concept of a 'fraud on justice' was adopted by Lander J in Gartner v Carter [2004] FCA 258 (' Gartner v Carter' ) to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140].
Case: Australian Securities &amp; Investments Commission v Mercorella (No 3) [2006] FCA 772
Outcome: considered
principle extends to 'trickery' and 'shams'. A 'sham' refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471; see also Beazley v Steinhardt (1999) 106 A Crim R 21; affirmed on appeal in [1999] FCA 1255 (' Beazley' ). The recent case of Australian Securities &amp; Investments Commission v Mercorella (No 3) [2006] FCA 772 provides an example of the denial of legal professional privilege to documents in furtherance of a sham transaction. In that case, creditors of a managed investment scheme claimed privilege over documents relating to securities obtained from the defendant and certain companies in the scheme. The transactions were allegedly entered into so as to advance those creditors' interests over the interests of other creditors to the scheme. Mansfield J found that the communications were prima facie in furtherance of a sham and, as such, were not privileged. After referring to Lander J's decision in Gartner v Carter and Barclays Bank plc v Eustice [1995] 4 All ER 511 (' Barclays Bank '), his Honour stated at [95]: is a short step from those decisions to the present facts, as prima facie found. The [creditors] engaged in the transactions reflected in the Deed, and the granting of the securities within the structures it created, to secure or advance their interests over others who had advanced money to [the first defendant] or to the Scheme. There is a prima facie case that the "restructure" of the advances so that they appear as advances to the partnership of Ajay and Opey is a sham.'
Case: Barclays Bank plc v Eustice [1995] 4 All ER 511
Outcome: considered
principle extends to 'trickery' and 'shams'. A 'sham' refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471; see also Beazley v Steinhardt (1999) 106 A Crim R 21; affirmed on appeal in [1999] FCA 1255 (' Beazley' ). The recent case of Australian Securities &amp; Investments Commission v Mercorella (No 3) [2006] FCA 772 provides an example of the denial of legal professional privilege to documents in furtherance of a sham transaction. In that case, creditors of a managed investment scheme claimed privilege over documents relating to securities obtained from the defendant and certain companies in the scheme. The transactions were allegedly entered into so as to advance those creditors' interests over the interests of other creditors to the scheme. Mansfield J found that the communications were prima facie in furtherance of a sham and, as such, were not privileged. After referring to Lander J's decision in Gartner v Carter and Barclays Bank plc v Eustice [1995] 4 All ER 511 (' Barclays Bank '), his Honour stated at [95]: is a short step from those decisions to the present facts, as prima facie found. The [creditors] engaged in the transactions reflected in the Deed, and the granting of the securities within the structures it created, to secure or advance their interests over others who had advanced money to [the first defendant] or to the Scheme. There is a prima facie case that the "restructure" of the advances so that they appear as advances to the partnership of Ajay and Opey is a sham.' In Barclays Bank , communications between the client and his lawyer in relation to the setting up of transactions at an undervalue so as to prejudice the bank were held to be 'sufficiently iniquitous for public policy' to require those communications to be discoverable. Schiemann LJ (with whom Aldous and Butler-Sloss LJJ agreed) stated at 524: that view be correct, then it matters not whether either the client or the solicitor shared that view. They may well have thought that the transactions would not fall to be set aside ... either because they thought that the transactions were not at an undervalue or because they thought that the court would not find that the purpose of the transactions was to prejudice the bank. But if this is what they thought then there is a strong prima facie case that they were wrong. Public policy does not require the communications of those who misapprehend the law to be privileged in circumstances where no privilege attaches to those who correctly understand the situation.'
Case: R v Bell; Ex parte Lees [1980] HCA 26 ; (1980) 146 CLR 141
Outcome: cited
a client is engaged in fraudulent conduct, communications with his or her lawyer in furtherance of the fraud are not privileged, regardless of whether the lawyer is a party to the fraud or not: Clements at 562 [213]. The principle applies to communications passing between a client and lawyer where the lawyer is innocent of the fraud or improper purpose: R v Bell; Ex parte Lees [1980] HCA 26 ; (1980) 146 CLR 141 at 145. Further, the fraud need not be that of the client or the lawyer; it may be that of a third party: Capar v Commissioner of Police (1994) 34 NSWLR 715; R v Central Criminal Court; Ex parte Francis &amp; Francis [1989] AC 346, cited with approval in Clements at 562-565 [217]-[218].
Case: Butler v Board of Trade [1971] 1 Ch 680
Outcome: applied
the principle to apply, there must be more than a mere assertion or allegation of fraud or impropriety: Bullivant at 201, 203 and 204-205. In Propend at 514, Brennan CJ expressed the test as being one of 'reasonable grounds for believing' that the relevant communication was for an improper purpose. The requirement has also been described as one of a 'prima facie case': Butler v Board of Trade [1971] 1 Ch 680 (' Butler' ) at 689; cf Baker v Evans (1987) 77 ALR 565 at 574. In Kearney at 516, Gibbs CJ approved the test formulated in O'Rourke v Darbishire [1920] AC 581 at 604, namely that 'there must be something to give colour to the charge'; 'the statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact'. The High Court in Propend applied this test: at 514 per Brennan CJ, at 521 per Dawson J, 534 per Toohey J, 546 per Gaudron J, 556 per McHugh J, and 592 per Kirby J. It is not necessary to prove an improper purpose on the balance of probabilities. The 'prima facie' test arguably reflects the fact that issues of legal professional privilege are usually dealt with in the interlocutory stages of a proceeding, but the authorities have not departed from that formulation where a declaration is sought in relation to privilege issues: Butler ; Propend; Beazley . It must also be established, on the same prima facie basis, that the communication which is the subject of the claim for privilege was made in furtherance of, or as a step preparatory to, the commission of the fraud or wrongdoing. In Butler, Goff J found at 687 that a letter written by the plaintiff's lawyer which volunteered a warning that the plaintiff may incur serious consequences if he did not take care was not shown to be 'in preparation for or in furtherance of or as part of any criminal designs on the part of the plaintiff': see also Zemanek v Commonwealth Bank of Australia (unreported, Federal Court, Hill J, 2 October 1997). The planned payments of the iron filings claim were never carried into effect because the invasion of Iraq intervened. Scales gave evidence to the Commission that the iron filings money has never been paid and remains in AWBI's accounts. However, the fact that the payments were never made to the GBI will not prevent the application of the fraud exception so long as there is sufficient evidence that the communications were in furtherance of, or preparatory to, the commission of the fraud or impropriety in the broad sense described above: see Butler; and Clements at 562 [213].
Case: Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336
Outcome: cited
my view, the evidence establishes a more than adequate prima facie case that AWB knowingly and deliberately disguised the true nature of the prices in contracts A1670 and A1680. If it be relevant, I also consider that the evidence establishes the foregoing matters on the balance of probabilities and to a level of satisfaction commensurate with the seriousness of the allegation: see Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 at 362 per Dixon J. No question arises here of evidence which would not be admissible in a final hearing: cf Propend . AWB argued that there was no evidence that the transaction furthered any particular fraud, iniquity or illegality. It submitted that it is common ground that the United Nations' resolutions were not in terms incorporated into Australian law. AWB submitted that, consequently, the fraud exception is not available to take the documents out of the operation of the doctrine of legal professional privilege. This narrow approach is at odds with the authorities that stress the wide range of fraudulent or iniquitous activities that fall within the principle. I have inspected the six documents that were said to relate to the iron filings claim. My inspection of AWB's documents revealed a further four documents that fall within this category and are still the subject of a privilege claim. I am satisfied that these 10 documents are not privileged. The documents were, prima facie, brought into existence in furtherance of an improper and dishonest purpose, viz inflating the prices of contracts A1670 and A1680 so as to extract payments out of the United Nations' escrow account that would then be utilised, in part, to satisfy a compensation claim by GBI. Prima facie, the evidence establishes that the transaction was deliberately and dishonestly structured by AWB so as to misrepresent the true nature and purpose of the trucking fees and to work a trickery on the United Nations. It would be contrary to public policy for the privilege to enure in communications of this kind.
Case: Australian Securities and Investments Commission re Richstar Enterprises Pty Ltd v Carey (No 5) (2006) 58 ACSR 6
Outcome: cited
As French J said in Australian Securities and Investments Commission re Richstar Enterprises Pty Ltd v Carey (No 5) (2006) 58 ACSR 6, s 1323 of the Corporations Act 2001 (Cth) does not authorise the Court to order that the person or company the subject of the orders appointing receivers to the property pay the costs of the receivers in discharging their function. This is consistent with a long established practice in England, see Evans v Clayhope Properties Pty Ltd [1988] 1 All ER 444 at 446.
Case: Evans v Clayhope Properties Pty Ltd [1988] 1 All ER 444
Outcome: cited
As French J said in Australian Securities and Investments Commission re Richstar Enterprises Pty Ltd v Carey (No 5) (2006) 58 ACSR 6, s 1323 of the Corporations Act 2001 (Cth) does not authorise the Court to order that the person or company the subject of the orders appointing receivers to the property pay the costs of the receivers in discharging their function. This is consistent with a long established practice in England, see Evans v Clayhope Properties Pty Ltd [1988] 1 All ER 444 at 446.
Case: Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19 ; (1962) 107 CLR 9
Outcome: cited
It is the almost invariable practice for courts not to make any final order for costs in favour of a plaintiff on an interim application, the reason being that usually the substantive merits remain to be determined. The plaintiff's case may then appear to be very strong, indeed unanswerable, but as Dixon CJ pointed out in Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19 ; (1962) 107 CLR 9 at 20: "Experience of forensic contests should confirm the truth of the common saying that one story is good until another is told ..." It would be better if ASIC did not seek final orders for costs in interim applications of this nature. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: 6 July 2007 Counsel for the Plaintiff: M Scott Solicitor for the Plaintiff Australian Government Solicitor Counsel for Receiver for first and fourth Defendants: N Fryde No appearance for fifth Defendant Counsel for sixth and seventh Defendants: N Evans Solicitor for sixth and seventh Defendants Baker &amp; McKenzie Date of Hearing: 6 July 2007 Date of Judgment: 6 July 2007 SCHEDULE OF PARTIES AUSTRALIAN SECURITIES &amp; INVESTMENTS COMMISSION Plaintiff - and - FUELBANC AUSTRALIA LIMITED (ACN 117 937 327) ("Fuelbanc") First Defendant - and - PAYCARDS GLOBAL PTY LTD (ACN 116 759 472) ("PayCards Global") Second Defendant - and - PAYCARDS INVESTMENTS PTY LTD (ACN 118 252 369) ("Paycards Investments") Third Defendant - and - C PROPERTY GROUP PTY LTD (ACN 118 252 387) ("PC Property Group") Fourth Defendant - and - STEPHEN JOHN MCDOUGALL ("McDougall") Fifth Defendant - and - TIMOTHY ROSS MCDOUGALL ("Timothy McDougall") Sixth Defendant - and - MATTHEW ALAN MCDOUGALL ("Matthew McDougall") Seventh Defendant AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1033.html
Case: Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (ACN 008 799 040) (2001) ATPR 41-802
Outcome: referred to
The Commission asked me to incorporate in the orders the findings of fact made for the purpose of determining the appropriate penalties and other remedies. I do not think that it is appropriate to do that for a number of reasons. First, it would make the orders of the court unnecessarily lengthy and it would raise the question of what findings should or should not be included. Secondly, such a course would create a risk of inconsistency between the findings in the orders and the findings in the reasons for judgment: Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (ACN 008 799 040) (2001) ATPR 41-802. Reference was made by the Commission to s 83 of the Act, but that section does not suggest that such a course is necessary or appropriate. The findings of fact in the reasons for judgment can be proved in the manner contemplated by the section. 7 Cambur Industries was incorporated in 1962 and it carries on business as an importer and wholesale supplier of electrical goods, homeware products and tableware products. The company's business is divided into three divisions, which correspond to those different types of goods. The evidence is that for the most part the divisions operate separately. 8 The electrical goods supplied by Cambur Industries include kitchen products manufactured under two well-known brand names, Bamix and Magimix, such as stick mixers, juicers, food processors and coffee machines. The coffee machines are referred to as 'dual branded' Nespresso/Magimix. The contraventions in this case relate to the supply of the Bamix and Magimix products and the Nespresso/Magimix coffee machines. I will refer to these products as 'the Cambur products', except where it is necessary to distinguish between them. 9 The head office of Cambur Industries is in Victoria and the company has a regional office in New South Wales. The company has salespeople in Victoria, New South Wales and Adelaide. In the other States and Territories it operates through commission agents. Cambur Industries has about 35 employees, of whom approximately 60 per cent are full-time employees and 40 per cent are part-time employees. 10 The electrical goods division of Cambur Industries has four employees, one of whom is Mr Caulfield, who is the sales and marketing manager. The other three staff members report to him and he in turn reports to the managing director. Mr Caulfield is 57 years old and has worked as a salesperson for a number of years. Mr Caulfield and his wife have a small shareholding in Cambur Industries. Mr Caulfield is effectively the product manager for the Bamix and Magimix products, including the Nespresso/Magimix coffee machines. At the time of the conduct that contravened the Act, he was the one who made the decisions on behalf of Cambur Industries about the marketing and distribution of the Cambur products. At the time of the contravening conduct, Mr Caulfield was working in South Australia.
Case: Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482
Outcome: referred to
In fixing the pecuniary penalties, I have had regard to the cases to which I was referred. It is important to bear in mind that other cases are no more than a guide and there is an obvious danger in attempting too close a comparison for the purposes of fixing a penalty. In particular, there is a danger in taking a broadly analogous case and the penalty imposed in that case and then adding for circumstances considered more serious, and subtracting for circumstances considered less serious. Bearing those observations in mind, two cases which I have found quite helpful are Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482 and Australian Competition and Consumer Commission v Westminster Retail Pty Ltd (2005) ATPR 42-084. 103 Injunctions might still be appropriate even if the likelihood of future contraventions is slight, if future contraventions are likely to cause significant damage to other persons: cf Australian Competition and Consumer Commission v Dermalogica Pty Ltd (supra) at [111] per Goldberg J. Without wishing to minimise the seriousness of the contravening conduct here, I do not think this case falls into that category. 104 For these reasons, I decline to grant the injunctions sought by the Commission. 105 The Commission seeks an order that the respondents pay its costs of an incidental to the proceeding to be agreed or taxed. The respondents do not dispute the fact that they must pay the applicant's costs. The parties have attempted to agree an amount for costs, but have been unable to do so. In the circumstances, it is appropriate to make the order sought by the Commission.
Case: Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79
Outcome: referred to
Cambur Industries proffers an undertaking that it will maintain the compliance programme formulated by Mr Dee in January 2006 for a period of three years. The Court's power to accept an undertaking is constrained by the limits of its power to make an order to similar effect as the undertaking. The Court's power to make an order that a contravener comply with a compliance programme is contained in s 80 or s 86C of the Act. As far as s 80 is concerned, a training programme may go no further than the contravening conduct, or, it seems, that Part of the Act in which the section contravened appears: Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197; Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79 at 88-90 [25], [26] and [36] per French J. The programme which may be the subject of an order under s 86C is a programme relating to 'the contravening conduct, similar conduct or related conduct'.
Case: Australian Competition and Consumer Commission v Westminster Retail Pty Ltd (2005) ATPR 42-084
Outcome: referred to
In fixing the pecuniary penalties, I have had regard to the cases to which I was referred. It is important to bear in mind that other cases are no more than a guide and there is an obvious danger in attempting too close a comparison for the purposes of fixing a penalty. In particular, there is a danger in taking a broadly analogous case and the penalty imposed in that case and then adding for circumstances considered more serious, and subtracting for circumstances considered less serious. Bearing those observations in mind, two cases which I have found quite helpful are Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482 and Australian Competition and Consumer Commission v Westminster Retail Pty Ltd (2005) ATPR 42-084.
Case: Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197
Outcome: referred to
Cambur Industries proffers an undertaking that it will maintain the compliance programme formulated by Mr Dee in January 2006 for a period of three years. The Court's power to accept an undertaking is constrained by the limits of its power to make an order to similar effect as the undertaking. The Court's power to make an order that a contravener comply with a compliance programme is contained in s 80 or s 86C of the Act. As far as s 80 is concerned, a training programme may go no further than the contravening conduct, or, it seems, that Part of the Act in which the section contravened appears: Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197; Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79 at 88-90 [25], [26] and [36] per French J. The programme which may be the subject of an order under s 86C is a programme relating to 'the contravening conduct, similar conduct or related conduct'.