Case: Australian Softwood Forest Pty Ltd v Attorney-General (NSW) [1981] HCA 49 ; (1981) 148 CLR 121
Outcome: cited
Of direct application to the present case is Australian Softwood Forest Pty Ltd v Attorney-General (NSW) [1981] HCA 49 ; (1981) 148 CLR 121. The case concerned a pine plantation investment scheme which the Corporate Affairs Commission (NSW) alleged involved the issuing or offering of an "interest" contrary to s 76(1) of the Companies Act 1961 (NSW). The trial judge made a declaration to the effect alleged and granted injunctions. The Court of Appeal dismissed the appeal but said that it was not a proper case for the grant of declarations, which were "little more than prefatory averments to the grant of an injunction". The High Court dismissed the substantive appeal. The parties accepted that an injunction was no longer necessary since the conduct in question was not continuing. The High Court nevertheless granted a declaration substantially to the effect of that granted by the trial judge. 54 The contraventions the subject of the declaration in Australian Softwood carried criminal penalties: Companies Act, s 86(1). Murphy J thought this was a positive reason for the grant of a declaration. Certainly his Honour saw the possibility, indeed desirability, of criminal proceedings as no reason for refusing a declaration. His Honour commenced his judgment as follows at (136): "One of the most widespread and successful of the species of fraud known in Australia and elsewhere as 'the investment racket' is the forest or plantation variety." Later (at 137) his Honour said that the appellant " ... has already procured signatures and acceptances from more than 4000 persons. This represents more than $200,000 in deposits and promises to pay instalments of well over a million dollars. Presumably all those who have been party to offences against the Companies Act in relation to the issues are liable to criminal proceedings, at least with the consent of the Minister (see s 381). In these circumstances, and because the respondent did not press in this Court for the injunction, I agree the relief should be confined to appropriate declarations." 55 In Intertax Fryberg J (at [8]) distinguished Australian Softwood on the ground that the High Court's approval "... was to the proposition that a declaration could be granted notwithstanding that an injunction would not be granted." If by this his Honour meant that the High Court only granted a declaration because, with the consent of the parties, they did not grant an injunction, then I do not agree. Gibbs CJ said (at 125): "With all respect, Hutley JA was not correct in saying that declarations 'are little more than prefatory averments to the grant of an injunction'. In my opinion it was proper to grant a declaration in the present case although it is now agreed that an injunction is not an appropriate remedy." In any case, if it were only appropriate to make declarations where injunctions were not granted, that would not get over the supposed problem of possible "falsification" by subsequent acquittal in criminal proceedings. 57 His Honour observed (at 603) that while ordinarily a declaration is not made that a defendant has committed a crime, there was no doubt that there was jurisdiction to make such a declaration in a proper case: Imperial Tobacco Limited v Attorney-General [1981] AC 718 at 750, Sankey v Whitlam . Thus it was appropriate in many cases for a business person who is told by a regulatory authority that he or she cannot do something to apply for a declaration that the view is erroneous. Conversely, the right was mutual; the Crown could also obtain a declaration that the person's conduct contravened the law. That practice, which was common in New South Wales, had been given the "seal of approval" by the High Court in Australian Softwood .