case_text: Second, the first respondent submits that a prima facie right to recover will be displaced where it would be consistent with good conscience to allow the lessor to retain the overpaid rent. It referred to the statement of the High Court in David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48 ; (1992) 175 CLR 353 (at 379) that a defendant "is entitled to raise by way of answer any matter or circumstance which shows that his or her receipt (or retention) of the payment is not unjust". 74 The first respondent contends that if it were ordered to refund the overpaid rent in its entirety, the applicant would obtain a windfall benefit. It would be a windfall because at the time that this dispute arose, the applicant conceded there should have been a rental increase, at least up to the level assessed by Mr Ned Walsh, whose assessment is discussed in the primary judgment. 89 The recognition of a "unifying legal concept" does not, however, render the traditional categories of restitutionary claims, such as the action for money had and received, null and void. On the contrary, in recent years the High Court, and superior State courts, have chosen to frame claims in restitution within the bounds of these established categories. See Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516, Baltic Shipping Company v Dillon [1993] HCA 4 ; (1993) 176 CLR 344, David Securities , Pavey & Matthews , Ovidio , McKay (referring to Mason v New South Wales ), and Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333. 91 Despite Deane J's overture in Pavey & Matthews that "unjust enrichment" assists in determining whether the law should recognise new categories of restitution, in David Securities , the majority (Mason CJ, Deane Toohey, Gaudron and McHugh JJ) noted that (at 379): "it is not legitimate to determine whether an enrichment is unjust by reference to some subjective evaluation of what is fair or unconscionable. Instead, recovery depends upon the existence of a qualifying or vitiating factor such as mistake, duress or illegality." 92 It is therefore clear from the High Court's approach in David Securities and Roxborough that while the categories of restitution are not closed, the "established categories" still provide, at the very least, the starting point for analysing restitutionary claims. 111 Turning to the question whether the applicant's restitutionary claim was properly pleaded, I agree that the claim was not pleaded as well as it could have been. However, Mason and Carter make some salient observations about pleading claims for restitution. The learned authors state (at [2904]): "A pleading that asserts in the abstract that P was unjustly enriched at D's expense will usually be struck out. The authorities require the basis of such an allegation to be explained in the pleading. In light of the general statements in David Securities Pty Ltd v Commonwealth Bank of Australia , courts have been averse to pleadings which simply appeal to 'idiosyncratic notions of what is fair and just', or which plead generalised claims based on unjust enrichment. We explain elsewhere why it is legitimate to say that causes of action arise in restitution. Nevertheless, we are not advocating pleadings which rely merely on 'unjust enrichment', unless the essential facts are set out . ... Pleaders are unlikely to allege unjust enrichment in a context devoid of any facts, and the likelihood that the facts pleaded might attract some novel restitutionary claim in this fast-developing area of the law, saw Gummow J refusing to strike out such a pleading in Winterton Constructions Pty Ltd v Hambros Australia Ltd ." (footnotes removed) 112 The applicant pleaded its claim of "unjust enrichment" by reference to the invalidity of the notice. While it could have more clearly identified the claim as one for restitution on the basis of money had and received, the relevant issue was adequately raised. In addition, as Mason and Carter point out, there are good reasons not to plead claims in restitution with a great degree of specificity. In a developing area of the law, where the categories of claims are not closed, an applicant should not shut itself out of making a case for "some novel restitutionary claim", as long as the relevant facts upon which the claim is based are identified. 113 As it turns out, the facts in this case do not "attract some novel restitutionary claim". They fall squarely within an established category an action for money had and received. However, it is for the above reasons that I am satisfied that the applicant pleaded its claim for restitution adequately. 114 The applicant and first respondent are in dispute over the exact amount of money which was overpaid. The dispute surrounds three issues: • whether interest can be claimed on the GST component of the overpaid rent when the applicant would have received an "input tax credit" from the Australian Taxation Office for those sums; • whether the appropriate interest rate to be applied to the overpaid rent is the penalty rate or the business overdraft rate as specified by the Reserve Bank of Australia; and • whether the first respondent was entitled to an automatic increase in rent of three per cent on 1 September 2005, pursuant to clause 3.2.1, irrespective of whether it has served a notice under that clause. 115 Section 51A(1)(a) of the Federal Court Act 1976 (Cth) provides significant discretion in determining questions relating to the application of interest to any award of money. It is in the following terms: "In any proceedings, for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either: (a) order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered ..." (emphasis added)


case_outcome: cited

case_text: It also relies upon the statement of Goldberg J in Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [54] : "a court should be reluctant to embrace the proposition that, as a general rule, it is appropriate to undertake an enquiry as to who was successful in relation to particular issues in a case to determine whether there should be an apportionment of costs against a successful party. A court should not be too ready to disallow costs simply because a party has failed upon an issue, unless it be quite a separate and distinct issue from the issues in respect of which it succeeded or unless there be some element of unreasonableness or inappropriate conduct in relation to that issue: cf Verna Trading Pty Ltd v New India Assurance Pty Ltd [1991] 1 VR 129 at 152-154."


case_text: In relation to the appropriate interest rate to be applied, the applicant submits that the penalty interest rate, as specified in Penalty Interest Rates Act 1983 (Vic), should be used to calculate interest in this case. It referred to my judgment in McCormick v Riverwood International (Australia) Pty Ltd [2000] FCA 32 in support of that submission. In that case I applied the penalty interest rate after citing the following observations of Heerey J in EMCL Pty Ltd v Esanda Finance Corporation Ltd (No 2) (1998) 160 ALR 382 (at 384): "I think there is obvious practical value in having the Federal Court applying the same interest rate as would be applied in litigation in the same State in which the case is being heard. It would be undesirable for there to be distinctions drawn from State to State, depending on whether it was thought the regime in any particular State did or did not impose a commercial rate of interest."


case_outcome: discussed

case_text: Lastly, the applicant referred to the decision of Gobbo J in Esso Australia Resources Ltd v Gas and Fuel Corporation of Victoria [1993] 2 VR 99. His Honour found that Mason v New South Wales (at 105): "confirmed that a payment is made under duress or compulsion where there is a belief, on reasonable grounds, that non-payment will result in serious consequences such as interference with property rights or with the carrying on of a business . In the Air India Case , the test required the threat of a step, other than an invocation of legal process, which would cause harm to the payer." (emphasis added) 71 The applicant submits that it falls squarely within the test for duress and compulsion as formulated by Gobbo J. 72 The first respondent submits that the applicant has simply stated, in its pleading, that the retention of the overpaid rent would constitute "unjust enrichment". It contends that "unjust enrichment" is insufficient to give rise to a cause of action or an entitlement to refund the monies paid.


case_text: The second respondent contends that it was improper to institute the deceit claim in the first place. It submits that the claim involved an allegation of criminality. As such, the claim should not have been made without proof to the Briginshaw standard: see White Industries (Qld) Pty Ltd v Flower & Hart (1988) 156 ALR 169 at 241. 155 In addition, the second respondent invites me to infer that the deceit claim was included for the "ulterior motive" of "poisoning" the Court against the respondents, or to bring pressure upon the respondents to settle. It submits that the deceit claim was very small, $12,000, compared to the overpaid rent claim, which was in the realm of $700,000. It contends that therefore, the claim was raised so as to discredit the respondents. 156 The third basis upon which the second respondent submits it is entitled to indemnity costs is by reason of the applicant's rejection of a settlement offer. In the 16 February 2004 letter, the second respondents' solicitors offered to settle the case on the basis that each side bear its own costs. The second respondent contends that the applicant was imprudent to reject this offer.


case_outcome: referred to

case_text: The insurmountable hurdle that the second respondent faces in relation to the hopeless case submission is that I rejected its application for summary dismissal of the case against it on 29 March 2004. In rejecting that application, I held that causation is a question of fact, and therefore I was unable at that stage to make a finding that the case was "clearly untenable", under the test laid down in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 130. This was the requisite test for a summary dismissal at the time, although I note that this position has now changed as a result of an amendment made to the Federal Court Act by the Migration Litigation Reform Act 2005 (Cth). Section 31A of the Federal Court Act now provides that the Court may summarily dismiss a matter where that matter has no reasonable prospect of success . The section expressly provides that a proceeding need not be "hopeless" or "bound to fail" for it to have no reasonable prospect of success.


case_text: In addition to United Scientific Holdings , the first respondent relies upon the decision of the New South Wales Court of Appeal in GR Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80 per Gleeson CJ as authority for the proposition that time is presumed not to be of the essence in relation to the right to invoke a rent review. These cases acknowledge that the presumption is rebuttable by sufficient "contra-indications" in the lease itself or the surrounding circumstances.


case_title: Hughes v Western Australia Cricket Association (Inc) (1986) ATPR 40-748

case_text: However, if I am minded to apportion costs, the applicant contends that I should take into account the approach of Toohey J in Hughes . In that case, although the applicant failed in the majority of causes of action it pleaded, it was awarded 75 per cent of its costs. His Honour did so on the basis that the applicant had "succeeded in his primary aim", and that the applicant "failed on some issues in circumstances where, not only should he not have the costs of those issues, but there should be some compensation for the respondents for the time taken in meeting those issues both prior to and at the hearing": see Hughes at 48,137. 141 The applicant in this case contends that in a majority of its claims it either succeeded or the issue was not determined. As the applicant acknowledged, however, I expressed serious misgivings about a number of its claims that were not, in a formal sense, finally determined. 142 The claim I did not express a view upon was the breach of good faith allegation. That claim was a true alternative to the challenge to the formal validity of the notice in the following sense. The applicant framed its claim for breach of good faith by contending that the more "generous" the requirements under the lease were for validity of notices, the more stringent the duty to act in good faith was. The converse of that submission is that the more stringently a notice is required to be construed, the less chance there is of finding a breach of good faith. Accordingly, because I found the notice to be invalid as a matter of form, at least one of the bases of the applicant's claim for the implication and breach of a duty of good faith fell away. 143 This fact assumes some importance because the applicant submits that a great deal of the evidence during the trial that went to the good faith claim, also went to its other claims. This includes the expert evidence. As such, the applicant submits that a significant amount of the evidence in the trial went to a claim that was not determined, and which I did not express any views upon. 144 In relation to the deceit claim issue, the applicant submits there should be no discount to its costs by virtue of it making, and maintaining until closing submissions, this claim. The deceit claim arose out of an internal email discovered by the second respondent relating to the "management fees" paid by the applicant in relation to the premises. That email stated: "Note on our file says "Tenant pays management fees of $462-50 (plus GST), half goes to owner half goes to Colliers Jardine' Rent goes direct to owner, CJ's [Colliers Jardine] are involved so that owner can claim full management fees as an outgoing. " (emphasis added)


case_text: This passage was cited with approval by Kenny J in Inspector-General in Bankruptcy v Bradshaw (No 2) [2006] FCA 383 at [12] . 139 The applicant submits that it was reasonable for it to plead the claims that it did, that there was substance to the claims and that there was a contest of facts in relation to them.


case_title: Keddie v Foxall [1955] VLR 320

case_text: The first respondent submits that if the case had been confined to the issue of the validity of the form of the notice, the trial would have taken less than a day. Accordingly, the first respondent contends that the claims which the applicant lost (and on which the first respondent says it had no reasonable prospects of success) unnecessarily and unduly prolonged the trial. It cites Keddie v Foxall [1955] VLR 320, Thorne v Doug Wade Consultants Pty Ltd [1985] VR 476 and Re Elgindata Ltd (No 2) [1993] 1 All ER 232 in support of the proposition that the costs the applicant would otherwise be entitled to should be reduced.


case_text: The applicant relies upon the following passage from Lakatoi Universal Pty Ltd v LA Walker [2000] NSWSC 561 at [48] per Einstein J to support its objection to the grant of leave to file and serve an amended defence and cross-claim: "It is one thing for the court to case manage proceedings in terms of carrying out its best endeavours to ensure that unnecessary multiplicity of proceedings are avoided wherever possible. It is entirely another thing once a complex hearing extending over some 10 weeks is then followed by detailed findings on a multiplicity of issues binding all the parties, for one party then and only then, to seek to proceed against another party on a cross-claim, relying upon aspects of the judgment to sustain that claim." 25 The applicant contends allowing the first respondent to amend its pleading would result in the applicant being required to put on further evidence by way of defence. It says that it would raise an estoppel defence to the proposed cross-claim, and that would require evidence to be led as to the issue of reliance. 26 The applicant submits that I should take into consideration the fact that an application by it to amend its pleading was rejected in the primary proceeding on the basis that further evidence would need to be led by the respondents in answer the applicant's new claims, and I was not prepared to permit the case to be reopened. The applicant contends that the same approach should be taken to the first respondent's proposed cross-claim.


case_text: In the face of a plain inconsistency within a lease, regard must be had to the general canons of contractual construction. The objective intention of the parties must be ascertained, and a common sense and commercially sensible approach must be taken. See, for example, Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 cited by Gleeson CJ, Gummow and Hayne JJ in Maggbury Pty Limited v Hafele Australia Pty Limited [2001] HCA 70 ; (2001) 210 CLR 181 at [43] , and Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19 ; [1997] AC 749 at 770-71 per Lord Steyn.


case_title: Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19 ; [1997] AC 749


case_title: Mason v New South Wale s [1959] HCA 5 ; (1959) 102 CLR 108

case_text: The second case the applicant relies upon in relation to compulsion is McKay v National Australia Bank Ltd [1998] 4 VR 677. The appellant in that case claimed he had made an "involuntary payment ... under unlawful compulsion within the principles enunciated in Mason v New South Wales ". Mason v New South Wales [1959] HCA 5 ; (1959) 102 CLR 108 is a case involving a claim for money had and received on the basis of compulsion.


case_title: McCormick v Riverwood International (Australia) Pty Ltd [2000] FCA 32


case_text: The second case the applicant relies upon in relation to compulsion is McKay v National Australia Bank Ltd [1998] 4 VR 677. The appellant in that case claimed he had made an "involuntary payment ... under unlawful compulsion within the principles enunciated in Mason v New South Wales ". Mason v New South Wales [1959] HCA 5 ; (1959) 102 CLR 108 is a case involving a claim for money had and received on the basis of compulsion. 66 In McKay , Winneke P stated as follows (at 686): "I venture to suggest that the legal doctrine of involuntary payments made under compulsion or coercion has no application to the facts of this case. That doctrine, in my view, is limited to circumstances where a party has been wrongfully compelled to make a payment demanded of him by an authority which, ex necessitate, he cannot resist. Compulsion leading to involuntary payment within the meaning of this doctrine, as I understand it, can only occur where the demand for payment is made under threat of immediate and empowered distress or seizure of the party's property or person so that the party is coerced into making the payment as a matter of necessity." (emphasis added) 67 The applicant submits Mr Allen's threats to evict come within the test for compulsion articulated by Winneke P. 68 The applicant also drew attention to the statement of Tadgell JA in McKay (at 689): "To act in response to pressure exerted by another will not be to act involuntarily and so to act under duress unless the pressure is fairly to be regarded by the law as unacceptable. A means of pressure or influence that the law will regard as unacceptable are various and indefinite and the categories are not closed." 69 During oral submissions, I raised the issue of whether compulsion can be found to have occurred where there was nothing to stop an applicant seeking injunctive relief. The applicant submits that the availability of injunctive relief to the party the subject of compulsion is irrelevant. It contends that this has to be so, as whenever a party has time to make a payment it also has time to seek an ex parte injunction. Any party the subject of a wrongful threat could always seek an injunction rather than pay the money over, and, accordingly, an action for money had a received by way of compulsion, at least in respect of threats to property, could never be made out. 83 In support of this submission, the first respondent relies upon the observation in McKay that the threat to issue legal proceedings or to pursue another legal remedy could "seldom be a wrong in itself". The Court in McKay said (at 690) that the "proper use of legal process does not constitute duress" and that "the threat to institute a civil action in good faith cannot constitute duress". It held, by analogy, that a "bona fide threat by a secured creditor to exercise rights conferred by the security can scarcely be relevantly different from a bona fide threat to sue". The first respondent contends that a bona fide threat by a landlord must fall into the same category. 84 Before turning to my specific findings, I wish to make some brief comments about the current position in Australia law with respect to restitutionary claims and "unjust enrichment". 85 Historically, what were described as the "common", "indebitatus" or "money" counts were generally seen as an appendage to the law of contract. The common counts included the action for money had and received, and other actions, such as for quantum meruit. The common counts were traditionally regarded as being based upon an implied contract theory. That is, they were based upon the implication of a contract which required the defendant to repay the plaintiff. Accordingly, the claims were described as "quasi-contractual". See Goff and Jones, The Law of Restitution (6 th ed, 2002) at [1-002]-[1-004] ("Goff and Jones") and K Mason and JW Carter, Restitution Law in Australia (1995) ("Mason and Carter") at [101]-[109]. Goff and Jones describe quasi-contract as "the most ancient and significant part of restitution" (at [1-001]). 89 The recognition of a "unifying legal concept" does not, however, render the traditional categories of restitutionary claims, such as the action for money had and received, null and void. On the contrary, in recent years the High Court, and superior State courts, have chosen to frame claims in restitution within the bounds of these established categories. See Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516, Baltic Shipping Company v Dillon [1993] HCA 4 ; (1993) 176 CLR 344, David Securities , Pavey & Matthews , Ovidio , McKay (referring to Mason v New South Wales ), and Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333.


case_title: Moses v Macferlan (1760) 97 ER 676

case_text: In the seminal case of Moses v Macferlan (1760) 97 ER 676, Lord Mansfield identified the specific, but non-exhaustive, instances where the action for money had and received lay. These were (at 681): "for money paid by mistake; or upon consideration which happens to fail; or for money got through imposition, (express, or implied); or extortion; or oppression; or an undue advantage taken of the plaintiff's situation, contrary to the laws made for the protection of persons under those circumstances." 90 Roxborough is the most recent High Court case dealing with a claim for restitution. In that case, five out of six judges referred to the instances identified by Lord Mansfield in Moses v Macferlan where an action for money had and received was recognised to arise. Gleeson CJ, Gaudron and Hayne J noted (at [15]) that Mason and Carter: "point out that cases decided in relation to the common indebitatus counts, although they involved an implied contract analysis which is now out of date "form the precedents which make up the legal matrix of restitution law"." (footnote omitted)


case_text: In support of its submission that it would be unjust to require the landlord to repay the overpaid rent, it referred to Ovidio v Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6 , a recent decision of the Victorian Court of Appeal. 76 Ovidio involved the lease of retail premises. The parties had signed a lease on 14 August 2000. Section 8 of the Retail Tenancies Reform Act 1998 (Vic) provided that a prospective landlord must give a disclosure statement to the prospective tenant before entering into a lease. This was not done. Section 8 also provided that a failure to give a disclosure statement means "the tenant may withhold payment of rent until the end of 7 days after the landlord gives the tenant a copy of the disclosure statement" and "the tenant is not liable to pay the rent attributable to the period before the landlord gave the tenant a copy of the disclosure statement". 77 The landlord belatedly gave the tenant a disclosure statement on 5 May 2003. Up to this point, the tenant had been ignorant of its rights, and had been paying the rent pursuant to that lease. The tenant successfully brought an action in the Victorian Civil and Administrative Tribunal ("VCAT") seeking restitution of the rent it had paid since entering into the lease, in its entirety. The landlord appealed VCAT's decision. 87 In Ovidio , Chernov JA referred to the history of the action for money had and received in the following terms (at [8]): "Historically, restitutionary relief was provided by courts of common law, although equitable principles played an important part in moulding the action. The basis of the claim for money had and received was articulated in the 18 th century by Lord Mansfield in Moses v. Macferlan . I will deal later with what his Lordship relevantly said in that regard, but for present purposes it is sufficient to mention what is said in the third edition of Bullen & Leake's Precedents of Pleadings about the gist of the action, namely, that a claim for money had and received is "the most comprehensive of all common counts [and is] applicable wherever the defendant has received money which in justice and equity belongs to the plaintiff, under circumstances which render the receipt of it a receipt by the defendant to the use of the plaintiff."" (footnotes removed) 89 The recognition of a "unifying legal concept" does not, however, render the traditional categories of restitutionary claims, such as the action for money had and received, null and void. On the contrary, in recent years the High Court, and superior State courts, have chosen to frame claims in restitution within the bounds of these established categories. See Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516, Baltic Shipping Company v Dillon [1993] HCA 4 ; (1993) 176 CLR 344, David Securities , Pavey & Matthews , Ovidio , McKay (referring to Mason v New South Wales ), and Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333. 104 I also find the first respondent's reliance upon Ovidio in support of its claim that it would not be unjust for it to retain either all or part of the overpaid rent to be flawed. The present case is distinguishable from that of Ovidio on a number of grounds. 105 The most obvious point of distinction is that the landlord in Ovidio was found to have a counter-restitutionary claim against the tenant. Although the first respondent in this case submitted it also had a counter-restitutionary claim against the applicant, I do not see how such a claim could succeed. It must be remembered that in Ovideo , the effect of finding the tenant was entitled to restitution would have been that it would have had occupancy of the relevant premises for two and a half years for free. It was in this context that the Victorian Court of Appeal found the landlord would have a counter-restitutionary claim against the tenant for use and occupation of the premises. 106 Those facts are far removed from those in the present case. The parties in this case agreed to a tenancy on the terms set out in the lease. The tenant paid rent pursuant to that lease. The terms of the lease included that the rent be increased if the rental review procedures were followed (at least so far as clause 3.2.2 was concerned). Those procedures were not adhered to. Accordingly, in ordering that the applicant is entitled to restitution of the overpaid rent, the parties will actually get exactly what they bargained for under the terms of the lease, and the rent that the applicant has paid (minus the overpaid rent) constitutes good consideration for its tenancy. In those circumstances, it can hardly be said that the first respondent would have a claim against the applicant for use and occupation of the premises. 109 This finding is fortified when it is considered that, in Ovidio , when the Court came to determine the quantum of the counter-restitutionary claim, that is, what the "reasonable rent" was that the tenant should pay, their Honours had regard to what in fact the parties had bargained for. They did not themselves embark upon any independent assessment of the reasonable rent (although I acknowledge that there was no evidence before their Honours as to this matter). This demonstrates the inappropriateness of the Court deciding what a reasonable rental figure would be, when the parties have themselves agreed upon procedures to determine this. 110 For completeness, I note that even if I did seek to determine the "reasonable rent", I do not think averaging the four assessments tendered before me in evidence would be an appropriate way to determine objectively the correct figure. In such circumstances, the Court would have to determine that figure for itself, albeit with the assistance of the assessments available in the evidence.


case_text: The first respondent submits that as the annual rental increase provided for under the lease is automatic, it cannot relevantly be described as a "Rent Review". It relies upon Pasen v Buy-Rite Discounts Pty Ltd (1992) V ConvR |P54-431 in support of this submission. That case dealt with the issue of whether a provision in a lease was a "rent review clause" for the purposes of s 10 of the Retail Tenancies Act 1986 (Vic). It was held that a clause that automatically increased the rent over the term of the lease was not a "rent review clause" for the purposes of the legislation. Brooking J, with whom Marks and Smith JJ agreed, stated (at 65,091): "In my view, a lease which fixes the rent for the whole of the term by enabling the rent throughout the term to be ascertained from within the four corners of the lease does not, according to the ordinary use of language, provide for a review of the rent if it provides for an increase or increases or decrease or decreases in the rent in the course of the term, whether by way of simply stating the new amount or amounts or by way of requiring a calculation to arrive at the new amounts or amounts. The rent is fixed by the lease itself throughout the term and the lease in fixing different amounts is not providing for a review of the rent: it is simply fixing a rent which is not uniform throughout the term." 42 The first respondent noted Brooking J's use of the term "fix" and the use of that term in 3.2.1 in support of its submission that clause 3.2.1 does not provide for a "Rent Review" 43 Ultimately, the hurdle that the first respondent would face in relation to its preferred interpretation of the term "Review Date" is that this term is expressly defined at the beginning of clause 3.2. Whether the process provided for in clause 3.2.1 can objectively be described as a "rent review" seems to be immaterial to me. The question that would need to be resolved is not what the ordinary meaning of the term is, but rather what the parties intended it to mean in the context of the lease. When the lease itself expressly says what the meaning of the term is, regard must be had to that meaning.


case_text: In Pavey & Matthews Pty Ltd v Paul [1987] HCA 5 ; (1987) 162 CLR 221, the High Court rejected implied contract as the theoretical basis for claims in restitution. Instead, Deane J, with whom Mason and Wilson JJ generally agreed, stated (at 256-7): "unjust enrichment ... constitutes a unifying legal concept which explains why the law recognizes, in a variety of distinct categories of case , an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by ordinary processes of legal reasoning, of the question whether the law should, in justice, recognize such an obligation in a new or developing category of case ... " (emphasis added) 89 The recognition of a "unifying legal concept" does not, however, render the traditional categories of restitutionary claims, such as the action for money had and received, null and void. On the contrary, in recent years the High Court, and superior State courts, have chosen to frame claims in restitution within the bounds of these established categories. See Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516, Baltic Shipping Company v Dillon [1993] HCA 4 ; (1993) 176 CLR 344, David Securities , Pavey & Matthews , Ovidio , McKay (referring to Mason v New South Wales ), and Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333. 91 Despite Deane J's overture in Pavey & Matthews that "unjust enrichment" assists in determining whether the law should recognise new categories of restitution, in David Securities , the majority (Mason CJ, Deane Toohey, Gaudron and McHugh JJ) noted that (at 379): "it is not legitimate to determine whether an enrichment is unjust by reference to some subjective evaluation of what is fair or unconscionable. Instead, recovery depends upon the existence of a qualifying or vitiating factor such as mistake, duress or illegality." 107 I do not accept the first respondent's "fall back" submission that I should determine what the "reasonable rent" would have been, and only order restitution of any amount that the applicant has paid over that sum. The amount by which it would have been "reasonable" to increase the rent is not relevant in these circumstances. As Deane J stated in Pavey & Matthews (at 256), restitution does not provide "judicial discretion to do whatever idiosyncratic notions of what is fair and just might dictate". 108 The real question is what was the applicant was obliged to pay under the lease? While the applicant did make an offer to pay increased rent by reference to an independent assessment, the first respondent rejected that offer. It did so on the assumption that it was entitled to a higher rent. That assumption proved to be wrong. Accordingly, the agreement on foot between the parties provided that the rent payable was that which was paid, less the overpaid rent. The applicant, therefore, did not receive any additional benefit for its payment of the overpaid rent.


case_title: Re Elgindata Ltd (No 2) [1993] 1 All ER 232


case_title: Ritter v Godfrey [1920] 2 KB 47

case_text: In general, costs follow the event and any departure from this principle should only occur in exceptional circumstances: Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 28 ALR 201; Cretazzo v Lombardi (1975) 13 SASR 4; and Ritter v Godfrey [1920] 2 KB 47 at 52-3.


case_text: The recognition of a "unifying legal concept" does not, however, render the traditional categories of restitutionary claims, such as the action for money had and received, null and void. On the contrary, in recent years the High Court, and superior State courts, have chosen to frame claims in restitution within the bounds of these established categories. See Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516, Baltic Shipping Company v Dillon [1993] HCA 4 ; (1993) 176 CLR 344, David Securities , Pavey & Matthews , Ovidio , McKay (referring to Mason v New South Wales ), and Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333. 92 It is therefore clear from the High Court's approach in David Securities and Roxborough that while the categories of restitution are not closed, the "established categories" still provide, at the very least, the starting point for analysing restitutionary claims. 99 Nor do I consider as relevant the fact the applicant may be considered to achieve a "windfall" by reason of it receiving restitution of the overpaid rent. The High Court squarely faced this issue in Roxborough , and held that that fact did not prevent a claim in restitution. 100 Roxborough involved a claim for money had and received by retailers of tobacco products against the wholesaler of those products. The contracts of sale between the parties involved invoices that specified the wholesale price of the products and an additional fee representing an ad valorem license fee imposed by New South Wales state law. The license fee was subsequently held to be unconstitutional by virtue of it imposing an excise in contravention of s 90 of the Commonwealth Constitution . The retailers claimed sums equal to the amounts specified in the invoices as the "tobacco license fee", for approximately the month prior to the constitutional decision being handed down. These amounts had been paid by the retailers, but had been retained by the defendant and not paid to the New South Wales Government. 101 The retailers' claim was upheld by the High Court on the basis that there had been a failure of consideration. The failure in this case was described by Gummow J at [104] as "the failure to sustain itself of the state of affairs contemplated as a basis for the payments the appellants seek to recover". Gleeson CJ, Gaudron and Hayne JJ described, at [19], the failure as "the failure of a severable part of the consideration for which the net total amounts shown on the invoices were paid". 102 In Roxborough , there was no suggestion that the retailers would pass on the remitted monies to its customers. Gleeson CJ, Gaudron and Hayne JJ stated (at [5]): "[i]n all probability, whoever succeeds in these proceedings will have made a windfall gain. In the absence of some legislative intervention, the appellants, if they succeed, are unlikely to be obliged to pass on the fruits of their success to the smokers who bore the financial burden of the invalid tax. For its part, the respondent has collected what was held to be a tax on goods, but it has not had to pay it over to the revenue authorities." 103 The Court went on to order repayment by the wholesaler to the retailers of the relevant monies, irrespective of the fact that this would provide the retailers with a "windfall" benefit.


case_text: Independent of its specific rebuttals of the second respondent's contentions, the applicant claims that the second respondent's conduct during the proceeding in relation to discovery should disentitle it to any award of indemnity costs. It relies upon the comments of Einfeld J in Telstra Corporation Ltd v First Netcom Pty Ltd [1998] FCA 656 , where his Honour stated (at 4): "... while it is certainly true that some unreasonable conduct on the part of the party against whom indemnity costs are sought must be demonstrated, it must equally be true that the party seeking the indemnity costs must come to the Court with clean hands." 161 The applicant contends that this extract is authority for the proposition that, when the Court exercises its discretion on costs, it takes into account the conduct of the parties 162 The particular conduct the applicant relies upon relates to a notice of motion heard by a Registrar of this Court on 10 September 2004. That notice of motion sought further discovery from the second respondent. The applicant had specifically requested, amongst other things, documents relating to Mr Williams' knowledge of sales and leasing markets for industrial premises similar to the subject premises. It filed the notice of motion having not received what it considered to be a satisfactory response to its request. 170 Accordingly, the second respondent submits that the comments of Einfeld J in Telstra Corporation Ltd are wrong.


case_title: Thorne v Doug Wade Consultants Pty Ltd [1985] VR 476


case_title: Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 28 ALR 201


case_text: In the primary judgment, I made the following comments in relation to this issue: "In determining what orders may be appropriate, the parties may wish to consider the applicability of the principles laid down in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904 (" United Scientific Holdings ") in relation to the retrospective application of rent reviews completed outside the period provided for under the lease. In United Scientific Holdings , the House of Lords held that there was nothing in that case that displaced the presumption that strict adherence to the timetables specified in the relevant rent review clauses was not of the essence of the contract. There were in fact two separate cases decided in United Scientific Holdings . The first involved a rent review on a 99 year lease. The review was to occur each ten years after the commencement of the lease, with the new rent to commence on 31 August of that year. The rent review mechanisms provided that the revised rent was to be determined by agreement, or failing agreement, by arbitration "during the year immediately preceding" the 10 year period to which that rent would relate. By the end of the first 10 year period, such agreement had not been reached, and nor had the matter been referred to arbitration. The second case involved a 21 year lease, commencing upon 8 April 1968. The rent was to be reviewed every seven years. The relevant machinery provided for the lessor to serve a notice on the lessee, and the lessee to serve a counter-notice accepting the proposal or making a counter-offer. The parties were then to negotiate. If agreement had not been reached after a certain time, the lessor was required to appoint an independent valuer. In this case, the lessor's notice was served within time. However, no agreement had been reached by the parties, and the lessor failed to appoint an independent valuer within the time provided for under the lease. In both cases the House of Lords held that time was not of the essence in relation to the clauses in the leases which the lessors had not complied with. The lessors had not lost the opportunity to have the rent for the next rental period reviewed by virtue of not complying with the time periods set down in the rent review machinery clauses. The potential significance of the case for this proceeding in terms of any final orders that may be made is as follows. The House of Lords held that once the relevant terms were complied with (namely an arbitration concluded in the first case and independent valuation conducted in the second case), the new rent would be payable from the date that the lease provided that the new rental period was to commence. That is, despite the lessors' tardiness, not only did they maintain their rights to rent reviews, but once the rent reviews were completed, the revised rent applied retrospectively as if those reviews had been completed on time." 20 The first respondent relies on United Scientific Holdings to assert that the further notice operates retrospectively back to 1 March 2003. To the extent that it is necessary, it seeks leave to file an amended defence and cross-claim so as to seek the appropriate declaratory relief to this effect. The declarations sought are that the further notice is valid, and that the rental for the period commencing 1 March 2003 is that which will be determined in accordance with the rent review machinery in the lease (namely the amount assessed as the proper rent by the independent third party). 21 The applicant objects to the Court granting the first respondent leave to file and serve an amended defence and cross-claim. It submits that it has informed the first respondent since early 2003 that it rejected the validity of the notice, yet the first respondent did not seek to protect its rights by issuing a provisional further notice. The applicant contends that the first respondent has provided no explanation as to why it did not take this course or plead the issue of its entitlement to do so. 22 The applicant submits that the first respondent is now seeking to implement the rent review machinery relating to independent third party assessment of the proper rent to be paid, despite having rejected the applicant's offer to take this course on 20 March 2003. At that time, the first respondent rejected the applicant's offer because the first respondent asserted it was entitled to the amount specified in the notice by reason of the applicant not objecting in time, and therefore the first respondent was not bound to submit to any third party assessment of the rent. 30 In addition to United Scientific Holdings , the first respondent relies upon the decision of the New South Wales Court of Appeal in GR Mailman & Associates Pty Ltd v Wormald (Aust) Pty Ltd (1991) 24 NSWLR 80 per Gleeson CJ as authority for the proposition that time is presumed not to be of the essence in relation to the right to invoke a rent review. These cases acknowledge that the presumption is rebuttable by sufficient "contra-indications" in the lease itself or the surrounding circumstances.


case_text: The recognition of a "unifying legal concept" does not, however, render the traditional categories of restitutionary claims, such as the action for money had and received, null and void. On the contrary, in recent years the High Court, and superior State courts, have chosen to frame claims in restitution within the bounds of these established categories. See Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516, Baltic Shipping Company v Dillon [1993] HCA 4 ; (1993) 176 CLR 344, David Securities , Pavey & Matthews , Ovidio , McKay (referring to Mason v New South Wales ), and Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333.


case_title: Dellios v Zegarac [2006] FCA 1733

case_text: 13 December 2006, Marshall J refused an application for leave to appeal out of time against Phipps FM's decision. His Honour expressed the view that the Federal Magistrate's decision was "free from doubt such that it would be futile to extend the time within which to allow an appeal to be filed": see Dellios v Zegarac [2006] FCA 1733 at [19] .


case_text: 15 December 2006, Marshall J also dealt with an application by Ms Zegarac to review the sequestration order made on 18 May 2006. Ms Zegarac sought to persuade his Honour that the Magistrate's judgment (on which the bankruptcy notice was founded) had been obtained by fraud. He dismissed the application to review the Registrar's decision: see Dellios v Zegarac (No 2) [2006] FCA 1831.


case_text: power to dismiss a proceeding on the ground that it is frivolous or vexatious or an abuse of process is not to be exercised lightly: see General Steel Industries Inc. v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129-130. If, however, a proceeding is an abuse of process, it may be dismissed: see O 20 r 5 of the Federal Court Rules . A proceeding will constitute an abuse of process if it is "foredoomed to fail": see Walton v Gardiner [1992] HCA 12 ; (1993) 177 CLR 378 at 393.


case_title: Walton v Gardiner [1992] HCA 12 ; (1993) 177 CLR 378


case_title: Zegarac v Dellios [2005] VSC 264

case_text: Slavica Zegarac became bankrupt on 18 May 2006. A sequestration order was made by a Registrar on the petition of Mr Paul Dellios (trading as Dellios West & Co). That order was based on a judgment given by the Magistrate's Court of Victoria dated 26 April 2005. An appeal against the decision of the Magistrate was dismissed by the Supreme Court on 28 June 2005: see Zegarac v Dellios [2005] VSC 264. Mr Gess Rambaldi and Mr Andrew Yeo were appointed joint and several trustees of the bankrupt estate of Ms Zegarac. They are members of the firm Pitcher Partners.


case_title: Zegarac v Dellios [2006] FMCA 34

case_text: 12 October 2005, Ms Zegarac applied to the Federal Magistrates Court for an order setting aside the bankruptcy notice on the ground that she had a counter claim, set-off or cross demand against Mr Dellios which exceeded the amount of the debt owed to him. On 16 December 2005, Federal Magistrate Phipps dismissed the application. He provided reasons for that decision on 19 January 2006: see Zegarac v Dellios [2006] FMCA 34.


case_outcome: considered

case_text: As Collier J observed in Access For All Alliance (Hervey Bay) Inc v Hervey Bay City Council [2007] FCA 974 at [10] , in the context of the exercise of the discretion concerning costs, the issue is whether there is anything about the particular proceedings to persuade me that it is appropriate to depart from the usual order. Other decided cases in which some but not all factors are present or cases that present different considerations are ' not particularly helpful ' ( Fetherston at [12] per Heerey J). I note that in no other case cited by the parties were all of the factors present that arise in these proceedings. For example, the application was only made after judgment was given ( Dibbs ; Access For All Alliance ) or the case could not be characterised as public interest litigation ( Access For All Alliance ).


case_text: The relevance of the cost of public interest litigation to an individual was discussed by Wilcox J in Woodlands at 147. His Honour adopted the approach of Morling J in Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd (1991) 100 ALR 568 , namely that it was not in the public interest for a litigant to be heavily out-of-pocket for taking public-spirited action. The applicants do not seek financial gain from the litigation. Even if they do intend to fly with Virgin and do not wish to pay for a carer to accompany them, the costs of the litigation far outweigh that cost, so as to render it irrelevant to a question of personal financial, rather than public, benefit.


case_text: In Canada, the Supreme Court in British Columbia (Minister of Forests) v Okanagan Indian Band 2003 SCC 71 , 313 N.R. 84 (at [40] [41] per LeBel J) and Little Sisters Book & Art Emporium v Canada (Commissioner of Customs & Review Agency) 2007 SCC 2 , J.E 2007-211 (at [36] [41] per Barstarache and LeBel JJ) discussed factors such as: • access to justice; • the right of indemnity for costs incurred by a successful party; • the need to establish special circumstances where an order is sought that the usual costs order not apply in public interest litigation; • the ability of a party to continue the litigation if an order were not made; • whether the litigant could show that he or she genuinely cannot afford to pay for the litigation and that no other realistic option exists for bringing the issues to trial; • the existence of a prima facie case of sufficient merit; and • special circumstances sufficient to satisfy the court to depart from the usual order for costs.


case_text: The parties agree on many of the factors to be taken into account in the exercise of the Court's discretion to make an order under rule 1. As discussed in the authorities which consider O 62A r 1 and the equivalent provision in the Federal Magistrates Court Rules, the factors include: • the timing of the application ( Sacks v Permanent Trustee Australia Ltd [1993] FCA 502 ; (1993) 45 FCR 509 at 511 per Beazley J; Flew v Mirvac Parking Pty Ltd [2006] FMCA 1818 at [48] per Barnes FM; Minns v State of NSW (No. 2) [2002] FMCA 197 at [9] per Raphael FM]); • the complexity of the factual or legal issues raised in the proceedings ( Hanisch at 387 per Drummond J; Dibb v Avco Financial Services Limited [2000] FCA 1785 at [15] per Sackville J); • the amount of damages that the applicant seeks to recover ( Hanisch at 387) and the extent of any other remedies sought ( Flew at [48]); • whether the applicant's claims are arguable and not frivolous or vexatious ( Flew at [15]); • the undesirability of forcing the applicant to abandon the proceedings ( Woodlands v Permanent Trustee Company Limited (1995) 58 FCR 139 at 148 per Wilcox J; Flew at [9]); and • whether there is a public interest element to the case ( Woodlands at 146; Flew at [23], [47]). 7 Virgin contends that, in addition, the Court should take into account: • the costs likely to be incurred by the parties in the preparation for, and hearing of, the matter ( Flew at [48]); • whether the party opposing the making of the order has been uncooperative and/or has delayed the proceedings ( Dibb at [17]; Hanisch at 390); and • '... any other matters which may go towards establishing that there should be a departure in advance from the usual rules as to quantification of the amount of costs to be payable by the ultimately unsuccessful party ' ( Flew at [48]). 39 A deterrent effect of a potential adverse costs order is insufficient of itself to warrant an order under O 62A r 1 ( Dibb at [16]; Flew at [52]). Virgin says each applicant must establish that he will be ' prevented or inhibited from conducting his case ' if no order is made ( Dibb at [16]). Virgin submits that, while not determinative of the entitlement to an order, the applicants need to establish that they would be forced to abandon the litigation. It is not sufficient, Virgin says, that the applicants do not want to be exposed to an order for costs in the ordinary course if they are unsuccessful. 50 The applicants have not established that they would be forced to abandon the litigation if no order were made capping the costs. A large proportion of applicants in the Court are concerned at the possibility of being required to pay costs if they are unsuccessful ( Dibb at [16] per Sackville J). However, I accept that these applicants would be inhibited or reluctant to continue the litigation if there were no order made under O 62A r 1. In circumstances where neither applicant seeks a monetary outcome from the litigation, I do not see that their inhibition or reluctance to continue the proceedings for the reasons given to be unreasonable or irrelevant. 51 Mr Ferguson is unlikely to be able to meet any substantial costs order. It is not apparent that, even if he were made bankrupt, he would be able to do so. The maximum costs order that he seeks directly relates to the indemnity provided under the grant to him of legal aid. Mr Corcoran is in no different a position from many applicants in the Court. He has sufficient assets to meet a costs order but is disinclined to put them at risk. The difference between his position and that of other litigants is that he will receive no financial gain if he succeeds in obtaining the orders sought. While, if successful, he would be able to fly on Virgin without a carer, he is presently able to fly on other airlines without that extra cost.


case_text: Many of these factors have not been challenged by Virgin. However, Virgin submits that they are not sufficient to depart from the usual costs order. Virgin points out that, as was recognised in Fetherston v Peninsula Health (No 2) [2004] FCA 594 ; (2004) 137 FCR 262 and Flew , there is nothing in the Act or in other legislation to indicate that policy considerations warrant a special provision for costs in human rights litigation. 44 There is, of course, O 62A r 1 and the circumstances in which this rule applies are not limited. 45 The existence of a public interest in the determination of the issues in litigation is a factor of some significance in the awarding of costs. However, public interest and an arguable case are not necessarily decisive and not, of themselves, sufficient to prevent the usual costs order being made ( Ruddock at [18] [19]; Woodlands at 148; Physical Disability at [7]). The usual order for costs applies notwithstanding that the Act is beneficial legislation ( Fetherston at [9] per Heerey J). However, discretionary considerations may lead to a different result ( Fetherston at [12]). 56 As Collier J observed in Access For All Alliance (Hervey Bay) Inc v Hervey Bay City Council [2007] FCA 974 at [10] , in the context of the exercise of the discretion concerning costs, the issue is whether there is anything about the particular proceedings to persuade me that it is appropriate to depart from the usual order. Other decided cases in which some but not all factors are present or cases that present different considerations are ' not particularly helpful ' ( Fetherston at [12] per Heerey J). I note that in no other case cited by the parties were all of the factors present that arise in these proceedings. For example, the application was only made after judgment was given ( Dibbs ; Access For All Alliance ) or the case could not be characterised as public interest litigation ( Access For All Alliance ). 58 Virgin contends that the costs likely to be incurred will be substantially in excess of $15,000 and in excess of the combined proposed cap of $30,000. Virgin estimates that the costs will be well in excess of $53,000, reflecting the considerable time, expense and resources that will be required for the preparation and the hearing. Virgin also contends that the applicants have, to date, demonstrated a failure to conduct the matter in an efficient and economical manner. It has been noted (by Heerey J in Fetherston and by Barnes FM in Flew ) that neither the Act nor the Federal Court Rules provide for a limitation to the usual costs order or any special provision for costs in proceedings brought under the Act. Unlike the Federal Magistrates Court, the Federal Court Rules do not limit and prescribe costs, enabling a party better to calculate at the outset of litigation the likely costs to be awarded to the successful party. However, this is only of assistance when an estimate can be made of the length of hearing and the costs of the evidence. In Flew , as here, Virgin has estimated the costs of a likely hearing, not including its costs of preparation and evidence.


case_text: The parties agree on many of the factors to be taken into account in the exercise of the Court's discretion to make an order under rule 1. As discussed in the authorities which consider O 62A r 1 and the equivalent provision in the Federal Magistrates Court Rules, the factors include: • the timing of the application ( Sacks v Permanent Trustee Australia Ltd [1993] FCA 502 ; (1993) 45 FCR 509 at 511 per Beazley J; Flew v Mirvac Parking Pty Ltd [2006] FMCA 1818 at [48] per Barnes FM; Minns v State of NSW (No. 2) [2002] FMCA 197 at [9] per Raphael FM]); • the complexity of the factual or legal issues raised in the proceedings ( Hanisch at 387 per Drummond J; Dibb v Avco Financial Services Limited [2000] FCA 1785 at [15] per Sackville J); • the amount of damages that the applicant seeks to recover ( Hanisch at 387) and the extent of any other remedies sought ( Flew at [48]); • whether the applicant's claims are arguable and not frivolous or vexatious ( Flew at [15]); • the undesirability of forcing the applicant to abandon the proceedings ( Woodlands v Permanent Trustee Company Limited (1995) 58 FCR 139 at 148 per Wilcox J; Flew at [9]); and • whether there is a public interest element to the case ( Woodlands at 146; Flew at [23], [47]). 7 Virgin contends that, in addition, the Court should take into account: • the costs likely to be incurred by the parties in the preparation for, and hearing of, the matter ( Flew at [48]); • whether the party opposing the making of the order has been uncooperative and/or has delayed the proceedings ( Dibb at [17]; Hanisch at 390); and • '... any other matters which may go towards establishing that there should be a departure in advance from the usual rules as to quantification of the amount of costs to be payable by the ultimately unsuccessful party ' ( Flew at [48]). 39 A deterrent effect of a potential adverse costs order is insufficient of itself to warrant an order under O 62A r 1 ( Dibb at [16]; Flew at [52]). Virgin says each applicant must establish that he will be ' prevented or inhibited from conducting his case ' if no order is made ( Dibb at [16]). Virgin submits that, while not determinative of the entitlement to an order, the applicants need to establish that they would be forced to abandon the litigation. It is not sufficient, Virgin says, that the applicants do not want to be exposed to an order for costs in the ordinary course if they are unsuccessful. 40 Virgin submits that, as found by Barnes FM in Flew at [53], the fact that an applicant would need to go into debt to meet costs does not lead to an inference that he or she would be forced to abandon the proceedings if no order were made. Further, Virgin says that there is no sufficient evidence that either Mr Ferguson or Mr Corcoran would be forced to discontinue the proceedings if the costs were not capped. Mr Corcoran and his wife are in receipt of income and have assets. Those assets may, Virgin submits, enable Mr Corcoran to obtain a loan rather than sell the assets. In any event, reluctance to be exposed to the risk of selling an investment property cannot, Virgin submits, be equated to being "forced" to abandon the claim. 41 As Barnes FM said in Flew at [52], impecuniosity of one party or claims about the relative financial significance of the cost of proceedings cannot of themselves be determinative. It would not be unusual that fear of exposure to costs acts as a deterrent to litigation. It is in that context that the comment that a party should not be "forced" to abandon litigation because of the possibility of an adverse, uncapped, costs order should be considered. While it may not be necessary to establish that the party was forced to abandon litigation for fear of costs, mere concern as to the effect of an adverse costs order on a party's asset position, or a concern that a party may become bankrupt if unable to meet a costs order are not, by themselves, factors that sufficiently render the applicants' position different from other litigants faced with the usual costs order. 42 The applicants rely on a juxtaposition of factors, some but not all of which have been present in cases previously decided: (a) there is no financial benefit to the applicants in bringing the proceedings; (b) there is a public interest in the resolution of the issues; (c) the need for a sufficiently disabled person to provide a carer on flights is likely to affect numbers of people for whom the incremental cost is likely to be insufficient to justify the commencement of proceedings under the Act; (d) each of the applicants has asserted that he would be likely to be unable to proceed with the litigation if the O 62A r 1 order were not made; (e) the explanation given by each applicant is reasonable and has not been challenged as a bona fide reason; (f) the application has been brought in a timely manner; (g) the applicants have, after an initial period clarifying their case, sought to narrow the issues to be determined; (h) if the matter had proceeded in the Supreme Court of New South Wales, a cap would have applied automatically (s 47 of the Legal Aid Commission Act 1979 (NSW)). 53 It cannot be said that the case lacks complexity. As pointed out by Beazley J in Sacks at 511, the intention on the introduction of O 62A r 1 was to apply the rule principally to commercial litigation at the lower end of the scale in terms of complexity and the amount in dispute. That is, it was introduced to keep costs proportionate in low value litigation. The original object of O 62A r 1 as set out in a letter from the Chief Justice of the Federal Court to the President of the Law Council of Australia regarding the introduction of the rule, was to ' define a budget so that the management of the case might be tailored according to its economic limits ' (cf Sacks at 511, Flew at [7]). That, however, is not a limitation on the availability of an order. There is no reason why it should not apply, in appropriate situations, to cases that are somewhat complex. 58 Virgin contends that the costs likely to be incurred will be substantially in excess of $15,000 and in excess of the combined proposed cap of $30,000. Virgin estimates that the costs will be well in excess of $53,000, reflecting the considerable time, expense and resources that will be required for the preparation and the hearing. Virgin also contends that the applicants have, to date, demonstrated a failure to conduct the matter in an efficient and economical manner. It has been noted (by Heerey J in Fetherston and by Barnes FM in Flew ) that neither the Act nor the Federal Court Rules provide for a limitation to the usual costs order or any special provision for costs in proceedings brought under the Act. Unlike the Federal Magistrates Court, the Federal Court Rules do not limit and prescribe costs, enabling a party better to calculate at the outset of litigation the likely costs to be awarded to the successful party. However, this is only of assistance when an estimate can be made of the length of hearing and the costs of the evidence. In Flew , as here, Virgin has estimated the costs of a likely hearing, not including its costs of preparation and evidence.


case_text: An order made pursuant to O 62A r 1 applies equally to all parties to the proceedings ( Hanisch v Strive Pty Ltd (1997) 74 FCR 384 at 389 per Drummond J). 6 The parties agree on many of the factors to be taken into account in the exercise of the Court's discretion to make an order under rule 1. As discussed in the authorities which consider O 62A r 1 and the equivalent provision in the Federal Magistrates Court Rules, the factors include: • the timing of the application ( Sacks v Permanent Trustee Australia Ltd [1993] FCA 502 ; (1993) 45 FCR 509 at 511 per Beazley J; Flew v Mirvac Parking Pty Ltd [2006] FMCA 1818 at [48] per Barnes FM; Minns v State of NSW (No. 2) [2002] FMCA 197 at [9] per Raphael FM]); • the complexity of the factual or legal issues raised in the proceedings ( Hanisch at 387 per Drummond J; Dibb v Avco Financial Services Limited [2000] FCA 1785 at [15] per Sackville J); • the amount of damages that the applicant seeks to recover ( Hanisch at 387) and the extent of any other remedies sought ( Flew at [48]); • whether the applicant's claims are arguable and not frivolous or vexatious ( Flew at [15]); • the undesirability of forcing the applicant to abandon the proceedings ( Woodlands v Permanent Trustee Company Limited (1995) 58 FCR 139 at 148 per Wilcox J; Flew at [9]); and • whether there is a public interest element to the case ( Woodlands at 146; Flew at [23], [47]). 7 Virgin contends that, in addition, the Court should take into account: • the costs likely to be incurred by the parties in the preparation for, and hearing of, the matter ( Flew at [48]); • whether the party opposing the making of the order has been uncooperative and/or has delayed the proceedings ( Dibb at [17]; Hanisch at 390); and • '... any other matters which may go towards establishing that there should be a departure in advance from the usual rules as to quantification of the amount of costs to be payable by the ultimately unsuccessful party ' ( Flew at [48]). 21 Virgin submits that the trial will be complex and estimates that the party/party costs arising from the hearing are likely to be in the order of $39,000. This estimate does not include costs associated with discovery, preparation of evidence and preparation for trial. Virgin contends that all of the issues of fact and law are complex and thus outside the intended application of O 62A r 1 ( Hanisch at 387) and that the preparation of the evidence will be both complex and costly. 22 In relation to discovery Virgin points to what it describes as the broad, ambiguous and/or irrelevant categories of disclosure sought by the applicants. Virgin says that the applicants' reliance on the current ITC does not necessarily narrow the scope of discovery, as those criteria also formed part of the earlier ITC. The reasonableness of those criteria may, Virgin says, involve consideration of the reasons why they were initially adopted by Virgin. This may require evidence from past and present employees. 23 Virgin says that it will necessarily adduce extensive evidence in response to the applications concerning: • the history associated with the development of the ITC and the reasons why the ITC were introduced; • changes in the policy that took place on 30 September 2003, 1 June 2006 and 21 June 2007; • an explanation of the implementation of the ITC; • the physical movements involved in putting an aircraft seat belt on, donning a life jacket, putting on an oxygen mask and responding to cabin crew directions; • what can occur in certain emergency situations; • responses that Virgin's staff are required to make during mid-air turbulence, mid-air cabin decompression and emergency evacuation from the aircraft including water ditching; • the effect on those procedures of an inability to comply with the ITC; and • policies implemented by other airlines.


case_title: Little Sisters Book & Art Emporium v Canada (Commissioner of Customs & Review Agency) 2007 SCC 2 , J.E 2007-211


case_text: The parties have referred to only one other case that has raised similar issues under the Act, McLean v Airlines of Tasmania Pty Ltd (1996) EOC 92-862. In that case the Human Rights & Equal Opportunity Commission considered discrimination by an airline on the basis of disability. The applicant was seeking to fly on a small plane which was not easily wheelchair accessible and which had no cabin attendant. The Commission found that the discrimination was not unlawful as, in light of the facts of that case, it was reasonable for the airline to refuse access to the disabled applicant. While similar, these proceedings raise different and new issues to those addressed in McLean . 33 It is not seriously contended by Virgin that there is no question of public interest raised in the proceedings. Virgin submits, however, that the claims involve self interest on the part of the applicants as well as public interest. This does not derogate from the broader impact of the ITC. The ability of disabled persons to fly with Virgin, a major commercial airline in Australia, without the extra cost of a carer raises questions of public interest beyond the private interests of the applicant. 34 Claims for financial compensation by each of the applicants have been abandoned. Accordingly, the amount of damages that the applicants may seek to recover is not a factor that assists in the exercise of the Court's discretion.


case_text: The parties agree on many of the factors to be taken into account in the exercise of the Court's discretion to make an order under rule 1. As discussed in the authorities which consider O 62A r 1 and the equivalent provision in the Federal Magistrates Court Rules, the factors include: • the timing of the application ( Sacks v Permanent Trustee Australia Ltd [1993] FCA 502 ; (1993) 45 FCR 509 at 511 per Beazley J; Flew v Mirvac Parking Pty Ltd [2006] FMCA 1818 at [48] per Barnes FM; Minns v State of NSW (No. 2) [2002] FMCA 197 at [9] per Raphael FM]); • the complexity of the factual or legal issues raised in the proceedings ( Hanisch at 387 per Drummond J; Dibb v Avco Financial Services Limited [2000] FCA 1785 at [15] per Sackville J); • the amount of damages that the applicant seeks to recover ( Hanisch at 387) and the extent of any other remedies sought ( Flew at [48]); • whether the applicant's claims are arguable and not frivolous or vexatious ( Flew at [15]); • the undesirability of forcing the applicant to abandon the proceedings ( Woodlands v Permanent Trustee Company Limited (1995) 58 FCR 139 at 148 per Wilcox J; Flew at [9]); and • whether there is a public interest element to the case ( Woodlands at 146; Flew at [23], [47]).


case_outcome: applied

case_text: The fact that the proceedings are brought otherwise than for the personal or financial gain of the applicant does not detract from the general proposition that ordinarily costs follow the event ( Ruddock at [18]). The fact that litigation can be characterised as being "in the public interest" does not, of itself, mean that the usual order is not made. However, the nature and purpose of the proceedings are still relevant in the exercise of the discretion to award costs and the exercise of the discretion takes account of all of the circumstances ( Ruddock at [18] [19]; [24]). There is no error in taking into account in a decision whether to award costs matters such as the absence of personal gain on the part of the applicants, the fact that a significant number of members of the public may be affected and that the basis of the challenge is arguable and raises "significant issues" as to the interpretation and application of statutory provisions ( Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72 at [20] per Gaudron and Gummow JJ, at [49] per McHugh J). The same circumstances are relevant to an order under Order 62A r 1 which, while making provision for the costs of a successful party, departs from the usual order that would otherwise be made.


case_text: In Physical Disability Council of NSW v Sydney City Council [1999] FCA 815 , the applicant requested a O 62A r 1 order after Madgwick J declined to grant the interlocutory injunction sought. This weighed against the exercise of his Honour's discretion to make the order. Unlike the applicant in Physical Disability the applicants have filed the notice of motion at an early stage in the proceedings. This is clearly appropriate. However, the timing means that the extent of the evidence and the costs to be incurred cannot be fully assessed at this stage. If an order is to be made, it is difficult to determine the amount at which costs should be capped. 16 Virgin raises the history of the litigation to date and asserts that a number of steps have been taken unnecessarily because of the way in which the applicants have conducted the proceedings. There have been amendments to the application and to the points of claim and also correspondence in respect of the provision of particulars. Certain claims have been abandoned. The applicants do not really dispute that there has been a somewhat unfortunate procedural history or that any order capping the costs may exclude costs arising from the amendments or that any order under O 62A r 1 should take effect from the date of filing of the notice of motion. 17 The filing of the notice of motion early in the proceedings is relevant as is the procedural history prior to that filing. 45 The existence of a public interest in the determination of the issues in litigation is a factor of some significance in the awarding of costs. However, public interest and an arguable case are not necessarily decisive and not, of themselves, sufficient to prevent the usual costs order being made ( Ruddock at [18] [19]; Woodlands at 148; Physical Disability at [7]). The usual order for costs applies notwithstanding that the Act is beneficial legislation ( Fetherston at [9] per Heerey J). However, discretionary considerations may lead to a different result ( Fetherston at [12]). 46 As stated by Madgwick J in Physical Disability at [7]: ...if proceedings can properly be characterised as public interest litigation, the prime motivation of which is the upholding of the public interest in the rule of law, that may be a factor which contributes to a finding that there are special circumstances justifying a departure from the traditional rule...the characterisation of proceedings in that way is not alone enough to warrant such departure. Something more is required. That additional quality or requirement may be met by its being shown that the unsuccessful moving party had an arguable case and that the case had raised and resolved significant issues as to the interpretation and future administration of a statute dealing with matters of public interest and concern, which has practical implications for relevant sections of the public and for private persons. (original emphasis) 47 Virgin says that, while there is an undeniable public interest in people with disabilities having dignified access to goods and services, the applicants do not explain the importance of independent travel for people with disabilities or how the ITC undermine their sense of personal dignity. Virgin points out that persons with disabilities rendering them unable to comply with the ITC may require care during a flight, either from a carer or from one of the airline staff and that the applicants do not explain why the existence of a carer affects their ability to travel independently or their sense of personal dignity. 48 The applicants may not have explained these matters. They may or may not be relevant to a final determination of discrimination. That does not, however, derogate from the public interest in the subject matter of these proceedings.


case_text: It is of some interest to note that maximum costs orders, also known as protective costs orders, are made in other jurisdictions within the discretion of the court. For example, in the United Kingdom the Court of Appeal has set out the discretionary considerations in Regina (Corner House Research) v Secretary for Trade and Industry [2005] 1 W.L.R. 2600 at [74] as whether: • the case is a public law case raising issues of general public importance. • the public interest requires that those issues be resolved. • the applicant has no private interest in the outcome of the case. • having regard to the financial resources of the applicant and the respondent and the amount of costs that are likely to be involved, it is fair and just to make the order. • if the order is not made, the applicant will probably discontinue the proceedings and will be acting reasonably in so doing.


case_text: The general principle is that costs ordinarily follow the event and that a successful litigant receives costs in the absence of special circumstances justifying some other order ( Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [11] per Black CJ and French J). This reflects the principle that the award of costs to a successful party is principally by way of perceived restorative justice ( Ruddock at [12]). In Ruddock at [13], Black CJ and French J discussed the fact that novel legal issues and public interest litigation are cases where the usual rationale for the award of costs, that the successful party has been wronged at the hands of the losing party, does not necessarily apply. A losing party may, as their Honours point out, have had very good legal grounds for its position and conducted itself in the litigation in an entirely reasonable way and an order that costs follow the event may work unfairness. It may also, as their Honours observed, pose a significant barrier against parties of modest means even if the contemplated claim has substantial merit. 9 Chief Justice Black and French J said at [13] that criticisms concerning costs in public interest litigation did not justify a global modification of the usual rule that costs follow the event, but that the ability to exercise discretion is desirable. Further, as noted at [14], the compensatory principle ' was long subject to a limited public interest qualification at common law '. The further factor, that a party is deprived of costs because of its conduct of the proceedings, does not presently apply to Virgin, although Virgin submits that the applicants' conduct of the proceedings to date, in the amendment of pleadings and provision of particulars, is relevant. 10 The fact that the proceedings are brought otherwise than for the personal or financial gain of the applicant does not detract from the general proposition that ordinarily costs follow the event ( Ruddock at [18]). The fact that litigation can be characterised as being "in the public interest" does not, of itself, mean that the usual order is not made. However, the nature and purpose of the proceedings are still relevant in the exercise of the discretion to award costs and the exercise of the discretion takes account of all of the circumstances ( Ruddock at [18] [19]; [24]). There is no error in taking into account in a decision whether to award costs matters such as the absence of personal gain on the part of the applicants, the fact that a significant number of members of the public may be affected and that the basis of the challenge is arguable and raises "significant issues" as to the interpretation and application of statutory provisions ( Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72 at [20] per Gaudron and Gummow JJ, at [49] per McHugh J). The same circumstances are relevant to an order under Order 62A r 1 which, while making provision for the costs of a successful party, departs from the usual order that would otherwise be made. 45 The existence of a public interest in the determination of the issues in litigation is a factor of some significance in the awarding of costs. However, public interest and an arguable case are not necessarily decisive and not, of themselves, sufficient to prevent the usual costs order being made ( Ruddock at [18] [19]; Woodlands at 148; Physical Disability at [7]). The usual order for costs applies notwithstanding that the Act is beneficial legislation ( Fetherston at [9] per Heerey J). However, discretionary considerations may lead to a different result ( Fetherston at [12]).


case_text: The parties agree on many of the factors to be taken into account in the exercise of the Court's discretion to make an order under rule 1. As discussed in the authorities which consider O 62A r 1 and the equivalent provision in the Federal Magistrates Court Rules, the factors include: • the timing of the application ( Sacks v Permanent Trustee Australia Ltd [1993] FCA 502 ; (1993) 45 FCR 509 at 511 per Beazley J; Flew v Mirvac Parking Pty Ltd [2006] FMCA 1818 at [48] per Barnes FM; Minns v State of NSW (No. 2) [2002] FMCA 197 at [9] per Raphael FM]); • the complexity of the factual or legal issues raised in the proceedings ( Hanisch at 387 per Drummond J; Dibb v Avco Financial Services Limited [2000] FCA 1785 at [15] per Sackville J); • the amount of damages that the applicant seeks to recover ( Hanisch at 387) and the extent of any other remedies sought ( Flew at [48]); • whether the applicant's claims are arguable and not frivolous or vexatious ( Flew at [15]); • the undesirability of forcing the applicant to abandon the proceedings ( Woodlands v Permanent Trustee Company Limited (1995) 58 FCR 139 at 148 per Wilcox J; Flew at [9]); and • whether there is a public interest element to the case ( Woodlands at 146; Flew at [23], [47]). 53 It cannot be said that the case lacks complexity. As pointed out by Beazley J in Sacks at 511, the intention on the introduction of O 62A r 1 was to apply the rule principally to commercial litigation at the lower end of the scale in terms of complexity and the amount in dispute. That is, it was introduced to keep costs proportionate in low value litigation. The original object of O 62A r 1 as set out in a letter from the Chief Justice of the Federal Court to the President of the Law Council of Australia regarding the introduction of the rule, was to ' define a budget so that the management of the case might be tailored according to its economic limits ' (cf Sacks at 511, Flew at [7]). That, however, is not a limitation on the availability of an order. There is no reason why it should not apply, in appropriate situations, to cases that are somewhat complex.


case_text: The parties agree on many of the factors to be taken into account in the exercise of the Court's discretion to make an order under rule 1. As discussed in the authorities which consider O 62A r 1 and the equivalent provision in the Federal Magistrates Court Rules, the factors include: • the timing of the application ( Sacks v Permanent Trustee Australia Ltd [1993] FCA 502 ; (1993) 45 FCR 509 at 511 per Beazley J; Flew v Mirvac Parking Pty Ltd [2006] FMCA 1818 at [48] per Barnes FM; Minns v State of NSW (No. 2) [2002] FMCA 197 at [9] per Raphael FM]); • the complexity of the factual or legal issues raised in the proceedings ( Hanisch at 387 per Drummond J; Dibb v Avco Financial Services Limited [2000] FCA 1785 at [15] per Sackville J); • the amount of damages that the applicant seeks to recover ( Hanisch at 387) and the extent of any other remedies sought ( Flew at [48]); • whether the applicant's claims are arguable and not frivolous or vexatious ( Flew at [15]); • the undesirability of forcing the applicant to abandon the proceedings ( Woodlands v Permanent Trustee Company Limited (1995) 58 FCR 139 at 148 per Wilcox J; Flew at [9]); and • whether there is a public interest element to the case ( Woodlands at 146; Flew at [23], [47]). 37 The applicants rely on the grant of legal aid and submit that costs should be capped at the extent of the legal aid indemnity provided to the applicants, as in Woodlands at 149. Mr Ferguson says that he ' may be unable to pursue the litigation in the event of his application being unsuccessful ' (emphasis added) as he does not have the means to meet an adverse costs order and does not wish to be made a bankrupt. Mr Ferguson says that he is unemployed and in receipt of a Disability Support Pension. 38 Mr Corcoran does have assets and could meet an adverse costs order but does not wish to be forced to sell property and thereby deprive himself and his family of financial security. He wishes to have the costs capped, even if the Court deemed $15,000 to be inadequate. 45 The existence of a public interest in the determination of the issues in litigation is a factor of some significance in the awarding of costs. However, public interest and an arguable case are not necessarily decisive and not, of themselves, sufficient to prevent the usual costs order being made ( Ruddock at [18] [19]; Woodlands at 148; Physical Disability at [7]). The usual order for costs applies notwithstanding that the Act is beneficial legislation ( Fetherston at [9] per Heerey J). However, discretionary considerations may lead to a different result ( Fetherston at [12]). 49 The relevance of the cost of public interest litigation to an individual was discussed by Wilcox J in Woodlands at 147. His Honour adopted the approach of Morling J in Australian Federation of Consumer Organisations Inc v Tobacco Institute of Australia Ltd (1991) 100 ALR 568 , namely that it was not in the public interest for a litigant to be heavily out-of-pocket for taking public-spirited action. The applicants do not seek financial gain from the litigation. Even if they do intend to fly with Virgin and do not wish to pay for a carer to accompany them, the costs of the litigation far outweigh that cost, so as to render it irrelevant to a question of personal financial, rather than public, benefit. 52 On the pleadings and the accepted facts of the disability of the applicants and their inability to comply with the ITC, the applicants have an arguable case of direct and indirect discrimination under the Act. The questions raised in the pleadings have not previously been considered in the Court and raise novel questions, a relevant factor ( Woodlands at 148). In order to establish direct discrimination, the applicants must establish that the ITC are not reasonable. The factual considerations for an assessment of reasonableness are likely to be coextensive, or at least overlap, with the available defence of unjustifiable hardship in respect of the indirect discrimination claim. The evidence concerning reasonableness/unjustifiable hardship is likely to be largely adduced by Virgin. The applicants have indicated the nature of the evidence they intend to adduce and it is in short compass and documentary in form. At this stage of the proceedings, the extent of Virgin's evidence is not apparent. It should be possible for the parties to formulate agreed facts as to some of the matters to be relied on by Virgin, such as statutory requirements. The issues have already been narrowed. If the scope of the factual issues can be further narrowed, the complexity will arise in submissions and in the evaluative process and will not necessarily mean a lengthy final hearing. If that is not the case, I can reconsider the maximum amount of recoverable costs.


case_text: support of its submission that the winding up order should be set aside, the Defendant relied upon the following statement by Hodgson J in George Ward Steel v Kizkot (1989) 15 ACLR 464 at 465: In my view, if an order winding up a company is made in the absence of the defendant company, and an application is brought promptly by the company, with notice being given to the liquidator, to the plaintiff and to any creditor who appeared at the hearing; and if the evidence shows an explanation for the non-appearance at the hearing and indicates solvency of the company; and if there is consent to setting aside, or at least non-opposition; and if the liquidator indicates that nothing in his investigations to date shows a reason for the company to be stopped from trading, then the court will normally set aside the order. His Honour was concerned with an application under Part 40 r 9(3) of the now superseded Supreme Court Rules 1970 (NSW) which was equivalent to O 35, r 7(2)(a). The application to set aside the winding up order was determined by his Honour within about two weeks of the winding up order being made. His Honour's reasons do not reveal the reason behind the Defendant's non-appearance. Hodgson J's decision was considered by Nicholson J in Registrar of Aboriginal Corporation v Murnkurni Women's Aboriginal Corporation (1995) 58 FCR 125 at 127-128. His Honour's reasons do not shed much light on the reason behind the respondent's failure to appear in that case, though it is apparent that the applicant had obtained an order for substituted service which was, as was accepted by the respondent in that case, properly effected. His Honour went on to say: It may not be that the dicta of Hodgson J in Kizkot and the principles relied upon for Murnkurni are necessarily in conflict. All that Hodgson J required was evidence which "indicates" solvency. He did not say that solvency was to be established as a fact. Certainly he must have accepted there should be evidence which indicates solvency in the sense of showing it to be arguable that the company was solvent. In my opinion the effect of the authorities is to require this Court to consider whether there is an arguable defence which in turn requires the Court to consider whether solvency is arguable. ... For the reasons given I consider that both the solvency and other aspects are arguable and that, accordingly, the application to set aside the order pursuant to FCR O 35, r 7(2)(a) should be granted. Hodgson J's decision in Kizkot was followed by Gyles J on several occasions: Deputy Commissioner of Taxation v Fairchild Development (in liq) [2006] FCA 714 and Deputy Commissioner of Taxation v Vallod Pty Ltd; in the matter of Vallod Pty Limited [2007] FCA 535. In the latter case Gyles J said (at [4]) that "Hodgson J's points are not, of course, a statutory formula but they are a useful checklist of things to at least take into account." Gyles J set aside the winding up order in that case within a week of it being made.


case_text: J's decision was considered by Nicholson J in Registrar of Aboriginal Corporation v Murnkurni Women's Aboriginal Corporation (1995) 58 FCR 125 at 127-128. His Honour's reasons do not shed much light on the reason behind the respondent's failure to appear in that case, though it is apparent that the applicant had obtained an order for substituted service which was, as was accepted by the respondent in that case, properly effected. His Honour went on to say: It may not be that the dicta of Hodgson J in Kizkot and the principles relied upon for Murnkurni are necessarily in conflict. All that Hodgson J required was evidence which "indicates" solvency. He did not say that solvency was to be established as a fact. Certainly he must have accepted there should be evidence which indicates solvency in the sense of showing it to be arguable that the company was solvent. In my opinion the effect of the authorities is to require this Court to consider whether there is an arguable defence which in turn requires the Court to consider whether solvency is arguable. ... For the reasons given I consider that both the solvency and other aspects are arguable and that, accordingly, the application to set aside the order pursuant to FCR O 35, r 7(2)(a) should be granted.


case_text: J's decision in Kizkot was followed by Gyles J on several occasions: Deputy Commissioner of Taxation v Fairchild Development (in liq) [2006] FCA 714 and Deputy Commissioner of Taxation v Vallod Pty Ltd; in the matter of Vallod Pty Limited [2007] FCA 535. In the latter case Gyles J said (at [4]) that "Hodgson J's points are not, of course, a statutory formula but they are a useful checklist of things to at least take into account." Gyles J set aside the winding up order in that case within a week of it being made.


case_title: Deputy Commissioner of Taxation v Vallod Pty Ltd; in the matter of Vallod Pty Limited [2007] FCA 535


case_text: are other decisions which might be understood to impose a higher burden on a party seeking to set aside an order pursuant to O 35, r 7(2). In Australian Competition & Consumer Commission v Black on White Pty Ltd [2004] FCA 363 ; (2008) 138 FCR 314 Spender J said at [14]-[15]: [14] In my opinion, the discretion to set aside an order pursuant to 0 35, r 7(2) of the Federal Court Rules is one that ought to be exercised only in exceptional circumstances, and that generally speaking, the jurisdiction is not to be exercised unless it can be shown that, without fault on the applicant's part, he or she had not been heard on the relevant question. [15] In Wentworth v Rogers (No 9) (1987) 8 NSWLR 388 , Kirby P, in delivering the judgment of the court, accepted there may be unusual circumstances apart from fraud where a court would set aside or vary a perfected order, but that such power, if it existed, could only be used in the most exceptional of cases. The Full Court of the Federal Court in Wati v Minister for Immigration and Multicultural Affairs (1997) 78 FCR 543 said at 552 that the jurisdiction was "truly exceptional" and added: Moreover, generally speaking, the jurisdiction is not to be exercised unless it can be shown that, without fault on the applicant's part, he or she has not been heard on the relevant question. Whether the discretion to set aside an order pursuant to O 35, r 7(2) ought to be exercised in exceptional circumstances only or whether it may be exercised in circumstances that cannot be so described is a question that does not need to be decided in the present case. Either way, I would not be disposed to accede to the Defendant's application to set aside the winding up order. In the present case there is no satisfactory explanation given for the Defendant's non-appearance. The Defendant simply says that its directors left the country to live abroad and, while away, neglected to attend to the company's affairs for a period of almost five years. I think this is a factor that tells against the exercise of any discretion in favour of the Defendant. I note also that there was a significant delay between the making of the winding up order and the filing of the application. The delay was in the vicinity of five months. Mr and Mrs Pagent returned to Australia in late 2005 and I infer that their neglect of the Defendant's affairs continued for several years after their return. Even if the Defendant appeared at the hearing of the winding up application, it is doubtful whether it would have been able to demonstrate any arguable basis to resist the making of a winding up order. The Defendant's insolvency was presumed by its non-compliance with the creditor's statutory demand for payment and it would have been necessary for the Defendant to rebut the presumption of insolvency if it wished to resist the making of the order. The Defendant's only significant assets consist of various artworks which were at the time of the winding up hearing in the possession of a third party pursuant to some arrangement which is not dealt with in the evidence in any way. The evidence does not address whether a sale of artwork constituted a practical means of obtaining cash with which to pay the Plaintiff in a timely manner. In addition, there is no evidence before me that there was, at that time, any obligation, capacity or willingness on the part of Mr and Mrs Pagent or any other person to make additional contributions to the Fund or to provide financial accommodation or assistance of some other kind which might enable the Defendant to pay the Plaintiff. The evidence includes a recent valuation of the artwork undertaken for insurance purposes which values the artwork at about $1.2 million. But there is no evidence which indicates how easy or difficult it would be to turn any of it into cash. The payments made to the Plaintiff by or on behalf of the Defendant did not follow the sale of any of the artwork but were made possible by what were said to be non-deductible contributions recently made to the Fund by Mr Pagent.