case_text: s 51A is a qualified and complex deeming provision: McGrath v Australian Naturalcare Products Pty Limited [2008] FCAFC 2 ; (2008) 165 FCR 230. What the section does is, first, provide that where a corporation makes a representation with respect to any future matter and it does not have reasonable grounds for making the representation, the representation shall be taken to be misleading: s 51A(1). Secondly, s 51A(2) provides that for the purposes of s 51A(1) the corporation is deemed not to have had reasonable grounds for making the representation "... unless it adduces evidence to the contrary". If the alleged representor does adduce evidence to the effect that it had reasonable grounds for making the representation, the deeming provision does not operate: Australian Naturalcare 165 FCR at 242 [44] per Emmett J and 283 [191]- [192] per Allsop J. That throws back onto an applicant the ultimate onus of proof to make good a claim that there were no reasonable grounds for making the representation. The Court then decides in the ordinary way, on the balance of probabilities whether the representee has established that the representor did not have reasonable grounds for making the representation. And, the representor must have had reasonable grounds for a representation as to a future matter at the time he, her or it made the representation: Australian Naturalcare 165 FCR at 284 [198] per Allsop J. The quality of the evidence adduced by the representor under s 51A(2) must be sufficient to be capable, if accepted, of amounting to providing the representor with reasonable grounds for making the representation at the time it was made. The Court must determine whether the evidence is "evidence to the contrary" so as to throw onto the representee the onus of proving that the representor did not have reasonable grounds for making the representation: Australian Naturalcare 165 FCR at 282-283 [191]-[192] per Allsop J. In the context of a trial, the representee will not need to lead evidence in chief on the issue since he, she or it can rely on the deeming in the provision which is only displaced by the representor adducing evidence to the contrary. That evidence, if adduced, will lead to a case in reply. The Court still has to decide whether the evidence relied on as being "to the contrary" adduced by the representor is capable of amounting to reasonable grounds for making the representation. Then, if it is so capable, the Court assesses whether the representee has proved, on the whole of the evidence, that the representor did not have reasonable grounds for making it.


case_outcome: followed

case_text: savings, if any, made by an applicant should not be taken into account in reduction of a claim made under s 82 of the Act: Milner v Delita Pty Limited (1985) 9 FCR 299 at 304, per Lockhart J. Lockhart J held that money contributed by an applicant who was induced by conduct that contravened s 52 to enter into a partnership for the processing and growing of guavas had been applied for the purposes of the partnership. He said that it had been envisaged in the misleading promotional brochures that the expenditures would give rise to tax losses that could be claimed as deductions against their income by the investor tax payers. But Lockhart J held that that was an irrelevant consideration for the purposes of an assessment of damages under s 82. He found that there was no relevant nexus between the contravention of the Act by the respondent and any benefit gained by the applicant by reason of the allowability of the claimed losses. Lockhart J applied Simpson Ltd v Hubbards Pty Limited (1982) 44 ALR 695 at 702-703. There Bowen CJ, Franki and McGregor JJ held that since damages were compensatory, the question of deducting probable taxation did not arise. They said that an applicant could not be required to set off past tax losses against an award of damages so as to reduce the total sum of damages ordered by the Court. They regarded the tax losses as being, in one sense, an asset of the applicant who should not be required to dissipate that asset for the benefit of the person who contravened s 52 of the Act: Simpson 44 ALR at 703.


case_outcome: cited

case_text: general principle in contract is that " ... if a man signs a written contract, he is considered as the contracting party, unless it clearly appears that he executes it as agent only": Cooke v Wilson [1856] EngR 883 ; (1856) 1 CB (NS) 153 at 164 per Crowder J, see too at 162 per Cresswell J; Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 at 558E-F per McHugh JA; H O Brandt & Co v H N Morris & Co Ltd [1917] 2 KB 784 at 793-794 per Viscount Reading CJ, 796-797 per Scrutton LJ. The same principle must apply where the contract is made orally. The question of whether a person so acts as to be a party is determined objectively: Carminco 243 ALR at 479 [23].


case_text: all, the intended market for this investment were people holidaying at The Entrance who were attracted to walk into PRD's office at the site, as each of the applicants here did. These applicants were ordinary members of the public, not professional landlords or real estate investors or developers. They were the very class of persons who were intended to be attracted by the brochure viz: namely the kind of investor who would be looking for a return in something which it was hard to imagine could be offered at that level. In another context, to do with the law of defamation, Lord Devlin once observed tellingly in Lewis v Daily Telegraph Limited [1964] AC 234 at 285 (and see also Mirror Newspapers Limited v Harrison [1982] HCA 50 ; (1982) 149 CLR 293 at 304 per Brennan J): "A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that ." (emphasis added)


case_text: 82(1) of the Act permits recovery by an applicant for loss or damage notwithstanding his, her or its failure to mitigate or contributory negligence unless the applicant's own carelessness or disregard of his, her or its interests is the cause of some or all of the loss or damage: Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 at 286G-287C per Fisher, Gummow and Lee JJ applying what French J had said in Pavich v Boira Nominees Pty Ltd [1988] ANZ Conv R 556 at p 23; see too Sykes v Reserve Bank of Australia (1998) 88 FCR 511 at 517B-E per Heerey J, Sundberg J agreeing at 521F. The misrepresentations were a link in the causal chain between Mr Owers' entry into the transaction and his loss: cf: Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at 469 [14] per Gleeson CJ. At best, from Austcorp's perspective, there may have been two concurrent causes of the imprudent decisions of Mr Owers and Ms Tan-Bounkeua to buy their apartments and lease them to Mustara. Austcorp's conduct was one of the causes, the other being those applicants' failure to receive legal advice exposing to them the effect of cl 20.9. 3.1 THE APPLICANTS 3.1.1 BRIAN OWERS


case_text: I accept that a careful solicitor ought to have picked up the significance of cl 20.9 of the lease, the evidence before me indicates that solicitors did not always do so. Indeed, Austcorp recommended that Mr Walker distribute to purchasers the memorandum prepared by Penhryn Parker, solicitors, identifying the significant features of the transaction. That memorandum in itself did not pick up the limitation in cl 20.9. Nor did Mr Owers' solicitor pick it up. While Mr Fullerton, who advised the Luciani/Taldarmar applicants did pick it up, I am satisfied that by failing to advert in the brochure itself to any limitation of confidence by those promoting the venture such as is contained in cl 20.9, should sound against Austcorp where solicitors for purchasers or the purchasers themselves did not pick this up. After all, Austcorp set the misleading representations in motion. It cannot simply rely upon the overstatements in the brochure to be corrected where they were seriously made and used as powerful marketing tools by it in preparing the brochure with the knowledge that they had that affect. And as Mason J observed in Puxu 149 CLR at 210-211 in a passage applied by Jacobson and Bennett JJ in National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90 ; (2004) 61 IPR 420 at 437 [52] - [53] (a case where the communication was made in a letter of offer to individual shareholders in a company): "There may be situations where to exploit the mistaken views of the public would contravene s 52 and would not be corrected by an inconspicuous accurate representation e.g. in a concealed label or the 'fine print' of a contract ." (emphasis added) In the context of the unqualified powerful assertions in the representations, the terms of cl 20.9 were inconspicuous and part of the "fine print" of the contract in the sense referred to by Mason J in Puxu 149 CLR at 210-211. As Jacobson and Bennett JJ said in National Exchange 61 IPR at 437 [50] (applied by Keane JA in Downey [2005] QCA 199 at [83] ): "A document which, when read as a whole, is factually true and accurate may still be capable of being misleading if it contains a potentially misleading primary statement which is corrected elsewhere in the document but without the reader's attention being adequately drawn to the correction."


case_text: extensively reviewing the authorities in NMFM Property Pty Ltd v Citibank Ltd [2000] FCA 1558 ; (2000) 107 FCR 270 at 550 [1244] Lindgren J concluded that an act is done "on behalf of" a corporation for the purpose of s 84(2) if either the actor engaged in the conduct intending to do so as representative of or for the corporation, or the actor did so in the course of the corporation's business, affairs or activities. He also concluded that it is not necessary to show that the actor engaged in the conduct for the benefit of the corporation: see too Walplan Pty Ltd v Wallace [1985] FCA 479 ; (1985) 8 FCR 27 at 37-38 per Lockhart J, (Sweeney and Neaves JJ agreeing); Downey [2005] QCA 199 at [56] - [60] per Keane JA.


case_text: was the guiding hand and ultimately benefited from what its subsidiaries did. It argued that its conduct vis a vis its subsidiaries should be viewed as akin to a real estate agent who passes on the vendor's instructions. I reject that argument. Austcorp did not confine itself to communicating what its subsidiary said, did or represented, without adopting or endorsing it: cf: Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 ; (2004) 218 CLR 592 at 605 [38] - [40] per Gleeson CJ, Hayne and Heydon JJ. To the contrary, the reality was that the subsidiaries were Austcorp's vehicle for realising its investment in the project. The subsidiaries acted as Austcorp caused them to act. While each of Austcorp and its subsidiaries was a separate legal person, acting through the individuals who were employees of Austcorp, all acted in dual capacities: cf: Hamilton v Whitehead [1988] HCA 65 ; (1988) 166 CLR 121 at 128 per Mason CJ, Wilson and Toohey JJ. The activities of each member of the Austcorp group involved in the development and marketing of the resort were interlocking and Austcorp controlled each of them: cf: NSW Mutual Real Estate Fund Ltd v Brookhouse [1979] FCA 7 ; (1978) 38 FLR 257 at 263 per Franki J, 264 per St John J, 266 per Deane J.


case_text: argued that the applicants' case was built on an illusion created with the benefit of hindsight and self-serving assertions. The fact that the brochure conveyed confidence in the prospects of the development, Austcorp argued, did not mean that there was a high level of assurance that the project and the resort would succeed. I reject that argument. The words of the brochure were calculated to convey assurance. The admissions by Austcorp that that was the purpose of using the words of the brochure, of a 7% net guaranteed return for 10 years, namely that it was the "sure thing" referred to in Coudert Bros' letter to the Commission in August 1999 make it clear beyond doubt that the power of this message was realised and deliberate. Of course, liability under s 52 does not depend on the intention of the corporation which engages in the conduct: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 197. Mr Chappell gave this evidence: "And you knew at the time that the company Mustara Holdings was not offering any guarantee. Correct? --- It was through the lease they were proposing to enter into with the investor for a 10 year period. [...] Which was the whole basis of the offer. Mr Chappell, do you own any rental property? --- Not at the moment. You have in the past? --- I have, yes. And you've rented it out to people? --- I have. And if they enter into a lease that doesn't guarantee you payment of the rent, does it? --- It doesn't. There are certain obligations under the lease which they enter into, the lessee and the lessor, which you can rely on depending on the person. That doesn't guarantee you payment of the rent under the lease, does it? --- Well, no, it's not guaranteed. No, and the promise to pay under the lease, well, as I think you would accept, depends on the lessee's ability to pay from time to time? --- Correct. And the lessee might fall on hard times? --- Yes, it could. The lessee might encounter unforeseen circumstances? --- It may. And that might affect its ability to pay? --- Correct. And the lessee may simply walk away and choose not to pay? --- It's possible, yes. And if it does whether or not you get your payments depends on the financial position of the lessee? --- That's true. .... You're not suggesting seriously to his Honour, are you, that the mere fact of entry into a lease with a tenant involves a guarantee of payment of rent under the lease? --- No. Thank you, and you knew therefore that Mustara as the lessee under the proposed leases wasn't guaranteeing payment of the rent under the lease? --- It wasn't guaranteeing it, no. ..... Pacific International Hotels Pty Limited was not guaranteeing payment of the rent at seven per cent net return per annum for 10 years? --- No. HIS HONOUR: When you say 'No' you are agreeing with Dr Bell? --- I'm agreeing that it didn't." I am satisfied that the brochure achieved, objectively and in the subjective minds of each of the applicants who gave evidence before me, the purpose of instilling in them the belief that the rent would be paid as a "sure thing" [See 3. below]. However, I am also satisfied that the applicants' were worldly enough to realise that no-one would be able to give them a guarantee against the vicissitudes of the marketplace. No-one for example could have predicted the shocking events of 11 September 2001, or other economic events which might affect the Australian or international economies generally. It would be quite unreasonable for anyone to believe that a promoter of a resort hotel project in the Central Coast of New South Wales would be able to predict the outcome of the world economy over the succeeding 10 years and given assurance that nothing could happen which might so impact on the operations of the hotel that rent would not in any circumstances cease to be paid at the guaranteed rate. As Gibbs CJ said in Puxu 149 CLR at 199 (see also Campomar (2000) 202 CLR at 85 [102]-[103] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ): "The heavy burdens which [s 52] create cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will of course depend on all the circumstances." Austcorp argued that the nexus was, in effect, broken because the contract was a legal document which set out with considerable precision and at length the actual relationship that would exist if a person entered into the contract and the lease. For example, it argued that it was not reasonable for a person in the position of Ms Tan-Bounkeua not to have had a solicitor advising her and that, had she done so, the solicitor would have broken the chain of causation, even if he or she negligently failed to advise the purchaser of the provisions of cl 20.9 or the existence of Mustara. I discuss this specific issue below [See 2.18]. Gibbs CJ observed in Puxu [1982] HCA 44 ; 149 CLR 191 at 199 that the Act did not impose burdens which operated for the benefit of persons who failed to take reasonable care of their own interests: see too Campomar 202 CLR at 85 [102]. While I accept that a careful solicitor ought to have picked up the significance of cl 20.9 of the lease, the evidence before me indicates that solicitors did not always do so. Indeed, Austcorp recommended that Mr Walker distribute to purchasers the memorandum prepared by Penhryn Parker, solicitors, identifying the significant features of the transaction. That memorandum in itself did not pick up the limitation in cl 20.9. Nor did Mr Owers' solicitor pick it up. While Mr Fullerton, who advised the Luciani/Taldarmar applicants did pick it up, I am satisfied that by failing to advert in the brochure itself to any limitation of confidence by those promoting the venture such as is contained in cl 20.9, should sound against Austcorp where solicitors for purchasers or the purchasers themselves did not pick this up. After all, Austcorp set the misleading representations in motion. It cannot simply rely upon the overstatements in the brochure to be corrected where they were seriously made and used as powerful marketing tools by it in preparing the brochure with the knowledge that they had that affect. And as Mason J observed in Puxu 149 CLR at 210-211 in a passage applied by Jacobson and Bennett JJ in National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90 ; (2004) 61 IPR 420 at 437 [52] - [53] (a case where the communication was made in a letter of offer to individual shareholders in a company): "There may be situations where to exploit the mistaken views of the public would contravene s 52 and would not be corrected by an inconspicuous accurate representation e.g. in a concealed label or the 'fine print' of a contract ." (emphasis added) Austcorp attacked the claim by Ms Tan-Bounkeau. It contended that no-one would think that advertisements, brochures or the other promotional material would contain terms or representations that could be relied on as the basis of a serious investment in real property. It argued that she had failed to take reasonable care of her own interests relying on Puxu 149 CLR at 199 per Gibbs CJ and Poulet Frais 220 ALR at 233 [107] per Branson, Nicholson and Jacobson JJ. I reject that submission. Austcorp, the author of the false descriptions of the investment, should not be able to say that its representations could not be taken at face value. It had made misleading and deceptive representations of a guaranteed 7% p.a. return relying on the perception of the investors that "Pacific International Hotels" was the lessee. Yet, Austcorp was conscious that cl 20.9 of the lease made a fundamental qualification to this assertion and that its marketing message would have been far less compelling if accurate information had been conveyed about cl 20.9. The assurance of a return would have been undermined if Austcorp had complied with s 52. Potential investors, including Ms Tan-Bounkeua, would have been less enthusiastic had the promotional material revealed that the only promoter offering any long term financial commitment to an investor, Pacific International Hotels, was not prepared to back its judgment beyond the limited extent of cl 20.9. As Mr Hung acknowledged, the consequence of cl 20.9 meant that it was not a "sure thing" that the investors would receive their promised 7% p.a. net return for 10 years. In the context of the unqualified powerful assertions in the representations, the terms of cl 20.9 were inconspicuous and part of the "fine print" of the contract in the sense referred to by Mason J in Puxu 149 CLR at 210-211. As Jacobson and Bennett JJ said in National Exchange 61 IPR at 437 [50] (applied by Keane JA in Downey [2005] QCA 199 at [83] ): "A document which, when read as a whole, is factually true and accurate may still be capable of being misleading if it contains a potentially misleading primary statement which is corrected elsewhere in the document but without the reader's attention being adequately drawn to the correction."


case_title: Pavich v Borba Nominees Pty Ltd [1988] ANZ Conv R 556


case_outcome: distinguished

case_text: Austcorp wished to disclaim liability for what was said in the brochure or to have advised investors or members of the public who read it that they could not rely on it, it would have been easy to put a disclaimer on the document. But, there is not a word of caution in the brochure. It is full of optimistic predictions and assurances of a long term and significant return. And, of course, a disclaimer might undermine the message of a "sure thing". Austcorp or the other promoters did not exhort the applicants to make their own inquiries about the "guaranteed" return or the certainty of its receipt unlike in Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd [2005] FCAFC 131 ; (2005) 220 ALR 211 at 232 [104] per Branson, Nicholson and Jacobson JJ. Austcorp attacked the claim by Ms Tan-Bounkeau. It contended that no-one would think that advertisements, brochures or the other promotional material would contain terms or representations that could be relied on as the basis of a serious investment in real property. It argued that she had failed to take reasonable care of her own interests relying on Puxu 149 CLR at 199 per Gibbs CJ and Poulet Frais 220 ALR at 233 [107] per Branson, Nicholson and Jacobson JJ. I reject that submission. Austcorp, the author of the false descriptions of the investment, should not be able to say that its representations could not be taken at face value. It had made misleading and deceptive representations of a guaranteed 7% p.a. return relying on the perception of the investors that "Pacific International Hotels" was the lessee. Yet, Austcorp was conscious that cl 20.9 of the lease made a fundamental qualification to this assertion and that its marketing message would have been far less compelling if accurate information had been conveyed about cl 20.9. The assurance of a return would have been undermined if Austcorp had complied with s 52. Potential investors, including Ms Tan-Bounkeua, would have been less enthusiastic had the promotional material revealed that the only promoter offering any long term financial commitment to an investor, Pacific International Hotels, was not prepared to back its judgment beyond the limited extent of cl 20.9. As Mr Hung acknowledged, the consequence of cl 20.9 meant that it was not a "sure thing" that the investors would receive their promised 7% p.a. net return for 10 years.


case_text: I am satisfied that it would be unreasonable to read the brochure as offering an assurance against anything that might happen in the market, the use of an apparently reputable hotel operator's name, Pacific International Hotels, in connection with the promise of a 7% p.a. return for 10 years from the investment was calculated to induce confidence that the promoters of the venture had a foundation for the confidence expressed concerning future matters. Those who were named in the brochure as organisations, rather than particular identified corporate identities, included the hotel operator, as "Pacific International", and a developer, "Austcorp". Ordinarily, a statement which involves the state of mind of the maker will convey the meaning expressly, or by implication, that the maker of the statement had a particular state of mind when it was made and, commonly, that there was a basis for that state of mind: Global Sportsman Pty Limited v Mirror Newspapers Limited [1984] FCA 180 ; (1984) 2 FCR 82 at 88 per Bowen CJ, Lockhart and Fitzgerald JJ; RAIA Insurance Brokers Limited v FAI General Insurance Co Limited [1993] FCA 92 ; (1993) 41 FCR 164 at 172-175 per Beaumont and Spender JJ, with whom Davies J generally agreed at 165-166.


case_title: Ricochet Pty Ltd v Equity Trustees Executors and Agency Company Ltd [1993] FCA 99 ; (1992) 41 FCR 229

case_text: Gould v Vaggelas (1984) 157 CLR 215 at 236 Wilson J identified four principles which are frequently used as a practical guide to assess the issue of whether a person has been induced to contract based on a misrepresentation (cf: Ricochet Pty Ltd v Equity Trustees Executors and Agency Company Ltd [1993] FCA 99 ; (1993) 41 FCR 229 at 234 per Lockhart, Gummow and French JJ; Dominelli Ford (Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd [1992] FCA 550 ; (1992) 38 FCR 471 at 482-483 per Beaumont, Foster and Hill JJ; Sutton v AJ Thompson Pty Ltd (1987) 73 ALR 233 at 240 per Forster, Woodward and Wilcox JJ), namely: "1. Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case. If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation. The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation. The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract."


case_title: S. Pearson & Son, Ltd v Dublin Corp [1907] AC 351

case_text: Hung's 29 November letter left no room to doubt that Austcorp was the developer of the resort. Of course, none of the present applicants received it, but it makes Austcorp's defence that it did not engage in the conduct complained of ring hollow. A similar line of defence seeking to exculpate a principal for the act of its agent was criticised by the Earl of Halsbury as being like the schoolboy's game of "I did not take it, I have not got it" in S. Pearson & Son, Ltd v Dublin Corporation [1907] AC 351 at 357. After all its activity in promoting the development and the sale of apartments in the resort, it would be extraordinary if Austcorp now could hide behind its previously hidden corporate veils. Mr Zantiotis discussed the guaranteed return and the lease with investors from time to time. In early December 1999, he obtained a letter of advice from Chris Mitchell of Corrrs Chambers Westgarth, solicitors, about the application of Ch 5C of the Corporations Law to Austcorp in relation to its involvement with the development of the resort. Mr Zantiotis was then unaware that on 26 August 1999 the Australian Securities and Investments Commission ( ASIC ) had granted Landillo an exemption for offers made to investors before 1 January 2000. Coudert Bros had acted on Mr Hung's instructions to obtain this. Mr Mitchell recommended seeking an exemption from ASIC. Mr Mitchell reviewed a number of documents including the contract, the lease and the brochure. Corrs Chambers Westgarth's letter referred specifically to the statement in the brochure that "your return will be a guaranteed 7% per annum". Mr Mitchell advised that this "... seems inconsistent with the limitation of the guarantee under the Lease". Mr Zantiotis was not concerned by this inconsistency at the time. He took the view that when asked by potential investors about how the 7% return related to the lease and the guarantee for the 10 years that "... I was always responsible enough to refer the contract and all its contents to their solicitors". I formed the impression that Mr Zantiotis was a fairly straightforward witness and that he chose this response to investors' questions to enable him to avoid giving them the direct answer (exposed in Mr Mitchell's letter) while giving them access to the full contractual position through their own solicitors' advice. Mr Zantiotis reviewed the letter from Corrs Chambers Westgarth with Mr Hung who told him that it was not necessary to get an exemption.


case_text: am of opinion that until the registration of the strata plan on 1 August 2000 it was not certain that loss would be suffered by any of the applicants, because before then they were not obliged and could not be compelled to complete the contract. Indeed they were entitled, if that registration had not occurred by 31 December 2000, to rescind their contracts. It was only when the strata plan was registered that the applicants were faced with the obligation to complete the contracts and deprived of the opportunity to rescind under cl 33.2. Thus, when each of the applicants became bound to complete or later completed their contracts, they would suffer loss or damage because only then would they pay or be liable to pay more for their apartment than it was worth: Scarcella v Lettice [2000] NSWCA 289 ; (2000) 51 NSWLR 302 at 309 [32] per Handley JA, 310 [41] per Giles JA and cf per Powell JA at 310 [37].


case_title: Simpson Ltd v Hubbards Pty Limited (1982) 44 ALR 695


case_title: Sutton v AJ Thompson Pty Ltd (1987) 73 ALR 233


case_text: her own carelessness in not engaging a solicitor was a cause of Ms Tan-Bounkeua's loss, I am not satisfied that it was the only cause. As I have found, a solicitor might, but would not necessarily, have advised her about the existence and effect of cl 20.9. Although the representations were made in order to interest investors in purchasing apartments in the development, their message would be undone only if a solicitor in fact advised his or her client of the effect of cl 20.9. And the risk to Austcorp, if that happened, was that it might lose the benefit of the sale: Sydney Harbour Casino Properties Pty Ltd v Coluzzi [2002] NSWCA 74 at [43] , [57] per Mason P (with whom Giles and Heydon JJA agreed on this point at [92] and [93]). Moreover, had Ms Tan-Bounkeua been informed before completion that Mustara had ceased to be a subsidiary of Pacific International Hotels since she had entered into the contract, she would not have proceeded because that would have exposed her to risk of loss. The correctness of these representations depended on the nature of the "assurance" of the net rental return of 7% of the purchase price for 10 years. (Mr Owers did not receive the leaflet so only representation (a) is relevant to his position.) At the time of entering into the contracts each of the applicants understood that the way in which they would be paid the return was through their lease of their apartment to Mustara on terms that it pay the rent at the rate of 7% of the purchase price net of deductions for 10 years. The "assurance" came from this understanding and, in Mr Owers' and Ms Tan-Bounkeua's cases, the connection that Mustara was a subsidiary of Pacific International Hotels which guaranteed the performance of Mustara. In other contexts the word "guarantee" can have a range of connotations, but as Mason P observed in Coluzzi [2002] NSWCA 74 at [46] (Giles and Heydon JJA agreeing on this issue at [92]-[93]) it can certainly include a firm assurance as to a state of affairs. Thus, since I have found that, when entering the contract and signing the lease, Mr Owers and Ms Tan-Bounkeua were not aware of the nature and effect of cl 20.9 of the lease, limiting the guarantee, it was false to represent to them that payment of the rent for the entire term was "assured" in the sense that they understood the representations. That is, it made no difference to either of them that Pacific International Hotels was not the lessee if Mustara were its subsidiary and, in substance, Pacific International Hotels would stand completely behind Mustara. If that were the case then, as a matter of substance, the statements in the promotional material of the "security of a lease to Pacific International Hotels" would have been true, even though the technical legal mechanism of a lease to Mustara with a guarantee by its parent was utilised. They saw themselves dealing with, and receiving assurance from, the involvement of Pacific International Hotels for the lease of their apartments and the operation of the resort. But, that was not the true position. Mustara had ceased to be a subsidiary on 23 December 1999. And, as they understood the position, if Mustara failed they could still look to Pacific International Hotels to honour the promise for the full 10 years. Because cl 20.9 of the lease qualified their entitlement to look to Pacific International Hotels for payment, one means by which Mr Owers and Ms Tan-Bounkeua understood that the return would be assured, namely that Pacific International Hotels would be liable to pay it in full for the whole 10 year term, was falsified. Additionally, Austcorp's failure to correct the position in relation to Mustara not being a subsidiary of Pacific International also falsified the basis of the assurance. Representation (b): net rental return would be achieved through the lease of apartments to Pacific International Hotels for a term of 10 years with two 10 year options That was a key selling point. It worked on Mr Owers and Ms Tan-Bounkeua. They understood that from day one for 10 years they would receive that return. The promise of a guaranteed return was a prime consideration for them, as Austcorp understood it used this as its marketing strategy based on the experts assessment of each of Mr Walker (in his letter of 3 June 1999), Mr Chappell and Mr Hung. In Coluzzi [2002] NSWCA 74 at [57] Mason P observed of a similar representation, that it may be reasonable to make a qualified estimate or prediction but quite unreasonable to make "... an unqualified and firm prediction such as is conveyed by the word 'guaranteed' in the present context". That context was a guaranteed net 7% p.a. return on capital invested in a serviced apartment bought off the plan. The assurance, here, was no doubt reinforced by the understanding (unrealised because of cl 20.9) that the legal structure of the lease to the entity referred to as "Pacific International Hotels" and "Pacific International" in the promotional material would reflect these representations. Last, representation (e) was also predictive of the outcome of the investment. Its verification was dependent on what would transpire after the representation was made. The assessment of how the investment would turn out could only be made after the making of that representation.


case_text: 82(1) of the Act permits recovery by an applicant for loss or damage notwithstanding his, her or its failure to mitigate or contributory negligence unless the applicant's own carelessness or disregard of his, her or its interests is the cause of some or all of the loss or damage: Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 at 286G-287C per Fisher, Gummow and Lee JJ applying what French J had said in Pavich v Boira Nominees Pty Ltd [1988] ANZ Conv R 556 at p 23; see too Sykes v Reserve Bank of Australia (1998) 88 FCR 511 at 517B-E per Heerey J, Sundberg J agreeing at 521F. The misrepresentations were a link in the causal chain between Mr Owers' entry into the transaction and his loss: cf: Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at 469 [14] per Gleeson CJ. At best, from Austcorp's perspective, there may have been two concurrent causes of the imprudent decisions of Mr Owers and Ms Tan-Bounkeua to buy their apartments and lease them to Mustara. Austcorp's conduct was one of the causes, the other being those applicants' failure to receive legal advice exposing to them the effect of cl 20.9. 3.1 THE APPLICANTS 3.1.1 BRIAN OWERS Austcorp argued that none of representations (a)-(e) and (h) were with respect to future matters. In Sykes 88 FCR at 514D-515A Heerey J and at 519F-520D Sundberg J (see too per Emmett J at 535B) approved what Hill J had said in Ting v Blanche [1993] FCA 524 ; (1993) 118 ALR 543 at 552-553. Hill J, as an example, suggested that a representation as to future rental will be with respect to a future matter although it may at the same time be a representation as to the maker's state of mind. The context and circumstances in which a representation is conveyed will affect its characterisation for the purposes of s 51A: Sykes 88 FCR at 521E per Sundberg J, 535B-E per Emmett J.


case_outcome: applied

case_text: serious act of an investor signing and exchanging such a document knowing that it related to an interest in property, in general, will operate to bind the purchaser to the terms of the contract: Toll (FGCT) Pty Ltd v Alphapharm [2004] HCA 52 ; (2004) 219 CLR 165 at 182 [47] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ. The act of signature ordinarily conveys a representation that the person signing either has read and approved the contents of the document or is willing to take the chance of being bound by the contents whatever they may be: Toll 219 CLR at 180-181 [45]. Where the person who signs a contract to purchase an interest in property has a solicitor acting for him or her on the transaction, this representation will ordinarily be enhanced by the addition of the fact that the solicitor will have considered and advised his or her client on the legal effect of the document. Of course, where fraud or misrepresentation has operated to affect the contracting party's decision to sign, the Court may find that he or she will not be bound by the contract or the effect of the signature: Toll 219 CLR at 181 [46]. One reason for this is that the effect of the misapprehension induced, or caused, by the fraud or misrepresentation may have caused the innocent party either not to advert to a subject matter in the contract, at all, or to understand it in a sense different to that induced by the misapprehension. In other words, the effect of the misapprehension may affect the context in which the contract or document is understood by the person who signs it. Just as the construction of a contract is affected by the objective matrix of facts known to both parties, so too, a misapprehension induced or caused by fraud or misrepresentation will affect the quality of the assent ordinarily evinced by a signature.


case_title: Travel Compensation Fund v Tambree [2005] HCA 69 ; (2006) 224 CLR 627

case_text: a person claims to recover loss or damage under s 82(1) of the Act, the question of causation is whether he, she or it has suffered that loss or damage "... by conduct of another person that was done in contravention of ..." here, relevantly, s 52. In Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525 Mason CJ, Dawson, Gaudron and McHugh JJ said that the word "by" as used in s 82(1) clearly expressed the notion of causation without defining or elucidating it. They held that, in general, this required using the common law practical, or common-sense, concept of causation unless the provisions of the Act operated to modify or supplement that concept. They said that where the claim under s 82(1) was to recover for loss or damage by misleading conduct consisting of misrepresentations done in contravention of s 52(1) , as at common law, "... acts done by the representee in reliance on the misrepresentation constitute a sufficient connexion to satisfy the concept of causation": see too Travel Compensation Fund v Tambree [2005] HCA 69 ; (2005) 224 CLR 627 at 639 [30] per Gleeson CJ, 642-643 [44]-[49] per Gummow and Hayne JJ, 645-647 [53]-[60] per Kirby J, 653-654 [78]-[81] per Callinan J.


case_text: argued that none of representations (a)-(e) and (h) were with respect to future matters. In Sykes 88 FCR at 514D-515A Heerey J and at 519F-520D Sundberg J (see too per Emmett J at 535B) approved what Hill J had said in Ting v Blanche [1993] FCA 524 ; (1993) 118 ALR 543 at 552-553. Hill J, as an example, suggested that a representation as to future rental will be with respect to a future matter although it may at the same time be a representation as to the maker's state of mind. The context and circumstances in which a representation is conveyed will affect its characterisation for the purposes of s 51A: Sykes 88 FCR at 521E per Sundberg J, 535B-E per Emmett J.


case_text: value is not a value arrived at by an ill informed market. The test was stated by Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5 ; (2008) 233 CLR 259 at 276-277 [51] as: "Value is determined by forming an opinion as to what a willing purchaser will pay and a not unwilling vendor will receive for the property ( Spencer v The Commonwealth (1907) 5 CLR 418). In determining that value, there must be attributed to the parties a knowledge of all matters that affect its value. Those matters will include the predicted impact of future events as well as the experience of the past and the rates of return on other investments. As Isaacs J pointed out in Spencer v The Commonwealth ((1907) 5 CLR 418 at 441): 'We must further suppose both to be perfectly acquainted with the land, and cognisant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property. (Emphasis added.)' The market for the property is, therefore, assumed to be an efficient market in which buyers and sellers have access to all currently available information that affects the property ." (final emphasis added) I am of opinion that prior to recent times the market was operating in an inefficient manner. Initially, the market was created and affected, in part, by the misleading and deceptive representations. These attributed to apartments in the resort an aura of being good, solid investments with the prospect of a guaranteed return for many years. After Mustara's collapse, a substantial number of sales occurred at higher price levels which have not been sustained since 2004. Even then, as Mr Dupont's analysis showed, from 2000 to 2004 the rise in sale prices for apartments in the resort was around 40% to 50%, while the rise of 84% in Wyong Shire for that period was substantially greater. Thus there was some, but not a full, appreciation that the value of an apartment in the resort was not as good as in the general area. But the subsequent drop of prices to levels generally materially below the original purchase prices off the plan, demonstrates that the market was not operating efficiently before this later time. Mr Dupont concluded that by March 2008 the value of apartments, based on the latest sales, had fallen to around 20% below their 2000 level while median apartment prices in Wyong Shire had increased 55% in the same period. I accept that evidence. I am satisfied that the present level of prices reflects the true value now of the apartments. The consequence is stark. The real value of the applicants' original investments in comparison to similar property in the surrounding area has decreased markedly over the eight or more years since they entered into their contracts to purchase. That decrease and its very different direction to the significant increase in value of immediately surrounding properties were not explained by any evidence. I discount the suggestion made to Mr Owers of a concern that some costly remedial work may be needed for the resort. There was no evidence of what that was or of any effect on the value of the apartments. No expert referred to it and I am not satisfied that, whatever the basis of the concern conveyed to Mr Owers was, it affords any explanation of this marked decrease in the market price of apartments in the resort. It is because this extraordinary reduction in prices for apartments in the resort has occurred but has not been otherwise explained on the evidence, that I reject Mr Tew's direct comparison approach between other sales of properties in the resort and the applicants' apartments as an appropriate way of valuing them at an earlier time than the present. Those earlier prices, while genuine market prices, did not reflect the true value of the apartments. I find that the market was not then operating as an efficient market: cf: Walker Corporation 233 CLR at 276-277 [51]. It may be that the purchasers who paid increased prices for apartments in the resort from the time of Mustara's demise till the current trend emerged were acting under a misconception that there was a real prospect of capital growth. But, even then those prices were generally significantly less than the increase in median prices in the immediate area. This is a sure indication that the values in the resort were affected by some factor outside ordinary market forces: i.e. by factors other than those bearing on the true value of the apartments. Significant (as opposed to normal market) capital growth was not a real possibility for these particular properties. They were in a resort with substantive restrictions on their use, either as a long-term residence for their owners or when let short term to other individuals. They had to be part of a resort complex if they were to be likely to earn any shorter term significant investment return. But the actual operations of the resort have been desultory compared to what was necessary in order to support a net return paid by a lessee over 10 years of 7% of the purchase price. I am satisfied, having considered the evidence for myself, that the true value of the apartments in the resort at the time each applicant purchased is better reflected by reference to the current and more recent sale prices. Since these are materially less than the purchase prices some seven to eight years later, I am satisfied that each of the applicants acquired on completion of their purchase an apartment which was worth less than what was paid for it. I prefer Mr Dupont's adoption of a capitalisation approach as opposed to Mr Tew's comparable sales approach. However, the methodology each valuer used and his reasoning process do not enable me to adopt either's ultimate valuation using their respective approaches. The market in 1999 and 2000 ascribed values to apartments in the resort that were distorted by the effect of the misrepresentations, including the earlier assurances by Landillo of guaranteed returns of 8%, then 7.5% (before Austcorp's involvement) and finally 7%p.a.


case_title: Walplan Pty Ltd v Wallace [1985] FCA 479 ; (1985) 8 FCR 27


case_title: Wardley Australia v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514

case_text: a person claims to recover loss or damage under s 82(1) of the Act, the question of causation is whether he, she or it has suffered that loss or damage "... by conduct of another person that was done in contravention of ..." here, relevantly, s 52. In Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525 Mason CJ, Dawson, Gaudron and McHugh JJ said that the word "by" as used in s 82(1) clearly expressed the notion of causation without defining or elucidating it. They held that, in general, this required using the common law practical, or common-sense, concept of causation unless the provisions of the Act operated to modify or supplement that concept. They said that where the claim under s 82(1) was to recover for loss or damage by misleading conduct consisting of misrepresentations done in contravention of s 52(1) , as at common law, "... acts done by the representee in reliance on the misrepresentation constitute a sufficient connexion to satisfy the concept of causation": see too Travel Compensation Fund v Tambree [2005] HCA 69 ; (2005) 224 CLR 627 at 639 [30] per Gleeson CJ, 642-643 [44]-[49] per Gummow and Hayne JJ, 645-647 [53]-[60] per Kirby J, 653-654 [78]-[81] per Callinan J. Until 1 August 2000 the applicants had only a contingency of suffering loss depending on whether they completed their contracts. The economic interest of the applicants that would be infringed by Austcorp's misleading conduct was their obligation to complete their purchase consequent upon the registration of the strata plan and the loss of their right to rescind: Wardley 175 CLR at 532-533 per Mason CJ, Dawson Gaudron and McHugh JJ. Austcorp contended that this analysis overlooked the liability for legal costs before 1 August 2000 that the applicants (other than Ms Tan-Bounkeua) incurred. I reject that argument. First, Austcorp did not plead those matters as material facts. Secondly, the applicants in any event may have incurred a contingent liability for the legal costs of receiving advice on whether or not to enter into the contract. No solicitor rendered an invoice for those fees before 1 August 2000 and, thus, the applicants had no legal obligation to pay those fees before that date. Had Mr Owers been advised not to enter into the contract or of the effect of cl 20.9, he would have followed the advice. There is no evidence whether he would have been charged by Mr Joseph for the advice. The question was not in issue. Next, Austcorp argued that Luciani/Taldarmar had incurred legal fees of $1,700 as at 7 February 2000. However, Shephard & Shephard, in the course of giving their fee estimate on that date advised, them that they would charge that amount for acting on the purchase. Shephard & Shephard only invoiced that sum on 15 December 2000, being the day when the contract was completed. On 7 February 2000 Shephard & Shephard had asked only for a sum of $200 on account of anticipated immediate disbursements. I am not satisfied payment of this sum (if it were paid) would amount to loss or damage, since it was sought to enable the solicitors to investigate and advise upon whether the applicants should go ahead with the purchase by binding themselves to a contract. That is, the expense would have been incurred in investigating whether the applicants could rely on Austcorp's representations. The applicants' claim was for damage caused by their entry into contracts which they became obliged to complete only on 1 August 2000. That was the first occasion of any relevant infringement of the applicants' economic interests, for they were then legally obliged to pay the price which the wrongdoer (misrepresentor) had misled them to agree to pay: Wardley 175 CLR at 533. In Wardley 175 CLR at 527 Mason CJ, Dawson, Gaudron and McHugh JJ explained the distinction between detriment, in a general sense, and damage suffered on entry into an agreement induced by a misrepresentation which is, or proves to be, to an applicant's disadvantage. The applicant will sustain a detriment in a general sense because the agreement subjects him, her or it to obligations and liabilities which exceed the value or worth of the benefits which it conferred on that person. But such a detriment will not necessarily amount to more than a contingency of future loss. In general, it is only when the contingency is fulfilled that an applicant will be found to have suffered loss or damage sufficient to infringe his, her or its economic interests for the purposes of an action under s 82(1): Wardley 175 CLR at 533. It is self-evident that the applicants would not have been able to sue for damages in respect of the losses they claim here before they completed or were legally bound to complete their contracts. Risk of loss is not actual loss. The mere entry into the contract did not, of itself, require each applicant to complete it since that obligation would only arise, or be able to be enforced by or against the applicant, once the strata plan was registered: Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 216 CLR 388 at 407-409 [46] - [54] . In Karedis Enterprises Pty Ltd v Antoniou (1995) 59 FCR 35 at 43C-D Burchett and Hill JJ (Sackville J agreed at 45C; see too at 48E) held that where a lessee had been induced by the lessor's misrepresentations as to takings into entering into a lease, the question for limitation purposes was " ... when was it that the loss which the [applicants] ultimately suffered (or a more than negligible part of it ) was either ascertained by them or reasonably ascertainable? " But, in any event, the relevant loss or damage that the applicants claimed under s 82 of the Act was that "by" Austcorp's contravention of s 52 they paid Landillo more for their apartments than they were worth: Wardley 175 CLR at 527, 532-533. I am of opinion that Mr Owers and Ms Tan-Bounkeau are not prevented by s 82(2) from recovering that loss The parties agreed (by the end of final address) the quantum of damages (before interest) that would be recoverable as expenditures incurred (other than the loss of value on the purchase price which I dealt with under the heading "Valuation") if the applicants succeeded except in two respects concerning Mr Owers. These were: (a) whether he made a recoverable loss since, after paying $48,837 more than he earned in returns from the apartment, Mr Owers obtained taxation deductions which left him a net $2,335 better off; (b) whether Mr Owers should recover damages on the $33,000 deposit that he paid from his bank account and did not borrow. (a) Tax benefits In final address Austcorp accepted that up to 31 March 2008 Ms Tan-Bounkeua and Luciani/Taldarmar had incurred agreed amounts that they would not have spent or become liable to pay as a result of their financing the acquisition of their apartments. Those amounts were agreed by the parties' expert accountant witnesses in a joint report. On this basis, Ms Tan-Bounkeua had incurred a loss of $52,473 and Luciani/Taldarmar had incurred a loss of $116,868. This recognised that those applicants had incurred these losses before taking account of income tax deductions or benefits which they obtained in consequence of their expenditures included in the total sums. The parties accepted that any taxation consequences for those applicants were not relevant to the amount of damages to which they were entitled. The individual applicants will have to deal with the taxation consequences of any award in due course.


case_text: reject this argument. First, Austcorp was not a party to the contract or disclosure statement even if it were the puppet master behind them. Secondly, a corporation cannot engage in a contravention of s 52 of the Act and then seek to excuse itself from liability to relief being granted against it under Part VI on the basis that it, or another person, has sought to negate the effect of the contravention by provisions like cl 39 or the disclosure statement without, at least, making full, intelligible, and frank disclosure of the true position so as to negate its earlier contravention. Thirdly, in honest trade and commerce contractual exclusions like cl 39 and documents like the disclosure statement may have some effect. The courts have recognised that they may be given effect, depending on all the circumstances, as evidentiary of the complaining party's state of mind having been disabused of any relevant misleading or deceptive conduct: cf: Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd [2005] WASCA 174 ; (2005) 224 ALR 134 at 147-148 [59] - [60] per Steytler P, 164 [133] per McLure JA and 164-165 [135]-[141] per Pullin JA.


case_title: Watson v Foxman (1995) 49 NSWLR 315

case_text: each of the applicants who gave evidence and Messrs Chappell and Hung were giving an account of events that happened years before and about which they had not given much, if any, thought until recently for the purpose of this litigation. I agree with the caution expressed by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319 concerning evidence of this kind. He said: "Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience." Austcorp argued that, to varying degrees, the applicants' oral evidence of their continuing reliance on the representations complained of at the time they executed or completed the contracts and leases should be discounted or rejected. It claimed that the important nature of the transactions and the fact that a solicitor could be expected to explain the contractual documents accurately, so as to dispel any misapprehension or misrepresentation, weighed against a finding that the representations complained of were relied on at all by the time of execution or completion. And, Austcorp argued that the failure of the applicants, other than Ms Tan Bounkeua (who had no solicitor), to call the solicitor acting for them was a powerful factor undermining the reliability of their evidence. Here, however, there is the objective evidence of the contents of the brochure and other promotional material (including the unchallenged, and inherently likely evidence of Mr Walker's repetition and reinforcement of its messages in his discussions with each applicant). There is no doubt that these conveyed the powerful messages of assurance and success of the investment contained in the representations. In general, these factors lend force to the applicants' claims that the representations were relied on by them at the time they entered into their contracts, completed them and executed their leases. I will, of course, consider each applicant's individual circumstances separately below. But, as a matter of ordinary human experience, powerful marketing messages tend to have a sustained effect. Although the representator did not remove the effect of the misrepresentations, I am satisfied that Mr and Mrs Di Giulio and Mr Luciani turned their mind to these questions and considered the advice from each of Mr Dunn and Mr Fullerton carefully before taking a considered but deliberate risk to proceed with the investment based on their own confidence in the outcome. This is a particularly apposite instance of the need for the exercise of caution, expressed by McLelland CJ in Eq in Watson v Foxman 49 NSWLR at 318-319, in accepting evidence of persons claiming many years later to have been misled by representations in entering into a contract. Mrs Di Giulio was emphatic that she was not aware that the guarantee by Pacific International Hotels was limited to 12 months worth of rent as opposed to 10 years. She said: "Well, there's a big difference from 10 years to 12 months. This was suppose to be a solid future investment, not something that was suppose to be for 12 months and we weren't told that at the time . It wasn't said here in the brochures or the leaflet, it wasn't told by Warren Walker and, you know, our solicitors reassured us everything would be okay . When you say solicitors reassured you that everything would be OK, what are you referring to? --- That it would be a solid future investment to, you know, to carry on with that ." (emphasis added) She denied that she was aware of the 12 months limitation and said: "It wouldn't be logical to go into something that' s 12 months when you're thinking of a future investment."


case_title: Webb v Bloch (1928) 41 CLR 331

case_text: Chappell wrote much of the wording of the brochure. He wrote letters to the investors saying that Austcorp was the developer. While he may not have done this with any intention to mislead people, he did it to publicise the fact that Austcorp was the active parent company responsible for the Austcorp group's overall development activities throughout Australia, including that of the resort. Austcorp was prepared to allow a loose and ambiguous representation, connecting Austcorp with the development, to be made in the brochure. In my opinion, this is a case where it is clear that any Austcorp company which in fact had an association with the development could be taken to have published the brochure: Webb v Bloch (1928) 41 CLR 331 at 363-366 per Issacs J; see also Abigail v Lapin [1934] UKPCHCA 1 ; (1934) 51 CLR 58 at 70-71 per Lord Wright.


case_text: it appears on the objective material here, that Austcorp was not involved in its dealings with third parties as a mere agent or conduit for a separate and disclosed, or undisclosed, principal. Its chosen method of doing business is likely to have made Austcorp a principal in many transactions it effected for the purposes of the project because it does not appear to have disclosed any intention to contract as an agent. When Mr Chappell or Mr Hung made decisions, wearing their Austcorp hats, their position was distinguishable from that of acting as an agent for an Austcorp subsidiary. In Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661 at 666 Mason ACJ, Wilson, Deane and Dawson JJ said: "... even though a corporation acts honestly and reasonably, it may nonetheless engage in conduct that is misleading or deceptive or is likely to mislead or deceive: .... That does not, however, mean that a corporation which purports to do no more than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false. If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive." (references omitted)


case_outcome: discussed

case_text: The authorities on the scope of "reasonable excuse" as a ground of exculpation from the operation of a statutory prescription were comprehensively analysed and explained by Hely J in Bank of Valletta PLC v National Crime Authority (1999) 164 ALR 45 at [36] ff. 79 Justice Hely's explanation of the authorities indicates that the proper construction of "reasonable excuse" in s 219 is consistent with the view taken by Mr Magarey, as set out at [61]. That is to say, the person seeking to rely upon it must establish some particular prejudice which is sufficient to displace the assumption of compliance with the summons. 80 In Valletta , Hely J referred to authorities of the High Court, the New South Wales Court of Appeal and the Privy Council. Three propositions may be gleaned from his Honour's analysis of those authorities. 81 First, the question of what constitutes "reasonable excuse" is to be determined from the terms and structure of the particular statute and the circumstances of each particular case: Valletta at [39], [47]. 82 Second, reasonable excuse is not confined to physical or practical difficulties in complying with the statutory prescription. It includes any excuse which would be accepted by a reasonable person as sufficient to justify non-compliance, but it is necessary to bear in mind the importance of the particular statutory prescription to the overall statutory regime: Valletta at [42]. 83 Third, the question of what constitutes reasonable excuse involves an objective determination in all the circumstances. These include the adverse consequences to an individual of being compelled to answer and the adverse consequences to an inquiry if the questions are not answered: Valletta at [44], [47]. 84 Applying these principles, it is quite plain that reliance on legal advice as a ground of reasonable excuse would be inconsistent with the statutory scheme contained in particular in s 1292 of the Corporations Act and ss 68 , 217 and 219 of the ASIC Act . 85 The primary function of the Board is to hear disciplinary proceedings brought by ASIC in respect of auditors and liquidators. Privilege against self-incrimination and privilege against exposure to a penalty do not constitute reasonable excuse for failing to answer. It seems to me that the Board's statutory functions would be rendered otiose if reliance on legal advice were to constitute reasonable excuse.


case_text: In my view, support for this proposition is to be found in the remarks of the High Court in Ostrowski v Palmer [2004] HCA 30 ; (2004) 218 CLR 493 at [2] per Gleeson CJ and Kirby J; at [53] [54] per McHugh J; and at [85] per Callinan and Heydon JJ. 87 The point was put in strong terms by Callinan and Heydon JJ at [85] as follows: A mockery would be made of the criminal law if accused persons could rely on, for example, erroneous legal advice, or their own often self-serving understanding of the law as an excuse for breaking it... 88 It is true that in Ostrowski their Honours were concerned with s 24 of the Criminal Code (WA) which applied to mistakes about the factual ingredients of an offence, not mistakes about the existence of the law creating the offence, or to the question of reasonable excuse. However, the approach stated by their Honours is applicable by analogy in the present context.


case_text: In Re Modern Woodcraft Pty Limited (In Liquidation) (1997) 75 FCR 245 at 253-254, Lindgren J appears to have considered that reliance on legal advice was reasonable excuse for failure to file affidavits within the time limited for the purpose of s 597A(3) of the Corporations Law . Nevertheless, for the reasons stated by his Honour at 254, that decision is confined to its own facts. 90 The Court's jurisdiction is enlivened under s 219(7) of the ASIC Act . That sub-section falls to be considered in its own terms, in its full statutory context. 91 Section 219(7) is in the nature of a contempt proceeding. It provides that if the Court is satisfied that the person to whom a certificate has been given has "without reasonable excuse" failed to comply with a requirement stated in the certificate, the Court may punish the person "in the same manner as if he or she had been guilty of contempt."


case_outcome: referred to

case_text: In Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 534, 545, the High Court said that proceedings for contempt must be seen as criminal in nature. It follows that charges must be proved to the criminal standard. It does not follow that every provision of the Criminal Code is imported into the proceeding. 93 The note under s 219(2A) of the ASIC Act refers to s 13.3 of the Criminal Code in an aid to the construction of s 219(7) and part of the statutory context: Pearce, D C & Geddes, R S, Statutory Interpretation in Australia (6 th ed, LexisNexis Butterworths, 2006) at [4.49]. But it does not follow from this that the provisions of Ch 2 of the Criminal Code dealing with the General Principles of Criminal Responsibility are applicable. 94 As the learned authors of Federal Criminal Law (LexisNexis Butterworths, 1994) observe at [5A-015] observe: The essence of Ch 2 of the Criminal Code is to do away with the concepts of actus reus and mens rea and to replace them with a mechanism requiring all federal offences to be divided up...into so-called "physical" and "fault" elements.


case_text: rationale for the exercise of the contempt power is "to protect the effective administration of justice by demonstrating that the Court's orders will be enforced": AMIEU v Mudginberri Station Pty Ltd [1986] HCA 46 ; (1986) 161 CLR 98 at 107. There is "a public interest in the exercise of the contempt power in cases of disobedience to an order": Mudginberri Station [1986] HCA 46 ; 161 CLR 98 at 107. The law recognises a distinction between civil and criminal contempts. A civil contempt usually involves disobedience to a court order or breach of an undertaking. On the other hand, a criminal contempt is committed where there is contempt in the face of the court or an interference with the administration of justice. In Mudginberri Station [1986] HCA 46 ; 161 CLR 98 at 108, Gibbs CJ, Mason, Wilson and Deane JJ said: When the defendant's disobedience is casual it may readily appear that the primary purpose of exercising the power is to vindicate the plaintiffs' rights. On the other hand, when the disobedience is accompanied by public defiance it may as readily be seen that the primary purpose of exercising the power is the vindication of the court's authority. But the classification in terms of primary purpose is a more complex and artificial undertaking when the punishment is for wilful disobedience unaccompanied by defiance. There is, accordingly, much to be said for the view that all contempts should be punished as if they are quasi criminal in character, notwithstanding the adoption of the contrary view by some members of this Court in the decisions to which we have already referred. A civil contempt may be classed as a criminal contempt if there has been a contumacious defiance of the Court's order or an undertaking given to the Court: Mudginberri Station [1986] HCA 46 ; 161 CLR 98 at 108. The applicant contends that the respondent's conduct is contumacious and in deliberate defiance of the September 2002 orders and the November 2007 undertaking. In those circumstances, it was put that the respondent's conduct must be characterised as criminal contempt because "it occurs in circumstances where the conduct amounted to public defiance, involves a public injury and this calls into play a penal disciplinary jurisdiction to deal with criminal contempt": Mudginberri Station [1986] HCA 46 ; 161 CLR 98 at 108. In discharging the onus of proof, the applicant must establish beyond reasonable doubt that the respondent had knowledge of the order or undertaking and voluntarily did an act or omitted to do an act in breach of that order or undertaking. A party must comply strictly with an order that requires the party to do something or to refrain from doing something. The course of the trial Dr Toben was represented by counsel. I adopted the procedure of having the charges read over to Dr Toben. He pleaded not guilty to each of the 28 charges. I should address the question of contumacy because it is important in classifying the contempt and in considering any penalty to determine whether the disobedience to the order has been wilful or contumacious: Mudginberri Station [1986] HCA 46 ; 161 CLR 98 at 105-107 and 111-113. I am satisfied beyond reasonable doubt that the separate publications on the Adelaide Institute website of the material which has established each of the charges which I have found proven was wilful and contumacious. The fact that the AI Document has appeared regularly on the Adelaide Institute website on each of the days accessed and can be accessed through a number of the Adelaide Institute newsletters is evidence of a wilful and contumacious disobedience of the September 2002 orders and the November 2007 undertaking. Moreover, the number of statements which have been identified by the applicant in support of the charges giving rise to the imputations, in particular imputations 1 and 2 of the September 2002 orders which I have found proven on the various dates upon which the Adelaide Institute website was accessed, shows a wilful and contumacious disregard of the September 2002 orders and the November 2007 undertaking.


case_text: Attorney-General v Punch Ltd [2002] UKHL 50 ; (2003) 1 All ER 289 , Lord Nicholls said at [35]: An interlocutory injunction, like any other injunction, must be expressed in terms which are clear and certain. The injunction must define precisely what acts are prohibited. The Court must ensure that the language of its order makes it plain what is permitted and what is prohibited. This is a well-established, soundly based principle. The person should not be put at risk of being in contempt of court by an ambiguous prohibition, or a prohibition the scope of which is obviously open to dispute. It was argued that the September 2002 orders were imprecise and vague in that in paragraph 3 of the orders reference was made to "substantially similar content to the document 'About the Adelaide Institute'". It was contended that the form of order required the respondent to make a subjective assessment of what might be substantially similar content to that which was contained in the document "About the Adelaide Institute". It was contended that in those circumstances the order was so vague that it should not be the subject matter of contempt proceedings.


case_text: Attorney-General v Times Newspapers [1974] AC 273 at 309, Lord Diplock said: Contempt of court is punishable because it undermines the confidence not only of the parties to the particular litigation but also of the public as potential suitors, in the due administration of justice by the established courts of law.


case_text: The King v Metal Trades Employers Association; Ex parte Amalgamated Engineering Union, Australian Section [1951] HCA 3 ; (1951) 82 CLR 208 at 243 Latham CJ said, "Wilful disobedience to an order of the Court is contempt of a criminal nature." In Australian Consolidated Press Ltd v Morgan [1965] HCA 21 ; (1965) 112 CLR 483 at 489, Barwick CJ said: A contempt in procedure by disobedience of an order of the Court or by breach of an undertaking given to it may be accompanied by such contumacy or defiance on the part of the party against whom the contempt proceedings are brought as evidences a criminal as well as a civil contempt.


case_text: 135 of the Evidence Act applies to both criminal and civil trials. It permits the Court to refuse to admit evidence if the probative value of the evidence is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the party against whom the evidence is sought to be tendered. It seems to me the unguarded admissions made by a party which are sought to be used for the purpose of proving the party to be in contempt of Court and therefore liable to be imprisoned could be unfairly prejudicial to that party. They might, if admitted, mean that that party is put at a forensic disadvantage by having to give evidence to explain the admissions where otherwise that party would choose not to give evidence. The Courts have said the inability to cross-examine on material sought to be adduced in a civil trial may attract the discretion in s 135: Bakerland Pty Ltd v Coleridge [2002] NSWCA 30 at [55] ; Longhurst v Hunt [2004] NSWCA 91 at [46] - [49] .


case_text: course, the November 2007 undertaking is in a different class. The respondent gave the undertaking himself. He has always been aware of that undertaking and its effect. So much is clear from his attempting to resile from the undertaking. An undertaking given to the Court is punishable in the same way as if it were an order of the Court. It is a contempt to breach an undertaking the same as it is to disobey an order of the Court: Biba Ltd v Stratford Investments Ltd [1973] Ch 281 ; Windsurfing International Inc v Sailboard Australia Pty Ltd [1986] FCA 384 ; (1986) 19 FCR 110. A breach of an undertaking will involve the same consequences for the party in breach as disobedience of an order of the Court: Milburn v Newton Colliery (1908) 52 S.J. 317. Where the undertaking is given to the Court by the person who is to be bound by the undertaking, the undertaking does not need to be served upon that person before contempt proceedings for a breach of that undertaking are commenced. Order 37 rule 3 only applies to orders, not undertakings: Windsurfing International Inc v Sailboard Australia Pty Ltd [1986] FCA 384 ; 19 FCR 110. Separate charges for breaches of the September 2002 orders and the November 2007 undertaking


case_text: her Honour found that the respondent controlled the Adelaide Institute and thereby was responsible for its actions, and for the material which was published on the Adelaide Institute's websites. She found that the material contained in the AI Document conveyed the imputations which were the subject matters of the orders mentioned above. She found that publishing material on a website which is not password protected had the effect of communicating that information to the public. Such publication allows persons who access the website with a browser to view the material. Her Honour described how the material moves through the World Wide Web by relying on the description given in the Canadian Human Rights Tribunal in Citron v Zündel (No 4) (2002) 41 CHRR D/74 at [60]: The Internet is a means of global communication that relies on a universal set of protocols or standards for the transmission of information. Two related sets of communication instructions, Transmission Control Protocol, (TCP) and Internet Protocol, (IP), govern how information will move through the system, defining addresses, routing systems, and all the regulation necessary to permit communication among users. Her Honour also relied on the Tribunal's description of the World Wide Web at [67]: The World Wide Web, (the "Web"), is a specific application that uses the Internet to send and display data, including text, graphics, audio and video. There are two active components on the Web: a server that stores and transmits information, and a client or browser that requests, receives and displays the information obtained from the server. A "web site" is a collection of computer files that are coded in a specific way ... to allow information to be sent on request to a browser. The files are then displayed in a way consistent with the instructions provided by the creator of the web site. Every web site has a unique Uniform Resource Locator (URL), akin to their Internet address. Once connected to the Internet, the URL ... is necessary to gain access to a given web site ... Her Honour found that publication of the AI Document on the World Wide Web amounted to conduct which was rendered unlawful by the Racial Discrimination Act and made a declaration accordingly. Her Honour found that the AI Document and other material published by the respondent on the World Wide Web conveyed the imputations in paragraph 2 of the September 2002 orders. Her Honour found that the first and second imputations would engender feelings of hurt and pain within members of the Jewish Community who would, by reason of the publication, consider themselves being treated contemptuously, disrespectfully and offensively. She also found that the third and fourth imputations would offend, insult, hurt and wound members of the Jewish Community and engender the same senses. The judge found that the publication of the AI Document was unlawful under s 18C of the Racial Discrimination Act and that it was published because of the ethnic origin of the people in the group identified in the document, namely Jews and it was an act reasonably likely to humiliate and intimidate Jewish people. The judge found that the respondent had not established any exceptions under s 18D of the Racial Discrimination Act . Her Honour made a permanent injunction restraining the respondent first, from publishing to the public on the World Wide Web the AI Document or any document with substantially similar content to that document; and secondly, from publishing any material which would convey the imputations which she had previously found to be unlawful. The respondent's reaction The respondent appealed against the September 2002 orders. The respondent deleted all material on the website within the time prescribed by paragraph 1 of her Honour's orders. That action indicates an awareness of the September 2002 orders. However, some time before 23 September 2002, the material which was contained in the AI Document was again published on the same website. On 14 December 2002 the respondent attended the 3 rd International Historical Revisionism Conference in Italy and published further material on the website. On 5 February 2003 the respondent entered the September 2002 orders. Initially the respondent argued that the sealed order now on file did not reflect her Honour's reasons but that argument was abandoned. The respondent's appeal On 22 April 2003 the respondent filed an amended notice of appeal against the September 2002 orders. The notice of appeal did not challenge the finding made by Branson J that publication of the material was conduct which was rendered unlawful by s 18C of the Racial Discrimination Act , being conduct which was reasonably likely in all the circumstances to offend, insult, humiliate and intimidate the groups or persons identified by her Honour. Three matters were argued on the appeal. First, that Part IIA of the Racial Discrimination Act was unconstitutional. Secondly, the material which had been published on the website did not have a sufficient degree of causal connection with race, colour or national or ethnic origin as required by s 18C of the Racial Discrimination Act . Thirdly, the published material fell within the exemption to the provisions of Part IIA in s 18D. In May 2003, at or about the time the matter was heard by the Full Court, the respondent published on the website "that the appeal would signal how strong the Jewish Zionist influence is in Australia's judiciary where a battle rages between common law and talmudic law." The Full Court dismissed the respondent's challenge to the validity of Part IIA of the Racial Discrimination Act . Carr and Kiefel JJ found that the provisions of Part IIA were supported by the external affairs power. Allsop J found that Part IIA , ss 18C and 18C (1)(b) "in its statutory context, are reasonably capable of being considered as appropriate and adopted to implement the obligations ... assumed by Australia" under the International Convention on the Elimination of All Forms of Racial Discrimination done at New York on 7 March 1966. The Full Court found that the AI Document was calculated to offend in itself those who maintain that the holocaust occurred and, in particular, Jewish people. It concluded at least one reason the AI Document was published was because of the race or ethnic origin of Jewish Australians. It found that the AI Document was deliberately provocative and inflammatory, and contrived to smear Jews. It rejected the respondent's contention that he was entitled to an exemption by reason of s 18D(b) which provides that s 18C does not render unlawful anything said or done reasonably and in good faith in the course of any publication made for genuine academic or other genuine purpose in the public interest. I disagree. The intention of the September 2002 orders is to prevent Dr Toben from continuing to engage in conduct that is rendered unlawful by s 18C of the Racial Discrimination Act . The September 2002 orders were designed to achieve that result in two ways. First, in paragraph 2 by requiring Dr Toben to remove from the Adelaide Institute website the AI Document and any other material which conveyed the imputations in paragraph 2(a)(iii). Branson J made that clear when she approved at [111] the approach taken by the Canadian Human Rights Tribunal which considered the utility of making any order in a similar case. In the case of Citron v Zündel 41 CHRR D/74, the Tribunal said at [300]: Any remedy awarded by this, or any Tribunal, will inevitably serve a number of purposes: prevention and elimination of discriminatory practises is only one of the outcomes flowing from an Order issued as a consequence of these proceedings. There is also a significant symbolic value in the public denunciation of the actions that are the subject of this complaint. Similarly, there is the potential educative and ultimately larger preventative benefit that can be achieved by open discussion of the principles enunciated in this or any Tribunal decision. Paragraph 3 of the orders was designed to ensure that once there had been compliance with paragraph 2 of the orders, conduct of the kind which gave rise to the declaration in paragraph 1 would not be repeated. To that end, paragraph 3 restrains Dr Toben from publishing the AI Document anywhere on the World Wide Web and further restrains him from publishing material with substantially similar content to that document. It was necessary to include paragraph 3(b) because otherwise it might have been said by Dr Toben that he was entitled to publish on the World Wide Web information which was in slightly different form to that which was contained in the AI Document. Paragraph 3(c) of the orders is designed to reflect, insofar as future conduct is concerned, that which Dr Toben was obliged to remove from the World Wide Web website in accordance with paragraph 2(a)(iii). In my opinion, the orders are not imprecise or vague and uncertain. They do not become so because they require the party to whom they are directed to make a subjective assessment of the material which may be published on the World Wide Web.


case_text: was put by way of an alternative argument that the September 2002 orders ought to be construed as not intending to deny Dr Toben his right of free speech which was said to be given him by s 18D of the Racial Discrimination Act . Mr Perkins relied upon Evans v New South Wales [2008] FCAFC 130 ; (2008) 168 FCR 576. In that case, the Full Court of this Court held regulations made under the World Youth Day Regulation 2008 (NSW) which were in turn made under the World Youth Day Act 2006 (NSW) are invalid in that they impermissibly infringe freedom of speech. I do not think that directly impacts upon the proposition which was put by the respondent. I think the proposition that must be accepted is that the September 2002 orders were made for the purpose of preventing the respondent from engaging in conduct that is rendered unlawful by the Racial Discrimination Act . They ought to be construed in accordance with the provisions of that Act in the sense that Branson J would not have intended to make orders preventing the respondent from doing something which was otherwise lawful. The September 2002 orders ought to be understood as only preventing the respondent from doing something which is unlawful. The purpose of the orders was to require him to desist from further publications in contravention of the Racial Discrimination Act and requiring him to remove publications which had already been held to contravene the Racial Discrimination Act .


case_text: the respondent argued that Dr Toben was provoked by Mr Jones' publication in the Australian Jewish News to publishing the material which he did and breaching the undertaking. The respondent relied on Fig Tree Developments Ltd v Australian Property Custodial Holdings [2008] FCA 1041. I do not, with respect, think that that case stands for the proposition which was put. That case involved an application for discovery and the judge made some observations about a party having the right to apply to be released from an undertaking. But, in any event, there are a number of difficulties with this argument. First, the September 2002 orders and the November 2007 undertaking operated in their terms for all circumstances. Dr Toben was obliged to comply with the terms of paragraphs 2 and 3 of the September 2002 orders until such time as those orders were varied or revoked. If he thought that Mr Jones had said something that would have allowed him to respond, but for the orders to which he was subjected, he could have applied to the Court for a variation or revocation of those orders. He was not entitled for himself to ignore those orders. Secondly, there is no evidence that he responded as he did because of the provocation which he said was displayed by Mr Jones. His articles suggest that he thought he had some right to respond because of what was published in the Australian Jewish News but there is no evidence because he gave none that he was provoked into doing what he did. Thirdly, and in any event, intention is not an element that needs to be established by the moving party when that party seeks punishment for contempt by another party disobeying an order of the Court. For all of those reasons, those arguments fail.


case_text: ICI Australia Operations Pty Ltd v Trade Practices Commission [1992] FCA 474 ; (1992) 38 FCR 248 , Lockhart J (with whom Gummow J agreed and French J generally agreed) said at 259: Plainly injunctions should be granted in clear and unambiguous terms which leave no room for the persons to whom they are directed to wonder whether or not their future conduct falls within the scope or boundaries of the injunction. Contempt proceedings are not appropriate for the determination of questions of construction of the injunction or the aptness of the language in which they are framed. That decision was approved in Universal Music Australia Pty Ltd v Sharman Networks Ltd [2006] FCAFC 41.


case_text: the argument put does not assist the respondent in the proceeding because the respondent has not tendered any evidence at all and there is no evidence that would bring the respondent within s 18D of the Racial Discrimination Act . The onus was on the respondent to establish an entitlement to an exemption under s 18D of the Racial Discrimination Act : Jones v Scully [2002] FCA 1080 ; (2002) 120 FCR 243 at [127] and [230]. Next it was put that the Australian Citizenship Act 2007 (Cth) (the Citizenship Act) has the effect of rendering the September 2002 orders nugatory. It was not explained what was meant by the term "rendering the order nugatory" but unless the Citizenship Act had the effect of discharging or revoking the September 2002 orders then the orders would continue to stand. Mr Perkins relied upon the preamble in the Citizenship Act which provides: The Parliament recognises that Australian citizenship represents full and formal membership of the community of the Commonwealth of Australia, and Australian citizenship is a common bond, involving reciprocal rights and obligations, uniting all Australians, while respecting their diversity. The Parliament recognises that persons conferred Australian citizenship enjoy these rights and undertake to accept these obligations: (a) by pledging loyalty to Australia and its people; and (b) by sharing their democratic beliefs; and (c) by respecting their rights and liberties; and (d) by upholding and obeying the laws of Australia.


case_title: Longhurst v Hunt [2004] NSWCA 91


case_title: Milburn v Newton Colliery (1908) 52 S.J. 317 Roach v Electoral Commission [2007] HCA 43 ; (2007) 233 CLR 162

case_text: relied upon Roach v Electoral Commission [2007] HCA 43 ; (2007) 233 CLR 162. That case was concerned with provisions of the Electoral Act 1918 (Cth) which disqualified as voters at federal elections persons who were serving sentences of imprisonment regardless of duration for offences against the laws of the Commonwealth, a State or a Territory. In the course of his reasons, Gleeson CJ said at [12]: The preamble to the Australian Citizenship Act 2007 (Cth) declares that Parliament recognises that Australian citizenship represents full and formal membership of the community of the Commonwealth of Australia, and the Australian citizenship is a common bond, involving reciprocal rights and obligations. The reference to the reciprocity of rights and obligations is important in the context of membership of the community. Serious offending may warrant temporary suspension of one of the rights of membership, that is, the right to vote. Emphasis upon civic responsibilities a the corollary of political rights and freedoms, and upon society's legitimate interest in promoting recognition of responsibilities as well as acknowledgment of rights, has been influential in contemporary legal explanation of exclusions from the franchise as consistent with the idea of universal adult suffrage. In my opinion, those remarks have no relevance to the issues under consideration. Dr Toben has not been deprived of any rights attaching to citizenship. The declaration in paragraph 1 of the September 2002 orders is that the respondent in publishing the AI Document engaged in conduct rendered unlawful by Part IIA of the Racial Discrimination Act . The injunctions in paragraph 2 require him to remove from the Adelaide Institute website the AI Document and any other material which convey the imputations to which reference is made. That order contemplates that anything published which contains those imputations would contravene s 18C of the Racial Discrimination Act . The injunctions in paragraph 3 make the same assumptions. The injunctions restrain him from engaging in conduct which the Racial Discrimination Act renders unlawful. No citizen is entitled to engage in similar unlawful conduct because of the provisions of s 18C of the Racial Discrimination Act . Dr Toben has not lost any of the incidents of citizenship which are given by the Citizenship Act. Of course, the November 2007 undertaking is in a different class. The respondent gave the undertaking himself. He has always been aware of that undertaking and its effect. So much is clear from his attempting to resile from the undertaking. An undertaking given to the Court is punishable in the same way as if it were an order of the Court. It is a contempt to breach an undertaking the same as it is to disobey an order of the Court: Biba Ltd v Stratford Investments Ltd [1973] Ch 281 ; Windsurfing International Inc v Sailboard Australia Pty Ltd [1986] FCA 384 ; (1986) 19 FCR 110. A breach of an undertaking will involve the same consequences for the party in breach as disobedience of an order of the Court: Milburn v Newton Colliery (1908) 52 S.J. 317. Where the undertaking is given to the Court by the person who is to be bound by the undertaking, the undertaking does not need to be served upon that person before contempt proceedings for a breach of that undertaking are commenced. Order 37 rule 3 only applies to orders, not undertakings: Windsurfing International Inc v Sailboard Australia Pty Ltd [1986] FCA 384 ; 19 FCR 110. Separate charges for breaches of the September 2002 orders and the November 2007 undertaking


case_text: Telstra Corporation Ltd v SingTel Optus Pty Ltd [2007] FCA 824 at [19] the Court said: It is a fundamental principle of the law relating to injunctions that they should be expressed with precision. A person against whom an injunction is made should be told precisely what can or cannot be done ...


case_title: The King v Metal Trades Employers Association; Ex parte Amalgamated Engineering Union, Australian Section [1951] HCA 3 ; (1951) 82 CLR 208


case_text: Toben has published remarks which might be described as insulting of the Court and which tend to scandalise the Court. An act which is calculated to lower the authority of the Court or a judge of the Court or an act which is calculated to obstruct or interfere with the course of justice will be a contempt: The King v Nicholls [1911] HCA 22 ; (1911) 12 CLR 280. The first class is often referred to as scandalising the Court. Mr Perkins, Dr Toben's counsel, argued that the Court should not have regard to those remarks in considering whether these charges of contempt have been made out. I think that contention is partly right. Clearly enough, whatever remarks Dr Toben has made about the Court would not be relevant in determining whether his other remarks or his other publication was in disobedience of the September 2002 orders or breached the November 2007 undertaking. However, his remarks may be relevant for that aspect of the applicant's case which is directed to establishing contumacy.