case_text: At the same time, Maddocks sent a third draft of the Sale of Shares Agreement to Frawley. At this stage, Middletons had not reverted with their comments. The covering letter sent by email provided: "We refer to your earlier emails and telephone conversations with Chong Ming. We attach a revised Draft Sale of Shares Agreement (Draft No. 3 dated 25 August 2004) with the amendments highlighted for your comments. Please note that Middletons have not reverted with their comments at this stage. The main amendments are as follows: 1. Recitals A, B and C have been deleted as requested. 2. ... 3. The Third Bank Guarantee has been deleted and manner of release revised in clause 6.3. 4. ... Meanwhile, we will continue to follow up with Middletons on their comments to the draft Sale of Shares Agreement..." 77 Thompson spent the morning of 26 August 2004 corresponding by email with his solicitors about amendments to the draft Sale of Shares Agreement. A copy of an amended version was emailed to him by Middletons at 9.28 am. At that stage the changes made were described, in part, by Middletons in the following terms: "I attach our further amended version of the Sale of Shares Agreement ... As you can see, the amendments previously made by the commercial group have been retained, and the amendments made by the tax and property groups are also now included and highlighted. I make the following comments regarding the property-related amendments: 1. I have assumed that Latitude is purchasing all the shares in [EHD]. On that basis, I have simply included the development rights as part of the Business of EHD since Latitude will take over that Business at completion. ... 2. You should be aware that the Business of EHD as defined in the Agreement is broader than the construction of the Stage 3 and 3A Apartments. The Agreement defines the Business as the business of developing: - the apartments already constructed as at the date of the Sale of Shares Agreement; - the apartments to be constructed (including the Stage 3 and 3A Apartments). Was this agreed? My concern is that there may be carry-over obligations from Stages 1 and 2 for which Latitude may become liable. If this has not been agreed between the parties, I suggest that either the Business be limited to the Stage 3 and 3A Apartments or Latitude obtain warranties and indemnities with respect to the previous Stages. 3. The dates for the construction milestones are different to those set out in the [HofA]. I have amended the Sale of Shares Agreement to comply with the milestone dates set out in the [HofA]. Please let me know if you have agreed different milestone dates with Break Free. 4. [Construction process flexibility]... 5. I have included the warranties, undertakings and requirements recommended in our due diligence report . 6. [Carve out of contracts of sale]... In addition, the tax group amended the GST clause to mirror the clause in the [HofA]. Once you have had an opportunity to consider the attached version, please let me know whether we may send it to Maddocks..." (Emphasis added) 78 Thompson responded at 10.02 am. His instructions to Middletons were clear: "Item 2 no this wasn't agreed and this was discus[s]ed with James Edmonds that it is only 3, 3A and potenti[a]l 4. We will definitely need protection. Ideally if they can be removed from this agreement so I don't have to deal with any issues that come up from the past work. Is this possible? Item 3 yes we amended the dates To reflect the importance of the Sunset clauses. Please put back as they were. Item 4 see what they say ditto 5 Item 6 is good...." (Emphasis added) 179 BreakFree's assertion that even if it had repudiated the HofA (as it did), Latitude did not accept the repudiation but elected to affirm it should be rejected. The conduct said by BreakFree to constitute the election affirmation was the fact that Latitude lodged a caveat upon the Crown Lease on 1 September 2004 claiming an interest as sub-lessee. Latitude contended that the lodgement of the caveat was consistent with its right to terminate for the repudiatory breach by BreakFree that the lodgement of the caveat could not be characterised as an election by Latitude to affirm the HofA. An inference of affirmation will not be drawn from conduct just because it is consistent with the existence or the continuation of the relevant contract: Immer (No 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) [1993] HCA 27 ; (1993) 182 CLR 26. As Brennan J said (at 30): "An act amounting to an election must be unequivocal. Where a contract can be terminated at the option of a promisee, the right to terminate is not necessarily lost by the promisee doing any act consistent with the continuance of the contract. If the act is also consistent with the reservation of a right to terminate in certain events, the right to terminate is not lost by the doing of the act." (Footnotes omitted) See also Chitty on Contracts , vol 1 (2004, 27 th ed) at [24-003]. 180 Judged in that light, it cannot be said that the lodging of the caveat was unequivocal or not consistent with the reservation of a right to terminate. So much was made clear by the letter from Middletons to Maddocks of 31 August 2004 (see [96] above)). An election to terminate is a restricted right which may be effected after some delay by communicating that the contract is at end: see Cheshire and Fifoot's The Law of Contract (2002, 8 th ed) at [21.21] and [21.29]. There was no such delay in the present case. 181 In the circumstances, it is neither necessary nor appropriate to go on and consider, if Latitude had affirmed the HofA, whether it immediately breached the HofA: (1) by failing to provide the Second and Third Bank Guarantees and further or alternatively, the charge required under cl 7 of the HofA; (2) by failing to negotiate under cl 3 of the HofA. 182 For the reasons outlined earlier, none of these matters (taken singularly or collectively), viewed objectively, evinced an intention on the part of Latitude not to be bound by the HofA. Contrary to BreakFree's submissions, the losses suffered by Latitude were not attributable to its own conduct but the wrongful conduct of BreakFree, repudiatory conduct which Latitude accepted. BreakFree's counterclaim is dismissed.


case_outcome: referred to

case_text: In the circumstances, I am not persuaded that Latitude was misled by BreakFree. Though private contractual negotiations involving a corporation in trade or commerce may support a claim for a breach of s 52 of the TPA, it is important to distinguish infringing conduct from representations that are apposite to "sharp commercial practice" or made in the course of parties bargaining at arm's length: Rhone Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477 at 490; Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 at 475; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 (per Black CJ); at 40-41 (per Gummow J); Poseidon Ltd v Adelaide Petroleum NL Ltd (1992) 105 ALR 25 at 26 and Australian Competition and Consumer Commission v Oceania Commercial Pty Ltd [2003] FCA 1516 at [196] - [201] . The relationship between Latitude and BreakFree was that of vendor and purchaser, bargaining at arm's length. In these circumstances, there cannot be said to have been any expectation on either side that BreakFree would not reserve its rights to undertake development, either in relation to the Erskine on the Beach Project or other projects. This is reinforced by the evidence outlined above. Similarly, any non-disclosure by BreakFree about its commercial intentions should a long form contract not be struck with Latitude cannot be construed as misleading or to have misled Latitude.


case_text: Traditionally, agreements to negotiate in ' good faith ' were viewed as unenforceable due to want of certainty or lack of consideration, eg Carr v Brisbane City Council [1956] St R Qd 402; Mallozzi v Carapelli SpA [1976] 1 Lloyd's Rep 407 and Walford v Miles [1992] 2 AC 128 at 138 cited by Einstein J in Aiton Australia Pty Ltd v Transfield Pty Ltd [1999] NSWSC 996 ; (1999) 153 FLR 236 at [80] .


case_outcome: considered

case_text: Two matters are not in dispute. First, Latitude and BreakFree were bound by the HofA, a final agreement within the first category of Masters v Cameron [1954] HCA 72 ; (1954) 91 CLR 353 at 360, namely a contract: "in which the parties [had] reached finality in arranging all the terms of their bargain and intend[ed] to be immediately bound to the performance of those terms, but at the same time propose[d] to have the terms restated in a form which [would] be fuller and more precise but not different in effect." Clause 3.1 of the HofA adopted this language. 107 The binding nature and effect of the HofA was repeatedly reinforced by counsel for BreakFree. As Senior Counsel for BreakFree submitted, it was a contract binding the parties at once to perform the agreed terms whether the completed formal document came into existence or not and: "in those circumstances, all you can say is that if there is the appropriate clause to require negotiation, or if there is the negotiation then, in those circumstances, there will be a long form agreement if the parties reach agreement." (Emphasis added) 108 One of the matters binding the parties on execution of the HofA was that cll 3.1 and 3.3 of the HofA imposed a mutual obligation on the parties to negotiate the terms of a long form contract and to conduct those negotiations in good faith. That is the second matter not in dispute. However, until execution of such a long form contract (if at all) and subject to any agreement to vary the terms of the HofA, the parties remained bound by the terms of the HofA to buy and sell the Developer's Assets. 169 BreakFree submitted that it was possible to read down cl 7.4.1 of the HofA and that the provision of additional security was consistent with the objective intention of the parties irrespective of whether finality, in the form of an Long Form Contract, was in fact reached by the 30 August 2006. This construction was said to be supported by considerations of business efficacy. Priority should be given, it was submitted, to preserving the parties' intention to be immediately bound even if the form of the arrangement was imperfect: Masters v Cameron at 360-361. 170 There are at least three reasons why these submissions should be rejected. Both relate to the terms of cl 7.4.1 of the HofA. First, cl 7.4.1 required that Latitude provide the charge or mortgage on the ' Possession Date' . This date was not defined by the HofA and must refer to the date on which Latitude took possession of the assets which it sought to acquire from BreakFree. Contrary to BreakFree's submission, the obligation to provide the charge was contingent on performance by BreakFree of its obligation to deliver these assets, defined in cl 1 as the assets of the Developer's Business. Latitude never took possession of these assets and could not be understood as undertaking, by cl 7.4.1, to confer on BreakFree a benefit unsupported by prior consideration. The second basis relates to the identification of the relevant consideration - the assets of the Developer's Business. Latitude could not provide security in respect of assets it did not possess. 171 Thirdly, the contention ignores the express terms of the HofA and the effect of it. The HofA was, as BreakFree submitted (see [105] above), a contract which, subject to the conditions precedent being satisfied, bound Latitude to purchase the Developer's Assets for $5.4 million. For the reasons set out above, the conditions precedent were satisfied. Latitude was bound to purchase those assets. The failure of Latitude to provide additional security pursuant to cl 7.4.1 of the HofA in relation to the long form contract did not constitute a breach of the HofA and, further, did not evince an intention on the part of Latitude no longer to be bound by the HofA.


case_outcome: applied

case_text: It is a composite clause. It appears to involve two concepts - " negotiations in good faith " - but directed at a particular end - "to ensure that the terms set out in these [HofA] are given full effect. " The phrase " negotiations in good faith " is not a defined term. That does not necessarily make the requirement uncertain. In Coal Cliff at 27, Kirby P acknowledged that: "[i]n a small number of cases, by reference to a readily ascertainable external standard, the court may be able to add flesh to a provision which is otherwise unacceptably vague or uncertain or apparently illusory: see eg, Powell v Jones [1968] SASR 394 at 399; Sweet and Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699; cf Meehan v Jones [1982] HCA 52 ; (1982) 149 CLR 571 at 589; Jillcy Film Enterprises [ Inc v Home Box Office Inc 593 F Supp 515 at 521 (1984); [and]] Ridgeway Coal Co Inc v FMC Corporation [616 F Supp 404 (1985) at 408] ." 124 Against that background, two matters must be noted at the outset. A term stipulating that parties " will conduct all such negotiations in good faith " is a contractual term. In Meehan v Jones [1982] HCA 52 ; (1982) 149 CLR 571 at 578, Gibbs CJ said that: "It is only if the court is unable to put any definite meaning on the contract that it can be said to be uncertain." 125 If it is possible to attribute a definite meaning to cl 3.3 of the HofA, even if there be more than one possible meaning, the requirement that the parties negotiate in good faith will not be void for uncertainty: Meehan v Jones at 578 citing Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8 ; (1968) 118 CLR 429 at 436 (per Barwick CJ). The question whether the court is capable of putting a definite meaning on cl 3.3 raises additional issues - when, how, why and by reference to what standard or principles is the clause to be given a definite meaning? How is one person's bargaining to be judged to be in breach of a promise or a duty to negotiate in good faith? Is a higher duty to be imposed in certain and, if so, what circumstances? Do the additional words " to ensure that the terms set out in these Heads of Agreement are given full effect" in cl 3.3 of the HofA assist in providing certainty or add to its uncertainty? What do these additional words mean?


case_text: Specific conduct has also been identified by various courts as constituting ' bad faith ' or a lack of ' good faith ' including: (1) acting arbitrarily, capriciously, unreasonably or recklessly: e.g. see Viscount Radcliffe in Selkirk v Romar Investments Ltd [1963] 1 WLR 1415 at 1422-23 cited by Gyles J in Goldspar at [173]; and Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [65] ; (2) acting in a manner that is oppressive or unfair in its result by, for example, seeking to prevent the performance of the contract or to withhold its benefits: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [65] - [66] ; (3) failing to have reasonable regards to the other party's interests: Overlook Management BV v Foxtel Management Pty Ltd (2002) ACR 90 143 at [67] cited by Peden E, Good Faith in the Performance of Contracts (2003) at 160. (4) failing to act 'reasonably' in general. I consider this requirement in further detail below.


case_text: Notwithstanding the view I have formed that cl 3.3 of the HofA was contractually uncertain, it is however desirable to examine the existence and content of the asserted duty. That examination will reveal that despite repeated dicta accepting the existence of the duty of good faith of the kind relied upon, Counsel took me to only one case in which it was held, at first instance, that there was a breach of such a duty and yet even then that holding was not determinative of the outcome of the litigation: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [60] and on appeal in Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40 ; (2006) 149 FCR 395 at [119] and [235] to [238]. Secondly, as the subsequent discussion will reveal, I am not to be taken as accepting that such a duty, however defined, exists. (ii) 132 Although no implied duty to negotiate in good faith was pleaded or relied on, it is convenient to consider the issue for such light that it sheds upon the express duty that was both pleaded and relied on. There has been a recent willingness of Australia Courts to find that a duty of ' good faith ' in negotiations is an implied or incidental term of every commercial contract unless the duty is either excluded expressly or by necessary implication: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [64] ; Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15 ; Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187 ; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd (1999) 21 ATPR 41-703; Alcatel Australia Pty Ltd v Scarcella (1998) 44 NSWLR 349; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 and Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 . 134 It is sufficient to note that intermediate courts have repeatedly been willing to hold that such a duty exists. However, as noted earlier I was referred to only one decision where the existence of such a duty (express or implied) was held to have been breached: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [66] , a decision which Gyles J subsequently described as ' adventurous ': Council of the City of Sydney v Goldspar Australia Pty Ltd (2006) 230 ALR 437 at [166]. Two things should be noted about the decision at first instance. First, the breach of such a duty was not determinative ( Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [60] ) and the decision was the subject of appeal. Finn and Sundberg JJ at [119] considered that it was unnecessary or inappropriate to deal with the issue given their conclusions on other issues and, further, went on to say (at [119]) that: "Given both the multiple assumptions required to be made if one was to consider [the subject of breach of an implied duty of good faith] and the potentially contentious nature character of it in any event, we do not consider it is appropriate or helpful to enter upon the matter at this point in this appeal." See also Emmett J at [235] [238]. 143 As a result, some academics and judges have resorted to ascertaining the scope of ' good faith ' by focusing on the negative or the exclusions - what constitutes ' bad faith '. This has been described as the ' excluder ' definition on the basis that the good faith requirement cannot actually be satisfied in positive terms: See Summers RS, "'Good Faith' in General Contract Law and the Sales Provisions of the Uniform Commercial Code" (1968) 54 Va L Rev 195; Renard Constructions at 266; Burger King at [150]; and Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [64] - [65] . 146 Specific conduct has also been identified by various courts as constituting ' bad faith ' or a lack of ' good faith ' including: (1) acting arbitrarily, capriciously, unreasonably or recklessly: e.g. see Viscount Radcliffe in Selkirk v Romar Investments Ltd [1963] 1 WLR 1415 at 1422-23 cited by Gyles J in Goldspar at [173]; and Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [65] ; (2) acting in a manner that is oppressive or unfair in its result by, for example, seeking to prevent the performance of the contract or to withhold its benefits: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [65] - [66] ; (3) failing to have reasonable regards to the other party's interests: Overlook Management BV v Foxtel Management Pty Ltd (2002) ACR 90 143 at [67] cited by Peden E, Good Faith in the Performance of Contracts (2003) at 160. (4) failing to act 'reasonably' in general. I consider this requirement in further detail below.


case_text: Notwithstanding the view I have formed that cl 3.3 of the HofA was contractually uncertain, it is however desirable to examine the existence and content of the asserted duty. That examination will reveal that despite repeated dicta accepting the existence of the duty of good faith of the kind relied upon, Counsel took me to only one case in which it was held, at first instance, that there was a breach of such a duty and yet even then that holding was not determinative of the outcome of the litigation: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [60] and on appeal in Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40 ; (2006) 149 FCR 395 at [119] and [235] to [238]. Secondly, as the subsequent discussion will reveal, I am not to be taken as accepting that such a duty, however defined, exists. (ii) 161 First, it ignores the principles concerning repudiation. The relevant principles were summarised by Finn and Sundberg JJ in Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40 ; (2006) 149 FCR 395 at [102] and [103] as follows: "102. The principles governing repudiation of a contract are, as we understand it, not in issue and for present purposes can be stated shortly. (i) A party will have repudiated a contract if, by words or conduct, it evinces an intention no longer to be bound by it or if that party shows it intends to fulfil the contract only in a manner substantially inconsistent with its obligations and not in any other way: Shevill v Builders Licensing Board [1982] HCA 47 ; (1982) 149 CLR 620 at 625-626; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23 ; (1989) 166 CLR 623. (ii) The party's conduct is to be judged objectively by reference to the effect it would be reasonably calculated to have upon a reasonable person: Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd at 658 above; Satellite Estate Pty Ltd v Jacquet (1968) 71 SR (NSW) 126 at 150. (iii) A party that acts on a genuine but erroneous view of its obligations under the contract will not for that reason alone have repudiated it. That party may still be willing to perform the contract according to its tenor: DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12 ; (1978) 138 CLR 423 at 431-432; Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] UKHL 11 ; [1980] 1 WLR 277. But persistence in an untenable construction will ordinarily be regarded as repudiatory: Summers v Commonwealth [1918] HCA 33 ; (1918) 25 CLR 144 at 152; and see Chitty on Contracts [25-018]. 103. We would note, additionally, that in the case of contracts of significant duration in which interaction and some level of cooperation is required, it is common for parties without formally varying their contract to conduct their dealings inter se in ways that they find acceptable and convenient, fair and reasonable, or commercially necessary "rather than by reference to a priori rights and duties": cf Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117." 162 Secondly, the conduct of Latitude identified by BreakFree did not, judged objectively by reference to the effect it would be reasonably calculated to have upon a reasonable person, evince an intention no longer to be bound by the HofA. 163 Latitude's failure to provide, request or even secure the Third Bank Guarantee was entirely referable to the fact that, on 20 August 2004, Frawley agreed that Latitude would only provide one more bank guarantee, a fact he confirmed to his solicitor: see [71] above. This was the type of conduct that Finn and Sundberg JJ considered in [103] of Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40 ; (2006) 149 FCR 395. 164 Further, a request to extend the deadline for the satisfaction of cl 7 of the HofA was not, as submitted by counsel for BreakFree, identical to the procedure for extension of deadlines for the satisfaction of conditions precedent under cl 2.2 of the HofA. Clause 21.1 of the HofA applied to all other contractual variations and required the formal execution of a new deed. Its terms are mandatory " [t]hese [HofA] may only be varied or replaced by a document duly executed by the parties ". Time was of the essence (cl 21.5) and would, in relation to the provision of guarantees, have required formal amendment of the HofA. The efficacy of engaging in the procedure for formal amendment is questionable given that the parties' attention, in the week prior to 30 August 2004, was directed to a range of additional matters, including the warranties and other amendments sought by Latitude and communicated by its solicitors to BreakFree on 26 August 2004 [see [77ff] above]. In the circumstances, it was reasonable for Latitude to continue its negotiations on these matters without piecemeal amendment under cl 21.1 in respect of individual clauses such as the provision of guarantees under cl 7. The draft Sale of Shares Agreement forwarded by Middletons on 26 August 2004 was consistent with an intention that there be global amendments to the HofA in the form of a " document duly executed by the parties" pursuant to cl 21.1. 165 BreakFree's reference to the failure of Latitude to provide the Second Bank Guarantee under the HofA by 30 August 2004 erroneously focuses on only part of the circumstances which are to be judged objectively. Considered objectively, in light of all the circumstances, including the fact that Thompson had requested and received the bank guarantee from the Bank as early as 24 August 2004 and that all remained was for he and his wife to sign and fax the document, it cannot be said that the failure of Latitude to provide the Second Bank Guarantee to BreakFree, whether taken singularly or with any other fact or facts, evinced an intention on the part of Latitude no longer to be bound by the HofA.


case_text: In Australia, part of the impetus for the recognition of a implied duty to act in good faith has been the desirability and practice of courts in controlling reliance on general rescission clauses so as to prevent their use " for improper and extraneous purposes ": see Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd [1972] HCA 36 ; (1972) 128 CLR 529 at 548; Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13 ; (1973) 130 CLR 575 at 587 (per Barwick CJ); and Burger King at [151]. In light of these matters and of the foregoing analysis, the issue is whether the conduct of BreakFree, in the course of negotiations and ultimately relying on its power to terminate the HofA under cl 2.2.2, judged objectively, demonstrated a lack of good faith.


case_title: Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25

case_text: It was common ground that s 52 of the TPA prohibited BreakFree or any person acting on behalf of BreakFree from engaging in conduct ' in trade or commerce' that was misleading or deceptive or likely to mislead or deceive and that the phrase, ' in trade or commerce ' was sufficiently broad to apply to the private contractual negotiations between Latitude and BreakFree: Poseidon Ltd v Adelaide Petroleum NL (1992) ATPR 41-164 (see also definition of "conduct" in s 4(2)(b) of the TPA). 188 Latitude's allegations fell into two categories: (1) representations made by Smith and Frawley relevant to BreakFree's capacity or intention to develop the site and to on-sell the Development Assets and the Stage 4 Assets to Latitude ("Representations relating to BreakFree's Status as Manager"); and (2) representations by Frawley that BreakFree agreed to vary cl 2 of the HofA so that it was not conditional on Deposits Condition Precedent. The statutory questions relevant to each category of representation overlap with the inquiries at common law relating to the obligation to negotiate in good faith and the construction of the parties' agreement in relation to the status of the Deposits Condition Precedent on 30 August 2004. Factual findings already made in relation to the common law claims are pertinent to the resolution of the TPA claims. 189 Latitude contends that during the course of negotiating the terms of the HofA, BreakFree misrepresented to Latitude that it did not intend to develop the Erskine site, and was uninterested in representing itself in the market as a developer, and failed to disclose to Latitude that it reserved its rights to undertake the development if the parties' terminated the HofA. 194 In the circumstances, I am not persuaded that Latitude was misled by BreakFree. Though private contractual negotiations involving a corporation in trade or commerce may support a claim for a breach of s 52 of the TPA, it is important to distinguish infringing conduct from representations that are apposite to "sharp commercial practice" or made in the course of parties bargaining at arm's length: Rhone Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477 at 490; Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 at 475; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 (per Black CJ); at 40-41 (per Gummow J); Poseidon Ltd v Adelaide Petroleum NL Ltd (1992) 105 ALR 25 at 26 and Australian Competition and Consumer Commission v Oceania Commercial Pty Ltd [2003] FCA 1516 at [196] - [201] . The relationship between Latitude and BreakFree was that of vendor and purchaser, bargaining at arm's length. In these circumstances, there cannot be said to have been any expectation on either side that BreakFree would not reserve its rights to undertake development, either in relation to the Erskine on the Beach Project or other projects. This is reinforced by the evidence outlined above. Similarly, any non-disclosure by BreakFree about its commercial intentions should a long form contract not be struck with Latitude cannot be construed as misleading or to have misled Latitude.


case_text: Although no implied duty to negotiate in good faith was pleaded or relied on, it is convenient to consider the issue for such light that it sheds upon the express duty that was both pleaded and relied on. There has been a recent willingness of Australia Courts to find that a duty of ' good faith ' in negotiations is an implied or incidental term of every commercial contract unless the duty is either excluded expressly or by necessary implication: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [64] ; Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15 ; Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187 ; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd (1999) 21 ATPR 41-703; Alcatel Australia Pty Ltd v Scarcella (1998) 44 NSWLR 349; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 and Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 . 143 As a result, some academics and judges have resorted to ascertaining the scope of ' good faith ' by focusing on the negative or the exclusions - what constitutes ' bad faith '. This has been described as the ' excluder ' definition on the basis that the good faith requirement cannot actually be satisfied in positive terms: See Summers RS, "'Good Faith' in General Contract Law and the Sales Provisions of the Uniform Commercial Code" (1968) 54 Va L Rev 195; Renard Constructions at 266; Burger King at [150]; and Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [64] - [65] . 147 A requirement to act ' reasonably ' when acting in good faith was first articulated in Australia by Priestly JA in Renard Constructions where his Honour observed that reasonableness had " much in common with the notions of good faith" : at 263. Following this decision, courts have favoured ' reasonableness ' as one of the requirements of good faith. Finkelstein J in Garry Rogers Motors stated that "provided the party exercising the power acts reasonably in all the circumstances, the duty to act fairly and in good faith will ordinarily be satisfied" : at [37]. However, several Australian academics have rejected the proposition that good faith includes a requirement of reasonable conduct: See Carter et al (2007) at 27 and Peden, E " When Common Law Trumps Equity: the Rise of Good Faith and Reasonableness and the Demise of Unconscionability " (2005) 21 JCL 226. Factors tied to the content of the contract


case_title: Rhone Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477


case_title: Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 76 ALJR 43

case_text: In Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] HCA 5 ; (2002) 76 ALJR 436 (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ at [40], Kirby J at [87] [89]) and Callinan J at [156], the High Court declined to decide the issue of the existence and content of such an obligation. At that time, the authorities relevant to the implied term of ' fair dealing' were collected and discussed by Finn J in Hughes Aircraft Systems at 188-198. It is unnecessary to traverse either those authorities or the more recent decisions that have considered the issue. 136 There is a lack of consensus about the content of the requirement of good faith in negotiations. That is not surprising. The High Court declined to enter the debate in Royal Botanic Gardens and Canadian academic, Professor Michael Bridge, sceptically defined good faith as " a concept which means different things to different people in different moods at different times and in different places ": '"Does Anglo-Canadian Contract law need a Doctrine of Good Faith?'" (1984) 9 Can Bus LJ 385 at 407. Professor Bridge's description is concerning. If true, a requirement to negotiate in good faith provides little or no assistance to parties in seeking to ascertain or judge their conduct. 137 While the precise boundaries of the content of a requirement of good faith in negotiations remains unclear, some propositions have enjoyed varying degrees of judicial support.


case_text: Specific conduct has also been identified by various courts as constituting ' bad faith ' or a lack of ' good faith ' including: (1) acting arbitrarily, capriciously, unreasonably or recklessly: e.g. see Viscount Radcliffe in Selkirk v Romar Investments Ltd [1963] 1 WLR 1415 at 1422-23 cited by Gyles J in Goldspar at [173]; and Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [65] ; (2) acting in a manner that is oppressive or unfair in its result by, for example, seeking to prevent the performance of the contract or to withhold its benefits: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [65] - [66] ; (3) failing to have reasonable regards to the other party's interests: Overlook Management BV v Foxtel Management Pty Ltd (2002) ACR 90 143 at [67] cited by Peden E, Good Faith in the Performance of Contracts (2003) at 160. (4) failing to act 'reasonably' in general. I consider this requirement in further detail below. 183 In light of the conclusions earlier set out, it is also unnecessary to consider and resolve Latitude's complaint that BreakFree breached its duty to negotiate in good faith. However, for the sake of completeness, I made the following observations. The legal analysis of the express and implied duty to negotiate in good faith set out above is relevant. It must be recalled that the context in which impugned conduct is said to arise is relevant. Here, BreakFree and Latitude were negotiating in the commercial context of vendor and purchaser. "Bad faith" or conduct imputing an absence of "good faith" takes on particular meaning where a vendor, in the position of BreakFree, seeks to use a power of rescission to resile late in the course of negotiations. Viscount Radcliffe's comments in Selkirk at 1422-23 are instructive: "... it has been said that a vendor, in seeking to rescind, must not act arbitrarily, or capriciously, or unreasonably. Much less can he act in bad faith. He may not use the power of rescission to get out of a sale "brevi manu," since by doing so he makes a nullity of the whole elaborate and protracted transaction. Above all...he must not be guilty of "recklessness" in entering into his contract, a term [connoting] an unacceptable indifference to the situation of a purchaser who is allowed to enter into a contract with the expectation of obtaining a title which the vendor has no reasonable anticipation of being able to deliver. A vendor who has so acted is not allowed to call of the whole transaction by resorting to the contractual right of rescission.. ."


case_text: The final category ties the impugned conduct directly to the content of the contract in question. In South Sydney District Rugby League Football Club Ltd v News Ltd (2000) 177 ALR 611 at [426] Finn J noted that the: "... positive content of the good faith requirement was what Professor Lücke has described as "loyalty" to that which actually had been promised and agreed : see Lücke, "Good Faith and Contractual Performance", in Finn (ed), Essays on Contract, 1987, 162-4; see also the normative view of Fried, Contract as Promise, 1981, 85ff; or, to put the matter negatively, was to preclude what the Restatement, Second, Contracts refers to as " evasion of the spirit of the bargain "; see SS205 comment d; Farnsworth, Contracts, 2 nd ed, 1990, SS7.17 p 551..." (Emphasis added) (v) 149 Although as noted above, the boundaries of good faith evade precise definition, there appears to be at least some consensus on the limits of any such duty. In particular, a duty of good faith: (1) is not fiduciary in nature; (2) does not require a party to subordinate its own interests, let alone act selflessly; and (3) does not require a party to restrict decisions and actions, reasonably taken, which are designed to promote the legitimate interests of a party and which are not otherwise in breach of an express contractual term. See Justice Finn "Good Faith and Fair Dealing: Australia" Commercial Good Faith Conference (Auckland, New Zealand, 2 September 2005); South Sydney District Rugby League at [394] in the context of an implied duty and, finally, in the context of a duty to negotiate in good faith arising out of an alternative dispute resolution clause see Aiton Australia at [83]. (vi)


case_text: If it is possible to attribute a definite meaning to cl 3.3 of the HofA, even if there be more than one possible meaning, the requirement that the parties negotiate in good faith will not be void for uncertainty: Meehan v Jones at 578 citing Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8 ; (1968) 118 CLR 429 at 436 (per Barwick CJ). The question whether the court is capable of putting a definite meaning on cl 3.3 raises additional issues - when, how, why and by reference to what standard or principles is the clause to be given a definite meaning? How is one person's bargaining to be judged to be in breach of a promise or a duty to negotiate in good faith? Is a higher duty to be imposed in certain and, if so, what circumstances? Do the additional words " to ensure that the terms set out in these Heads of Agreement are given full effect" in cl 3.3 of the HofA assist in providing certainty or add to its uncertainty? What do these additional words mean?


case_text: Although no implied duty to negotiate in good faith was pleaded or relied on, it is convenient to consider the issue for such light that it sheds upon the express duty that was both pleaded and relied on. There has been a recent willingness of Australia Courts to find that a duty of ' good faith ' in negotiations is an implied or incidental term of every commercial contract unless the duty is either excluded expressly or by necessary implication: Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [64] ; Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15 ; Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187 ; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd (1999) 21 ATPR 41-703; Alcatel Australia Pty Ltd v Scarcella (1998) 44 NSWLR 349; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 and Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 .


case_title: Walford v Miles [1992] 2 AC 128

case_text: Traditionally, agreements to negotiate in ' good faith ' were viewed as unenforceable due to want of certainty or lack of consideration, eg Carr v Brisbane City Council [1956] St R Qd 402; Mallozzi v Carapelli SpA [1976] 1 Lloyd's Rep 407 and Walford v Miles [1992] 2 AC 128 at 138 cited by Einstein J in Aiton Australia Pty Ltd v Transfield Pty Ltd [1999] NSWSC 996 ; (1999) 153 FLR 236 at [80] . 129 The agreement was considered 'certain' because " B and C must negotiate (B because it is bound to A to do so and C because it is bound to B to do so) and there is a process for resolving any disagreement between B & C" : at 212. Hayne J distinguished the agreement in Con Kallergis from that considered by the House of Lords in Walford. The latter was found to be uncertain because either party could break off negotiations at any time and for any reason.


case_outcome: cited

case_text: The principles to be applied by the Court in determining an application to set aside a statutory demand are also not in dispute. The Court must be satisfied that there is a genuine dispute between Ultradrilling and West about the existence or amount of the debt to which the demand relates: s 459H(1)(a) of the Act . That issue is determined at the time the Court hears the application: Andi-Co Australia Pty Ltd v Meyers [2004] FCA 1358 at [16] . For a genuine dispute to exist, the dispute must "be bona fide and truly exist in fact". The grounds for alleging the existence of a dispute must be "real and not spurious, hypothetical, illusory or misconceived": Spencer Constructions Pty Ltd v G&M Aldridge Pty Ltd [1997] FCA 681 ; (1997) 76 FCR 452 at 464; see also John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 at 253 and TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70 ; (2008) 66 ACSR 67 at 79.


case_text: The function of the Court, on review of a Registrar's decision under s 35A(5) of the Federal Court Act , is to rehear the case and decide the facts for itself. It is a hearing de novo. That is to say, it is a complete rehearing at which the parties may adduce further evidence. It is for the Court to be satisfied of the matters prescribed by the Act and to exercise the discretion unfettered by the decision of the Registrar. The cases that make good those propositions include: Mazukov v University of Tasmania [2004] FCAFC 159 at [22] - [27] ; and Martin v Commonwealth Bank of Australia (2001) 217 ALR 634 at [6] and [12] and Callegher v Australian Securities and Investments Commission (2007) 239 ALR 749 at [46]. 28 There is sufficient objective evidence to establish a prima facie allegation of delay on the part of Ultradrilling caused by its own conduct. It is important to note that Ultradrilling's contentions proceeded not on the basis that there could be no implied term relating to time but that the legal argument there existed one or more implied terms covering all of the instances set out in the schedule to the letter dated 7 February 2008 was "patently feeble". That contention is understandable. However, the evidence before the Court on these issues (including the terms of the contract) is not exhaustive: cf TR Administration 66 ACSR at 81-82. Indeed, what evidence was before the Court suggested that there was in fact no formal, integrated written contract, but instead a series of emails, purchase orders, and invoices, including the Purchase Order partially set out above.


case_text: Ultradrilling submitted that the fact that West now puts forward these details of the offsetting claim to overcome the difficulties identified by the Deputy Registrar should tell strongly against the genuineness of the claim, both on the issue of whether the delays are recoverable by West against Ultradrilling and the amount of any such claim. In any event, Ultradrilling contends that the evidence now provided does not rise above mere assertion and should be rejected on that basis alone: see Elm Financial Services Pty Ltd v MacDougal [2004] NSWSC 560 at [18] - [19] and TR Administration 66 ACSR at 79-80. Ultradrilling focused, in particular, on the charges for "lost mark up" and the "lost profit" on the pumps (see [35] above). Ultradrilling contended that if, as was required, a line was drawn to distinguish between evidence that was merely spurious, bluster or assertion and evidence which provided sufficient factual particularity to exclude the merely fanciful or futile, the offsetting claim would be dismissed: TR Administration at 79-80. 38 I reject this submission. What this application has demonstrated is that the terms on which West engaged Ultradrilling to drill bore holes and the manner in which Ultradrilling completed that work is the subject of dispute. Those issues cannot be resolved and should not be resolved in the present application. Moreover, it must be recalled that West is not required to establish the precise dollars and cents or provide a fully evidenced claim: Elm Financial Services at [19]. 39 Secondly, the bases on which Ultradrilling contends that charges for "lost mark up" and the "lost profit" on the pumps are spurious cannot be accepted. "Lost mark up" was criticised by Ultradrilling on the grounds that "[t]he sense in which this amount was 'lost' [was] unexplained." However, that loss was explained. In Mr West's additional affidavit and accompanying spreadsheet (see [35]-[36] above), it was described as the margin which West would have received on the engineer's labour - that is, the difference between the rate charged to the client and the rate actually paid to the engineer. Whether such loss is recoverable from Ultradrilling and if so, whether 30% is the correct rate to apply in calculating the loss, are issues to be determined in other forums. The other loss, the "lost profit" component, was challenged by Ultradrilling on the basis that because the pumps were said to be custom-built for the Project, there could be no "usual practice" for renting the pumps and it was not plausible to assume that each of the pumps, if not required on the Project, would have been immediately rented out for the whole period to a third party at $110 per day. Again, those are issues that will need to be resolved in another forum. 40 In the present case, it cannot be said that the evidence was merely spurious, bluster or assertion. The evidence ultimately provided by West provided sufficient factual particularity to exclude the merely fanciful or futile. Whether West will succeed at any trial of the issue is irrelevant. 41 Adding together the $47,916 in genuine dispute and the approximately $151,610 in offsetting claims yields a total amount which exceeds the balance of $155,397 claimed by Ultradrilling pursuant to the Statutory Demand. In the circumstances, the appropriate orders are that the Statutory Demand be set aside under s 459H(3) of the Act and that Ultradrilling pay West's costs of and incidental to the application, both before the Registrar and this Court, such costs to be taxed in default of agreement. 42 In view of those orders, it is unnecessary to separately consider setting aside the Statutory Demand on one or more of the grounds set out in s 459J of the Act . I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. Associate: Dated: 23 September 2008 Counsel for the Plaintiff: CM Slater Solicitor for the Plaintiff: Webb Korfiatis Counsel for the Defendant: R Strong Solicitor for the Defendant: Colquhoun Murphy Date of Hearing: 10 September 2008 Date of Judgment: 23 September 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1443.html


case_outcome: followed

case_text: The principles to be applied by the Court in determining an application to set aside a statutory demand are also not in dispute. The Court must be satisfied that there is a genuine dispute between Ultradrilling and West about the existence or amount of the debt to which the demand relates: s 459H(1)(a) of the Act . That issue is determined at the time the Court hears the application: Andi-Co Australia Pty Ltd v Meyers [2004] FCA 1358 at [16] . For a genuine dispute to exist, the dispute must "be bona fide and truly exist in fact". The grounds for alleging the existence of a dispute must be "real and not spurious, hypothetical, illusory or misconceived": Spencer Constructions Pty Ltd v G&M Aldridge Pty Ltd [1997] FCA 681 ; (1997) 76 FCR 452 at 464; see also John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 at 253 and TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70 ; (2008) 66 ACSR 67 at 79. 8 The manner in which the Court approaches the task is also not in dispute. The Court does not resolve contested questions of fact or determine where the merits lie in any contest: Kortz Ltd v Data Acquisition Pty Ltd [2006] FCA 1722 ; (2006) 155 FCR 556 at [40] . The Court determines only whether the supporting affidavits filed and served by West depose to facts from which the Court is able to conclude that a genuine dispute exists. As Young J said in John Holland Construction 14 ACSR at 253, something between mere assertion and the proof of the existence of the disputed debt is required: see also Micha International Pty Limited v Jong Seol Lee [2008] NSWSC 921 at [5] and Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411 at [23] .


case_text: The manner in which the Court approaches the task is also not in dispute. The Court does not resolve contested questions of fact or determine where the merits lie in any contest: Kortz Ltd v Data Acquisition Pty Ltd [2006] FCA 1722 ; (2006) 155 FCR 556 at [40] . The Court determines only whether the supporting affidavits filed and served by West depose to facts from which the Court is able to conclude that a genuine dispute exists. As Young J said in John Holland Construction 14 ACSR at 253, something between mere assertion and the proof of the existence of the disputed debt is required: see also Micha International Pty Limited v Jong Seol Lee [2008] NSWSC 921 at [5] and Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411 at [23] .


case_text: The function of the Court, on review of a Registrar's decision under s 35A(5) of the Federal Court Act , is to rehear the case and decide the facts for itself. It is a hearing de novo. That is to say, it is a complete rehearing at which the parties may adduce further evidence. It is for the Court to be satisfied of the matters prescribed by the Act and to exercise the discretion unfettered by the decision of the Registrar. The cases that make good those propositions include: Mazukov v University of Tasmania [2004] FCAFC 159 at [22] - [27] ; and Martin v Commonwealth Bank of Australia (2001) 217 ALR 634 at [6] and [12] and Callegher v Australian Securities and Investments Commission (2007) 239 ALR 749 at [46].


case_title: Mazukov v University of Tasmania [2004] FCAFC 159


case_title: Micha International Pty Limited v Jong Seol Lee [2008] NSWSC 921


case_text: I reject Ultradrilling's "failure to particularise" contention on a number of bases. First, it cannot be said that when Mr West identified incidents allegedly caused by Ultradrilling and giving rise to the need to place Ultradrilling on standby pending further instructions, he was purporting to give a complete list. So much is made clear by the language of para [12] of his affidavit of 29 May 2008. Secondly, it is apparent from the contemporaneous correspondence before the Court that Macmahon itself attributed delays on the Project to what it described as "lack of production" by Ultradrilling. In those circumstances and having regard to the nature of the incidents identified, it is neither possible nor appropriate for a Court in a proceeding of this nature to seek an exhaustive list of each incident, determine its cause, and then ascertain the time and cost of any such delay. There is objective evidence that there is a genuine dispute about whether Ultradrilling was entitled to charge separately for "other standby" for the whole of the amount of $18,634. Put another way, contrary to the submissions of Ultradrilling, it cannot be said that the dispute as to the whole of the amount is a "patently feeble legal argument or an assertion of facts unsupported by evidence": Rhagodia Pty Ltd v National Australia Bank Ltd (2008) 67 ACSR 367 at [93] (internal citation and quotation marks omitted). There is "sufficient prima facie plausibility to merit further investigation" as to the truth of the assertion: Rhagodia at [93] (internal citation and quotation marks omitted). 23 As noted earlier, West contended that it also had offsetting claims of $120,420 against Ultradrilling based on Ultradrilling's alleged delay in completing the drilling work that was said to constitute a breach of the contract between West and Ultradrilling. The losses arising from the breach were said by Mr West in his 29 May affidavit to comprise: 1. $18,152 for internal administrative costs; 2. $31,990 short payment from Macmahon; and 3. $70,278 for other delay costs incurred by West. 24 Before turning to consider these amounts, it is necessary to say something about the general nature and alleged cause of the offsetting claims. There is no dispute that the Project was delayed. As noted earlier, what is in dispute is the cause of the delays and, having determined the cause, the precise costs resulting from those delays and their recoverability under the contract (i.e. whether the delays constitute breaches of one or more terms of the contract). Some of the costs said to arise from the delays I have already considered (see [18] to [22] above).


case_title: Spencer Constructions Pty Ltd v G&M Aldridge Pty Ltd [1997] FCA 681 ; (1997) 76 FCR 452


case_title: Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411


case_text: The principles to be applied by the Court in determining an application to set aside a statutory demand are also not in dispute. The Court must be satisfied that there is a genuine dispute between Ultradrilling and West about the existence or amount of the debt to which the demand relates: s 459H(1)(a) of the Act . That issue is determined at the time the Court hears the application: Andi-Co Australia Pty Ltd v Meyers [2004] FCA 1358 at [16] . For a genuine dispute to exist, the dispute must "be bona fide and truly exist in fact". The grounds for alleging the existence of a dispute must be "real and not spurious, hypothetical, illusory or misconceived": Spencer Constructions Pty Ltd v G&M Aldridge Pty Ltd [1997] FCA 681 ; (1997) 76 FCR 452 at 464; see also John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 at 253 and TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd [2008] VSCA 70 ; (2008) 66 ACSR 67 at 79. 9 The test to be applied in determining whether an offsetting claim exists is the same as that applied in ascertaining the existence of a genuine dispute: TR Administration Pty Ltd 66 ACSR at 79. 10 As noted earlier, Ultradrilling was engaged by West as a subcontractor on the Project to undertake extensive drilling work. West in turn had been hired by head contractor Macmahon Contractors Pty Ltd ("Macmahon"). The Statutory Demand issued by Ultradrilling claims an amount that is said to represent the balance due to it from West for the drilling work done pursuant to the contract. The genuine dispute alleged by West is whether certain amounts are in fact payable and owing under the contract; the offsetting claim is for losses said to arise out of Ultradrilling's breach of the contract due to its delay in completing the work. 11 West contends that of the $155,397 remaining unpaid on the Statutory Demand, there is a genuine dispute in relation to $47,916 arising from excessive and incorrect charges by Ultradrilling. 28 There is sufficient objective evidence to establish a prima facie allegation of delay on the part of Ultradrilling caused by its own conduct. It is important to note that Ultradrilling's contentions proceeded not on the basis that there could be no implied term relating to time but that the legal argument there existed one or more implied terms covering all of the instances set out in the schedule to the letter dated 7 February 2008 was "patently feeble". That contention is understandable. However, the evidence before the Court on these issues (including the terms of the contract) is not exhaustive: cf TR Administration 66 ACSR at 81-82. Indeed, what evidence was before the Court suggested that there was in fact no formal, integrated written contract, but instead a series of emails, purchase orders, and invoices, including the Purchase Order partially set out above. 37 Ultradrilling submitted that the fact that West now puts forward these details of the offsetting claim to overcome the difficulties identified by the Deputy Registrar should tell strongly against the genuineness of the claim, both on the issue of whether the delays are recoverable by West against Ultradrilling and the amount of any such claim. In any event, Ultradrilling contends that the evidence now provided does not rise above mere assertion and should be rejected on that basis alone: see Elm Financial Services Pty Ltd v MacDougal [2004] NSWSC 560 at [18] - [19] and TR Administration 66 ACSR at 79-80. Ultradrilling focused, in particular, on the charges for "lost mark up" and the "lost profit" on the pumps (see [35] above). Ultradrilling contended that if, as was required, a line was drawn to distinguish between evidence that was merely spurious, bluster or assertion and evidence which provided sufficient factual particularity to exclude the merely fanciful or futile, the offsetting claim would be dismissed: TR Administration at 79-80.


case_text: As to the question of evidence of subsequent events, I have considered the case of Bretag v Immigration Review Tribunal (unreported, O'Loughlin J, 29 November 1991) (' Bretag '). In that case, the Tribunal had to answer the question of whether two persons in a relationship had a mutual commitment to the exclusion of others. The Tribunal had to determine the question at a particular point in time but made reference to evidence about subsequent events in assessing whether at the relevant time the relationship was exclusive. In reviewing the decision of the Tribunal, the court found that the Tribunal's undue reliance on the evidence of subsequent events disclosed error. The court did not hold that, in all circumstances, evidence of subsequent events was a relevant consideration which the legislation required the Tribunal to consider. Rather, the court held that in determining the nature of a relationship at a particular time, evidence of subsequent events may be taken into account if it tends to logically show the existence or non-existence of the relationship at that particular time. As stated by O'Loughlin: It is clear, of course, that the Tribunal was entitled to have regard to evidence that dealt with the relationship between Mr Bretag and the applicant and between Mr Bretag and Leanne subsequent to 28 January 1990 for the purposes of testing the claimed relationship between the applicant and Mr Bretag as at that date and as at the date of the application for the PEPAE 7 February 1990. But the evidence of the subsequent history is only relevant so long as it tends to logically show the existence or non-existence of facts relevant to the issue to be determined. 37 However O'Loughlin J, in finding error in the Tribunal's reasoning process, explained that the Tribunal must be careful not to attribute too much weight to the evidence of subsequent events: In my opinion the Tribunal erred in law. It correctly identified the test that it had to apply, that is, the "Dhillon test", but having made that correct decision it erred in law by permitting itself to be influenced inappropriately by events that occurred subsequent to the events subsisting at the time of the application...The duty of the Tribunal was to assess the personal circumstances of the applicant and her husband as they existed at the time when the application for the PEPAE was made, that is, as at 7 February 1990. In terms of the "Dhillon test", the dominant question was this: as at 7 February 1990, can it be said that the parties had a mutual commitment to a shared life as husband and wife to the exclusion of others. It was a misconception of the limited evidence on the subject of Mr Bretag's state of mind to draw an inference that his relationship to the applicant was not, on that date, either genuine or continuing. ... I have concluded that the Tribunal did not use subsequent events as an aid to determine the existence or non-existence of facts that were relevant to the issue (in the manner permitted by Pochi's case); rather, it permitted itself to be influenced inappropriately by the resumption of the relationship between Mr Bretag and Leanne some two months after this marriage to the applicant. 38 Contrary to the submissions of the appellant, the relevant regulations I am considering clearly focus attention at the time of application. The only relevance of Bretag is the extent to which evidence may impact upon that assessment, and particularly evidence of subsequent events. In my view, the Tribunal here undertook its task in looking at all the material before it, both at the time of application and thereafter. No error of the type identified in Bretag has occurred here.


case_title: Minister for Immigration & Ethnic Affairs v Pochi (1980) 4 ALD 139

case_text: This does not mean that evidence subsequent to the visa application does not need to be considered at all. Evidence of events subsequent to the visa application is relevant if it 'tends logically to show the existence or non-existence of facts relevant to the issue to be determined': see Minister for Immigration and Ethnic Affairs v Pochi (1980) 4 ALD 139 at 160 per Deane J. The Tribunal must consider all relevant evidence, which may include evidence of events subsequent to the date of application insofar as it assists in the task of determining whether the appellant and the sponsor were in a marriage relationship at the time of the application. The question of whether particular evidence is relevant and the weight it is to be given is clearly a matter for the Tribunal.


case_text: The appellant also claimed that the Tribunal made findings of fact unsupported by the evidence. In particular, the appellant claims that the Tribunal did not give proper consideration to the evidence before it and did not make correct findings of fact based on the evidence. However, the Tribunal is not obliged to deal with in its reasons every piece of evidence submitted by the appellant. In WAEE v Minister for Immigration & Multicultural & Indigenous Affairs (2003) 75 ALD 630, the Full Federal Court discussed a number of decisions of the Refugee Review Tribunal and stated at [46]-[47] that: It is plainly not necessary for the Tribunal to refer to every piece of evidence and every contention made by an applicant in its written reasons. It may be that some evidence is irrelevant to the criteria and some contentions misconceived. Moreover, there is a distinction between the Tribunal failing to advert to evidence which, if accepted, might have led it to make a different finding of fact (cf Minister for Immigration & Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at [87] - [97] ) and a failure by the Tribunal to address a contention which, if accepted, might establish that the applicant had a well-founded fear of persecution for a Convention reason.... Nevertheless, it is an administrative body and not a court and its reasons are not to be scrutinised 'with an eye keenly attuned to error'. Nor is it necessarily required to provide reasons of the kind that might be expected of a court of law. The inference that the Tribunal has failed to consider an issue may be drawn from its failure to expressly deal with that issue in its reasons. But that is an inference not too readily to be drawn where the reasons are otherwise comprehensive and the issue has at least been identified at some point. It may be that it is unnecessary to make a finding on a particular matter because it is subsumed in findings of greater generality or because there is a factual premise upon which a contention rests which has been rejected. Where however there is an issue raised by the evidence advanced on behalf of an applicant and contentions made by the applicant and that issue, if resolved one way, would be dispositive of the Tribunal's review of the delegate's decision, a failure to deal with it in the published reasons may raise a strong inference that it has been overlooked. 40 The claim arises specifically in the context of the Tribunal's consideration of the circumstances prescribed by subreg 1.15A(3). However, an analysis of the Tribunal's findings shows that the Tribunal did consider all the material evidence before it and reveals no error law. 41 The appellant sought to impugn the Tribunal's consideration of the evidence about the financial aspects of his relationship with the sponsor. The appellant claimed that the Tribunal solely considered the evidence of the joint bank account and did not take into account the evidence of the joint utilities bills which post-date the time of the visa application. The appellant further claims that, given the appellant and the sponsor were married only 4 days before the date of the visa application, it was not realistic to expect joint financial commitment immediately, or at the time of the application.


case_text: It is clear that the power to issue shares must be exercised for a proper purpose. In Ashburton Oil NL v Alpha Minerals NL [1971] HCA 5 ; (1971) 123 CLR 614 at 640 Gibbs J said as follows: However powers conferred on directors by the articles of association of a company must be used bona fide for the benefit of the company as a whole and not to obtain some private advantage. Directors are not entitled to use their power of issuing and allotting shares merely for the purpose of defeating the wishes of an existing majority of shareholders or maintaining their own control of the company.


case_outcome: discussed

case_text: First, as to the question of standard of proof, the defendants submitted that the allegations that the directors acted with improper purpose were serious and that the principles in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 at 361-362 apply. It was submitted the Court must be satisfied that the allegations are made out having regard to the gravity of the matters alleged and that such satisfaction must not be produced by 'inexact proofs, indefinite testimony or indirect inferences'. 22 It is undoubtedly plain as stated in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66 ; (1992) 110 ALR 449 at 450 that the principles in Briginshaw do not create any different or intermediate standard of proof between the civil standard of on a balance of probabilities and the criminal standard of proof of beyond reasonable doubt. Clearly where there is an allegation of impropriety or criminal or fraudulent conduct then a court should not lightly make a finding of a person being guilty of such conduct. However, the essential task always remains of looking at the evidence in its totality and determining whether a party has proved on the balance of probabilities the factual matters required for that party to succeed.


case_text: In Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Company NL [1968] HCA 37 ; (1968) 121 CLR 483 at 492, Barwick CJ, McTiernan and Kitto JJ said the following about the power vested in directors to issue new shares: The suggested corollary is that an exercise of the power cannot be maintained as having been bona fide in the interests of the company unless the company had at the time of the exercise an immediate need of the capital to be paid up on the new shares. In many a case this may be true as a proposition of fact; but in our opinion it is not true as a general proposition of law. 28 Further on (at 493) their Honours said as follows: The principle is that although primarily the power is given to enable capital to be raised when required for the purposes of the company, there may be occasions when the directors may fairly and properly issue shares for other reasons, so long as those reasons relate to a purpose of benefiting the company as a whole, as distinguished from a purpose, for example, of maintaining control of the company in the hands of the directors themselves or their friends. An inquiry as to whether additional capital was presently required is often most relevant to the ultimate question upon which the validity or invalidity of the issue depends; but that ultimate question must always be whether in truth the issue was made honestly in the interests of the company. 29 And further on (at 493-494) their Honours said as follows: But if, in making the allotment, the directors had an actual purpose of thereby creating an advantage for themselves otherwise than as members of the general body of shareholders, as for instance by buttressing their directorships against an apprehended attack from such as Harlowe, the allotment would plainly be voidable as an abuse of the fiduciary power, unless Burmah had no notice of the facts. 30 Further, I accept that even an honest and good faith exercise of power by directors may nevertheless be improper. 31 Thirdly, I make some observations on the factual enquiry necessary in identifying the purpose for which a power may be exercised. It may be possible to conclude on a collective reason or purposes of a board comprising multiple directors, even though each statement by a director of his or her reasons or purposes may differ (see eg Langton v Forsayth Mineral Exploration NL (1975) 1 ACLR 227). This is not to say that each director's position must not be analysed separately; but I must determine the substantial purpose of the directors (if necessary the majority of directors) which is causative of the decision being made to allot the shares (see Harlowe's [1968] HCA 37 ; 121 CLR 483 and Re Southern Resources Ltd (No 2) (1989) 15 ACLR 770). Obviously, I must have regard to the circumstances surrounding the decision in question, as well as the evidence of the directors themselves. 33 In Harlowe's 121 CLR 483, in determining whether an allotment of shares had been made for an improper purpose, Barwick CJ, McTiernan and Kitto JJ said at 493: Directors in whom are vested the right and the duty of deciding where the company's interests lie and how they are to be served may be concerned with a wide range of practical considerations, and their judgment, if exercised in good faith and not for irrelevant purposes, is not open to review in the courts. 35 Similarly in Idameneo (No 123) Pty Ltd v Symbion Health Ltd (2007) 64 ACSR 680 , at [114], Lindgren J stated: There is a well-known line of authority to the general effect that it is the province of directors, not the courts, to identify where the interests of a company lie, and that the courts do not exercise a supervisory function over the business judgments of directors: see, for example, Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co NL [1968] HCA 37 ; (1968) 121 CLR 483 at 493; Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821 at 832.


case_text: Similarly, in Howard Smith Ltd v Ampol Petroleum Ltd [1974] 1 NSWLR 68 at 74 the Privy Council stated that: ... it would be wrong for the court to substitute its opinion for that of the management, or indeed to question the correctness of the management's decision, on such a question, if bona fide arrived at. There is no appeal on merits from management decisions to courts of law: nor will courts of law assume to act as a kind of supervisory board over decisions within the powers of management honestly arrived at. 35 Similarly in Idameneo (No 123) Pty Ltd v Symbion Health Ltd (2007) 64 ACSR 680 , at [114], Lindgren J stated: There is a well-known line of authority to the general effect that it is the province of directors, not the courts, to identify where the interests of a company lie, and that the courts do not exercise a supervisory function over the business judgments of directors: see, for example, Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co NL [1968] HCA 37 ; (1968) 121 CLR 483 at 493; Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821 at 832.


case_text: Similarly in Idameneo (No 123) Pty Ltd v Symbion Health Ltd (2007) 64 ACSR 680 , at [114], Lindgren J stated: There is a well-known line of authority to the general effect that it is the province of directors, not the courts, to identify where the interests of a company lie, and that the courts do not exercise a supervisory function over the business judgments of directors: see, for example, Harlowe's Nominees Pty Ltd v Woodside (Lakes Entrance) Oil Co NL [1968] HCA 37 ; (1968) 121 CLR 483 at 493; Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821 at 832.


case_title: Jones v Dunkel (1959) 101 CLR 298

case_text: It was also submitted that I should draw an inference that this email of 9 July 2008 was part of the overall plan to consolidate the directors' control of the company, reinforced by the failure to call Mr Baguley; reliance was placed to this end upon the principle in Jones v Dunkel (1959) 101 CLR 298. Of course, the failure to call evidence may, not must, lead to an inference that the uncalled evidence would not have assisted a party's case. The application of the principles in Jones v Dunkel must be applied in the context of the evidence that is presented to a court. Assuming that the defendants were in a position to call Mr Baguley, I do not regard the email as of sufficient significance to consider Mr Baguley to be a witness expected to be called. Further, on the evidence presented by Bell IXL, I would not otherwise require an explanation of the email of 9 July 2008 in circumstances where the main issues of fact relate to the events in May 2008. In this hearing, all of the directors and Mr Waller gave evidence and were subject to cross-examination on all the issues raised for determination between the parties, including the existence of some impermissible arrangement between the defendants. 94 I am not saying the email of 9 July may not be relevant to showing (on Bell IXL's case) an overall strategy of improper purpose. However, in the end, the conclusion I have reached is that irrespective of the wording adopted in the 9 July email, the purpose in making the allotment was not that described by Bell IXL. I have reached this conclusion on the basis of all the evidence before me including the evidence of all the actual persons involved in the decision-making in May and June 2008. 95 In view of the above, I propose to dismiss the proceeding and make other orders upon hearing further from the parties. I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. Associate: Dated: 26 September 2008 Counsel for the Plaintiff: Mr Mark A Robins Solicitor for the Plaintiff: Pointon Partners Counsel for the First Defendant: Mr Noel C Hutley SC, Mr David J O'Callaghan SC & Mr Robert G Craig Solicitor for the First Defendant: Johnson Winter & Slattery Counsel for the Second and Third Defendants: Mr David T Forbes Solicitor for the Second and Third Defendants: Chang, Pistilli & Simmons Date of Hearing: 2 - 4, 10 September 2008 Date of Judgment: 26 September 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1457.html


case_text: Thirdly, I make some observations on the factual enquiry necessary in identifying the purpose for which a power may be exercised. It may be possible to conclude on a collective reason or purposes of a board comprising multiple directors, even though each statement by a director of his or her reasons or purposes may differ (see eg Langton v Forsayth Mineral Exploration NL (1975) 1 ACLR 227). This is not to say that each director's position must not be analysed separately; but I must determine the substantial purpose of the directors (if necessary the majority of directors) which is causative of the decision being made to allot the shares (see Harlowe's [1968] HCA 37 ; 121 CLR 483 and Re Southern Resources Ltd (No 2) (1989) 15 ACLR 770). Obviously, I must have regard to the circumstances surrounding the decision in question, as well as the evidence of the directors themselves.


case_text: It is undoubtedly plain as stated in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66 ; (1992) 110 ALR 449 at 450 that the principles in Briginshaw do not create any different or intermediate standard of proof between the civil standard of on a balance of probabilities and the criminal standard of proof of beyond reasonable doubt. Clearly where there is an allegation of impropriety or criminal or fraudulent conduct then a court should not lightly make a finding of a person being guilty of such conduct. However, the essential task always remains of looking at the evidence in its totality and determining whether a party has proved on the balance of probabilities the factual matters required for that party to succeed.


case_text: In Ngurli Ltd v McCann [1953] HCA 39 ; (1953) 90 CLR 425 at 439-440, the High Court said of the power to issue shares: The power must be used bona fide for the purpose for which it was conferred, that is to say, to raise sufficient capital for the benefit of the company as a whole. It must not be used under the cloak of such a purpose for the real purpose of benefiting some shareholders or their friends at the expense of other shareholders or so that some shareholders or their friends will wrest control of the company from the other shareholders. It was submitted by Bell IXL that the expression 'under the cloak of such a purpose' was an apt description of the allegedly false reasons for the placement given by LFE's directors.


case_text: Thirdly, I make some observations on the factual enquiry necessary in identifying the purpose for which a power may be exercised. It may be possible to conclude on a collective reason or purposes of a board comprising multiple directors, even though each statement by a director of his or her reasons or purposes may differ (see eg Langton v Forsayth Mineral Exploration NL (1975) 1 ACLR 227). This is not to say that each director's position must not be analysed separately; but I must determine the substantial purpose of the directors (if necessary the majority of directors) which is causative of the decision being made to allot the shares (see Harlowe's [1968] HCA 37 ; 121 CLR 483 and Re Southern Resources Ltd (No 2) (1989) 15 ACLR 770). Obviously, I must have regard to the circumstances surrounding the decision in question, as well as the evidence of the directors themselves. 36 This is not to say that the court cannot examine the objective commercial justification of a course of action to assess the credibility of assertions by the directors as to their motives and purposes: see Re Southern Resources Ltd (No 2) 15 ACLR 770. 37 Ultimately, each case must turn on its facts, after an assessment of all the evidence, which includes the documentary material, but read in light of other admissible evidence which may impact upon the meaning to be given to documentary evidence and the context of such documentary evidence and the proper inferences that may be drawn. The evidence of directors must be considered and evaluated, always in the context of the other evidence before the court. In some circumstances a court may reject the evidence of directors, not because it is intentionally false, but because in the circumstances the overwhelming context is to the contrary, which leads the court to conclude that the evidence of the directors is more reconstruction than recollection. 38 Each director and Mr Waller gave evidence and was subjected to cross-examination and an attack upon their credit. I have come to the view that I should accept the evidence of each of the directors and Mr Waller of Aegis. They all answered the questions asked of them directly and without prevarication and, in my view, honestly. For the reasons given in the course of this judgment, I do not accept that the context of the allotment of shares is overwhelmingly against the evidence given as to the purpose of the allotment. There was a commercial basis for the allotment and, in my view, it was appropriate as a matter of business judgment for the directors in view of the history of LFE and potential future activities. 39 One attack upon the credibility of the directors was based upon the lack of any proper board papers and lack of documents evidencing any real search for the placement of the shares. 40 Bell IXL's contention was that the lack of any proper board papers and the lack of documents evidencing any real search for a placement was the best evidence of the improprieties of the directors. However, as I have said, I am satisfied that it was not the practice of these directors to record in writing, whether by diary note or otherwise, the content of ongoing discussions amongst themselves or with third parties. The directors did not run LFE by recording or minuting each step of every transaction. Of course, it is not the function of the board minutes to confirm decisions, such as the decision taken on 19 May 2008 to meet with Mr Booth on 20 May 2008 to discuss the placement. The fact that the directors so acted is consistent with the circumstances of the directors assuming their defacto 'executive' roles at a critical time for LFE, where it had no staff in Australia, and where the directors were compelled to perform all the executive and non-executive functions in order to assist the management of the company.


case_text: Directors of a company cannot ordinarily exercise a fiduciary power to allot shares for the purpose of defeating the voting power of existing shareholders by creating a new majority ( Whitehouse v Carlton Hotel Pty Ltd [1987] HCA 11 ; (1987) 162 CLR 285 at 289 per Mason, Deane and Dawson JJ).


case_text: One of the relevant considerations on a stay application of this kind is whether the proposed appeal is genuine and based on reasonably arguable grounds: see Andrews v John Fairfax & Sons Limited [1979] 2 NSWLR 184 at 188-9. I could form no judgment on this point in the absence of a notice of appeal and submissions from counsel. No doubt other potentially relevant considerations could arise from Mr Siminton's consideration of the terms of the orders. 15 For these reasons I adjourned the further hearing of this stay application until 15 November 2007. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. Associate: Dated: 15 November 2007 Counsel for the Applicant: Ms D Mortimer SC & Mr S Hibble Solicitor for the Applicant: Australian Prudential Regulation Authority Counsel for the Respondent: Mr D Sharp Solicitor for the Respondent: Erhardt & Associates Date of Hearing: 7 November 2007 Date of Judgment: 15 November 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1714.html


case_text: On 26 October 2007 I delivered judgment in this proceeding: see Australian Prudential Regulation Authority v Siminton (No 6) [2007] FCA 1608. I found that Mr Siminton was a person who had carried on and was proposing to carry on the business of banking in Australia and that such conduct constituted or would constitute a contravention of s 7 of the Banking Act 1959 (Cth) ("the Act "). I also found that Mr Siminton had engaged in conduct which contravened s 66 of the Act . I foreshadowed making injunctive orders to restrain Mr Siminton from engaging in further contraventions of the Act and orders appointing a receiver to identify the persons who had made deposits in the "bank" established by Mr Siminton, to get in the funds which were the subject of an order, made by Gray J on 10 January 2006, and to provide for an orderly and equitable distribution of those funds to depositors. I listed the matter for mention on 7 November 2007. On that day I made the foreshadowed orders.


case_text: By notice of motion dated 5 November 2007 Mr Siminton moved the Court for orders that: • $500,000 of the moneys subject to the orders made by Gray J on 10 January 2006, be released to him for the purpose of the payment of his legal expenses including the costs of a proposed appeal; • The execution of the judgment, insofar as it appointed and empowered a receiver be stayed pending the hearing and determination of a proposed appeal; and • The order made by the Full Court on 19 July 2006 that Mr Siminton pay a $50,000 fine within 60 days or such further time and by such instalments as the District Registrar might allow be stayed pending the hearing and determination of the proposed appeal: see Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 ; (2006) 152 FCR 129. 3 I refused the applications for orders that $500,000 be released to Mr Siminton and that there be a stay of the Full Court's order. I adjourned the application for a stay of execution of the orders relating to the appointment of a receiver to 15 November 2007. I indicated that I would publish my reasons for these decisions at a later date. These are those reasons. 4 This proceeding was commenced on 14 December 2005. Since that time Mr Siminton has accumulated unpaid legal fees totalling almost $500,000. He sought release of that amount in order to pay his solicitor and counsel their outstanding fees and to provide funds to support the prosecution of an appeal from my judgment and orders in the principal proceeding. Counsel also submitted that, unless the funds were released, Mr Siminton would be denied natural justice because he might have to prosecute the proposed appeal without legal assistance. Counsel asserted that Mr Siminton had the right to use the funds in the manner proposed. 11 Even if I had the power to grant the stay I would not be disposed, in the exercise of my discretion, to do so. Mr Siminton has been in default of the Full Court's orders since 2 October 2006. No explanation for the delay in making the application has been proffered. More importantly, it is difficult to conceive of what purpose would be served by granting a stay pending the hearing and determination of the foreshadowed appeal from my judgment. Even if a Full Court were to hold that Mr Siminton had not contravened any of the provisions of the Act such a finding would not impinge in anyway on the efficacy of the Full Court's order that Mr Siminton pay a $50,000 fine or the legal consequences of his failure to do so. Mr Siminton appears to continue to labour under the misconception that the contempt for which the fine was imposed can, in some way, be purged or excused by findings that the orders of Sundberg J which Mr Siminton was found to have breached, should not have been made because Mr Siminton had not, in fact, contravened the Act . This misconception was disabused by the Full Court over a year ago: see Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 ; (2006) 152 FCR 129 at 137-8. It may be that the stay is sought on the assumption that, if he is successful in persuading the Full Court that he has not contravened the Act , the money will immediately become available to him to use as he wishes, including paying the fine. Such an assumption would be misplaced. Deposits were made on terms which required that they would be invested so as to yield interest at promised rates. They were not invested so that they could be used by Mr Siminton for his own purposes. Mr Siminton's fiduciary obligations to depositors may well prevent him from drawing on depositor's funds to pay the fine. Any stay would, therefore, be of doubtful utility. 12 For these reasons the application for a stay of the Full Court's order was refused. 13 Although, in the judgment which I handed down on 26 October 2007, I had foreshadowed making orders in relation to the appointment and duties of a receiver, the orders were not made until 7 November 2007. Mr Siminton's notice of motion was filed on 5 November 2007. The application for a stay of my orders was therefore made in anticipation of those orders being made but at a time when Mr Siminton was unaware of the terms of those orders. He had not, therefore, had the opportunity of framing a notice of appeal, even in draft form.


case_text: The Full Court's order read: "2 Paragraph 2 of the orders of Merkel J made on 10 April 2006 is set aside and in lieu thereof it is ordered: (a) A fine in the sum of $50,000 be imposed on the appellant in respect of the contempt ... (b) The fine be paid to the District Registrar within 60 days or such further time and by such instalments as the District Registrar may allow. (c) In the event that there is default in payment of the fine or of any instalment, the District Registrar shall apply to a judge of the Court for direction concerning enforcement." On 18 September 2006, the day on which the sixty day period prescribed by Order 2(b) expired, Mr Siminton applied for an extension of time within which to make payment of the $50,000. By order dated 18 September 2006 the District Registrar extended the time for payment to 5:00 pm on 2 October 2006. On that day Mr Siminton's solicitors wrote to the District Registrar seeking a further extension of one month for Mr Siminton to pay the fine. No reason for seeking the extension was given. The application was refused. The fine has not since been paid. On 7 November 2007 I found that Mr Siminton had committed a contempt of the Full Court's order by failing to make the $50,000 payment (or that part of it which he had the capacity to pay) in a timely manner: see Australian Prudential Regulation Authority v Siminton (No 8) [2007] FCA 1612. 10 I harbour grave doubts as to whether I have the power, should I be minded to exercise it, to stay the operation of the Full Court's order. The Full Court imposed the fine and provided the mechanism by which Mr Siminton could be relieved of the obligation to pay it in whole or in part within the 60 days which the Court allowed. The Full Court did not confer on a single judge of the Court the power to vary its orders or delay their implementation.


case_text: On general agency principles, Mr Somerset's knowledge of the falsity of the proposed confessional advertisement is attributable to his principal, AMI. Mr Somerset became party to the arrangement to deceive the public in the course of acting in AMI's interests, and the case is not one of a fraud perpetrated by Mr Somerset exclusively against AMI; cf Beach Petroleum NL v Johnson (1993) 43 FCR 1 at [22.31] [22.35] and cases there cited. Another way of expressing the matter is to say that because Mr Somerset was AMI's agent, AMI cannot claim, as against Mr Turpie, to have relied on what Mr Turpie said and wrote, devoid of the accompanying context that Mr Somerset and Mr Turpie were proposing a lie to the public. Mr Turpie did not mislead or deceive Mr Somerset, and if Mr Somerset misled and deceived Dr Vaisman into believing that Mr Turpie suffered from impotence or erectile dysfunction (as noted below, I do not accept that Dr Vaisman had any belief one way or the other on that matter), it was Mr Somerset, not Mr Turpie, who caused AMI's loss; cf Dalton v Lawson Hill Estate Pty Ltd (2005) 66 IPR 525 at [121] [130].


case_title: Dalton v Lawson Hill Estate Pty Ltd (2005) 66 IPR 525


case_text: In my view, the Federal Magistrate was correct to reach this conclusion. In Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 (2002) 209 CLR 597, the High Court held that, when the Immigration Review Tribunal had denied an applicant procedural fairness, it was open to that tribunal to take the view that it had not performed its statutory function, to set aside its purported decision and to revisit the matter. As a step to reaching that conclusion, at [52], Gaudron and Gummow JJ cited with approval the judgment of the Supreme Court of Canada in Chandler v Alberta Association of Architects [1989] 2 SCR 848 at 861-862, where Sopinka J, which whom Dixon CJ and Wilson J concurred, said: As a general rule, once [an administrative] tribunal has reached a final decision in respect to the matter that is before it in accordance with its enabling statute, that decision cannot be revisited because the tribunal has changed its mind, made an error within jurisdiction or because there has been a change of circumstances.


case_title: Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 (2002) 209 CLR 597


case_text: In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30 ; (1998) 195 CLR 1 at 18, Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ referred to injury in employment as a term which "covers injury of any compensable kind", and alteration to an employee's position to the employee's prejudice as: "... a broad additional category which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question." 23 Suspension from employment is an injury of a compensable kind. It is also an "affection of, or deterioration in, advantages enjoyed" before the suspension. Suspension can be a form of punishment and was most certainly a form of punishment meted out to Ms Eghnatios by AOS for being an alleged "trouble maker" and standing up for her workplace rights.


case_text: It is noteworthy that in Community & Public Sector Union v Telstra Corporation Ltd [2001] FCA 267 ; (2001) 104 IR 195 at 199 the Full Court endorsed the view expressed in Squires v Flight Stewards Association of Australia (1982) 2 IR 155 at 164 by Ellicott J that an employee who was "stood down" on full pay for one month was injured in his employment because he was: "... treated substantially differently to the manner in which [an employee] is ordinarily treated and where that treatment can be seen to be injurious or prejudicial."


case_text: Employees also have the right to assist in the preparation and presentation of cases in courts of law and industrial tribunals designed to assert their legal rights without fear of thuggish retaliatory disciplinary action by an employer. The community should not tolerate the conduct which AOS engaged in with respect to Ms Eghnatios. The total penalty which should be imposed is $60,000. Having regard to the totality principle, it would not be appropriate to treble that amount to reflect the three prohibited reasons for which the offending conduct was taken. It is appropriate, however, for the Court to punish the two separate discriminatory overt acts of the transfer and the suspension of an individual employee. The total sentence reflects the totality principle as discussed by Jessup J in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at 570-571; [145] to [146]. 41 The Court makes the following orders: 1. Pursuant to s 807(1)(a) of the Workplace Relations Act 1996 (Cth) ("the Act ") a penalty of $60,000 is imposed on the respondent. 2. The penalty is to be paid into Consolidated Revenue within 21 days of the date of this order. 3. Pursuant to s 807(1)(b) of the Act , the respondent pay Ms Joanne Eghnatios, within 21 days of the date of this order, the sum of $6,668.97 by way of compensation for damage suffered by her as a result of contraventions of Div 4 of Pt 16 of the Act by the respondent. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. Associate: Dated: 14 February 2008 Counsel for the Applicant: Mr P O'Grady Solicitor for the Applicant: Australian Government Solicitor There was no appearance for the Respondent Date of Hearing: 4 February 2008 Date of Judgment: 14 February 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/66.html


case_title: Community & Public Sector Union v Telstra Corporation Ltd [2001] FCA 267 ; (2001) 104 IR 195