case_text: order that the First Respondent, Second Respondent and/or Third Respondent be restrained from infringing the applicant's copyright in the applicant's photographs, images and written words by reproducing (including by way of web-site) or authorising the reproduction of such photographs, images and written words or a substantial part thereof without the licence of the applicant. There was no dispute between the parties as to the principles which attend the granting of interlocutory injunctions. In a judgment recently delivered in Sebel Furniture Limited v Acoustic and Felts Pty Ltd [2009] FCA 6 ( Sebel's case) at paras 19-31, Foster J offers a comprehensive summary of those principles, which I gratefully adopt: THE RELEVANT PRINCIPLES (INTERLOCUTORY INJUNCTIONS) In Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 ; (2001) 208 CLR 199 , a majority of the High Court held that, where an interlocutory injunction is sought (inter alia) in respect of private rights, it is necessary to identify the legal or equitable rights which are to be determined at the trial and in respect of which the final relief is sought. Their Honours who comprised the majority made clear that the final relief sought need not be injunctive in nature. See [8] [21] (pp 216 220) (per Gleeson CJ); [59] to [61] (pp 231 232) (per Gaudron J); and [86] [92] (pp 239 242); [98] to [100] (pp 244 246); and [105] (p 248) (per Gummow and Hayne JJ). At [10] (p 216), Gleeson CJ also specifically cited with approval Spry, The Principles of Equitable Remedies , 5th edn, 1997 (pp 446 456). In his Reasons for Judgment, at [13] (p 218), Gleeson CJ expressly approved the following passage from the Reasons for Judgment of Mason ACJ in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58 ; (1986) 161 CLR 148 at 153: In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction. These remarks of Mason ACJ which were approved by Gleeson CJ echo the observations made by the High Court in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618 at 622 623. In Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 227 CLR 57 at [65] (pp 81 82), when referring to the well-known passage in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; 118 CLR 618 at 622 623, Gummow and Hayne JJ said: By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument [ [1968] HCA 1 ; (1968) 118 CLR 618 at 620]. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal [ [1968] HCA 1 ; (1968) 118 CLR 618 at 622]: How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks. At [70] to [72] (pp 83 and 84), their Honours went on to explain the similarities and differences between the test expounded in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; 118 CLR 618 and the test articulated in American Cyanamid Co v Ethicon Ltd [1975] UKHL 1 ; [1975] AC 396 as follows: When Beecham and American Cyanamid are read with an understanding of the issues for determination and an appreciation of the similarity in outcome, much of the assumed disparity in principle between them loses its force. There is then no objection to the use of the phrase "serious question" if it is understood as conveying the notion that the seriousness of the question, like the strength of the probability referred to in Beecham , depends upon the considerations emphasised in Beecham . However, a difference between this Court in Beecham and the House of Lords in American Cyanamid lies in the apparent statement by Lord Diplock that, provided the court is satisfied that the plaintiff's claim is not frivolous or vexatious, then there will be a serious question to be tried and this will be sufficient. The critical statement by his Lordship is "[t]he court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried" [1975] UKHL 1 ; [[1975] AC 396 at 407]. That was followed by a proposition which appears to reverse matters of onus [ [1975] UKHL 1 ; [1975] AC 396 at 408] : So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought. (Emphasis added.) Those statements do not accord with the doctrine in this Court as established by Beecham and should not be followed. They obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought. The second of these matters, the reference to practical consequences, is illustrated by the particular considerations which arise where the grant or refusal of an interlocutory injunction in effect would dispose of the action finally in favour of whichever party succeeded on that application [See the judgment of McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 535 536 and the article by Sofronoff, " Interlocutory Injunctions Having Final Effect ", Australian Law Journal, vol 61 (1987) 341.95]. The first consideration mentioned in Beecham , the nature of the rights asserted by the plaintiff, redirects attention to the present appeal. ... The remaining questions identified by Mason ACJ in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58 ; 161 CLR 148 require Sebel to show that: (a) it will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted; and (b) the balance of convenience favours the granting of an injunction. The first of these matters involves an assessment by the Court as to whether the claimant would, in all material respects, be in as good a position if he were confined to his damages remedy, as he would be in if an injunction were granted (see the discussion of this aspect in Spry, The Principles of Equitable Remedies , 7th edn, 2007 at pp 383 389; at pp 397 399; and at pp 457 462). The second of these matters requires the Court to exercise a discretion. In exercising that discretion, the Court is required to assess and compare the prejudice and hardship likely to be suffered by the defendant, third persons and the public generally if an injunction is granted, with that which is likely to be suffered by the claimant if no injunction is granted. In determining this question, the Court must make an assessment of the likelihood that the final relief (if granted) will adequately compensate the claimant for the continuing breaches which will have occurred between the date of the interlocutory hearing and the date when final relief might be expected to be granted. In order to address the irreparable injury question, the balance of convenience and the balance of justice in the present case, it is necessary to consider the nature and strength of Sebel's case and the circumstances in which the respondent decided to compete with Sebel by importing the Titan chair into Australia and by promoting and selling that chair in this country. It is also necessary to consider and evaluate the impact that the grant or refusal of an injunction will have or is likely to have on third persons and the public generally. In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30 ; (1998) 195 CLR 1 at [65] and [66] (pp 41 43), Brennan CJ and McHugh, Gummow, Kirby and Hayne JJ, in a joint judgment, expressly adopted a passage from Spry, The Principles of Equitable Remedies (5th edn, 1997, at pp 402 403), which may be summarised as follows: (a) In assessing the balance of convenience in an interlocutory injunction application, the interests of the public and third persons are relevant and have more or less weight according to other material circumstances; (b) Whether those interests tend to favour the grant or the refusal of an injunction in any given case depends upon the circumstances of that case; and (c) Hardship visited upon third persons or the public generally by the grant of an interlocutory injunction will rarely be decisive. The question is how to apply those principles to the circumstances of the present case, insofar as they have been revealed on the evidence led on the hearing of the interlocutory injunction? In a general way the proceedings might be described as a suit between two trade competitors in the market for the supply of fishing lures and associated equipment. Mr Peter Pakula, the director of Pakula Tackle, has a long association with that market. As long ago as 1987, Mr Pakula caused a business name "Pakula Tackle" to be registered in Sydney. He carried on business under this name until December 1999. The business embraced the design, manufacture, distribution and sale of fishing lures. The lures were for use in game fishing. Mr Pakula has deposed and it does not seem to be controversial that lures produced in the course of this business quickly became well recognised and popular within the game fishing fraternity both in Australia and worldwide. In December 1999, Mr Pakula sold his business to a company, Tailored Marine Accessories Pty Ltd (Tailored Marine). A director of that company was a Mr John Zacaropoulos whose then wife was Mrs Jennifer Zacaropoulos. The Second Respondent in these proceedings, Mr Mario Zacaropoulos, is the cousin of Mr John Zacaropoulos. Mr Mario Zacaropoulos commenced to work in the business along with his cousin John upon its acquisition by Tailored Marine from Mr Pakula. Mr Pakula continued "for some time" to work in that business as a "consultant". In or about May 2004, Mr John Zacaropoulos and wife Jennifer separated. The present Applicant, Pakula Tackle was incorporated at about the same time. Under the terms of their separation Mrs Jennifer Zacaropoulos became the sole shareholder in Pakula Tackle. I infer, although it is not completely clear on the affidavit material, that pursuant to the separation agreement Pakula Tackle succeeded to the business hitherto conducted by Tailored Marine. Mr Mario Zacaropoulos remained employed in the business, now as an employee of Pakula Tackle. Mr Pakula also continued his consultancy to the business. Over the course of his consultancy during the ownership of the business by Tailored Marine, Mr Pakula observed, so he states, a continuing deterioration in that business because of quality control, customer relations and production issues. That observation is controversial. Mr Mario Zacaropoulos has deposed to working "tirelessly" in the business "promoting an increase in the profits of the business" during the period from 2005 to 31 March 2007. Additionally, in respect of Zacatak's trade mark number 1169590, I note, as in like fashion as did Foster J in the Sebel case, that this is a registered trade mark. The Registrar must therefore have considered that this trade mark had about a distinguishing features which permitted its registration under the Trade Marks Act . The Registrar's opinion is not binding and his reasons for registering trade mark number 1169590 are not in evidence. Nonetheless, at this interlocutory stage, that Zacatak's alleged infringement arises, in part, from its use of its own registered trade mark, is not a factor which tells in favour of the grant of interlocutory injunctive relief to Pakula Tackle. For the reasons which I have given, I am not persuaded, in respect of registered mark 753420, albeit at an interlocutory stage, that Pakula Tackle has made out even a serious question to be tried. That conclusion renders strictly unnecessary for me to consider the ramifications of registered trade mark 753420 being registered to Gamefish Central, not Pakula Tackle. Section 106 of the Trade Marks Act makes provision for the assignment of a registered trade mark. Such an assignment may be made either with or without the goodwill of the business concerned in the relevant goods or services. The term "assignment" in relation to a trade mark is defined by s 6 of the Trade Marks Act to mean "an assignment by act of the parties concerned". No assignment of any of the marks pleaded is evidenced. Pakula Tackle is said to be an authorised user, but that is not the way its case is cast in the statement of claim. Further, the evidence led on its behalf to date on that subject is noteworthy for its vague generality.


case_outcome: considered

case_text: applying this test one does not engage in comparing the registered mark and the allegedly infringing mark side by side but instead asks one self whether, drawing upon an imperfect recollection, potential customers might form an impression that the allegedly infringing mark is one in the same as the registered trade mark; see Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 415. That there might possibly be public confusion is not sufficient. Approaching the question in this way and as a matter of general impression, my conclusion at this interlocutory stage is that Pakula Tackle's infringement case is weak in respect of any infringement of such rights as it may enjoy in respect of registered trade mark number 753420. I doubt whether, even drawing on imperfect recollection, a potential customer would be confused as between the two marks. There are obvious differences which one might think would play upon a recollection, the eagle in the case of the Pakula Tackle mark and the Australian Flag in the case of the Zacatak mark. The names themselves are radically different.


case_outcome: applied

case_text: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 595: It is not necessary, in order to find that a trade mark offends against the section, to prove that there is an actual probability of deception leading to a passing-off. While a mere possibility of confusion is not enough for there must be a real, tangible danger of its occurring ( Reckitt & Colman (Australia) Ltd v Boden [3], at pp 94, 95; Sym Choon & Co Ltd v Gordon Choons Nuts Ltd . [4], at p 79) it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt. (iii) In considering the probability of deception, all the surrounding circumstances have to be taken into consideration. (This includes the circumstances in which the marks will be used, the circumstances in which the goods will be bought and sold, and the character of the probable purchasers of the goods: Jafferjee v Scarlett [5], at p 120).


case_outcome: cited

case_text: is deposed to is an assignment by Gamefish Central to Pakula Tackle of the right to litigate the infringement of copyright. When this assignment occurred is not evidenced. In Taypar Pty Ltd v Santic (1989) 21 FCR 485 at 491, Spender J stated: Any infringement of the copyright in the drawing 87.404, the "Reflections" plan, or the house at Drayton Terrace, occurred at a time when Taypar was not the owner of the copyright, and in my view, Taypar is not competent to sue in respect of any such infringement. This was relied upon behalf of Zacatak so as to question whether Pakula Tackle had even established any standing to bring the alleged copyright infringement claim. For its part, Pakula Tackle sought comfort from a more recent decision, Global Brand Marketing Inc v Cube Footwear Pty Ltd (2005) 65 IPR 44. In that case, in the course of an interlocutory judgment in respect of an application for the dismissal of a proceeding or alternatively the striking out of a statement of claim, Goldburg J (at page 56, para 59) stated: According to para 24 of the statement of claim, the deed of assignment purports to assign "all part, present and future rights to sue for infringement of the copyright and all other intellectual property rights in the said sample patterns and footwear patterns used to produce footwear under licence from the applicant". This assignment of rights to sue is an assignment not of a bare right of action but the assignment of a right which is incidental to the assignment of intellectual property rights: see Taypar at FCR 491-2; IPR 153. The distinction between an assignment of copyright simpliciter and an assignment of copyright coupled with an assignment of rights to sue for infringement, whether past, present or future, does not appear to have been the subject of consideration in Dixon v Masterton .


case_text: Pakula Tackle website has the hall marks of a trade catalogue. So too does that of Zacatak. A trade catalogue can constitute an original literary work; University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608. In A One Accessory Imports Pty Ltd v Off Road Imports Pty Ltd (1996) 65 FCR 478 at 487, Drummond J stated: Copyright subsists in an "original literary work": s 32 of the Act. The expression "literary work" is defined in s 10 to include: "a table, or compilation, expressed in words, figures or symbols ... ". Trade catalogues are capable of constituting original literary works: University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601 at 608; Purefoy Engineering Co Ltd v Sykes Boxall & Co Ltd (1955) 72 RPC 89 at 95. The cases repeatedly say that whether a compilation has sufficient originality to attract copyright protection depends on the degree of skill, judgment or labour which has been involved in producing it. See Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273; [1964] 1 All ER 465; Football League Ltd v Littlewoods Pools Ltd [1959] Ch 637 at 650-651; Blackie & Sons Ltd v Lothian Book Publishing Co Pty Ltd [1921] HCA 27 ; (1921) 29 CLR 396 at 398-399; Real Estate Institute of New South Wales v Wood (1923) 23 SR (NSW) 349 at 352. So far as compilations that consist entirely of existing material, that is, material not created by the compiler, are concerned, Ladbroke (Football) Ltd is authority that originality may be found, and a claim of copyright may therefore subsist, by virtue of selection alone. See at 277-278; 469-470, per Lord Reid, at 286-287; 476-477 per Lord Hodson, at 289-290; 478-479 per Lord Devlin and at 292, 293; 480, 481 per Lord Pearce. In Collis v Cater, Stoffell & Fortt Ltd (1898) 78 LT 613, a decision that has "never been doubted" ( Ladbroke (Football) Ltd at 290; 479) copyright was held to exist in a chemist's catalogue "although it contained `nothing whatever but a simple list' of drugs, etc with names and prices which the plaintiff kept in stock or could obtain to order": Ladbroke (Football) Ltd at 278; 470. That copyright can exist in such a mundane compilation of information readily available to all shows why the skill, judgment and labour in selecting what to include in a trade catalogue will be as relevant as the often very limited skill, judgment and labour involved in putting that selection into written form, in determining whether the compilation has sufficient "originality" to attract copyright. In considering whether a compilation that wholly consists of or that includes existing material is itself an original work, the question is whether the compilation, looked at as an entity, is original: it is not proper to dissect the work into its parts, and by determining that the individual parts lack originality, to deny originality to the whole work. This issue is dealt with fully in Ladbroke (Football) Ltd . The reason is that by s 32 of the Act, "copyright is a statutory right which ... would appear to subsist, if at all, in the literary or other work as one entity", per Lord Hodson at 285; 475. See also Ladbroke (Football) Ltd at 276-277, 290 and 291; 468-469 and 478-479. Copyright in a work will be infringed by the unauthorised reproduction of a substantial part of the work: see ss 36(1) and 14 (1) of the Act. In determining whether that has occurred, it is sometimes said that the question is whether the part taken could by itself be the subject of copyright. But as Lord Reid said at 277; 469, when both the questions whether copyright subsists in a work and, if so, whether it has been infringed are in issue: " ... that is only a shortcut, and the more correct approach is first to determine whether the plaintiffs' work as a whole is `original' and protected by copyright, and then to inquire whether the part taken by the defendant is substantial." Later in that same case, Drummond J observed (at 490): Ladbroke (Football) Ltd, Reddwood Music and Eisinger proceed on the basis that a composite work made up of pirated material and original material produced by the compiler can itself be an original work possessing copyright, even though it may also infringe the copyright in the pirated material included in it. In my opinion, a work can be an original work in which copyright will subsist, even though it is itself an infringement of the copyright in an earlier work because it is, in part, a copy of a substantial part of that copyright work. This will be the position provided the later work includes qualitatively significant changes to the copies material.


case_text: In Byrne v Australian Airlines Ltd [1995] HCA 24 ; (1995) 185 CLR 410 at 422 Brennan CJ, Dawson and Toohey JJ, after referring to the criteria listed in BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] HCA 40 ; (1977) 180 CLR 266 at 283, said: "as Deane J has observed [in Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64 ; (1984) 156 CLR 41 at 121], the cases in which the criteria ... have been applied in this Court are cases in which there was a formal contract, complete on its face. He pointed out that a rigid approach should be avoided in cases, such as the present, where there is no formal contract. In those cases the actual terms of the contract must first be inferred before any question of implication arises. That is to say, it is necessary to arrive at some conclusion as to the actual intention of the parties before considering any presumed or imputed intention."


case_title: BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] HCA 40 ; (1977) 180 CLR 266


case_text: Their Honours then quoted the observations of Deane J in Hawkins v Clayton [1988] HCA 15 ; (1988) 164 CLR 539 at 573 as to the test to be applied in cases where the parties have not spelt out the full terms of their contract: "a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case." 114 Given what was agreed between the parties (as to which see [105]), the term in par 3(f) cannot be implied. Harold and Saul are entitled to use the name as long as they operate the City restaurant. It is accordingly not necessary for the reasonable or effective operation of the contract that they have ownership rights in the name. For them to have such rights would be inconsistent with the agreement that was in fact made. I note that in the applicants' written submissions the implication of this term is predicated on "the express agreement" of the parties upon the terms pleaded in par 3(a) to (e) of the statement of claim. Of course essential parts of that agreement have not been upheld. 115 It is clear from alleged terms 3(f) and (g) that the latter is dependent on the former. That is to say, it is because the parties are joint owners of the intellectual property that none of them can use the name Squires Loft without the consent of all of them. Even if sub-par (g) were independent of (f), I do not consider that it is to be implied. In determining whether it is necessary for the reasonable or effective operation of the contract to imply such a term, it is appropriate to take into account that the draft licence prepared in June 1997, given by Lionel to Saul for his consideration, contained in clause 3.32, to which Lionel's marginal notes drew Saul's attention, a provision that the licensee was not entitled to prevent the use of the name Squires Loft by any other licensee. Saul expressed no concern about this provision, though another provision in that clause did not accord with the arrangements between the parties and was to be corrected. Further, the whole tenor of Harold and Saul's case is that there would be other licensees or franchisees who would be entitled to use the name. In these circumstances I am not satisfied that it is necessary to imply the term in par 3(g). I note that in their written submissions the applicants did not seek to support the implication of this term.


case_text: Traditionally, contract formation is analysed in terms of offer and acceptance. However, as Heydon JA recognised in Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61 ; (2001) 53 NSWLR 153 at 179, offer and acceptance are neither necessary nor sufficient to explain every case. While it is an error to assume that because something has been done, there must be a contract pursuant to which it has been done, a contract may nevertheless be inferred from the acts and conduct of the parties: Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117 per McHugh JA (Hope and Mahoney JJA concurring); Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32 at 80 83; Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 14,551 at 14,569; (1995) Aust Contract Reps |P90-059 at 90,322. The relevant conduct of the parties must be capable of proving all the essential elements of the alleged contract, so that if the conduct is too ambiguous or vague to establish a contract with legal certainty, no contract will be inferred.


case_title: Integrated Computer Systems Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) BPR 11,110


case_title: Vroon BV v Foster's Brewing Group Ltd [1994] 2 VR 32


case_title: Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd (1995) 7 BPR 14,551; (1995) Aust Contract Reps |P90-059


case_text: It has generally been accepted since the House of Lords decision in James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 that while evidence of subsequent conduct is admissible to determine the existence of a contract, it is not admissible to determine the terms of a contract: see D W McLauchlan, "Contract Formation, Contract Interpretation, and Subsequent Conduct" (2006) 25 University of Queensland Law Journal 77. This rule must be understood in its context. Subsequent conduct is not admissible to resolve ambiguities in a contract the existence of which is not disputed. But such a rule would be nonsensical in the case of contracts the existence of which is only ascertained or confirmed by subsequent conduct. In such cases, the subsequent conduct does not resolve ambiguities but rather discloses whether the parties reached agreement and the content of such agreement. Without evidence of subsequent conduct relevant to the terms of the contract, all that could be said is that the parties reached agreement; it could not be said about what. I therefore agree with the following passage from the judgment of Nettle JA (with which Chernov and Ashley JJA concurred) in Husain v O & S Holdings (Vic) Pty Ltd [2005] VSCA 269 at [51] : "a manifestation of mutual assent may be made even though neither offer or acceptance can be identified and even though the moment of formation cannot be determined. In point of principle I see no reason why that sort of analysis should not apply as much to an aspect or term of a contractual relationship as to the existence of the relationship itself." I was not taken to any detailed judicial analysis of this question and nor was it addressed at any length by the parties. It is therefore not appropriate to say anything more other than that there are many unresolved questions in this area. There is a world of grey between the two clear extremes of a written contract and a contract "drifted into" by subsequent conduct. This case is not the vehicle in which to determine the extent to which subsequent conduct is relevant to ascertaining the terms of these grey area contracts.


case_outcome: approved

case_title: Husain v O & S Holdings (Vic) Pty Ltd [2005] VSCA 269


case_title: The Aramis [1989] 1 Lloyd's Rep 213

case_text: A court will not lightly infer a contract from the conduct of the parties. In The Aramis [1989] 1 Lloyd's Rep 213, Bingham LJ said the relevant questions in that case were whether the conduct of each party would be reasonably understood by the other as being either an offer or the acceptance of that offer, on the terms contended for. His Lordship said, at [1989] 1 Lloyd's Rep 224: "I do not think it is enough for the party seeking the implication of a contract to obtain 'it might' as an answer to these questions, for it would, in my view, be contrary to principle to countenance the implication of a contract from conduct if the conduct relied upon is no more consistent with an intention to contract than with an intention not to contract. It must, surely, be necessary to identify conduct referable to the contract contended for or, at the very least, conduct inconsistent with there being no contract made between the parties to the effect contended for. Put another way, I think it must be fatal to the implication of a contract if the parties would or might have acted exactly as they did in the absence of a contract." Similarly in Pacific Brands Sports and Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288 at [47] , Finkelstein J said: "If the conduct in question is consistent with an intention not to contract, for example, if the conduct is referable to some other obligation, a contract by conduct will not arise."


case_title: Pacific Brands Sports and Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288


case_text: In The Commonwealth v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394 at 444 Deane J said: "Since an estoppel will not arise unless the party claiming the benefit of it has adopted the assumption as the basis of action or inaction and thereby placed himself in a position of significant disadvantage if departure from the assumption be permitted, the resolution of an issue of estoppel by conduct will involve an examination of the relevant belief, actions and position of that party." 129 I have examined the evidence of Harold and Saul about the ownership of the name Squires Loft at [63] to [68]. As there indicated, I am not persuaded that either of them was alert to the difference between a permission to use Lionel and Joel's intellectual property, in particular the name, and a conferring of ownership rights in that property or name. Notwithstanding the stance they have since taken, namely that they became joint owners of the intellectual property, I am satisfied that all they thought they were getting was a right to use the name in the conduct of the City restaurant. The same applies to the other items of intellectual property: the recipes for the sauces for example. 130 Even if I had concluded that Harold and Saul believed they were being given ownership rights in the intellectual property, in particular the name, I would not have upheld the estoppel. In Verwayen at 444-445 Deane J said: "The question whether such a departure would be unconscionable relates to the conduct of the allegedly estopped party in all the circumstances. That party must have played such a part in the adoption of, or persistence in, the assumption that he would be guilty of unjust and oppressive conduct if he were now to depart from it. The cases indicate four main, but not exhaustive, categories in which an affirmative answer to that question may be justified, namely, where that party: (a) has induced the assumption by express or implied representation; (b) has entered into contractual or other material relations with the other party on the conventional basis of the assumption; (c) has exercised against the other party rights which would exist only if the assumption were correct; (d) knew that the other party laboured under the assumption and refrained from correcting him when it was his duty in conscience to do so. ... In cases falling within category (a), a critical consideration will commonly be that the allegedly estopped party knew or intended or clearly ought to have known that the other party would be induced by his conduct to adopt, and act on the basis of, the assumption." 131 Did Lionel and Joel play such a part in the adoption of the pleaded assumption that they would be guilty of unjust or oppressive conduct if they were now to depart from it? In my view they did not play such a part. I do not regard any of the matters listed in [126] as constituting conduct by them that they would have thought would lead Harold and Saul to assume that the parties were joint owners of the intellectual property, in particular the name. In relation to matter (c) in [127], the tenor of the St Kilda joint venture agreement is inconsistent with the Squires Loft name being owned by the parties rather than Squires Loft Pty Ltd. At the time of the conduct in [127] I am satisfied that Lionel and Joel did not know or intend that Harold and Saul would be induced by it or any of it to adopt, and act on the basis of, the assumption that the parties were joint owners of the intellectual property, in particular the name. Nor do I consider that Lionel and Joel clearly ought to have known that they would. 132 The second assumption pleaded by the applicants is not a live issue. Lionel and Joel accept, in my view correctly, that Harold and Saul have the right to operate the City restaurant under the name Squires Loft. Had they not accepted that position, I would have upheld the second assumption, and held that they were not at liberty to depart from it by preventing Harold and Saul from so operating the City restaurant. I will deal later with whether the right has been lost.


case_outcome: followed

case_title: Challender v Royle (1987) 4 RPC 363

case_text: The elements of s 129(1) are made out. The only issue arises under sub-s (4). Paragraph (a) of sub-s (4) requires the trade mark in question to be registered, however it is silent as to whether the registration must be a valid registration or whether an invalid registration will suffice. This issue was considered by the Court of Appeal in Challender v Royle (1887) 4 RPC 363. That case concerned the Patents, Designs, and Trade Marks Act 1883 (UK), s 32 of which has become s 129 of the present Act. Section 32 provided as follows: "Where any person claiming to be the patentee of an invention, by circulars advertisements or otherwise threatens any other person with any legal proceedings or liability in respect of any alleged manufacture use sale or purchase of the invention, any person or persons aggrieved thereby may bring an action against him, and may obtain an injunction against the continuance of such threats, and may recover such damages (if any) as may have been sustained thereby, if the alleged manufacture, use, sale, or purchase to which the threats related was not in fact an infringement of any legal rights of the person making such threats: Provided that this section shall not apply if the person making such threats with due diligence commences and prosecutes an action for infringement of his patent." 166 The question in that case was whether the defendant, in the course of defending the claim that he had made a threat to which s 32 applied, was entitled to attack the validity of the plaintiff's patent. Cotton LJ said, at 371, that: "the Court must be satisfied 'that the act complained of is not in fact an infringement of any legal right of the person making such threats' ... the question whether the patent of the person making the threats is a valid patent must come into consideration if the plaintiff in the action seeks it, because I cannot see how, if a patent is invalid, there can be any act done in infringement of a legal right when the legal right depends only on the validity of that patent." 167 The issue arose again in Pittevil & Co v Brackelsberg Melting Processes Ltd (1931) 49 RPC 23. At this time the relevant act was the Patents and Designs Act 1907 1919 (UK), s 36 of which had been s 32 of the 1907 Act. The only relevant amendment to that section was that the words "any legal rights of the person making such threats" had been replaced by "the patent". It was argued that Challender v Royle did not apply since the term "patent" encompassed both inventions and alleged inventions. Thus, it was argued, the section applied even if the patent was invalid and so the validity of a patent could not be challenged in a threats case. The Court of Appeal did not accept this argument, holding that amendments otherwise having the effect of broadening the scope of the section should not be read as cutting down a right established by judicial authority, particularly since the amendment was contained only in the schedule to the amending act. Challender v Royle was therefore applied. 169 No cases have considered whether what had been said in Challender and Pittevil applied to the 1955 Act. However the first edition of D R Shanahan, Australian Trade Mark Law and Practice (1982) at 383 cited Pittevil , and concluded that "it is necessary that the registration be valid and it appears to be open to the plaintiff to plead the invalidity of the registration without actually seeking revocation". The present Act continued, in sub-s (4), the highlighted requirements of s 124 of the 1955 Act cited above. 170 The position established by Challender v Royle , that a defendant in a threat case may argue invalidity of the registration, is supported by sound policy considerations, as the passage from Cotton LJ cited at [166] demonstrates. It seems unlikely that subsequent re-workings of the original legislative provision, which have expanded and clarified the right to bring a proceeding where a threat is made, would have displaced what was said in Challender v Royle without clear words. Both the report of the Attorney-General's committee into the 1955 Act ("Report of the Committee Appointed by the Attorney-General of the Commonwealth to Consider what Alterations are Desirable in the Trade Marks Law of the Commonwealth (1954)" and the Explanatory Memorandum for the current Act are silent on the question. On their face, the meaning of the words in s 129(4)(a) - "the trade mark is registered" - is clear. However, when the history of the threat provision is examined, there is no basis for saying that any version of the trade mark legislation has changed the position set out in Challender v Royle and Pittevil . Further, the words in the emphasis in [168] "the acts ... constitute ... an infringement of the trade mark" seem to pick up the concept in the passage from Cotton LJ's reasons set out at [166]. In those circumstances the words should be understood as meaning "the trade mark is validly registered". It follows that the applicants have failed to make out par (a) of sub-s (4), since the trade mark is invalid.


case_text: The issue arose again in Pittevil & Co v Brackelsberg Melting Processes Ltd (1931) 49 RPC 23. At this time the relevant act was the Patents and Designs Act 1907 1919 (UK), s 36 of which had been s 32 of the 1907 Act. The only relevant amendment to that section was that the words "any legal rights of the person making such threats" had been replaced by "the patent". It was argued that Challender v Royle did not apply since the term "patent" encompassed both inventions and alleged inventions. Thus, it was argued, the section applied even if the patent was invalid and so the validity of a patent could not be challenged in a threats case. The Court of Appeal did not accept this argument, holding that amendments otherwise having the effect of broadening the scope of the section should not be read as cutting down a right established by judicial authority, particularly since the amendment was contained only in the schedule to the amending act. Challender v Royle was therefore applied. 169 No cases have considered whether what had been said in Challender and Pittevil applied to the 1955 Act. However the first edition of D R Shanahan, Australian Trade Mark Law and Practice (1982) at 383 cited Pittevil , and concluded that "it is necessary that the registration be valid and it appears to be open to the plaintiff to plead the invalidity of the registration without actually seeking revocation". The present Act continued, in sub-s (4), the highlighted requirements of s 124 of the 1955 Act cited above. 170 The position established by Challender v Royle , that a defendant in a threat case may argue invalidity of the registration, is supported by sound policy considerations, as the passage from Cotton LJ cited at [166] demonstrates. It seems unlikely that subsequent re-workings of the original legislative provision, which have expanded and clarified the right to bring a proceeding where a threat is made, would have displaced what was said in Challender v Royle without clear words. Both the report of the Attorney-General's committee into the 1955 Act ("Report of the Committee Appointed by the Attorney-General of the Commonwealth to Consider what Alterations are Desirable in the Trade Marks Law of the Commonwealth (1954)" and the Explanatory Memorandum for the current Act are silent on the question. On their face, the meaning of the words in s 129(4)(a) - "the trade mark is registered" - is clear. However, when the history of the threat provision is examined, there is no basis for saying that any version of the trade mark legislation has changed the position set out in Challender v Royle and Pittevil . Further, the words in the emphasis in [168] "the acts ... constitute ... an infringement of the trade mark" seem to pick up the concept in the passage from Cotton LJ's reasons set out at [166]. In those circumstances the words should be understood as meaning "the trade mark is validly registered". It follows that the applicants have failed to make out par (a) of sub-s (4), since the trade mark is invalid.


case_outcome: distinguished

case_text: In this connection the respondents rely on J H Coles Pty Ltd v Need [1933] HCA 48 ; (1933) 49 CLR 499. There the appellant (Coles) and Need entered into an agreement that Need would open a shop and conduct a business therefrom under Coles' trade name, the business being similar to that conducted by Coles. Need was to buy all his stock from Coles at a concession price. No time was fixed for the duration of the agreement. Coles' name was affixed to the shop front. Initially Need purchased all his stock from Coles, but after a while Coles was unable to supply the whole of Need's requirements, and he obtained some of his stock elsewhere. After about three years, his purchases from Coles were negligible. Coles was then in voluntary liquidation. Its liquidator required Need to remove the Coles trade name from his shop, and on his refusal, brought an action to restrain him from continuing to use the name. 175 Irvine CJ granted the injunction. His Honour found that Coles had granted Need a licence to use its name, that no period had been fixed for the grant, that the licence had been duly determined by notice, the implied term of the licence being that it should last as long as the buying and selling on the terms and prices arranged should go on, and that these matters having ceased, Coles was entitled to revoke the licence. 176 The Full Court upheld the Chief Justice's decision. Before the Full Court Need contended that he had acquired by assignment of Coles' goodwill a right to use its trade name permanently or indefinitely. This is the Court rejected, confirming the Chief Justice's conclusion that Need had no more than a licence to use the name, which had been revoked.


case_text: The High Court, by majority, allowed Need's appeal: Need v J H Coles Pty Ltd [1931] HCA 55 ; (1931) 46 CLR 470. The Privy Council allowed Coles' appeal. The Board agreed with the reasoning of the Chief Justice, the Full Court and the dissenting judges in the High Court, Starke and Dixon JJ. Their Lordships said, at 46 CLR 503: "all the right that the respondent ever had in regard to the user of the appellant's trade names was a revocable licence to use these names so long as the business arrangement continued between the appellant and respondent. From these conclusions it follows that prima facie the appellant is entitled on well-recognized principles to an order restraining the respondent from the unauthorized use of the appellant's trade names after the licence was revoked, since the continuance thereafter of such user necessarily involves a passing off by the respondent of his business as being a business for the sale of the appellant's goods and as being a business in which the appellant has at least an interest, and in this way there would be practised a deception of the public to the prejudice of the appellant's business reputation and goodwill." 178 Their Lordships went on to consider whether the appellant's conduct had disentitled it to relief, and decided that it had not. 179 In the Supreme Court Irvine CJ and two members of the Full Court (Macfarlan and Mann JJ) thought the licence revocable at will, and that no question of reasonable notice arose. In the High Court Starke J was of the same view. The other members of the High Court did not consider the question. Dixon J said, at 46 CLR 483: "I agree with the view that the agreement was brought to an end and that it had ceased before the suit was commenced to confer upon the appellant a contractual right or licence to the use of the trade names. I think that, if the agreement had not already ended, it terminated when the winding-up commenced. The arrangement made between the appellant and the Company created a business relation in which the advantages reciprocally enjoyed and conferred depended on each continuing to carry on his or her trade. The shopkeeper for his profit sold with the help of the Company's trade names and methods the goods with which the Company supplied him. The remuneration of the Company for the use of its names and for whatever other service it gave was obtained from the profitable supply of the goods which the shopkeeper sold. Such an arrangement could not survive the termination of the business existence of either party. I do not think that a contractual intention should be imputed to the Company and the appellant to confer upon the appellant a right to the use of the trade names on the termination of the agreement. The parties did not, I think, consider what was to happen if the agreement was brought to an end, and the Company at least meant to do no more than allow its name to be used so long as the shop was a means of selling its goods." At [110] I have rejected the respondents' submission that the applicants' licence to use the name was revocable at will. Harold and Saul were at liberty to use the Squires Loft name in the City restaurant as long as they wanted to.


case_text: In Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385 at 417 Brennan J said: "Where the respective obligations of parties to a contract are mutually dependent and concurrent, the primary rule is that neither party who fails to perform his obligation when the time for performance arrives can rescind for the other party's failure at that time to perform his obligation. Each party's obligation is conditional on performance by the other; neither can complain of non-performance by the other when the condition governing the other's obligation goes unfulfilled. But if one party intimates to the other that it is useless for the other to fulfil his obligation and the other acts on the intimation, the party to whom the intimation is given is dispensed from a nugatory tender of performance." 188 It is common ground that the respondents • by their solicitors' letter of 31 March 2005 stated that the respondents would no longer be dealing with the applicants in any capacity • terminated the supplies of sauces and Squires Loft cuts of meat from Top Cut to the applicants • refused to supply any further stationery to them • changed their business cards, menus and marketing material to exclude any reference to the applicants, and • did not have a website operating for October and December 2005, and by their solicitors' letter of 9 November 2005 refused to acknowledge any interest of the applicants in having the website up and running. 189 In these circumstances the respondents have intimated to the applicants that it was useless for them to perform their part of the licence. The prima facie obligation on the applicants to perform their part was thus dispensed with. Accordingly the applicants have not by their conduct evinced an intention not to be bound by the licence. It was not open to the respondents to treat them as if they had, and thereby bring it to an end. The steps taken by the applicants, namely obtaining their own sauces and stationery, were forced on them by the respondents. 193 In my view it was the respondents' solicitors' letter of 31 March 2005 and the ensuing conduct set out at [188] that constituted the breach and activated the principle in Foran v Wight . 194 As at November 2006 Joel did not think that Harold and Saul's right to use the name had terminated as a result of his and Lionel's acceptance of their repudiation of the licence. I refer in this connection to what I have said at [184]. 195 In their submissions the parties dealt exhaustively with the name Squires Loft: the applicants claiming an ownership interest and the respondents contending for a mere licence. They also dealt fully with the registration of the name, and what should be done to correct the erroneous impression created by Saul's appearance as its proprietor. Apart from the name, the applicants did not identify the components of "all intellectual property related to the venture". This is doubtless to be explained by the fact that the respondents' case was that they had granted the applicants a licence to use in the City restaurant the name and "the get-up and methodology used by the Respondents in running a restaurant in South Yarra under the name 'Squires Loft'": par 3(b) of the defence. Of course the applicants claimed that the agreement was that the parties would jointly own all intellectual property related to the venture, including the name. However, their fall back position, in the defence to cross-claim, was that if Lionel and Joel had granted them the licence alleged in par 3(b) of the defence, it was for the life of the City restaurant business established pursuant to the licence. The applicants' main case having failed, and the respondents' licence case having succeeded, all that remained for decision was whether the licence of the name and the get up and methodology employed by the respondents in running the South Yarra restaurant was a licence • terminable at will • terminable for breach • which came to an end upon the dissolution of the parties' business relationship, or • for the life of the City restaurant. I have decided that the licence was not terminable at will, had not been terminated for breach, did not come to an end when the parties fell apart, but was for the life of the City restaurant.


case_text: The question is whether the 11 March 2005 letter, summarised at [39(pp)], evinces an intention on Harold and Saul's part no longer to be bound by the agreement or to fulfil the agreement only in a manner substantially inconsistent with their obligations and not in any other way: Shevill v Builders Licensing Board [1982] HCA 47 ; (1982) 149 CLR 620 at 625-627 and Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14 ; (1985) 157 CLR 17 at 33. The letter was not about any agreement between the parties, whether that asserted by the applicants or the more limited agreement that Harold and Saul could use the Squires Loft name. It was a complaint that Lionel and Joel had engaged in conduct that infringed Saul's trade mark. It demanded that they refrain from dealing with or seeking to licence the mark in relation to the provision by a third party of restaurant or catering services without their consent. It may have been a bold letter written on the dubious basis of Saul's registration of the mark. But it was not a repudiation or renunciation of whatever agreement existed between the parties.


case_text: Finally, I accept the respondents' submission that in the context of licensing and franchising, business people do not "give away" their intellectual property. The very core of licensing and franchising is the owner's retention of ownership and the grant to the licensee or franchisee of the right to use the property. 76 It follows from what I have said at [61] to [75] that I do not accept the applicants' submission that the Court "can readily find an express agreement upon the common ownership of the 'Squires Loft' name ... in accordance with the evidence of Saul and Harold". Nor do I accept that Lionel and Joel's evidence that Harold and Saul could use the name in the City restaurant for as long as they wished, though there was no agreement that the parties would be joint owners of the name, was "tailored". 77 The applicants also point to various matters that they contend should lead the Court to infer that an agreement in terms of par 3(f) was made. I will assess them one by one, though I will need eventually to view them as a whole. 191 The question is whether the 11 March 2005 letter, summarised at [39(pp)], evinces an intention on Harold and Saul's part no longer to be bound by the agreement or to fulfil the agreement only in a manner substantially inconsistent with their obligations and not in any other way: Shevill v Builders Licensing Board [1982] HCA 47 ; (1982) 149 CLR 620 at 625-627 and Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14 ; (1985) 157 CLR 17 at 33. The letter was not about any agreement between the parties, whether that asserted by the applicants or the more limited agreement that Harold and Saul could use the Squires Loft name. It was a complaint that Lionel and Joel had engaged in conduct that infringed Saul's trade mark. It demanded that they refrain from dealing with or seeking to licence the mark in relation to the provision by a third party of restaurant or catering services without their consent. It may have been a bold letter written on the dubious basis of Saul's registration of the mark. But it was not a repudiation or renunciation of whatever agreement existed between the parties.


case_text: question whether there is any evidence of a particular fact is a question of law: Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 355; Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232 , 38 AAR 55 at [29] ; Wecker v Secretary, Department of Education Science and Training [2008] FCAFC 108 , (2008) 249 ALR 762 at [99] .


case_title: Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232 , 38 AAR 55


case_text: fact that the Tribunal is not bound by the rules of evidence does not free the Tribunal to make a decision upon evidence which lacks rational probative force: Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 33 at 41 per Brennan J; Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85 ; (1980) 4 ALD 139 at 155-6; Collector of Customs (Tas) v Flinders Island Community Association [1985] FCA 232 ; (1985) 8 ALN N102 ; Rodriguez v Telstra Corp Ltd [2002] FCA 30 ; (2002) 66 ALD 579 at [25] ; Wecker at [96].


case_title: Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85 ; (1980) 4 ALD 139


case_title: Repatriation Commission v Nation (1995) 57 FCR 2538 AAR 55

case_text: to ss 44(4) and (5) of the AAT Act and s 28 of the Federal Court of Australia Act 1976 (Cth) the Court has power to remit the case for re-hearing by the Tribunal, which may be confined or at large: Repatriation Commission v Nation (1995) 57 FCR 25. I consider that the matter as a whole ought be remitted to the Tribunal differently constituted for determination according to law. It is unnecessary, given this conclusion, to consider the other questions of law raised in the application. The application will accordingly be allowed. I will hear the parties on the question of costs. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. Associate: Dated: 09 February 2009 Counsel for the Applicant: Mr L A Tsaknis Solicitor for the Applicant: Cocks Macnish Counsel for the Respondent: The Respondent appeared in person Date of Hearing: 15 December 2008 Date of Judgment: 09 February 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/59.html


case_title: Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 33


case_title: Rodriguez v Telstra Corp Ltd [2002] FCA 30 ; (2002) 66 ALD 579


case_text: question whether there is any evidence of a particular fact is a question of law: Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 355; Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232 , 38 AAR 55 at [29] ; Wecker v Secretary, Department of Education Science and Training [2008] FCAFC 108 , (2008) 249 ALR 762 at [99] . The fact that the Tribunal is not bound by the rules of evidence does not free the Tribunal to make a decision upon evidence which lacks rational probative force: Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 33 at 41 per Brennan J; Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85 ; (1980) 4 ALD 139 at 155-6; Collector of Customs (Tas) v Flinders Island Community Association [1985] FCA 232 ; (1985) 8 ALN N102 ; Rodriguez v Telstra Corp Ltd [2002] FCA 30 ; (2002) 66 ALD 579 at [25] ; Wecker at [96].


case_text: The appellant apparently did not refer to any particular difficulties in living in Manila. However, the Tribunal does not report asking him about that topic or about the practicality of relocation or his fear of persecution if relocated. As far as the reasons for decision go, the Tribunal had no information from the appellant on those points. It is to be noted that the appellant said that he, in effect, disguised that he was Muslim (cf Appellant S395/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 71 ; (2003) 216 CLR 473). It does not follow that there would not be persecution of Muslim male homosexuals in Manila simply because it is not predominantly a Muslim city. Again, it may well be that a properly directed Tribunal will find that relocation is an answer to the claim. I am not satisfied that such a finding is inevitable. 21 The appeal will be allowed; the orders of the Federal Magistrates Court will be set aside; and, in lieu thereof, it will be ordered that the decision of the Tribunal be set aside and the matter remitted to the Tribunal for further decision according to law. The respondent Minister will pay the costs (if any) of the appellant of this appeal and of the Federal Magistrates Court proceeding. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate: Dated: 29 April 2008 The Appellant appeared in person Counsel for the First Respondent: Mr C Mantziaris Solicitor for the First Respondent: DLA Phillips Fox Date of Hearing: 1 November 2007 Date of Judgment: 29 April 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/556.html


case_text: The gravamen of the appellant's claim for protection was his special position as a male Muslim homosexual in the Philippines. The Tribunal accepted that he was a male Muslim homosexual. However, it did not expressly refer to the consequences of that. Furthermore, the appellant is correct in submitting that none of the country information identified by the Tribunal referred to that circumstance. The Tribunal did not have to expressly deal with every matter raised by the appellant. However, it was obliged to deal with a discrete basis for protection put forward by him ( Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389 , (2003) 77 ALJR 1088 at [24] , [95]; Htun v Minister for Immigration and Multicultural Affairs [2001] FCA 1802 ; (2001) 194 ALR 244 at [42] ). Put another way, the Tribunal did not identify the correct social group. Considering the greater class does not necessarily deal with the lesser ( SZBJH v Minister for Immigration and Citizenship [2008] FCA 501 at [35] [42]). The appellant's contention was, and is, that a male Muslim homosexual was in a different, and more vulnerable, position than other male homosexuals in the Philippines. That contention was not considered.


case_title: Htun v Minister for Immigration and Multicultural Affairs [2001] FCA 1802 ; (2001) 194 ALR 244


case_title: SZBJH v Minister for Immigration and Citizenship [2008] FCA 501


case_text: It is submitted for the respondent Minister that the findings by the Tribunal are inconsistent with the appellant fearing persecution as required by s 91R of the Act. It is submitted that neither serious harm nor systematic and discriminatory persecution was or could be established, referring to VBAO v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 60 ; (2006) 231 ALR 544 ; (2006) 81 ALJR 475. 18 It is not clear that this point was raised before the Federal Magistrates Court, and is not raised by notice of contention. In any event, the point is not decisive. In my opinion, if the appellant's case is taken at its highest, s 91R could possibly be met. He paints a serious picture as to the plight of a Muslim homosexual male suffering from crushing oppression, including psychological harm, physical harm and the threat of physical harm, with no effective State protection. I am not satisfied the Tribunal squarely dealt with that case. As I have said, the manner in which it dealt with particular incidents may have been coloured by the failure to focus upon the essence of the appellant's claim. Whilst the appellant may well have difficulty in persuading a properly directed Tribunal that the requirements of s 91R are met, I cannot rule out that possibility. 19 It is also submitted by the Minister that the Federal Magistrate was correct in holding that the relocation finding by the Tribunal was decisive. The difficulty with that argument is that the Tribunal did not concentrate upon the position of a Muslim male homosexual from his family and his tribe in Manila or elsewhere other than Mindanao. He said in one of his communications to the Tribunal: I cannot think of any place that is safe.


case_text: The "causes of action" pleaded appear to hinge on CAL's entry into the Packer agreement, an agreement about which it seems to be suggested the other respondents were aware. As against the fifth respondent it is alleged that they owed a duty of care to the Court, their fellow legal practitioners and the opposing parties and that they acted in breach of that duty in astonishingly expressed ways. I can only say that this claim ought never have been made in the way it was. It is offensive. A like duty of care is pleaded against the first to the fourth respondents. It is no more intelligible. A parallel claim is brought against all respondents under s 82 of the Trade Practices Act 1974 (Cth) for alleged contraventions of s 52 of that Act, this claim relying on the same conduct as in the negligence claim. The rationale for this claim is seemingly that if the conduct was negligent, it also was misleading or deceptive. How that conduct (which all related to circumstances allegedly affecting the conduct of the inquiry as damages application) could be said to be in "trade or commerce" is left as a mystery: cf Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17 ; (1990) 169 CLR 594 at 603-604; Little v Law Institute of Victoria (No 3) [1990] VR 257; WJ Green & Co (1984) Pty Ltd v Wilden Pty Ltd, (unreported, Supreme Court of Western Australia, Parker J, 24 April 1997).


case_title: Little v Law Institute of Victoria (No 3) [1990] VR 257


case_title: WJ Green & Co (1984) Pty Ltd v Wilden Pty Ltd, (unreported, Supreme Court of Western Australia, Parker J, 24 April 1997)


case_text: As best I can understand the claim that Mr Cirillo seeks now to make it is not revealed in his Statement of Claim it is that in defending the application he made for an inquiry as to damages, CAL (seemingly with the knowledge of the other respondents) sought to avail of a ground of defence not open to it in consequence of the "Packer agreement"; that defence (which never had to be considered given the answers to the preliminary questions) was one not open to CAL and yet it is said to have added very significantly to the costs incurred by Mr Cirillo in prosecuting his application; the respondents allegedly abused the processes of the court in this and in a way (unspecified) that gives rise to the tort of abuse of process: cf Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509. 28 It is unnecessary for me to speculate further about such a possible claim because there is, in my view, an insuperable obstacle to it as the chronology reveals.


case_text: The order for costs of $500,000 made by Olsson AJ involved a determination of the rights and liabilities of the parties to the inquiry application in respect of the costs of and incidental to that application that were incurred by them. Mr Cirillo has not sought to have this order set aside. In consequence it stands as a valid and conclusive order of a superior court of record unless and until it is set aside: see Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 at [27] - [30] . 30 As best I can understand the changing picture presented by counsel for Mr Cirillo in submissions it has no reflection in the present pleadings the damages claimed for the proposed tort of abuse of process include, it would seem, at least that part of his own solicitor and client costs in the inquiry as to damages which were incurred in consequence of the conduct of the respondents alleged to give rise to the tort. I am uncertain what else the damages would include although it again seems likely that, as in the present application, Mr Cirillo would also be attempting to be relieved indirectly of the obligation to pay some, or part of, the monies he has been ordered to pay under the consent order.


case_text: Nonetheless, as I have noted, the consent order as to costs determined the incidence of costs as between Mr Cirillo and the first to fourth respondents in respect of all issues of costs in the inquiry as to damages application. For Mr Cirillo to make the claim he now foreshadows without first seeking to have that costs order set aside constitutes, in my view, an indirect challenge to the costs order itself. It is well accepted that a consent order is as efficacious as those pronounced after a contest and can support a plea of res judicata: see Spencer Bower, Turner and Handley, Res Judicata at [38]-[39] (3 rd ed, Butterworths, 1996); Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21 ; (1988) 164 CLR 502 at 508. Though the costs order itself reflected the usual rule that costs follow the event, it represented an agreement by the parties that had both judicial sanction in relation to its subject matter and coercive authority: see Spencer Bower et al [39] (1996). For as long as that order stands I do not understand that Mr Cirillo seeks to challenge the substantive judgment of Olsson AJ given on 28 February 2003 the principle of finality embodied in the doctrine of res judicata precludes an examination of the incidence of costs, albeit indirectly, in a tort action such as foreshadowed: see Cabassi v Vila [1940] HCA 41 ; (1940) 64 CLR 130 at 139; Cachia v Westpac Financial Services Ltd [2005] NSWCA 239 at [2] ; Markisic v Department of Community Services of New South Wales (No 2) [2006] NSWCA 321 at [45] ff; see also D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12 ; (2005) 214 ALR 92 at [83] . What is envisaged, as I understand it, involves a form of collateral attack on the order made.


case_title: Cachia v Westpac Financial Services Ltd [2005] NSWCA 239


case_title: Markisic v Department of Community Services of New South Wales (No 2) [2006] NSWCA 321


case_title: D'Orta-Ekenaike v Victorian Legal Aid [2005] HCA 12 ; (2005) 214 ALR 92


case_title: Hanrahan v Ainsworth (1985) 1 NSWLR 370

case_text: Counsel for Mr Cirillo has sought to avoid this conclusion by relying on the decision of Hunt J in Hanrahan v Ainsworth (1985) 1 NSWLR 370 where His Honour refused to strike out an action for abuse of process in which costs and expenses associated with an earlier instituted proceeding against the now plaintiff by the now defendant were held to be recoverable in the latter proceeding if proved. 33 That case is clearly distinguishable from the present. The earlier proceeding had never been set down for trial and in consequence no costs order had been made in it. In consequence, no issue of res judicata or of collateral attack on a final order arose in that case. 34 For the above reasons, I am satisfied that the application should be dismissed as against the first to the fourth respondents.


case_text: In relation to Finlaysons' motion, I am equally satisfied that to allow the application to remain on foot would in the circumstances be manifestly unfair to that firm and would itself constitute an abuse of process. The foreshadowed claim would in substance be seeking (amongst other things) to reverse the effect of the consent order and the agreement underpinning it: cf R v Balfour; Ex parte Parkes Rural Distributions Pty Ltd (1987) 17 FCR 26 at 34. If successful it would result in a judgment that conflicted with Olsson AJ's consent order. 36 I have considered the proposed claim notwithstanding the opaque manner in which it has come forth in the course of the hearing before me. I would dismiss the application against all five respondents for the reasons I have given. 37 However, I would in any event dismiss the application without attempting to divine what the proposed claim might comprehend and for this reason: the present application and Statement of Claim are so removed from the type of claim proposed and are so vexatious in character, as to constitute an entirely inappropriate vehicle for possibly giving life to that claim.


case_text: Caltex contended that the residual oils were neither "manufactured" nor "produced" according to the ordinary meaning of those words. In reliance on Commissioner of Taxation v Jax Tyres Pty Ltd (1984) 5 FCR 257 ( Jax Tyres ), Caltex said that the essence of manufacturing or producing is that what is made shall be a new and different article having a distinctive character or use from that out of which it is made. The residual oils are not made from crude oil, it said, but are an undesirable material left over at the completion of a process designed to manufacture other products (for example, petrol, diesel and jet fuel). Caltex focussed on the objectives of its refinery operations. It said that far from those operations being directed to making the residual oils, their existence was neither intended nor desired and Caltex at all times sought to minimise their creation. Rather than being manufactured goods, it said, the residual oils are an inevitable consequence of making the goods that Caltex intended for sale. 62 At the core of Caltex's argument was a characterisation of the residual oils as a type of "waste" produced as part of a manufacturing process but requiring "disposal" in some manner. Disposal by burning as a refinery fuel it said was analogous to scrap wood being burnt by a carpenter to heat his or her factory. 63 The Macquarie Dictionary meanings of "manufacture" include: [T]o make or produce by hand or machinery, especially on a large scale; to make in any manner; to work up (material) into form for use ... 65 In the context of the sales tax legislation, Lockhart J said in Jax Tyres (at 261): The primary meaning of the word "manufacture" when used as a verb is to make something by hand; but since the industrial revolution the word has come to mean manufacture by machinery, often on a large scale and with a division of labour. This accords with the dictionary definition. ... ... To manufacture an article necessarily involves producing a different article from the articles, materials or ingredients from which it was made. As Darling J said in McNicol v Pinch [1906] 2 KB 352 at 361: "I think the essence of making or of manufacturing is that what is made shall be a different thing from that out of which it is made." That passage was approved and applied by Dixon J in Federal Commissioner of Taxation v Jack Zinader Pty Ltd [1949] HCA 42 ; (1949) 78 CLR 336 the leading case in this field. Whether the article which results from the process of manufacturing is a different article from the constituents or ingredients from which it was made is a question of fact: the Jack Zinader case. "Production" ... is a word of wide import; but it still involves the element of producing something different from the materials from which it was made. It is not possible to formulate precise definitions of such general terms as "manufacture" and "production"; but they do not bear a restricted meaning. Whatever answers the description of "manufacture" or "production" of goods according to accepted usage of the English language is within the Act. 66 The courts have attributed an ordinary meaning, within the "accepted usage of the English language", to the terms "manufactured", "manufacture" and "manufactured goods" in a number of cases: see Federal Commissioner of Taxation v Rochester [1934] HCA 17 ; (1934) 50 CLR 225 at 226 (Dixon J); MP Metals Pty Ltd v Federal Commissioner of Taxation [1968] HCA 89 ; (1978) 117 CLR 631 at 649 (Menzies J); Jax Tyres at 261; Federal Commissioner of Taxation v Jack Zinander Pty Ltd [1949] HCA 42 ; (1949) 78 CLR 336 at 344-355 (Dixon J); Commonwealth v 5 Star Foods Pty Ltd (2002) 167 FLR 214. In 5 Star Foods , Byrne J said at 222: The cases to which I was referred also emphasise that the word ["manufacture"] should be given its meaning in ordinary everyday language: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) [1981] HCA 26 ; (1981) 147 CLR 297 at 304-305 per Gibbs CJ. To my mind this meaning comprehends the application of a repetitive process, especially a mechanical process, to a thing or things to bring it or them to a form or condition specified. This process may be directed to producing a thing in a state fit for sale, for consumption by the end user, for attachment to or assembly with other things or for some further process. ... 71 Caltex laid emphasis on the fact that none of the residual oils is an intended object of the activities it undertakes at the refineries. Accordingly it said that to characterise the residual oils as manufactured or produced goods would lead to the strange result that Caltex was unintentionally manufacturing something. However for the purposes of s 5 of the Tariff Act, the critical question in my view is whether objectively speaking the goods in question can be said to have emerged from a process as a "new and different article ... having a distinctive character or use": see Jax Tyres 5 FCR at 264 (Lockhart J). The focus of s 5 is on the extant goods that are made subject to duty, not on the person who manufactures them or that person's stated objectives. Duty is imposed "on" goods by reference to their quality as manufactured goods. It is not imposed with any reference to the relative value of the goods or the subjective intentions of the manufacturer. This is not to say that the principle objectives of a commercial operation will not be relevant to the question of characterisation. They provide the context for the task of characterisation and are an important factor to take into account. They are not however determinative of the question. In any event I do not think it is accurate to say that Caltex unintentionally manufactures the residual oils. They are not the principal products created at the refineries, but it is clear that Caltex intends to bring about all of the known consequences of the refining process, which includes the production of the residual oils. In doing so its objective is to extract as much value as possible from the crude oil. I do not accept Caltex's pejorative characterisation of the residual oils as waste or rubbish. It did not dispose of them as if they were waste; it consumed them in a productive manner. 72 Caltex made a further submission that the residual oils were not "produced" for the purposes of s 5 because the word "produced" is there concerned only with tobacco production. The Excise Act draws a distinction it said between goods manufactured and goods produced, because the Act has distinct licensing arrangements for "licensed manufacturers" and "licensed producers", the latter of which are held only by producers of tobacco: see Division 2 of Part III of the Excise Act . Caltex said that "produced" should be construed with that context in mind and limited to the production of the various tobacco products identified in the Schedule. 73 I cannot accept that the word "production" must be limited in that way. The contention that it should was not developed by Caltex in any detail. It amounted to not much more than an assertion that a narrow construction was required because of the existence of the specific licensing arrangements for tobacco "producers" in Division 2 of Part III. Division 2 regulates the production of tobacco seed, tobacco plant and tobacco leaf by requiring a producer to hold a "producer licence". A "producer licence" is "a licence granted under Part IV , the holding of which authorises the licence holder to produce tobacco seed, tobacco plant or tobacco leaf". There is nothing express in Division 2 of Part III of the Excise Act that could be said to limit the ambit of the word "produced" in the Tariff Act. Further, s 5 of the Tariff Act gives no indication that "produced" is intended to be limited to tobacco production. To the contrary s 5 is in wide terms and applies to " all goods ... manufactured or produced". The Schedule itself reflects the intended width of the term. It describes various goods as "products" including those in issue in this case and refers to some goods (other than tobacco) as having been manufactured or produced (see, for example, item 11(a) describing "diesel fuel produced or manufactured by the process of refining waste oils ..."). The word "produced" is not defined in the Tariff Act, which one would expect if it were to be given the restricted meaning Caltex contends for. In my view it should be given its ordinary meaning. 74 Neither party referred me to the legislative history of Division 2 of Part III or s 5 of the Tariff Act. I note however that the words "manufactured or produced" have appeared in s 5 of the Tariff Act since its inception in 1921 (and the section itself has remained in the same form since then). At that time no equivalent to Division 2 of Part III appeared in the Excise Act . Division 2 of Part III was introduced in the relevant form in 2000 and I see no reason why its introduction at that time should alter the ordinary meaning of "produced" in s 5 of the Tariff Act. Further, it may be observed that the version of the Excise Act in force in 1923 contained specific provisions relating to the "manufacture" of tobacco and included separate licensing arrangements for "producers" of "material". "Material" included "all material used in the manufacture of excisable goods and declared by proclamation to be material within the meaning of this Act". There could be no suggestion that the word "produced" in s 5 of the Tariff Act was to have borne a restricted meaning relevant only to "material", because "produced" in s 5 quite clearly related to "goods dutiable under the Schedule" (excisable goods) and not the more limited concept of "material" or, for that matter, tobacco. 75 Caltex made a number of submissions regarding the constitutional conception of duties of excise, which it said bore importantly on the proper construction of the words "manufactured" or "produced". It submitted that the "essence" of a duty of excise is that it is a tax on a step in the production or distribution of goods that are intended to be passed on by a manufacturer to consumers , that is, third party consumers. Consistently with that understanding, it said, the Tariff Act imposes duties of excise directly on or in respect of goods that are destined for consumption by consumers, the relevant excise step being the step of manufacturing or producing the goods before they are passed down the line to consumers. Accordingly it said the terms "manufactured" and "produced" should be construed as applying only to the step of manufacture or production taken with respect to goods intended to reach third party consumers (i.e. not goods that are consumed by their manufacturer). On that basis Caltex said it does not "manufacture" or "produce" the residual oils because it takes no step to bring them into existence as part of a process that ends in their receipt by third party consumers. Instead they are created because they are an inevitable consequence of the process of producing other goods which are intended to reach consumers.


case_text: The courts have attributed an ordinary meaning, within the "accepted usage of the English language", to the terms "manufactured", "manufacture" and "manufactured goods" in a number of cases: see Federal Commissioner of Taxation v Rochester [1934] HCA 17 ; (1934) 50 CLR 225 at 226 (Dixon J); MP Metals Pty Ltd v Federal Commissioner of Taxation [1968] HCA 89 ; (1978) 117 CLR 631 at 649 (Menzies J); Jax Tyres at 261; Federal Commissioner of Taxation v Jack Zinander Pty Ltd [1949] HCA 42 ; (1949) 78 CLR 336 at 344-355 (Dixon J); Commonwealth v 5 Star Foods Pty Ltd (2002) 167 FLR 214. In 5 Star Foods , Byrne J said at 222: The cases to which I was referred also emphasise that the word ["manufacture"] should be given its meaning in ordinary everyday language: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) [1981] HCA 26 ; (1981) 147 CLR 297 at 304-305 per Gibbs CJ. To my mind this meaning comprehends the application of a repetitive process, especially a mechanical process, to a thing or things to bring it or them to a form or condition specified. This process may be directed to producing a thing in a state fit for sale, for consumption by the end user, for attachment to or assembly with other things or for some further process. ...


case_title: MP Metals Pty Ltd v Federal Commissioner of Taxation [1968] HCA 89 ; (1978) 117 CLR 631


case_text: In the context of the sales tax legislation, Lockhart J said in Jax Tyres (at 261): The primary meaning of the word "manufacture" when used as a verb is to make something by hand; but since the industrial revolution the word has come to mean manufacture by machinery, often on a large scale and with a division of labour. This accords with the dictionary definition. ... ... To manufacture an article necessarily involves producing a different article from the articles, materials or ingredients from which it was made. As Darling J said in McNicol v Pinch [1906] 2 KB 352 at 361: "I think the essence of making or of manufacturing is that what is made shall be a different thing from that out of which it is made." That passage was approved and applied by Dixon J in Federal Commissioner of Taxation v Jack Zinader Pty Ltd [1949] HCA 42 ; (1949) 78 CLR 336 the leading case in this field. Whether the article which results from the process of manufacturing is a different article from the constituents or ingredients from which it was made is a question of fact: the Jack Zinader case. "Production" ... is a word of wide import; but it still involves the element of producing something different from the materials from which it was made. It is not possible to formulate precise definitions of such general terms as "manufacture" and "production"; but they do not bear a restricted meaning. Whatever answers the description of "manufacture" or "production" of goods according to accepted usage of the English language is within the Act. 66 The courts have attributed an ordinary meaning, within the "accepted usage of the English language", to the terms "manufactured", "manufacture" and "manufactured goods" in a number of cases: see Federal Commissioner of Taxation v Rochester [1934] HCA 17 ; (1934) 50 CLR 225 at 226 (Dixon J); MP Metals Pty Ltd v Federal Commissioner of Taxation [1968] HCA 89 ; (1978) 117 CLR 631 at 649 (Menzies J); Jax Tyres at 261; Federal Commissioner of Taxation v Jack Zinander Pty Ltd [1949] HCA 42 ; (1949) 78 CLR 336 at 344-355 (Dixon J); Commonwealth v 5 Star Foods Pty Ltd (2002) 167 FLR 214. In 5 Star Foods , Byrne J said at 222: The cases to which I was referred also emphasise that the word ["manufacture"] should be given its meaning in ordinary everyday language: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) [1981] HCA 26 ; (1981) 147 CLR 297 at 304-305 per Gibbs CJ. To my mind this meaning comprehends the application of a repetitive process, especially a mechanical process, to a thing or things to bring it or them to a form or condition specified. This process may be directed to producing a thing in a state fit for sale, for consumption by the end user, for attachment to or assembly with other things or for some further process. ...


case_title: Commonwealth v 5 Star Foods Pty Ltd (2002) 167 FLR 214


case_text: I do not agree that the words "manufactured" or "produced" must be read so as to apply only to goods that are intended to reach a third party consumer or to "go into the market", rather than to goods that might be consumed by a manufacturer itself in the course of its operations. Duties of excise are inland taxes on "a step in the production, manufacture, sale or distribution of goods": see Ha v New South Wales [1997] HCA 34 ; (1997) 189 CLR 465 ( Ha ) at 490. In Matthews v Chicory Marketing Board (Vict) [1938] HCA 38 ; (1938) 60 CLR 263 ( Matthews ) at 304, Dixon J said: To be an excise the tax must be levied "upon goods," but those apparently simple words permit of much flexibility in application. The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. (In Parton v Milk Board (Victoria) [1949] HCA 67 ; (1949) 80 CLR 229 Dixon J qualified this statement to remove the reference to consumption, following the decision of the Privy Council in Atlantic Smoke Shops Ltd v Conlon [1943] AC 550.) 78 The disjunctive language used in the passages from Ha and Matthews demonstrates that a tax imposed on any one of the steps referred to will qualify as a duty of excise. For example a tax imposed on the sale of goods to consumers would be an excise, as would a tax imposed on the manufacture of goods without any necessary reference to their sale. In support of its contention Caltex relied particularly upon passages in Anderson's Pty Ltd v Victoria [1964] HCA 77 ; (1964) 111 CLR 353 ( Anderson's) and Bolton v Madsen [1963] HCA 16 ; (1963) 110 CLR 264 ( Bolton ), which were followed by the Full Court of this Court in Commissioner for A.C.T. Revenue v Kithock Pty Ltd [2000] FCA 1098 ; (2000) 102 FCR 42 ( Kithock ) . In Anderson's , Barwick CJ said at 364: [T]he judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. (Emphasis added.) 83 Assuming they fall within the Schedule, the impost in this case is levied directly on the residual oils as the "subjects of manufacture" and affects them as commodities in the hands of Caltex. The residual oils are of use to Caltex and serve an economic purpose. Without them Caltex would need to acquire fuel oil from an alternative source at higher cost. The impost is not levied upon the consumption of the residual oils by Caltex. Nor is it a tax on the ownership of the residual oils. It is an excise in the most obvious sense; a tax upon the step of manufacturing or producing a defined good. In my view, to accept the limitation contended for by Caltex would be counter to the trend of the High Court's decision making from the early decision in Peterswald v Bartley [1904] HCA 21 ; (1904) 1 CLR 497 through to Ha [1997] HCA 34 ; 189 CLR 465 , which has been to enlarge the field of permissible steps of taxation in the context of duties of excise. 84 Further, Caltex's argument arrives at a position whereby excise duties would be limited to taxes bearing the characteristics of an indirect tax a tax levied on a person with the expectation that that person will not bear the financial burden of the tax but pass it on to another. The indirectness or otherwise of a tax has been rejected as a necessary element of an excise: see Dennis Hotels Pty Ltd v Victoria [1960] HCA 10 ; (1960) 104 CLR 529 ( Dennis Hotels ) at 583, 585 and 590 (Menzies J); see also Ha 189 CLR at 509. The effect of adopting Caltex's position would be to reject the step of manufacture or production as an occasion in itself for the imposition of an excise and necessitate an inquiry into the subjective intentions of the relevant manufacturer. As I have said the cases demonstrate the stand alone nature of each permissible taxation step and it would not be consistent in my view to introduce a limitation focussed on intention. In this connection, I adopt what Menzies J said in Dennis Hotels 104 CLR at 583: I find nothing in the language of the Constitution which would exclude from the categories of duties of customs or duties of excise, duties to be borne as well as paid by the importer or manufacturer. In other words, unless it be by the use of the words "customs" and "excise" themselves, the Constitution does not adopt the distinction between direct and indirect taxes so that, unless the usage of the words otherwise requires, an import duty on goods imported for use or consumption by the importer would be a customs duty, and a duty upon the production of goods for the producer's own use or consumption would be an excise duty, and both would be beyond the power of the Parliament of a State. In my view a thing capable of description as a manufactured good, and consumed or otherwise applied by its manufacturer in that manufacturer's commercial operations, is capable of being the subject of an excise duty.


case_text: I do not agree that the words "manufactured" or "produced" must be read so as to apply only to goods that are intended to reach a third party consumer or to "go into the market", rather than to goods that might be consumed by a manufacturer itself in the course of its operations. Duties of excise are inland taxes on "a step in the production, manufacture, sale or distribution of goods": see Ha v New South Wales [1997] HCA 34 ; (1997) 189 CLR 465 ( Ha ) at 490. In Matthews v Chicory Marketing Board (Vict) [1938] HCA 38 ; (1938) 60 CLR 263 ( Matthews ) at 304, Dixon J said: To be an excise the tax must be levied "upon goods," but those apparently simple words permit of much flexibility in application. The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. (In Parton v Milk Board (Victoria) [1949] HCA 67 ; (1949) 80 CLR 229 Dixon J qualified this statement to remove the reference to consumption, following the decision of the Privy Council in Atlantic Smoke Shops Ltd v Conlon [1943] AC 550.) 78 The disjunctive language used in the passages from Ha and Matthews demonstrates that a tax imposed on any one of the steps referred to will qualify as a duty of excise. For example a tax imposed on the sale of goods to consumers would be an excise, as would a tax imposed on the manufacture of goods without any necessary reference to their sale. In support of its contention Caltex relied particularly upon passages in Anderson's Pty Ltd v Victoria [1964] HCA 77 ; (1964) 111 CLR 353 ( Anderson's) and Bolton v Madsen [1963] HCA 16 ; (1963) 110 CLR 264 ( Bolton ), which were followed by the Full Court of this Court in Commissioner for A.C.T. Revenue v Kithock Pty Ltd [2000] FCA 1098 ; (2000) 102 FCR 42 ( Kithock ) . In Anderson's , Barwick CJ said at 364: [T]he judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. (Emphasis added.) 82 As Dixon J said in Matthews 60 CLR at 303-304: The basal conception of an excise in the primary sense which the framers of the Constitution are regarded as having adopted is a tax directly affecting commodities. ... The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. (Emphasis added.)


case_text: The disjunctive language used in the passages from Ha and Matthews demonstrates that a tax imposed on any one of the steps referred to will qualify as a duty of excise. For example a tax imposed on the sale of goods to consumers would be an excise, as would a tax imposed on the manufacture of goods without any necessary reference to their sale. In support of its contention Caltex relied particularly upon passages in Anderson's Pty Ltd v Victoria [1964] HCA 77 ; (1964) 111 CLR 353 ( Anderson's) and Bolton v Madsen [1963] HCA 16 ; (1963) 110 CLR 264 ( Bolton ), which were followed by the Full Court of this Court in Commissioner for A.C.T. Revenue v Kithock Pty Ltd [2000] FCA 1098 ; (2000) 102 FCR 42 ( Kithock ) . In Anderson's , Barwick CJ said at 364: [T]he judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. (Emphasis added.) 81 Each of the cases relied on by Caltex involved impugned taxes concerning goods ultimately intended for sale to third party consumers. The question of self-consumption did not arise in any of the cases and I was not referred to any cases in which the conception of a duty of excise had been limited in the manner contended for by Caltex. The Commissioner said that the statement of the Chief Justice in Anderson's 111 CLR 353 was intended to do no more than identify three ways of locating the incidence of an excise duty: the steps of (1) bringing into existence, (2) bringing to a consumable state or (3) passing them down the line to the point of receipt by the consumer. I agree. The passage is consistent with the understanding that an excise may be imposed on discrete steps taking place with respect to goods, without it being necessary that every step take place. The passage does not articulate a principle that excise duties are only those taxes that affect goods destined for consumption by parties other than the original manufacturer or producer. Similarly the emphasis placed by the Full Court in Kithock on the position of consumers was necessary to explain, by way of exclusion, that goods already in circulation amongst consumers cannot be the subject of an excise duty. It is by now clear that consumption taxes are not excises. While it is an essential characteristic of an excise that goods have not yet passed into consumption, I do not accept that it is essential that goods are intended to pass into a market or to be sold to a third party, even though that will be the ordinary occurrence.