case_text: In the course of its submission, BARM noted that in Howland-Rose and Ors v Federal Commissioner of Taxation [2002] FCA 246 ; (2002) 118 FCR 61 , Conti J dealt with the tax position of four participants in BPS, in what amounted to a test case for BPS and the subsequent Budplans. His Honour held that the participants were not entitled to allowable deductions under s 51(1) of the Income Tax Assessment Act 1936 (Cth) ('ITAA 1936 ' ) in respect of the 'management fees' or 'research fees' paid by them. A review of his Honour's reasons does not indicate than any issue arose in that case as to the quantum of the outgoings claimed to be incurred; only their characterisation in terms of the section of the statute. 16 BPS was established by a prospectus dated 5 December 1995 ('Prospectus') and a trust deed dated the same date between BARM, ATTORI, ARG and each participant ('the Trust Deed'), once he or she signed the 'Principal Deed' referred to below. 17 Participants in BPS executed the following documents: (1) an application form that is found at page 56 of the Prospectus ('Application Form'); (2) the Principal Deed that is found at pages 57 and 58 of the Prospectus ('Principal Deed'), to which were annexed a copy of the Budplan Syndicate Deed, at pages 46-51 of the Prospectus ('Syndicate Deed') and a Loan Agreement between PGF and the participant, at pages 52 54 of the Prospectus ('Loan Agreement'); (3) in some or all cases, an alternative loan agreement between the participant and PGF ('Alternative Loan Agreement'). 92 While the Commissioner's primary submission is that the mode of discharge of payment of the management fees is irrelevant to the issue of derivation by BARM, the mode of discharge adopted (utilising bills of exchange) had the consequence that payments in the amounts shown on the bills of exchange (i.e. full payment of the management fees instalments) are to be taken as having been made to BARM on the dates on which the bills of exchange were delivered to it: Howland-Rose at [128] [130]; Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471 at [44] [47].


case_outcome: referred to

case_title: Integrated Computer Services Pty Limited v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110


case_outcome: considered

case_text: On the other hand, contrary to the submission in [73] and [74] above, BARM's alternative (1) does require a disregard of the legal relationships created by the relevant instruments; it requires a conflation of separate transactions, albeit financially dependent separate transactions, and taxation by reference to the end economic result of that conflation. That is equally impermissible. While not directly in point, it has a resonance with the alternative argument that was put to the High Court in Investment Merchant Finance Corporation Ltd v Federal Commissioner of Taxation [1971] HCA 35 ; (1971) 125 CLR 249 where the assessment in question was sought to be upheld on the footing that the transaction, as a whole , was the carrying out of a profit-making scheme for the purposes of s 26(a) of the ITAA 1936, and that, in determining the profit derived from the scheme, the dividend received should be brought into account rather than being treated as itself, assessable income in accordance with s 44 of the ITAA 1936: in particular, see Menzies J at 262. That alternative argument was rejected by all members of the Court. 106 Of course, there will be cases where the Parliament mandates such treatment. The example that comes most readily to mind is the consolidation regime in Part III 90 of the ITAA 1997. 107 Alternative (1), rather than avoiding a 'blinkered' view of the transaction as submitted by BARM, does just that by requiring a 'closing of the eyes' to the separate transactions that took place. Contentions that alternative (1) recognises the reality of the transaction, as a whole, elides what that involves conflation of separate, albeit financially dependent, transactions, and taxation by reference to the end economic result. Like taxation by reference to economic equivalence, it must be rejected.


case_outcome: cited

case_text: A receipt will not come home where the amount received is affected by a legal or equitable restriction affecting the separate use, benefit or enjoyment of the recipient: Arthur Murray at 318; Barratt v Federal Commissioner of Taxation [1992] FCA 271 ; (1992) 36 FCR 222 at 231; RW Parsons, Income Taxation in Australia : Principles of Income, Deductibility and Tax Accounting , Law Book Company, Sydney (1985) at [11.49]. For example, where the receipt is affected by a constructive trust (see, MacFarlane v Federal Commissioner of Taxation (1986) 13 FCR 356) or where the recipient is not the beneficial object of the receipt (see The Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 424).


case_text: In determining whether an amount paid or payable to the taxpayer has the character of income, it is necessary: (a) to have regard to the quality of the amount in the hands of the taxpayer and not to the character of the expenditure to the payer : Federal Commissioner of Taxation v McNeil [2007] HCA 5 ; (2007) 229 CLR 656 at [20] and [55]; G.P. International Pipecoaters Pty Ltd v Federal Commissioner of Taxation [1990] HCA 25 ; (1990) 170 CLR 124 at 136; (b) to have regard to the whole of the surrounding circumstances or factual matrix, and not just to the contract under which the amount is paid or payable: Federal Coke Co Pty Ltd v Federal Commissioner of Taxation (1977) 34 FLR 375 at 385; Federal Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 53; (c) as an elaboration of the previous paragraph, to consider the substance rather than the form of the transaction, particularly where an amount is paid as part of a wider, composite transaction: Dickenson v Federal Commissioner of Taxation [1958] HCA 62 ; (1958) 98 CLR 460 at 482, 491; Reuter v Federal Commissioner of Taxation 93 ATC 5030 at 5036 5037; Federal Commissioner of Taxation v Broken Hill Pty Co Ltd (2000) 45 ATR 507 at [50]; Macquarie Finance Ltd v Federal Commissioner of Taxation (2004) 57 ATR 115 at [61], [64] per Hill J, on appeal [2005] FCAFC 205 ; (2005) 146 FCR 77 at [109] [111] per French J, [169] [170] and [187] per Hely J, and [251] [253] per Gyles J; Customs & Excise Commissioners v Diners Club Ltd [1989] 1 WLR 1196 at 1207; see also Barclays Mercantile Business Finance Ltd v Mawson [2005] 1 AC 684; and (d) to disregard the labels used by the parties: Federal Commissioner of Taxation v Krakos Investments Pty Ltd (1995) 61 FCR 489 at 495; Vincent v Federal Commissioner of Taxation (2002) 124 FCR 350 at [64] [72].


case_outcome: distinguished

case_title: Permanent Trustee Co of New South Wales v Federal Commissioner of Taxation (1940) 6 ATD 5

case_text: That enquiry proceeds by reference to the 'realities' that affect the taxpayer's separate use, benefit and disposal of the receipt rather than merely the legal form of, or legal entitlements arising from, the receipt itself: Permanent Trustee Co of New South Wales v Federal Commissioner of Taxation (' Prior ') (1940) 6 ATD 5 at 13.


case_text: The authorities support the proposition that an agreement may be implied from the acts and conduct of the parties even where the strictures of offer and acceptance cannot be strictly proven: see Brogden v Metropolitan Railway (1877) 2 AC 666 at 672, 678, 679, 686, 689, 698; Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 B.P.R 11,110 at 11,117; Pobjie Agencies v Vinidex Tubemakers (2000) Aust Contract R 90-112 at [21]-[32]; see also Vroon v Foster's Brewing Group Ltd [1994] 2 VR 32 at 67.


case_title: Reuter v Federal Commissioner of Taxation 93 ATC 5030


case_text: This is illustrated by the approach to income recognition in the area of insurance. It is accepted that, in an appropriate case, the aggregate of insurance premiums received by an insurer in a year of income does not give a substantially correct reflex of that insurer's income because of the contingencies affecting those premiums: see Sun Insurance Office v Clark (1912) AC 443 at 452-4, 456 and 460, 461, approved in Ballarat Brewing and Carden .


case_title: The Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417


case_text: The question of whether a contract was entered into or, if so, what the terms of that contract were, is not resolved by inadmissible assertions as to subjective beliefs, intentions or desires. Questions of formation of contract are dealt with on the objective theory of contract. As was recently restated by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 179: 'This Court, in Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 ; (2004) 78 ALJR 1045 , has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.' 62 The Commissioner submitted in the present case: (a) There is no evidence of any negotiations in relation to a deposit agreement. It is not self-evident what the terms of such an agreement would have been had there been any negotiation. (b) Athough Mr Lear proposed a deposit agreement (with unidentified terms), Mr Gallagher did not want to impose any 'legal restrictions as to how it uses its money'.


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


case_title: Vincent v Federal Commissioner of Taxation (2002) 124 FCR 350


case_text: The Court's role is to determine whether a genuine dispute exists. That issue is determined at the time the Court hears the application: Andi-Co Australia Pty Ltd v Meyers [2004] FCA 1358 at [16] . The manner in which the Court approaches the task is also not in dispute. The Court does not resolve contested questions of fact. The Court does not determine where the merits lie in any contest: Kortz Ltd v Data Acquisition Pty Ltd [2006] FCA 1722 ; (2006) 155 FCR 556 at [40] . The Court determines whether the supporting affidavits filed and served by Ox Operations depose to facts from which the Court is able to conclude that a genuine dispute exists. As Young J said in John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 at 253, something between mere assertion and the proof of the existence of the disputed debt is required.


case_outcome: applied

case_text: There is a substantial body of authority in the Federal Court and other Australian Courts that the Court has no power to extend the time for compliance after it has expired: Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2007) 63 ACSR 300 and G&J Gears Australia Pty Ltd v Brobo Group Pty Ltd (2006) 229 ALR 638 at [46] to [52] and the authorities referred to therein. 5 In Aussie Vic Plant Hire , the Court of Appeal of the Supreme Court of Victoria considered that body of authority. Chernov JA considered that the policy of Pt 5.4 of the Act and the mischief which s 459F(2)(a)(i) seeks to abrogate makes it implicit that the Court is not empowered to extend the time for compliance with a statutory demand after the period has expired. His Honour considered that Pt 5.4 of the Act is a code which provides a strict and self executing regime: [84]-[97]. Maxwell P and Neave JA disagreed: [28] to [77]. Nettle and Ashley JJA, the remaining members of the Court of Appeal, concluded that as a matter of statutory construction of the Act and, in particular s 459F(2)(a)(i) of the Act , read with s 70 , an application to extend time for compliance with a statutory demand may be made under s 459F(2)(a)(i) after the time for compliance has expired: [118]-[124] and [183]-[187]. However, their Honours did not the permit the time for compliance with the statutory demand to be extended after the period had expired on the basis that the view, that the Court has no power to extend the time for compliance after it has expired, had existed for more than 10 years and one could not say "positively that it was wrong and productive of inconvenience": [123]. The High Court granted special leave to appeal. The appeal was heard on 6 February 2008 and the decision reserved. 6 Consistent with the approach adopted by Nettle and Ashley JJA, I would not permit the time for Ox Operations to comply with the statutory demand to be extended. The period has expired. On that basis, the application for review has no utility and should be dismissed. 7 However, in order to deal with all issues and to avoid unnecessary costs, in the event that the High Court considers that s 459F(2)(a)(i) of the Act (whether read alone or in conjunction with other provision of the Act ) enables a Court to extend the time for compliance with a statutory demand after it has expired, I propose to deal with the merits of Ox Operations application to set aside LMPD's statutory demand pursuant to ss 459G and 459H of the Act .


case_text: As has been said many times, a notice under O 33 r 12 has the same coercive effect as a subpoena for production. Compliance is mandatory unless the Court otherwise orders: Potts v Dennis Jones & Co Pty Ltd (No. 2) (1995) 58 FCR 61 at 70. Similarly, the considerations which apply to the setting aside of a subpoena are equally applicable to a notice to produce: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Pty Ltd [2007] VSC 450 and Crown Joinery Pty Ltd v Lyleho Pty Ltd [2007] VSC 214. The grounds on which a notice to produce may be set include that it is too wide, oppressive or fishing. The issues in the case and the possible relevance of the document or documents to those issues are obviously relevant in deciding whether the notice is fishing: Seven Network Ltd v News Ltd (No 11) [2006] FCA 174 at [6] .


case_text: There is a substantial body of authority in the Federal Court and other Australian Courts that the Court has no power to extend the time for compliance after it has expired: Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2007) 63 ACSR 300 and G&J Gears Australia Pty Ltd v Brobo Group Pty Ltd (2006) 229 ALR 638 at [46] to [52] and the authorities referred to therein.


case_text: LMPD submitted that the Second Ground of Challenge was not available to Ox Operations by reason of the principles in Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452 at 459-460 as explained in Hansmar Investments Pty Ltd v Perpetual Trustee Co Ltd (2007) 61 ACSR 321 at 326. LMPD submitted that the second ground of challenge was not " raised expressly, by necessary inference, or by a reasonably available inference " in the affidavit of Mr Grezos sworn on 16 June 2007 ("the First Grezos Affidavit") and filed in support of the application to set aside the statutory demand: Hansmar at [28].


case_title: Hansmar Investments Pty Ltd v Perpetual Trustee Co Ltd (2007) 61 ACSR 321


case_text: Finally, in response to a notice to produce " [t]he documents evidencing payments to [LMPD] between 1 February 2004 to 13 September 2006 ", Ox Operations produced to LMPD an incomplete ledger for LMPD. That general ledger recorded the various payments to LMPD as loans rather than payments received as trustee or subject to some other arrangement. 42 As has been said many times, a notice under O 33 r 12 has the same coercive effect as a subpoena for production. Compliance is mandatory unless the Court otherwise orders: Potts v Dennis Jones & Co Pty Ltd (No. 2) (1995) 58 FCR 61 at 70. Similarly, the considerations which apply to the setting aside of a subpoena are equally applicable to a notice to produce: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Pty Ltd [2007] VSC 450 and Crown Joinery Pty Ltd v Lyleho Pty Ltd [2007] VSC 214. The grounds on which a notice to produce may be set include that it is too wide, oppressive or fishing. The issues in the case and the possible relevance of the document or documents to those issues are obviously relevant in deciding whether the notice is fishing: Seven Network Ltd v News Ltd (No 11) [2006] FCA 174 at [6] .


case_title: John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250


case_title: Kortz Ltd v Data Acquisition Pty Ltd [2006] FCA 1722 ; (2006) 155 FCR 556


case_text: The function of the Court, on review of such a decision, is to rehear the case and decide the facts for itself. It is a hearing de novo: s 35A(6) of the Federal Court of Australia Act 1976 (Cth); Mazukov v University of Tasmania [2004] FCAFC 159 at [22] to [27] and Martin v Commonwealth Bank of Australia (2001) 217 ALR 634 at [6] and [12].


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


case_title: Potts v Dennis Jones & Co Pty Ltd (No. 2) (1995) 58 FCR 61


case_text: The principles to be applied by the Court in determining an application to set aside a statutory demand are not in dispute. In the present case, the Court must be satisfied that there is a genuine dispute between Ox Operations and LMPD about the existence or amount of the debt to which the demand relates: s 459H(1)(a) of the Act . For a genuine dispute to exist, the dispute must "be bona fide and truly exist in fact". The grounds for alleging the existence of a dispute must be "real and not spurious, hypothetical, illusory or misconceived": Spencer Constructions Pty Ltd v G&M Aldridge Pty Ltd [1997] FCA 681 ; (1997) 76 FCR 452 at 464.


case_text: As the liquidator of LMPD submitted, the starting point is s 1305 of the Act . Section 1305(1) is a facilitative provision which has been given a broad interpretation: Valoutin Pty Ltd v Furst (1998) 154 ALR 119 at 128. 16 It provides that: (1) A book kept by a body corporate under a requirement of this Act is admissible in evidence in any proceeding and is prima facie evidence of any matter stated or recorded in the book. (2) A document purporting to be a book kept by a body corporate is, unless the contrary is proved, taken to be a book kept as mentioned in subsection (1). 17 "Books" is defined in s 9 of the Act to include: (a) a register; and (b) any other record of information; and (c) financial reports or financial records, however compiled, recorded or stored; and (d) a document; but does not include an index or recording made under Subdivision D of Division 5 of Part 6.5.


case_text: Ox Operations' written submissions referred to Walsh v Salzer Constructions Pty Ltd [2000] VSCA 228 as support for the proposition that the fact that a company acts as a treasurer for other entities within the same group does not by itself give rise to a debtor creditor relationship. So much may be accepted. But that is not the only relevant fact in this application. The more significant fact is the existence of the prima facie position reflected in the general ledger of LMPD a loan to Ox Operations. The decision may be put to one side. 29 For those reasons, I do not accept that the first ground of challenge raises a genuine dispute. 30 On review, Ox Operations also sought to set aside the statutory demand on a second basis: that Ox Operations was not indebted to LMPD and that the general ledger did not and could not reflect the true position.


case_title: Adam v Ward [1917] AC 309

case_text: Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5 ; (2004) 218 CLR 366 ( Bashford ), Gleeson CJ, Hayne and Heydon JJ said in a joint judgment that the principles to be applied in determining whether an occasion of publication was one of qualified privilege are well known. Their Honours referred to Toogood v Spyring (1834) 1 Cr M & R 181 (149 ER 1044) and Adam v Ward [1917] AC 309. They quoted (at [9]) the following oft cited statement made by Parke B in Toogood v Spyring (at 193) (ER 1049-1050): In general, an action lies for the malicious publication of statements which are false in fact, and injurious to the character of another (within the well-known limits as to verbal slander), and the law considers such publication as malicious, unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned. In such cases, the occasion prevents the inference of malice, which the law draws from unauthorized communications, and affords a qualified defence depending upon the absence of actual malice. If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society ; and the law has not restricted the right to make them within any narrow limits. [my emphasis] Their Honours said (at [9]) that "[r]eciprocity of duty or interest is essential", citing Adam v Ward at 334 where the following statement appears: It was not disputed, in this case on either side, that a privileged occasion is, in reference to qualified privilege, an occasion where the person who makes a communication has an interest or a duty, legal, social, or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it. This reciprocity is essential.


case_title: Baldry v Jackson [1976] 2 NSWLR 415

case_text: response to Veda's Limitation Act defence submission, the applicants argue that all of the amendments to their respective pleadings take effect as from the filing of the original statement of claim (on 25 January 2006 in Mr McGary's proceeding and on 16 December 2005 in the other eight proceedings). The applicants refer to Baldry v Jackson [1976] 2 NSWLR 415 at 419 per Samuels JA, O 13 r 3A of the Federal Court Rules , and Vintage Developments Pty Ltd v GHD Pty Limited (No 2) [2006] FCA 1437 ( Vintage ). The applicants submit: Where the limitation period of one year applies any pleaded imputation after 16 December 2005 is within time, and in the case of Mr McGary, any publication after 25 January 2006 . If there is a publication prior to 16 February 2003 then any subsequent publication will be within time by virtue of the savings provisions under s 14B(2) of the Limitation Act when amended with effect from 17 February 2003. All publications are of substantially the same matter. All causes of action pleaded in defamation are publications within the twelve month period prior to the commencement of the proceedings or they come within the savings provision under s 14B(2) of the Limitation Act .


case_outcome: followed

case_text: Bashford v Information Australia (Newsletters) Pty Ltd [2004] HCA 5 ; (2004) 218 CLR 366 ( Bashford ), Gleeson CJ, Hayne and Heydon JJ said in a joint judgment that the principles to be applied in determining whether an occasion of publication was one of qualified privilege are well known. Their Honours referred to Toogood v Spyring (1834) 1 Cr M & R 181 (149 ER 1044) and Adam v Ward [1917] AC 309. They quoted (at [9]) the following oft cited statement made by Parke B in Toogood v Spyring (at 193) (ER 1049-1050): In general, an action lies for the malicious publication of statements which are false in fact, and injurious to the character of another (within the well-known limits as to verbal slander), and the law considers such publication as malicious, unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned. In such cases, the occasion prevents the inference of malice, which the law draws from unauthorized communications, and affords a qualified defence depending upon the absence of actual malice. If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society ; and the law has not restricted the right to make them within any narrow limits. [my emphasis] Their Honours said (at [9]) that "[r]eciprocity of duty or interest is essential", citing Adam v Ward at 334 where the following statement appears: It was not disputed, in this case on either side, that a privileged occasion is, in reference to qualified privilege, an occasion where the person who makes a communication has an interest or a duty, legal, social, or moral, to make it to the person to whom it is made, and the person to whom it is so made has a corresponding interest or duty to receive it. This reciprocity is essential. I return now to Bashford (see [279] above). In Bashford , the publisher of a trade newsletter was sued for defamation. The High Court held (5:2) that the occasion was one of qualified privilege. The reciprocity of duty or interest necessary to attract the defence existed because only persons responsible for occupational health and safety subscribed to the newsletter and it covered only that subject. The majority rejected a submission that qualified privilege was displaced because the newsletter was published for profit. Their Honours acknowledged that in Macintosh v Dun , the fact that the mercantile agency was in the business of providing information for profit appeared to have been an important consideration leading to denial of the defence of qualified privilege. However, they thought it would be wrong to isolate the element of profit and to conclude that its presence will necessarily always deny the availability of the defence. In relation to Macintosh v Dun , their Honours said (at [16]): ... [F]urther elements were identified: the disclosure of confidential information would be sought, and it would likely be sought by means condemned as at least inappropriate, if not unlawful. While these further considerations were seen as following from the existence of the profit motive, they were considerations critical to the conclusion that the occasion was not privileged. In their joint judgment, Gleeson CJ, Hayne and Heydon JJ thought it important to recognise that the Privy Council in Macintosh v Dun did not endorse the proposition that had been urged in the Full Court that payment for information necessarily denies that the occasion of its communication is privileged (at [20]). Similarly, their Honours considered that the Privy Council did not hold that the voluntary assumption of obligation (whether by contract or otherwise) was necessarily inconsistent with the existence of mutual duty or interest. Their Honours said (at [20]): What distinguished Macintosh from Howe & McColough was the nature of the information conveyed and the manner of its collection. In Macintosh information which included private or confidential material gathered from and about third parties was being conveyed; in Howe & McColough , information about a transaction to which the maker of the statement was a party was passed on. In Macintosh , the fear was that inappropriate methods would be used to assemble the information; in Howe & McColough , the person who made the communication already possessed relevant knowledge. It is noteworthy that s 30(5) of the uniform Defamation Act 2005 now reflects the view expressed in Bashford that the defence of qualified privilege is not defeated simply by the fact that the defamatory matter is published for reward. Following their discussion of Macintosh v Dun , Bashford and the uniform Defamation Act 2005 , the learned authors: Trindade, Cane and Lunney, The Law of Torts in Australia (4 th Ed, OUP, 2007) have no hesitation in saying that "[t]he communications of credit agencies to their client will therefore now be regarded as being covered by this category of qualified privilege" (at [7.7.4.1.1] p 394). I agree: and consider that s 30(5) reflected, rather than changed, the law in this respect.


case_text: relies on a series of authorities that were concerned with internet service providers: Bunt v Tilley [2006] EWHC 407 ; [2006] 3 All ER 336 ; Godfrey v Demon Internet Ltd [2001] QB 201; Cubby, Inc v CompuServe Inc 776 F. Supp. 135 (1991); Urbanchich v Drummoyne Municipal Council (1991) Aust Torts Reports p81-127.


case_title: Cubby, Inc v CompuServe Inc 776 F.Supp. 135 (1991)


case_outcome: discussed

case_text: appeal to the High Court ( Dun v Macintosh [1906] HCA 24 ; (1906) 3 CLR 1134) the Supreme Court's decision on the question of privilege was affirmed. In separate judgments, Griffith CJ, Barton J and O'Connor J expressed agreement with Pring J's judgment in the Supreme Court. The plaintiff, a grazier and stock dealer, sued a firm that had reported him to the secretary who had informed the other members accordingly. The High Court held (4:1) that the occasion was privileged. Macintosh v Dun was distinguished as turning on its own facts. Griffith CJ said (at 371) that the Privy Council had not professed to lay down any new rule, and had thought that the communication complained of was not to be seen as having been made in answer to an enquiry but as information volunteered. The Chief Justice also thought that their Lordships had considered the contract in Macintosh v Dun as "contrary to public policy" (at 371). Barton J agreed with the Chief Justice. O'Connor J also distinguished Macintosh v Dun as turning on the special circumstances under which it was claimed the privilege arose (at 373). His Honour characterised Macintosh v Dun as a case concerning an individual, association or corporation "that makes a business of collecting information about traders' credit and selling it for reward to other traders" (at 373). O'Connor J saw the real ground of the decision as residing in Lord Macnaghten's reference to "the interest of the community" and "the welfare of society" (see [295] above). The evidence shows that Veda was incorporated on 12 December 1967 under the name "Credit Reference Association of New South Wales Limited", as a company limited by guarantee. It has had several changes of name (see [2] above). Until the 1990s it was an unlisted non-profit public company, but it then ceased to be a non-profit entity and also became a company limited by shares and guarantee. As at November 1995 it members were all credit providers. Although the memorandum and articles of association in evidence did not limit the membership to credit providers, I infer from their names that the signatories were in fact all credit providers. Veda's name was then "Credit Reference Association of Australia Limited". Clause 7 of the memorandum of association provided: (1) Each member, and each other person as the Directors determine, may upon agreeing to the terms, conditions and fees determined by the Directors, be entitled to obtain from the Company such information as may be in the possession of the Company, to the extent allowed by the law in any manner prescribed by the Directors as concerns the credit, insurance claims history or any commercial information in relation to any person. (2) The Company shall not be obliged to receive information relating to any person otherwise than from members of the Company, and only to the extent allowed by the law, and in receiving, holding and supplying such information the Company shall at all times be acting as the agent of each member. (3) The member agrees to indemnify the Company in respect of all: (a) demands, claims, actions, proceedings or suits brought against the Company, whether in law or in equity; (b) liabilities of the Company; and (c) costs and expenses including legal costs and expenses (on a solicitor and own client basis) incurred by the Company arising directly or indirectly out of the use or reliance upon information supplied by or through the member to the Company, which is inaccurate for any reason, including because of error or omission.


case_title: Godfrey v Demon Internet Ltd [2001] QB 201


case_text: v Dun does not represent, even at a minimum,the predominant view of the law in the United States: see 15A Am Jur 2d, Collections and Credit Agencies , § 28 and Petition of Retailers Commercial Agency Inc , 174 NE 2d 376 (Mass., 1961). The United States position is summarised in American Jurisprudence 2d in the paragraph cited (footnotes omitted): Though there is authority to the contrary, reports of mercantile or other credit-reporting agencies, furnished in good faith to one having a legitimate interest in the information, are privileged. On the other hand, the decision in Macintosh v Dun was applied in Canada in Gillett v Nissen Volkswagen [1975] 3 WWR 520; 58 DLR (3d) 104, and see Informa Confidential Reports (Pty) Ltd v Abro , [1975] (2) S.A. 760.


case_text: Australia, Macintosh v Dun was distinguished in Howe and McColough v Lees [1910] HCA 67 ; (1910) 11 CLR 361. That was a case of an association of stock salesmen who carried on business in the Bendigo sale-yards, and who, by the rules of the association, had contracted to inform the association's secretary of any person's failure to settle for stock purchased within a stipulated period. It seems clear that if Veda had remained a mutual association it would have been indistinguishable for present purposes from the Association in Greenlands or from the association of stock salesmen in Howe and McColough v Lees . Senior counsel for Veda informed the Court that Veda "demutualised and became a public company in the late 1990s". He submits that it would be "incongruous" and would be "the sort of thing that brings the common law into disrepute" if such a change in formal status could cause Veda to lose the defence of qualified privilege.


case_title: Informa Confidential Reports (Pty) Ltd v Abro [1975] (2) S.A. 760


case_text: Sullivan v Moody , Tame v New South Wales is unlike the present cases in that it was concerned with duties imposed by statute on persons who perform certain functions in the interests of the public or of a cross-section of it (for a recent illustration from the United Kingdom see Jain v Trent Strategic Health Authority [2009] 2 WLR 248). However, I think that the approach taken in Tame v New South Wales is applicable. The defence of qualified privilege is made available because it is seen to be required in the public interest. It would introduce an incoherence in the law to impose a duty of care on Veda directed to the accuracy of its credit reports to enquiring credit providers. 2. Did Veda commit a breach of any duty of care it owed to the applicants in relation to the accuracy of the credit reports concerning them that caused those credit reports to be inaccurate?


case_text: Privy Council's decision has been criticised. In Watt v Longsdon [1930] 1 KB 130 at 148, Scrutton LJ said that the decision "must not be relied on too strongly" in the light of the decision of the House of Lords in London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15 ( Greenlands ). In Greenlands the House distinguished Macintosh v Dun . The case concerned the London Association for the Protection of Trade (Association) which had over 6,000 members who paid an annual subscription. A member (Kydd) applied to the Association on a form provided by it for information on the commercial standing of a trading company (Greenlands) with which Kydd proposed to deal. The secretary to the Association (Hadwen) applied to a commercial agent and debt collector (Wilmshurst) at Hereford where Greenlands carried on business for such information. Having obtained the information from Wilmshurst, Hadwen passed it onto Kydd. Greenlands sued Wilmshurst, the Association and Hadwen for libel. A jury returned verdicts against all three defendants, finding express malice against Wilmshurst. The Association and Hadwen appealed. The Court of Appeal ordered a new trial as against them. On the further appeal to the House of Lords, Greenlands consented to have the judgment against the Association set aside because it transpired that it was an unincorporated association. The point of distinction that seems to be common to their Lordships' speeches is that in Greenlands the Association was an unincorporated not-for-profit association who business was carried on by a committee, which did not operate solely from motives of pecuniary gain, and Hadwen did not act as agent of the Association but as agent of Kydd. Their Lordships emphasised that whether qualified privilege was attracted depended on a close scrutiny of all the circumstances of the individual case. The present cases share some features with both Macintosh v Dun and Greenlands . Like the defendants in Macintosh v Dun : Veda is motivated by the desire for pecuniary gain; Veda is not itself in the business of providing credit but is in the different business of collecting and providing, for reward to itself, creditworthiness information sought by credit providers. On the other hand, as in Greenlands : It seems clear that if Veda had remained a mutual association it would have been indistinguishable for present purposes from the Association in Greenlands or from the association of stock salesmen in Howe and McColough v Lees . Senior counsel for Veda informed the Court that Veda "demutualised and became a public company in the late 1990s". He submits that it would be "incongruous" and would be "the sort of thing that brings the common law into disrepute" if such a change in formal status could cause Veda to lose the defence of qualified privilege.


case_title: Macintosh v Dun (1905) 5 SR (NSW) 708


case_text: referred to Veda's pleaded defence of qualified privilege at [116] above. The applicants submit that publication by Veda was not made on an occasion of qualified privilege. They rely on Macintosh v Dun [1908] UKPCHCA 3 ; (1908) 6 CLR 303 ; [1908] AC 390. Veda submits that Macintosh v Dun was wrongly decided and should not be followed. I turn now to Macintosh v Dun [1908] UKPCHCA 3 ; (1908) 6 CLR 303 ; [1908] AC 390. On appeal, the Privy Council ([1908] AC 390 at 400) referred to the facts that: Their Lordships identified "the real question" as being whether it was "in the interests of the community" and "for the welfare of society" that the protection that the law gave to communications made in legitimate self-defence or from a bona fide sense of duty "should be extended to communications made from motives of self-interest by persons who trade for profit in the characters of other people" (at 400). Answering this question "no", they added: But information such as that which [the defendants] offer for sale may be obtained in many ways, not all of them deserving of commendation. It may be extorted from the person whose character is in question through fear of misrepresentation or misconstruction if he remains silent. It may be gathered from gossip. It may be picked up from discharged servants. It may be betrayed by disloyal employees. It is only right that those who engage in such a business, touching so closely very dangerous ground, should take the consequences if they overstep the law.


case_text: applicants do not submit that Veda was subject to the broad duty of care that I have described. They quoted from the following summary by McDougall J in OzEcom & Anor v Hudson Investment Group & Ors [2007] NSWSC 719 ( OzEcom ) at [321] of the elements of the cause of action in negligence causing pure economic loss extracted from recent High Court judgments: (1) Reasonable foreseeability of loss is not of itself a sufficient basis to impose a duty of care: Tame v New South Wales [2002] HCA 35 ; (2002) 211 CLR 317 at 329 [6] (Gleeson CJ; Tame was a case of alleged psychiatric injury, but what his Honour said applies a fortiori to a case of pure economic loss); Sullivan v Moody And Others [2001] HCA 59 ; (2001) 207 CLR 562 at 576 [420] (another case of alleged psychiatric and other injury; the comment just made in relation to Tame applies). (2) Nonetheless, reasonable foreseeability is a necessary condition of duty: Tame at 355 [103] (McHugh J). (3) The absence of reasonable foreseeability negates the existence of a duty of care (following from (2)). (4) A plaintiff's 'vulnerability', in the sense of its inability to protect itself from the consequences of a defendant's want of reasonable care, is an important requirement in analysing whether any such duty of care is owed: Woolcock Street Investments Pty Ltd v CDG Pty Ltd And Another [2004] HCA 16 ; (2004) 216 CLR 515 at 530 [23] (Gleeson CJ, Gummow, Hayne and Heydon JJ). (5) Another important consideration is assumption of responsibility coupled with known reliance: Woolcock Street at 531 [24] (ibid). (6) The existence and terms of any relevant contract may bear upon the existence and content of a duty of care: Astley And Others v Austrust Limited [1999] HCA 6 ; (1999) 197 CLR 1 , 22 [47] (Gleeson CJ, McHugh, Gummow and Hayne JJ). To adapt the words of Lord Steyn (with whom the rest of the House of Lords agreed) in Williams And Another v Natural Life Health Foods Ltd [1998] 1 WLR 830 at 857, the role of the law of tort is to fill gaps where other remedies are not available. (7) The relevant statutory and common law context, including the allocation of responsibilities and the provision of remedies, is relevant to the determination, whether a duty of care should be imposed in a particular case: Esanda Finance Corporation Limited v Peat Marwick Hungerfords [1997] HCA 8 ; (1997) 188 CLR 241 at 282 and 286 (Mc Hugh J [sic]); and see Perre And Others v Apand Pty Limited [1999] HCA 36 ; (1999) 198 CLR 180 at 192 [5] (Gleeson CJ; his Honour repeated this sentiment in Tame at 329 [6]), 226 [120] (McHugh J)." As McDougall J acknowledged, the material relevant to the seven headings might overlap to some extent. Veda responded to the applicants' submissions based on the passage from OzEcom set out at [379] above. I therefore turn now to the five elements summarised at [380] above. 1. Foreseeability of economic loss As indicated earlier I am prepared to assume in favour of the applicants that it was reasonably foreseeable that if an inaccurate credit report was issued concerning them, they were likely to suffer economic loss. As also indicated earlier, the assumption may not be warranted. The question whether an applicant actually did suffer economic loss as a result of a particular inaccurate credit report would arise at the damages stage of these proceedings.


case_text: applicants do not submit that Veda was subject to the broad duty of care that I have described. They quoted from the following summary by McDougall J in OzEcom & Anor v Hudson Investment Group & Ors [2007] NSWSC 719 ( OzEcom ) at [321] of the elements of the cause of action in negligence causing pure economic loss extracted from recent High Court judgments: (1) Reasonable foreseeability of loss is not of itself a sufficient basis to impose a duty of care: Tame v New South Wales [2002] HCA 35 ; (2002) 211 CLR 317 at 329 [6] (Gleeson CJ; Tame was a case of alleged psychiatric injury, but what his Honour said applies a fortiori to a case of pure economic loss); Sullivan v Moody And Others [2001] HCA 59 ; (2001) 207 CLR 562 at 576 [420] (another case of alleged psychiatric and other injury; the comment just made in relation to Tame applies). (2) Nonetheless, reasonable foreseeability is a necessary condition of duty: Tame at 355 [103] (McHugh J). (3) The absence of reasonable foreseeability negates the existence of a duty of care (following from (2)). (4) A plaintiff's 'vulnerability', in the sense of its inability to protect itself from the consequences of a defendant's want of reasonable care, is an important requirement in analysing whether any such duty of care is owed: Woolcock Street Investments Pty Ltd v CDG Pty Ltd And Another [2004] HCA 16 ; (2004) 216 CLR 515 at 530 [23] (Gleeson CJ, Gummow, Hayne and Heydon JJ). (5) Another important consideration is assumption of responsibility coupled with known reliance: Woolcock Street at 531 [24] (ibid). (6) The existence and terms of any relevant contract may bear upon the existence and content of a duty of care: Astley And Others v Austrust Limited [1999] HCA 6 ; (1999) 197 CLR 1 , 22 [47] (Gleeson CJ, McHugh, Gummow and Hayne JJ). To adapt the words of Lord Steyn (with whom the rest of the House of Lords agreed) in Williams And Another v Natural Life Health Foods Ltd [1998] 1 WLR 830 at 857, the role of the law of tort is to fill gaps where other remedies are not available. (7) The relevant statutory and common law context, including the allocation of responsibilities and the provision of remedies, is relevant to the determination, whether a duty of care should be imposed in a particular case: Esanda Finance Corporation Limited v Peat Marwick Hungerfords [1997] HCA 8 ; (1997) 188 CLR 241 at 282 and 286 (Mc Hugh J [sic]); and see Perre And Others v Apand Pty Limited [1999] HCA 36 ; (1999) 198 CLR 180 at 192 [5] (Gleeson CJ; his Honour repeated this sentiment in Tame at 329 [6]), 226 [120] (McHugh J)." As McDougall J acknowledged, the material relevant to the seven headings might overlap to some extent. In Perre v Apand Pty Ltd [1999] HCA 36 ; (1999) 198 CLR 180 , a case concerning pure economic loss, Gummow J said (at [198]): The question in the present case is whether the salient features of the matter gave rise to a duty of care owed by Apand. In determining whether the relationship is so close that the duty of care arises, attention is to be paid to the particular connections between the parties. ... There is no simple formula which can mask the necessity for examination of the particular facts. In its submissions, Veda summarised " the particular facts" in the present cases as follows: [ 18 ] (a) the Respondent operates a credit reporting business regulated by the Privacy Act 1988 ; (b) the business involves entering into contracts with subscribers for provision to them of the services provided by the Respondent, pursuant to which the subscribers are obligated to report credit defaults to the Respondent by posting such reports on the Respondent's database for the benefit of other subscribers; (c) the legislation places restrictions on the type of credit information which credit providers are permitted to post onto the database and imposes certain obligations on both the Respondent and the credit providers to take steps to ensure the credit information on the credit file was accurate; (d) the Respondent maintains the database but does not control the posting of information onto the database or when the information on credit files is posted onto the database; the manner in which consumer credit information is posted onto the database is controlled by the Act; (e) the Respondent has no contractual or other pre-existing relations with the persons the subject of credit files on the database, and has no knowledge of their personal or financial circumstances; (f) while the subscribers could be said to rely on the credit information which they are provided with, the persons subject to credit files held on the database do not rely on the credit files in any direct or conscious way, though they may be aware of their existence; (g) so far as the evidence in these proceedings revealed, the Applicants did not seek to access their credit files, or concern themselves with their contents, until after they became aware that the files may contain information which was interfering with them obtaining credit; (h) the posting of default information onto credit files can be done via the internet in a manual fashion, but overwhelmingly is done by automated computer downloads with minimal human intervention at the credit provider end and none at the Respondent's end under either process the Respondent does not see the default information before it is registered onto the credit files; (i) the Respondent has no direct knowledge of the default information which subscribers post on the database the subscribers are the controllers and source of that information which they create in their own business records; the subscribers have similar, if not more onerous, obligations as to accuracy of the information imposed on them by the legislation; (j) the Respondent does not trigger or control when the access is made to the database; it is a contractual obligation to make the credit information placed on there by credit providers available at all times to other credit provider subscribers; (k) the Respondent does not use the information for any purpose it is a passive repository for the credit information, akin to a notice board or clearing house for the benefit of third parties; (l) the obligations imposed on the Respondent under the legislation in relation to prevention of inaccurate or misleading credit information are limited to reasonable steps and reacting once it becomes aware of inaccuracies; (m) the purpose of enquiries of the credit files by subscribers is to assist them in assessing credit applications by members of the public; at the time of such credit enquiries the Respondent has no knowledge of the particular application or the reasons for it; (n) a refusal of credit may or may not involve the applicant for credit in suffering financial harm; (o) the Respondent carries out various activities designed to correct alleged inaccuracies in credit information on the database, including training credit provider's employees, audit procedures, and complaints handling and investigation on behalf of members of the public, all within the restrictions on disclosing personal information imposed on the Respondent by the legislation; (p) as the Applicants concede, the provision of credit reporting services by the Respondent is of significant social and economic utility in enabling members of the public to obtain appropriate credit quickly and safely and at reasonable cost. I do not understand the applicants to dispute this summary.


case_title: Petition of Retailers Commercial Agency Inc , 174 NE 2d 376 (Mass., 1961)


case_text: parties are agreed that I ought not to decide the constitutional question unless I first find that a cause of action under the Defamation Act has been made out. The theoretical availability of such a cause of action does not in itself result in inconsistency for the purposes of s 109: see State of Victoria v Commonwealth [1937] HCA 82 ; (1937) 58 CLR 618. Since I have decided to dismiss all nine proceedings including the claims of defamation, on other grounds stated above, I will say nothing further on the present issue. For the reasons given above, all nine proceedings will be dismissed with costs except the costs of the unresolved constitutional issue, as to which there will be no order for costs. I certify that the preceding five hundred and ninety-six (596) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 1 April 2009 In each proceeding : Counsel for the Applicant: Mr T S Hale SC and Mr P W Bates Mr D F C Thomas (on 1 April 2008 alone, when the constitutional issue was argued) Solicitor for the Applicant: Gerard Malouf & Partners Counsel for the Respondent: Mr B R McClintock SC and Mr M S White Solicitor for the Respondent: Ebsworth & Ebsworth Lawyers Counsel for the intervener, the Attorney-General for the State of New South Wales: Mr M G Sexton SC SG and Ms K M Richardson (Ms Richardson appeared on 1 April 2008 when the constitutional issue was argued) Dates of Hearing: 10, 17, 18, 19, 20, 25, 26, 27, 28 March; and 1, 21, 24 April 2008 Date last submission received: 6 May 2008 Date of Judgment: 1 April 2009 ANNEXURE AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/305.html


case_text: applicants do not submit that Veda was subject to the broad duty of care that I have described. They quoted from the following summary by McDougall J in OzEcom & Anor v Hudson Investment Group & Ors [2007] NSWSC 719 ( OzEcom ) at [321] of the elements of the cause of action in negligence causing pure economic loss extracted from recent High Court judgments: (1) Reasonable foreseeability of loss is not of itself a sufficient basis to impose a duty of care: Tame v New South Wales [2002] HCA 35 ; (2002) 211 CLR 317 at 329 [6] (Gleeson CJ; Tame was a case of alleged psychiatric injury, but what his Honour said applies a fortiori to a case of pure economic loss); Sullivan v Moody And Others [2001] HCA 59 ; (2001) 207 CLR 562 at 576 [420] (another case of alleged psychiatric and other injury; the comment just made in relation to Tame applies). (2) Nonetheless, reasonable foreseeability is a necessary condition of duty: Tame at 355 [103] (McHugh J). (3) The absence of reasonable foreseeability negates the existence of a duty of care (following from (2)). (4) A plaintiff's 'vulnerability', in the sense of its inability to protect itself from the consequences of a defendant's want of reasonable care, is an important requirement in analysing whether any such duty of care is owed: Woolcock Street Investments Pty Ltd v CDG Pty Ltd And Another [2004] HCA 16 ; (2004) 216 CLR 515 at 530 [23] (Gleeson CJ, Gummow, Hayne and Heydon JJ). (5) Another important consideration is assumption of responsibility coupled with known reliance: Woolcock Street at 531 [24] (ibid). (6) The existence and terms of any relevant contract may bear upon the existence and content of a duty of care: Astley And Others v Austrust Limited [1999] HCA 6 ; (1999) 197 CLR 1 , 22 [47] (Gleeson CJ, McHugh, Gummow and Hayne JJ). To adapt the words of Lord Steyn (with whom the rest of the House of Lords agreed) in Williams And Another v Natural Life Health Foods Ltd [1998] 1 WLR 830 at 857, the role of the law of tort is to fill gaps where other remedies are not available. (7) The relevant statutory and common law context, including the allocation of responsibilities and the provision of remedies, is relevant to the determination, whether a duty of care should be imposed in a particular case: Esanda Finance Corporation Limited v Peat Marwick Hungerfords [1997] HCA 8 ; (1997) 188 CLR 241 at 282 and 286 (Mc Hugh J [sic]); and see Perre And Others v Apand Pty Limited [1999] HCA 36 ; (1999) 198 CLR 180 at 192 [5] (Gleeson CJ; his Honour repeated this sentiment in Tame at 329 [6]), 226 [120] (McHugh J)." As McDougall J acknowledged, the material relevant to the seven headings might overlap to some extent. It must be emphasised that foreseeability of economic loss is only the beginning of the enquiry as to whether a duty of care exists: see, for example, Sullivan v Moody [2001] HCA 59 ; (2001) 207 CLR 562 at [42] . The method of posing the foreseeability question is not free of difficulty. I have expressed it as relating to the foreseeability of economic harm arising from the provision of an inaccurate credit report to an enquiring credit provider. However, an alternative is to express it as the foreseeability of economic harm arising from a failure by Veda to take certain steps by way of training or warning or monitoring subscribers with a view to ensuring that they enter only accurate data into the database. I am prepared to assume that it was foreseeable that in the case of some listing credit providers there would be some steps in the nature of training, warning or monitoring that might prevent an inaccurate listing of a default which was likely to cause an individual economic loss. Much would depend on the extent, persistence and intensity of the training, warning and monitoring, and on the particular credit provider's desire to cooperate. I should make it clear that the extent, persistence and intensity of the training, warning and monitoring may need to be very great indeed. It may even require Veda to assume the role of a day to day enforcement authority with a presence in the credit provider's business establishment, in order to exclude the possibility of inaccurate listings. 2. Vulnerability of the loss sufferer The applicants were not powerless in relation to the information recorded in their credit information files maintained by Veda. Section 18H of the Privacy Act gave them a right of access to their file and s 18J entitled them to have Veda make appropriate corrections, deletions or additions to ensure that information in their file was accurate, up-to-date, complete and not misleading, or, if Veda did not do so, to have it include a statement in their credit information file. Veda submits that the general law background to Part IIIA of the Privacy Act also tells against the imposition of a duty of care of the kind that the applicants must establish. Veda refers to the law relating to defamation and to statements by the High Court in Sullivan v Moody and Tame v New South Wales [2002] HCA 35 ; (2002) 211 CLR 317 , generally to the effect that a duty of care will not be recognised where its recognition would render the common law incoherent. In particular, Veda relies on the defence of qualified privilege claims in defamation a defence that is made available in the public interest. The defence is made available by the common law when a credit reporting agency provides an inaccurate credit report to a credit provider. It is argued that it would be destructive of that defence if the same common law were to impose a duty of care on the credit reporting agency as the foundation for a liability in negligence. Sullivan v Moody was concerned with notifications by various categories of professional persons to the authorities of suspicions on reasonable grounds that certain offences had been committed against children. Certain medical practitioners and social workers employed by the South Australian Department of Community Welfare issued reports to the authorities that certain children had been sexually abused. The fathers of the children alleged that as a result of negligent examination, diagnosis and reporting by those professional persons, they, the fathers, had suffered shock, distress, psychiatric injury and resultant personal and financial loss. The High Court held that it would be inconsistent with the proper and effective discharge of the professional or statutory responsibilities of those involved in investigating and reporting upon alleged sexual abuse, for them to be subjected to a legal duty to take care to protect persons who were suspected of being the sources of the harm. Their Honours emphasised (at [42]) that foreseeability of harm to the fathers was not sufficient to ground a duty of care. Sullivan v Moody is not on all fours with the present case because it involved a statutorily imposed duty on the professional persons to provide reports. There is no duty imposed by the Privacy Act on Veda to engage in its credit reporting business. Notwithstanding this difference, in my view Sullivan v Moody gives guidance in the circumstances of the present cases. The passage from Sullivan v Moody quoted above is not expressed to depend on the imposition of the reporting duty by statute, or on the "professional" responsibilities of the medical practitioner and social workers. Rather, the passage addresses the relationship between the imposition of a duty of care and the existence of the defence of qualified privilege. Once I have held that even an inaccurate defamatory credit report issued by Veda does not expose it to liability for defamation by reason of the defence of qualified privilege, it would introduce incoherence in the common law to impose a duty of care. Veda would, contrary to the convenience of the community and welfare of society that give rise to the defence, be inhibited in passing on the creditworthiness information in its database to those who have a legitimate interest in receiving it. At [28], Gleeson CJ stated (citations omitted): ... as in Sullivan v Moody , this is a case where the appellant claims to have been injured in consequence of what others were told about her. There is the same intersection with the law of defamation, and the same need to preserve legal coherence ... In the events that occurred, Mrs Tame's reputation was not harmed. But suppose it had been. Then the law would have engaged in an exercise of balancing the rights and responsibilities of Mrs Tame and Acting Sergeant Beardsley by reference to considerations many of which would be rendered irrelevant by the application of the law of negligence. Similarly, Gaudron J stated (at [58] citations omitted): The second matter which indicates that Acting Sergeant Beardsley did not owe a duty of care to Mrs Tame is the fact that the direct cause of her psychiatric illness was not the inaccurate recording of her blood alcohol level, but its communication to others. Thus, in this case as in Sullivan v Moody , "there is an intersection with the law of defamation which resolves the competing interests of the parties through well-developed principles about privilege and the like" ... And as in Sullivan v Moody , "[t]o apply the law of negligence in the present case would resolve that competition on an altogether different basis". At the very least, the law of negligence with respect to psychiatric injury ought not be extended in a disconformity with other areas of the law. McHugh J observed (at [122] and [123] citations omitted): Mrs Tame's psychiatric illness is the product of her concern for her reputation. There is no doubt that the publication of the P4 report to the insurer defamed her. She could have sued for damages for defamation. If successful, she could have recovered all the damages in that action that she sought in the present action including damages for her psychiatric illness. In determining whether Acting Sergeant Beardsley owed a duty of care to Mrs Tame, it is proper to take into account quite apart from the issue of reasonable foreseeability that the law of defamation appears a more appropriate medium for dealing with the facts of her case than the law of negligently inflicted nervous shock. Her action arises out of a communication to a third party, her concern is with her reputation and the law of defamation has various defences that reconcile the competing interests of the parties more appropriately than the law of negligence. This Court has already taken the view that, independently of policy issues relevant to the interests of the parties and persons like them, the need for the law to be coherent is a relevant factor in determining whether a duty exists. In Sullivan v Moody , ... the Court said that coherence in the law was a relevant factor in determining whether a duty of care existed. In Sullivan , the Court held that officers of the Department of Community Welfare owed no duty of care to a person affected by a communication made as the result of investigating, under a statutory power, a sexual assault allegation. Finally, Callinan J, (at [323], [325]) stated (citations omitted): Whilst it may be accepted that a plaintiff is entitled to avail herself of whatever remedies are available to her, it is important that a decision and the reasoning leading to it, in an unusual case, which this one is, be in harmony with, so far as is possible, available related causes of action, and the common law as a whole or, as it was put by this Court in Sullivan v Moody , ... that they not offend the "coherence of the law". The facts of this case might conceivably have given rise to actions in negligent misstatement (if that action is not confined to claims for economic loss) and defamation. That these causes of action may also be available on the facts of the case, and would then be governed by special rules affected by policy considerations, is relevant to the question whether the appellant should recover damages for "nervous shock" on the basis of those facts. As to the former cause of action, Barwick CJ in Mutual Life & Citizens' Assurance Co Ltd v Evatt ... said: "But I think it is quite clear that the relationship of proximity, adequate for compensation of injury caused by physical acts or omissions, would be inappropriate in the case of utterance by way of information or advice which causes loss or damage. The necessary relationship in that connexion must needs be more specific." ... Many controls and special defences, both statutory and at common law, ordinarily operate to restrict claims in defamation; for example, defences of qualified and absolute privilege, and the need for a plaintiff to prove absence of good faith on the part of the defendant. Like Sullivan v Moody , Tame v New South Wales is unlike the present cases in that it was concerned with duties imposed by statute on persons who perform certain functions in the interests of the public or of a cross-section of it (for a recent illustration from the United Kingdom see Jain v Trent Strategic Health Authority [2009] 2 WLR 248). However, I think that the approach taken in Tame v New South Wales is applicable. The defence of qualified privilege is made available because it is seen to be required in the public interest. It would introduce an incoherence in the law to impose a duty of care on Veda directed to the accuracy of its credit reports to enquiring credit providers. 2. Did Veda commit a breach of any duty of care it owed to the applicants in relation to the accuracy of the credit reports concerning them that caused those credit reports to be inaccurate?


case_text: applicants do not submit that Veda was subject to the broad duty of care that I have described. They quoted from the following summary by McDougall J in OzEcom & Anor v Hudson Investment Group & Ors [2007] NSWSC 719 ( OzEcom ) at [321] of the elements of the cause of action in negligence causing pure economic loss extracted from recent High Court judgments: (1) Reasonable foreseeability of loss is not of itself a sufficient basis to impose a duty of care: Tame v New South Wales [2002] HCA 35 ; (2002) 211 CLR 317 at 329 [6] (Gleeson CJ; Tame was a case of alleged psychiatric injury, but what his Honour said applies a fortiori to a case of pure economic loss); Sullivan v Moody And Others [2001] HCA 59 ; (2001) 207 CLR 562 at 576 [420] (another case of alleged psychiatric and other injury; the comment just made in relation to Tame applies). (2) Nonetheless, reasonable foreseeability is a necessary condition of duty: Tame at 355 [103] (McHugh J). (3) The absence of reasonable foreseeability negates the existence of a duty of care (following from (2)). (4) A plaintiff's 'vulnerability', in the sense of its inability to protect itself from the consequences of a defendant's want of reasonable care, is an important requirement in analysing whether any such duty of care is owed: Woolcock Street Investments Pty Ltd v CDG Pty Ltd And Another [2004] HCA 16 ; (2004) 216 CLR 515 at 530 [23] (Gleeson CJ, Gummow, Hayne and Heydon JJ). (5) Another important consideration is assumption of responsibility coupled with known reliance: Woolcock Street at 531 [24] (ibid). (6) The existence and terms of any relevant contract may bear upon the existence and content of a duty of care: Astley And Others v Austrust Limited [1999] HCA 6 ; (1999) 197 CLR 1 , 22 [47] (Gleeson CJ, McHugh, Gummow and Hayne JJ). To adapt the words of Lord Steyn (with whom the rest of the House of Lords agreed) in Williams And Another v Natural Life Health Foods Ltd [1998] 1 WLR 830 at 857, the role of the law of tort is to fill gaps where other remedies are not available. (7) The relevant statutory and common law context, including the allocation of responsibilities and the provision of remedies, is relevant to the determination, whether a duty of care should be imposed in a particular case: Esanda Finance Corporation Limited v Peat Marwick Hungerfords [1997] HCA 8 ; (1997) 188 CLR 241 at 282 and 286 (Mc Hugh J [sic]); and see Perre And Others v Apand Pty Limited [1999] HCA 36 ; (1999) 198 CLR 180 at 192 [5] (Gleeson CJ; his Honour repeated this sentiment in Tame at 329 [6]), 226 [120] (McHugh J)." As McDougall J acknowledged, the material relevant to the seven headings might overlap to some extent. Veda submits that the general law background to Part IIIA of the Privacy Act also tells against the imposition of a duty of care of the kind that the applicants must establish. Veda refers to the law relating to defamation and to statements by the High Court in Sullivan v Moody and Tame v New South Wales [2002] HCA 35 ; (2002) 211 CLR 317 , generally to the effect that a duty of care will not be recognised where its recognition would render the common law incoherent. In particular, Veda relies on the defence of qualified privilege claims in defamation a defence that is made available in the public interest. The defence is made available by the common law when a credit reporting agency provides an inaccurate credit report to a credit provider. It is argued that it would be destructive of that defence if the same common law were to impose a duty of care on the credit reporting agency as the foundation for a liability in negligence. Tame v New South Wales is the second case relied on by Veda. Ms Tame was the driver of a car that was involved in a traffic accident. She had a nil blood alcohol level, but when completing a report on the accident, a police officer mistakenly recorded that her blood alcohol level was 0.14. While the error was subsequently noticed and corrected, a copy of the uncorrected report was provided to the insurer which was handling Ms Tame's claim against the nominal defendant in respect of the accident. The insurer nevertheless admitted liability. Some time after the accident Ms Tame's solicitor told her about the entry concerning her blood alcohol level in the police report that had been given to the insurer. The police confirmed that the entry was wrong and they apologised. The insurer confirmed that liability for the accident was admitted. Nonetheless, Ms Tame became obsessed with the mistake that the police had made and ultimately developed a psychiatric disorder. She sued the State, claiming that it was vicariously liable for the negligence of the police officer. The High Court held that the police officer had not owed a duty to take reasonable care to avoid psychiatric injury to Ms Tame. Like Sullivan v Moody , Tame v New South Wales is unlike the present cases in that it was concerned with duties imposed by statute on persons who perform certain functions in the interests of the public or of a cross-section of it (for a recent illustration from the United Kingdom see Jain v Trent Strategic Health Authority [2009] 2 WLR 248). However, I think that the approach taken in Tame v New South Wales is applicable. The defence of qualified privilege is made available because it is seen to be required in the public interest. It would introduce an incoherence in the law to impose a duty of care on Veda directed to the accuracy of its credit reports to enquiring credit providers. 2. Did Veda commit a breach of any duty of care it owed to the applicants in relation to the accuracy of the credit reports concerning them that caused those credit reports to be inaccurate?


case_title: Toogood v Spyring (1834) 1 Cr M & R 181 (149 ER 1044)


case_title: Urbanchich v Drummoyne Municipal Council (1991) Aust Torts Reports p81-127


case_text: response to Veda's Limitation Act defence submission, the applicants argue that all of the amendments to their respective pleadings take effect as from the filing of the original statement of claim (on 25 January 2006 in Mr McGary's proceeding and on 16 December 2005 in the other eight proceedings). The applicants refer to Baldry v Jackson [1976] 2 NSWLR 415 at 419 per Samuels JA, O 13 r 3A of the Federal Court Rules , and Vintage Developments Pty Ltd v GHD Pty Limited (No 2) [2006] FCA 1437 ( Vintage ). The applicants submit: Where the limitation period of one year applies any pleaded imputation after 16 December 2005 is within time, and in the case of Mr McGary, any publication after 25 January 2006 . If there is a publication prior to 16 February 2003 then any subsequent publication will be within time by virtue of the savings provisions under s 14B(2) of the Limitation Act when amended with effect from 17 February 2003. All publications are of substantially the same matter. All causes of action pleaded in defamation are publications within the twelve month period prior to the commencement of the proceedings or they come within the savings provision under s 14B(2) of the Limitation Act . Veda submits that Vintage is distinguishable because the application in that case was an application to amend the capacity in which a party sued under O 13 r 2(6). However, Veda submits that O 13 r 2(6) is also subject to O 13 r 2(3)'s requirement of leave where the limitation period has expired, and that the correctness of Vintage is doubtful because the parties did not refer Her Honour to O 13 r 2(3). The parties' submissions raised two issues for decision. The first relates to the construction and application of s 14B(2003). The second relates to the construction and application of O 13 rr 2 and 3A of the Federal Court Rules . Both issues were argued by reference to general principles, and I will decide them accordingly, leaving it to the parties to apply my decision to the nine individual proceedings. Section 14B(2003) Vintage does not assist one way or the other. In that case the applicants moved under O 13 r 2 for leave to amend, and regard was had to subrules (3) and (6) of that rule and to rule 3A. With respect, Bennett J correctly observed (at [20]) that the effect of rule 3A(1)(b) was that if the Court did not otherwise order when granting leave to amend under O 13 r 2, the amendment would take effect when the document the subject of the amendment was first filed. Rule 3A is a default provision. When dealing with an application under rule 3 for leave to amend, the Court must bear in mind that unless it orders otherwise, rule 3A will have effect. Since I have decided that s 14B(2003) did not apply, I need say nothing further in relation to O 13 r 2 and 3A of the Federal Court Rules .


case_title: Watt v Longsdon [1930] 1 KB 130

case_text: Privy Council's decision has been criticised. In Watt v Longsdon [1930] 1 KB 130 at 148, Scrutton LJ said that the decision "must not be relied on too strongly" in the light of the decision of the House of Lords in London Association for Protection of Trade v Greenlands Ltd [1916] 2 AC 15 ( Greenlands ).


case_title: Weldon v Neal (1887) 19 QBD 394

case_text: to the amendment of the Federal Court of Australia Act 1976 (Cth) (FCA Act) by the insertion of subs (2B) in s 59 by the Law and Justice Legislation Amendment Act 1994 (No 84 of 1994), it was generally accepted that the Court could not, under its rule-making power, deprive a litigant of the benefit of a limitation defence. This idea can be traced back to Weldon v Neal (1887) 19 QBD 394 ; and see the annotations to O 13 r 2 in Practice & Procedure High Court and Federal Court of Australia at [40,455.15]. Subsection (2B) was introduced into s 59 of the FCA Act on 23 June 1994. It provides: The Rules of Court may make provision for: (a) the amendment of a document in a proceeding; or (b) leave to amend a document in a proceeding; even if the effect of the amendment would be to allow a person to seek a remedy in respect of a legal or equitable claim that would have been barred because of the expiry of a period of limitation if the remedy had originally been sought at the time of the amendment. Pursuant to this amendment, O 13 r 2 was amended on 1 August 1994 by Statutory Rules 279 of 1994. The amendments substituted a new subrule (3) of rule 2 and added new subrules (4), (5), (6) and (7) to that rule.


case_text: Section 75B for present purposes deems a person to be involved in a contravention of (inter alia) Part V (which includes s 52 and s 59 by a corporation if that person "has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention": see s 75B(1)(c). This, as I earlier noted, is the vehicle relied upon by the applicants to impose liability on Bell and Sladojevic under s 82 of the TP Act in respect of the contraventions alleged against Tiltform Licensing by virtue of their conduct: see Wheeler Grace & Pierucci Pty Ltd v Wright (1989) 11 ATPR 40-940. Section 75B does not require that the participant knew he or she was participating in a contravention of the Act. What, though, is required is actual knowledge of the essential elements of the contravention and intentional participation in it: Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661 at 666 ff.


case_text: I equally should comment on Sladojevic's relationship with Benson. This relationship needs to be considered bearing two matters in mind first, Sladojevic's tendency to domineer; and, secondly, his power over Tiltform Australia by virtue of the licence agreements Tiltform Licensing had with it. While Benson was, in the relevant period, within Sladojevic's power vis-à-vis investments to be made in Tiltform Australia, the evidence is that at that time their relationship was cordial. I accept that Benson readily accepted and acted upon proposals and suggestions of Sladojevic relating to securing investment in Tiltform Australia. But I do not accept, and it has not been suggested, that Sladojevic was in essence a "shadow director" of Tiltform Australia: cf Secretary of State for Trade and Industry v Deverall [2001] Ch 340 at 354; Australian Securities Commission v A S Nominees Ltd (1995) 133 ALR 1 at 52-53. The evidence is that Benson had and relied upon his own financial advisers in relation to the formation and their operation of Tiltform Australia and that he was experienced in the conduct of his own businesses. I do not accept that he was simply Sladojevic's cipher despite Parker's occasional attempts to paint him as such.


case_title: Australian Securities Commission v A S Nominees Ltd (1995) 133 ALR 1


case_text: By way of background to what I have to say I would observe the following. It is trite to say the question whether conduct in a given instance is of the s 52/s 995 proscribed character is to be determined having regard to all the relevant circumstances. Silence can render conduct misleading or deceptive if in all the circumstance the party complaining of the non-disclosure was reasonably entitled to expect that if the matters in question existed, had occurred, or were contemplated, they would be disclosed: see Hughes Aircraft Systems International v AirServices Australia (1977) 76 FCR 151 at 198-199 and the cases there discussed. 202 The seeming background relied upon to found a "duty to disclose" in this matter (at least for the purposes of the misleading or deceptive conduct claims) was Parker's claimed trust in Bell as a fellow accountant who was the accountant for Tiltform Licensing and whom he dealt with as such. 203 The evidence concerning Bell in this regard is slight. In Sladojevic's original letter to Murabito agreeing to the 2 June 2000 meeting Bell (who was to be in attendance) was described as "an integral part of our organisation and responsible for the strategic planning of our organisation". 357 In the Rawley matter I indicated that the question whether conduct in a given instance is proscribed by s 52/s995 is to be determined having regard to all the relevant circumstances. Silence can render conduct misleading or deceptive if in all the circumstance the party complaining of the non-disclosure was reasonably entitled to expect that if the matters in question existed, had occurred, or were contemplated, they would be disclosed: see Hughes Aircraft Systems International at 198-199. 358 Seemingly the "duty to disclose" in Chehade's case was founded in his "trust in Robert and Geoff". I have earlier commented on that trust. I would simply reiterate that to have trust in another person for whatever reason (be it reasonable or fanciful) does not as of course result in the imposition of an obligation on that other to act in accordance with the dictates of that trust. If such trust is to have any significance at all in a particular matter (I exclude from this relationships of undue influence), there must ordinarily be reason in the relationship of the parties either in that matter or arising from past or present dealings that properly could give rise in the circumstances to the expectation that the disclosure of the information in question would be made if it was known to the trusted party. 359 The short answer to the Chehade case is that neither Bell nor Sladojevic on my findings so conducted themselves in relation to Chehade's investment decision that they could properly be expected to disclose information to Chehade. As I will indicate below, I am satisfied Chehade did it his own way. He was the author of his own harm. His trust may have been in Bell and Chehade making the investment a profitable one given their commitment to the Tiltform enterprise and its success. That was not a trust that could author a liability of the type claimed here.


case_text: Given that the primary relief sought is damages under s 82 of the TP Act or, in the alternative, s 1325 of the Corporations Law, the critical issue in this case is whether any or all of the contravening conduct materially contributed to the loss the applicants' claim they suffered in consequence of their making their investment. In this particular setting the applicants accept, properly, that it is for them ultimately to prove contravening conduct was an inducement to their making of the investment in Tiltform Australia: see Lam v Austintel Investments Australia Pty Ltd (1989) 97 FLR 458 at 477-478; albeit it need not be the sole inducement: Kabwand Pty Ltd v National Australia Bank Ltd (1989) 11 ATPR 40-950 at 50,378; see also Travel Compensation Fund v Tambree trading as R Tambree and Associates [2005] HCA 69 ; (2005) 224 CLR 627 at [32] . As s 82 makes plain, the loss or damage suffered must be "by conduct of another person that was done in contravention of [s 52]": see Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525. Notwithstanding the submissions made by Sladojevic on the potential difference between s 82 and s 1325 in this regard because of the former's use of "by" and the latter's "because of", this as will be seen is not a difference I need explore here given my findings.


case_title: Kabwand Pty Ltd v National Australia Bank Ltd (1989) 11 ATPR 40-950


case_title: Travel Compensation Fund v Tambree trading as R Tambree and Associates [2005] HCA 69 ; (2005) 224 CLR 627


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


case_text: It is unnecessary to enlarge on the above in any detail. It is well accepted. Because I have found contraventions to have occurred, it is helpful still to be reminded of the observations of the Full Court of this Court in Ricochet Pty Ltd v Equity Trustees Executors and Agency Co Ltd (1993) 41 FCR 229 at 235: "A finding that a misrepresentation might have induced a decision will not of itself establish as a matter of probability that it did. Consistently with that finding, it may be that, on the balance of probabilities, a party was induced to make a decision by a combination of factors including the misrepresentation. Assuming a non-trivial contribution to the causative process by the misrepresentation, then it may be actionable. Ultimately, the 'causative threshold' beyond which liability attaches to a misrepresentation which is one of a number of factors inducing a decision that produces loss, will be a question of judgment. This is a familiar process adverted to in various related contexts by Mason CJ in March v E & M H Stramare Pty Ltd (supra) and in this Court in Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No 2) (1987) 16 FCR 410 at 418-419 and Pavich v Bobra Nominees Pty Ltd [1988] ATPR 49,849. (See also Munchies Management Pty Ltd v Belperio (1988) 84 ALR 700 at 712). But the mere possibility that a misrepresentation might have induced a course of action by the representee can never of itself attach liability under s 82 to the making of it."


case_text: I would also note, because of their present relevance, the observations of Gummow J in Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 at 241: "It is, of course, fundamental that s 52 is not designed for the benefit of persons who fail, in the circumstances of the case, to take reasonable care of their own interests ..." 213 To anticipate what I will say, while the nature of the representations made by Bell and Sladojevic were likely to induce reliance, any inference that the applicants acted on those representations is negatived in the circumstances of this case. I am satisfied that those representations played no part in their decision to invest. I regard the evidence given to the contrary by Parker, Lee and Murabito as unreliable. In each of their cases it reflected at best reconstruction and rationalisation resulting in the creation of a collective memory. Their decision was one in which Parker was influential. They backed their own judgment as to the prospects for the Tiltform technology and Tiltform Australia. In so doing they assumed a risk that adequate working capital would be secured and the short term cash flow problem overcome. They did not rely upon Bell or Sladojevic. They knew, or ought to have known, through Parker, that Bell's "$2 million" had not been raised. Their investment decision was not relevantly influenced by Sladojevic' s 7 August letter. 214 I have, in outlining the evidence for the misleading or deceptive conduct claims, referred not only to the context in which those representations were to be evaluated for the purpose of determining their falsity or otherwise but also to the context in which their causative significance is to be judged. The following are my reasons for the conclusion I have foreshadowed. 215 There are five matters of general significance to which reference should be made at the outset as they bear in various ways on the resolution of the present question. First, the relevant events occurred over a relatively short period, i.e. from 2 June to 9 August, and at a time when both Tiltform Australia was in its infancy and the national licence system had not been established. Secondly, the contact between Parker and Lee on the one hand and Bell and Sladojevic on the other in this period was quite limited. Less so the contact between Lee, though not Parker, and Benson. Thirdly, all of the above persons, it can be inferred, were aware that in order to succeed Tiltform Australia would have to have sufficient working capital to address both licence fees and investment in formwork. The licence agreements and the disclosure documents made this clear. Thirdly, there was at the above time a considerable level of enthusiasm being demonstrated for the Tiltform technology, its use in the construction industry and in its profit making potential. Bell and Sladojevic and the WA investors exhibited that enthusiasm. Fourthly, the clear inference to be drawn from the evidence is that the climate in which the negotiations occurred for the WA investment in Tiltform Australia was one in which buoyant expectations were entertained that working capital would be forthcoming. Dawkins advent as "chairman" of Tiltform Australia in late July clearly provided some stimulus to this. Fifthly, the WA investment was made in Tiltform Australia which at the time was, and was known by the WA investors to be, Benson's and his joint venture partner Dr Abraham's company. No investment was being made in Tiltform Licensing. Neither Bell nor Sladojevic held offices in, or were shareholders of, Tiltform Australia although as I will later indicate a claim is brought against them as promoters of that company. 216 It is clear that, from the outset, the directors of the Icon Group Murabito, Palmiero and Lee made their own highly positive business judgment of the virtue and attractions of the Tiltform technology, of its profit making potential and of the advantage of acquiring a licence of it. When Parker was offered participation in the investment opportunity Tiltform WA, he in turn came to share the same positive attitude to the Tiltform "opportunity" after his initial meeting in Adelaide on 2 June with Sladojevic and Bell an attitude contributed to significantly by Sladojevic's explanations etc of the technology. I need not repeat here my findings on that meeting other than to say I do not consider that Parker's projections were discussed in detail with Bell at that meeting, though there was discussion of them. The collective decision of the WA investors to accept the offer of shares in Tiltform WA within ten days of Parker's return from the 2 June meeting provides some evidence, in my view, of their faith in the Tiltform technology.


case_text: In their written submissions this amalgam is explained in the following way, i.e. Bell and Sladojevic "were promoting the benefit of their licensed product through Tiltform Australia and the Applicants were entitled to consider them as within their confidence". Relying, in particular, upon the terms of the licence agreements with Tiltform Australia, it is said investors in the position of the applicants would know they (i.e. the applicants and Bell and Sladojevic) "were in it together, would believe that the promoters' actions and advices would be as much in their [i.e. the applicants'] interest as their own, and would be made for the mutual purposes of the relationship, and not for the promoters' own self interest". I have indicated earlier in these reasons that the licence agreements contain clauses favourable to the licensor I would instance intrusive powers to control the licencee which are commonly found in exclusive licences involving the use and exploitation of intellectual property: cf Pacific Brands Sports & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40 ; (2006) 149 FCR 395.


case_text: The above would seem to be suggesting that the licensing agreement constituted a fiduciary relationship between Tiltform Licensing and Tiltform Australia. When I put this, in my view, extraordinary proposition which would turn fiduciary many exclusive dealerships, agencies, intellectual property licences, etc.: cf Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64 ; (1984) 156 CLR 41; counsel for the applicants resiled from it. However, in supplementary submissions, counsel re-embraced the above though with one additional matter of emphasis which is said to be "critical". This is that Sladojevic and Bell "were promoting the take up of shares in Tiltform Australia and advancing the licence that Tiltform Australia had with Tiltform Licensing is (sic) the reason why the proposed investors should seriously consider the investment." 253 So, it is said, from the moment Bell and Sladojevic put forward the Benson Tiltform Australia proposal on 26 June 2000 without Benson's sanction, they were promoting the take up of capital in Tiltform Australia, and they placed themselves in a position where their interest in the share take up conflicted with their duty, seemingly, to act in the joint interest of themselves and the WA investors. I note in passing that the substance of the proposal - the making of an investment in Tiltform Australia had already been discussed at the 24 June 2000 meeting. 254 In any event, it is said in my view surprisingly that this is a case "where the existence of a fiduciary relationship is indicated by the particular licence agreement alone". They point to the licence being an exclusive Australia wide one; to the fact that the position of Tiltform Australia in the Tiltform Group was fundamental to the success of the Group; and to the terms of cl 11.1.2 of the agreement which imposed, in essence, what is commonly encompassed in clauses imposing duties of fair dealing on parties to long term commercial relationships: I refer, purely for reasons of convenience and because good faith itself is not in issue, to Finn, "The Fiduciary Principle" in Youdan (ed) Equity, Fiduciaries and Trusts , 10 ff, 1989. 261 It is sufficient to note for present purposes that (i) the distinguishing characteristic of a fiduciary relationship is that "its essence, or purpose, is to serve exclusively the interests of a person or group of persons" (which, as in the case of a partnership or fiduciary joint venture, can include the fiduciary): see generally Meagher, Gummow & Lehane, at 5-005 ff; (ii) a relationship may be fiduciary in part and non-fiduciary in part: Hospital Products Ltd v United States Surgical Corporation , at 97-98 ff; (iii) insofar as the fiduciary relationship is claimed to be founded on mutual trust and confidence, the circumstances must nonetheless be such that the parties to the relationship can reasonably expect loyalty from the other, i.e. the subordination of self interest to joint interest: Gibson Motorsport Merchandise Pty Ltd at [11]-[13]; (iv) a person who provides information, suggestion or advice to another upon which that other may reasonably be expected to rely is not for that reason alone necessarily in a fiduciary relationship with that other, though that person will be a fiduciary if the factual matrix is such that that other is in the circumstances reasonably entitled to expect that the information provider, etc is acting in the matter in that other's interest: cf Pilmer v Duke Group Ltd (in liq) [2001] HCA 31 ; (2001) 207 CLR 165; Commonwealth Bank of Australia v Smith (1991) 42 FCR 390; (v) the loyalty obligation imposed on a fiduciary is that he or she cannot (a) in any matter within the scope of the fiduciary relationship (see Bertchnell v Equity Trustees Executor & Agency Co Ltd [1929] HCA 24 ; (1929) 42 CLR 384 at 408) have a personal interest or an inconsistent engagement with a third party; or (b) use his or her position to own, or to a third party, possible advantage, unless this is freely and informedly consented to by the person(s) to whom loyalty is owed, or is authorised by law: Chan v Zacharia [1984] HCA 36 ; (1984) 154 CLR 178 at 199; Breen v Williams [1995] HCA 63 ; (1996) 186 CLR 71 at 113; (vii) outside of commercial agency, partnership and trust relationships, care needs to be taken in concluding that commercial parties are in a fiduciary relationship for some or all purposes - not because a commercial relationship cannot be fiduciary, but because such a relationship, commonly, possesses characteristics (e.g. known adversarial interests, the reasonable expectation of self-reliance, etc.) which negative a fiduciary finding: Gibson Motorsport Merchandise Pty Ltd , at [2]-[18]; News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 539-541.


case_text: I have set out what is said to be the basis of the promoters claim at some length for this reason. I have had considerable difficulty in divining precisely what that basis might be. As pleaded, it suggests that the circumstances gave rise to a fiduciary relationship between each of Bell and Sladojevic as promoters of Tiltform Australia on the one hand and the WA investors on the other. The relevant relationships, I would add, were not with Tiltform Australia as such, as is ordinarily the case with promoters of companies: see Tracy v Mandalay Pty Ltd [1953] HCA 9 ; (1953) 88 CLR 215 at 241-242. How the pleaded relationship emerges from the particulars is by no means clear. Presumably its consequence, though, was that Bell and Sladojevic were obliged to act in the interests of the WA investors.


case_text: In written submissions it was suggested initially that they were promoters "because of the clear benefits to be derived by them from a share take up in [Tiltform Australia]". The decision of the High Court in Tracey v Mandalay Pty Ltd , (esp at 241) was in this relied upon for support by way of asserted factual analogy. Those submissions, though, went on to make the assertion of a fiduciary relationship akin to that of proposed joint venturers: United Dominion Corporation Ltd v Brian Pty Ltd [1985] HCA 49 ; (1985) 157 CLR 1. This joint venture which could only be said to be between the WA investors and Bell and Sladojevic if the alleged joint venturers' separate corporate entities (i.e. Tiltform Licensing and Tiltform Australia) were disregarded seems to be focussed on Bell's and Sladojevic's obligations as promoters of "the benefit of their (sic) licensed product through Tiltform Australia". I note in passing that no claim is made against Bell and Sladojevic as knowing participants in a breach of duty by Tiltform Licensing. Presumably, in this version of the joint venture, Bell and Sladojevic as fiduciaries were obliged to act in the mutual interest of themselves and the investors within the scope of the proposed venture. 258 In supplementary submissions, the "proposed joint venture" basis continued to be insisted upon, although apparently as an amalgam of the two previous approaches advanced, i.e. they were promoters of Tiltform Australia in the take up of the shares and of the proposed joint venture. The nature of the fiduciary duty owed in this amalgam submission is entirely unclear. Fully informed consent apart, were Bell and Sladojevic obliged to act in the interests of the proposed joint venturers (including themselves) to the exclusion of their own, several personal interests? Or were they obliged to act in the interests of the investors to the exclusion of any personal interest of their own? 259 Because of the difficulties I have in understanding how precisely the promoter fiduciary relationships are said to have been generated and what was the nature of the fiduciary wrongdoing allegedly engaged in in light of the relationships, I will give in relatively short form my own conclusions as to why I consider that there was, in the circumstances, no fiduciary relationship between Bell or Sladojevic and the WA investors. In so doing I have attempted as best I can to take account of the submissions advanced by the applicants.