case_text: Marks v GIO Australia Holdings Ltd [1998] HCA 69 (1998) 196 CLR 494 at [95] Gummow J said: Section 82 has at least five discrete elements. First, it identifies the legal norms for contravention of which the action under the section is given. Secondly, it identifies those by and against whom that action lies. Thirdly, the section specifies the injury for which the action lies as the suffering of loss or damage. Fourthly, it stipulates a causal requirement that the plaintiff's injury must be sustained "by" the contravention. Finally, the measure of compensation is "the amount of" the loss or damage sustained. For present purposes, the crucial one of those five elements is the second, particularly the identification of the person by whom the claim for damages can be brought. That is a question on which there is remarkably little authority, except in the case of one application of the misleading and deceptive conduct provisions of the Trade Practices Act , found in s 52 and the following sections. In relation to the various provisions of Pt IV of the Trade Practices Act , which include s 45DB , I have been unable to find any case in which a person not directly affected by the proscribed conduct, but only affected by reason of conducting dealings with a person directly affected, has made a claim for damages, much less succeeded in one. Further, the principal authorities in which the High Court of Australia has pronounced upon the meaning and effect of s 82 of the Trade Practices Act have been concerned with questions of causation and the measure of damages, the fourth and fifth elements identified by Gummow J. That description applies to Marks itself, as well as to Wardley Australia Limited v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 , Henville v Walker [2001] HCA 52 (2001) 206 CLR 459 , I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 (2002) 210 CLR 109 and HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 (2004) 217 CLR 640. Care must be taken in applying statements made in the judgments in those cases, concerning the fourth or fifth elements identified by Gummow J, to a case concerning the second element, the identification of the person who is entitled to claim.


case_outcome: cited

case_text: present purposes, the crucial one of those five elements is the second, particularly the identification of the person by whom the claim for damages can be brought. That is a question on which there is remarkably little authority, except in the case of one application of the misleading and deceptive conduct provisions of the Trade Practices Act , found in s 52 and the following sections. In relation to the various provisions of Pt IV of the Trade Practices Act , which include s 45DB , I have been unable to find any case in which a person not directly affected by the proscribed conduct, but only affected by reason of conducting dealings with a person directly affected, has made a claim for damages, much less succeeded in one. Further, the principal authorities in which the High Court of Australia has pronounced upon the meaning and effect of s 82 of the Trade Practices Act have been concerned with questions of causation and the measure of damages, the fourth and fifth elements identified by Gummow J. That description applies to Marks itself, as well as to Wardley Australia Limited v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 , Henville v Walker [2001] HCA 52 (2001) 206 CLR 459 , I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 (2002) 210 CLR 109 and HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 (2004) 217 CLR 640. Care must be taken in applying statements made in the judgments in those cases, concerning the fourth or fifth elements identified by Gummow J, to a case concerning the second element, the identification of the person who is entitled to claim.


case_title: Henville v Walker [2001] HCA 52 (2001) 206 CLR 459


case_title: I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 (2002) 210 CLR 109


case_title: HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 (2004) 217 CLR 640


case_title: Harris v Milfull [2002] FCAFC 442

case_text: great majority of cases concerning claims for damages pursuant to s 82 of the Trade Practices Act have been cases brought in reliance on the provisions relating to misleading and deceptive conduct, particularly s 52 , which is found in Pt V of the Trade Practices Act . Those cases fall into two classes. The first class concerns claims by people to whom representations amounting to misleading and deceptive conduct have been made. In such cases, the principal issue is often that of reliance. The question is whether the recipient of the representations relied on the truth of them in acting to his or her detriment, and suffered damage. In the second class of cases, the person claiming is not the person to whom the representations have been made, but a competitor of the person making the representations. This class of cases appears to have developed by analogy with the tort of passing off. A competitor of the person engaging in the misleading and deceptive conduct is permitted to claim profits lost by reason of sales of the competitor's products being diverted to those who have relied on the representations, and been misled by them into purchasing the first person's products instead of the competitor's. The existence of this class of cases might be said to be consistent with the proposition that, in determining who is entitled to claim damages pursuant to s 82 of the Trade Practices Act , that section is to be construed literally, so that no limit is to be imposed on the classes of persons who can trace loss and damage to some contravention by the person they sue of any of the provisions of Pt IV or Pt V of the Trade Practices Act . This is not necessarily the case. There do not appear to have been cases in which the net has been cast any wider than the class of competitors in the quasi-passing off situation. For instance, there appears to be no case in which a supplier of materials to the competitor has claimed for diminution of profits on the basis that, because the competitor lost sales, it ordered from the supplier less by way of materials to manufacture its products than it would have otherwise have done. In addition, it appears from Harris v Milfull [2002] FCAFC 442 that the principles relating to claims by shareholders that are derivative of those by the corporation in which they hold shares apply in relation to claims in respect of misleading and deceptive conduct. If it were the case that s 82 of the Trade Practices Act should be read as placing no limits on the classes of persons who can claim, it would surely be read as permitting claims by the shareholders, without regard to the principles barring derivative claims. With the single exception of the competitor category, relating to s 52 of the Trade Practices Act and other related sections, I have been unable to find any case in which a party whose interest is not protected directly by a provision of Pt IV or Pt V of the Trade Practices Act has been held to be entitled to claim damages pursuant to s 82 of the Trade Practices Act as a result of a contravention of a provision in relation to another party's protected interest. With the possible exception of Harris v Milfull (referred to in [10] above), I have not been able to find a case in which such a party has attempted to claim. The category of competitors in relation to misleading and deceptive conduct can be regarded as exceptional, because of the analogy with the tort of passing off, rather than as representative of any principle that s 82 applies to entitle any person who can trace loss or damage to a contravention of one of the relevant provisions to claim damages. To hold that s 82 , in conjunction with a provision of Pt IV , has such a broad reach would be a pioneering step. Before taking it, careful consideration of a number of factors would be necessary. I did not have the benefit of full argument about those factors.


case_outcome: considered

case_text: of the earliest cases in which a competitor of the person engaging in misleading and deceptive conduct was successful in claiming damages pursuant to s 82 of the Trade Practices Act is Janssen-Gilag Pty Limited v Pfizer Pty Limited [1992] FCA 437 ; (1992) 37 FCR 526. In dealing with s 82 , Lockhart J said at 529-530: Section 82 is the vehicle for the recovery of loss or damage for multifarious forms of contravention of the provisions of Pts IV and V of the Act. It is important that rules laid down by the courts to govern entitlement to damages under s 82 are not unduly rigid, since the ambit of activities that may cause contraventions of the diverse provisions of Pts IV and V is large and the circumstances in which damage therefrom may arise will vary considerably from case to case. What emerges from an analysis of the cases (and there are many of them) is that they do not impose some general requirement that damage can be recovered only where the applicant himself relies upon the conduct of the respondent constituting the contravention of the relevant provision. Also, a perusal of the provisions of Pts IV and V, the contravention of which gives rise to an entitlement to an applicant for compensation for loss or damage, points to the conclusion that applicants may claim compensation when the contravener's conduct caused other persons to act in a way that led to loss or damage to the applicant. Examples are s 46 which concerns the misuse of market power by corporations; s 47 relating to the practice of exclusive dealing; also s 48 which is concerned with resale price maintenance. As to s 47(1) and (6) relating to third line forcing see Castlemaine Tooheys Ltd v Williams and Hodgson Transport Pty Ltd [1986] HCA 72 ; (1986) 162 CLR 395 (High Court) and (1985) 7 FCR 509 (Full Federal Court). See Hubbards Pty Ltd v Simpson Ltd [1982] FCA 57 ; (1982) 60 FLR 430 and [1982] FCA 210 ; (1983) 69 FLR 392 (on appeal) with respect to s 48. See also Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1987) 18 IR 355 where contraventions of s 45 of the Act were involved and they concerned contracts, arrangements or understandings or restrictive dealings which adversely affected competition.


case_text: of the earliest cases in which a competitor of the person engaging in misleading and deceptive conduct was successful in claiming damages pursuant to s 82 of the Trade Practices Act is Janssen-Gilag Pty Limited v Pfizer Pty Limited [1992] FCA 437 ; (1992) 37 FCR 526. In dealing with s 82 , Lockhart J said at 529-530: Section 82 is the vehicle for the recovery of loss or damage for multifarious forms of contravention of the provisions of Pts IV and V of the Act. It is important that rules laid down by the courts to govern entitlement to damages under s 82 are not unduly rigid, since the ambit of activities that may cause contraventions of the diverse provisions of Pts IV and V is large and the circumstances in which damage therefrom may arise will vary considerably from case to case. What emerges from an analysis of the cases (and there are many of them) is that they do not impose some general requirement that damage can be recovered only where the applicant himself relies upon the conduct of the respondent constituting the contravention of the relevant provision. Also, a perusal of the provisions of Pts IV and V, the contravention of which gives rise to an entitlement to an applicant for compensation for loss or damage, points to the conclusion that applicants may claim compensation when the contravener's conduct caused other persons to act in a way that led to loss or damage to the applicant. Examples are s 46 which concerns the misuse of market power by corporations; s 47 relating to the practice of exclusive dealing; also s 48 which is concerned with resale price maintenance. As to s 47(1) and (6) relating to third line forcing see Castlemaine Tooheys Ltd v Williams and Hodgson Transport Pty Ltd [1986] HCA 72 ; (1986) 162 CLR 395 (High Court) and (1985) 7 FCR 509 (Full Federal Court). See Hubbards Pty Ltd v Simpson Ltd [1982] FCA 57 ; (1982) 60 FLR 430 and [1982] FCA 210 ; (1983) 69 FLR 392 (on appeal) with respect to s 48. See also Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1987) 18 IR 355 where contraventions of s 45 of the Act were involved and they concerned contracts, arrangements or understandings or restrictive dealings which adversely affected competition. It is by no means clear that the cases to which his Honour referred support the proposition that an applicant may claim compensation when the contravener's conduct caused other persons to act in a way that led to loss or damage to the applicant. Castlemaine Tooheys Ltd v Williams & Hodgson Transport Pty Ltd [1986] HCA 72 ; (1986) 162 CLR 395 , to which his Honour referred, was a claim in respect of alleged exclusive dealing, because a brewery insisted on deliveries to the premises of its retail customers being conducted by its nominated carrier. As the report of the case in the Full Court of this Court in Castlemaine Tooheys Ltd v Williams & Hodgson Transport Pty Ltd (1985) 7 FCR 509 demonstrates, the party claiming damages was itself a transport company, ie one of the very parties excluded by the alleged exclusive dealing requirement. (On appeal in Castlemaine Tooheys , the High Court held that no contravention of s 47 of the Trade Practices Act occurred.) The case did not test, for instance, whether a retailer of beer who insisted on using an excluded transport company for its deliveries would be entitled to claim damages under s 82 of the Trade Practices Act . Hubbards Pty Ltd v Simpson Ltd [1982] FCA 57 ; (1982) 60 FLR 430 and Simpson Ltd v Hubbard Pty Ltd [1982] FCA 210 ; (1982) 69 FLR 392 involved a claim in respect of resale price maintenance, brought by the very dealer whose resale prices the contravening party had attempted to maintain. It did not test the question whether, for instance, a customer of a dealer whose prices had been forced up by a third party engaging in resale price maintenance could sue the contravener directly for loss suffered by the customer. Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1987) 18 IR 355 was a case in which the applicant was the party against whom the primary boycott was mounted, in contravention of s 45 of the Trade Practices Act . That case did not test the question whether a customer of the party boycotted would have been entitled to claim damages from the boycotting parties in respect of its loss of profits through being unable to obtain supplies from the boycotted party.


case_title: Castlemaine Tooheys Ltd v Williams & Hodgson Transport Pty Ltd (1985) 7 FCR 509


case_title: Hubbards Pty Ltd v Simpson Ltd [1982] FCA 57 ; (1982) 60 FLR 430


case_title: Simpson Ltd v Hubbard Pty Ltd [1982] FCA 210 ; (1982) 69 FLR 392


case_title: Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1987) 18 IR 355


case_text: of the important factors must be the purpose of the legislation. In my reasons for judgment published on 4 October 2007, at [46]-[57], I discussed the question whether the trade and commerce of Rural Export was trade and commerce "involving the movement of goods between Australia and places outside Australia". I reached the conclusion that it was not. In doing so, I followed the views expressed by Hely J in Australian Wool Innovation Ltd v Newkirk (No. 2) [2005] FCA 1307 , and relied on the passages from the parliamentary debates, on which his Honour relied at [60]-[61]. It is unnecessary to set out again the passages from the parliamentary debates. They lead to the conclusion, which Hely J adopted and I followed, that s 45DB of the Trade Practices Act is directed very specifically at the protection of a narrow form of trade or commerce, namely that of which the movement of goods between Australia and places outside Australia is a part. On appeal in the present case, the Full Court did not say anything to suggest that this view is incorrect. If Rural Export, whose trade and commerce does not involve the movement of goods between Australia and places outside Australia, were entitled to recover damages, the result would be to expand dramatically the nature of the trade or commerce protected by s 45DB. This would be beyond the purpose of the legislation, as discerned by Hely J and by me, based on the relevant extrinsic materials. Such an extension would mean that trade or commerce not involving the relevant movement of goods would be protected, simply by reason of the existence of another party in respect of whom a contravention had occurred, and whose trade and commerce did involve the movement of goods between Australia and places outside Australia. Such an extension of protection is not warranted by the terms of s 82(1) of the Trade Practices Act , given the limited protection afforded by s 45DB. For these reasons, Rural Export is not entitled to recover damages in the present proceeding, because its trade or commerce is not itself protected by s 45DB of the Trade Practices Act . It is unnecessary to deal with the question whether the finding that Rural Export's trade or commerce was not hindered or prevented (a finding also not overturned by the Full Court) would also lead to the conclusion that Rural Export is not entitled to damages. Rural Export's claimed loss and damage In case I am wrong in the conclusion I have expressed in [15] above, I turn to the evidence in relation to loss and damage suffered by Rural Export.


case_outcome: followed

case_text: Because of the transitional provisions introducing s 31A into the Federal Court of Australia Act 1976 (Cth), the test in that section for summary dismissal of causes of action cannot be applied on the present application. For the purposes of determining fair arguability, rather, I must have regard to the line of authority exemplified in Sir Garfield Barwick CJ's judgment in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125, particularly at 129-130. Gaudron, McHugh, Gummow and Hayne JJ said in Agar v Hyde [2000] HCA 41 ; (2000) 201 CLR 552 at 576 [57] : 'The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were to be allowed to go to trial in the ordinary way.' 34 I am satisfied on the material before me that there is a high degree of certainty this amendment would not be able to succeed as pleaded and ought not to be allowed to go to trial. Other factors which have induced me to come to this conclusion are as follow. The discussions that Mr Sukkar said occurred with the bank officers did not take place in circumstances where it might be expected, ordinarily, that reasonable persons in the position of the parties or Mr Sukkar himself would regard the bank as giving him financial advice, as opposed to simply putting forward the bank's position, even if that position were being put perhaps forcefully or determinedly. 53 It is important to plead material facts in order to identify what is alleged will be the essential matters to be proved to establish a party's legal right to relief or resist the grant of relief to the opponent. Under the judicature system of pleading, such as is maintained in this Court, there is no necessity to assert or identify a legal category of action or suit which the facts asserted may illustrate, involve or demonstrate and on which the particular relief claimed is based or to which it is relevant: Agar v Hyde 201 CLR at 577-578 [64]. The essentiality of pleading the material facts, as opposed to even pleading a statute pursuant to which relief might be claimed, was emphasised recently in Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38 ; (2005) 223 CLR 251 at 264-265 [38] - [40] per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ; and see also Air Link Pty Ltd v Paterson (2005) 223 CLR 283 at 298-299 [25]-[32].


case_outcome: discussed

case_text: As ASS pointed out, there are departures in that rule from similar, but differently worded, rules in other courts. But it has relied on a construction of O 13 r 2(1) based on what Sachs LJ said in Brickfield Properties Ltd v Newton [1971] 1 WLR 862 esp at 874-875; [1971] 3 All ER 328 at 337-338. The approach which ASS urged in accordance with the approach of Sachs LJ in Brickfield [1971] 1 WLR 862; [1971] 3 All ER 328 is that r 2(1) creates a plenary power to amend. However, Edmund-Davies and Cross LJJ expressed considerable doubts about Sachs LJ's approach to the English rule, which was cast in somewhat similar terms to O 13 r 2(1). ASS said that the power ought not be read down by reference to the commencing words of the rule, 'Subject to the following provisions of this rule'.


case_text: On a number of occasions the courts have considered claims in which bankers have been sought to be made into fiduciaries of their customers. Recently, in Commonwealth Bank of Australia v Finding [2001] 1 Qd R 168 the Court of Appeal of the Supreme Court of Queensland considered a case in which a bank was in the position of being a mortgagee exercising power of sale as well as being financier of the purchaser. The Court held that no fiduciary duty to the incoming purchaser arose in the bank on the facts in that case. In coming to that conclusion they referred to a number of authorities in this Court, the High Court and elsewhere. They pointed out that in other cases where a relationship of a fiduciary nature between banker and customer arose, the bank had assumed the role of financial adviser, or perhaps had brought parties together, and the customer had placed complete faith and confidence in the adviser, as one would expect in a fiduciary relationship. In a passage quoted with approval by the Court of Appeal in Finding [2001] 1 Qd R at 172, Hill J had said in Golby v Commonwealth Bank of Australia (1996) 72 FCR 134 at 136: 'It is not a critical feature of a banker/customer relationship that the banker undertakes or agrees to act for or on behalf of or in the interests of its customer in the exercise of some power or discretion affecting the interests of the customer in a legal or practical sense. Absent therefore some special feature, such as the giving of advice in Smith [42 FCR 390], there is no reason to erect a fiduciary relationship between bank and customer when that relationship is essentially one founded in contract.' 38 And as Davies and Pincus JJA with Derrington J pointed out in Finding [2001] 1 Qd R at 173-174 [13], there was no evidence in that case of reliance upon the advice of the bank in relation to the transaction, nor was there evidence of the customers holding any expectation that the bank would disclose the relevant information or that it had assumed the role of adviser to the customers. Here the proposed amendment does not make any allegation of reliance by ASS upon the advice given by either Messrs Burrowes or Bingham in relation to interest rates, timing of finance or the quality of the terms proposed by the bank. In those circumstances, the proposed pleading does not reveal a cause of action that I regard as fairly arguable. 39 I would also observe in passing that, unlike what had happened in the cases to which I have referred, much of what was pleaded as material which the bank ought to have disclosed suggested that, had disclosure been made, the proposition of dealing with Akyman would have appeared even better from ASS's point of view than it had on what ASS already knew. Although the bank had made its own internal estimates as to how profitable the business was likely to be, based on the sales projections which it had been given by Akyman, it is likely that much of that material had been already provided to ASS by the same source (Akyman) in one form or another, albeit it is possible that it may not have provided all of it. In any event, these observations do not affect the matter because, if there were a duty to disclose, the bank would have had to discharge its obligation to give a proper disclosure.


case_text: In Commonwealth Bank of Australia v Smith (1991) 42 FCR 390 at 391 Davies, Sheppard and Gummow JJ looked at a situation in which a bank was held to have entered into a fiduciary relationship with its customer. Their Honours noted that it was not a novel proposition, where a bank gave a customer advice upon financial affairs, that in addition to any contractual rights the customer may have, the relationship between the parties may be such as to found either a breach of a common law duty of care or a breach of a fiduciary duty. And they said that in many cases the bank as financier would have a manifest personal interest of its own in the matter. 25 They said that the question then became one of ascertaining whether, given the apparent commercial self-interest of the bank, it also could be taken to have assumed a fiduciary responsibility towards the customer in question, and emphasised that the context and factual settings were critical in that regard. Their Honours said that a bank could be expected to act in its own interests in ensuring the security of its position as a lender to its customer ( Smith 42 FCR at 391): '... but it may have created in the customer the expectation that nevertheless it will advise in the customer's interests as to the wisdom of a proposed investment. This may be the case where the customer may fairly take it that to a significant extent his interest is consistent with that of the bank in financing the customer for a prudent business venture. In such a way the bank may become fiduciary and occupy the position of what Brennan J has called "an investment adviser"; Daly v Sydney Stock Exchange Ltd [1986] HCA 25 ; (1986) 160 CLR 371 at 384-385.' 26 Their Honours went on to emphasise that the case before them was not one where one would properly describe the parties as acting in a commercial transaction at arm's length and each with the assistance of fully independent professional advice ( Smith 42 FCR at 392). 27 I am of opinion that the evidence before me on this application has every characteristic of a transaction of the latter description. This involved a business proposition that was being considered by ASS and its principals over a period. They had the assistance of fully independent professional advice from their solicitors, Bruce & Stewart. In his affidavits, Mr Sukkar noted disclosures that the bank and also Akyman had made, to some degree, at the times when Bruce & Stewart were advising first him and Mr Barrow and, later, ASS. There was also some further disclosure to ASS because its consent had to be given to the relationship agreement between the bank and Akyman.


case_text: On a number of occasions the courts have considered claims in which bankers have been sought to be made into fiduciaries of their customers. Recently, in Commonwealth Bank of Australia v Finding [2001] 1 Qd R 168 the Court of Appeal of the Supreme Court of Queensland considered a case in which a bank was in the position of being a mortgagee exercising power of sale as well as being financier of the purchaser. The Court held that no fiduciary duty to the incoming purchaser arose in the bank on the facts in that case. In coming to that conclusion they referred to a number of authorities in this Court, the High Court and elsewhere. They pointed out that in other cases where a relationship of a fiduciary nature between banker and customer arose, the bank had assumed the role of financial adviser, or perhaps had brought parties together, and the customer had placed complete faith and confidence in the adviser, as one would expect in a fiduciary relationship. In a passage quoted with approval by the Court of Appeal in Finding [2001] 1 Qd R at 172, Hill J had said in Golby v Commonwealth Bank of Australia (1996) 72 FCR 134 at 136: 'It is not a critical feature of a banker/customer relationship that the banker undertakes or agrees to act for or on behalf of or in the interests of its customer in the exercise of some power or discretion affecting the interests of the customer in a legal or practical sense. Absent therefore some special feature, such as the giving of advice in Smith [42 FCR 390], there is no reason to erect a fiduciary relationship between bank and customer when that relationship is essentially one founded in contract.'


case_text: The matters alleged to have been relevant for the bank to disclose, again, have features which suggest that much of this material could be taken to have been known to ASS or its principals during the course of the relationship. Of course, the mere fact that ASS had some knowledge is not an answer to a claim of breach of fiduciary duty. In order to discharge his or her duty the fiduciary must disclose fully and frankly the nature and extent of any conflict between his or her duty and or interest and the interest of the person to whom the fiduciary owes the duty. As Lord Radcliffe said in giving the advice of the Judicial Committee in Gray v New Augarita Porcupine Mines Ltd [1952] 3 DLR 1 at 14 of a director's duty to disclose to the company's board: 'The amount of detail required must depend in each case upon the nature of the contract or arrangement proposed and the context in which it arises. It can rarely be enough for a director to say "I must remind you that I am interested" and to leave it at that, unless there is some special provision in a company's articles that makes such a general warning sufficient. His declaration must make his colleagues "fully informed of the real state of things" (see Imperial Mercantile Credit Ass'n v Coleman (1873), LR 6 HL 189 at p 201, per Lord Chelmsford). If it is material to their judgment that they should know not merely that he has an interest, but what it is and how far it goes, then he must see to it that they are informed (see Lord Cairns in the same case at p 205).'


case_text: And, Brennan CJ, Gaudron, McHugh and Gummow JJ said in Maguire v Makaronis [1997] HCA 23 ; (1997) 188 CLR 449 at 466 (footnote omitted) (which was approved by Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ in Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 at [107] ): 'What is required for a fully informed consent is a question of fact in all the circumstances of each case and there is no precise formula which will determine in all cases if fully informed consent has been given.' 40 The sufficiency of disclosure by a fiduciary can depend on the sophistication and intelligence of the person to whom it is made, so that it can truly be said that his or her consent is fully informed. That is a question of fact in all cases ( Farah Constructions [2007] HCA 22 at [107] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ). Because I am of opinion that no fiduciary obligation arose, it is irrelevant for me to consider the question of sufficiency of disclosure in the context of whether the proposed amendment is fairly arguable (cf: Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31 ; (2001) 207 CLR 165 at 198-199 [77] - [79] per McHugh, Gummow, Hayne and Callinan JJ).


case_outcome: distinguished

case_title: McGee v Yeomans [1977] 1 NSWLR 273

case_text: I am of opinion that the commencing words of r 2(1) which I have just quoted demonstrate that the power of the Court in r 2(1), in the ordinary and natural meaning of the rule, must be read as being constrained by matters referred to in the rest of O 13 r 2. These words make O 13 r 2 operate differently to rules such as those considered in cases like McGee v Yeomans [1977] 1 NSWLR 273 at 279G where Glass JA observed that the general power of amendment under the New South Wales rules ( Supreme Court Rules 1970 (NSW) Pt 20 r 1(1)) was not made subject to the other parts of the same rule, and that another part of that rule (SCR Pt 20 r 4(7)) expressly provided that those parts did not limit the general power to allow amendments under SCR Pt 20 r 1(1) (cf: Charles Church Developments Ltd v Stent Foundations Ltd [2007] 1 WLR 1203). 67 That might not be the end of the argument because ASS also pointed to O 13 r 2(2). There is certainly also a plenary character to the grant of power in that rule. But it falls to be considered here, having regard to the question whether the interests of justice operate to allow the filling of a gap which would have the consequence of overcoming an expired limitation period. In that respect, the qualification in the commencing words of O 13 r 2(1) and other parts of the rule in O 13 r 2 are relevant. Order 13 r 2 subrr (3) to (7) deal expressly with applications to the Court for leave to make amendments: • to correct mistakes in the name or identity of the party; • to substitute one party for another where such a mistake needs correction; • to alter the capacity in which a party is said to be suing; or • to add a new claim for relief or foundation in law for a claim for relief provided that it arises out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the party applying for the amendment. 68 Each of those subrules and the framing of subr (3) in itself evince an intention to allow the correction of mistakes or the addition of a legal formulation of a claim for relief, but not to add previously omitted material facts necessary to complete the pleading of an existing cause of action. And subr (9) expressly provides that an amendment would not be permitted which would have an effect inconsistent with a statute of limitation in matters arising under subrr (7)(b) and (8).


case_text: The first question which needs to be determined, in the application to amend, is whether the proposed pleading raises a cause of action which is fairly arguable. I have taken this formulation from the reasons of Dawson, Gaudron and McHugh JJ in Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 at 154-155. They said that if a matter were fairly arguable then, ordinarily, the party seeking to amend ought to be permitted to argue it, provided that any prejudice to the other side might be compensated by costs. Kirby J, in concurring, also pointed to other prejudices and considerations which may inform a proper exercise of the discretion to permit amendment ( JL Holdings 189 CLR at 170-171). 20 The first representation said to give rise to the expectation pleaded in paragraph 21D came out of the conversation between Mr Burrowes of the bank and Mr Sukkar. Mr Burrowes said that it would be the quickest and best way to proceed, they would be the best rates that he would be able to give and that the application then being discussed would be the quickest way to procure finance. 21 The second representation on which the expectation in paragraph 21D was said to have been raised arose out of a conversation with Mr Bingham. The evidence before me is that he is no longer an officer of the bank, his whereabouts are not known and he was not previously considered to be a person who would be a witness in the proceedings. Mr Sukkar says that Mr Bingham told him over the telephone that the issue of interest rates was raised and Mr Bingham said that the rates then discussed would be the best that Mr Sukkar would be able to achieve. And, at a later time, he said that he wanted ASS, in effect, to proceed quickly in order for Mr Nicolau or Akyman to be satisfied that ASS could raise the funds and proceed with a letter of credit. Mr Bingham was also claimed to have said that they were the best interest rates he would be able to give to the applicants. 44 In JL Holdings 189 CLR at 154-155 Dawson, Gaudron and McHugh JJ referred to considerations of case management as having a relevance, albeit that they should not in the ordinary course outweigh the ultimate need for the Court to do justice between the parties. Likewise, I am of opinion that part of the balance in which justice between the parties in the present application is to be viewed, is the fact that these proceedings have been on foot for six years and involve events that took place over 10 years ago, among other events. The allegations involve quite new claims and matters in the context of the existing pleadings and extensive affidavits. These related to conversations of which Mr Sukkar has been well aware at all times, since he was a party to them when they occurred (see too Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327 at 334 [32] per Hill, Madgwick and Conti JJ). 45 ASS submitted that some of the material in the documents newly discovered by the bank alerted those advising ASS to the possibility of this claim. But that is not a statement that anyone has made on oath nor has it been tested. I have been asked to infer that that is the case. An amendment of this significance, if granted, would require the bank to review the whole of its case and the way in which its relationship with ASS developed and proceeded in the first half of 1997. I am not satisfied that this task could fairly be undertaken by the bank in a short time. This would mean that the bank would have to find and interview witnesses as well as to subpoena documents from others. It includes the possibility that it would have to find Mr Bingham, its former officer, if he is still able to give evidence and if he has any recollection of the events so long afterwards. It is not suggested by ASS that there are any bank manager's diary notes evidencing any of the three conversations relied on so that, at the moment, there is no contemporaneous record of the conversations upon which anyone can rely. It may be that the bank is able to do a search within its own records and discover those, but the evidence before me indicates that it is likely that in the ordinary course those documents that have not been the subject of discovery could have been destroyed by now, although no search, at the moment, has been undertaken. I have had regard to the possibility that new documents could be located. 46 But even then it may be necessary to subpoena others, such as, for example, Bruce & Stewart. Again, I must have regard to the likelihood that documents which that firm had at the time may now have been destroyed, since some of the applicable limitation periods applying to its dealings with ASS and its principals have since expired, albeit that there is a potential for some causes of action to have remained, such as those depending on damage occurring quite some time after the transactions. 47 All these matters suggest to me that there could be substantial delays in the further hearing of the matter with possibilities of real prejudice to the bank. Moreover, the evidence before me indicates the value of the bank's security is in the order of about $1.5 million less than its claimed debt. There is no evidence from ASS as to its current financial position or its ability to meet any such difference. In JL Holdings 189 CLR at 154 Dawson, Gaudron and McHugh JJ referred to the fact that if the case was fairly arguable then the party seeking the amendment should be permitted to pursue it '... provided that any prejudice to [the other side] might be compensated by costs'. 48 On the evidence, before me, I am not satisfied that there is any real prospect of the bank being compensated by costs in this case were it ultimately to be successful. Indeed, I am satisfied that the bank is likely to suffer a substantial shortfall in the realisation of any security should it succeed in these and the related proceedings in enforcing those securities and recovering judgment against ASS and the guarantors of ASS. In those circumstances it would be an empty mantra for the Court to say simply that an order for costs would be sufficient. ASS's senior counsel indicated during argument that, if its application were granted, attempts would be made to provide evidence of its ability to pay or provide security for $40,000 in a manner satisfactory to the Court to secure the bank's costs thrown away, together with the value of the 10 days' interest on the outstanding moneys claimed by the bank (about $15,000). 49 I am not satisfied that this security would compensate the bank against the prejudice an amendment would occasion. This is not merely because of the bank's loss of the opportunity to have a hearing that has now been fixed to commence this week for over six months. The prospect is that that hearing will be delayed further. In the meantime the shortfall in value of the bank's securities would be likely to increase. In the circumstances I am of opinion that the cause of action sought to be raised by the amendment is not sufficiently strong as to warrant the exercise of my discretion, balancing all the interests of the parties as best I can on the material before me, so as to conclude that it is in the interests of justice to allow the amendment. 50 The second basis on which the application to amend has been contested is that ASS wishes to plead its reliance upon the six representations to which I have referred. The proposed pleading refers to a number of activities which ASS is said to have undertaken in reliance upon the six representations. 51 There is a dispute between the parties as to whether or not the evidence currently filed supports or answers those aspects of reliance. But, it is accepted by ASS that other than two paragraphs in the amended statement of claim, no material facts are pleaded at present which would be sufficient as instances on which ASS could be found to have relied on any of the six representations. ASS pointed to pars 55 and 56 of the amended statement of claim. They alleged that, first, on 11 March 1999 the bank proposed to ASS and Akyman that sales of the EFTPOS product cease until such time as particular identified problems with it were rectified, and, secondly, on 15 March 1999 Akyman responded by telling the bank that its proposal would be addressed by an upgrade to the third release of the product. But those allegations appear to be ones involving activity by Akyman, not by ASS. 54 Here, as ASS accepted at the outset of its argument, the facts pleaded in the amended statement of claim in respect of the six representations required an allegation of reliance in order to complete the essential elements of a cause of action under s 82. But, the pleading omitted any allegation that any of the six misrepresentations caused ASS to do or refrain from doing anything (cf: Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525, 527 per Mason CJ, Dawson, Gaudron and McHugh JJ). Accordingly, the facts pleaded in the current amended statement of claim do not disclose a basis upon which relief might be granted. Hence ASS seeks an amendment to assert the material facts in respect of its reliance. 55 It follows that as the amended statement of claim currently stands, it does not plead, as ASS accepted, a cause of action under s 82(1) of the Act in respect of the six representations to which the new amendments are directed. 56 If ASS were to attempt today to plead for the first time any such cause of action, it would be outside any applicable limitation period under s 82(2) of the Act. That provides that a cause of action under s 82(1) may be commenced at any time within six years after the day on which the cause of action that related to the conduct accrued. No suggestion was made in argument that the causes of action on each of the six representations had not accrued at least by some time in 2004. This has had the consequence that if I do not grant this amendment, the causes of action cannot be retrieved. 61 Of course there will be cases in which material facts have already been pleaded that demonstrate that a remedy not already sought should be allowed to be sought or that some expansion of the circumstances relied on as material facts may be permitted because they are, in substance, fairly pleaded already. But there are also considerations of policy behind the enactment of statutes of limitations, as the judgment of McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25 ; (1996) 186 CLR 541 at 551-554 demonstrates with clarity. In a case like the present the effect of delay on the quality of justice may be seen to be an important factor in the legislative choice of the six year limitation period in s 82(2) of the Act. 62 Here I think it is fairly safe to infer an oversight has occurred in the pleading of the amended statement of claim which the proposed amendment now seeks to rectify. In JL Holdings 189 CLR at 154-155, 170-171 the Court was mindful that amendments to rectify such oversights ought ordinarily to be granted if they can be done without injustice to the other party. The question here is whether an injustice will be done by taking away from the bank the protection that the limitation period in s 82(2) may have given it against a cause of action incompletely alleged against it. The pleading of the causes of action based on each of the six representations in issue here, as currently on the record of the Court, will result in the action failing because of the absence of any allegation of the material fact of ASS's reliance. 63 I am of opinion that permitting an amendment which would take away from a party a substantive defence granted by legislation, in circumstances where there is no direct procedural rule supporting the grant of an amendment, is capable of causing injustice within the concepts discussed in JL Holdings [1997] HCA 1 ; 189 CLR 146 and the cases to which that decision refers. 64 However, ASS has relied on the provisions of O 13 r 2. That provides: '2 General (1) Subject to the following provisions of this rule, the Court may, at any stage of any proceeding, order that any document in the proceeding be amended, or that any party have leave to amend any document in the proceeding, in either case in such manner as the Court thinks fit. (2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings. (3) Where an application to the Court for leave to make the amendment mentioned in subrules (4), (5) or (6) or paragraph (7) (a) is made after any relevant period of limitation current at the date of commencement of the proceeding has expired, the Court may, nevertheless, grant such leave in the circumstances mentioned in that subrule if it thinks it is just to do so. (4) Where there has been a mistake in the name or identity of a party, an amendment to correct the name of the party may be made notwithstanding that the effect of the amendment is to substitute another person as a party. (5) Where an order to correct a mistake in the name of a party has the effect of substituting another person as a party, the proceeding shall be taken to have commenced with respect to that person on the day the proceeding commenced. (6) An amendment to alter the capacity in which a party sues may be made if the new capacity is one which that party had at the date of the commencement of the proceeding or has since acquired. (7) An amendment may be made even if the effect of the amendment is to add a new claim for relief or foundation in law for a claim for relief (whether by way of substitution for an existing claim for relief or foundation in law or not) if the new claim for relief or foundation in law: (a) arises out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the party applying for leave to make the amendment; or (b) subject to subrule (9), arises, in whole or in part, out of facts or matters that have occurred or arisen since the commencement of the proceeding. (8) Subject to subrule (9), an amendment of a pleading may be made even if the amendment pleads a fact or matter that has occurred or arisen since the commencement of the proceeding. (9) Paragraph (7) (b) and subrule (8) do not permit an amendment that would have an effect inconsistent with any statute that limits the time within which an action or a proceeding of a particular kind may be brought or instituted.'


case_title: Truebit Pty Ltd v Westpac Banking Corporation [1997] FCA 1290 (unreported 27 November 1997)

case_text: The Queensland Court of Appeal also quoted with approval what Branson J had said in Truebit Pty Ltd v Westpac Banking Corporation [1997] FCA 1290 at p 28. Her Honour set out the following passage from Meagher RP, Gummow WMC and Lehane JRF, Equity: Doctrines and Remedies (3 rd ed, Butterworths, 1992) at pp 130-131, which read: '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; or, to put it negatively, it is a relationship in which the parties are not each free to pursue their separate interests.' Her Honour then continued: 'There is thus an inconsistency between the notion of Westpac assuming a fiduciary duty to the applicants in respect of its treatment of their application for finance and the maintenance of Westpac's "own commercial self interest as lender". Moreover, there is a commercial, and possibly conceptual, unreality surrounding the contention that Westpac was entitled to consider the applicants' application for finance both in the applicants' interest and in Westpac's own interest as the proposed lender to the applicants, but not in Westpac's interest as the mortgagee/lender exercising through a receiver the power of sale in respect of [the property].'


case_text: determination of native title in Aboriginal people by orders of the Federal Court in the exercise of power conferred by the Native Title Act , is the expression, consistent with the scheme of the Act, of what the Chief Justice of Australia, Chief Justice French, has described as the "beneficial purpose" of the legislation to provide for the recognition and protection of native title, as set out in s 3 of the Act. That beneficial purpose rests on a declared "moral foundation" ( Northern Territory v Alyawarr (2005) 145 FCR 442 at [63]) contained in the preamble to the Act as acknowledged by the High Court of Australia in Mabo v Queensland (No. 2) (1992) 175 CLR 1, that the common law of Australia recognises, a form of native title, that reflects the entitlement of the indigenous inhabitants of Australia, in accordance with their laws and customs, to their traditional lands. When the Federal Court makes a determination of native title in Aboriginal people, it does so in recognition of traditional laws, customs, rights and interests subsisting in those people as part of the common law of Australia.


case_title: Mabo v Queensland (No. 2) (1992) 175 CLR 1


case_text: the Court will be concerned to understand and place emphasis upon whether the agreement is genuine and freely made on an informed basis by all parties, represented by experienced independent lawyers and in the case of a State party, whether appropriate consideration has been given to the content of the applicant's claim (see, Munn (for and on behalf of the Gungari People) v Queensland (2001) 115 FCR 109, per Emmett J; Smith & Ors v State of Western Australia (2000) 104 FCR 494 per Madgwick J at [28] to [33]).


case_title: Smith & Ors v State of Western Australia (2000) 104 FCR 494


case_text: is well established that the power to strike out a pleading and to enter summary judgment must be exercised with great caution and only in very clear cases where the Court is satisfied that the cause of action cannot possibly succeed ( Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129).


case_outcome: applied

case_text: Rossetto submits that the principles in Shepperd v The Council of the Municipality of Ryde [1952] HCA 9 ; (1952) 85 CLR 1 apply. He relies upon a clear common intention of the parties that, first, Mr Rossetto would rely upon the representations and, on that basis, proceed to contract to buy the premises. Secondly, the representations were ' presupposed as something antecedent upon which the purchaser might implicitly rely ' ( Shepperd at 13). Mr Rossetto submits that, as enunciated in Gates v The City Mutual Life Assurance Society Ltd [1986] HCA 3 ; (1986) 160 CLR 1, a collateral contract arises where the intention of the parties is clear and the terms of the collateral contract are not inconsistent with the main written agreement (at 5). A collateral agreement inconsistent with the principal contract will not be enforced ( Maybury v Atlantic Union Oil Co Ltd [1953] HCA 89 ; (1953) 89 CLR 507 at 517; Gates at 5 per Gibbs CJ and at 11 per Mason, Wilson and Dawson JJ). The collateral contract as pleaded is inconsistent with at least clauses 56.2 (especially 56.2.2), 56.3 and 56.4. Mr Rossetto is not entitled to damages for the loss of an expectation of rental or profits unless reliance on the representations deprived him of the opportunity to enter into a different contract resulting in greater rental or profits ( Havyn Pty Ltd v Webster (2005) 12 BPR 22,837 at [117(g)]; Gates at 13 to 15; Marks at [48]). There is no pleading or evidence that, had Mr Rossetto not relied on the representations, he would have entered into a different contract and thereby made a profit. However, Mr Rossetto asserts in his written submissions that the evidence will be adduced to establish an opportunity foregone by reason of reliance on the representation, for which he is entitled to damages. Value of the premises


case_title: General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125


case_text: Rossetto is not entitled to damages for the loss of an expectation of rental or profits unless reliance on the representations deprived him of the opportunity to enter into a different contract resulting in greater rental or profits ( Havyn Pty Ltd v Webster (2005) 12 BPR 22,837 at [117(g)]; Gates at 13 to 15; Marks at [48]). There is no pleading or evidence that, had Mr Rossetto not relied on the representations, he would have entered into a different contract and thereby made a profit. However, Mr Rossetto asserts in his written submissions that the evidence will be adduced to establish an opportunity foregone by reason of reliance on the representation, for which he is entitled to damages. Value of the premises


case_text: 52 is directed at the making of the representation, not the failure to honour it. Where there is no obligation to honour the false representation, the measure of the loss is not determined by reference to what Mr Rossetto would have received if Meriton's representations had been true ( Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at [132] per McHugh J with whom Gummow J agreed). The representations were not warranties entitling Mr Rossetto to estimated rental or profits for the years in which the premises contained the only child care centre in the World Tower ( Warwick Entertainment at [148]).


case_text: 52 of the Act proscribes a corporation from engaging in trade or commerce in conduct that is misleading or deceptive or is likely to mislead or deceive. Mr Rossetto and Bimbee claim that they have suffered, or are likely to suffer, loss or damage ' by conduct of ' Meriton in contravention of s 52 and may recover that loss or damage pursuant to s 82 or s 87 of the Act. The words ' by conduct of ' in ss 82 and 87 impose a causal requirement that the loss or damage claimed must be sustained "by" the contravention of s 52 ( Marks v GIO Australia Holdings Ltd [1998] HCA 69 ; (1998) 196 CLR 494 at [95] ; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 ; (2002) 210 CLR 109 at [50] and [54]). Bimbee alleges that it relied on the representations. On the basis of this chronology and the pleadings, and in the absence of particularisation or explanation, Bimbee cannot establish that it entered the lease in reliance on the representations. To the contrary, Bimbee entered the lease with full knowledge there would be a second child care centre in the World Tower. The representations are not a cause of the loss or damage it is alleged to have suffered or is likely to suffer ( I & L Securities at [57]). Bimbee does not have a reasonable cause of action against Meriton for past or future damages suffered by reason of a contravention of s 52 of the Act. Mr Rossetto alleges that the representations were made to induce him to enter into the contract. He alleges that the representations were a promise made in consideration of him entering into the main contract, which he did. He pleads a collateral contract, formed on or before exchange. The allegation in the further amended statement of claim at [29] is: 'On or before 11 March 2002 [Mr Rossetto] and [Meriton] entered into an agreement (the collateral contract) pursuant to which in consideration of [Mr Rossetto] entering [the contract] , [Meriton] agreed to sell to [Mr Rossetto] the only child care centre in the World Tower.' Mr Rossetto submits that, at the time the representations were made, Meriton intended to sell Mr Rossetto the only child care centre in the World Tower and Mr Rossetto was prepared to purchase the premises on the basis that it was the only child care centre. He says that the representations were warranties of the collateral contract, which were breached when the premises on level 11 of the World Tower were sold to a third party and approved as a child care centre. By reason of the breach of the collateral contract, Mr Rossetto alleges that he suffered damages, particularised as for the alleged contravention of s 52 of the Act and discussed at [24] to [36] below.


case_text: is not pleaded that the representations were made to Bimbee. Bimbee relies on the fact that Meriton's conduct caused Mr Rossetto to act in a way that led to loss or damage to Bimbee. If so, the contravening conduct must still be a cause of the loss which must directly result from the conduct ( Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526 at 529 31 per Lockhart J). Bimbee was incorporated in March 2004. By that time, Mr Rossetto had been informed that the representations were untrue and had been offered rescission of the contract. Mr Rossetto was the sole director of Bimbee. Despite knowledge that there was to be another child care centre in the World Tower, Bimbee elected to take a lease of the premises. Bimbee was not misled at the time it took an interest in the premises.


case_text: 52 of the Act proscribes a corporation from engaging in trade or commerce in conduct that is misleading or deceptive or is likely to mislead or deceive. Mr Rossetto and Bimbee claim that they have suffered, or are likely to suffer, loss or damage ' by conduct of ' Meriton in contravention of s 52 and may recover that loss or damage pursuant to s 82 or s 87 of the Act. The words ' by conduct of ' in ss 82 and 87 impose a causal requirement that the loss or damage claimed must be sustained "by" the contravention of s 52 ( Marks v GIO Australia Holdings Ltd [1998] HCA 69 ; (1998) 196 CLR 494 at [95] ; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 ; (2002) 210 CLR 109 at [50] and [54]). Mr Rossetto is not entitled to damages for the loss of an expectation of rental or profits unless reliance on the representations deprived him of the opportunity to enter into a different contract resulting in greater rental or profits ( Havyn Pty Ltd v Webster (2005) 12 BPR 22,837 at [117(g)]; Gates at 13 to 15; Marks at [48]). There is no pleading or evidence that, had Mr Rossetto not relied on the representations, he would have entered into a different contract and thereby made a profit. However, Mr Rossetto asserts in his written submissions that the evidence will be adduced to establish an opportunity foregone by reason of reliance on the representation, for which he is entitled to damages. Value of the premises Mr Rossetto has suffered no loss with respect to the value of the premises because what he bought was worth what he paid for it ( Marks at 514-5 per McHugh, Hayne and Callinan JJ). There was no loss as a result of altering his position under the inducement of the misleading conduct ( Marks at 513-4). The damages alleged to have been suffered by Bimbee are particularised as: 'The loss of income being the reduction in the net income caused by [Bimbee] not operating the only child care centre in the World Tower building as represented to [Mr Rossetto] '. Bimbee's claim has been further particularised to include loss of income and goodwill. The former has been particularised as: • past loss of income, calculated as profit expected less actual profit received; and • future loss of income, as expected income assuming no competitor and a daily charge of $120 per child.


case_text: collateral agreement inconsistent with the principal contract will not be enforced ( Maybury v Atlantic Union Oil Co Ltd [1953] HCA 89 ; (1953) 89 CLR 507 at 517; Gates at 5 per Gibbs CJ and at 11 per Mason, Wilson and Dawson JJ). The collateral contract as pleaded is inconsistent with at least clauses 56.2 (especially 56.2.2), 56.3 and 56.4.


case_text: or damage suffered by reason of a contravention of s 52 is not confined by reference to a form of claim under the general law and is not necessarily singular; it may be, for example, both loss of revenue and loss of capital and may be incurred at different times ( Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 216 CLR 388 at [44] , [49] [52]). However, the risk of loss is not itself a category of loss ( Murphy at [46] discussing Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 526-7).


case_text: Rossetto submits that the principles in Shepperd v The Council of the Municipality of Ryde [1952] HCA 9 ; (1952) 85 CLR 1 apply. He relies upon a clear common intention of the parties that, first, Mr Rossetto would rely upon the representations and, on that basis, proceed to contract to buy the premises. Secondly, the representations were ' presupposed as something antecedent upon which the purchaser might implicitly rely ' ( Shepperd at 13). Mr Rossetto submits that, as enunciated in Gates v The City Mutual Life Assurance Society Ltd [1986] HCA 3 ; (1986) 160 CLR 1, a collateral contract arises where the intention of the parties is clear and the terms of the collateral contract are not inconsistent with the main written agreement (at 5).


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


case_text: for the purposes of this application that Mr Rossetto entered into the contract in reliance on the misrepresentations and affirmed the contract after being told the true position, Mr Rossetto is not automatically precluded from a claim for damages pursuant to ss 82 and 87. The success of his claim may depend upon whether his decision to affirm the contract was reasonable ( Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd (2005) 224 ALR 134 at [72]). The affirmation of the contract alone does not result in an absence of a reasonable cause of action for damages pursuant to ss 82 and 87. There may be loss or damage after entry into the contract and prior to the decision to affirm the contract or prior to the completion of the contract. The decision may have been reasonable in light of evidence Mr Rossetto proposes to adduce concerning the time, energy and money he had already invested in the premises although no such evidence has been forthcoming to date. These are factual matters that will need to be determined. Section 52 is directed at the making of the representation, not the failure to honour it. Where there is no obligation to honour the false representation, the measure of the loss is not determined by reference to what Mr Rossetto would have received if Meriton's representations had been true ( Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at [132] per McHugh J with whom Gummow J agreed). The representations were not warranties entitling Mr Rossetto to estimated rental or profits for the years in which the premises contained the only child care centre in the World Tower ( Warwick Entertainment at [148]).


case_outcome: referred to

case_text: an application for an extension of time to commence a proceeding under the ADJR Act is made the Court has an unfettered discretion. There is a large number of potentially relevant considerations which, depending upon the circumstances, may need to be balanced in determining how the discretion should be exercised. Many of these were collected by Wilcox J in his judgment in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176 ; (1984) 3 FCR 344 at 348-9. I am prepared to assume, in Ms Luck's favour that she did not make timely applications because of ignorance of her legal rights and because of health problems. She has also been occupied with a good deal of litigation in this Court and elsewhere. I am also prepared to assume that the respondents would suffer no prejudice were an extension of time to be granted. On the other hand, it is necessary to have regard to the considerable delay involved and the merits of the principal application. The factor which, however, weighs most heavily against the granting of an extension of time is that the two decisions which are the subject of the objections to competency were both expressed to be operative for only twelve months and three months respectively. Their effect is spent. Any attempt to deal with the alleged failure to make a decision to review the second decision would, for the same reason, serve no useful purpose. No useful purpose would be served at this stage by quashing these decisions or declaring them to be null and void. The June 2008 decision, in respect of which a timely application was made, was in substantially the same terms as the two spent decisions. Ms Luck relies on the same grounds to challenge all three decisions. She will not, therefore, be deprived of the opportunity of testing the legal validity of the restrictions placed on her in relation to her dealings with Centrelink.


case_text: Section 177D applies Part IVA to any scheme where a taxpayer, described in s 177D(a) as 'the relevant taxpayer' has obtained or would but for s 177F obtain a tax benefit in connection with the scheme and, having regard to eight matters identified in s 177D(b), it would be concluded that the person or one of the persons who entered into or carried out the scheme or any part of the scheme did so for the purpose of enabling the relevant taxpayer to obtain a tax benefit in connection with the scheme or, for the purpose of enabling 'the relevant taxpayer and another taxpayer or other taxpayers each to obtain a tax benefit in connection with the scheme (whether or not that person who entered into or carried out the scheme or any part of the scheme is the relevant taxpayer or is the other taxpayer or one of the other taxpayers)'. The concepts of 'tax benefit' (s 177C), 'scheme' (s 177A) and 'scheme to which this Part applies' (s 177D) have, viewed objectively, an inter-related operation in s 177F in deciding whether the power conferred upon the Commissioner by s 177F(1)(a) can be exercised ( Commissioner of Taxation v Hart [2004] HCA 26 ; (2004) 217 CLR 216 at [37] ).


case_text: In determining whether either appellant has obtained a tax benefit in connection with the scheme the Commissioner was required under s 177C(1)(a) to consider whether an amount not included by the taxpayer in his or her assessable income as returned would have been included had the scheme not been implemented. That consideration contemplates the most likely prediction of future events absent the sequence of distributions and gifts interposed after or from the distribution by OPSL as trustee of the PGUT. A reference to obtaining a tax benefit is also to be read as reference to an amount that 'might reasonably be expected to have been included'. That phrase seems to contemplate a lower threshold of prediction although in Federal Commissioner of Taxation v Peabody [1994] HCA 43 ; (1994) 181 CLR 359 at p 385, the Court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) concluded that a 'reasonable expectation' involves 'a prediction as to events which would have taken place if the relevant scheme had not been entered into or carried out and the prediction must be sufficiently reliable for it to be regarded as reasonable'. The Court in FCT v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 at p 424 (Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ), observed that in establishing, for the purposes of s 177C(1)(a), a tax benefit by reason of the non-inclusion of assessable income in a taxpayer's assessable income, 'it is sufficient that at least the amount in question might reasonably have been included in the assessable income had the scheme not been entered into or carried out'. 44 At [147], the Tribunal addressed the second limb of the prediction test in s 177C(1)(a) as interpreted in Federal Commissioner of Taxation v Peabody (supra) to determine whether the Commissioner's hypothesis as to the distributions from the P & A Trust to Mr and Mrs McCutcheon equally was 'sufficiently reliable for it to be regarded as reasonable'. In considering that matter, the Tribunal concluded: In cross-examination, the respondent was able to show and the Tribunal finds, that Mr McCutcheon was motivated by the desire to receive the sale proceeds stemming from the sale of two businesses in as tax effective a manner as was possible and to reinvest those proceeds. In and of itself, this is not indicative of a purpose to gain a tax benefit within section 177D but it is a fact which is relevant to consider and give appropriate weight to. [147] 45 The Tribunal also concluded that it was a matter for the Commissioner to demonstrate to the Tribunal that a basis for sufficiently reliable prediction subsisted once the appellants put the determination and assessments in issue. There is no doubt that the onus and burden of proof falls upon the appellants to demonstrate that the assessment issued to each taxpayer is excessive. That necessarily involves each taxpayer adducing evidence which would discharge the onus of demonstrating that the Commissioner's prediction or hypothesis was not sufficiently reliable for it to be regarded as reasonable. The appellants sought to do that by reliance upon the history of distributions. 46 The Commissioner, although not bearing the onus, sought to support the hypothesis on the following basis. The appellants ultimately owned and controlled each of the P & A Trust, the PGUT, the NCT, the NCIT and the AM Trust. The appellants were the economic owners of the income derived from the sale of the businesses leading to the adoption of the scheme. The appellants led no evidence as to what distributions would have been made by the P & A Trust, if any, had the scheme not been entered into. A consideration of previous distributions showed that PGUT and another beneficiary, Pennant Fuels Pty Ltd received substantial distributions in earlier years. Distributions were made to PGUT in the income years ending 30 June 1991 and 1995. In those years, the P & A Trust held all of the units in PGUT. In those years, the PGUT had tax losses available to offset income receipts. In the 1998 year, the trust vested. The Commissioner contended that a distribution to PGUT of the proceeds of sale of the Townsville businesses would have served no purpose given that but for the scheme, the P & A Trust was the sole unit holder in the PGUT. The Commissioner contended before the Tribunal that distributions appear to have been made for tax effective purposes. The appellants' accountants of 14 November 1997 in a letter to Cleary & Hoare described the PGUT and Pennant Fuels as a loss trust and loss company in relation to distributions. Pennant Fuels carried on business from 1984 to 1990 and appeared to serve no purpose after that time other than to receive distributions in the income years ending 30 June 1995, 1996 and 1997 as it had carried forward losses. Upon voluntary liquidation on 27 May 1998, Pennant Fuels distributed all of its income and capital to the appellants. It was deregistered on 7 December 1998. The Commissioner contended before the Tribunal that it was improbable that the sum of $3,232,813.00 would have been distributed to that entity but for the scheme as it only had tax losses in the income year ending 30 June 1998 of $15,449.00. The Commissioner contended that the children of the appellants received nominal distributions in the income years ending 1996 and 1997 and it was therefore improbable that they would have received the income stream or a significant component of it as minors are taxed at the top marginal rate.


case_text: In determining whether either appellant has obtained a tax benefit in connection with the scheme the Commissioner was required under s 177C(1)(a) to consider whether an amount not included by the taxpayer in his or her assessable income as returned would have been included had the scheme not been implemented. That consideration contemplates the most likely prediction of future events absent the sequence of distributions and gifts interposed after or from the distribution by OPSL as trustee of the PGUT. A reference to obtaining a tax benefit is also to be read as reference to an amount that 'might reasonably be expected to have been included'. That phrase seems to contemplate a lower threshold of prediction although in Federal Commissioner of Taxation v Peabody [1994] HCA 43 ; (1994) 181 CLR 359 at p 385, the Court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) concluded that a 'reasonable expectation' involves 'a prediction as to events which would have taken place if the relevant scheme had not been entered into or carried out and the prediction must be sufficiently reliable for it to be regarded as reasonable'. The Court in FCT v Spotless Services Ltd [1996] HCA 34 ; (1996) 186 CLR 404 at p 424 (Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ), observed that in establishing, for the purposes of s 177C(1)(a), a tax benefit by reason of the non-inclusion of assessable income in a taxpayer's assessable income, 'it is sufficient that at least the amount in question might reasonably have been included in the assessable income had the scheme not been entered into or carried out'.


case_text: However, the appeal to this Court is confined to the resolution of the question of law only. The Commissioner made a determination in reliance upon s 177F(1)(a) that Farrago as trustee of the AM Trust had obtained a tax benefit of $3,232,813.00 being an amount not included in its assessable income in its trustee capacity. That determination posits a prediction which is an alternative to and different from the prediction that NOPL would have distributed the stream of income it received to each appellant equally. The Commissioner is entitled to adopt, especially in the context of complex arrangements, alternative views of what would or might reasonably have been expected to have occurred and make alternative determinations of an amount not included in the assessable income of particular taxpayers ( Richardson v Federal Commissioner of Taxation [1932] HCA 67 ; (1932) 48 CLR 192 ; Deputy Commissioner of Taxation v Moorebank Pty Ltd [1988] HCA 29 ; (1988) 165 CLR 55 ; Deputy Commissioner of Taxation v Richard Walter Pty Limited [1995] HCA 23 ; (1995) 183 CLR 168 per Mason CJ at p 188, Brennan J at p 202, Deane and Gaudron JJ at p 214, Dawson J at p 217, Toohey J at p 229 and McHugh J at p 238). The issue of the validity of the determination made by the Commissioner concerning Farrago is not (as it could not be) that no basis on the facts subsisted for the making of the determination. The question of law concerning validity is the lack of symmetrical treatment between the alternative and multiple determinations made to the particular taxpayers and the issue of amended assessments to different taxpayers in respect of what is described as the one stream of income. The appellants say that FCT v Richard Walter is to be distinguished on its facts from the present case as although the Court recognised that 'alternative assessments' might properly issue to 'two [different] taxpayers' in respect of the 'same item of income' (per Brennan J at p 202) the Court necessarily although implicitly recognised that the validity of such alternative assessments involves the making of alternative determinations (based on the prediction contemplated by s 177C(1)(a)) in respect of the two or more taxpayers leading to an assessment issued to each taxpayer the subject of each determination. Thus, it is contended that a determination made in respect of a tax benefit in a particular amount obtained by taxpayer A cannot support an assessment issued to taxpayer B for the inclusion of that amount in the assessable income of B. As a result, the appellants say not only is the determination made in the alternative to Farrago invalid as a proper exercise of the conferred power as it resulted in an amended assessment to Mr McCutcheon but the alternative determinations addressed to Mr McCutcheon and Mrs McCutcheon are also invalid.


case_title: Deputy Commissioner of Taxation v Moorebank Pty Ltd [1988] HCA 29 ; (1988) 165 CLR 55


case_text: It is perfectly clear that a deponent in seeking to demonstrate (and discharge the onus of proof) that an assessment is excessive having regard to a prediction as to whether an amount might reasonably have been included in the assessable income of the taxpayer, can not simply give evidence that the answer is to be found in the deponent speculating as to what he or she would or would not have done in the absence of the scheme ( WD & HO Wills (Australia) Pty Ltd v FCT (1996) 65 FCR 298). The Commissioner accepted in the course of argument on the appeal that it is perfectly proper for a deponent in the position of Mr McCutcheon to say in evidence that the trustee (controlled by the taxpayers) would not have made distributions of the amounts postulated by the Commissioner to the taxpayers, provided the foundation for that observation or conclusion is given in evidence. In other words, Mr McCutcheon might have said that 'the trustee would never have distributed such a substantial portion to either my wife or I' because (or for that reason that) and then identify factual circumstances which support the proposition. The vice said to exist in Mr McCutcheon's evidence is that it is simply speculative evidence on the ultimate question unsupported by any evidence of material facts from which the conclusion Mr McCutcheon contends for could be drawn. 38 It seems to me that the evidence goes to the question of whether the determinations made by the Commissioner are properly founded upon a prediction that an amount of approximately $1.6m might reasonably have been included in the assessable income of Mr and Mrs McCutcheon had the scheme not been entered into or carried out thus giving rise to a tax benefit being one of the integers upon which s 177F operates. That question seems to me to be an element of the ultimate question. Accordingly, it is not open to Mr McCutcheon to simply swear the issue by providing what he may consider to be a complete answer to the question in issue based on his speculation as to what might have occurred. However, it seems to me that the statement in para 68 needs to be assessed in context. Paragraph 66 also asserts that had the distributions from the P & A Trust not been made in the manner reflected in the transactions comprising the scheme, distributions would not have been made to Mr and Mrs McCutcheon in the ratio 50/50. That paragraph is gathered up in the words objected to in para 68. Both para 66 and the words in para 68 are sought to be explained by two factual contentions. In para 67, Mr McCutcheon says that the first reason that no such distributions would have been made is that OSPL as trustee of the PGUT was also a vendor of the retail business and was, as a result, entitled to a part of the proceeds of sale and thus a substantial part of the stream of income received by NOPL as trustee of the P & A Trust was, in any event, due and payable to OSPL as trustee of the PGUT. Whether that statement is correct or incorrect it nevertheless represents a contended reason or material fact said to support a conclusion that the P & A Trust distributions would not otherwise have gone equally in their totality to Mr and Mrs McCutcheon. The second factual contention is contained in para 68 to the effect that the largest amount of income ever distributed to Mr and Mrs McCutcheon by the P & A Trust was $25,000.00 to Mr McCutcheon and $13,000.00 to Mrs McCutcheon in the income year ending 30 June 1997. Mr McCutcheon goes on to say that the history of distributions by the trustee of the P & A Trust shows that the bulk of the trust's income has been distributed to particular entities and only very small amounts have historically been distributed to Mr and Mrs McCutcheon or their daughters Sally and Claire McCutcheon. Moreover, Mr McCutcheon says that the P & A Trust has a history of distributing large amounts of income to the trustee of the PGUT. 39 It seems to me that the Tribunal is entitled to receive into evidence the statement objected to by the respondent provided foundation facts are given in evidence which support what would otherwise be a bald speculative statement. Those foundation facts would in the ordinary course of events be detailed and comprehensive and seek to explain why the prediction could not reasonably be entertained in the context of a full understanding of the matrix of fact. Such an approach would be consistent with principle and enable the taxpayer to state a position derived from a factual foundation. In this case, the foundation facts are confined to the matters identified. However, factual matters were deposed to which were said to support the excluded evidence. Although of course the Tribunal by s 33 of the AAT Act is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate, the Tribunal might usefully be guided by the foundation rule in relation to the relevance of evidence contained in s 55(1) of the Evidence Act 1995 (Cth) in these terms: 'The evidence that is relevant in a proceeding is evidence that if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding'. The excluded statement by itself, could not possibly rationally affect directly or indirectly the assessment of the probability of the existence of a fact in issue. However, it seems to me that the excluded evidence ought to have been admitted by the Tribunal as a statement to be contextually understood having regard to the evidence of material facts (although put in controversy by the respondent) in paras 67 and 68 of the affidavit said to support the excluded evidence. Those material facts were admitted by the Tribunal. 40 Accordingly, the Tribunal erred in refusing to admit the evidence of Mr McCutcheon identified by the italicised words above. Because the italicised words were simply given meaning by the statements identified, the exclusion of the italicised words made no difference to the deliberations of the Tribunal. 41 The appellants contend that the Tribunal erred in determining whether a taxpayer had obtained a tax benefit. As to the contended equal distribution to Mr and Mrs McCutcheon of an amount totalling $3,232,813.00, the appellants contend that the Tribunal applied an incorrect methodology. The appellants say that the Tribunal disregarded the history of previous determinations; concluded that there was no evidence before the Tribunal upon which it could act in order to determine what the appellants would have done if the scheme had not been entered into or carried into effect; and concluded that it would be speculative to adopt the submissions of the appellants as to what might have happened had the scheme not been implemented. The appellants contend that there was no evidence before the Tribunal admissible or otherwise to support the conclusion that there would have been or might reasonably be expected to have been a distribution by the trustee of the P & A Trust to Mr and Mrs McCutcheon equally. It follows, it is said, that since there was no evidence to support that conclusion, no tax benefit in connection with the scheme has been identified and thus the determination is invalid.


case_text: The appellants say that they use the term 'no evidence' in the 'strict sense' of an error of law on the part of the Tribunal in reaching a conclusion unsupported by any evidence before the Tribunal rather than as an impermissible attempt to challenge a finding of fact on an appeal concerned only with questions of law ( TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 119 ; (1988) 82 ALR 175). The appellants say, 'where is the evidence upon which the Tribunal could conclude as a reasonable prediction of events, absent the scheme, that Mr and Mrs McCutcheon would have been likely to receive an equal distribution of the income stream of $3,232,813.00?' The appellants say the evidence of historical distributions by the trustee of the P & A Trust is entirely inconsistent with such a hypothesis. The Tribunal reached these conclusions. At [145], the Tribunal agreed, 'with the reasons and submissions advanced by [the Commissioner] in connection with the quantification of the tax benefit in the case of each of Mr and Mrs McCutcheon for reasons which will be explained next'. At [146], the Tribunal said this: 146. The Tribunal is of the opinion that while the scheme was entered into for the purpose of obtaining a tax benefit in the case of both Applicants (the non-inclusion of assessable income within section 177C(1)(a)), nevertheless it is not correct to say, as the respondent contended that the full amount of the non-included assessable income would have been shared equally by the applicants. 43 The Tribunal noted that the previous distribution history concerning the P & A Trust indicated that there were persons apart from the appellants who had received distributions. The Tribunal concluded that there was no evidence before it upon which it could act in order to determine what distributions the appellants might have caused the trustee to make, had the scheme not been entered into or carried out. The appellants contended before the Tribunal that evidence of historical distributions provided a basis on which the Tribunal could conclude that distributions would not have been made consistent with the hypothesis. The Tribunal examined the history of distributions and was unpersuaded that those distributions provided support for the appellants' contentions.


case_text: If there is no relevant SoP, s 120A(3) of the VE Act does not apply: s 120A(4). The third step must therefore be taken without reference to any SoP, in accordance with the approach summarised in Byrnes v Repatriation Commission [1993] HCA 51 ; (1993) 177 CLR 564, at 571, per curiam : 'The position may be summarized as follows: (1) First, sub-s. (3) of s. 120 is applied: do all or some of the facts raised by the material before the Commission give rise to a reasonable hypothesis connecting the veteran's injury with war service? The hypothesis will not be reasonable if it is contrary to known scientific facts or is obviously fanciful or untenable. If the hypothesis is not reasonable, the claim fails. Proof of facts is not in issue at this point. (2) If a reasonable hypothesis is established, sub-s. (1) of s. 120 is applied. The claim will succeed unless: (a) one or more of the facts necessary to support the hypothesis are disproved beyond reasonable doubt; or (b) the truth of another fact in the material, which is inconsistent with the hypothesis, is proved beyond reasonable doubt, thus disproving, beyond reasonable doubt, the hypothesis'. See Woodward v Repatriation Commission [2003] FCAFC 160 ; (2003) 131 FCR 473, at 483 [55], per curiam ; Bull v Repatriation Commission (2001) 34 AAR 326, at 329-330 [13]-[15], per Emmett and Allsop JJ. 26 In Bull v Repatriation Commission , at 330 [16] Emmett and Allsop JJ regarded the exposition of a ' reasonable hypothesis ' in East v Repatriation Commission (1987) 16 FCR 517, as authoritative. In East the Court said this (at 532-533): 'The adoption of Brennan J's notion [in his dissenting judgment in Repatriation Commission v O'Brien [1985] HCA 10 ; (1985) 155 CLR 422] of a reasonable hypothesis meant that Parliament was requiring something by way of a causal link, but which fell short of proof of the link even prima facie as a fact. The meaning of the phrase "reasonable hypothesis" was felicitously explained by a Veterans' Review Board ... "A hypothesis may be conveniently defined as : 'proposition made as basis for reasoning, without assumption of its truth; supposition made as starting point for further investigation from known facts; groundless assumption': The Concise Oxford Dictionary. ... The addition of the word 'reasonable' would however seem to imply that what is required is more than a mere hypothesis. In the opinion of the Board, to be reasonable, a hypothesis must possess some degree of acceptability or credibility it must not be obviously fanciful, impossible, incredible or not tenable or too remote or too tenuous. For a reasonable hypothesis to be 'raised' by material before the Board, we think it must find some support in that material that is, the material must point to, and not merely leave open, a hypothesis as a reasonable hypothesis. At the same time, however, a hypothesis may be reasonable without having been proved (either on the balance of probability or beyond reasonable doubt) to be correct as a matter of fact. Were it otherwise, it would no longer be a hypothesis but would have been elevated to some higher status. Accordingly a connection asserted by a hypothesis to exist between death or incapacity and service may still be reasonable even though theoretical, and it may be theoretical in either or both of a least two senses: by postulating a known medical fact but in circumstances not known to have definitely existed in the instant case; or by postulating a medical principle which science is not yet able to definitely prove but is unable to describe as unreasonable." We agree with this analysis. A reasonable hypothesis requires more than a possibility, not fanciful or unreal, consistent with the known facts. It is an hypothesis pointed to by the facts, even though not proved upon the balance of probabilities '. (Emphasis added.) 27 In Bull v Repatriation Commission , Emmett and Allsop JJ made the following comment (at 331 [18]) about East : 'The Court said that an hypothesis is not reasonable if it is obviously fanciful or impossible or incredible or not tenable or too remote or too tenuous. However, the Full Court did not say that if an hypothesis was not obviously fanciful or not impossible, or not incredible or tenable or not too remote or not too tenuous, it was therefore necessarily reasonable. The material must point to the connecting hypothesis ...' (Emphasis in original.) Their Honours observed (at 331 [21]) that there is no doubt that the AAT is obliged to look at all the material, not just some of it and that at this point it is not entitled to find facts or reject matters.


case_title: Byrnes v Repatriation Commission [1993] HCA 48 ; (1993) 177 CLR 574

case_text: If there is no relevant SoP, s 120A(3) of the VE Act does not apply: s 120A(4). The third step must therefore be taken without reference to any SoP, in accordance with the approach summarised in Byrnes v Repatriation Commission [1993] HCA 51 ; (1993) 177 CLR 564, at 571, per curiam : 'The position may be summarized as follows: (1) First, sub-s. (3) of s. 120 is applied: do all or some of the facts raised by the material before the Commission give rise to a reasonable hypothesis connecting the veteran's injury with war service? The hypothesis will not be reasonable if it is contrary to known scientific facts or is obviously fanciful or untenable. If the hypothesis is not reasonable, the claim fails. Proof of facts is not in issue at this point. (2) If a reasonable hypothesis is established, sub-s. (1) of s. 120 is applied. The claim will succeed unless: (a) one or more of the facts necessary to support the hypothesis are disproved beyond reasonable doubt; or (b) the truth of another fact in the material, which is inconsistent with the hypothesis, is proved beyond reasonable doubt, thus disproving, beyond reasonable doubt, the hypothesis'. See Woodward v Repatriation Commission [2003] FCAFC 160 ; (2003) 131 FCR 473, at 483 [55], per curiam ; Bull v Repatriation Commission (2001) 34 AAR 326, at 329-330 [13]-[15], per Emmett and Allsop JJ.


case_text: The AAT continued as follows: '18. Apart from his lumbar spondylosis the deceased suffered from other non-war caused illnesses including osteoarthritis of the sacroiliac joints and osteoarthritis of the knee joints. It seems to us that those conditions would also have played their part in the deceased's inability to exit the tractor. 19. Ten weeks prior to the accident the deceased had obtained a prescription for an anti-depressant and an analgesic. Again nothing is known as to the frequency with which the deceased availed himself of this mediation and if he had taken any on the day of his death. If he had taken an anti-depressant this may have affected his reaction time. 20. We agree with the Applicant that the material before us has raised an hypothesis, however the real question is whether given all the material before us, the hypothesis can be said to be a reasonable one. 21. Although facts may be assumed for the purpose of constructing an hypothesis, a distinction must be made between assumed facts on the one hand and speculation and conjecture on the other. 22. The fact situation and statement of law by Wright LJ in Caswell v Powell Duffryn Associated Collieries Limited [1940] AC 152 at 169 is particularly apposite in this matter, namely: My Lords, the precise manner in which the accident occurred cannot be ascertained as the unfortunate young man was alone when he was killed. The Court therefore is left to inference or circumstantial evidence. Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In come cases the other facts can be inferred with as much practical certainty as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture. 23. As we have previously pointed out, facts may be assumed for the purpose of constructing an hypothesis. However in this case, all that is known is that the deceased suffered from war-caused lumbar spondylosis amongst other diseases which would have limited mobility, and had obtained a prescription for anti-depressant medication. He was killed when a tractor he was driving rolled over. To then say that it was his lumbar spondylosis that prevented him jumping clear of the tractor so as to avoid fatal injury when all he had was one to two seconds in which to take that action is, on what is known in this matter, mere speculation and incapable of raising an hypothesis properly categorised as reasonable'. 18 Accordingly, the AAT affirmed the decision under review. 19 In his written submissions, Mr Vincent, who appeared for the applicant, accepted that a finding as to whether a reasonable hypothesis has or has not been raised is a question of fact. However, he argued that the authorities establish that the AAT, when considering whether a reasonable hypothesis has been raised, is not entitled to find facts, prefer certain material, resolve conflicts or reject matters. 38 I should mention one other matter. The applicant sought to derive comfort from the AAT's reference in its reasons to the distinction between assumed facts and conjecture. According to Mr Vincent, the AAT's citation of Caswell v Powell Duffryn showed that the AAT was purporting to make a finding of fact on the balance of probabilities. 39 I read the AAT's reference as intended merely to indicate that something more than conjecture or speculation is required before a hypothesis can be characterised as reasonable. I do not read the AAT's citation of Caswell v Powell Duffryn as indicating that it was making impermissible findings of fact, whether on the balance of probabilities or otherwise. The AAT was only saying what the authorities have said: the material before the AAT must point to the connecting hypothesis, rather than the connection remaining purely in the realm of conjecture or speculation. 40 The applicant has failed to establish that the AAT erred in law. The application must be dismissed, with costs. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. Associate: Dated: 21 August 2007 Counsel for the Applicant: Mr M Vincent Solicitor for the Applicant: Dibbs Abbott Stillman Counsel for the Respondent: Ms J MacDonnell Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 15 August 2007 Date of Judgment: 21 August 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1290.html