case_text: The most recent reference to the topic in Australia is that by the Full Court in Ranbaxy [2008] FCAFC 82 at [105] : "A patent application will overcome a prior publication, as a selection patent, if the following criteria are met: • there must be some substantial advantage to be secured by the use of the selected members; • the whole of the selected members must possess the advantage in question; • the selection must be in respect of a quality of a special character, which can fairly be said to be peculiar to the group; and • the advantage possessed by the selected members must be clearly disclosed in the specification. (see Re IG Farbenindustrie AG's Patents (1930) 47 RPC 289 at 322-3)." However, that was said in considering the ground of false suggestion rather than lack of novelty. It is a fair brief summary of the position as it was understood at the time of the 1952 Act based upon the authority to which reference was made Re IG Farbenindustrie AG's Patents (1930) 47 RPC 289. This remained the basis of the law in the United Kingdom, at least until the decision of the House of Lords in EI Du Pont De Nemours & Co (Witsiepe's) Application [1982] FSR 303. 78 Crennan J made a passing reference to patents of addition (to which I shall return) and selection patents in Imperial Chemicals Industries Pty Ltd v Commissioner of Patents [2004] FCA 1658 ; (2004) 213 ALR 399 , (2004) 63 IPR 476 , (2005) AIPC 92-055 at [66] . Her Honour also referred to a decision of Delegate Barker in University of Georgia Research Foundation Inc v Biochem Pharma Inc (2000) 51 IPR 222 , (2001) AIPC 91-676. It is quite clear from that decision that the Commissioner of Patents has applied the IG Farbenindustrie AG's Patents (1930) 47 RPC 289 principles for many years (see also Pfizer Inc v Commissioner of Patents [2005] FCA 137 ; (2005) 141 FCR 413 at [10] and [11]). Gummow J made a delphic reference to the topic in Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 at 529, (1990) 16 IPR 545 , (1990) AIPC 90-670 where, after reference to the decision of Falconer J in Re Genentech Inc's (Human Growth Hormone) Patent [1989] RPC 613 at 629 633, he said: "[s]election patents may require special attention, but that is a matter for another day." As I said earlier, the decision of Falconer J appeared to be and, in my opinion, was, a departure from the manner in which the law of anticipation had been understood in the United Kingdom and in Australia up to that time. 79 It seems to me that it is too late in the day to find that the principles explained by Maugham J in IG Farbenindustrie AG's Patents (1930) 47 RPC 289 are not relevant to the question of anticipation under the 1952 Act (and the 1990 Act, for that matter). That is not to recognise a special class of patents the reference to a selection patent is a convenient shorthand to pick up the relevant principles concerning anticipation. I approach the United Kingdom cases from and including EI Du Pont De Nemours & Co (Witsiepe's) Application [1982] FSR 303 with caution. I must also endeavour to keep separate questions of anticipation, on the one hand, and obviousness, on the other. The distinction is not always easy to discern in the authorities on this topic, including the seminal judgment of Maugham J. 80 There is a question as to whether the selection patent principles apply to a compound specifically identified in the early specification as a member of the larger class (eg as an example or derivative) or whether it is restricted to the express identification (for the first time) of a particular member of the larger class with the special characteristic. The latter was conceded by the patentee in EI Du Pont De Nemours & Co (Witsiepe's) Application [1982] FSR 303. In the Court of Appeal, Buckley LJ had favoured the view that the concession was necessary (395) but, in the House of Lords, Lord Simon preferred to leave the point open ([1982] FSR 303 at 315). I favour the view of Buckley LJ as more in accordance with the rationale as explained by Maugham J and with his description of the class as follows ( IG Farbenindustrie AG's Patents (1930) 47 RPC at 321): "The second class comprises patents (the so-called selection patents) based on a selection of related compounds such as the homologues and substitution derivatives of the original compounds which presumably have been described in general terms and claimed in the originating patent." 85 The third proposition was explained by Maugham J in IG Farbenindustrie AG's Patents (1930) 47 RPC 289 as follows (at 323): "If there are five thousand possible members of the group, and a hundred have been selected as possessing some new and definite advantage, it is not intended to assert that such a selection patent would be bad if it were shown as the result of further research that there existed another hundred members possessing the same advantage. If, on the other hand, it were to be established that there were a thousand unselected members which possessed the same advantage, I doubt very much whether the patent could be sustained. The quality must be of a special character. It must not be one which those skilled in the art will expect to find in a large number of the members. It would be rash to attempt a closer definition, for the question is ultimately one of appreciation. Returning to the same old fashioned metaphor I would say that the citadel must be defended, and that there is no reward if the gates have been opened at the first blast of the trumpet. ... I will summarise the conclusion at which I have arrived by saying that in a selection patent the inventive step lies in the selection for a useful and special property or characteristic adequately defined; and this is the proposition which has to be kept in mind in considering the application to amend and the Petition for revocation." 101 It is difficult to see how this patent could have been valid without disclosing the starting point or the master patent in the specification. To do so would have amounted to obtaining the patent on a false suggestion or representation within the meaning of s 100(1)(k) of the 1952 Act or be in breach of s 40(1)(a) of that Act by not describing the invention (see Sami S Svendsen Inc v Independent Products Canada Ltd [1968] HCA 65 ; (1968) 119 CLR 156 at 159 and 164 165). The same applies under the 1990 Act. Hence the necessity to spell out that step and the advantage in the complete specification ( Re IG Farbenindustrie AG's Patents (1930) 47 RPC 289 at 323; Institut Francais du Petrole des Carburants et Lubricants' Application, Re [1972] FSR 147 at 154, [1972] RPC 364). The specification of the patent in suit is drafted consistently with that obligation. The cases on selection patents discuss both novelty and obviousness by reference to the nature of the selection from the earlier patent specification to the later claim.


case_outcome: cited

case_text: "Utility" in this sense "depends upon whether, by following the teaching of the complete specification, the result claimed is produced" ( Advanced Building Systems [1998] HCA 19 ; 194 CLR 171 at [24] ). The result claimed may cover two aspects one is physically producing a result and the other is producing a result that is useful. Useful in this sense does not mean commercially successful. Put another way, Gummow J in Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 at 96 approved the following statement of general principle: "If an invention does what it is intended by the patentee to do, and the end attained is itself useful, the invention is a useful invention."


case_text: It is difficult to see how this patent could have been valid without disclosing the starting point or the master patent in the specification. To do so would have amounted to obtaining the patent on a false suggestion or representation within the meaning of s 100(1)(k) of the 1952 Act or be in breach of s 40(1)(a) of that Act by not describing the invention (see Sami S Svendsen Inc v Independent Products Canada Ltd [1968] HCA 65 ; (1968) 119 CLR 156 at 159 and 164 165). The same applies under the 1990 Act. Hence the necessity to spell out that step and the advantage in the complete specification ( Re IG Farbenindustrie AG's Patents (1930) 47 RPC 289 at 323; Institut Francais du Petrole des Carburants et Lubricants' Application, Re [1972] FSR 147 at 154, [1972] RPC 364). The specification of the patent in suit is drafted consistently with that obligation. The cases on selection patents discuss both novelty and obviousness by reference to the nature of the selection from the earlier patent specification to the later claim.


case_outcome: discussed

case_text: Asahi Kasei Kogyo KK's Application [1991] RPC 485 concerned the 1977 United Kingdom Act. Counsel for the Comptroller of Patents neatly, and, in my opinion correctly, summed up the law as it previously stood in the following way ([1991] RPC at 520): "Novelty is a fundamental of patent law. Prior to the Act of 1977 it was settled law in the U.K. that "if the prior inventor's publication contains a clear description of, or clear instruction to do or make, something that would infringe that patentee's claim if carried out after the grant of the patentee's patent, that patentee's claim will have been shown to lack the necessary novelty", see: General Tire v. Firestone [1972] R.P.C. 457 at p 485. Accordingly under the Act of 1949 a claim to a chemical compound has been held to be anticipated by a statement that it has been prepared (Gyogyszeripari [1958] R.P.C. 51) or with a method for preparation which does not work (SKF [1968] R.P.C. 415). The latter cases were consistent with General Tire being instances where the prior documentation contained a description of the invention." The House of Lords upheld the contrary view of Falconer J in Re Genentech Inc's (Human Growth Hormone) Patent [1989] RPC 613. The 1977 Act, in s 2(2), included the words "made available to the public". Counsel in Asahi [1991] RPC 485 suggested this may have made a difference to the test. Falconer J's reasoning did not appear to depend upon that distinction, although he did refer to a decision of the Technical Board of Appeal of the European Patent Office supporting his position. Falconer J expressly declined to follow decisions of the Patents Appeal Tribunal in Gyogyszeripara Kurato Interzet's Application [1958] RPC 51 and Smith Kline & French Laboratories' Application [1968] RPC 415 and the established practice of the Comptroller. Counsel for the petitioner for revocation in that case submitted that this was a departure from the long standing law in the United Kingdom as to anticipation and I agree with that submission.


case_outcome: distinguished

case_text: Counsel for Sanofi-Aventis submitted that enabling disclosure, not mere disclosure, is required for anticipation, citing, most recently, Lindgren J in Alphapharm Pty Ltd [2008] FCA 559 at [160] [161] and the decision of the House of Lords in SmithKline Beecham (Paroxetine Methanesulfonate) Patent [2006] RPC 323. By way of introduction, it is worth remarking that the phrase "enabling disclosure" was brought to prominence by the speech of Lord Hoffmann in Biogen Inc v Medeva plc [1996] UKHL 18 ; [1997] RPC 1 , (1996) 36 IPR 438. That decision concerned the requirements for a valid patent under the 1997 United Kingdom Act (based upon the European Patent Convention) but did not concern the question of anticipation. The most important question was whether a later patent could claim an earlier priority date because it was "supported" by the earlier specification. That is a concept similar to, but narrower than, whether a later patent is fairly based upon an earlier specification in our law (cf F Hoffman-La Roche & Co AG v Commissioner of Patents [1971] HCA 3 ; (1971) 123 CLR 529 ; CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 1168 ; (1994) 51 FCR 260 ; Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58 ; (2004) 217 CLR 274). It may be accepted that, in the case of a claim for a chemical compound by formula, in order to be valid, the specification would have to disclose how it might be manufactured (s 40). The phrase was also used in the speech of Lord Oliver in Asahi Kasei Kogyo KK's Application [1991] RPC 485 , to which I shall return. The phrase is reasonable shorthand in relation to the disclosure required for there to be anticipation of a process or method claim but, in my opinion, has little, if any, relevance to anticipation of a product claim or a claim for a chemical compound by formula. Indeed, it is apt to mislead in relation to the latter. For a product claim, the novelty must lie in the product not the means of producing it ( May & Baker Ltd v Boots Pure Drug Co Ltd (1948) 65 RPC 255 at 281 282). By the same token, a new process to obtain an old product will have novelty. 57 Lord Hoffman's speech in SmithKline Beecham (Paroxetine Methanesulfonate) Patent [2006] RPC 323 spells out the current United Kingdom position with clarity. Under the 1977 United Kingdom Act "disclosure" and "enablement" are separate concepts and are cumulative requirements for anticipation, although there may be circumstances where disclosure will also satisfy enablement. In my opinion, at least in relation to product claims and claims for chemical compounds by formula, this is a departure from the law of Australia and from English law as it was applied up to 1977. I would respectfully suggest that it creates an anomalous relationship between anticipation and infringement. 58 In the present case, the earlier patent gave Sanofi-Aventis a monopoly in relation to the making and using of PCR 4099 and its enantiomers, together or separate, even though there was no description of a method of resolving the enantiomers. 59 I venture the view that the claimed symmetry between the disclosure requirements for validity of the earlier patent and disclosure for anticipation purposes does not exist or is anomalous in the case of a chemical compound described (adequately) by formula. 60 Nonetheless, Lord Hoffman's speech is useful in other respects. So far as the immediate point is concerned, in dealing with disclosure, he said ( SmithKline Beecham (Paroxetine Methanesulfonate) Patent [2006] RPC 323 at 337, [34] [35]): "Did the Synthon application disclose an invention which, if performed, would infringe the SB patent? Because it covered a class of chemicals defined by reference to a formula, it disclosed a myriad of compounds, each of which may be regarded as an invention. But that does not matter if one of those inventions was the crystalline PMS claimed in the patent. There seems to me no doubt that the application disclosed the existence of PMS crystals of 98 per cent purity and claimed that they could be made. Whether in fact they could be made is the question of enablement which I shall come to in a moment. But their existence and their advantages for pharmaceutical use were clearly disclosed in the application. And on the basis of the judge's finding of monomorphism, a PMS crystal of 98 per cent purity must necessarily have all the characteristics of the crystals claimed in the patent, including the IR and XRD spectra." At 334 ([22]) he said: "It follows that, whether or not it would be apparent to anyone at the time, whenever subject-matter described in the prior disclosure is capable of being performed and is such that, if performed, it must result in the patent being infringed, the disclosure condition is satisfied. The flag has been planted, even though the author or maker of the prior art was not aware that he was doing so." Then, at 336 ([32]): "In the case of disclosure, when the matter relied upon as prior art consists (as in this case) of a written description, the skilled person is taken to be trying to understand what the author of the description meant. His common general knowledge forms the background to an exercise in construction of the kind recently discussed by this House in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46 ; [2005] R.P.C. 9. And of course the patent itself must be construed on similar principles. But once the meanings of the prior disclosure and the patent have been determined, the disclosure is either of an invention which, if performed, would infringe the patent, or it is not. The person skilled in the art has no further part to play." 61 The applicants contend that, in any event, the methods of resolving the enantiomers were part of the common knowledge of skilled persons in Australia at the priority date and would be applied as a matter of routine. 68 After referring to the well-known passage from General Tire & Rubber Co [1972] RPC 457 at 485 486 and citing various other cases, his Honour said ( Alphapharm [2008] FCA 559 at [161] ): "What does "enabling disclosure" mean in the context of a product claim? It means that the earlier disclosure must point unmistakeably to the (+)-enantiomer of citalopram, as distinct from the racemate, as a drug desirable to obtain." I take "as distinct from" to mean "separately from" not "instead of" or "as opposed to". This does not include any separate requirement of enablement in accordance with SmithKline Beecham (Paroxetine Methanesulfonate) Patent [2006] RPC 323 and is consistent with my opinion.


case_outcome: referred to

case_text: Crennan J made a passing reference to patents of addition (to which I shall return) and selection patents in Imperial Chemicals Industries Pty Ltd v Commissioner of Patents [2004] FCA 1658 ; (2004) 213 ALR 399 , (2004) 63 IPR 476 , (2005) AIPC 92-055 at [66] . Her Honour also referred to a decision of Delegate Barker in University of Georgia Research Foundation Inc v Biochem Pharma Inc (2000) 51 IPR 222 , (2001) AIPC 91-676. It is quite clear from that decision that the Commissioner of Patents has applied the IG Farbenindustrie AG's Patents (1930) 47 RPC 289 principles for many years (see also Pfizer Inc v Commissioner of Patents [2005] FCA 137 ; (2005) 141 FCR 413 at [10] and [11]). Gummow J made a delphic reference to the topic in Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513 at 529, (1990) 16 IPR 545 , (1990) AIPC 90-670 where, after reference to the decision of Falconer J in Re Genentech Inc's (Human Growth Hormone) Patent [1989] RPC 613 at 629 633, he said: "[s]election patents may require special attention, but that is a matter for another day." As I said earlier, the decision of Falconer J appeared to be and, in my opinion, was, a departure from the manner in which the law of anticipation had been understood in the United Kingdom and in Australia up to that time.


case_text: An inventive step does not require any particular process of invention such as a flash of genius. However, there must be a step from one thing to another. In the case of a seminal invention, it may be from very little to something. The same might be said of any original invention. Where an inventor describes the step by reference to the starting point or base line and an end point or result, it is the inventiveness of that step that is to be judged, not, for example, the inventiveness of the base line or starting point. In making that judgment, the standard test is: "whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not." ( Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd [1981] HCA 12 ; (1981) 148 CLR 262 per Aickin J at 286). 109 The applicants submit that it would also be appropriate to inform the skilled addressee of the results of the testing of the formulations of PCR 4099 which had taken place up to November 1985 when the decision was made to attempt to obtain the enantiomers of PCR 4099. In particular, that between 1983 and 1985 there were reports of side effects and, in particular, convulsions and death in some animals. I cannot reconcile that submission with the narrow basis upon which inventive step is being considered. It is also questionable as to whether that would be consistent with the limited use to which evidence of what the inventor knows and does can be put (cf Wellcome Foundation Ltd [1981] HCA 12 ; 148 CLR 262 per Aickin J at 268 288). The patentee chose to omit those matters from the specification. 110 The result which might be described as unexpected in the light of the French specification was not so much the characteristics of the dextro-rotatory enantiomer (which were within the expected broad range) but rather the characteristics of the levo-rotatory enantiomer in particular, that it was inactive. It was common general knowledge among skilled workers in the field in Australia at the priority date that one of the two enantiomers might contain all of the activity. In my opinion, the discovery of that characteristic in this case was not so unexpected as to amount to an inventive step. Therefore, if, contrary to my opinion, claim 1 was novel and if it is to be considered in the light of the complete specification, then it was obvious and did not involve an inventive step. 111 It then becomes necessary to consider claims 2 5, which I do consider novel. The specification in suit refers to the finding of salts among the mineral and organic acid salts of the dextro-rotatory enantiomer, "which crystallize easily, are not hygroscopic and are sufficiently water-soluble as to make their use as active medicinal principals particularly advantageous". Three salts in particular are identified: hydrogen sulfate, the taurocholate and the hydrobromide. The hydrochloride had been identified as of use because it was in powder form. These compounds are the subject of claims 2, 3, 4 and 5. The conversion of the pure enantiomer to any of the salts was not suggested to have any particular difficulties that was described as being achieved "in standard manner" and "by means of standard methods". The specification in suit does not claim any inventive step in the method of obtaining the salts once clopidogrel was known the claims rest on the properties of the salts. Again, the critical issue is the correct starting point. If it is only common general knowledge in Australia at the priority date, then the ground of invalidity must fail, as clopidogrel was not part of that common general knowledge. On the other hand, if the starting point is that which is recounted in the specification of the patent in suit, including the racemic mix PCR 4099 disclosed in the French patent and the dextro-rotatory enantiomer, then there is at least substance in the contention that each of the claims was obvious.


case_text: Subsection 66(2) of the TPA provides that goods are of merchantable quality if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as is reasonable to expect having regard to: (1) any description applied to them by the corporation; (2) the price received for them; and (3) all other relevant circumstances. In a case such as this, the 'relevant circumstances' are likely to include the nature of the defect, its intractability, and its effect on performance: see, e.g., Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220, at 227-228 per Rougier J; Crowther v Shannon Motors Co [1975] 1 WLR 30 at 33; and Jillawarra Grazing Co v John Shearer Ltd (1984) ATPR 40-441 at 45-089 per Toohey J. Goods that are not of merchantable quality are unmerchantable: see Rogers v Parish (Scarborough) Ltd [1987] QB 933 (" Rogers v Parish ") at 946 per Woolf LJ and Courtney v Medtel Pty Ltd (2003)126 FCR 219 (" Medtel ") at 264 per Sackville J; appeal allowed in Medtel Pty Ltd v Courtney [2003] FCAFC 151 ; (2003) 130 FCR 182 but not on this point. Medtel concerned s 74D of the TPA, but its discussion of 'merchantable quality' is relevant in the present context.


case_title: Crowther v Shannon Motors Co [1975] 1 WLR 30


case_title: Jillawarra Grazing Co v John Shearer Ltd (1984) ATPR 40-441


case_outcome: approved

case_text: Subsection 66(2) of the TPA provides that goods are of merchantable quality if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as is reasonable to expect having regard to: (1) any description applied to them by the corporation; (2) the price received for them; and (3) all other relevant circumstances. In a case such as this, the 'relevant circumstances' are likely to include the nature of the defect, its intractability, and its effect on performance: see, e.g., Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220, at 227-228 per Rougier J; Crowther v Shannon Motors Co [1975] 1 WLR 30 at 33; and Jillawarra Grazing Co v John Shearer Ltd (1984) ATPR 40-441 at 45-089 per Toohey J. Goods that are not of merchantable quality are unmerchantable: see Rogers v Parish (Scarborough) Ltd [1987] QB 933 (" Rogers v Parish ") at 946 per Woolf LJ and Courtney v Medtel Pty Ltd (2003)126 FCR 219 (" Medtel ") at 264 per Sackville J; appeal allowed in Medtel Pty Ltd v Courtney [2003] FCAFC 151 ; (2003) 130 FCR 182 but not on this point. Medtel concerned s 74D of the TPA, but its discussion of 'merchantable quality' is relevant in the present context. 32 Rogers v Parish provides some limited guidance as to an appropriate approach in this context because it too concerned a road vehicle, although not a heavy commercial vehicle. Although roadworthy, the vehicle in question, a Range Rover, misfired at all road speeds, had excessive noise emitting from the gear box and substantial defects in the body work. The judge at first instance held that the vehicle was of merchantable quality because it was roadworthy and capable of proceeding from one place to another. This finding was set aside on appeal. Mustill LJ said at 944: Starting with the purpose for which 'goods of that kind' are commonly bought, one would include in respect of any passenger vehicle not merely the buyer's purpose of driving the car from one place to another but of doing so with the appropriate degree of comfort, ease of handling and reliability and, one might add, of pride in the vehicle's outward and interior appearance. What is the appropriate degree and what relative weight is to be attached to one characteristic of the car rather than another will depend on the market at which the car is aimed. 33 Plainly enough, the purpose for which a commercial vehicle of this kind is commonly bought would include the purpose of being used to transport heavy loads of goods over long distances interstate safely, reliably and efficiently. The loads carried by the truck in this case were not said to be other than within the common range. Indeed, Mack conceded that the interstate long distance haulage of loads of the kind allegedly carried by the truck in the course of the Lowes' business was a "purpose for which trucks, such as the Lowe truck in question, would commonly be utilised". Thus, the first issue to arise under s 71(1) was not in dispute. 35 In this connection too, the observations of Mustill LJ, in Rogers v Parish at 944, though apropos a different kind of vehicle, are helpful: To identify the relevant expectation one must look at the factors listed in the subsection. The first is the description applied to the goods. In the present case the vehicle was sold as new. Deficiencies which might be acceptable in a secondhand vehicle were not to be expected in one purchased as new. Next, the description 'Range Rover' would conjure up a particular set of expectations, not the same as those relating to an ordinary saloon car, as to the balance between performance, handling, comfort and resilience. The factor of price was also significant. At more than 14,000 [pounds] this vehicle was, if not at the top end of the scale, well above the level of the ordinary family saloon. The buyer was entitled to value for his money. With these factors in mind, can it be said that the Range Rover as delivered was as fit for the purpose as the buyer could reasonably expect? The point does not admit of elaborate discussion. I can only say that to my mind the defects in engine, gearbox and bodywork, the existence of which is no longer in dispute, clearly demand a negative answer. 36 The critical question is whether the applicants' truck suffered from some or all of the defects the applicants allege. The outcome of the case very much depends on the answer to this question. For this reason, in this case, s 71(1) and (2) give rise to substantially the same question. 37 Mack accepts that the applicants made it known to it that they were acquiring the truck for interstate long-haul goods transport. This entitles them to rely on s 71(2), as well as s 71(1). Indeed, Mack accepts that it assured them that the truck was fit for this purpose. It is common ground, therefore, there was an implied condition under the contract for supply that the truck was at the time of supply reasonably fit for this purpose. As noted, Mack did not seek to argue at trial that s 71(2) was unavailable to the applicants because they did not rely on Mack's skill and judgment or the skill and judgment of Mr Kumnick. 38 Although the notion of reasonable fitness for purpose is not precisely the same as the concept of merchantability, in this case there is no significant difference. There is here an overlap in the operation of s 71(1) and (2) and, under both, the real question is whether or not the truck was fit for the purpose of interstate long-haul goods transport. At trial the applicants and Mack accepted that this was so, and the applicants relied on the same facts to demonstrate a failure on Mack's part to meet both s 71(1) and (2). 39 Of course, even if the applicants establish that the truck was not fit for the purpose of interstate long-haul goods transport, there is a further question whether or not they are entitled to the relief they seek. 40 As already noted, besides their unmerchantability or unfitness for purpose claim, the applicants also retained a limited claim under s 52 of the TPA. This was to the effect that Mack's representations (via its salesman, Mr Kumnick) that: • the truck would provide safe, reliable and efficient service for at least 800,000 kilometres; and • driving the truck was like driving a car were misleading and deceptive, or likely to mislead or deceive, in contravention of s 52 of the TPA. As it happened, there was no great dispute as to whether Mr Kumnick made these statements to the applicants. Mr Kumnick admitted making the second statement and that he said something like the first. Thus, in an affidavit sworn before trial, he said that he told Mr Lowe that the truck should prove to be "safe and reliable" for about 800,000 kilometres. He also told Mr Lowe that the truck would be ideally suited for his purpose of interstate haulage. Mr Kumnick emphasized that he made this latter statement and the observation that the trucks "drive like cars" in the context of talking to an experienced heavy vehicle driver. 41 Section 52 of the TPA prohibits a corporation from engaging in conduct in trade and commerce that is misleading or deceptive, or that is likely to mislead or deceive. The words "engage in conduct" include the making of representations about a past, present or future matter. It is not in issue that, for the purposes of s 52 of the TPA, the respondent is a corporation engaged in trade and commerce.


case_title: Courtney v Medtel Pty Ltd (2003)126 FCR 219


case_outcome: followed

case_title: Medtel Pty Ltd v Courtney (2003) 130 FCR 18

case_text: Subsection 66(2) of the TPA provides that goods are of merchantable quality if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as is reasonable to expect having regard to: (1) any description applied to them by the corporation; (2) the price received for them; and (3) all other relevant circumstances. In a case such as this, the 'relevant circumstances' are likely to include the nature of the defect, its intractability, and its effect on performance: see, e.g., Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220, at 227-228 per Rougier J; Crowther v Shannon Motors Co [1975] 1 WLR 30 at 33; and Jillawarra Grazing Co v John Shearer Ltd (1984) ATPR 40-441 at 45-089 per Toohey J. Goods that are not of merchantable quality are unmerchantable: see Rogers v Parish (Scarborough) Ltd [1987] QB 933 (" Rogers v Parish ") at 946 per Woolf LJ and Courtney v Medtel Pty Ltd (2003)126 FCR 219 (" Medtel ") at 264 per Sackville J; appeal allowed in Medtel Pty Ltd v Courtney [2003] FCAFC 151 ; (2003) 130 FCR 182 but not on this point. Medtel concerned s 74D of the TPA, but its discussion of 'merchantable quality' is relevant in the present context. 34 The contentious issue was whether or not the truck was fit for this purpose "as is reasonable to expect". In Graham Barclay Oysters Pty Ltd v Ryan [2000] FCA 1099 ; (2000) 102 FCR 307 at 445, Lindgren J (with whom Lee J on this point agreed) held that the words "as it is reasonable to expect" in s 74D are to be considered from the perspective of a reasonable consumer placed in the position of the actual consumer. Put another way, these words require the Court to consider what is objectively reasonable to expect at the time of supply to the consumer: see Medtel Pty Ltd v Courtney [2003] FCAFC 151 ; (2003) 130 FCR 182 , at 205 per Branson J, with whom Jacobson J agreed, and 199 [43] per Moore J. This assessment is to be undertaken in light of the information concerning the goods that is available at the time of trial: see 206 per Branson J.


case_text: Thus, where s 71(1) is invoked, the Court must determine: • the purpose or purposes for which goods of the relevant kind are commonly bought; and • whether the goods supplied are as fit for the purpose or purposes so identified as is reasonable to expect, having regard to the factors and circumstances listed. These issues call for an objective assessment. The focus of the first is the purpose or purposes for which the goods are "commonly bought" as opposed to the particular consumer's subjective purpose. Further, to quote Cooper J in Cavalier Marketing (Australia) Pty Ltd v Rasell (1990) 96 ALR 375 (" Rasell ") at 400, s 71(1) "requires that all normal purposes for which goods are commonly bought be brought into consideration. Fitness is to be tested against each of those purposes and none are to be excluded".


case_text: The contentious issue was whether or not the truck was fit for this purpose "as is reasonable to expect". In Graham Barclay Oysters Pty Ltd v Ryan [2000] FCA 1099 ; (2000) 102 FCR 307 at 445, Lindgren J (with whom Lee J on this point agreed) held that the words "as it is reasonable to expect" in s 74D are to be considered from the perspective of a reasonable consumer placed in the position of the actual consumer. Put another way, these words require the Court to consider what is objectively reasonable to expect at the time of supply to the consumer: see Medtel Pty Ltd v Courtney [2003] FCAFC 151 ; (2003) 130 FCR 182 , at 205 per Branson J, with whom Jacobson J agreed, and 199 [43] per Moore J. This assessment is to be undertaken in light of the information concerning the goods that is available at the time of trial: see 206 per Branson J.


case_text: The application of s 52 is not restricted to conduct that is intended to mislead or deceive: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 (' Puxu ') at 197 per Gibbs CJ; and Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228 per Stephen J. The conduct complained of must be viewed as a whole: see, e.g., Puxu at 199 per Gibbs CJ.


case_title: Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216


case_text: In order to make out their case under s 52 of the TPA, the applicants need to establish that: (1) the conduct of which they complained occurred; (2) viewed objectively, the conduct was misleading or deceptive; and (3) they relied on Mack's conduct in the sense that it operated as an inducement for them to enter into arrangements for the acquisition of the truck. In order to be compensated for any loss and damage under s 82(1) of the TPA, they also need to establish a causal connection between this conduct and the loss for which they seek compensation: see, e.g., Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525-526 per Mason CJ, Dawson, Gaudron and McHugh JJ and Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at 469-470 per Gleeson CJ, 480 per Gaudron J, 489 per McHugh J and 509 per Hayne J. 270 In order to be compensated for any loss and damage under s 82(1) of the TPA in respect of a claim under s 52 of the TPA, the applicants needed to establish a causal connection between the respondent's conduct (here, the alleged misrepresentation) and the loss for which they sought compensation: see, e.g., Wardley Australia Ltd v Western Australia [1992] HCA 55 ; (1992) 175 CLR 514 at 525-526 per Mason CJ, Dawson, Gaudron and McHugh JJ and Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at 469-470 per Gleeson CJ, 480 per Gaudron J, 489 per McHugh J and 509 per Hayne J.


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


case_text: Where a corporation makes a representation with respect to a future matter, and the corporation does not have reasonable grounds for making the representation, s 51A(1) of the TPA deems the representation to be misleading for the purposes of s 52 ; and s 51A(2) deems a corporation not to have reasonable grounds unless it adduces evidence to the contrary. See Ting v Blanche [1993] FCA 524 ; (1993) 118 ALR 543 at 552 per Hill J and Phoenix Court Pty Ltd v Melbourne Central Pty Ltd (1997) ATPR (Digest) 46-179 at 54,432 per Goldberg J. Applicants who rely on s 51A do not, therefore, have to establish as part of a cause of action under s 52 of the TPA that the respondent did not have reasonable grounds for making the representation.


case_title: Phoenix Court Pty Ltd v Melbourne Central Pty Ltd (1997) ATPR (Digest) 46-179


case_text: The applicants have not pleaded the facts upon which their s 52 claim would depend with the care and clarity that is called for in such a pleading: compare Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (1998) ATPR 41-633 and Banque Commerciale S A v Akhil Holdings Ltd [1990] HCA 11 ; (1990) 169 CLR 279 at 286 per Mason CJ and Gaudron J. What the applicants have done is pick up and rely on their pleading as regards s 71 of the TPA as part of the pleading of a claim based on s 52 of the TPA. This course has left the scope of their s 52 claim a matter for guess work. As I have said, it was a claim scarcely mentioned at trial and all but abandoned in closing submissions, when counsel for the applicants conceded that the s 52 claim added nothing in substance to the s 71 claim. In these circumstances, it is plain enough that the claim was fundamentally flawed at the outset of the trial and remained so. It would be unfair to require Mack to guess at what it meant and therefore how it might be answered. In so far as the applicants sought to retain any part of their s 52 claim, it must fail.


case_title: Banque Commerciale S A v Akhil Holdings Ltd [1990] HCA 11 ; (1990) 169 CLR 279


case_text: Further, although it scarcely matters, I agree with Mack's submission that Mr Kumnick's statement to the effect that driving the truck was like driving a car was in the nature of commendatory puffery and not a representation of an actionable kind. Whether representations made in the course of negotiations such as those for sale are actionable or merely in the nature of puffery depends on the particular facts, considered "in the light of the ordinary incidents and character of commercial behaviour": see General Newspapers Pty Ltd v Telstra Corporation [1993] FCA 473 ; (1993) 45 FCR 164 , at 178 per Davies and Einfeld JJ; Pappas v Soulac Pty Ltd (1983) 50 ALR 231 at 234-235 per Fisher J; and Sanders v Glev Franchises Pty Ltd [2002] FCA 1332 at [270] - [274] per Kenny J.


case_text: Further, although it scarcely matters, I agree with Mack's submission that Mr Kumnick's statement to the effect that driving the truck was like driving a car was in the nature of commendatory puffery and not a representation of an actionable kind. Whether representations made in the course of negotiations such as those for sale are actionable or merely in the nature of puffery depends on the particular facts, considered "in the light of the ordinary incidents and character of commercial behaviour": see General Newspapers Pty Ltd v Telstra Corporation [1993] FCA 473 ; (1993) 45 FCR 164 , at 178 per Davies and Einfeld JJ; Pappas v Soulac Pty Ltd (1983) 50 ALR 231 at 234-235 per Fisher J; and Sanders v Glev Franchises Pty Ltd [2002] FCA 1332 at [270] - [274] per Kenny J. 52 In Pappas v Soulac (1983) 50 ALR 231 , Fisher J held that a number of the statements made by the vendor's agent (a Mr Spencer) to the purchasers of a shopping centre were of this kind. His Honour said, at 234-235: It is important to appreciate that many of the statements alleged or admittedly made by Mr Spencer were wholly or in part statements of opinion, not capable of being objectively proved to be true or false. They were also essentially the type of introductory comments, in the nature of puffery, made at the start of negotiations for the purpose of attracting the interest of a possible purchaser. As such they became irrelevant or of little, if any significance when detailed information is subsequently given a fortiori, to a potential purchaser with commercial experience. To the extent that they are essentially puffery, it is proper to be reluctant to elevate them to the status of potentially misleading conduct. His Honour held, at 238, that a statement by Mr Spencer that the shopping centre was a good investment was "the type of puffing which would normally fall from a selling agent and which was incapable of being proved to be correct or incorrect". See also Hanave Pty Ltd v LFOT Pty Ltd [1998] FCA 1051 (31 August 1998) per Moore J.


case_title: Sanders v Glev Franchises Pty Ltd [2002] FCA 1332


case_text: In Pappas v Soulac (1983) 50 ALR 231 , Fisher J held that a number of the statements made by the vendor's agent (a Mr Spencer) to the purchasers of a shopping centre were of this kind. His Honour said, at 234-235: It is important to appreciate that many of the statements alleged or admittedly made by Mr Spencer were wholly or in part statements of opinion, not capable of being objectively proved to be true or false. They were also essentially the type of introductory comments, in the nature of puffery, made at the start of negotiations for the purpose of attracting the interest of a possible purchaser. As such they became irrelevant or of little, if any significance when detailed information is subsequently given a fortiori, to a potential purchaser with commercial experience. To the extent that they are essentially puffery, it is proper to be reluctant to elevate them to the status of potentially misleading conduct. His Honour held, at 238, that a statement by Mr Spencer that the shopping centre was a good investment was "the type of puffing which would normally fall from a selling agent and which was incapable of being proved to be correct or incorrect". See also Hanave Pty Ltd v LFOT Pty Ltd [1998] FCA 1051 (31 August 1998) per Moore J.


case_text: Furthermore, I am unable to discern in the evidence anything that might be regarded as proof of damages for this purpose: compare Gurdag v Stillwell Ford Pty Ltd (1985) 61 ALR 689. There is no claim for repairs or loss calculated by reference to the price the applicants paid for the truck and its true worth. As discussed below, the evidence led in connection with loss of profits is fundamentally flawed. There is a claim for loss of time for 73 days, which has not been proved. These observations confirm my conclusion that, as the applicants' counsel said, this cause of action can in fact add little to the applicants' primary case. 58 Mr Lowe's evidence was critical to the applicants' case. Mr Lowe was forty-nine years of age when he acquired the truck. He was a qualified mechanic and an experienced truck driver. He had more than twenty years' experience of driving a number of different heavy prime mover vehicles in long-haul interstate transport operations. Mr Lowe and his wife had begun their long-haul goods transport business over twenty years before the purchase of the truck. He had owned and operated numerous different model trucks prior to March 1998, including three Mack trucks. In September 1997, some months before the purchase of the truck in March 1998, he and his wife purchased a new Tautliner semi-trailer. The truck was to be used to transport this semi-trailer, loaded with goods. 59 On or shortly before Friday, 20 March 1998, Mr Lowe spoke to Mr Kumnick at Mack's Adelaide office about buying a new truck to replace the Mack CHR he was operating at that time. Mr Lowe and Mr Kumnick had regular dealings with one another at this time. In this circumstance, Mr Kumnick knew that the replacement truck was for use in interstate haulage. Mr Kumnick made an appraisal of Mr Lowe's Mack CHR and looked into what Mack might offer by way of a replacement.


case_outcome: applied

case_text: Subject to the Evidence Act 1995 (Cth), evidence that is relevant in a proceeding is admissible. In order, however, for 'expert' opinion evidence to be admissible, it must fall within s 79 of the Evidence Act 1995 (Cth). This is because opinion evidence is generally inadmissible (see s 76) but s 79 provides that: If a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to the evidence of an opinion of that person that is wholly or substantially based on that knowledge. This provision enacts the common law in important respects, although it has consequences of its own. In HG v The Queen [1999] HCA 2 ; (1999) 197 CLR 414 at 427, Gleeson CJ said: ... the provisions of s 79 will often have the practical effect of emphasising the need for attention to requirements of form. By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience, the section requires that the opinion is presented in a form which makes it possible to answer that question. 192 Section 79 primarily requires: (a) identification of a relevant field of specialised knowledge; (b) a showing that, by reason of training, study or experience, the witness has that specialised knowledge; and (c) a showing that the opinion evidence of the witness is wholly or substantially based on that specialised knowledge.


case_text: Furthermore, the facts and assumptions on which the witness bases his or her opinion must be identified and proved, and constitute a proper foundation for the opinion expressed. The field of specialised knowledge must be shown to apply to these facts or assumptions. See, generally, Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 743-744 per Heydon JA and Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354 ; [2002] FCAFC 157 at [87] , where a Full Court of this Court observed that many of the matters on which s 79 depends involve "questions of degree, requiring the exercise of judgment". Whether or not an expert has the requisite expertise is, however, a question of fact: see Hamod v Suncorp Metway Insurance Ltd [2006] NSWCA 243 at [39] . Where an expert purports to give an opinion that lies outside the field of his specialised knowledge, the opinion will be inadmissible: see, e.g., Allstate Life Insurance Co v ANZ Banking Group Ltd (No 6) (1996) 64 FCR 79 at 85 per Lindgren J and Henscke & Co v Rosemount Estates Pty Ltd (1999) 47 IPR 63 ; [1999] FCA 1561 at [69] per Finn J.


case_title: Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 30 ; (2002) 55 IPR 354


case_title: Hamod v Suncorp Metway Insurance Ltd [2006] NSWCA 243


case_title: Allstate Life Insurance Co v ANZ Banking Group Ltd (No 6) (1996) 64 FCR 79


case_title: Henscke & Co v Rosemount Estates Pty Ltd (1999) 47 IPR 63 ; [1999] FCA 1561


case_title: Rhoden v Wingate [2002] NSWCA 165

case_text: The proof of facts and assumptions on which an opinion is based is not always straightforward. As Heydon JA said in Rhoden v Wingate [2002] NSWCA 165 at [86] : When assessing the admissibility of expert opinions, it is not the case that an opinion is only admissible if at the close of the case of the party relying on it the evidence establishes each of the assumptions on which it is based on the balance of probabilities. The primary evidence relating to those assumptions might be controversial. Which parts of the primary evidence are to be accepted, and what the correct conclusions from the primary evidence are, are matters for the trier of fact at the end of the trial. The opinion evidence may be admitted if there is evidence which, if accepted, is capable of establishing the truth of the assumptions. The witness must differentiate between the assumed facts on which he or she bases his or her opinion and the opinion being proffered. The witness must disclose in what way, if any, the opinion is based on information communicated by another person. If this is not done, then the opinion may be inadmissible or carry diminished weight: Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 at 347-348 and Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 123 at [13] . More generally, the reasoning on which the opinion is based must be sufficiently intelligible and transparent to enable the court to form its own assessment about the cogency of the opinion.


case_title: Arnotts Ltd v Trade Practices Commission (1990 24 FCR 313


case_title: Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 123


case_text: It is also accepted that an expert witness is not an advocate for a party and has a paramount duty to the Court and not to the person retaining him: see 'Guidelines for Expert Witnesses' applicable in this Court and National Justice Compania Naviera SA v Prudential Assurance Co Ltd [1993] 2 Lloyd's Rep 68 at 81-82 per Creswell J. A want of independence, in the case of an expert witness said to be affected by interest or bias, tends to affect the weight to be given to his or her opinion: see FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33 (" FGT Custodians ") at [12] per Ormiston JA, with whom Chernov and Eames JJA agreed.


case_text: It is also accepted that an expert witness is not an advocate for a party and has a paramount duty to the Court and not to the person retaining him: see 'Guidelines for Expert Witnesses' applicable in this Court and National Justice Compania Naviera SA v Prudential Assurance Co Ltd [1993] 2 Lloyd's Rep 68 at 81-82 per Creswell J. A want of independence, in the case of an expert witness said to be affected by interest or bias, tends to affect the weight to be given to his or her opinion: see FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33 (" FGT Custodians ") at [12] per Ormiston JA, with whom Chernov and Eames JJA agreed. 221 None of these factors by itself would deprive Mr Lambert of the independence desired of an expert witness. I do not consider that Mr Lambert's involvement with Mr Haire would necessarily have affected the evidence he gave. I note too that Mr Morrison was also involved as an expert in other proceedings though for the truck manufacturer. Involvement in other proceedings in the same or similar interest need not affect independence. It was, moreover, clear that Mr Lambert gave evidence of opinions he genuinely held. Nonetheless, it was equally clear that Mr Lambert was inclined to 'side' with the applicants. His apparent commitment to the applicants' position indicated more than intellectual attraction to their position. Precisely why Mr Lambert was so disposed is unclear. As the respondent noted, he had not seen 'eye to eye' with the Roaduser's management or with Mr Wallace from Mack. I doubt, however, that this is a sufficient explanation. It is enough to say that Mr Lambert impressed me as a witness who had, for whatever reason, become somewhat overly involved in the interests of a party to the litigation. As Ormiston JA's discussion in FGT Custodians at [12] makes clear, this circumstance may diminish the weight accorded an expert's opinion. Here, it lessened to some degree the weight I might otherwise have given Mr Lambert's opinion. In the end, however, my preference for Dr Morrison's opinion to that of Mr Lambert's was more affected by considerations other than this. I would add that there was no occasion to exercise my discretion under s 135 of the Evidence Act 1995 (Cth). 222 There were a number of other matters that also tended to diminish the weight to be attached to Mr Lambert's evidence, including that, in cross-examination, it became apparent that much of his technical opinion was not based on any actual testing of the applicants' truck. Thus, for example, Mr Lambert conceded that he had done no testing to establish the relative torsional rigidity of trailers. Instead, his opinion was based on the fact that he had "a very good eye for observing vehicle behaviour". Further, Mr Lambert stated he used his "own observation and measurements" to establish the chassis was bent. When asked whether he established first whether the ground surface was flat, he conceded "Well, I didn't check it in an absolute sense, no ... I have got a very good eye for flat surfaces". 223 Notwithstanding these reservations, I have found it necessary to consider Mr Lambert's evidence carefully.


case_text: In the present context, the respondent also drew attention to s 135 of the Evidence Act 1995 (Cth), which confers a discretion to refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party; (b) be misleading or confusing; or (c) cause or result in undue waste of time. It seems that the failure of a witness to comply with relevant 'Guidelines for Expert Witnesses' may be a factor weighing in favour of the exclusion of his or her evidence, since the expert's opinion is infected by failure to understand his or her responsibilities as an expert: compare United Rural Enterprises Pty Ltd v Lopmand Pty Ltd [2003] NSWSC 870 at [15] - [19] per Campbell J. 197 The respondent objected to the admissibility of the opinion of Dr McLean on the basis that: (a) he lacked the requisite "specialised knowledge"; and/or (b) he purported to give opinion on matters outside any "specialised knowledge" he may possess as a result of his training, study or experience; and/or (c) his evidence demonstrated fundamental flaws in its factual basis or in its process of reasoning. The respondent argued that Dr McLean's evidence should be excluded entirely, alternatively, admitted only for the purpose of providing expert opinion on matters relating to the alleged vibration problems of the Lowes' truck. 198 It was apparently common ground that, as at May 2007, Dr McLean was a senior lecturer in the School of Mechanical, Materials and Mechatronics Engineering, in the Faculty of Engineering at the University of Wollongong. A University of Wollongong website stated Dr McLean's research activities to be "Bulk solids, Handling and Physical Processing" and his "area of specialisation ... machine and mechanical system dynamics and evaluation of power and drive requirements for Bulk Solid Handling and Equipment".


case_text: Had a breach of the condition created by s 71 occurred, would the applicants' damages claim have been made out? The applicants' statement of claim sought damages or compensation by reference to various provisions of the TPA, including ss 73 , 75AD, 82 and 87 . At no stage in the proceeding, however, have the parties referred again to s 73. The authorities are clear that no action for damages lies under s 82 for breach of a condition implied by s 71 of the TPA: see Austral Pacific Group Ltd (in liq) v Airservices Australia [2000] HCA 39 ; (2000) 203 CLR 136 (" Austral ") at 141 per Gleeson CJ, Gummow and Hayne JJ, citing Brennan J in Arturi v Zupps Motors Pty Ltd (1980) 49 FLR 283 at 285-286. Provisions such as ss 75AD and 87 are of no assistance in this context. I accept, however, that the Court may award damages in respect of a breach of a s 71 condition by virtue of s 39B(1A)(c) of the Judiciary Act 1903 (Cth). In Austral , at 141, the joint judgment said: The claim in contract for damages for breach of obligations imposed by provisions such as ss 71 and 74 of the Trade Practices Act involved obligations that are statutorily created and take effect by a legal fiction, namely that the parties made a contract including the relevant obligations. That is how Brennan J analysed the matter in Arturi v Zupps Motors Pty Ltd. It follows that a party claiming damages for breach of such an obligation asserts a right which owes its existence to federal law thereby, in a State court, attracting the exercise of federal jurisdiction invested under s 39(2) of the Judiciary Act . If, as the High Court stated, a State court deciding a s 71 claim is exercising federal jurisdiction under s 39(2) of the Judiciary Act , then it follows that a federal court can entertain the same claim under s 39B(1A)(c) because the obligation created by s 71 "owes its existence to federal law". See also LNC Industries Ltd v BMW (Australia) Ltd [1983] HCA 31 ; (1983) 151 CLR 575. In any event, the applicants' s 52 claim would provide an independent basis for jurisdiction over the s 71 claim.


case_title: Arturi v Zupps Motors Pty Ltd (1980) 49 FLR


case_title: LNC Industries Ltd v BMW (Australia) Ltd [1983] HCA 31 ; (1983) 151 CLR 575


case_text: The measure of damages for a breach of an obligation created by s 71 of the TPA is the contractual measure, namely, the estimated loss directly and naturally resulting in the ordinary course of events from the breach. The prima facie measure of that loss is "the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty": compare Hadley v Baxendale [1854] EWHC Exch J70 ; (1854) 9 Ex 341 at 354; (1854) 156 ER 145 at 151; AFA Electronics Pty Ltd v Strathfield Group Wholesale Pty Ltd [2001] VCS 289 at [88], discussing s 59 of the Goods Act 1958 (Vic). Section 52 of the Sale of Goods Act 1895 (SA) is to similar effect. In other words, prima facie, had they succeeded on liability, the Lowes would have been entitled to the difference between the value of a truck fit for the purpose of long-haul goods transportation and the value of the truck they actually received and used in their business. The applicants did not, however, seek damages on this basis. There was no evidence of this amount. 269 Effectively, the applicants sought damages under the second limb of Hadley v Baxendale for the loss as may reasonably be supposed to have been in the contemplation of the parties, at the time they made the contract, as the probable result of the breach of it. It is on this basis, for example, that they claim damages in respect of loss of earnings: compare Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81 ; (1986) 161 CLR 653 at 667-668; Hodgson & Hodgson v Morella Pastoral Co Pty Lt d (1975) 13 SASR 51 at 66-67; NEA Pty Ltd v Magenta Mining Pty Ltd [2005] WASC 106 at [305] per EM Heenan J, affirmed in NEA Pty Ltd v Magenta Mining Pty Ltd [2007] WASCA 70. A claimant is of course under a duty to take all reasonable steps to mitigate the loss caused by the breach.


case_text: The measure of damages for a breach of an obligation created by s 71 of the TPA is the contractual measure, namely, the estimated loss directly and naturally resulting in the ordinary course of events from the breach. The prima facie measure of that loss is "the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty": compare Hadley v Baxendale [1854] EWHC Exch J70 ; (1854) 9 Ex 341 at 354; (1854) 156 ER 145 at 151; AFA Electronics Pty Ltd v Strathfield Group Wholesale Pty Ltd [2001] VCS 289 at [88], discussing s 59 of the Goods Act 1958 (Vic). Section 52 of the Sale of Goods Act 1895 (SA) is to similar effect. In other words, prima facie, had they succeeded on liability, the Lowes would have been entitled to the difference between the value of a truck fit for the purpose of long-haul goods transportation and the value of the truck they actually received and used in their business. The applicants did not, however, seek damages on this basis. There was no evidence of this amount.


case_text: Effectively, the applicants sought damages under the second limb of Hadley v Baxendale for the loss as may reasonably be supposed to have been in the contemplation of the parties, at the time they made the contract, as the probable result of the breach of it. It is on this basis, for example, that they claim damages in respect of loss of earnings: compare Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81 ; (1986) 161 CLR 653 at 667-668; Hodgson & Hodgson v Morella Pastoral Co Pty Lt d (1975) 13 SASR 51 at 66-67; NEA Pty Ltd v Magenta Mining Pty Ltd [2005] WASC 106 at [305] per EM Heenan J, affirmed in NEA Pty Ltd v Magenta Mining Pty Ltd [2007] WASCA 70. A claimant is of course under a duty to take all reasonable steps to mitigate the loss caused by the breach.


case_title: Hodgson & Hodgson v Morella Pastoral Co Pty Lt d (1975) 13 SASR 51


case_title: NEA Pty Ltd v Magenta Mining Pty Ltd [2005] WASC 106


case_title: NEA Pty Ltd v Magenta Mining Pty Ltd [2007] WASCA 70


case_text: For present purposes, it is sufficient to refer to the Full Court's discussion in Kenny & Good Pty Ltd v MGICA (1992) Ltd (1997) 77 FCR 307 at 330 (per Wilcox, Branson and Sackville JJ) regarding the general principles governing damages under the TPA. Their Honours said: Care must be taken to examine the facts of the particular case and not to determine cases by placing them into preconceived categories. However, bearing that caution in mind, the authorities to which we have referred support several general propositions relevant to the present case: • in assessing damages under s 82 of the TPA Act, the principles applicable to actions for deceit, being closely analogous, provide a useful guide in most cases • in a case where something is purchased in consequence of a misrepresentation, the prima facie measure of damages is the difference between the price paid and the true value of the thing. But this is not an inflexible rule and is merely illustrative of a more general proposition, namely, that the purchaser is entitled to recover as damages, a sum representing the prejudice or disadvantage he has suffered in consequence of altering his position under the inducement of the respondent's misrepresentation. That general principle applies to other claims, such as those brought by lenders or mortgage insurers who have entered into transactions in reliance on false or misleading representations • a person induced to enter a transaction by misrepresentations, generally speaking, must show that the losses claimed are related to the misrepresentation. It is not enough simply to show that the transactions was induced by the representation and the losses would not have occurred but for the transaction. The loss must flow directly from the inducement • where property acquired in a transaction induced by a misrepresentation subsequently declines in values, damages are not awarded in respect of the decline if it is attributable to an independent, extrinsic or supervening cause • if the applicant would have entered into the relevant transaction, even if the misrepresentation had not been made, any losses flowing from the transaction as such cannot be said to flow directly from the inducement. In such a case the applicant would have been exposed, in any event, to the precise risk that ultimately eventuated. See more recently Zuvela v Geiger [2007] WASCA 138 at [41] - [43] per EM Hennan AJA.


case_title: Zuvela v Geiger [2007] WASCA 138


case_text: As emerged at the hearing on 7 June 2006, the appellant's main argument (in substance, the only ground now pursued) is that he satisfies items (A) and (E) of clause 100.221(4) of Schedule 2 of the Regulations and that the Tribunal and Federal Magistrate erred by failing to ask the necessary questions and ignored relevant material, namely provisions of the Family Law Act 1975 (Cth) ("Family Law Act") and the Child Support (Assessment) Act 1989 (Cth) ("Assessment Act"). The appellant relied on the decision of Dowsett J in Fitch v Migration Review Tribunal [2004] FCA 1673. 30 The appellant's argument is as follows. In relation item (A), the appellant relied on s 61C and s 61D of the Family Law Act . Under s 61C(1) of the Family Law Act , a parent has parental responsibility for a child to the extent that it is not displaced by a parenting order of the Court, and under s 61C(2) , that legal position is not affected by changes in the nature of the parents' relationship, such as separation. Section 61B explains what parental responsibility means. Section 61D sets out the effect of a parenting order. Since there was no evidence before the Tribunal of any court order affecting the appellant's parental responsibility, the Tribunal should have taken as given that it was intact and he had joint custody of his daughter. 31 The minute of 27 May 2006 was also said to be relevant to item (A). It was submitted that the Tribunal should have drawn the inference from the sponsor's statement she was now living with the appellant that their young daughter would also be living with them. On that basis, the Tribunal should have concluded that not only did the appellant have parental responsibility, but also that by living with her he was necessarily exercising a measure of day to day care for the daughter's welfare and development. He therefore satisfied item (A). 40 The second decision is Fitch . In that case, the Minister's delegate refused to grant the visa applicant a Subclass 801 visa, a permanent spouse visa. At the time of the decision whether to grant the visa, an applicant must satisfy clause 801.221(1) of Sch 2 of the Regulations which requires that the applicant meets the requirements of one of clauses (2), (2A), (3), (4), (5), (6) or (8). Clause 801.221(6)(c)(ii) is identical to clause 100.221(4)(c)(ii). The applicant's relationship to the sponsor had ended. In the Tribunal, the applicant claimed that clause (6) was satisfied because he satisfied item (6)(c)(ii)(A) and his sponsor satisfied item (6)(c)(ii)(E), in relation to the son of their relationship. There was evidence before the Tribunal, in the form of a statutory declaration, that the applicant and the sponsor had an informal agreement whereby the applicant saw his son on particular days and alternate weekends and contributed financially to his upkeep. The Tribunal found that the visa criteria were not satisfied. It found that there was no evidence before it of a Court order under the Family Law Act granting access, joint custody or residence, nor was their evidence that the applicant had an obligation under a child maintenance order under that Act "or any other formal (and accepted) maintenance obligation" (see [7] of his Honour's reasons). 41 In this Court, the applicant submitted that the Tribunal had erred in its construction of items (A) and (E) in three respects. The Minister conceded one ground, namely that the Tribunal had construed the alternative criteria in items (C), (D) and (E) as referring to the visa applicant rather than the sponsoring spouse. However, the Minister contended that the application would have failed for other reasons. The two other grounds urged by the applicant were (1) that informal arrangements under which an applicant has custody, joint custody or access can satisfy item (A), and; (2) the sponsoring spouse may have a "formal maintenance obligation" for the purpose of item (E) even in the absence of a court order or other formal arrangement. 42 Dowsett J concluded that both items (A) and (E) were satisfied. In relation to item (A), his Honour found that the applicant had "custody" or "joint custody". His Honour considered the definition of "custody" in the Regulations and the definition of "parental responsibility" in s 61B of the Family Law Act , concluding that the two expressed "the same core concept" and neither purported to "create new rights or obligations" (at [14]). His Honour considered that the content of the term "custody" as used in the Regulations depended upon the Family Law Act as well as the general law and other statutes. In that context, his Honour found that "parental responsibility" and "custody" were not matters of strict legal rights but were more in the nature of parental obligations. His Honour said (at [24]): "It follows that the present applicant has parental responsibility for his child, including either custody or joint custody of him. I see no reason to conclude that the informal arrangements in place between him and his sponsoring spouse make any difference to the custody situation." 43 Having found that the applicant had custody or joint custody, it was not necessary to address whether the applicant had "access". However, his Honour noted that the term "access", not defined in the Regulations , was traditionally used to describe contact arrangements between a non-custodial parent and his or her child. His Honour said (at [25]) that "I see no reason to conclude that access arrangements must be pursuant to a court order if they are to satisfy item (A)". 44 In relation to the sponsoring spouse satisfying item (E), his Honour noted the common law responsibility of a parent to maintain a child, which was recognised and enforced by statute (referring specifically to s 286 of the Queensland Criminal Code and s 15 of the Maintenance Act 1965 (Qld)). His Honour noted that at all relevant times the sponsoring spouse was under a statutory obligation to maintain her child, and concluded that such obligation constituted a "formal maintenance obligation". 52 Counsel for the appellant submitted that Fitch established that once a child is born in Australia of parents living in Australia, one of whom in this case is an Australian citizen, that the father and the mother stand in a statutory relationship to that child by virtue of the provisions of the Family Law Act . That statutory relationship obviates the need for a visa applicant to produce evidence of even make submissions in order to satisfy the requirement contained in clause 100.221(4)(c)(ii). It should also be noted that counsel for the appellant submitted that Dowsett J's reference to ss 61C and 66C of the Family Law Act was incorrect as s 3 of the Assessment Act would apply in relation to the child in Fitch as well as in the present case, but nothing turns on that since the provisions are the same in substance. 53 Counsel for the Minister, submitted that Fitch did not go so far as the appellant contended. What Dowsett J concluded was that the level of formality required to satisfy the relevant criteria was not stringent, but not that the statutory relationship between parent and child obviated the need for evidence and submissions. As the Tribunal correctly stated, there had been no evidence before it that the criteria in clause 100.221(4)(c)(ii) were met. The Tribunal could not sensibly have accepted the minute as proof that the appellant had responsibility for the daughter's day to day welfare and that there was a joint custody arrangement. It could equally have been presumed from the minute that the appellant was failing to care for or support their daughter. 54 Counsel for the Minister also submitted that, in any event, Yazbec should be preferred to Fitch. She submitted that, following Yazbec , the Tribunal did not have before it evidence of a formal maintenance obligation and did not err by proceeding to make a decision under s 359A when such information was not forthcoming. The main basis on which it was contended that Yazbec should be preferred was that Sundberg J took a more thorough and orthodox approach to statutory construction, particularly in relation to the term "formal maintenance obligation" in item (E). Counsel contended that the approach of Dowsett J in Fitch gave no meaning to the term "formal", rendering it otiose and with no work to do. This was contrary to a proper approach to statutory construction. It was submitted that Dowsett J did not undertake a proper assessment of the term "formal maintenance obligation" in reaching his conclusion and, in particular, that he did not consider the difference between a maintenance obligation and a formal maintenance obligation, whereas Sundberg J did analyse this issue (at [12]).


case_text: Clause 100.221(4) provides that: The applicant meets the requirements of this subclause if: (a) the applicant first entered Australia as the holder of a Subclass 309 (Spouse (Provisional)) visa and either: (i) continues to be the holder of that visa; or (ii) is no longer the holder of that visa because the visa: (A) was granted before 1 November 1999; and (B) has ceased to be in effect because the applicant: (I) was outside Australia at the end of the 30 month period specified in the Subclass 309 visa for travelling to and entering Australia; or (II) left Australia after the end of the 30 month period specified in that visa for travelling to and entering Australia; and (b) the applicant would meet the requirements of subclause (2) or (2A) except that the relationship between the applicant and the sponsoring spouse has ceased; and (c) after the applicant first entered Australia as the holder of the visa mentioned in paragraph (a) -- either or both of the following circumstances applies: (i) either or both of the following: (A) the applicant; (B) a member of a family unit of the sponsoring spouse or of the applicant or of both of them; has suffered domestic violence committed by the sponsoring spouse; (ii) the applicant: (A) has custody or joint custody of, or access to; or (B) has a residence order or contact order made under the Family Law Act 1975 relating to; at least 1 child in respect of whom the sponsoring spouse: (C) has been granted joint custody or access by a court; or (D) has a residence order or contact order made under the Family Law Act 1975 ; or (E) has an obligation under a child maintenance order made under the Family Law Act 1975 , or any other formal maintenance obligation. 9 "Custody" is defined in reg 1.03 as follows: "Custody" , in relation to a child, means: (a) the right to have the daily care and control of the child; and (b) the right and responsibility to make decisions concerning the daily care and control of the child. 10 The events leading up to the Tribunal's decision require some explanation. On 22 April 2004, the Tribunal wrote to the appellant inviting him to comment on information in the Departmental file indicating the sponsor had taken out an AVO against him and that they were no longer in a spousal relationship. The appellant responded by letter dated 24 April 2004 indicating that although the AVO had been taken out, "we have since resolved our issues and there has been no violence since". He also stated that he and the sponsor lived together and that they had a daughter. On 28 April 2004, the Tribunal again wrote to the appellant, inviting the appellant to appear before the Tribunal at a hearing and provided the relevant hearing details. The letter stated that the Tribunal wished to take oral evidence at the hearing from the appellant as well as from the sponsor. On 10 May 2004, the Tribunal received a completed "response to hearing invitation form", which was signed by the sponsor. In response to the typed statement "I request that the Tribunal take oral evidence from" was written "English Fatima Mustapha, his wife". Under "I request that the Tribunal obtain the following written evidence or written materials" was written the sponsor's address and name, followed by the words "his wife". 34 The construction of the wording in clause 100.221(4)(c)(ii) has previously been considered in two decisions of this Court, in both cases by a single judge. The first is the judgment of Sundberg J in Yazbeck v Minister for Immigration & Multicultural Affairs [2002] FCA 980 ; (2002) 124 FCR 458 (" Yazbeck "). The applicant in that case had been refused a permanent visa of the same type as that applied for in the present case. Also as in the present appeal, the delegate had refused to grant the permanent visa on the basis that the relationship was not genuine and continuing, and the Tribunal reached the same view. In his amended application in this Court, the applicant contended that the Tribunal had erred in not finding that he satisfied items (A) and (E) of subclause 100.221(4). The Tribunal had before it evidence that the applicant had recently seen the two children of his marriage to the sponsor at a cousin's house, which the applicant claimed established that he had "access" to the children for the purposes of item (A). The applicant relied on s 66C of the Family Law Act for the claim that his former spouse had a "formal maintenance order" for the purposes of par (E). Subsection 66C(1) of the Family Law Act , which is virtually identical to s 3 of the Assessment Act , provides: The parents of a child have, subject to this Division, the primary duty to maintain the child. 35 In construing item (A), his Honour considered the relationship between subclause 100.221(4) and the amendments to the Family Law Act (at [7] [9]). Prior to amendments effected by the Family Law Reform Act 1995 ("the 1995 Act "), Part VII of the old Act had provided for custody and access orders. The 1995 Act introduced "parenting orders", in a new Part VII , to replace those orders. His Honour set out s 64B of the Family Law Act which defines a "parenting order" as dealing with any aspect of parental responsibility for a child, including with whom the child is to live ("residence orders") and contact between the child and another person or persons ("contact orders"). Subclause 100.221(4)(c)(ii) uses both the old terms "custody" and "access", as well as the new terms "residence" and "contact", and was intended by the drafters to accommodate both types of orders. His Honour then considered the discrepancy in the words between items (A) and (B), being that (B) expressly referred to orders made under the Family Law Act whereas item (A) does not. His Honour concluded that the omission of a reference to orders in item (A) was to be explained by bad drafting. His Honour found that this view was supported by the terms of item (C) which refers to the situation where the spouse was granted "joint custody or access by a court". His Honour described items (A) and (C) as "counterparts", explaining this description by giving the example that clause (C) deals only with the sponsor having joint custody because clause (A) deals with (sole) custody. 36 Having found that "custody" and "access" in item (A) referred to the concepts under the old Family Law Act , his Honour concluded that the Tribunal had been correct in finding that there was no evidence of custody or access before it. His Honour noted that "There was no evidence that a court order existed that entitled the applicant to access the children" (at [9]). 37 However, his Honour should not necessarily be taken to have excluded the possibility that something less than a court order could establish "access". His Honour said, at [10]: "Even if a person can, for the purposes of subclause 100.221(4)(ii)(A), have access to a child in the absence of a court order granting access, the applicant does not establish that he "has access" simply because he happens to have seen the child, whether close up or in the distance. Evidence that the applicant "saw his children recently and his wife at a cousin's house" does not established that he has access to his children." It must be said, however, that his Honour does appear to indicate a view that the lack of any reference to court orders in item (A) was merely a drafting oversight. 38 Having found that item (A) was not satisfied, his Honour said that the applicant's case would not be assisted even if he succeeded in his claims in relation to item (E). Nevertheless, his Honour turned to consider whether the applicant's spouse had a formal maintenance obligation for the purposes of item (E) by virtue of s 66C(1) of the Family Law Act . His Honour broke up item (E) into two limbs, being "an obligation under a child maintenance order made under made under the Family Law Act 1975 " and "any other formal maintenance obligation". The first limb was a type of order under the Family Law Act specifying the amount of maintenance to be provided. His Honour found that the type of obligations to which the second limb was directed was maintenance agreements made in writing by the parties to a marriage addressing the maintenance of a child, and which are regulated by the Family Law Act . It was not clear whether or not his Honour viewed this as being the only type of obligation which would satisfy the second limb. 39 His Honour also considered the result of the applicant's contention in relation to s 66C , if it was accepted. His Honour said (at [12]): "If the duty imposed by s 66C(1) were a "formal maintenance obligation", pars (C) and (D) would be rendered unnecessary as would the first limb of par (E). Any applicant whose relationship with the sponsoring spouse had ceased, and who satisfied par (A) or par (B) would, as a result of s 66C(1) , automatically satisfy the second limb of par (E). This would be an absurd result which is avoided by the approach I favour. Thereby effect is given to pars (C) and (D) and both parts of par (E), rather than rendering pars (C) and (D) and the first part of par (E) ineffectual." 45 Dowsett J was mindful of the apparent inconsistency with Sundberg J's decision in Yazbeck and discussed that decision at some length, at [30] to [38]. Prior to considering the decision in Yazbeck , Dowsett J considered the meaning of "residence order", "contact order" and "child maintenance order" used in items (B), (D) and (E), and notes that the terms were introduced by the 1995 amendments to the Family Law Act . His Honour also notes that prior to the 1995 amendments, the terms "custody orders", "access orders" and "maintenance orders" were traditionally used and the meanings of those terms. 46 Dowsett J agreed with Sundberg J's conclusion in Yazbeck that the Tribunal in that case had correctly concluded that the applicant did not have access on the basis of having recently seen his children at a cousin's house. Dowsett J's reasoning was that "Item (A) contemplates some form of continuing access rather than one previous incident of contact" (at 31]). His Honour then went on to consider the aspects of Sundberg J's judgment which appeared to go further. First, there was the issue of the relevance of the express reference in items (B), (D) and (E) to orders "made under the Family Law Act 1975 ", and to rights granted "by a court" in the case of item (C), whereas item (A) does not contain any such a reference. Dowsett J did not accept Sundberg J's analysis, concluding it was more likely to reflect "deliberate decisions than bad drafting" (at [32]). In reaching this conclusion, his Honour did not embrace Sundberg J's approach to items (A) and (C) as "counterparts", which analysis had apparently been a major part of Sundberg J's reasoning. Dowsett J observed that an approach to items (A) and (C) as counterparts seemed to assume that only the visa applicant and sponsor had any direct interest in the relevant child, whereas there was no reason to assume this, especially since there was no requirement that the child be the biological child of either person. His Honour also observed that, even assuming only the visa applicant and sponsor had direct links, item (C) does not provide a counterpart to item (A) for a case where a visa applicant has "access", since sole custody by the sponsor will not satisfy item (C). Although his Honour discusses some possible purposes of items (A) to (E) and their interaction (at [33]), his ultimate view was that it was very difficult to understand these matters entirely, and that the best course was probably "to give each item its natural meaning, unless some absurdity results" (at [35]). 47 Dowsett J considered Sundberg J's conclusion that item (A) was intended to deal with custody and access orders under the old Family Law Act . Dowsett J noted that, as Sundberg J had himself pointed out, the amended Act gives effect to orders made under the old Act (custody and access orders) as if they were orders made under the amended Act (residence and contact orders). On that basis, his Honour concluded that item (B) applied both to orders made under the old Act and the amended Act, and that item (A) must have been intended to deal with arrangements other than orders made under the old Act (at [36]). 48 Dowsett J considered Sundberg J's conclusion that an absurdity would arise if s 66C of the Family Law Act satisfied item (E). Dowsett J did not accept with Sundberg J's analysis that where a visa applicant satisfied item (A) or (B), the second limb of item (E) would automatically be satisfied, and that items (C) and (D) would thereby be rendered unnecessary. Dowsett J noted this analysis again assumed that the relevant child must be the biological (or perhaps adopted) child of either the visa applicant or the sponsor. Since s 66C applies only to "parents" (which exclude, for example, step-parents), and yet orders referred to in items (C) and (D) can be made in respect of non-parents, items (C) and (D) still had work to do. On Dowsett J's reasoning, the second limb of item (E) would not automatically be satisfied where a visa applicant satisfied items (A) or (B) since it could not be assumed that the sponsor was a parent for the purposes of s 66C. 49 Dowsett J also considered the policy implications of construing item (A) as requiring court orders, telling against the construction favoured by Sundberg J (at [34]): "... I see no reason why the Migration Regulations would discriminate, for present purposes, between recognized rights and obligations existing at law, but not evidenced in any order or other "formal" document, and rights and obligations which are so evidenced. Such discrimination would encourage unnecessary litigation". 50 His Honour also questioned (at [32]) "why bona fide consensus as to a child's welfare should not be sufficient", in the context of considering why item (A) should be construed as requiring court orders. 51 Dowsett J concluded by expressing his reluctance in reaching a different conclusion on item (E) than Sundberg J, adding that it was arguable that Sundberg J's decision on the issue did not form part of the ratio. Dowsett J also offered as explanations for the different decision that it "was based upon the evidentiary shortcomings of the applicant's case" and that "his Honour did not have the benefit of argument on the wider aspects of the matter" (at [39]). 54 Counsel for the Minister also submitted that, in any event, Yazbec should be preferred to Fitch. She submitted that, following Yazbec , the Tribunal did not have before it evidence of a formal maintenance obligation and did not err by proceeding to make a decision under s 359A when such information was not forthcoming. The main basis on which it was contended that Yazbec should be preferred was that Sundberg J took a more thorough and orthodox approach to statutory construction, particularly in relation to the term "formal maintenance obligation" in item (E). Counsel contended that the approach of Dowsett J in Fitch gave no meaning to the term "formal", rendering it otiose and with no work to do. This was contrary to a proper approach to statutory construction. It was submitted that Dowsett J did not undertake a proper assessment of the term "formal maintenance obligation" in reaching his conclusion and, in particular, that he did not consider the difference between a maintenance obligation and a formal maintenance obligation, whereas Sundberg J did analyse this issue (at [12]).


case_title: Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 1500

case_text: in relation to compliance with O 15A r 6(b) I am not satisfied that all reasonable inquiries have been made for the information sought in the application, as required by the rule. The only evidence before the Court is that inquiries were made by the applicant of the fifth respondent, Mr Walsh. There is no evidence that any inquiries were made of the first, second, third and fourth respondents, or indeed anyone else. "All reasonable inquiries" in O 15A r 6(b) prescribes an objective standard ( Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 391 , [1996] FCA 1500 at [41] ). While inquiries of one party only may actually constitute "all reasonable inquiries" if, for example, it is clear in the circumstances that that party is the only or the primary repository of information, or if it would be futile to ask other parties for information, it has not been demonstrated that either situation is the case here. In relation to information held by the fifth respondent, Mr Walsh informed the solicitors for the applicant by letter that the fifth respondent had only electronic copies of relevant financial statements, and that if the applicant wanted further information would have to be obtained from "the clients directly" (annexure CER-13 being a copy of a facsimile from Joe Walsh & Associates to Gadens Lawyers dated 7 November 2008). There is no evidence that inquiries by the applicant of the other respondents, or indeed other persons, were made, or would have been futile if made.


case_text: my view these difficulties undermine the applicant's claim such that the jurisdiction of the Court with respect to O 15A r 6 is not invoked. I am conscious of the beneficial construction the courts place on O 15A r 6, the fact that the applicant is not required to establish a prima facie case, and the fact that in this case the applicant claims that it has suffered significant losses in respect of the business it acquired from the respondents and for which it has paid "good money" (TS p 17 l 28). Further, I note that, notwithstanding the provision by Mr Walsh in his affidavit of the 2005 and 2006 financial statements of the first respondent, Mr Walsh did so notwithstanding apparent instructions from Mr Cartan that no material beyond the 2007 financial statements be provided to the applicant (affidavit of Joe Walsh para 16). However as found in St George Bank [2004] FCA 1360 ; (2004) 211 ALR 147 , confirmed by the Full Court more recently in Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 at [43] and Apache Northwest Pty Ltd v Newcrest Mining Ltd [2009] FCAFC 39 at [2] and [26], each of the elements prescribed in subparas (a), (b) and (c) of the rule must be established. In light of: inadequacies and inconsistencies I have noted in the evidence advanced by the applicant supporting the existence of a cause of action; and the applicant's incorrect analysis of the 2007 trading, profit and loss figures. I am not satisfied that the applicant has demonstrated, on an objective basis, reasonable cause to believe that it has or may have the right to obtain relief in the Court from the respondents or any of them for the purposes of O 15A r 6(a).


case_title: CGU Insurance Ltd v Malaysia International Shipping Corporation Berhad [2001] FCA 1223 ; (2001) 187 ALR 279


case_title: Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58


case_title: KGL Health Pty Ltd v Mechtler [2007] FCA 1410


case_title: Patterson v BTR Engineering (Aust) Limited (1989) 18 NSWLR 319


case_text: it is common ground between the parties that the principles articulated by Hely J in St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360 ; (2004) 211 ALR 147 with respect to the operation of O 15A r 6 are applicable in these proceedings. These principles are as follows: (a) The rule is to be beneficially construed, given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the Court, exercised in the particular circumstances of each case; (b) each of the elements prescribed in subparas (a), (b) and (c) of the rule must be established. Preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions themselves; (c) the test for determining whether the applicant has "reasonable cause to believe", as required by subpara (a), is an objective one. Further, the words "or may have" cannot be ignored. The applicant does not have to make out a prima facie case; (d) belief requires more than mere assertion and more than suspicion or conjecture. Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, that would dispose of the application insofar as it is based on that cause of action; (e) whilst uncertainty as to only one element of a cause of action might be compatible with the "reasonable cause to believe" required by subpara (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe; (f) the question posed by subpara (b) of the rule is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent. The question is whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court. Accordingly, an applicant for preliminary discovery may be entitled to discovery in order to determine what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent's breach and the likely quantum of any damages award; (g) whether an applicant has "sufficient information" for the purposes of subpara (b) also requires an objective assessment to be made. The subparagraph contemplates that the applicant is lacking a piece (or pieces) of information reasonably necessary to decide whether to commence proceedings; (h) it is no answer to an application under the rule to say that the proceeding is in the nature of a "fishing expedition". Indeed O 15A r 6 "expressly contemplates" what once might have been castigated as "fishing". As Burchett J commented in Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 500 ; (1990) 99 ALR 728 at 733, the rule is: ... designed to enable an applicant, in a situation where his proof can rise no higher than the level the rule describes, to ascertain whether he has a case against the prospective respondent ...