case_text: In relation to the absence of the lawyer's certificate, it is said that that is of no remaining significance as the cross-claim was filed by a solicitor on behalf of Meribal, thus, carrying with it the same assurance. Such a serious misstatement can hardly be swept aside in that fashion but, in any event, there is no explanation as to how, on the basis of the normal solicitor's assurance, a claim could be valued fully without discount to reflect the chances of failure and for costs ( KGL Health Pty Ltd v Mechtler [2007] FCA 1410). Counsel for Vatera points out that the only particularised claim at that time was $270,000. 15 In addition to the difficulties with the report, the DOCA is in an unsatisfactory form. It appears to be a boilerplate that is not well adapted for the particular proposal plus a home grown addition. The result is not acceptable. Upon execution of the DOCA, control of Meribal (including its assets and business) reverted to the director (cl 8.1). Trading is not prohibited. Meribal and the directors undertook to pay all taxes and statutory obligations due for payment by the company thereafter. There is no committee of creditors. There is a moratorium during the term of the DOCA in relation to any action by a creditor. A creditor is any person having a claim against Meribal whose claim is admitted by the Administrators. The Corporations Act procedures for making claims to liquidators are incorporated by reference. The DOCA bars creditors who do not prove. 16 The boilerplate clause concerning priority of distributions is as follows:


case_outcome: cited

case_text: Counsel for the first and second defendants has referred me to a number of authorities which recognise that the time pressures imposed by the Act in relation to administration make it inevitable that investigations and reports by administrators will be less than complete. They also support the proposition that deeds are not to be lightly set aside, stressing the need for materiality of misleading statements in the sense outlined in s 445D(1)(a)(ii) Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd (2005) 226 ALR 510 ; Khoury v Zambena Pty Ltd (1997) 23 ACSR 344 ; (1997) 15 ACLC 620 affirmed in Joseph Khoury & Sons v Zambena Pty Ltd [1999] NSWCA 402 ; (1999) 217 ALR 527 ; Deputy Commissioner of Taxation v Comcorp Australia Ltd (1996) 70 FCR 356 ; Deputy Commissioner of Taxation v Pddam Pty Ltd (1996) 19 ACSR 498 ; (1996) 14 ACLC 659 ; and Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99 ; (2000) 156 FLR 453; (2000) 34 ACSR 391.


case_title: Joseph Khoury & Sons v Zambena Pty Ltd [1999] NSWCA 402 ; (1999) 217 ALR 527


case_outcome: applied

case_text: The leading case in this area of law is the decision of the High Court of Australia in The State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146. In that case, the trial judge accepted an explanation by the respondents to the substantive proceedings for the delay in making application for leave to amend the defence, however refused the application to amend the defence on the basis, inter alia , that the amendments would jeopardise the hearing dates, and would have the result that the matter would be unlikely to be relisted until the following year. In allowing the respondent's appeal, Dawson, Gaudron and McHugh JJ held: "Sali v SPC Ltd was a case concerning the refusal of an adjournment in relation to which the proper principles of case management may have a particular relevance. However, nothing in that case suggests that those principles might be employed, except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable. Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim." (at 154) 16 Later in their judgment, their Honours continued: "Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties." (at 155) 17 Kirby J in JL Holdings Pty Ltd [1997] HCA 1 ; 189 CLR 146 also observed : "Among considerations which may tend to favour the extension of an indulgence to a paty applying for it are the following : that this is the only way in which the true issues and the real merits, factual and legal, can be litigated and artificiality avoided; that the oversight which occurred is adequately explained....; that any fault is that of the party's legal representatives; that the oversight was wholly accident; that it was simply the product of unavoidable human error.... Departures from a court ordered timetable, whilst relevant, are not decisive. Such orders are servants of justice. They are designed to enhance its achievement in a way that an inflexible application of rigid rules could prevent. Efficiency in the dispatch of court lists can sometimes be purchased at too high a price...." (at 169-170).


case_text: In addition to this authority, relevant decisions in relation to this application include the following : 1. In Jarrett v Westpac Banking Corporation [1999] FCA 425 , the Full Court held that the withdrawal of, or change of, legal representation shortly before a hearing will not necessarily or routinely give rise to a situation where the Court should permit the trial dates to be vacated (particularly Mansfield J at [87]). In that case, however, the Court allowed an appeal from a single judge refusing an adjournment, in circumstances where the respondents would have had no legal representation at the trial if the trial had proceeded 2. in Robinson v Aware Industries Ltd (unreported Weinberg J, 1 October 1998) Weinberg J noted that it was common ground between the parties in that case that, given the fact that the new solicitors and counsel for the applicant had only just been retained, it would be inappropriate and unfair to the applicant, as well as the respondents, to require the trial to proceed. His Honour ordered that the existing trial dates be vacated and a new trial date be fixed. However his Honour also ordered that, in the circumstances, the applicant pay the costs thrown away by reason of the need to vacate the trial date, on an indemnity basis 3. in Business in Focus (Aust) Pty Ltd v Begun Property Pty Ltd [2006] FCA 264 , in view of the prejudice the respondents would have suffered in this case if the trial had proceeded because of engagement of new solicitors shortly before the trial after a period of inactivity by their previous legal advisors, I ordered that the trial dates be vacated and any costs thrown away by the respondents as a result of the vacation of the trial date be borne by the applicants 4. in Menzies v CRCI Pty Ltd [2007] NSWCA 118 , where the application for vacation of the trial was made on the first day of the trial, the Court of Appeal of New South Wales held that: "where an amendment would require vacation of a trial hearing date which was set to take place within a few days, generally there is prejudice through prolongation of the litigation that is not entirely met by costs, and the imposition of that prejudice on the other party needs to be justified by the strength of the case made for the indulgence by the party applying for it." (at [27])


case_title: Robinson v Aware Industries Ltd (unreported, Weinberg J, 1 October 1998)


case_title: Business in Focus (Aust) Pty Ltd v Began Property Pty Ltd [2006] FCA 264


case_title: Menzies v CRCI Pty Ltd [2007] NSWCA 118


case_outcome: referred to

case_text: Eden refers to Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 ( Hughes ) and Cubic Transportation Systems Inc v State of New South Wales [2002] NSWSC 656 ( Cubic Transportation ). The facts of Hughes were vastly different from those of the present case. In Hughes , there were two competing tenderers, the applicant in the proceeding being the unsuccessful one. Finn J held that in the circumstances of the case, there was an implied contract that might be called a "process contract", according to which Airservices Australia incurred implied contractual obligations in favour of the tenderers, including an implied obligation to conduct its evaluation fairly and in a manner that would ensure equal opportunity as between them. Cubic Transportation also concerned competing tenderers.


case_outcome: distinguished

case_title: Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151


case_outcome: related

case_text: The next problem was the failure to comply with the requirements of the Corporations Law applicable at the time. The proposal was undoubtedly a "managed investment scheme" as defined in s 9 of the Corporations Law . Whilst this case has concentrated upon three investors, more than 20 investors contributed approximately $4 million in total. Prima facie, registration was required (s 601ED(1)). It could not be established that all of the issues of interests did not need disclosure to investors under Pt 6D.2 when made (see s 706 and s 708). Registration would have required the production to ASIC of documents that did not exist and a responsible entity to operate the scheme being a public company that held a dealer's licence to operate a managed investment scheme. The responsible entity would be subject to a number of statutory obligations. There was no responsible entity. These breaches were admitted in collateral proceedings in the Supreme Court of New South Wales and formed the basis of orders made in those proceedings ( Australian Securities and Investments Commission v Tasman Investment Management Ltd (2004) 183 FLR 294; Australian Securities and Investment Commission v Tasman Investment Management Ltd (2006) 202 FLR 343). It follows that Tosich had none of the protections provided for by the Corporations Law flowing from registration and the existence of a responsible entity. The proposal should not have been made to Tosich (or others) at all by a responsible financial planner.


case_title: Australian Securities and Investments Commission v Tasman Investment Management Ltd (2004) 183 FLR 294


case_text: Some basic propositions about s 21 should be borne in mind before approaching the detail of the issue. (1) "Knows" and "known" are strong words. They mean considerably more than "believes" or "suspects" or even "strongly suspects" (per McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25 ; (2003) 214 CLR 514 at 531; see also Commercial Union Assurance Co of Australia Ltd v Beard (1999) 47 NSWLR 735; (2000) 11 ANZ Ins Cas 61-458 per Davies A-JA at 75259). (2) The "matter" must be known to the insured. (3) On one alternative, the "matter" must also be known to be relevant to the decision of the particular insurer whether to accept risk, and, if so, on what terms in this case, on the basis put forward, by Macquarie Underwriting. As Gummow and Hayne JJ said in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [70] : "Under the Act, attention is shifted from the prudent insurer to the particular insurer." Although their Honours were in dissent in the result, this statement is obviously correct. (See also Twenty-First Maylux Pty Ltd v Mercantile Mutual Insurance (Aust) Ltd [1990] VR 919 ; (1989) 92 ALR 661.) (4) Relevance to the acceptance of the risk in the sense of the particular insurance hazard is required (McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [32] ). (5) In the other alternative, it must be found that a reasonable person in the circumstances could be expected to know that the matter was relevant to the decision of the particular insurer. There is some debate about the meaning of the words "the circumstances". Although they plainly mean the circumstances of the particular case, the debate is said to be between subjective and extrinsic circumstances (see the discussion in Mann P, Annotated Insurance Contracts Act (4 th ed, Lawbook Co, 2003), para 21.10.8). (6) There is a debate as to whether an insured can "know" a matter by its agent cf McHugh, Kirby and Callinan JJ at [30] with Gummow and Hayne JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [82] [89]. Pending further clarification by the High Court, the wider view should be taken following Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543 per Powell JA at 610 611 (agreed with by Priestley JA and Clarke JA). (7) The obligation applies to renewal of a contract (s 11(9)(b)) ( Alexander Stenhouse Ltd v Austcan Investments Pty Ltd [1993] HCA 22 ; (1993) 112 ALR 353).


case_text: In my opinion, counsel for the defendants is correct in submitting that a Jones v Dunkel inference is also available because of the failure by Aon to call evidence from those involved in the negotiations for Macquarie Underwriting, particularly Stuart Coleman. The availability of a Jones v Dunkel inference in the case of a witness who is a third party can be a difficult issue. Macquarie and Aon are not in the "same camp" and Coleman is not under the control of Aon. In a sense, he was available to both parties. However, only the broker, Aon, had dealings with the potential insurer. The client was not, and would never be, directly in that loop. Between the parties here, it was natural for Aon rather than the defendants to call the evidence from those at Macquarie Underwriting who were involved in the dealings between Aon and Macquarie from the inception of business and in the subsequent management of the business including the proposed renewal. The failure to lead this evidence further buttresses the inference in favour of the defendants ( Payne v Parker [1976] 1 NSWLR 191 per Glass JA at 201 202; Prasad v Minister for Immigration, Local Government and Ethnic Affairs [1991] FCA 133 ; (1991) 101 ALR 109 at 123; Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd [1989] FCA 275 ; (1989) 23 FCR 331 at 343 344; Ayoub v Euphoric Pty Ltd (2004) 12 BPR 22,735; [2004] NSWCA 457 per McClellan AJA at [62] [64]).


case_text: There have been varied opinions as to whether that basis can be applied by Australian courts without the High Court qualifying Poulton 89 CLR 540. As it happens, most negative opinions have been expressed by judges of this Court, eg Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd [1994] FCA 814 ; National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ; Chapman v Luminis Pty Ltd (No 4) [2001] FCA 1106 ; (2001) 123 FCR 62 ; Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] FCA 1413 ; (2003) 134 FCR 474 ; and Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; (2006) 70 IPR 146. A number of those and other authorities are analysed by McDougall J, who took the wider view, in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267. 37 The statutory claims remain to be considered. Counsel for the plaintiffs ultimately conceded that he could find no support for assignability of these causes of action. That is correct. That relieves me from deciding the point. I should say that the concession would follow, directly or indirectly, from a long line of authority in this Court that is against assignment of a claim for damages pursuant to s 82 of the Trade Practices Act 1974 (Cth) commencing with Park v Allied Mortgages Corp Ltd (1993) ATPR (Digest) 46-105. Those cases were recently reviewed and followed by Rares J in Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; (2006) 70 IPR 146 at [50] [58] in relation to claims made pursuant to s 82 for breaches of s 52 and s 51AC of the Trade Practices Act . 38 It follows that the purported assignment of each cause of action is ineffective. I should add that if the assignment is ineffective, it is so for all purposes. It follows that Tosich retains the causes of action regardless of the deed. That transaction has no relevant impact upon his claims. There is no evidence as to the arrangements between Tosich and All Saints in the eventuality of the assignment being ineffective. Such evidence would be as irrelevant to this case as would any other side arrangements between parties such as insurance. 39 Aon directly pleads limitation defences. The defendants adopt a "coat-tails" approach. Aon has taken the running on the issue. The starting point is that Tosich was reintroduced to the proceeding as a plaintiff by amendment on 18 May 2007. The next step is that 18 May 2007 is taken to be the date of the commencement of the proceeding by Tosich by virtue of O 6 r 11(3) of the Federal Court Rules . It is then contended that all relevant causes of action accrued on or about 6 November 2000 when the money was paid by Tosich. The last step is that each cause of action is barred, either by particular limitations in the Corporations Law or by the Limitation Act 1969 (NSW), applicable by virtue of s 79 of the Judiciary Act 1903 (Cth). There is little to recommend such a result. It would be a triumph of form over substance. Tosich commenced the proceeding on 27 November 2003, well within all potential limitation periods. All Saints was substituted for Tosich as plaintiff by order of the Court on 19 April 2006 claiming to be an assignee of the Tosich causes of action. The substantive causes of action remained the same at all times. Thus, the defendants faced the same causes of action at all times. The cross-defendants faced the same cross-claims at all times. However, lack of merit alone is not an answer to the point.


case_outcome: followed

case_text: The unexplained omission by Aon to draw the attention of the client to such an important consequence of the overall insurance arrangements that were in contemplation was a breach of the duty of Aon to exercise care and skill in carrying out its role as broker ( Caldwell v JA Neilson Investments Pty Ltd (2007) 14 ANZ Ins Cas 61-724; [2007] NSWCA 3 ; per Ipp JA at [103] [104]). No expert evidence is necessary to come to that conclusion (cf Geoffrey W Hill & Associates (Insurance Brokers) Pty Ltd v Squash Centre (Allawah North) Pty Ltd (1990) 6 ANZ Ins Cas 61-012 per Kirby P at 76768).


case_text: Finkelstein J took the wider view in TS & B Retail Systems Pty Ltd 158 FCR 444 and suggested that the High Court in Campbell's Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 CLR 386 had approved the effect of the statements by Lords Wilberforce and Roskill in Trendtex [1982] AC 679. The precise point that arises here did not arise in Campbell's Cash and Carry Pty Ltd [2006] HCA 41 ; 229 CLR 386. However, the reasoning of Gummow, Hayne and Crennan JJ at [68] [82] and Callinan and Heydon JJ at [258] [261] supports the opinion of Finkelstein J. In my opinion, the principle enunciated in Trendtex [1982] AC 679 can be taken to be established for Australia. It needs to be borne in mind that the statement in Poulton 89 CLR 540 was not the centre of controversy in that case.


case_text: Quantification of damages is a different matter. It has been said that the defendants have to establish that, absent the breach of duty, relevant cover would have been obtained, eg Ferrcom Pty Ltd v Inbush (NSW) Pty Ltd (1997) 9 ANZ Ins Cas 61-339 per Cole JA at 76732. That is so if full indemnity is to be awarded, cf Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3 ; (1986) 160 CLR 1 per Mason, Wilson and Dawson JJ at 13. The position is different if less than full indemnity is considered. Reconstruction of what would have occurred if the correct advice had been given involves a hypothetical set of past circumstances. As explained in Malec v JC Hutton Pty Ltd [1990] HCA 20 ; (1990) 169 CLR 638 , particularly per Brennan and Dawson JJ at 639 640 and Deane, Gaudron, McHugh JJ at 642 643, this is not decided as if it were an assessment on the balance of probabilities as to whether an event did or did not happen. Furthermore, in considering this case, it is to be borne in mind that Aon prevented the posited situation occurring and that it, not the defendants, was the expert in the field. See, generally, Cee Bee Marine Ltd v Lombard Insurance Co Ltd [1990] 2 NZLR 1 at 5 6. The reconstruction of events in this case does not depend upon what the defendants would have done in a particular situation in the sense discussed by Buchanan JA in Crown Insurance Services Pty Ltd v National Mutual Life Association of Australasia Ltd (2005) 13 ANZ Ins Cas 61-659 at [9] [14]. It principally (but not entirely) depends upon the assessment as to what others would have done. It is to be noted that the discussion of this question by Ashley J in TBI Pty Ltd v Aon Financial Planning Ltd (2004) 13 ANZ Ins Cas 61-601 at [213] [218] was tentative obiter dicta.


case_text: There have been varied opinions as to whether that basis can be applied by Australian courts without the High Court qualifying Poulton 89 CLR 540. As it happens, most negative opinions have been expressed by judges of this Court, eg Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd [1994] FCA 814 ; National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ; Chapman v Luminis Pty Ltd (No 4) [2001] FCA 1106 ; (2001) 123 FCR 62 ; Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] FCA 1413 ; (2003) 134 FCR 474 ; and Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; (2006) 70 IPR 146. A number of those and other authorities are analysed by McDougall J, who took the wider view, in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267.


case_title: Commercial Union Assurance Co of Australia Ltd v Beard (1999) 47 NSWLR 735; (2000) 11 ANZ Ins Cas 61-458


case_title: Crown Insurance Services Pty Ltd v National Mutual Life Association of Australasia Ltd (2005) 13 ANZ Ins Cas 61-659


case_title: Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] FCA 1413 ; (2003) 134 FCR 474


case_text: The first two steps are common to all causes of action. There has been much debate about amendment and limitation since Weldon v Neal (1887) 19 QBD 394. Many of the authorities were considered by the New South Wales Court of Appeal, presided over by Gleeson CJ, in relation to a rule similar to O 6 r 11(3) in Fernance v Nominal Defendant (1989) 17 NSWLR 710, particularly concerning the relationship between that rule and the New South Wales equivalent of the present O 13 r 2 of the Federal Court Rules . In this Court, see eg Zoneff v Elcom Credit Union Ltd [1990] ATPR 41-058 at 51,746 51,747. The introduction of s 59(2B) to the Federal Court of Australia Act 1976 (Cth) in 1994 and the consequent amendments to O 13 r 2 changed the landscape. Here, no argument was directed to those changes and their significance and, in particular, as to the interplay between O 6 r 11 and O 13 r 2. There was no discussion of the power to dispense with the Rules (O 1 r 8) (cf Karam v Australia and New Zealand Banking Group Ltd [2000] NSWSC 596 ; (2000) 34 ACSR 545).


case_title: Ferrcom Pty Ltd v Inbush (NSW) Pty Ltd (1997) 9 ANZ Ins Cas 61-339


case_text: One well established category where an assignment is valid (recognised by the authorities cited in Poulton 89 CLR 540 at 602) is an assignment of property, even though the property may be incapable of being recovered without litigation or, as it was put by Lord Roskill in Trendtex [1982] AC 679 at 703, where the cause of action is incidental to a right of property that has been acquired. There is no reason why such a cause of action could not include tort in an appropriate case eg detinue or conversion. However, based upon the submissions in this case, examples of the practical application of the principle are sparse. Re Daley; Ex parte National Australia Bank Ltd (1992) 37 FCR 390 was cited but the decision turned on what was held to be the assignment of a debt (37 FCR at 394 395). In Monk v Australian and New Zealand Banking Group Ltd (1994) 34 NSWLR 148 there had been no assignment of the cheques that would have constituted the necessary property. In that case, Cohen J referred to the decision of Gault J in First City Corporation Ltd v Downsview Nominees Ltd [1989] 3 NZLR 710 where it was held (at 757) that the assignment of a debenture by a parent company to a subsidiary included an assignment of causes of action in tort against a receiver of the company that issued the debenture and that the causes of action in tort were ancillary to the assignment of the debenture and so valid. The effect of that decision is somewhat clouded by the subsequent appellate history of the case ( First City Corporation Ltd v Downsview Nominees Ltd [1990] 3 NZLR 265; Downsview Nominees Ltd v First City Corporation Ltd [1993] AC 295) although the appeals did not turn upon the point in issue here.


case_title: Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3 ; (1986) 160 CLR 1


case_title: Geoffrey W Hill & Associates (Insurance Brokers) Pty Ltd v Squash Centre (Allawah North) Pty Ltd (1990) 6 ANZ Ins Cas 61-012


case_text: There can be no doubt that there was a causal connection between the negligence and each of the identified statutory breaches, and the loss making investment by Tosich. Each cause of action is established against Tasman Investments. There is no doubt about Warne's personal liability for all causes of action so established. He was the moving force for Tasman Investments in all respects relevant to the investment in the Queen Victoria Project and is responsible for all acts and omissions giving rise to the liability of the company ( Houghton v Arms [2006] HCA 59 ; (2006) 225 CLR 553). 26 The deed of assignment was executed on 16 June 2005 between Tosich as assignor and All Saints as assignee. At that time this proceeding was on foot, and a receiver had been appointed to the Queen Victoria Project by the Supreme Court of New South Wales in proceedings brought by ASIC. The substantive operative provisions of the deed were as follows: "1. The assignee will pay to the assignors by bank or trust account cheque the sum of One-Hundred and Fifty Thousand Dollars ($150,000) on the exchange of this Deed. 2. The assignors hereby transfer set-over and assign to the assignee absolutely all of their right, title and interest both at law and in equity in:- (a) the investment in their names in the Queen Victoria Project referred to in recital A; (b) all rights to receive any dividend or other monies from or by virtue of the receivership of the Queen Victoria Project referred to in recital C; (c) all claims demands causes of action and rights of action maintainable by the assignors or either of them arising out of or connected with the facts matters and circumstances referred to in the statement of claim filed in the Tosich proceedings;" 27 There are other features of the deed to note. The first is that the defendants Tasman Investment and Warne were each party to the deed and gave joint and several warranties as to the financial position of the assignee and Warne. They also (together with the assignee) indemnified the assignors against future legal costs and expenses in the proceeding, and covenant that they will not seek costs or expenses from the assignors in relation to this proceeding. Then there are clauses dealing with later recovery as follows: "11. If the receiver declares and pays a dividend in respect of the Queen Victoria Project prior to the conclusion of the Tosich proceedings and the connected proceedings, that dividend will be paid to the assignors once the Tosich proceedings and the connected proceedings have been finally concluded. If the receiver declares and pays a dividend in respect of the Queen Victoria Project once the Tosich proceedings and the connected proceedings have been finally concluded, that dividend will be paid to the assignors forthwith. 12. In circumstances where the assignors become entitled to any further payments consequent upon any award or judgment obtained by it, Tasman and/or Warne, the assignors shall be entitled to a further payment equivalent to: (a) $125,000; (b) plus interest which is hereby agreed in the amount of $54,225; plus (c) costs and disbursements which are hereby agreed in the amount of $55,000 inclusive of GST; less any amount paid pursuant to this Deed."


case_title: Jones v Dunkel (1959) 101 CLR 298

case_text: Based upon the evidence, it can be inferred that if Aon had approached Macquarie Underwriting on the basis that the financial planning business was in truth a continuing business, although carried on by another entity, that PI insurance would have been issued as if it were a renewal on terms no less favourable than the quote given as to premium and with retroactive cover to Tasman Investment and Warne to at least the inception of business and on the basis that prior known circumstances would be covered. At the very least, the evidence required an explanation from Aon as to precisely what occurred between it and Macquarie Underwriting. That explanation may, in turn, have required an explanation from Macquarie Underwriting. Counsel for the defendants is on strong ground in relying upon the unexplained failure of Aon to call any witness of its own, particularly either or both of Elia and Kazakova. A clear Jones v Dunkel inference is to be drawn ( Jones v Dunkel (1959) 101 CLR 298). The consequence is that the inference available from the evidence that a renewal on suitable terms to cover the Tasman Investment run off would have been available from Macquarie Underwriting can be more readily, and is, drawn. 88 In my opinion, counsel for the defendants is correct in submitting that a Jones v Dunkel inference is also available because of the failure by Aon to call evidence from those involved in the negotiations for Macquarie Underwriting, particularly Stuart Coleman. The availability of a Jones v Dunkel inference in the case of a witness who is a third party can be a difficult issue. Macquarie and Aon are not in the "same camp" and Coleman is not under the control of Aon. In a sense, he was available to both parties. However, only the broker, Aon, had dealings with the potential insurer. The client was not, and would never be, directly in that loop. Between the parties here, it was natural for Aon rather than the defendants to call the evidence from those at Macquarie Underwriting who were involved in the dealings between Aon and Macquarie from the inception of business and in the subsequent management of the business including the proposed renewal. The failure to lead this evidence further buttresses the inference in favour of the defendants ( Payne v Parker [1976] 1 NSWLR 191 per Glass JA at 201 202; Prasad v Minister for Immigration, Local Government and Ethnic Affairs [1991] FCA 133 ; (1991) 101 ALR 109 at 123; Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd [1989] FCA 275 ; (1989) 23 FCR 331 at 343 344; Ayoub v Euphoric Pty Ltd (2004) 12 BPR 22,735; [2004] NSWCA 457 per McClellan AJA at [62] [64]).


case_text: However, even if O 6 r 11(3) alone is considered and operates according to its terms, there is a real issue in this case as to the last step the effect of the limitation provisions. In Martinus v Kidd [1982] HCA 64 ; (1982) 150 CLR 648 it was pointed out that no new cause of action comes into being against the personal representative of a deceased tortfeasor the existing cause of action survives. In that case, time runs for limitation purposes from accrual of the cause of action against the deceased (see per Gibbs CJ, Murphy and Wilson JJ at 652; Mason J at 659). The same principle must be applicable in relation to a cause of action that survives for the benefit of the personal representation of the deceased estate, absent any special provisions. That principle applies to an action by a trustee in bankruptcy to enforce a liability of the bankrupt ( Re Mansell; Ex parte Norton (1892) 66 LT 245). The same principle should apply in the case of the assignment of a cause of action. The original cause of action remains the foundation of the action (although not directly applicable, see " The Jordan Nicolov" [1990] 2 Lloyds Reps 11 per Hobhouse J at 19; Lefevre v White [1990] 1 Lloyd's Reps 569 per Popplewell J at 577 citing Post Office v Norwich Fire Insurance Ltd [1967] 2 QB 363 per Lord Denning at 373; cf per Jacobs J in Re Harry Simpson & Company Pty Ltd and Companies Act 1936 [1964-5] NSWR 603 at 605; (1963) 81 WN (Pt 1) (NSW) 207 at 209. In the present case, the same causes of action have been pursued at all times.


case_title: Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543


case_title: Malec v JC Hutton Pty Ltd [1990] HCA 20 ; (1990) 169 CLR 638


case_text: There could, no doubt, be a case where the circumstances are such that it can be taken that any reasonable insured would know that any insurer would regard them as relevant to cover of the risk proposed without the benefit of evidence from the insurer or broker. It may be that the position arrived at by September/October 2002 would fall into that category so far as PI insurance in relation to run off insurance for Tasman Investments was concerned. A fund raising that was advised to be likely to be in breach of the Corporations Law was clearly failing, with the investors likely to suffer considerable losses. In my opinion, the same cannot be said of the circumstances in March/early April 2002. The likelihood of loss on the investment was not known. The possibility of breaches of the law in relation to the fund raising was known, but that is as high as it reached at that point. That was likely to be academic if the project succeeded. The relevance of that circumstance to a particular insurer needs to be established by evidence. It is conceivable that such evidence could have been led, but it was not. For the Court to fill that gap and make a finding as to that issue would amount to speculation. I conclude that it has not been established that a failure to disclose the pleaded circumstances would have given rise to any relief in relation to the hypothetical Macquarie Underwriting policy. The same reasoning would apply in relation to the application of s 28(3) ( Manchester Unity Total Care Building Society v MGICA Ltd (1991) 6 ANZ Ins Cas 61-062). 104 I am, thus, satisfied that the proper basis for quantification of loss is to assume that a Macquarie Underwriting policy would have issued based upon the proposal it received, including Tasman Investment as an insured with a retroactive date at least back to the inception of the business in 2000. The policy would, thus, have responded to claims made in the period from March 2002 to March 2003 arising from circumstances occurring in June November 2000. Such claims would have clearly fallen clearly within the insured risk and there has been no suggestion of any relevant exception. Allowance will have to be made for the proposed deductible of $20,000 per claim. Some allowance should be made for the higher premium proposed by Macquarie Underwriting. It would not be right in principle to allocate all of that increase to the one claim by Tosich. The amount recovered of $25,608.38 should be deducted. There should also be a modest discount to reflect the possibility that a policy on appropriate terms might not have issued. All in all, the cross-claimants should recover the sum of $70,000 plus interest in relation to Tosich. 105 Little attention was paid to the claims in relation to Roach and Kotwal and no special defence was raised in relation to them. The fact that they were paid out is of no consequence as there was no relevant policy in force at the time. The only distinction is that they were made later than that by Tosich. If proper insurance had been obtained, that should not have been relevant. The quantification of these claims needs to be further considered.


case_title: National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514


case_title: Payne v Parker [1976] 1 NSWLR 191


case_title: Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25 ; (2003) 214 CLR 514


case_text: The next question is what loss flowed from the breach. The role of damages in a case such as the present is to place the wronged party in the position it would have been in if there had been no breach of duty, ie if correct and timely advice had been given. The defendants lost the benefit of that advice. They were never in the position of having the advantage of it. That much is clear. That amounts to a loss caused by the breach sufficient to complete the cause of action (if it is viewed as tort) ( Poseidon Ltd & Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 per Mason CJ, Dawson, Toohey and Gaudron JJ at 355 and Brennan J at 362 and 368).


case_title: Post Office v Norwich Fire Insurance Ltd [1967] 2 QB 363


case_text: This area of the law is controversial. Choses in action in general are assignable (eg s 12 Conveyancing Act 1919 (NSW)). However, a bare right to litigate requires special consideration. Although maintenance was referred to in this context, no submissions were directed to the effect of the Maintenance, Champerty and Barratry Abolition Act 1993 (NSW) (cf Campbell J in Mid-City Skin Cancer and Laser Centre Pty Ltd v Zahedi-Anarak (2006) 67 NSWLR 569 at [194]). It is convenient to discuss the cause of action in negligence first. In 1953 the High Court, in Poulton v Commonwealth (1953) 89 CLR 540 at 602, in relation to a claim in conversion, baldly said: "... according to well-established principle, the right was incapable of assignment either at law or in equity". Lord Roskill said in Trendtex Trading Corporation v Credit Suisse [1982] AC 679 at 702C: "Though in general choses in action were assignable, yet causes of action which were essentially personal in their character, such as claims for defamation or personal injury, were incapable of assignment..." 30 One well established category where an assignment is valid (recognised by the authorities cited in Poulton 89 CLR 540 at 602) is an assignment of property, even though the property may be incapable of being recovered without litigation or, as it was put by Lord Roskill in Trendtex [1982] AC 679 at 703, where the cause of action is incidental to a right of property that has been acquired. There is no reason why such a cause of action could not include tort in an appropriate case eg detinue or conversion. However, based upon the submissions in this case, examples of the practical application of the principle are sparse. Re Daley; Ex parte National Australia Bank Ltd (1992) 37 FCR 390 was cited but the decision turned on what was held to be the assignment of a debt (37 FCR at 394 395). In Monk v Australian and New Zealand Banking Group Ltd (1994) 34 NSWLR 148 there had been no assignment of the cheques that would have constituted the necessary property. In that case, Cohen J referred to the decision of Gault J in First City Corporation Ltd v Downsview Nominees Ltd [1989] 3 NZLR 710 where it was held (at 757) that the assignment of a debenture by a parent company to a subsidiary included an assignment of causes of action in tort against a receiver of the company that issued the debenture and that the causes of action in tort were ancillary to the assignment of the debenture and so valid. The effect of that decision is somewhat clouded by the subsequent appellate history of the case ( First City Corporation Ltd v Downsview Nominees Ltd [1990] 3 NZLR 265; Downsview Nominees Ltd v First City Corporation Ltd [1993] AC 295) although the appeals did not turn upon the point in issue here. 32 There have been varied opinions as to whether that basis can be applied by Australian courts without the High Court qualifying Poulton 89 CLR 540. As it happens, most negative opinions have been expressed by judges of this Court, eg Allstate Life Insurance Company v Australia and New Zealand Banking Group Ltd [1994] FCA 814 ; National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ; Chapman v Luminis Pty Ltd (No 4) [2001] FCA 1106 ; (2001) 123 FCR 62 ; Deloitte Touche Tohmatsu v Cridlands Pty Ltd [2003] FCA 1413 ; (2003) 134 FCR 474 ; and Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; (2006) 70 IPR 146. A number of those and other authorities are analysed by McDougall J, who took the wider view, in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267. 33 Finkelstein J took the wider view in TS & B Retail Systems Pty Ltd 158 FCR 444 and suggested that the High Court in Campbell's Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 CLR 386 had approved the effect of the statements by Lords Wilberforce and Roskill in Trendtex [1982] AC 679. The precise point that arises here did not arise in Campbell's Cash and Carry Pty Ltd [2006] HCA 41 ; 229 CLR 386. However, the reasoning of Gummow, Hayne and Crennan JJ at [68] [82] and Callinan and Heydon JJ at [258] [261] supports the opinion of Finkelstein J. In my opinion, the principle enunciated in Trendtex [1982] AC 679 can be taken to be established for Australia. It needs to be borne in mind that the statement in Poulton 89 CLR 540 was not the centre of controversy in that case.


case_title: Prasad v Minister for Immigration, Local Government and Ethnic Affairs [1991] FCA 133 ; (1991) 101 ALR 109


case_title: Re Daley; Ex parte National Australia Bank Ltd (1992) 37 FCR 390


case_title: Re Harry Simpson & Company Pty Ltd and Companies Act 1936 [1964-5] NSWR 603 ; (1963) 81 WN (Pt 1) (NSW) 207


case_title: Re Mansell; Ex parte Norton (1892) 66 LT 245


case_title: Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267


case_title: TBI Pty Ltd v Aon Financial Planning Ltd (2004) 13 ANZ Ins Cas 61-601


case_title: "The Jordan Nicolov" [1990] 2 Lloyds Reps 11


case_text: This area of the law is controversial. Choses in action in general are assignable (eg s 12 Conveyancing Act 1919 (NSW)). However, a bare right to litigate requires special consideration. Although maintenance was referred to in this context, no submissions were directed to the effect of the Maintenance, Champerty and Barratry Abolition Act 1993 (NSW) (cf Campbell J in Mid-City Skin Cancer and Laser Centre Pty Ltd v Zahedi-Anarak (2006) 67 NSWLR 569 at [194]). It is convenient to discuss the cause of action in negligence first. In 1953 the High Court, in Poulton v Commonwealth (1953) 89 CLR 540 at 602, in relation to a claim in conversion, baldly said: "... according to well-established principle, the right was incapable of assignment either at law or in equity". Lord Roskill said in Trendtex Trading Corporation v Credit Suisse [1982] AC 679 at 702C: "Though in general choses in action were assignable, yet causes of action which were essentially personal in their character, such as claims for defamation or personal injury, were incapable of assignment..." 30 One well established category where an assignment is valid (recognised by the authorities cited in Poulton 89 CLR 540 at 602) is an assignment of property, even though the property may be incapable of being recovered without litigation or, as it was put by Lord Roskill in Trendtex [1982] AC 679 at 703, where the cause of action is incidental to a right of property that has been acquired. There is no reason why such a cause of action could not include tort in an appropriate case eg detinue or conversion. However, based upon the submissions in this case, examples of the practical application of the principle are sparse. Re Daley; Ex parte National Australia Bank Ltd (1992) 37 FCR 390 was cited but the decision turned on what was held to be the assignment of a debt (37 FCR at 394 395). In Monk v Australian and New Zealand Banking Group Ltd (1994) 34 NSWLR 148 there had been no assignment of the cheques that would have constituted the necessary property. In that case, Cohen J referred to the decision of Gault J in First City Corporation Ltd v Downsview Nominees Ltd [1989] 3 NZLR 710 where it was held (at 757) that the assignment of a debenture by a parent company to a subsidiary included an assignment of causes of action in tort against a receiver of the company that issued the debenture and that the causes of action in tort were ancillary to the assignment of the debenture and so valid. The effect of that decision is somewhat clouded by the subsequent appellate history of the case ( First City Corporation Ltd v Downsview Nominees Ltd [1990] 3 NZLR 265; Downsview Nominees Ltd v First City Corporation Ltd [1993] AC 295) although the appeals did not turn upon the point in issue here. 31 The decision of Finkelstein J in TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444 may be seen as an example of the category of connection with property. There, the assignment of a cause of action for breach of confidential information, connected with or relating to rights of property that were assigned, was upheld (see particularly 158 FCR 444 at [79] [81]). However, that decision, and others since 1982, have been influenced by dicta of Lord Wilberforce and Lord Roskill in Trendtex [1982] AC 679 indicating another basis for exception from the general rule whether the assignee has a "genuine and substantial interest in the success of the ... litigation" (per Lord Wilberforce at 694D) or has a "genuine commercial interest in the enforcement of the claim of another" (per Lord Roskill at 703D). 33 Finkelstein J took the wider view in TS & B Retail Systems Pty Ltd 158 FCR 444 and suggested that the High Court in Campbell's Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 CLR 386 had approved the effect of the statements by Lords Wilberforce and Roskill in Trendtex [1982] AC 679. The precise point that arises here did not arise in Campbell's Cash and Carry Pty Ltd [2006] HCA 41 ; 229 CLR 386. However, the reasoning of Gummow, Hayne and Crennan JJ at [68] [82] and Callinan and Heydon JJ at [258] [261] supports the opinion of Finkelstein J. In my opinion, the principle enunciated in Trendtex [1982] AC 679 can be taken to be established for Australia. It needs to be borne in mind that the statement in Poulton 89 CLR 540 was not the centre of controversy in that case. 34 Did All Saints have a genuine commercial interest in the enforcement of Tosich's claim? There is no direct evidence concerning the position of All Saints prior to the transaction. The inescapable inference from all the circumstances, including the structure of the transaction, is that All Saints was under the control of the Warne interests and that the transaction was to ensure that this proceeding continued notwithstanding a reluctance to pursue it on the part of Tosich. In particular, it seems to be aimed at removing or minimising Tosich's risk as to costs. It may be inferred that the purpose was to provide a vehicle for the defendants to pursue their cross-claims with the benefit of a claim proved by a plaintiff. That would remove the kind of problem exemplified by CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36 ; (2007) 237 ALR 420 ; (2007) 81 ALJR 1551 ; (2007) 62 ACSR 609. Indeed, as much was made clear by counsel for the plaintiffs and for the defendants on various occasions. I do not see anything objectionable about that purpose or about the structure of the transaction. All Saints could not profit from the arrangement. It is not "trafficking" in causes of actions in any real sense. Facilitation of cross-claims to be determined on their merits is not objectionable as such. However, it seems to me that the dicta in Trendtex [1982] AC 679 would have to be extended to include these circumstances within the permissible categories of assignment. The assignee is not shown to have had any interest in the claim prior to, or regardless of, the assignment. In view of the controversy surrounding the topic, an extension of the categories is not the province of a single judge. 35 What, then, of the connection with property? Austin J found that there were property interests created by the scheme. The deed purports to assign those interests and causes of action, including the present. In one sense, there is a clear connection. The intention is to recover the loss of property invested. However, the claim in negligence is not to recover the property that existed at the time of the transaction it is to recover the loss by way of damages. In my opinion, that is not the kind of claim connected with property that is covered by the traditional exception to the rule against assignment of causes of action, assuming, as I do, that the exception can include claims in tort where appropriate. The assignment of the cause of action in tort is not effective. 36 In the course of argument, counsel for the plaintiffs referred to a claim for money had and received. The Third Amended Originating Process claims, inter alia: "Orders in the nature of restitutionary orders for the refund to the Plaintiffs of the moneys originally invested in the Queen Victoria Project by the First Plaintiff and interest." The Third Amended Statement of Claim does not include pleading to support that claim and no amendment has been sought. Such a claim can be ignored for present purposes.


case_text: The decision of Finkelstein J in TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444 may be seen as an example of the category of connection with property. There, the assignment of a cause of action for breach of confidential information, connected with or relating to rights of property that were assigned, was upheld (see particularly 158 FCR 444 at [79] [81]). However, that decision, and others since 1982, have been influenced by dicta of Lord Wilberforce and Lord Roskill in Trendtex [1982] AC 679 indicating another basis for exception from the general rule whether the assignee has a "genuine and substantial interest in the success of the ... litigation" (per Lord Wilberforce at 694D) or has a "genuine commercial interest in the enforcement of the claim of another" (per Lord Roskill at 703D). 33 Finkelstein J took the wider view in TS & B Retail Systems Pty Ltd 158 FCR 444 and suggested that the High Court in Campbell's Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 CLR 386 had approved the effect of the statements by Lords Wilberforce and Roskill in Trendtex [1982] AC 679. The precise point that arises here did not arise in Campbell's Cash and Carry Pty Ltd [2006] HCA 41 ; 229 CLR 386. However, the reasoning of Gummow, Hayne and Crennan JJ at [68] [82] and Callinan and Heydon JJ at [258] [261] supports the opinion of Finkelstein J. In my opinion, the principle enunciated in Trendtex [1982] AC 679 can be taken to be established for Australia. It needs to be borne in mind that the statement in Poulton 89 CLR 540 was not the centre of controversy in that case.


case_title: Turbo Tek Enterprises Inc v Sperling Enterprises Pty Ltd [1989] FCA 275 ; (1989) 23 FCR 331


case_text: Some basic propositions about s 21 should be borne in mind before approaching the detail of the issue. (1) "Knows" and "known" are strong words. They mean considerably more than "believes" or "suspects" or even "strongly suspects" (per McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liq) [2003] HCA 25 ; (2003) 214 CLR 514 at 531; see also Commercial Union Assurance Co of Australia Ltd v Beard (1999) 47 NSWLR 735; (2000) 11 ANZ Ins Cas 61-458 per Davies A-JA at 75259). (2) The "matter" must be known to the insured. (3) On one alternative, the "matter" must also be known to be relevant to the decision of the particular insurer whether to accept risk, and, if so, on what terms in this case, on the basis put forward, by Macquarie Underwriting. As Gummow and Hayne JJ said in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [70] : "Under the Act, attention is shifted from the prudent insurer to the particular insurer." Although their Honours were in dissent in the result, this statement is obviously correct. (See also Twenty-First Maylux Pty Ltd v Mercantile Mutual Insurance (Aust) Ltd [1990] VR 919 ; (1989) 92 ALR 661.) (4) Relevance to the acceptance of the risk in the sense of the particular insurance hazard is required (McHugh, Kirby and Callinan JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [32] ). (5) In the other alternative, it must be found that a reasonable person in the circumstances could be expected to know that the matter was relevant to the decision of the particular insurer. There is some debate about the meaning of the words "the circumstances". Although they plainly mean the circumstances of the particular case, the debate is said to be between subjective and extrinsic circumstances (see the discussion in Mann P, Annotated Insurance Contracts Act (4 th ed, Lawbook Co, 2003), para 21.10.8). (6) There is a debate as to whether an insured can "know" a matter by its agent cf McHugh, Kirby and Callinan JJ at [30] with Gummow and Hayne JJ in Permanent Trustee Australia Ltd [2003] HCA 25 ; 214 CLR 514 at [82] [89]. Pending further clarification by the High Court, the wider view should be taken following Macquarie Bank Ltd v National Mutual Life Association of Australasia Ltd (1996) 40 NSWLR 543 per Powell JA at 610 611 (agreed with by Priestley JA and Clarke JA). (7) The obligation applies to renewal of a contract (s 11(9)(b)) ( Alexander Stenhouse Ltd v Austcan Investments Pty Ltd [1993] HCA 22 ; (1993) 112 ALR 353).


case_title: Weldon v Neal (1887) 19 QBD 394


case_title: Zoneff v Elcom Credit Union Ltd [1990] ATPR 41-058


case_text: On 11 April 2007 I decided an application for security for costs by the two cross-respondents in principle and gave reasons for the decision ( People Telecom Limited v Phatchat Pty Limited [2007] FCA 536). The last substantive paragraph was as follows: So, in my opinion, the task at the moment is to fix an amount which would be reasonable for those steps which should be taken to meet the s 45 and s 46 case, pending receipt of the evidence, which will be led by the applicant. It is at that point that both the cross-respondents, and myself, will have a better idea as to what is required for security. I will stand the matter over for further directions to 8 May 2007 at 9.15 am. If, in the meantime, that guidance helps you work something out, so much the better. 3 The amount of $30,000 was subsequently fixed for each cross-respondent. The point has now been reached where the next tranche of security is to be considered in relation to the cross-respondent Optus. After security was ordered and provided, there was a major change in the cross-claim based upon breach of Pt IV of the Trade Practices Act 1974 (Cth) the claim based upon s 46 has been abandoned, leaving a claim of breach of s 45 entirely based upon s 4D. Also, the cross-claimants' evidence has now been filed. 4 The orders for security were intended to provide security for the additional costs that would be incurred by reason of the preparation for the Pt IV cross-claim as such and that principle will govern this application, but with a rider. There are effectively three bases for the cross-claims against Optus breach of Pt IV of the Trade Practices Act 1974 (Cth), breach of the Privacy Act 1988 (Cth) and interference with contractual relations. There was no particular analysis of these bases on the earlier occasion the principal focus was upon the claims against the other cross-respondent. However, applying the same reasoning, the claim for interference with contractual relations would not attract an order for security. I doubt if the same can be said of the Privacy Act claim. On the face of it, it can be seen as both discrete and offensive (in the relevant sense). However, it arises out of circumstances otherwise in issue and, apart from a possible question of law, it is not suggested that it requires factual preparation not otherwise required.


case_outcome: considered

case_text: do not apprehend any error on the part of the Federal Magistrates Court in failing to find that such procedural fairness as is required by s 424A was not given to the appellant. In SZBYR v Minister for Immigration and Citizenship [2007] HCA 26 ; (2007) 81 ALJR 1190 at para 17, the High Court remarked of s 424(1)(a): The use of the future conditional tense (would be) rather than the indicative, strongly suggests that the operation of section 424(1)(a) is to be determined in advance and independently of the tribunal's particular reasoning on the facts of the case. What I have already observed in relation to s 424A is sufficient in the context of the present case to dispose of ground 2 of the notice of appeal. There was, in the circumstances, no obligation which arose under that section on the part of the Tribunal to give particulars in respect of the coincidence of lodgement of visa applications. There was no particularisation in the notice of appeal or oral submissions of what might otherwise constitute the adverse information. It is to be remembered, having regard to what was observed in SZBYR v Minister for Immigration and Citizenship [2007] HCA 26 ; (2007) 81 ALJR 1190 at para 18, that the Tribunal's subjective appraisals, thought processes, or determinations, do not constitute "information" for the purposes of s 424A.


case_text: Tribunal is required to give accurate particulars of adverse information to the applicant. Its failure to do so is jurisdictional error. see SZEEU v Minister for Immigration and Citizenship [2008] FCA 269 The Appellant's application for a protection visa had been grounded upon his claim to fear persecution in India on account of his Christianity. More particularly, the claim was propounded upon his alleging to have preached to Dalits in Trivandrum, and encouraged their conversion thereby violating anti-conversion laws. He alleged that he had been arrested and held for three weeks and had been mistreated. He also alleged that he had been again arrested in January 2006 after what he described as the "Muslim dominated" CPI(M) had achieved power in Kerala. He claimed that the administration of his church had been told not to admit Muslims into the precinct and that he had been followed around Trivandrum. After the events so related the Appellant had visited Singapore. On his return he stated that he had been arrested and accused of converting Hindus. He further stated that he had been released on payment of one lakh, of Indian Rupees, and that he had been ordered to cease his religious activities. His claim, further, was that he, his brother and his brother-in-law had subsequently resumed their Christian charitable activities in areas outside Trivandrum, but they had been arrested again in November 2006 and accused of procuring conversions. He further claimed that he, his brother and his brother-in-law had been threatened with deportation to Pakistan and ordered to cease all of their religious activities. It was on the strength of these claims that upon arrival in Australia the Appellant advanced his application for a protection visa. Quite how the case SZEEU v Minister for Immigration and Citizenship [2008] FCA 269 referred to in ground 2 was relevant was not developed in the Appellant's written or oral submissions. I have considered that case, which I note was decided on 7 March 2008. Its relevance to ground 2 is not immediately apparent. All in all, this is just one of those cases where the Tribunal reached views concerning the claim made for a visa, based upon an assessment of the Appellant's credibility. Having considered the Tribunal's reasons, there is nothing remarkable in the Federal Magistrates Court's conclusion that the Tribunal was entitled to reach the views that it did. Findings of credit, providing they are not indicative of illogicality, are matters, "par excellence", for the Tribunal. It follows that the appeal must be dismissed. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 25 February 2009 Counsel for the Appellant: The Appellant appeared in person Counsel for the Respondents: Mr P Cleary Solicitor for the Respondents: Clayton Utz Lawyers Date of Hearing: 17 February 2009 Date of Judgment: 17 February 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/158.html


case_text: was also advanced, in the course of oral submissions for the Appellant, the argument that the Federal Magistrates Court and it seems also the Tribunal, were in some way biased. There is not a scintilla of evidence which would support an apprehended bias challenge to the decision of the Federal Magistrates Court. In particular, the fact that that court gave its reasons for judgment upon the day on which the judicial review application was heard, does not support such a finding. As for the Tribunal proceeding, there was not developed before me any argument that the hearing before the Tribunal, in terms of the procedures adopted by the Tribunal, and having regard to its reasons, was such as would give rise to an apprehension of bias of the kind that I found present in SZKLK v Minister for Immigration [2008] FCA 1125.


case_text: acknowledged, it is permissible, in my opinion, to draw an inference that, even prospectively, the adverse contingency, which generated on the part of the first Tribunal, the letter of 3 July 2007, did not form part of the second Tribunal's thinking. That inference, to me, seems to be open from para 102 of the Tribunal's reasons. I note that in SZLPJ v Minister for Immigration and Citizenship [2008] FCA 1721 , Perram J adopted a similar approach: see especially para 16 of his Honour's reasons for judgment.


case_text: Even though this is a "fairly modest threshold" (see Meni's Tailoring and Alterations Pty Ltd v Jeans West Corp Pty Ltd [2003] FCA 1108 at [4] ), and accepting for the purposes of argument the respondents' estimate of $300,000, I am positively satisfied the threshold has not been met. 8 On 31 August 2006, following applications to the Federal Court and creditors' meetings, the assets of the Ansett Group were pooled. In the course of his reasons granting approval of the proposed pooling Goldberg J said: "the pooling proposal by the Administrators is sensible and advantageous to most of the creditors from a practical point of view." (Administrators' Seventh Report to Creditors, 31 March 2007, p 22) 9 The significance of pooling for present purposes is that an award of costs against the applicant would be recoverable from all the assets of the Ansett Group, and not just the assets of the applicant. I turn therefore to the evidence as to the current assets of the Group.


case_text: Mr Campbell also referred to the decision of Austin J in Cresvale Far East Ltd (in liq) v Cresvale Securities Ltd (No 2) (2001) 39 ACSR 622. His Honour was there concerned with an application for costs against an administrator under a deed of company arrangement. The administrator was a party and in the substantive proceeding had been removed by order of his Honour on the basis of findings of impropriety and negligence in the conduct of the administration. Because the office of company administrator was comparatively new, and not the subject of any costs jurisprudence, his Honour reviewed a number of analogous situations. 20 Under the heading "Personal costs orders against administrators", Austin J discussed a number of scenarios commencing with that identified by the sub-heading "Where the company under a deed of company arrangement is a party to the proceedings, but the administrator is not, and the company is unsuccessful" ([24]-[35]). That of course is the hypothesis on which the present application is brought. 23 C resvale does not assist in the present case. The applicant company has not been shown to have insufficient funds to meet the costs of a successful opposing party.


case_title: Wentworth v Wentworth [2000] NSWCA 350

case_text: His Honour said at [25]: "Clearly costs may be awarded against the company under administration, but the company may have insufficient funds to meet the costs of the successful party. In the normal case, the litigation will have been conducted on behalf of the company by the administrator. The question arises whether the court may order the administrator personally to pay the successful party's costs, although the administrator is not a party to the proceedings." His Honour then goes on to discuss Knight and points out that subsequent amendments to the New South Wales Supreme Court Rules have abolished some of the traditional categories of grounds for an order costs against non-parties referred to in that case: at [27], citing Wentworth v Wentworth [2000] NSWCA 350 at [162] . (There are no equivalent provisions in Order 28 of the Federal Court Rules .) He concludes at [32] that the New South Wales Rules would prevent a court in that State from awarding costs against an administrator who is not a party to the proceedings.


case_text: In the event of the respondents' application being dismissed, the applicant seeks costs on an indemnity basis. One established ground for such an order is that an application has been commenced or continued in circumstances where the losing party (in the present case the respondents seeking an order for security for costs), properly advised, should have known that there was no chance of success: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401, Ragat Developments Pty Ltd v Westpac Banking Corporation (1993) 217 ALR 175 at 177.


case_text: Thus the threshold requirement, which the respondents must establish, is that there is reason to believe that the applicant will be unable to pay the respondents' costs if they are successful. In the words of von Doussa J in Beach Petroleum NL v Johnson (1992) 7 ACSR 203 at 205: " ... the power of the court under s 1335 arises if credible evidence establishes that there is reason to believe there is a real chance that in events which can fairly be described as reasonably possible the plaintiff corporation will be unable to pay the costs of the defendant on service of the allocatur, if judgment goes against it. This will be so even if in other events which can also be fairly described as reasonably possible the plaintiff corporation would be able to pay the costs."


case_text: Mr Campbell SC for the respondents referred to Knight v F P Special Assets Ltd [1992] HCA 28 ; (1992) 174 CLR 178. The High Court there held that the Supreme Court of Queensland had jurisdiction to award costs against non-parties, in that instance receivers and managers of insolvent companies which had brought unsuccessful proceedings. Mason CJ and Deane J at 191 pointed out that the availability of an order for security for costs at an early stage of litigation would be a "strong argument for refusing to exercise a discretion to order costs against a non-party". However, as their Honours went on to point out, that did not deny the existence of a jurisdiction to award costs against non-parties, as distinct from the possible exercise of discretion to refuse such an order. 21 His Honour said at [25]: "Clearly costs may be awarded against the company under administration, but the company may have insufficient funds to meet the costs of the successful party. In the normal case, the litigation will have been conducted on behalf of the company by the administrator. The question arises whether the court may order the administrator personally to pay the successful party's costs, although the administrator is not a party to the proceedings." His Honour then goes on to discuss Knight and points out that subsequent amendments to the New South Wales Supreme Court Rules have abolished some of the traditional categories of grounds for an order costs against non-parties referred to in that case: at [27], citing Wentworth v Wentworth [2000] NSWCA 350 at [162] . (There are no equivalent provisions in Order 28 of the Federal Court Rules .) He concludes at [32] that the New South Wales Rules would prevent a court in that State from awarding costs against an administrator who is not a party to the proceedings.


case_title: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397


case_text: The application for security for costs must therefore be dismissed. It is not necessary therefore to say anything about the applicant's submissions as to the substantive merits of the respondents' case or the quantum of the amount of security sought. I would only say that there does seem to be force in the submission of Mr McGowan SC that the respondents are in a real sense the moving party since in their cross-claim they seek removal of the applicant's trade marks, which is something they would have to achieve anyway to obtain registration of their own marks. In substance, so it is said, the applicant is defending its property from attack: Maatschappij Voor Fondsenbezit v Shell Transport and Trading Co [1923] 2 KB 166 at 177, Willey v Synan [1935] HCA 76 ; (1935) 54 CLR 175, Re Travelodge Australia Ltd (1978) 21 ACTR 17.


case_title: Maatschappij Voor Fondsenbezit v Shell Transport and Trading Co [1923] 2 KB 166


case_title: White v Butt [1909] 1 KB 50

case_text: In postulating the availability of an order for security for costs, their Honours were alluding to the situation where an impecunious plaintiff is backed by a non-party which has an interest in the plaintiff succeeding in the litigation; cf Federal Court Rules O 28 r 3(1)(b), White v Butt [1909] 1 KB 50 at 55-56. In such a case, an order for security for costs against the plaintiff will, as a matter of practicality, require the non-party to provide the security. Failure to make such an application for security for costs at an early stage may, as a matter of discretion, tell against the later making of such an order against the non-party. In the present case there is no question this Court has jurisdiction to make an order for security for costs against the applicant, which of course is a party; the problem for the respondents is that the statutory pre-condition for such an order has not been established.


case_text: The latter decision has subsequently been discussed by the High Court in Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd [1998] HCA 19 ; (1998) 194 CLR 171 , particularly at [36] [40] per Brennan CJ, Gaudron, McHugh and Gummow JJ and in Lockwood Security Products [2007] HCA 21 ; 235 ALR 202 ; (2007) 81 ALJR 1070 at [106] [107]. It is made clear that external evidence cannot be relied upon. The same ground of invalidity was examined in some detail by the Full Court in Merck & Co Inc [2006] FCAFC 91 ; 154 FCR 31 at [20] [75] (cf at first instance Arrow Pharmaceuticals Ltd v Merck & Co Inc (2004) 213 ALR 182 , (2004) 63 IPR 85 at [80] [97]). The true scope of this ground of invalidity is difficult to discern in a case such as the present where the claims are for conventional products (albeit defined by chemical formula) and processes for the manufacture of products compared, say, with Merck & Co Inc [2006] FCAFC 91 ; 154 FCR 31 which dealt with a variation of a dosage regime. It is clear that the grounds of novelty and obviousness must be considered as such rather than through this prism ( CCOM Pty Ltd [1994] FCA 1168 ; 51 FCR 260 at 295 295). 132 "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_outcome: discussed

case_text: The applicants seek to sidestep this considerable obstacle by relying upon the description of the inventive step in the complete specification which makes it clear that the step was to go from the racemic mixture corresponding to the formula methyl alpha-5 (4,5,6,7-tetrahydro (3,2-c) thieno pyridyl) (2-chlorophenyl) acetate, described as derivative 1 in the French patent, to the dextro-rotatory enantiomer of that racemic mixture. The inventiveness of that step would then be judged according to Australian common general knowledge. It was submitted that this approach is consistent with that of the majority of the High Court in Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59 ; (2002) 212 CLR 411 at [41] and [52] [53]. That was consistent with the way in which that case had been conducted below ( Aktiebolaget Hässle v Alphapharm Pty Ltd [2000] FCA 1303 , (2000) 51 IPR 375 at [15] [24] and [44]). 99 Aktiebolaget [2002] HCA 59 ; 212 CLR 411 provides a good example. The compound, known as omeprazole, which undoubtedly involved an inventive step, was not easily formulated into a satisfactory pharmaceutical composition, and solving a problem in the administration of the drug by formulation was required, that being the gist of the inventive step claimed in that case. Obviousness was not judged on the basis that omeprazole had not been discovered simply because it had not passed into Australian common general knowledge. By analogy in the present case, the only invention described in the specification is moving from the particular racemic compound to the dextro-rotatory enantiomer of that compound. It would be the obviousness, or otherwise, of that step which would be tested, not the obviousness of formulating clopidogrel or any of the other compounds encompassed by the French patent. 100 On this basis, the state of Australian common general knowledge would still have an important part to play in judging inventiveness. It is easy to imagine that there would be technical fields where there is little Australian common general knowledge so that, for example, what may be routine in the laboratories of Switzerland would be inventive by Australian standards. On the other hand, there may be other fields where the relevant Australian knowledge was in advance of the country where the claimed invention took place, leading to the opposite conclusion. 103 The position established in Minnesota Mining [1980] HCA 9 ; 144 CLR 253 was of relatively short duration. Until then, the wider view of Williams J in HPM Industries Pty Ltd v Gerard Industries Ltd [1957] HCA 47 ; (1957) 98 CLR 424 had applied (see Graham Hart (1971) Pty Ltd v SW Hart & Co Pty Ltd [1978] HCA 61 ; (1978) 141 CLR 305 per Aickin J at 329 330). The 1990 Act widens the prior art base, but does not change the nature of the issue. Leaving aside Aktiebolaget [2002] HCA 59 ; 212 CLR 411 , the principal survey of the topic by the High Court since Minnesota Mining [1980] HCA 9 ; 144 CLR 253 was in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21 ; (2007) 235 ALR 202 , (2007) 81 ALJR 1070 , particularly at [31] [66]. That case did not involve the problem that arises here. It is noteworthy that the Court said of the 1990 provisions (at [127]): "As stated above, by enlarging the prior art base through including relevant prior disclosures beyond those disclosures proven to be part of the common general knowledge, these provisions raise the threshold for inventiveness. However, the idea remains that the prior disclosures to be taken into account, even as enlarged by s 7(3), are being considered for a particular purpose. That purpose is the purpose of looking forward from the prior art base to see what a person skilled in the relevant art is likely to have done when faced with a similar problem which the patentee claims to have solved with the invention." (Emphasis added.) (cf Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21 ; (2002) 188 ALR 280 , (2002) 76 ALJR 816 at [33] as to combination patents.) The applicants do not seek to utilise the contents of the prior specification as an admission as to common general knowledge (cf Lockwood Security Products [2007] HCA 21 ; 235 ALR 202 , 81 ALJR 1070 at [105] [109]). Rather, it is a statement of the nature of the inventive step that is claimed (cf in another context, Commissioner of Patents v Microcell Ltd [1959] HCA 71 ; (1959) 102 CLR 232).


case_text: The present cases are applications for revocation of a patent pursuant to s 138(3) of the Patents Act 1990 (Cth) (the 1990 Act). The patent claims an enantiomer of a racemate where that racemate was disclosed and claimed by an earlier patent. This has been an issue in relation to other compounds, most recently in two judgments published after the close of evidence and, in one case, after the close of addresses the decision of Lindgren J in Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559 and the decision of the Full Court in Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC [2008] FCAFC 82 respectively. 49 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. 67 Lindgren J dealt with a somewhat similar situation in Alphapharm [2008] FCA 559 although, in that case, there was no express reference to, or claim to, the enantiomers of the racemate in the alleged anticipation. His Honour had construed the relevant claims of the patent in suit as relating only to the (+)- or dextro-rotatory enantiomer of citalopram, having a separate existence, not being an indistinguishable part of the unresolved racemate. His reasoning included the following ( Alphapharm [2008] FCA 559 at [118] [119]): "The only context that I take into account in arriving at this conclusion is that it was part of common general knowledge: • that racemates contained in equal parts (+) and ( ) enantiomers; • that the enantiomers of a racemate were potentially separable, and it was a possibility that an enantiomer might have a stable existence as a compound distinct from being part of the racemate; • that some racemates had in fact been resolved into their separate enantiomers; and • that racemates were commonly represented by the symbol (+/-) to indicate the presence of both enantiomers. It is not that the (+)-citalopram compound does not exist when it is part of the racemate. The skilled addressee would understand that it exists whether a part of the racemate or apart from it, and that the purpose of the (+) symbol is only to distinguish it from the ( )-enantiomer and from its being merely part of the racemate or of some other mixture. The (+) or ( ) symbol, devoid of any context suggesting otherwise, implies distinctness from the racemate." In Alphapharm [2008] FCA 559 , Professor Martin Banwell was called by the applicant for revocation, as he was in these cases. 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. 69 It was alleged that the product claims of the patent in suit in that case were anticipated by the Australian Citalopram Patent. His Honour rejected the argument on the following basis ( Alphapharm Pty Ltd [2008] FCA 559 at [171] [173]): "The Australian Citalopram Patent did not refer to "enantiomers". It did not expressly or by implication otherwise disclose the individual enantiomers. It disclosed the racemate and enabled the obtaining of it. Whether this anticipated the present invention turns on my construction of the Patent see Section C above. The skilled but non-inventive addressee reading the Australian Citalopram Patent would have understood that (+/-)-citalopram consisted of the (+)-enantiomer of citalopram and the (-)-enantiomer, each as to 50%, and would have been able to identify the formulae for the S and R enantiomers, but would not have known, in the absence of experimentation, which was (+) and which was (-). These facts would not, however, point specifically to the independent existence of the enantiomers which is, according to my construction of the Patent specification, of the essence of claim 1. If I had construed claim 1 as referring to (+)-citalopram when present in the unresolved racemate, the Australian Citalopram Patent would have been an anticipation. But because of my construction outlined at Section C above, a person taught by the Australian Citalopram Patent, although taught to desire to obtain the racemate, would not be taught to desire to obtain the specific (+)-enantiomer in its own right. Similarly, the Australian Citalopram Patent's citalopram formula did not disclose the independently existing (+)-enantiomer. I note that if In re Adamson (1960) 275 F2d 952 is authority for the proposition that a patent for a racemate necessarily anticipates a claimed invention of either of its enantiomers, I respectfully disagree." 70 A little earlier than the decision in Alphapharm [2008] FCA 559 , Young J had considered a similar issue in Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC (No 2) [2006] FCA 1787 , (2006) 71 IPR 46. One question was whether the formula in claim 1 of the relevant patent claimed only the racemate and not the enantiomers separate from the racemate. The patentee, Warner-Lambert, called, amongst other witnesses, Professor Christopher Easton and Professor Peter Scammells, who gave evidence for Sanofi-Aventis in these cases. The applicant for revocation, Ranbaxy, called, inter alia, Dr Keith Watson, who was called by Apotex, one of the applicants, in these cases. His Honour's findings about common general knowledge (so far as is relevant) were as follows ( Ranbaxy [2006] FCA 1787 , 71 IPR 46 at [113] ): "(7) The biological activity of a racemate in a biological system can be quite different from that of a single enantiomer. The physical and biological properties of a racemate differ from that of an individual enantiomer in various respects: for example, there may be differences in solubility between the racemate and its enantiomers and differences in pharmacological properties. (8) The normal expectation is that there would be one enantiomer that is approximately twice as active as the racemate in terms of its operation in the target biological system. (9) Before 30 May 1986, the skilled team would expect that the R enantiomer was very likely to be the active, or more active, enantiomer, but this could not be known with certainty without isolating and testing the enantiomer. (10) Conversely, it was very likely to be the case that the S enantiomer was inactive, or substantially less active, than the R enantiomer, but this could not be known with certainty until the enantiomers had been isolated and tested. (11) Well before 30 May 1986, it was common general knowledge amongst medicinal chemists that racemic mixtures could be separated into the individual enantiomers by well-known methods of resolution. Indeed, undergraduate chemical students were taught procedures to resolve enantiomers. It was also generally known before May 1986 that enantiomers could be obtained by chiral synthesis. (12) As at 30 May 1986, it was feasible to use resolution or chiral synthesis to obtain a single enantiomer drug. Pharmaceutical companies had produced single enantiomer synthetic drugs either by way of resolution from the corresponding racemic mixture or by way of chiral synthesis prior to May 1986. (13) As at May 1986, it was known that enantiomers could have different biological properties and that it may be desirable to separate and remove the less active enantiomer." 73 Although the decisions in Alphapharm [2008] FCA 559 and Ranbaxy [2006] FCA 1787 , 71 IPR 46 turned in large measure upon the evidence in each case, a difference in approach can be detected on the question involving the disclosure of enantiomers, with Ranbaxy [2006] FCA 1787 , 71 IPR 46 favourable to the applicants on this issue, and Alphapharm [2008] FCA 559 being neutral. In neither case was there the express reference to enantiomers such as there is in the French and corresponding patents here. The priority dates of the relevant patents are also interesting when compared with the priority dates in issue here. In Ranbaxy [2006] FCA 1787 , 71 IPR 46 , the priority date of the broader patent was 30 May 1986 and that of the enantiomer patent 21 July 1989. In the case of Alphapharm [2008] FCA 559 the Australian Citalopram Patent had a priority date of 14 January 1976 and the enantiomer patent 14 June 1988. The common general knowledge found by Lindgren J to relate to the enantiomer patent and by Young J to relate to the broader patent was very much in the same time band as that relevant to construction of the patent in suit here. Naturally, the field of each invention is somewhat different but the principles of stereochemistry as they were understood at the time should not have varied much. There is no suggestion of any crucial and widely known developments during the years in question.


case_text: The latter decision has subsequently been discussed by the High Court in Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd [1998] HCA 19 ; (1998) 194 CLR 171 , particularly at [36] [40] per Brennan CJ, Gaudron, McHugh and Gummow JJ and in Lockwood Security Products [2007] HCA 21 ; 235 ALR 202 ; (2007) 81 ALJR 1070 at [106] [107]. It is made clear that external evidence cannot be relied upon. The same ground of invalidity was examined in some detail by the Full Court in Merck & Co Inc [2006] FCAFC 91 ; 154 FCR 31 at [20] [75] (cf at first instance Arrow Pharmaceuticals Ltd v Merck & Co Inc (2004) 213 ALR 182 , (2004) 63 IPR 85 at [80] [97]). The true scope of this ground of invalidity is difficult to discern in a case such as the present where the claims are for conventional products (albeit defined by chemical formula) and processes for the manufacture of products compared, say, with Merck & Co Inc [2006] FCAFC 91 ; 154 FCR 31 which dealt with a variation of a dosage regime. It is clear that the grounds of novelty and obviousness must be considered as such rather than through this prism ( CCOM Pty Ltd [1994] FCA 1168 ; 51 FCR 260 at 295 295).


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. 56 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_text: If that view is correct, then the patent in suit is not a selection patent in the ordinary sense as PCR 4099 and each of the enantiomers were expressly disclosed and claimed in the earlier patents and are expressly referred to in the patent in suit. In one sense, the dextro-rotatory enantiomer is selected from that sub-class. There is authority to suggest that selection can be from a small class (per Buckley LJ in Beecham Group Ltd's (Amoxycillin) Application, Re [1980] RPC 261 at 292; EI Du Pont De Nemours & Co (Witsiepe's) Application [1982] FSR 303 per Lord Wilberforce at 310; but, cf Institut Francais du Petrole des Carburants et Lubricants' Application, Re [1972] FSR 147 at 154, [1972] RPC 364). I will therefore assume, contrary to my own opinion, that the principle can apply to the present case on that basis if the requirements are met. 86 The phrase in In the matter of Esso Research and Engineering Co's Application (Shell) [1960] RPC 35 at 53 was "advantages peculiar to themselves" or, as Lord Wilberforce put it in EI Du Pont De Nemours & Co (Witsiepe's) Application [1982] FSR 303 at 309 "unrecognised advantages". Buckley LJ said in Beecham Group Ltd's (Amoxycillin) Application, Re [1980] RPC 261 at 292: "... the substance must be truly new and the advantage to be gained from its selection must be the inventor's own discovery as opposed to mere verification by him of previous predictions or of what was previously predictable; in other words, it must be unexpected." The specification in question here was, no doubt, drawn with this concept in mind. However, the advantages here are not different in kind from those described and predicted in the earlier patent specifications. Even if such an advantage could be satisfied by a quantum leap in relation to an earlier claimed advantage, the results here are by no means out of the range of results predictable from the tests done on the examples in the earlier specification. 105 The patentee's argument is not easily reconcilable with the existence of Pt VII of the 1952 Act dealing with patents of addition for "improvement in or modification of" the main invention, particularly with s 76, which was as follows: "Objection shall not be taken to an application for a patent of addition, so far as the invention is claimed in any claim of the complete specification, and a patent of addition, so far as the invention is so claimed, is not invalid, on the ground only that the invention, so far as claimed in any claim of the complete specification, is obvious and does not involve an inventive step, having regard to- (a) the publication of the main invention before the priority date of that claim but after the priority date of the claim of the specification of the main invention defining the invention the improvement in which, or the modification of which, is the subject of the first-mentioned claim, or, if there are two or more claims defining that invention, after the priority date of whichever of those claims has the earlier or earliest priority date; or (b) the use of the main invention during that period." A patent of addition expired with the original patent (s 75) (cf Ch 7 of the 1990 Act.) It will be observed that the section protected against invalidity on the ground of obviousness not novelty, and did so regardless of the state of common general knowledge in Australia. (For an interesting example of patents of addition in a similar context see Beecham Group Ltd's (Amoxycillin) Application, Re [1980] RPC 261.) 106 On the other hand, if the starting point or baseline is not known to those in the field in Australia, then the selected compound may be seen as a large advance or inventive step in one leap and may be a valuable contribution to the relevant field. It may, as in this case, provide a useful product for the public, thus justifying patent protection. 107 The applicants' contention cannot be rejected out of hand, particularly in the case of a selection patent where the prior publication is a patent specification published or issued in Australia. If that contention is wrong, then this objection to the validity of claim 1 fails. I will consider the position if the contention were accepted and on the basis that the starting point for analysis of the inventive step was the racemic compound of PCR 4099 as disclosed in the French patent. The starting point of the invention identified in the complete specification in suit is the racemic mixture of derivative 1 as described in the French patent application. There is no claim of invention in selecting that racemic mixture out of the others disclosed in the French patent. The invention claimed was ascertaining that only the dextro-rotatory enantiomer exhibited platelet aggregation inhibiting activity, the levo-rotatory enantiomer being inactive and being the less well tolerated of the two. It is, thus, expressed to be a selection patent only in that limited respect.