case_text: approach to be taken by the Court was recently reviewed by Jessup J in Darwalla Milling Co Pty Ltd v F Hoffman-La Roche Ltd (No 2) (2006) 236 ALR 322. Jessup J pointed out that there is little specificity that can be attached to the words "fair" or "reasonable". His Honour expressed the opinion that the practical judicial approach appears to be to identify any features of a settlement that are obviously unreasonable or unfair ( Darwalla at [39]). The evidence establishes that the proposed global amount, the methodology for distribution and the effect of the settlement on the payments to be made to the individual members has been adequately set forth to each of those members of the Deacons client group. As was the case in Darwalla, no objection, and no matter said to be unfair or unreasonable, has been raised in this case by any group member who will be covered by the settlement. As a result, I, like Jessup J in Darwalla , am left with only the broadest criteria to assess the reasonableness and fairness of the proposed settlement. Global settlement sum Jessup J considered whether the overall settlement sum was reasonable having regard to: the manner of its calculation and its relationship to the best possible case outcome for the group as a whole; the prospects of achieving an outcome at or near the best probable case; the extent of the weaknesses, substantive or procedural, in the applicant's case; whether the settlement sum falls within the realistic range of likely outcomes; the forensic difficulties which would be involved in the conduct of the case to judgment; and the time and costs which have been saved by a settlement at that particular stage of the proceedings ( Darwalla at [41]). As noted by Jacobson J in Taylor v Telstra Corporation Ltd [2007] FCA 2008 at [63] , Jessup J also said at [50] that he did not consider that it was the Court's function under s 33V to second guess the applicants' advisors in the answer to the question whether the applicants ought to have accepted the respondent's offer. The question is whether the agreed settlement falls within the range of a fair and reasonable outcome, taking everything into account. As Jessup J also pointed out in Darwalla , there is rarely, if ever, a case in which there is a unique outcome which should be regarded as the only fair and reasonable one. As in Darwalla , there is a settlement distribution scheme which does not specify precisely what the final entitlement of each group member will be under the settlement, although in this case:


case_outcome: cited

case_text: the present case, each Deacons client has had the benefit of advice from solicitors and counsel as to how his or her interests are best served in the litigation and by the proposed settlement. My task is to determine whether the proposed settlement is fair and reasonable having regard to the claims made on behalf of the group members who will be bound by the settlement ( Williams v FAI Homes Security Pty Ltd (No 4) [2000] FCA 1925 ; (2000) 180 ALR 459 at [19] per Goldberg J). While the nine factor test adopted by Goldberg J in Williams is not a rigid test to be applied, it is useful as a guide ( Haslam v Money For Living (Aust) Pty Limited (Administrators Appointed) [2007] FCA 897 at [20] per Gordon J.)


case_title: Lopez v Star World Enterprises Pty Limited [1999] FCA 104 ; (1999) ATPR 41-678

case_text: Branson J said in Australian Competition and Consumer Commission v Chats House Investments Pty Limited (1996) 71 FCR 250 at 258: ' it is appropriate for the Court to be satisfied that any settlement or discontinuance of representative proceedings has been undertaken in the interests of the group members as a whole, and not just in the interests of the applicant and the respondent '. The Court's task is to assess whether the compromise is fair and reasonable ( Lopez v Star World Enterprises Pty Limited (1999) ATPR 41-678 ; [1999] FCA 104 at [15] per Finkelstein J). The evidence provides a basis for calculating the total claims made by or on behalf of the Deacons clients and the percentage of these total claims made up by the individual claims of each Deacons client. This percentage is used to calculate the proportion of the global settlement sum to be paid to each Deacons client, allowing for costs. This enables the Court to understand the basis on which the amounts payable to the individual members of the group have been calculated. Where the global settlement and the method of distribution have been established, the fact that there is a degree of uncertainty in the precise distribution does not prevent approval being given to the settlement ( Lopez ). There has already been payment by the Deacons clients on account of costs incurred to date. The proposed schedule for distribution takes account of those payments of costs and it follows that the individual group members have been notified of, and approve the quantum of, the costs incurred. I am satisfied that there is no need for further evidence of the reasonableness of those costs. Accordingly, taking account of: the percentage of each claim to be paid to each Deacons client; the prospects of success in the proceedings affecting the likelihood that any Deacons client would obtain judgment for amounts significantly in excess of the settlement offer; the increased costs that would be incurred if the matter proceeded to its conclusion; the opinion of Mr Sharma; the fact that the proposed settlement was recommended by senior and junior counsel for the Deacons clients; the submissions of and support of the settlement by Ms Wilson, appearing for the Deacons clients; the submissions of support of the settlement by senior counsel for Airservices; the existence of a fair and reasonable settlement distribution scheme; and importantly, the fact that all members of the group of Deacons clients have approved the settlement; I am satisfied that it is appropriate so to approve it.


case_text: group was thus identified by criteria not limited to those associated with the nature of the claims themselves ( Multiplex Funds Management v P Dawson Nominees [2007] FCAFC 200 ; (2007) 164 FCR 275 at [137] [141] per Jacobson J). While I am informed that there are other former employees of Airservices not listed in Attachment 1 who otherwise come within the description set out in paragraph 2 of the application, those persons have not signed an agreement with Deacons. Those persons will not be bound by the proposed settlement. Following earlier unsuccessful attempts at settlement, including an attempted mediation, the matter has now been settled between the parties on the basis recorded in a "Deed of Release and Confidentiality".


case_text: noted by Jacobson J in Taylor v Telstra Corporation Ltd [2007] FCA 2008 at [63] , Jessup J also said at [50] that he did not consider that it was the Court's function under s 33V to second guess the applicants' advisors in the answer to the question whether the applicants ought to have accepted the respondent's offer. The question is whether the agreed settlement falls within the range of a fair and reasonable outcome, taking everything into account. As Jessup J also pointed out in Darwalla , there is rarely, if ever, a case in which there is a unique outcome which should be regarded as the only fair and reasonable one.


case_outcome: considered

case_title: Williams v FAI Homes Security Pty Ltd (No 4) [2000] FCA 1925 ; (2000) 180 ALR 459


case_text: adopting this course, it seems to me that the Tribunal was alive to the procedure, counselled by the High Court in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 231 ALR 592 at especially 602, para 43. There, in respect of a Tribunal proceeding, the court noted that the Tribunal had not identified particular aspects of the visa Applicant's account as important issues in the course of the hearing; that it had not challenged what the visa applicant had said; and that it did not say anything to him that would have revealed to him particular issues that were live issues in the context of the consideration of that particular visa application. Rather, based on what the delegate had decided, the Tribunal had left the visa Applicant in that case in a position where he would, and should, have understood that there was a quite different central and critical issue for determination, in the context of that case, as to whether the Tribunal was satisfied that a claim for a protection visa had been made out. No such criticism can be voiced of the way in which the Tribunal dealt with the case in this instance, nor in any failure on the part of the Federal Magistrates Court to quash the decision of the Tribunal on such a basis. Instead, what is revealed is a considered value judgment by the Tribunal, having well and truly put the male Appellant on notice in respect of critical, factual issues for determination. It is worthy of note, also, that the Tribunal asked the male Appellant, in the course of the hearing, whether he had any other information to provide in relation to the visa application, and that he responded that he did not. It was then that the Tribunal gave the male Appellant notice that the Tribunal might, on the information before it, be in a position to give an oral decision. The response, apparently made by the male Appellant, was that he wanted to change his life, and that he came "here"; ie, to Australia.


case_outcome: referred to

case_text: In Beaton v Moore Acceptance Corporation Pty Ltd [1959] HCA 59 ; (1959) 104 CLR 107 , Dixon CJ, Taylor and Windeyer JJ considered a case involving a purchaser who had entered into a contract with a vendor for the sale of goods, being a bulldozer. Before that contract was completed, the purchaser entered into a hire purchase contract with a financier, and the financier in turn entered into a contract with the original vendor to acquire the bulldozer from it so as to make it available to the purchaser. The bulldozer was defective when delivered to the purchaser. Dixon CJ, Taylor and Windeyer JJ said that the purchaser's claim against the original vendor was for breach of a contract '... which, by common consent, was superseded by the hire purchase agreement in question and which, therefore, was never carried into effect': Beaton 104 CLR at 118; see too Hellyer Drilling Co v MacDonald Hamilton & Co Pty Ltd (1983) 51 ALR 177 at 181 per Fitzgerald J. 365 The assignment was made as a contract. Each of North East Equity and Proud Machinery agreed with the bank in December 2002 that all North East Equity's rights in relation to the new line would be either assigned by it to, or taken as being enforceable directly by, the bank. Under that agreement, North East Equity's contractual rights against Proud Machinery passed to the bank in accordance with, or were superseded by, the terms of the notice executed by Proud Machinery on 3 December 2002: Beaton 104 CLR at 118. Accordingly, I am of opinion that North East Equity had no title to sue Proud Machinery for breach of contract. 366 North East Equity pleaded that Proud Machinery and Mr Proud owed it a duty '... in designing, procuring and installing the [n]ew [l]ine to exercise reasonable care and skill so as to avoid [North East Equity] suffering loss and damage by any act or omission on the part of [Mr] Proud or Proud Machinery'. I have found that Proud Machinery and Mr Proud did not design the new line.


case_text: The situation has some similarity to assessing damages where building work is defective. Recently, Finkelstein and Gordon JJ said that, speaking generally in cases of work done or not done, or damage caused to property in breach of contract, there are two bases for assessing damages: first, the cost of reinstatement, or secondly, the diminution of the value of the property due to the breach. They held that the correct measure is '... whatever is reasonable for the wronged party to recover': Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (2008) 166 FCR 494 at 503 [29]. I examined the authorities and concluded that the principle applicable based on Bellgrove v Eldridge [1954] HCA 36 ; (1954) 90 CLR 613 was ( Bowen Investments 166 FCR at 524 [98]): '... that the building owner was entitled to recover the cost of rectification provided that the rectification proposed was both necessary, to bring about conformity with the contract, and a reasonable course to adopt. "Reasonableness", in that context, can be seen to be what the owner could require having regard to the terms of the contract and the nature of the departure from them in the performance proffered by the other party. That is, of course, a factual enquiry.'


case_text: Rights to sue for the tort of negligent misrepresentation ( Poulton v The Commonwealth (1953) 89 CLR 540 at 602 per Williams, Webb and Kitto JJ) and for loss or damage under s 82 of the Trade Practices Act in respect of a contravention of s 52 are not assignable: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 at 732-734 [51] - [57] per myself; BHP Coal Pty Ltd v O & K Orenstein & Koppel AG [2008] QSC 141 at [76] per McMurdo J. Those rights remained with North East Equity.


case_outcome: applied

case_text: North East Equity alleged that the contract was a contract for the sale of goods within the meaning of one of the Sale of Goods Act 1895 of Western Australia or South Australia, but it did not identify which Act applied. Both Acts were written on the template devised by Sir Mackenzie Chalmers in 1893. The proper law of the contract for the supply of the new plant is the system of law by reference to which the contract was made, or that with which the transaction has its closest and most real connection: Bonython v The Commonwealth [1950] UKPCHCA 3 ; (1950) 81 CLR 486 at 498 per Lord Simonds. Their Lordships stated there that ( Bonython 81 CLR at 498): '[W]hat is the proper law of the contract, and therefore what is the substance of the obligation created by it, it is a factor and sometimes a decisive one that a particular place is chosen for performance.' 61 Here, the contract for the supply and installation of the new plant and equipment had to be substantially performed in Western Australia. The only connection with the law of South Australia was the location of Proud Machinery's head office there. A condition of the letters of credit was payment of 40% of the purchase price for the particular goods upon delivery to Perth. Effectively, performance of the contract had to occur either in Western Australia, or overseas in the various parts of the world from which Proud Machinery was sourcing supplies of items of plant and equipment to be installed. 62 The substantial obligation created by the contract was for Proud Machinery to supply and install, at Wattleup in Western Australia, the plant and equipment for which it was charging $3 million. That obligation, together with a consideration of the whole of the circumstances, leads to the conclusion that the proper law of the contract was the law of Western Australia. The transaction had its closest and most real connection with that State. Accordingly, I find that the Sale of Goods Act 1895 (WA) applied to contract.


case_title: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720


case_text: The situation has some similarity to assessing damages where building work is defective. Recently, Finkelstein and Gordon JJ said that, speaking generally in cases of work done or not done, or damage caused to property in breach of contract, there are two bases for assessing damages: first, the cost of reinstatement, or secondly, the diminution of the value of the property due to the breach. They held that the correct measure is '... whatever is reasonable for the wronged party to recover': Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (2008) 166 FCR 494 at 503 [29]. I examined the authorities and concluded that the principle applicable based on Bellgrove v Eldridge [1954] HCA 36 ; (1954) 90 CLR 613 was ( Bowen Investments 166 FCR at 524 [98]): '... that the building owner was entitled to recover the cost of rectification provided that the rectification proposed was both necessary, to bring about conformity with the contract, and a reasonable course to adopt. "Reasonableness", in that context, can be seen to be what the owner could require having regard to the terms of the contract and the nature of the departure from them in the performance proffered by the other party. That is, of course, a factual enquiry.' 384 The new line was a working asset used by North East Equity in its business from March 2003 to at least October 2007. On the hypothesis that I ought to have found that the new line was defective because it did not always pack out carrots with a core temperature of 5deg.C or less, such an event had no pecuniary consequence. And, the carrots were still packed chilled but perhaps not as low as exactly 5deg.C or less. The performance offered by the new line as installed was not productive of any relevant determent to North East Equity. It saw no need to reinstate, supplement or replace the refrigeration system. And it suffered no commercial detriment as a result. I am of opinion that North East Equity has not established that the cost of bringing the new line into conformity with the contractual term or representation relating to the 5deg.C requirement would be reasonable to award as damages: see Bowen Investments 166 FCR at 503 [29], 522 [93]. 385 In final address, counsel for North East Equity suggested that its reliance damages should be calculated on the basis set out below. It argued that it would not have entered into the contract and subsequent lease agreement with the bank, had it not acted in reliance on Proud Machinery's and Mr Proud's misleading representations, or if they had not been negligent. North East Equity's methodology used a number of approximations in claiming that it had suffered a loss of $1,300,000. In the calculations below, I have attempted to remove those approximations so that the result, using North East Equity's methodology, can be compared with other calculations, which I explain below. (Negative values are in parenthesis) Exact calculation North East Equity's approximation in its submissions (a) Total cost to North East Equity of new line (Based on North East Equity making all lease payments to the bank for 5 years to 30 May 2008. This figure was agreed by the parties.) $ (4,328,230) $ (4,328,230) (b) Add the current value of the new line (Based on Mr Gregson's evidence that at May 2007 the new line had an auction value of between $640,000 to $960,000.) $ 960,000 $ 1,000,000 (c) Add North East Equity's savings on labour costs: • based on a period of 4 years; • assuming savings per carton reduced by 30cents to 90cents per carton for 1,955,000 cartons p.a. (based on Mr Langridge's analysis that 23,000,000 kg p.a. were produced); • 0.30 x 1,955,000 = $586,500 p.a. labour savings; • subtract from this figure additional power costs of $89,700 p.a. that North East Equity claimed were incurred; • net saving of $586,500 - $89,700 = $496,800 p.a. (approximated by North East Equity to a net saving of $500,000 p.a.), or a total net saving of $1,987,200 (approximately $2 million) over 4 years. $ 1,987,200 $ 2,000,000 (e) Net expenditure by North East Equity $ (1,381,030) $ (1,328,230) approx $1.3 million 386 The above calculation mixed the costs in (a) for a 5 year lease, with only 4 years worth of savings in (c). The new line had been retained beyond the 4 year period and there was no evidence that North East Equity intended to bring the lease to an end before the expiry of the 5 year term. In that situation, I consider that credit should be given for the savings over the whole 5 year term of the lease not for only 4 years. I have rejected the claim that any representation was made to the effect that North East Equity's power costs would be less if the new line were acquired.


case_text: If such a small loss were incurred, it would not accord with commonsense for North East Equity not to have gone ahead with acquiring the new line. In assessing what Mr Tana (as the controlling mind of North East Equity) would have done, it is important to exclude from consideration the subsequent impacts of the fall in the market and the production problems with the farms. Mr Tana was optimistic in 2002 that demand for carrots would increase, so that the labour savings he expected would have been greater, the more carrots were processed. A reasonable business person in the position of Mr Tana and, I infer he too, would have replaced the inefficient old plant with the more efficient new line which gave the actual savings referred to above with the prospect of even greater ones in light of the expectation of greater demand and the significant reduction in future labour costs: Gull v Saunders & Stuart [1913] HCA 55 ; (1913) 17 CLR 82 at 89 per Barton ACJ, Gavan Duffy and Rich JJ approving British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways of London Co Ltd [1912] AC 673: cf at 689-691 per Viscount Haldane LC esp at 691 where the Lord Chancellor referred to replacing obsolete machines with up to date ones. 394 In my opinion, the value of the new line at March 2003 was likely to be substantially more than $1,500,000. So, this last calculation understates the net benefit which North East Equity would have obtained, notwithstanding the assumption that it had proved all of its claims of misrepresentations and breaches of duty under the Trade Practices Act and in tort. The fact that North East Equity chose to move most of its packing operations in October 2007 from Wattleup is not relevant to the application of the methodology suggested by it, since it has claimed the cost of leasing up until May 2008. Had it continued to use the new line, it would not have been worse off. Its decision to change its operations should be viewed in the same way that the decision to buy new turbines in British Westinghouse [1912] AC at 691 was viewed; namely, that the decision to centre operations at Lancelin was commercially sensible and would enable North East Equity to eliminate unnecessary road transport costs, including for transport of rejects and waste. 395 I am not satisfied that North East Equity has established what the new line was, in fact, worth in the condition in which it was installed. Thus, I am not satisfied that it has suffered any loss in receiving something worth less than what it agreed to pay, or what the bank actually paid, for it, other than in the limited respects that I have found (for the flume elevators and disruption). As I have understood the pleadings, these aspects were not the subject of any claim. 396 In conclusion, I find that, in substance, North East Equity's claims for damages for about $4.2 million in wasted expenditure and $4.85 million in economic loss have not been established. I will allow the parties to consider these reasons and address the question of the final orders which ought to be made. I certify that the preceding three hundred and ninety-six (396) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 12 August 2008 Counsel for the Applicant: MH Zilko SC and MD Cuerden Solicitor for the Applicant: Ilberys Lawyers Counsel for the Respondent: PG McGowan Solicitor for the Respondent: David Deakin Davies & Co Date of Hearing: 17-20, 24-28 September 2007 8-12 October 2007 Date of Judgment: 12 August 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1189.html


case_text: Moreover, while Mr Tana no doubt was annoyed by being asked to pay for the replacement flumes, had he done so by early 2004, when it was clear that Proud Machinery and Bruynooghe would not, this problem would have been resolved. I am not persuaded that it was reasonable for North East Equity not to have replaced them by June 2004 if there were production difficulties of any substance caused by the flume elevators: Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81 ; (1986) 161 CLR 653 at 658 per Gibbs CJ, at 668 per Wilson, Deane and Dawson JJ, at 673-674 per Brennan J. Accordingly, I am of opinion that the general damages for this problem should be awarded only for the period to June 2004 when the new flumes should have been installed, had a decision to replace them been made within a reasonable time. 376 It was not reasonably foreseeable, at the time the contract was entered into, that North East Equity would continue to operate a defective flume system which disrupted its business by affecting the orderly and efficient operation of the new line. Any damage it suffered beyond the time when what needed to be done became clear and that Proud Machinery would not replace the flume elevators, was not within the reasonable contemplation of the parties as flowing from the breach: Burns 161 CLR at 668 per Wilson, Deane and Dawson JJ. 377 I am of opinion that the cost of replacing the flume elevators was €51,000. There is no evidence of the freight or installation costs but, doing the best I can from reviewing the general costs of installing the new line I consider that an allowance of €9,000 should be made, making a total of €60,000. 378 It is difficult to dissect particular losses of time or costs as having been occasioned by one or more of the deficiencies in the new line which I have found. These were the defective flume elevators and the original location of the touch screen in the office, rather than above the tanks where it was moved later in 2003 at no cost to North East Equity. The task of making an assessment of any loss is more difficult because of the deficiencies I have found in North East Equity's management, or lack of it, of the new line.


case_text: Often when a person passes on what another has said, he or she gives his or her own imprimatur to the original statement. Thus, at common law, a person who passes on a rumour or statement made by another is treated as having the same responsibility as the source. And, in cases involving s 52 of the Trade Practices Act , the representor's conduct must be considered as a whole: Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 ; (2004) 218 CLR 592 at 605 [38] - [40] per Gleeson CJ, Hayne and Heydon JJ. Once the contract was made, what Mr North had said, which Proud passed on to North East Equity, assumed a different character because Proud Machinery then accepted responsibility for achieving that level of performance. 123 North East Equity also alleged that, between about late 2001 and September 2002, Proud made the following representations to Mr Tana orally, either on the telephone or in person: (viii) Mr Proud repeated the various written representations alleged. (ix) Proud Machinery and Mr Proud were possessed with sufficient knowledge, skill and experience to design, procure and install the new plant. (x) The new plant would utilise electric power more efficiently than the existing Sumich line. (xi) The new plant would comfortably handle a capacity of 150 tonnes per day packed out in cartons and in doing so it would be operating at 'idle'. 124 While it is likely that Mr Proud repeated the written representations that I have found were made in the course of either discussions or republishing his own letters, I do not consider that such repetition adds anything. I do not propose to deal with the instances of those repetitions because it is not necessary to do so.


case_text: In a commercial setting between experienced business people, the express words of the contract, even if contained in exchanges of correspondence, will often be an authoritative guide as to the matters on which each party relied in entering the contract. They will know that often events will have moved on from earlier communications. Courts will be mindful that representations made early in a negotiation process, can be potent and can continue to influence a party's understanding of what is being discussed, or what becomes the subject-matter of a contract. Nonetheless, courts must also be realistic about how negotiations progress; they are not static and when the context evolves, so does the understanding of each party as to what, at the later point of time, is being discussed. Gibbs CJ noted in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 199 (in a passage approved by Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ in Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12 ; (2000) 202 CLR 45 at 85 [102] ) that s 52 of the Trade Practices Act did not impose burdens which operated for the benefit of persons who failed to take reasonable care of their own interests. Gibbs CJ was discussing representations made to the public, as opposed to particular individuals. However, the judgment in Campomar 202 CLR at 83-84 [98]-[100] also discussed the need to consider all of the circumstances of the particular case. And, as McLelland CJ in Eq in Watson 49 NSWLR at 318-319 noted, recollections of pre-contractual conversations relied on as the source of an allegedly misleading or deceive representation can be affected by later events and the lapse of time.


case_text: McLelland CJ in Eq said that each element of the cause of action had to be proved to the reasonable satisfaction of the Court: Watson 49 NSWLR at 319; see also s 140 of the Evidence Act 1995 (Cth) and CEPU v ACCC [2007] FCAFC 132 ; (2007) 162 FCR 466 at 479-482 [29] - [39] per Weinberg, Bennett JJ and myself. 72 The process of construction of a contract is undertaken objectively. In Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [40] , Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said: 'It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.' (citations omitted) And in CEPU 162 FCR at 510 [164]-[165] Weinberg, Bennett and I said: ' In the construction of a contract, the court places itself in the commercial matrix in which the parties were at the time that the contract was made. This is so that the court can construe correctly both the express terms used by the parties and those which are included by implication in order to give effect to their presumed intention. In Royal Botanic Gardens and Domain Trust v South Sydney City Council [2001] FCA 760 ; (2002) 76 ALJR 436 ; 186 ALR 289 at [10] , Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said that it was appropriate to have regard to more than internal linguistic considerations and to consider the circumstances with reference to which the words in question in a contract were used and, from those circumstances, to discern the objective which the parties had in view. They applied what Lord Wilberforce had said, namely that an appreciation of the commercial purpose of the contract "... presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating" ( Reardon Smith Line v Hansen-Tangen [1976] 1 WLR 989 at 995-996). And, in Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70 ; (2001) 210 CLR 181 at [11] approving Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896 at 912, Gleeson CJ, Gummow and Hayne JJ said that interpretation of a written contract involved ... the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.' See also International Air Transport Association v Ansett Australia Holdings Limited [2008] HCA 3 ; (2008) 242 ALR 47 at 51-52 [8] per Gleeson CJ, at 63 [53] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ.


case_text: During the course of pre-contractual negotiations, many things are said or written which convey, expressly or impliedly, one or more representations about matters under consideration by the parties. In Codelfa Construction Pty Limited v State Rail Authority of NSW [1982] HCA 24 ; (1982) 149 CLR 337 at 352 Mason J, in his seminal judgment, said: 'It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.' 105 His Honour said that the reason that the actual intentions of the parties were not taken into account in determining construction to be given to a contractual provision was: '... for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.' 106 Here, of course, there was no written contract complete in itself. But the policy reasons lying behind the parol evidence rule and the objective theory of contract are recognitions of the tendency of parties to negotiations to attribute to some particular matter a significance that did not exist at the time of the conclusion of the contract. In an evolving negotiation ultimately leading to the conclusion of the contract, different positions are taken with respect to different subject matters. To attribute significance in the final expression of the parties' contractual relationship to something said earlier may create an unreal and inaccurate appreciation of the subject matter of the relationship actually entered into at the later time. Of course, many things are said and written to induce the entry of a person into a contract. Even the common law recognised that misrepresentations, innocent, negligent or fraudulent, provided grounds in particular circumstances entitling parties to relief from the consequences of entry into a contract. 107 Any statement or representation made during pre-contractual negotiations is apt to be misconstrued if taken out of context, or treated as if it were a contractual term simply because it was said or written. Negotiations to arrive at a contract are not themselves part of the contract. Sometimes, however, they may set the scene in which the contract is to be understood; on other occasions they may contain, or be the source of contractual terms. But, it is often not realistic to treat a pre-contractual statement in isolation as if it were made outside the context of an evolving negotiation, which the parties recognise is a process. That process will culminate when they finalise matters in a contract.


case_title: Fountain v Alexander (1982) 150 CLR 615

case_text: As a matter of ordinary English, the assignment by North East Equity of 'all of its rights in relation to' the new line was plenary. The expression 'in relation to' is of wide and general import (cp its width when used in a statute: Fountain v Alexander (1982) 150 CLR 615 at 629 per Mason J). And, in Loxton v Moir (1914) 18 CLR 360 at 379 Rich J said: 'The phrase "chose in action" is used in different senses, but its primary sense is that of a right enforceable by an action. It may also be used to describe the right of action itself, when considered as part of the property of the person entitled to sue. A right to sue for a sum of money is a chose in action, and it is a proprietary right.'


case_text: If such a small loss were incurred, it would not accord with commonsense for North East Equity not to have gone ahead with acquiring the new line. In assessing what Mr Tana (as the controlling mind of North East Equity) would have done, it is important to exclude from consideration the subsequent impacts of the fall in the market and the production problems with the farms. Mr Tana was optimistic in 2002 that demand for carrots would increase, so that the labour savings he expected would have been greater, the more carrots were processed. A reasonable business person in the position of Mr Tana and, I infer he too, would have replaced the inefficient old plant with the more efficient new line which gave the actual savings referred to above with the prospect of even greater ones in light of the expectation of greater demand and the significant reduction in future labour costs: Gull v Saunders & Stuart [1913] HCA 55 ; (1913) 17 CLR 82 at 89 per Barton ACJ, Gavan Duffy and Rich JJ approving British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways of London Co Ltd [1912] AC 673: cf at 689-691 per Viscount Haldane LC esp at 691 where the Lord Chancellor referred to replacing obsolete machines with up to date ones.


case_text: I am of opinion that nothing turns on whether the contract for the supply of the new line was, on its true characterisation, a contract for the sale of goods or a contract for work and materials. In the former case, s 14(i) of the Sale of Goods Act ordinarily would operate to imply a condition that the goods be reasonably fit for the purpose for which they were required, as made known by the purchaser. In the absence of special circumstances, a contract to do work and supply materials will carry with it two implied warranties: first, that the materials are of good quality and free from latent defects; and secondly, that the materials are reasonably fit for their intended purpose: Helicopter Sales (Australia) Pty Limited v Rotor-Work Pty Limited [1974] HCA 32 ; (1974) 132 CLR 1 at 6 per Menzies J, at 8 per Stephen J, Barwick CJ agreeing with their Honours at 4 and Mason J agreed with Stephen J at 15; Young & Marten Ltd v McManus Childs Ltd [1969] 1 AC 454. I am of opinion that because, not only was Proud Machinery to supply the goods, it was also to erect and install them, the contract was not merely a contract for the sale of goods, but was in substance a contract for the provision of work and materials: cf Hewett v Court [1983] HCA 7 ; (1983) 149 CLR 639 at 646-647 per Gibbs CJ, 650 per Murphy J, 655 per Wilson and Dawson JJ, 662 per Deane J. As Gibbs CJ noted, the distinction between a contract for the sale of goods and one for the provision of work and materials is frequently a fine one and the tests for distinguishing them are unsatisfactory and imprecise: Hewett 149 CLR at 646; see too Sutton KCT, Sales and Consumer Law (4 th ed, Lawbook Co, 1995) at [2.42]-[2.43]; Benjamin's Sale of Goods (7 th ed, Sweet & Maxwell, 2006) at [1-041]-[1-043]. 345 I summarise below the contractual terms and representations which I have found Proud Machinery made to North East Equity and my findings on them. In analysing whether the new line, as installed, conformed with the purposes and terms referred to in [66](a)-(e) above, I have had regard to the implication that the new line would be reasonably fit for those purposes ( Helicopter Sales 132 CLR at 4, 6, 8, 15: see [64]-[66] above). (1) Pack out rate per hour I have not found that terms or representations were made exactly corresponding to those pleaded and set out at [66](a) and [67](g) above. Rather I have found (at [87] above) that, at the time of entry into the contract, the processing capacity was contained in a term and representation that: the new line would have the capacity to process and pack at a rate of production per operating hour of 18.75 tonnes final pack out on the pallet (later reduced to 17.55 tonnes). For the reasons given above, I am not satisfied that this was incorrect or misleading or deceptive. The new line had that capacity. And, by operating a split shift, the new line had the capacity to achieve a pack out in excess of 150 or, later (after the handline was deleted), 140.4 tonnes in eight working hours. (2) Temperature I have found that terms and representations were made which corresponded to those pleaded and set out at [66](b), (c) and [67](h) and [102](iii) and (v), namely that the new line would, first, be designed so as to be reasonably fit to achieve: (b) the ability to process farm fresh carrots at field temperatures; (c) the core temperature of packed carrots to be not more than 5deg.C; and secondly, (h) achieve a guaranteed maximum of 5deg.C core temperature for North East Equity's carrots; (iii) have hydro-cooling tanks capable of producing constant product output; and (v) be capable of controlling the temperature of the carrots. I have found that I am not satisfied that the new line did not have these capacities if operated correctly. (3) Grading I have found terms and representations were made that corresponded to those pleaded and set out at [66](d) and [102] (ii) and (iv), namely that the new line would, first, be designed so as to be reasonably fit to achieve: (d) the ability to sort and grade carrots into eight distinct streams of size and length grades; and secondly, (ii) have nine hydro-cooling tanks which would allow one of those tanks for each length or size grade and provide the opportunity to have a spare tank; and (iv) provide quality length sizing for three separate lengths. I have found that I am not satisfied that the length graders (there being no complaint about the width or girth graders) were not reasonably fit for the purpose of providing quality length sizing in accordance with what both parties understood were their inherent limitations. I am not satisfied that the new line was not reasonably fit for the purpose of having the ability to sort and grade carrots into eight different streams of length and size. I am satisfied that the hydro cooling tanks conformed with representation (ii). (4) Efficiency I have found that terms and representations were made that corresponded to those pleaded and set out at [66](e) and [102](vii), namely that the new line would first, be designed so as to be reasonably fit to: (e) achieve an increase in efficiency of labour usage compared to the existing Sumich line; and secondly, (vii) increase production while reducing the man hours required to achieve that production compared to the existing at the Wattleup plant line. I am satisfied that these were correct. As Mr Tana admitted in the meeting of 18 November 2003, labour costs per carton had reduced by 25% or more. (5) Reduction in damage to carrots I have found that a representation was made that corresponded to that pleaded and set out in [102](vi) namely that the new line would greatly reduce damage to carrots and wastage. I am not satisfied that this was incorrect, misleading or deceptive. In any event there were no records of waste or damage to carrots so as to enable any finding to be made as to the position before or after the new line was installed. And, the quality of carrots delivered for processing after the new line was installed was very different from, and worse than, their earlier quality. North East Equity has not established that this representation was not met. 346 North East Equity also pleaded that the representations were made by Proud Machinery and Mr Proud: (a) as to the performance characteristics, uses or benefits of the new line and because they were incorrect there were contraventions of s 53(c) of the Trade Practices Act ; (b) as to future matters, thus engaging s 51A of the Trade Practices Act . On the findings I have made, it is not necessary to consider these claims. 347 Proud Machinery and Mr Proud argued that the contractual measure of damages was not appropriate or available to North East Equity because it had assigned all of its contractual rights to the Bank of Western Australia Ltd in November 2002. North East Equity had entered a master lease agreement with the bank in August 2002. The master lease agreement contemplated that in the future North East Equity would seek to lease goods from the bank and set out the general terms which would apply once goods were nominated and acquired by North East Equity. On 19 November 2002 the bank and North East Equity sent to Proud Machinery a 'novation notice to and acknowledgment from supplier'. This recited that North East Equity had: (1) 'novate[d]' to the bank all of its rights under the contract that it had with Proud Machinery relating to the construction of the new line under which the bank would receive title to it and become its owner (cl 1); (2) 'assign[ed] to [the bank] the [new line] and all of its rights in relation to the [new line]' (cl 2). 367 Nonetheless the contract contained an implied promise that Proud Machinery would exercise reasonable care and skill in the performance of its services, including the selection of goods or work and materials that were reasonably fit for the purposes for which North East Equity had (expressly or by implication) indicated they were required: Astley v Austrust Ltd [1999] HCA 6 ; (1999) 197 CLR 1 at 21-22 [46] - [47] per Gleeson CJ, McHugh, Gummow and Hayne JJ; Helicopter Sales [1974] HCA 32 ; 132 CLR 1. 368 In the relationship between North East Equity and Proud Machinery, that implied promise was parallel and concurrent with a co-extensive duty in tort on the part of Proud Machinery and Mr Proud to exercise the same reasonable skill and care: Astley 197 CLR at 23 [46]-[48] per Gleeson CJ, McHugh, Gummow and Hayne JJ. 369 The pleading of Proud Machinery's and Mr Proud's alleged negligence and the way in which North East Equity argued this claim reflected, in substance, its complaints of failures in the design, procurement and installation of the new line, which gave rise to the shortcomings in its operation as installed. The duty of care in this matter arose because and in the context of the contractual relationship. Proud Machinery had parallel and concurrent obligations in tort and contract to exercise reasonable care and skill in performing professional tasks owed to North East Equity under the contract. Mr Proud had a parallel and congruent obligation in tort: Astley 197 CLR at 23 [48]. There is no circumstance pleaded in the present case which would justify extending those obligations in tort beyond a parallel and concurrent liability of Proud Machinery and Mr Proud, co-extensive with the contractual obligations of Proud Machinery to exercise reasonable skill and care. 370 The contract was negotiated at arms length between two experienced and capable business people, Mr Tana and Mr Proud. Its express and implied terms reflected the commercial relationship agreed on by the parties for the procurement and installation of the new line. That relationship is a commonplace in commerce; a vendor who is the distributor of plant and equipment and a purchaser who, after negotiating with the vendor, agrees on terms for the purchase and installation of the equipment. The common law and statutory obligations (such as in Part V of the Trade Practices Act and the Sales of Goods Act ) which govern such a relationship do not need extension or modification on the facts of this matter or merely because one party was unhappy, after the event, with the result arrived at by the performance of the contract. 371 On the basis of my findings in respect of the contractual terms and representations, the claim in negligence, must also fail. 372 I have rejected the claims for damages for economic loss and loss of a chance to earn further profits as being without foundation. I have also found that, in substance, North East Equity has not established that the new line failed to operate in accordance with the pleaded contractual terms and representations, or that Proud Machinery and Mr Proud breached the duties of care they owed. There are still some subsidiary matters which I will address below.


case_text: In Beaton v Moore Acceptance Corporation Pty Ltd [1959] HCA 59 ; (1959) 104 CLR 107 , Dixon CJ, Taylor and Windeyer JJ considered a case involving a purchaser who had entered into a contract with a vendor for the sale of goods, being a bulldozer. Before that contract was completed, the purchaser entered into a hire purchase contract with a financier, and the financier in turn entered into a contract with the original vendor to acquire the bulldozer from it so as to make it available to the purchaser. The bulldozer was defective when delivered to the purchaser. Dixon CJ, Taylor and Windeyer JJ said that the purchaser's claim against the original vendor was for breach of a contract '... which, by common consent, was superseded by the hire purchase agreement in question and which, therefore, was never carried into effect': Beaton 104 CLR at 118; see too Hellyer Drilling Co v MacDonald Hamilton & Co Pty Ltd (1983) 51 ALR 177 at 181 per Fitzgerald J.


case_text: I am of opinion that nothing turns on whether the contract for the supply of the new line was, on its true characterisation, a contract for the sale of goods or a contract for work and materials. In the former case, s 14(i) of the Sale of Goods Act ordinarily would operate to imply a condition that the goods be reasonably fit for the purpose for which they were required, as made known by the purchaser. In the absence of special circumstances, a contract to do work and supply materials will carry with it two implied warranties: first, that the materials are of good quality and free from latent defects; and secondly, that the materials are reasonably fit for their intended purpose: Helicopter Sales (Australia) Pty Limited v Rotor-Work Pty Limited [1974] HCA 32 ; (1974) 132 CLR 1 at 6 per Menzies J, at 8 per Stephen J, Barwick CJ agreeing with their Honours at 4 and Mason J agreed with Stephen J at 15; Young & Marten Ltd v McManus Childs Ltd [1969] 1 AC 454. I am of opinion that because, not only was Proud Machinery to supply the goods, it was also to erect and install them, the contract was not merely a contract for the sale of goods, but was in substance a contract for the provision of work and materials: cf Hewett v Court [1983] HCA 7 ; (1983) 149 CLR 639 at 646-647 per Gibbs CJ, 650 per Murphy J, 655 per Wilson and Dawson JJ, 662 per Deane J. As Gibbs CJ noted, the distinction between a contract for the sale of goods and one for the provision of work and materials is frequently a fine one and the tests for distinguishing them are unsatisfactory and imprecise: Hewett 149 CLR at 646; see too Sutton KCT, Sales and Consumer Law (4 th ed, Lawbook Co, 1995) at [2.42]-[2.43]; Benjamin's Sale of Goods (7 th ed, Sweet & Maxwell, 2006) at [1-041]-[1-043].


case_text: There is a further difficulty with North East Equity's analysis because it relied, as the value of the new line, on the figure of $960,000 given by Jonathan Gregson. Mr Gregson had no formal qualifications as a valuer, but was a very experienced auctioneer. He had no experience in selling equipment of the kind in new line, other than selling other equipment belonging to North East Equity. First, Mr Gregson gave that figure in respect of the new line as at May 2007, not at the time of its acquisition or installation four years earlier. The figure affords no proper basis on which to compare the amount paid in early 2003 with the true value at that time of what was acquired: HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 at 656-659 [34]-[40] per Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ. Secondly, Mr Gregson was not able to offer an opinion in his expert report on the new line's value when it was acquired, saying only that this assessment was 'difficult'. He had tried to enquire of Mr Proud and Bruynooghe about a value which he could consider for his report, but desisted after he learned of their involvement in the proceedings. Nor did another equipment dealer of whom he enquired give him any assistance in placing a value on the new line. 390 Here, the subsequent fall in the carrot market may have been an independent or extrinsic cause affecting Mr Gregson's perception in 2007 of what the new line might then realise at auction based on his experience with selling North East Equity's equipment subsequent to early 2003: HTW Valuers 217 CLR at 659 [40]. If the market for carrots were higher, rather than lower, a processing plant offering substantial savings in labour costs would be likely to be more attractive to potential purchasers. Instead, by 2007 the market falls had driven some of North East Equity's competitors out of business. 391 This analysis shows that, even if North East Equity had proved that Proud Machinery and/or Mr Proud had contravened ss 52 and or 53 (c) of the Trade Practices Act and/or been negligent in one, or even all, of the respects it had alleged, it would not have established that the contravention(s) or breach(es) of duty had caused it to suffer any loss or damage. This is because, first, there is no evidence that the new line, as installed, was worth less than was paid for it (except, perhaps the €60,000 I have found it would have cost to replace the flume elevators and $10,000 for the disruption caused) and, secondly, even if it were, that difference was greater than the savings North East Equity achieved by operating the new line. 392 I do not accept that Mr Gregson's appraisal of the auction price realisable for the new line in May 2007 provides any reasonable basis on which to arrive at its value in March 2003 when it was brand new. A willing but not anxious purchaser, and a willing but not anxious vendor, would agree on a different and substantially higher price for brand new plant and equipment than for plant and equipment which had been used to process about four years worth of production at the levels shown on the evidence. The wear and tear of four years' use would create a substantial difference between the value when new (even if it were less than the price paid to Proud Machinery) and the value of the plant and equipment as seen by Mr Gregson.


case_text: The process of construction of a contract is undertaken objectively. In Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [40] , Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said: 'It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.' (citations omitted) And in CEPU 162 FCR at 510 [164]-[165] Weinberg, Bennett and I said: ' In the construction of a contract, the court places itself in the commercial matrix in which the parties were at the time that the contract was made. This is so that the court can construe correctly both the express terms used by the parties and those which are included by implication in order to give effect to their presumed intention. In Royal Botanic Gardens and Domain Trust v South Sydney City Council [2001] FCA 760 ; (2002) 76 ALJR 436 ; 186 ALR 289 at [10] , Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said that it was appropriate to have regard to more than internal linguistic considerations and to consider the circumstances with reference to which the words in question in a contract were used and, from those circumstances, to discern the objective which the parties had in view. They applied what Lord Wilberforce had said, namely that an appreciation of the commercial purpose of the contract "... presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating" ( Reardon Smith Line v Hansen-Tangen [1976] 1 WLR 989 at 995-996). And, in Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70 ; (2001) 210 CLR 181 at [11] approving Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society (No 1) [1998] 1 WLR 896 at 912, Gleeson CJ, Gummow and Hayne JJ said that interpretation of a written contract involved ... the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.' See also International Air Transport Association v Ansett Australia Holdings Limited [2008] HCA 3 ; (2008) 242 ALR 47 at 51-52 [8] per Gleeson CJ, at 63 [53] per Gummow, Hayne, Heydon, Crennan and Kiefel JJ.


case_title: Loxton v Moir (1914) 18 CLR 360


case_text: In a commercial setting between experienced business people, the express words of the contract, even if contained in exchanges of correspondence, will often be an authoritative guide as to the matters on which each party relied in entering the contract. They will know that often events will have moved on from earlier communications. Courts will be mindful that representations made early in a negotiation process, can be potent and can continue to influence a party's understanding of what is being discussed, or what becomes the subject-matter of a contract. Nonetheless, courts must also be realistic about how negotiations progress; they are not static and when the context evolves, so does the understanding of each party as to what, at the later point of time, is being discussed. Gibbs CJ noted in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 199 (in a passage approved by Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ in Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12 ; (2000) 202 CLR 45 at 85 [102] ) that s 52 of the Trade Practices Act did not impose burdens which operated for the benefit of persons who failed to take reasonable care of their own interests. Gibbs CJ was discussing representations made to the public, as opposed to particular individuals. However, the judgment in Campomar 202 CLR at 83-84 [98]-[100] also discussed the need to consider all of the circumstances of the particular case. And, as McLelland CJ in Eq in Watson 49 NSWLR at 318-319 noted, recollections of pre-contractual conversations relied on as the source of an allegedly misleading or deceive representation can be affected by later events and the lapse of time. 109 Additionally, it is important to be mindful of the particular relations between the parties. Here, two experienced commercial men were discussing a proposed transaction over many months. The discussions involved a considerable degree of planning and reworking in the course of arriving at a final, evolved concept. That concept was the subject of their contract. It is important, in that context, to evaluate what effect any representation conveyed at an earlier point in the negotiations, had at the time of entry into the contract, and how, at that time, any such representation was understood. Also, as Gibbs CJ identified in Puxu 149 CLR at 199, it is important to evaluate whether, at the time the contract was made, the representee had taken reasonable care to protect his or her own interests. The context, including subsequent events, statements or writings which cast a different light upon an earlier representation may be all important in determining whether it continued to have any operative effect or the effect alleged. 110 The letter of 29 July 2002 commenced by stating that it set out an outline of a system which Mr Proud believed would fulfil Mr Tana's desire to pack 150 tonnes of carrots over an 8 hour working day, and that it would include a number of specific items. Subsequently, the discussions evolved the concepts until these were crystallised in the contractual correspondence commencing with the letter of 30 September 2002 and ending with the letter of 18 October 2002. Both parties knew that the design and the drawings for the proposed line under discussion had changed on a number of occasions in the period between 29 July and 30 September 2002. 111 I have already explained what I find to be the contractual terms that emerged from the negotiations in relation to the tonnage per hour that the new line was warranted to process. It is not reasonable to read either of the two letters in isolation from the context in which they were communicated. That context included the background of what preceded each letter. The 30 September 2002 letter replaced and updated what had been said and written earlier in relation to the tonnage per hour figure. I find that the only representation, relating to the capacity of the new plant to produce any tonnage of carrots per hour, on which Mr Tana and North East Equity acted in relation to, was embodied in the contractual term I have found at [87] above, arising from sub-pars (a) and (g). 113 Thus, I am satisfied that at the time of the entry into the contract, the representation made originally in the letter of 29 July 2002 continued, namely that the nine cooling tanks would allow one tank for each length/size grade and provide the opportunity to have a spare tank. However, it was understood by Mr Tana and North East Equity, through him, in the context of the intervening events, including his visit to Belgium: see Puxu 149 CLR at 199 per Gibbs CJ. 114 The letter of 29 July 2002 said that, when a desired grade was selected to be sent to a packing position, the pumps and blower were activated in a manner appropriate to obtain a constant product output. North East Equity alleged that this representation was not fulfilled when the plant was commissioned and in operation. That was because the outflow system was said to rely on a combination of water pressure and compressed air to force carrots onto the discharge conveyor. That method of removing carrots from the tank was said to cause product surges, and then droughts, for the sorting tables, resulting in delays and inefficiencies in the continuous operation of the line. The letter of 29 July 2002 said that there was a 'PID control loop' which would calculate the speed of the pump and blower motor to ensure a controlled feed. The letter also indicated that it was possible to bypass that program and operate the tank manually. 115 I am satisfied that a representation was made, which continued to the time of contract, that the chilling tanks could be controlled in a way that would make them capable of producing a constant product output for the packing line.


case_text: Rights to sue for the tort of negligent misrepresentation ( Poulton v The Commonwealth (1953) 89 CLR 540 at 602 per Williams, Webb and Kitto JJ) and for loss or damage under s 82 of the Trade Practices Act in respect of a contravention of s 52 are not assignable: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 at 732-734 [51] - [57] per myself; BHP Coal Pty Ltd v O & K Orenstein & Koppel AG [2008] QSC 141 at [76] per McMurdo J. Those rights remained with North East Equity.


case_text: North East Equity relied on TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1963] HCA 57 ; (1963) 180 CLR 130 where a purchaser under a hire purchase agreement was held to be entitled to recover damages for breach of contract against both the vendor of the equipment and the financier who let it on hire purchase. However, the reason for this was that such a right was expressly created by s 7A(1) of the Hire-purchase Agreement Acts 1933-1946 (Qld): see TC Industrial 180 CLR at 136 where the relevant section is set out.


case_title: Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165


case_outcome: followed

case_title: Torkington v Magee [1902] 2 KB 427

case_text: That section is derived from s 25(6) of the Judicature Act 1873 (UK): see Meagher Gummow and Lehane's Equity: Doctrines & Remedies (4 th ed, Butterworths, 2002) [6-030], where at [6-480] the learned authors referred to the decision of Lord Alverstone CJ, Darling and Channell JJ in Torkington v Magee [1902] 2 KB 427 as an instance of a valid assignment of a chose in action. In Torkington [1902] 2 KB at 431-432 the Divisional Court held that an assignment of the benefit of an executory contract, of which there was no breach at the time, was validly made under the analogue of s 20. Their Lordships held that the right to sue for damages for a later breach by the obligor could be exercised directly by the assignee without suing in the assignor's name: Torkington [1902] 2 KB at 432.


case_title: Watson v Foxman (1995) 49 NSWLR 315

case_text: No contract is made in a vacuum. In order to construe the terms of the contract, the Court seeks to place itself in the matrix of mutually known facts forming the background in which the parties contracted. Additionally, where terms are alleged to have been made orally, it is necessary to identify what, if any, oral terms were agreed. In Watson v Foxman (1995) 49 NSWLR 315 at 318-319 McLelland CJ in Eq explained that, where a party alleged in civil proceedings that conduct of another was misleading or deceptive, or likely to mislead or deceive, ordinarily it was necessary for that party to prove to the reasonable satisfaction of the Court first, what the alleged conduct was, and secondly, the circumstances which rendered it misleading. He continued, in terms, which in my opinion are apposite to the identification of oral terms of a contract agreed to have been made in the course of negotiations, as follows: 'Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.' 71 McLelland CJ in Eq said that each element of the cause of action had to be proved to the reasonable satisfaction of the Court: Watson 49 NSWLR at 319; see also s 140 of the Evidence Act 1995 (Cth) and CEPU v ACCC [2007] FCAFC 132 ; (2007) 162 FCR 466 at 479-482 [29] - [39] per Weinberg, Bennett JJ and myself. 108 In a commercial setting between experienced business people, the express words of the contract, even if contained in exchanges of correspondence, will often be an authoritative guide as to the matters on which each party relied in entering the contract. They will know that often events will have moved on from earlier communications. Courts will be mindful that representations made early in a negotiation process, can be potent and can continue to influence a party's understanding of what is being discussed, or what becomes the subject-matter of a contract. Nonetheless, courts must also be realistic about how negotiations progress; they are not static and when the context evolves, so does the understanding of each party as to what, at the later point of time, is being discussed. Gibbs CJ noted in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 199 (in a passage approved by Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ in Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12 ; (2000) 202 CLR 45 at 85 [102] ) that s 52 of the Trade Practices Act did not impose burdens which operated for the benefit of persons who failed to take reasonable care of their own interests. Gibbs CJ was discussing representations made to the public, as opposed to particular individuals. However, the judgment in Campomar 202 CLR at 83-84 [98]-[100] also discussed the need to consider all of the circumstances of the particular case. And, as McLelland CJ in Eq in Watson 49 NSWLR at 318-319 noted, recollections of pre-contractual conversations relied on as the source of an allegedly misleading or deceive representation can be affected by later events and the lapse of time. 251 In making the second finding, I have not overlooked Mr Proud's evidence, which North East Equity relied on as supporting its case, in relation to the starting point for measuring the 18% rejects. In his written evidence, Mr Proud referred on three separate occasions to the agreed initial tonnage (182 tonnes per 8 hour working shift or 22.75 tonnes per operating hour) being fed into the new line commencing after the brush washers. In cross-examination Mr Proud said that this was wrong. I do not consider that Mr Proud was always reliable in his evidence. On this point, the contemporaneous documents are a surer guide to what the parties agreed and discussed than their recollections four or five years later. Those recollections have been coloured by the subsequent history of the dispute and the desires of both witnesses to justify in their own minds, what they thought they had done. Their evidence was prone to being assertive and unreliable: see too Watson 49 NSWLR at 318-319. 252 While North East Equity was entitled to rely on these statements by Mr Proud as admissions against interest, I do not consider them to be reliable. They made no commercial sense, since neither party measured the weight at that point, or had any objective means of calculating this. The new equipment had to work with what was to be retained, including the initial part of the plant. A mix of production targets was discussed in 2002. The key inputs were the initial quantity of carrots delivered and the pack out tonnage per hour. As I have found above, it made no sense for the parties to measure or consider the production of the new equipment in isolation. Ultimately, in 2002 Mr Tana agreed with Mr Proud that Proud Machinery would provide new equipment to be combined with some old for the plant, working as a whole, which could pack out 18.75 tonnes per operating hour (or 17.55 tonnes without the handline) with a maximum of 18% total rejects. The new equipment, obviously, had to have the capacity to operate in a way which enabled the final pack out rate to be achieved. But, as Mr Webster' s 1 August 2002 memorandum showed, the overall capacity of the line, consisting of both the old and new equipment, was what mattered. The new equipment could not process more than the amount of carrots fed into it from the old system's brush washers. I do not accept Mr Proud's written evidence on the starting point for measuring the 18% rejects. 253 In any event, I must approach the identification of the terms and the construction of the agreement objectively, rather than from the subjective points of view of the parties. For the reasons I have given, I am satisfied based on the mutually known facts, the evidence of discussions and contemporaneous written material that the parties agreed that the 18% rejects related to the processing operation as a whole, commencing from the point where the carrots were tipped into the wet hoppers. And, given the nature of the negotiations and the parties here, it is appropriate to assess whether any representation complained of was made by Proud Machinery or Mr Proud on the same basis.


case_title: Young & Marten Ltd v McManus Childs Ltd [1969] 1 AC 454


case_text: Secondly, in any event cl 1.15(g) was consistent with the plenary construction of the earlier assignment. It provided for North East Equity, as assignor, to make its name available, were that necessary, to enforce performance of the contract. That would only be where rights had not been passed to the bank by the earlier assignment. Since the bank was paying for the purchase and installation of the new line, it is not apparent, as a matter of commercial commonsense why it would leave causes of action for breach of contract by the vendor in the hands of the bank's customer. The bank would be conscious of the risk to it of its customer (North East Equity) becoming insolvent. If that occurred, the bank would have purchased, and would own the new line, but could only prove in its customer's insolvency for the damages needed to bring the new line into conformity with the contract. That would work commercial inconvenience and is not a commercially sensible construction in absence of clear words: Zhu v Treasurer of NSW [2004] HCA 56 ; (2004) 218 CLR 530 at 559 [82] per Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ. 360 Thirdly, cl 1.15(g) protected the interests of the bank where, for some legal or other reason, it could not sue (e.g. in respect of a claim for unliquidated damages which accrued before the assignment). Fourthly, the protection of the bank's interest in the goods referred to in cl 1.15(g) is not a right of North East Equity 'in relation to' the new line as contemplated in the notice; it is a distinct right of the bank. 361 North East Equity also argued that the assignment was of a bare right to damages. It was not; the assignment was of a legal chose in action for the reasons I have given.


case_text: No criminal proceeding has been commenced against either applicant arising out of Operation Wickenby. It was, therefore, necessary for an "investigation relating to a criminal matter" to be underway before a valid request for assistance of the Swiss authorities could be made under s 14 of the Mutual Assistance Act. The word "investigation" is not defined in the Act. Section 3 does, however, define a "criminal investigation" to mean "an investigation into an offence (whether the offence is believed to have been committed, to be being committed or to be likely to be committed)." The use of the phrase "investigation relating to a criminal matter" in s 14(1) comprehends a wider range of activities than those falling within the defined concept of a "criminal investigation". An investigation "relating to" a criminal matter has the potential to apply to a far broader range of activities: cf Oceanic Life Ltd v Chief Commissioner of Stamp Duties (NSW) [1999] NSWCA 416 ; (1999) 168 ALR 211 at 224-225 and the cases there referred to. It is not necessary, for present purposes, to determine the extent of the differences. This is because the evidence clearly establishes that the mutual assistance request was made to assist in the conduct of a criminal investigation known as Operation Wickenby. The evidence was given by Mr Outram, the ACC Executive Director, Operational Strategies. He deposed (and I accept) that Operation Wickenby began as a result of information contained in documentary material obtained after the execution of a search warrant in February 2004 on a hotel room occupied by Mr Phillip Egglishaw. That material suggested that a significant number of Australians had committed criminal offences involving taxation fraud. From July 2004 the ACC and the Australian Taxation Office ("the ATO") examined the material to determine which matters should be the subject of criminal investigation by the ACC and which matters should be the subject of civil investigation by the ATO. The ensuing criminal investigation conducted by the ACC was known as "Operation Wickenby". The civil investigations conducted by the ATO did not form part of Operation Wickenby. Operation Wickenby was conducted by the ACC pursuant to the Australia Crime Commission Authorisation and Determination (Money Laundering and Tax Fraud) Determination 2003. It involved the investigation of whether certain individuals had committed offences against Commonwealth criminal laws. Operation Wickenby is to be distinguished from Project Wickenby which was the title assigned to the separate investigations being overseen by the ATO. 39 Even if it be assumed that Article 1 of the Treaty imposes a positive obligation on Requesting States to identify with precision the offences to which the relevant investigation relates, there is no substance in the applicants' complaint that the request did not allege the commission of particular offences against Australian law. The request did contain references to a number of offences against Australian criminal law which it was alleged Mr Dunn had committed. The Treaty does not require the Requesting State to provide evidence that particular offences against its laws have been committed. As already noted, all that is required is that there be in existence a bona fide investigation which is designed to determine whether or not such offences have been committed. 40 The power to make an application for assistance which is conferred by s 14 of the Mutual Assistance Act is conditioned on there being "reasonable grounds to believe that a thing relevant to the ... investigation may be located in a foreign country." The request for mutual assistance which was sent to the Swiss authorities under cover of Ms Gibbins' 17 March 2005 letter, contained a good deal of information which suggested that material relevant to the investigation might be found in Switzerland. This information was largely derived from documents found on the personal computer of Mr Phillip Egglishaw and from responses by him to questions asked during a hearing conducted by the ACC. Strachans SA was based in Geneva. Mr Egglishaw was one of the principals of Strachans SA. He resides in Geneva. The Swiss Central Office was advised that "Australian authorities are investigating a number of Australian residents for using companies, trusts and bank accounts administered by Strachans S.A., an accounting services firm in Switzerland, to disguise their involvement in tax fraud schemes and money laundering" (paragraph 7). The Swiss authorities were also advised that the ACC believed that services provided by Strachans SA enabled Australian residents to obtain access to their funds "from anywhere in the world by the use of debit or credit cards linked to bank accounts opened and operated for them by Strachans outside Australia, including at Corner Banca, SA in Lugarno, Switzerland" (paragraph 9(c)).


case_text: The phrase "reasonable grounds to believe" (or variants of it) has a well understood and well settled meaning. In George v Rockett [1990] HCA 26 ; (1990) 170 CLR 104 at 112 the High Court said that: "When a statute prescribes that there must be "reasonable grounds" for a state of mind including suspicion and belief it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person." Later in its joint judgment the Court continued (at 116): "The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of mind may, depending on the circumstances, leave something to surmise or conjecture."


case_text: There are, in addition, other obstacles in the path of the applicants' argument. The first is that the Treaty does not form part of Australian domestic law and, therefore, save in an immaterial respect, does not impose binding obligations on the Attorney-General: see Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 286-7, 304 and 315.


case_text: Relevantly, s 7(2) of the Mutual Assistance Act provides that regulations may provide that the Act applies to a foreign country subject to any mutual assistance Treaty between that country and Australia. By s 7(3) of the Act it is provided that, if regulations have been made in accordance with s 7(2), then "this Act applies subject to the limitations, conditions, exceptions or qualifications that are necessary to give effect to the treaty in relation to that country." Regulation 4(1) of the Regulations provides that the Act applies to Switzerland "subject to such limitations, conditions, exceptions or qualifications as are necessary to give effect to the Treaty...." These provisions do not have the effect of incorporating the Treaty into Australian domestic law: see Bollag v Attorney-General (Cth) (1997) 79 FCR 198 at 214-6. As the respondents submit, in the absence of inconsistency between the Mutual Assistance Act and the Treaty, the Act applies and the Treaty does not.


case_text: It may also be the case, as the respondents argued, that the fact that scope exists for the Requested State to seek elaboration of a request for assistance before making a decision as to whether or not comply, renders the request immune from successful attack unless it be established that the pleaded omissions had occurred by reason of fraud or bad faith: cf Lego Australia Pty Ltd v Paraggio [1994] FCA 1286 ; (1994) 52 FCR 542 at 555-556; Puglisi v Australian Fisheries Management Authority (1997) 148 ALR 393 at 400. It is not, however necessary to determine whether this line of authority has application to requests for assistance made under the Mutual Assistance Act.


case_title: Puglisi v Australian Fisheries Management Authority (1997) 148 ALR 393


case_text: Although s 6(1)(n) of the DPP Act , in terms, identifies a 'function' of the DPP, it has been construed as being an empowering provision. In Director of Public Prosecutions v Australian Broadcasting Corporation (1987) 7 NSWLR 588 the NSW Court of Appeal held that s 6(1)(n) of the DPP Act conferred a special power on the DPP: see at 597. A similar approach to the construction of s 6(1)(n) of the DPP Act was adopted by a Full Court of this Court in Health Insurance Commission v Freeman (1998) 88 FCR 544 (" Freeman "). Whilst rejecting the notion that s 6(1)(n) empowered the DPP to give legal advice on request to Commonwealth authorities merely because they happened to be investigating the commission of offences under Commonwealth law, it held that such advice might be given in certain circumstances. Merkel J (with whom von Doussa and Carr JJ agreed) held (at 564-5) that: "... in any particular case, the function to which the legal advice is incidental or conducive must be identified. Contrary to the view held within the DPP's office, the DPP is not empowered under the DPP Act to give legal advice, if and when sought, to any Commonwealth authority merely because it is investigating the possible commission of offences under Commonwealth law. Before the precondition in s 6(1)(n) is met there must be some nexus between the investigation being conducted by the authority and a statutory function of the DPP. The nexus must be something more than a mere theoretical possibility that the DPP might institute, carry on or take over a prosecution at some future date. The facts of the particular case or the nature of the alleged offence must, at the very least, establish that the possibility of the DPP becoming involved in a prosecutorial function is a real one. A course of conduct of past referrals of similar matters to the DPP or evidence of an intention to refer the particular matter to the DPP for prosecution may suffice. Ultimately, each case will depend on its own facts." His Honour had earlier (at 561) expressed the view that: " ... it would seem to be incidental or conducive to the DPP's function of prosecuting, carrying on or taking over proceedings, including considering prosecuting, carrying on or taking over proceedings, to give legal advice to any Commonwealth authorities or agencies involved in the investigation of matters which are likely to be the subject of such proceedings, irrespective of whether the proceedings are prospective, imminent or actual. ... For example, it would clearly be "conducive" for the better fulfilment of the prosecutorial functions of the DPP, for advice to be given to an investigative agency to ensure evidential material being gathered by it for the purpose of a prosecution which it is intended to be carried on by the DPP, is being gathered lawfully."


case_text: Although s 6(1)(n) of the DPP Act , in terms, identifies a 'function' of the DPP, it has been construed as being an empowering provision. In Director of Public Prosecutions v Australian Broadcasting Corporation (1987) 7 NSWLR 588 the NSW Court of Appeal held that s 6(1)(n) of the DPP Act conferred a special power on the DPP: see at 597. A similar approach to the construction of s 6(1)(n) of the DPP Act was adopted by a Full Court of this Court in Health Insurance Commission v Freeman (1998) 88 FCR 544 (" Freeman "). Whilst rejecting the notion that s 6(1)(n) empowered the DPP to give legal advice on request to Commonwealth authorities merely because they happened to be investigating the commission of offences under Commonwealth law, it held that such advice might be given in certain circumstances. Merkel J (with whom von Doussa and Carr JJ agreed) held (at 564-5) that: "... in any particular case, the function to which the legal advice is incidental or conducive must be identified. Contrary to the view held within the DPP's office, the DPP is not empowered under the DPP Act to give legal advice, if and when sought, to any Commonwealth authority merely because it is investigating the possible commission of offences under Commonwealth law. Before the precondition in s 6(1)(n) is met there must be some nexus between the investigation being conducted by the authority and a statutory function of the DPP. The nexus must be something more than a mere theoretical possibility that the DPP might institute, carry on or take over a prosecution at some future date. The facts of the particular case or the nature of the alleged offence must, at the very least, establish that the possibility of the DPP becoming involved in a prosecutorial function is a real one. A course of conduct of past referrals of similar matters to the DPP or evidence of an intention to refer the particular matter to the DPP for prosecution may suffice. Ultimately, each case will depend on its own facts." His Honour had earlier (at 561) expressed the view that: " ... it would seem to be incidental or conducive to the DPP's function of prosecuting, carrying on or taking over proceedings, including considering prosecuting, carrying on or taking over proceedings, to give legal advice to any Commonwealth authorities or agencies involved in the investigation of matters which are likely to be the subject of such proceedings, irrespective of whether the proceedings are prospective, imminent or actual. ... For example, it would clearly be "conducive" for the better fulfilment of the prosecutorial functions of the DPP, for advice to be given to an investigative agency to ensure evidential material being gathered by it for the purpose of a prosecution which it is intended to be carried on by the DPP, is being gathered lawfully." 64 An additional source of power is to be found by a reading of s 6(1)(n) with s 6(2)(b) of the DPP Act . In Freeman Merkel J observed (at 566) that "[i]f it is regarded as desirable that the DPP have a general entitlement to give legal advice to Commonwealth authorities investigating the commission of offences under Commonwealth law, then that is a matter for Parliament." The DPP Act had, since its inception, contained s 6(2)(b) which empowered the executive, by regulation, to confer additional functions on the DPP. The power was not exercised, so as to confer power on the DPP to give general advice, until after the decision in Freeman was handed down. By regulation 3(1)(f) and (g) of the Director of Public Prosecutions Regulations 1984 (as amended by the Director of Public Prosecutions Amendment Regulations 1998 (No 1) which commenced on 22 December 1998) it was provided that it was a function of the DPP to provide legal advice to Commonwealth, State or Territory authorities "whether or not the advice is for the purposes of a particular investigation." It was plainly incidental and conducive to the performance of this function that the advice proffered by the DPP to the ACC and the Attorney-General's Department was given. 65 I note in conclusion that no argument was developed by the applicants to explain how and why, if the DPP had acted ultra vires, his involvement with the making of the request by the delegate of the Attorney-General, would render that request "invalid". 66 The applicants allege that the ACC did not act lawfully in providing to the DPP the information and advice sent in February 2005 by Mr Considine to Mr Adsett and in providing the information contained in the letters from the ACC to the Attorney-General's Department in May 2005 and November 2005.


case_text: The DPP was a "law enforcement agency" for the purposes of s 59(7) of the Act. In AA Pty Ltd v Australian Crime Commission [2005] FCA 1178 at [19] Finkelstein J held that a Director of Public Prosecutions or an Attorney-General were persons who had general responsibility for the enforcement of the laws of the Commonwealth and were, therefore, law enforcement agencies for the purposes of s 59(7) of the ACC Act . Although his decision was overturned on other grounds by a Full Court (see Australian Crime Commission v AA Pty Ltd [2006] FCAFC 30 ; (2006) 149 FCR 540) , this aspect of his Honour's reasons remained undisturbed. Indeed, the Full Court took a wider view of the term "law enforcement agency" than Finkelstein J had done.


case_title: Australian Crime Commission v AA Pty Ltd [2006] FCAFC 30 ; (2006) 149 FCR 540


case_text: In O'Reilly v Commissioners of the State Bank of Victoria [1983] HCA 47 ; (1982) 153 CLR 1 the High Court was called upon to determine the validity of certain notices given under the Income Tax Assessment Act 1936 (Cth). The Commissioner of Taxation had power to give the notices and he had delegated that power to Deputy Commissioners. Notices were given which bore a facsimile of the signature of a Deputy Commissioner which was stamped on the notices by the Chief Investigation Officer who had been authorised, by the Deputy Commissioner, to do so. The majority held that the notices were valid. Gibbs CJ (with whom Murphy J agreed) considered (at 12-13) that the Deputy Commissioner's delegated powers could be exercised through "a properly authorized officer". The Chief Investigation Officer was properly authorised notwithstanding the fact that the Deputy Commissioner had no personal knowledge that the officer intended to issue the particular notices. Wilson J (at 30-31) held that delegated power could be exercised through servants or agents. Mason J, in a dissenting judgment, was prepared to countenance the performance of ministerial acts by an agent of a delegate. His Honour said (at 18-19): "Apart from any exercise of his powers of delegation the Commissioner may appoint agents to act on his behalf and in his name. But, having regard to the statutory provisions here, I do not think that the Commissioner can appoint an agent to act on his behalf in exercising a statutory discretion or a statutory power which involves the formation of an opinion, except perhaps on the footing that the Commissioner retains to himself the substantial exercise of discretion or the substantial formation of the opinion, or the exercise of substantial control over the exercise of the discretion or the formation of the opinion, leaving to the agent the ministerial act of communicating the decision or issuing the notice." See generally, Campbell, "The Carltona Doctrine", (2007) 18 PLR 251. 77 The power conferred, by ss 59(7) and 59(9) on the CEO of the ACC or his delegate, Mr Outram, was conferred to facilitate departures from the general rule that information in the possession of the ACC should not be disseminated outside that body. The exercise of the power was conditional on the forming of value judgments as to the appropriateness or desirability or such dissemination. Information could only be communicated to a limited number of agencies. The significance which the legislature attached to the formation of the value judgments is indicated by the fact that, in each case, the judgment was to be formed by the CEO or a delegate drawn from the senior ranks (SES level) of the ACC. There was no evidence to suggest that the occasion for the exercise of power under s 59(7) or 59(9) was so frequent as to give rise to an assumption that the legislature could not have expected the CEO or a delegate personally to exercise the power. The exercise of the power had no direct effect on the rights of third parties but might, indirectly, have such an affect if the agency to whom the information was provided acted on it to the detriment of the third party. 78 These considerations suggest that the CEO or his delegate could not authorise other ACC officers to exercise the powers conferred by s 59(7) and s 59(9). Had Mr Outram purported to authorise Mr Considine or Mr Hellings to form the value judgments which lie at the heart of these statutory discretions, I would have been disposed to hold that the relevant disclosures had been made ultra vires. That is not, however, what occurred.


case_text: is a feature of reg 87(4) of the Defence (Personnel) Regulations , noted by the Full Court in Martincevic [2007] FCAFC 164 ; (2007) 164 FCR 45 at 54, [44] , that, once the Chief of Army (or a delegate) forms the opinion described in that sub-regulation, the service of the member concerned must be terminated. One aspect of that opinion is whether the decision-maker is "satisfied" in terms of reg 87(1)(e) that the member is not suited to be an enlisted member. These features of reg 87 mean that it is one of those provisions where "some fact or event [is] condition upon the existence of which the jurisdiction of a court or tribunal shall depend": R v Federal Court of Australia; ex parte Pilkington ACI (Operations) Pty Ltd [1978] HCA 60 ; (1978) 142 CLR 113 at 125. In this instance, the "fact or event" upon which the jurisdiction of the Chief of Army to terminate the service of a member depends is a state of subjective satisfaction, an opinion. In Bankstown Municipal Council v Fripp [1919] HCA 41 ; (1919) 26 CLR 385 at 403, Isaacs and Rich JJ observed of provisions of this type that they are employed with the object of preventing litigation on matters of jurisdictional fact.