case_text: applicable principles are set out in my decision in AWB v Cole at [135] [139]. The authorities draw a distinction between a mere reference to the existence of legal advice, which will not usually amount to a waiver, and cases in which the gist or substance of the legal advice has been disclosed: see Maurice at 481, 488 and 493; Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd [1996] HCA 15 ; (1996) 70 ALJR 603 at 607; Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12; Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 at 376-377; and Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237 ; (2004) 140 FCR 101 (' Bennett' ) at 104-105 [6] [9]. In Bennett , the Full Court (Tamberlin, Emmett and Gyles JJ) held that legal representatives of the Australian Customs Service had waived privilege in legal advice by stating openly that they had given advice to Customs that a particular regulation did not prohibit public comment by an officer on matters of public administration. The trial judge had held that a disclosure of the legal position or stance that a lawyer had advised a client to take was not inconsistent with the maintenance of confidentiality in the communication giving the advice. The trial judge also appeared to draw a distinction between statements which disclose the conclusion or logical result of legal advice, and statements which disclose the content of the legal advice and its reasoning: see Tamberlin J at 105 [10] and Gyles J at 118 [61]. The Full Court rejected this approach. Gyles J stated at 119 [65] that the voluntary disclosure of the gist or conclusion of the legal advice amounts to waiver in respect of the whole of the advice to which reference is made, including the reasons for the conclusion. Tamberlin J said at 104 [6]: my view, it would be inconsistent and unfair, having disclosed and used the substance of the advice in this way, to now seek to maintain privilege in respect of the relevant parts of that advice which pertain to the expressed conclusion. It may perhaps have been different if it had been simply asserted that the client has taken legal advice and that the position which was adopted having considered the advice, is that certain action will be taken or not taken. In those circumstances, the substance of the advice is not disclosed but merely the fact that there was some advice and that it was considered. However, once the conclusion in the advice is stated, together with the effect of it, then in my view, there is imputed waiver of the privilege. The whole point of an advice is the final conclusion. This is the situation in this case.' Subsequently, Tamberlin J was confronted with a case that was very similar to the one he hypothesised in Bennett . In Nine Films and Television Pty Ltd v NINOX Television Ltd (2005) 65 IPR 442, the applicant contended that the respondents had waived privilege in various legal advices because of the way in which the respondents had publicly referred to the advice. Tamberlin J held that there had been no waiver. He concluded that the mere assertion that advice had been taken, and the fact that action is then taken by the client, is not sufficient, unless the two are linked in such a way that it is apparent that the advice is that specified action should be taken. His Honour also made the following observations at 446-447 [26]: I accept that, in some circumstances, a clear disclosure of the "bottom line" of the advice, and the course of conduct taken thereafter, may be sufficient to amount to waiver of legal professional privilege, I do not think these matters have been established in the present case. On a fair and reasonable reading, the statement to the effect that senior counsel had been engaged and that he had reviewed matters in detail and that steps were being taken based on his recommendations is not sufficient to amount to a waiver of the legal advice. The substance or content of the advice is not disclosed with specificity or clarity. Questions of waiver are matters of fact and degree and, in this instance, I am not persuaded that the conduct, assertions or admissible evidence are sufficient to warrant the necessary implication that legal professional privilege has been waived.' The principles discussed in Bennett were applied in Seven Network Ltd v News Ltd (No 12 ) [2006] FCA 348. The issue was whether a statement in a discovered document that '[o]ur legal advice is that the risk of damages being awarded against Optus is low' had the consequence of waiving privilege in the legal advice that it referred to. Sackville J held that it did; the statement voluntarily disclosed the gist or conclusion of the legal advice: at [12]. AWB submitted that the reasoning in Bennett was unsound, particularly the holding that the disclosure of the conclusion stated in legal advice will amount to a waiver of the whole of the advice. AWB did not refer to any authorities that supported this submission and I reject it. In my view, it is well established that a voluntary disclosure of the gist, substance or conclusion of legal advice will amount to a waiver in respect of the whole of the relevant advice.


case_outcome: considered

case_text: Tamberlin J was confronted with a case that was very similar to the one he hypothesised in Bennett . In Nine Films and Television Pty Ltd v NINOX Television Ltd (2005) 65 IPR 442, the applicant contended that the respondents had waived privilege in various legal advices because of the way in which the respondents had publicly referred to the advice. Tamberlin J held that there had been no waiver. He concluded that the mere assertion that advice had been taken, and the fact that action is then taken by the client, is not sufficient, unless the two are linked in such a way that it is apparent that the advice is that specified action should be taken. His Honour also made the following observations at 446-447 [26]: I accept that, in some circumstances, a clear disclosure of the "bottom line" of the advice, and the course of conduct taken thereafter, may be sufficient to amount to waiver of legal professional privilege, I do not think these matters have been established in the present case. On a fair and reasonable reading, the statement to the effect that senior counsel had been engaged and that he had reviewed matters in detail and that steps were being taken based on his recommendations is not sufficient to amount to a waiver of the legal advice. The substance or content of the advice is not disclosed with specificity or clarity. Questions of waiver are matters of fact and degree and, in this instance, I am not persuaded that the conduct, assertions or admissible evidence are sufficient to warrant the necessary implication that legal professional privilege has been waived.'


case_outcome: cited

case_text: principles discussed in Bennett were applied in Seven Network Ltd v News Ltd (No 12 ) [2006] FCA 348. The issue was whether a statement in a discovered document that '[o]ur legal advice is that the risk of damages being awarded against Optus is low' had the consequence of waiving privilege in the legal advice that it referred to. Sackville J held that it did; the statement voluntarily disclosed the gist or conclusion of the legal advice: at [12].


case_text: Rio Tinto Ltd v Commissioner of Taxation (2005) 224 ALR 299, the Commissioner of Taxation filed particulars with the Court stating that the Commissioner would be relying on specified grounds 'which have been confirmed by Senior Tax Counsel... and supported by AGS... and opinions obtained from counsel'. The taxpayer contended that the Commissioner had thereby waived privilege in the legal advice of the Australian Government Solicitor and the opinions of counsel. Sundberg J held that these references voluntarily disclosed the conclusion or substance of the advice and consequently privilege had been waived. Sundberg J's decision went on appeal to the Full Court, but the Full Court's decision turned on the alternative ground of issue waiver: Rio Tinto at [72]. The Full Court considered that, in the particulars, the Commissioner had made an assertion that put the contents of the documents containing legal advice in issue, or necessarily laid them open to scrutiny, with the consequence that there was an inconsistency between the making of the assertion and the maintenance of the privilege.


case_outcome: discussed

case_text: common application of associated material waiver relates to the case where an expert report has been prepared in reliance upon other documents. In Australian Securities & Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 at 441-442 [21], Lindgren J summarised the applicable principles: Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 Ch D 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 (Interchase) at 151 per Pincus JA, at 160 per Thomas J. Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client's lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1997) 188 CLR 501 (Propend)...; Interchase , per Pincus JA; Spassked Pty Ltd v Cmr of Taxation (No 4) (2002) 50 ATR 70 at [17]. Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness's own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications: cf Interchase at 161-2 per Thomas J. Ordinarily disclosure of the expert's report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents; cf Attorney-General (NT) v Maurice [1986] HCA 80 ; (1986) 161 CLR 475 at 481... per Gibbs CJ, CLR 487—488... per Mason and Brennan JJ, CLR 492-493... per Deane J, CLR 497—498... per Dawson J; Goldberg v Ng [1995] HCA 39 ; (1995) 185 CLR 83 at 98... per Deane, Dawson and Gaudron JJ, CLR 109... per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870... ; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89... at [46] . Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents; Interchase at 148—150 per Pincus JA, at 161 per Thomas J. It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report: cf Dingwall v Commonwealth of Australia (1992) 39 FCR 521; Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400;... ACCC v Lux at [46].'


case_outcome: applied

case_text: Thomas v New South Wales [2006] NSWSC 380 (' Thomas' ), McClellan CJ at Common Law applied these principles to the documents which underpinned or supported the advice of counsel. His Honour stated at [17]: in the present case the primary document for which privilege was expressly waived was the advice of counsel, I can discern no difference in principle between such an advice and the advice or report of an expert retained for the purpose of the litigation. As I have indicated, I am satisfied that counsel relied upon instructions which they were given and, it would appear, relied upon medical reports in a way which influenced the content of the advice which they gave. Accordingly, insofar as there are documents which were relied upon in the preparation of the advice falling within categories 1, 2, 3 and 5 of the notice to produce, the service of the affidavit impliedly waived privilege in those documents.' Later at [20] his Honour said: In the present case the plaintiff disclosed the advice in these proceedings for the purpose of obtaining whatever assistance he could from that advice in pursuit of his claim. To my mind, that disclosure waived his privilege both in the advice itself and the documents which were used by counsel and which influenced the content of the advice. Waiver having occurred, the fact that the advice was not ultimately tendered is, to my mind, not relevant. Having sought an advantage, the plaintiff was bound by the course he had taken and accordingly is amenable to producing the relevant documents in response to an appropriate notice to produce.' According to the authorities discussed above, the limits of any waiver of associated material depend upon the nature of the advice that has been disclosed, what was represented by means of the disclosure, and the character of the transaction that gave rise to the disclosed legal advice. Regard must also be had to the way in which AWB's legal advice was described in the various disclosures. Essentially, by means of the disclosures, AWB was asserting that a detailed legal review had been undertaken, and that it had concluded that there was no evidence of any wrongdoing or other improper conduct by AWB in connection with its sale of wheat to Iraq under the OFF Programme. In my opinion, the nature and character of this disclosure is inconsistent with the maintenance of confidentiality in those documents which were taken into account by AWB's legal advisers in arriving at the advice they gave. To adapt the language used by McClellan CJ at Common Law in Thomas at [17] and [20], AWB's disclosures of its legal advice effect a waiver of privilege in the documents which were reviewed for the purposes of that advice or which influenced its content. Furthermore, AWB emphasised the breadth of its internal review in its various disclosures. In my view, AWB thereby waived privilege in documents which define the scope of the review or which reveal what investigations were in fact undertaken in the course of the review.


case_text: Newcrest Mining (WA) Limited v Commonwealth (1993) 40 FCR 507, French J applied the principle of associated material waiver in a case where one joint venturer disclosed significant elements of legal advice it had obtained in relation to mining leases held by the joint venture partners. His Honour held that the disclosure brought about an implied waiver of other legal advices obtained by the other joint venturers in relation to the mining leases. His Honour said at 509 that it was significant that the disclosures were made for the benefit of the joint venture as a whole and, although there was no direct evidence on the point, he considered that it was difficult to imagine that the disclosures would have occurred against the wishes of the other joint venturers or indeed without their consent.


case_text: England, the principle has been applied to documents which underpin or support expert evidence: see Dunlop Slazenger International Ltd v Joe Bloggs Sports Limited [2003] EDWCA Civ 901; Mayne Pharma Pty Ltd v Debiopharm SA [2006] EWHC 164 (Pat); and L'Oreal SA v Bellure NV [2006] EWHC 1503 (Ch).


case_outcome: approved

case_text: English cases illustrate the practical operation of the principle. In Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation (No 2) [1981] Com LR 138 (' Nea Karteria' ), a lawyer gave evidence that he had conducted an interview on the basis of a list of questions prepared by the plaintiffs' lawyers. While privilege was waived with respect to the witnesses' answers, the plaintiffs sought to maintain privilege with respect to the list of questions: at 139-140. Mustill J (as his Lordship then was) held at 140 that privilege over the list of questions had been waived by implication: seems to me that the written questions were, so to speak, part of the meeting. They were in a sense an agenda for the meeting. They formed the basis for one-half of the exchange between the lawyer and [the witness]. Evidence to that effect having been given by the lawyer, it seems to me that privilege must have been waived for those questions. And I think the interests of justice, which I believe to underlie the authorities on this part of the case, demand that the opposition and the court should have an opportunity to satisfy itself as to the accuracy of the evidence given to the lawyer as to the way in which he conducted the interview.' Mustill J drew a distinction at 140 between the instructions to the lawyer who carried out the questioning and the questions themselves; the instructions did not play a part in the meeting, did not form part of the body of events upon which the Court had to reach conclusions of fact, and were merely part of the prior history of those events. In R v Secretary of State for Transport; Ex parte Factortame (1997) 9 Admin LR 591 at 599, Auld LJ made the following observations concerning the application of the test stated in Nea Karteria : depends on whether the party making partial disclosure seeks to represent by so doing that the disclosed documents go to part or the whole of an "issue in question", the expression used by Mustill, J in the passage from his judgment in Nea Karteria that I have cited. The issue may be confined to what was said or done in a single transaction or it may be more complex than that and extend over a series of connected events or transactions. In each case the question for the court is whether the matters in issue and the document or documents in respect of which partial disclosure has been made are respectively severable so that the partially disclosed material clearly does not bear on matters in issue in respect of which material is withheld. The more confined the issue, for example as to the content of a single document or conversation, the more difficult it is likely to be to withhold, by severance, part of the document or other documents relevant to the document or conversation.' In Fulham Leisure Holdings Ltd v Nicholson Graham & Jones [2006] 2 All ER 599 (' Fulham' ) at 604 [11], Mann J suggested that it was helpful to approach the application of the test stated in Nea Karteria in three steps: first, identify the transaction in respect of which the disclosure has been made; secondly, ascertain from the nature of the disclosure or other evidence whether the transaction is wider than an advice given on a single occasion, if so, the whole of the wider transaction must be disclosed; and thirdly, the disclosure of the whole transaction may make it plain that further disclosure is necessary to avoid unfairness or misunderstanding of what has been disclosed. Mann J added at 607 [18] that once the transaction has been identified the cases show that the whole of the material relevant to that transaction must be disclosed. It is not open to a waiving party to say that the transaction is simply what the party has chosen to disclose; the court will determine objectively what the real transaction is so that the scope of the waiver can be determined. His Lordship also said that the application of these principles will be very fact sensitive and will vary from case to case: at 607 [19].


case_text: R v Secretary of State for Transport; Ex parte Factortame (1997) 9 Admin LR 591 at 599, Auld LJ made the following observations concerning the application of the test stated in Nea Karteria : depends on whether the party making partial disclosure seeks to represent by so doing that the disclosed documents go to part or the whole of an "issue in question", the expression used by Mustill, J in the passage from his judgment in Nea Karteria that I have cited. The issue may be confined to what was said or done in a single transaction or it may be more complex than that and extend over a series of connected events or transactions. In each case the question for the court is whether the matters in issue and the document or documents in respect of which partial disclosure has been made are respectively severable so that the partially disclosed material clearly does not bear on matters in issue in respect of which material is withheld. The more confined the issue, for example as to the content of a single document or conversation, the more difficult it is likely to be to withhold, by severance, part of the document or other documents relevant to the document or conversation.' Much the same answer follows if one asks what was the legal exercise or transaction that gave rise to the disclosed legal advice: see Factortame at 598-599; and Fulham at 604 [11] and 607 [18]. Having regard to the form of the legal advice disclosed by AWB, the relevant legal exercise or transaction encompassed a review of original documents and witness interviews, as well as summaries, chronologies or other analytical documents prepared by the lawyers, with a view to determining whether there was any improper or wrongful conduct by AWB. Material of this kind underpinned or influenced the legal advice which AWB has chosen to disclose, and it is not severable from that advice.


case_text: Fulham Leisure Holdings Ltd v Nicholson Graham & Jones [2006] 2 All ER 599 (' Fulham' ) at 604 [11], Mann J suggested that it was helpful to approach the application of the test stated in Nea Karteria in three steps: first, identify the transaction in respect of which the disclosure has been made; secondly, ascertain from the nature of the disclosure or other evidence whether the transaction is wider than an advice given on a single occasion, if so, the whole of the wider transaction must be disclosed; and thirdly, the disclosure of the whole transaction may make it plain that further disclosure is necessary to avoid unfairness or misunderstanding of what has been disclosed. Mann J added at 607 [18] that once the transaction has been identified the cases show that the whole of the material relevant to that transaction must be disclosed. It is not open to a waiving party to say that the transaction is simply what the party has chosen to disclose; the court will determine objectively what the real transaction is so that the scope of the waiver can be determined. His Lordship also said that the application of these principles will be very fact sensitive and will vary from case to case: at 607 [19]. Hargreaves' memorandum of 25 June 2005 makes it quite clear that his statements to the Australian Government were based upon all of the legal advice AWB had obtained, and not simply the advice it had obtained from Mr Tracey QC. It cannot be disputed that Hargreaves disclosed the substance of the legal advice which Blakes provided to AWB's board on 25 May 2004. AWB has already formed that view and acted on it by producing Blakes' power point presentation to the Commission. But in my view the consequence of Hargreaves' disclosures cannot be confined to Blakes' advice of 25 May 2004 and Mr Tracey QC's advices. Through the remainder of 2004 and until Hargreaves had his last meeting with Ms Carayanides in the period between 16 June 2005 and September 2005, Hargreaves met with Australian Government representatives several times and continued to make assertions that AWB's independent legal review had not identified any wrongdoing by AWB. The evidence shows that Blakes and Minters continued the legal review in 2004 and 2005 and provided ongoing legal advice to AWB. It is not open to a waiving party to say that the disclosures relate simply to one advice and not others, or that the relevant transaction is simply what the party has chosen to disclose; the Court will determine objectively what has been disclosed: see Fulham at 607 [18]. Hargreaves' memorandum of 25 June 2005 makes it plain that he deliberately deployed AWB's legal advice in his dealings with the Australian Government. He did so as part of AWB's strategy to secure the continued support of the Federal Government, both generally and in relation to AWB's dealings with the IIC and the United States Government. Hargreaves also deployed the advice in pursuit of the objectives that he set out in his memorandum; they included protecting and defending the reputation of AWB both within Australia and overseas, and minimising any attack by US wheat interests on AWB's position as the exclusive manager of wheat exports from Australia. Given these strategic objectives, it was important for AWB to disclose, indeed to stress, that it had conducted an extensive independent legal review which had found no evidence of any wrongdoing by AWB in connection with its exports of wheat to Iraq. By disclosing its legal advice to secure these objectives, AWB assumed the risk that it would be held to have waived legal professional privilege in connection with legal advices it obtained in the course of the legal review. Having regard to the legal principles governing waiver, I consider that any legal advice that AWB obtained from Blakes or Minters prior to Hargreaves' last meeting with Ms Carayanides on any of the subject matters, or relating to any of the issues, described at [180] above, has been waived by reason of the disclosures made by Hargreaves. Those subject matters and issues are wide enough to encompass the Tigris transaction and the iron filings claim. If AWB obtained legal advice during this period on those subject matters, or relating to those issues, from persons other than Blakes or Minters such as ABL, Mr Tracey QC or others, that advice has also been waived by Hargreaves' disclosures. Much the same answer follows if one asks what was the legal exercise or transaction that gave rise to the disclosed legal advice: see Factortame at 598-599; and Fulham at 604 [11] and 607 [18]. Having regard to the form of the legal advice disclosed by AWB, the relevant legal exercise or transaction encompassed a review of original documents and witness interviews, as well as summaries, chronologies or other analytical documents prepared by the lawyers, with a view to determining whether there was any improper or wrongful conduct by AWB. Material of this kind underpinned or influenced the legal advice which AWB has chosen to disclose, and it is not severable from that advice.


case_text: between a lawyer and client which facilitate a crime or fraud are not protected by legal professional privilege. This principle is often referred to as the 'fraud exception' to legal professional privilege, but this does not capture its full reach: Attorney-General (NT) v Kearney [1985] HCA 60 ; (1985) 158 CLR 500 (' Kearney' ) at 515; Propend at 546; Clements, Dunne & Bell Pty Ltd v Commissioner of Australian Federal Police (2001) 188 ALR 515 (' Clements' ) at 521-522 [30]. The principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J's review of the authorities in Clements at 522-526 [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a 'crime or fraud': R v Cox and Railton (1884) 14 QBD 153 (' R v Cox' ) at 165; a 'criminal or unlawful proceeding': Bullivant v Attorney-General (Vic) [1901] AC 196 (' Bullivant' ) at 201; 'any unlawful or wicked act': Annesley v Anglesea (1743) 17 St Tr 1139 at 1229; and 'all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances': Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. In Kearney , the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a 'deliberate abuse of statutory power' to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that 'legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.' Some authorities have expressed the principle as applicable to prevent a 'fraud on justice' in a broad sense. The concept of a 'fraud on justice' was adopted by Lander J in Gartner v Carter [2004] FCA 258 (' Gartner v Carter' ) to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140]. It is important to bear in mind that the fraud exception is based on public policy grounds. The principle is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest: see Kearney at 514-515; R v Cox at 614. This aspect of the principle is reflected in the statement that '[t]he privilege takes flight if the relationship between lawyer and client is abused': Clark v United States (1933) 289 US 1 at 15; see also Kearney at 514 and 524. For the principle to apply, there must be more than a mere assertion or allegation of fraud or impropriety: Bullivant at 201, 203 and 204-205. In Propend at 514, Brennan CJ expressed the test as being one of 'reasonable grounds for believing' that the relevant communication was for an improper purpose. The requirement has also been described as one of a 'prima facie case': Butler v Board of Trade [1971] 1 Ch 680 (' Butler' ) at 689; cf Baker v Evans (1987) 77 ALR 565 at 574. In Kearney at 516, Gibbs CJ approved the test formulated in O'Rourke v Darbishire [1920] AC 581 at 604, namely that 'there must be something to give colour to the charge'; 'the statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact'. The High Court in Propend applied this test: at 514 per Brennan CJ, at 521 per Dawson J, 534 per Toohey J, 546 per Gaudron J, 556 per McHugh J, and 592 per Kirby J.


case_text: between a lawyer and client which facilitate a crime or fraud are not protected by legal professional privilege. This principle is often referred to as the 'fraud exception' to legal professional privilege, but this does not capture its full reach: Attorney-General (NT) v Kearney [1985] HCA 60 ; (1985) 158 CLR 500 (' Kearney' ) at 515; Propend at 546; Clements, Dunne & Bell Pty Ltd v Commissioner of Australian Federal Police (2001) 188 ALR 515 (' Clements' ) at 521-522 [30]. The principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J's review of the authorities in Clements at 522-526 [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a 'crime or fraud': R v Cox and Railton (1884) 14 QBD 153 (' R v Cox' ) at 165; a 'criminal or unlawful proceeding': Bullivant v Attorney-General (Vic) [1901] AC 196 (' Bullivant' ) at 201; 'any unlawful or wicked act': Annesley v Anglesea (1743) 17 St Tr 1139 at 1229; and 'all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances': Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. In Kearney , the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a 'deliberate abuse of statutory power' to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that 'legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.' Some authorities have expressed the principle as applicable to prevent a 'fraud on justice' in a broad sense. The concept of a 'fraud on justice' was adopted by Lander J in Gartner v Carter [2004] FCA 258 (' Gartner v Carter' ) to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140]. Where a client is engaged in fraudulent conduct, communications with his or her lawyer in furtherance of the fraud are not privileged, regardless of whether the lawyer is a party to the fraud or not: Clements at 562 [213]. The principle applies to communications passing between a client and lawyer where the lawyer is innocent of the fraud or improper purpose: R v Bell; Ex parte Lees [1980] HCA 26 ; (1980) 146 CLR 141 at 145. Further, the fraud need not be that of the client or the lawyer; it may be that of a third party: Capar v Commissioner of Police (1994) 34 NSWLR 715; R v Central Criminal Court; Ex parte Francis & Francis [1989] AC 346, cited with approval in Clements at 562-565 [217]-[218]. The planned payments of the iron filings claim were never carried into effect because the invasion of Iraq intervened. Scales gave evidence to the Commission that the iron filings money has never been paid and remains in AWBI's accounts. However, the fact that the payments were never made to the GBI will not prevent the application of the fraud exception so long as there is sufficient evidence that the communications were in furtherance of, or preparatory to, the commission of the fraud or impropriety in the broad sense described above: see Butler; and Clements at 562 [213].


case_title: R v Cox and Railton (1884) 14 QBD 153

case_text: principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J's review of the authorities in Clements at 522-526 [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a 'crime or fraud': R v Cox and Railton (1884) 14 QBD 153 (' R v Cox' ) at 165; a 'criminal or unlawful proceeding': Bullivant v Attorney-General (Vic) [1901] AC 196 (' Bullivant' ) at 201; 'any unlawful or wicked act': Annesley v Anglesea (1743) 17 St Tr 1139 at 1229; and 'all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances': Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. In Kearney , the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a 'deliberate abuse of statutory power' to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that 'legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.' Some authorities have expressed the principle as applicable to prevent a 'fraud on justice' in a broad sense. The concept of a 'fraud on justice' was adopted by Lander J in Gartner v Carter [2004] FCA 258 (' Gartner v Carter' ) to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140]. It is important to bear in mind that the fraud exception is based on public policy grounds. The principle is sufficiently flexible to capture a range of situations where the protection of confidential communications between lawyer and client would be contrary to the public interest: see Kearney at 514-515; R v Cox at 614. This aspect of the principle is reflected in the statement that '[t]he privilege takes flight if the relationship between lawyer and client is abused': Clark v United States (1933) 289 US 1 at 15; see also Kearney at 514 and 524.


case_text: principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J's review of the authorities in Clements at 522-526 [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a 'crime or fraud': R v Cox and Railton (1884) 14 QBD 153 (' R v Cox' ) at 165; a 'criminal or unlawful proceeding': Bullivant v Attorney-General (Vic) [1901] AC 196 (' Bullivant' ) at 201; 'any unlawful or wicked act': Annesley v Anglesea (1743) 17 St Tr 1139 at 1229; and 'all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances': Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. In Kearney , the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a 'deliberate abuse of statutory power' to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that 'legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.' Some authorities have expressed the principle as applicable to prevent a 'fraud on justice' in a broad sense. The concept of a 'fraud on justice' was adopted by Lander J in Gartner v Carter [2004] FCA 258 (' Gartner v Carter' ) to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140]. For the principle to apply, there must be more than a mere assertion or allegation of fraud or impropriety: Bullivant at 201, 203 and 204-205. In Propend at 514, Brennan CJ expressed the test as being one of 'reasonable grounds for believing' that the relevant communication was for an improper purpose. The requirement has also been described as one of a 'prima facie case': Butler v Board of Trade [1971] 1 Ch 680 (' Butler' ) at 689; cf Baker v Evans (1987) 77 ALR 565 at 574. In Kearney at 516, Gibbs CJ approved the test formulated in O'Rourke v Darbishire [1920] AC 581 at 604, namely that 'there must be something to give colour to the charge'; 'the statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact'. The High Court in Propend applied this test: at 514 per Brennan CJ, at 521 per Dawson J, 534 per Toohey J, 546 per Gaudron J, 556 per McHugh J, and 592 per Kirby J.


case_text: principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J's review of the authorities in Clements at 522-526 [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a 'crime or fraud': R v Cox and Railton (1884) 14 QBD 153 (' R v Cox' ) at 165; a 'criminal or unlawful proceeding': Bullivant v Attorney-General (Vic) [1901] AC 196 (' Bullivant' ) at 201; 'any unlawful or wicked act': Annesley v Anglesea (1743) 17 St Tr 1139 at 1229; and 'all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances': Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. In Kearney , the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a 'deliberate abuse of statutory power' to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that 'legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.' Some authorities have expressed the principle as applicable to prevent a 'fraud on justice' in a broad sense. The concept of a 'fraud on justice' was adopted by Lander J in Gartner v Carter [2004] FCA 258 (' Gartner v Carter' ) to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140].


case_title: Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553


case_title: Gartner v Carter [2004] FCA 258

case_text: principle encompasses a wide species of fraud, criminal activity or actions taken for illegal or improper purposes: see North J's review of the authorities in Clements at 522-526 [35]-[44]. The scope of conduct caught by the principle has been articulated in a variety of ways, often without particular precision: Propend at 545. Classic formulations have spoken of communications in furtherance of a 'crime or fraud': R v Cox and Railton (1884) 14 QBD 153 (' R v Cox' ) at 165; a 'criminal or unlawful proceeding': Bullivant v Attorney-General (Vic) [1901] AC 196 (' Bullivant' ) at 201; 'any unlawful or wicked act': Annesley v Anglesea (1743) 17 St Tr 1139 at 1229; and 'all forms of fraud and dishonesty such as fraudulent breach of trust, fraudulent conspiracy, trickery, and sham contrivances': Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 553 at 565. In Kearney , the High Court applied the principle to deny legal professional privilege to legal advice obtained by the Northern Territory Government which was prima facie a 'deliberate abuse of statutory power' to defeat a land claim under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth). In his reasons for judgment, Gibbs CJ (with whom Mason and Brennan JJ agreed) stated at 515 that 'legal professional privilege will be denied to a communication which is made for the purpose of frustrating the processes of the law itself, even though no crime or fraud is contemplated.' Some authorities have expressed the principle as applicable to prevent a 'fraud on justice' in a broad sense. The concept of a 'fraud on justice' was adopted by Lander J in Gartner v Carter [2004] FCA 258 (' Gartner v Carter' ) to deny protection to a communication between a lawyer and client for the purpose of the client putting assets beyond the reach of the legitimate claims of secured creditors: at [130] and [139]-[140]. The principle extends to 'trickery' and 'shams'. A 'sham' refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471; see also Beazley v Steinhardt (1999) 106 A Crim R 21; affirmed on appeal in [1999] FCA 1255 (' Beazley' ). The recent case of Australian Securities & Investments Commission v Mercorella (No 3) [2006] FCA 772 provides an example of the denial of legal professional privilege to documents in furtherance of a sham transaction. In that case, creditors of a managed investment scheme claimed privilege over documents relating to securities obtained from the defendant and certain companies in the scheme. The transactions were allegedly entered into so as to advance those creditors' interests over the interests of other creditors to the scheme. Mansfield J found that the communications were prima facie in furtherance of a sham and, as such, were not privileged. After referring to Lander J's decision in Gartner v Carter and Barclays Bank plc v Eustice [1995] 4 All ER 511 (' Barclays Bank '), his Honour stated at [95]: is a short step from those decisions to the present facts, as prima facie found. The [creditors] engaged in the transactions reflected in the Deed, and the granting of the securities within the structures it created, to secure or advance their interests over others who had advanced money to [the first defendant] or to the Scheme. There is a prima facie case that the "restructure" of the advances so that they appear as advances to the partnership of Ajay and Opey is a sham.'


case_text: principle extends to 'trickery' and 'shams'. A 'sham' refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471; see also Beazley v Steinhardt (1999) 106 A Crim R 21; affirmed on appeal in [1999] FCA 1255 (' Beazley' ). The recent case of Australian Securities & Investments Commission v Mercorella (No 3) [2006] FCA 772 provides an example of the denial of legal professional privilege to documents in furtherance of a sham transaction. In that case, creditors of a managed investment scheme claimed privilege over documents relating to securities obtained from the defendant and certain companies in the scheme. The transactions were allegedly entered into so as to advance those creditors' interests over the interests of other creditors to the scheme. Mansfield J found that the communications were prima facie in furtherance of a sham and, as such, were not privileged. After referring to Lander J's decision in Gartner v Carter and Barclays Bank plc v Eustice [1995] 4 All ER 511 (' Barclays Bank '), his Honour stated at [95]: is a short step from those decisions to the present facts, as prima facie found. The [creditors] engaged in the transactions reflected in the Deed, and the granting of the securities within the structures it created, to secure or advance their interests over others who had advanced money to [the first defendant] or to the Scheme. There is a prima facie case that the "restructure" of the advances so that they appear as advances to the partnership of Ajay and Opey is a sham.'


case_text: principle extends to 'trickery' and 'shams'. A 'sham' refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences: Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55 ; (2004) 218 CLR 471; see also Beazley v Steinhardt (1999) 106 A Crim R 21; affirmed on appeal in [1999] FCA 1255 (' Beazley' ). The recent case of Australian Securities & Investments Commission v Mercorella (No 3) [2006] FCA 772 provides an example of the denial of legal professional privilege to documents in furtherance of a sham transaction. In that case, creditors of a managed investment scheme claimed privilege over documents relating to securities obtained from the defendant and certain companies in the scheme. The transactions were allegedly entered into so as to advance those creditors' interests over the interests of other creditors to the scheme. Mansfield J found that the communications were prima facie in furtherance of a sham and, as such, were not privileged. After referring to Lander J's decision in Gartner v Carter and Barclays Bank plc v Eustice [1995] 4 All ER 511 (' Barclays Bank '), his Honour stated at [95]: is a short step from those decisions to the present facts, as prima facie found. The [creditors] engaged in the transactions reflected in the Deed, and the granting of the securities within the structures it created, to secure or advance their interests over others who had advanced money to [the first defendant] or to the Scheme. There is a prima facie case that the "restructure" of the advances so that they appear as advances to the partnership of Ajay and Opey is a sham.' In Barclays Bank , communications between the client and his lawyer in relation to the setting up of transactions at an undervalue so as to prejudice the bank were held to be 'sufficiently iniquitous for public policy' to require those communications to be discoverable. Schiemann LJ (with whom Aldous and Butler-Sloss LJJ agreed) stated at 524: that view be correct, then it matters not whether either the client or the solicitor shared that view. They may well have thought that the transactions would not fall to be set aside ... either because they thought that the transactions were not at an undervalue or because they thought that the court would not find that the purpose of the transactions was to prejudice the bank. But if this is what they thought then there is a strong prima facie case that they were wrong. Public policy does not require the communications of those who misapprehend the law to be privileged in circumstances where no privilege attaches to those who correctly understand the situation.'


case_text: a client is engaged in fraudulent conduct, communications with his or her lawyer in furtherance of the fraud are not privileged, regardless of whether the lawyer is a party to the fraud or not: Clements at 562 [213]. The principle applies to communications passing between a client and lawyer where the lawyer is innocent of the fraud or improper purpose: R v Bell; Ex parte Lees [1980] HCA 26 ; (1980) 146 CLR 141 at 145. Further, the fraud need not be that of the client or the lawyer; it may be that of a third party: Capar v Commissioner of Police (1994) 34 NSWLR 715; R v Central Criminal Court; Ex parte Francis & Francis [1989] AC 346, cited with approval in Clements at 562-565 [217]-[218].


case_title: Butler v Board of Trade [1971] 1 Ch 680

case_text: the principle to apply, there must be more than a mere assertion or allegation of fraud or impropriety: Bullivant at 201, 203 and 204-205. In Propend at 514, Brennan CJ expressed the test as being one of 'reasonable grounds for believing' that the relevant communication was for an improper purpose. The requirement has also been described as one of a 'prima facie case': Butler v Board of Trade [1971] 1 Ch 680 (' Butler' ) at 689; cf Baker v Evans (1987) 77 ALR 565 at 574. In Kearney at 516, Gibbs CJ approved the test formulated in O'Rourke v Darbishire [1920] AC 581 at 604, namely that 'there must be something to give colour to the charge'; 'the statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact'. The High Court in Propend applied this test: at 514 per Brennan CJ, at 521 per Dawson J, 534 per Toohey J, 546 per Gaudron J, 556 per McHugh J, and 592 per Kirby J. It is not necessary to prove an improper purpose on the balance of probabilities. The 'prima facie' test arguably reflects the fact that issues of legal professional privilege are usually dealt with in the interlocutory stages of a proceeding, but the authorities have not departed from that formulation where a declaration is sought in relation to privilege issues: Butler ; Propend; Beazley . It must also be established, on the same prima facie basis, that the communication which is the subject of the claim for privilege was made in furtherance of, or as a step preparatory to, the commission of the fraud or wrongdoing. In Butler, Goff J found at 687 that a letter written by the plaintiff's lawyer which volunteered a warning that the plaintiff may incur serious consequences if he did not take care was not shown to be 'in preparation for or in furtherance of or as part of any criminal designs on the part of the plaintiff': see also Zemanek v Commonwealth Bank of Australia (unreported, Federal Court, Hill J, 2 October 1997). The planned payments of the iron filings claim were never carried into effect because the invasion of Iraq intervened. Scales gave evidence to the Commission that the iron filings money has never been paid and remains in AWBI's accounts. However, the fact that the payments were never made to the GBI will not prevent the application of the fraud exception so long as there is sufficient evidence that the communications were in furtherance of, or preparatory to, the commission of the fraud or impropriety in the broad sense described above: see Butler; and Clements at 562 [213].


case_title: O'Rourke v Darbishire [1920] AC 581

case_text: placed particular reliance on Dawson J's formulation of the scope of legal advice privilege in Waterford v Commonwealth [1987] HCA 25 ; (1987) 163 CLR 54 at 95: legal professional privilege relied upon in this case is that which attaches to communications between a legal adviser and his client for the purpose of giving or receiving legal advice and to documents recording those communications or containing information for the purpose of enabling the advice to be given. In order to attract that privilege, the communications must be confidential and the legal adviser must be acting in his professional capacity: see Minet v Morgan ; Wheeler v Le Marchant ; Smith v Daniell ; Bullivant v Attorney-General (Vict.) ; Jones v Great Central Railway Co ; O'Rourke v Darbishire ' . There is nothing controversial about this formulation of the principle. For the principle to apply, there must be more than a mere assertion or allegation of fraud or impropriety: Bullivant at 201, 203 and 204-205. In Propend at 514, Brennan CJ expressed the test as being one of 'reasonable grounds for believing' that the relevant communication was for an improper purpose. The requirement has also been described as one of a 'prima facie case': Butler v Board of Trade [1971] 1 Ch 680 (' Butler' ) at 689; cf Baker v Evans (1987) 77 ALR 565 at 574. In Kearney at 516, Gibbs CJ approved the test formulated in O'Rourke v Darbishire [1920] AC 581 at 604, namely that 'there must be something to give colour to the charge'; 'the statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact'. The High Court in Propend applied this test: at 514 per Brennan CJ, at 521 per Dawson J, 534 per Toohey J, 546 per Gaudron J, 556 per McHugh J, and 592 per Kirby J. The evidence before me establishes to the requisite prima facie standard that the price in contracts A1670 and A1680 was inflated to cover both the amount of the iron filings claim and the repayment by GBI of the debt which it owed to Tigris. A surcharge of US$8.375 pmt was added to each contract in respect of the Tigris debt, as shown by an email from Nigel Edmonds-Wilson to Scales and others at AWB dated 12 December 2002. The same email shows that in each contract the inland transportation fee was set at US$51.15 pmt. At the Commission, Mr Geary of AWB gave evidence that the prices in these two contracts were inflated to cover a component for the Tigris debt and a component for the US$2 million iron filings rebate. He also said that the United Nations was not advised at any stage that the prices for wheat in these two contracts had been inflated in this way so as to cover the Tigris debt and the iron filings claim. To adopt the words of Viscount Finlay in O'Rourke , the evidence gives ample 'colour to the charge' that the prices in these two contracts were falsely misrepresented. The evidence shows that the prices in the two wheat contracts were inflated as a means of extracting money from the United Nations' escrow account. Having regard to the terms of the memorandum of 7 February 2003, there are reasonable grounds for believing that, having extracted approximately US$2 million from the escrow account to meet the iron filings claim, AWB planned to pay that money in instalments to GBI via the mechanism of inland transportation fees. The material before me, including Whitwell's email of 7 November 2002 and his memorandum of 7 February 2003, indicates clearly that AWB knew that paying inland transportation fees to Alia was a means of making payments to the Iraqi Government. This plan was concealed from the United Nations.


case_text: my view, the evidence establishes a more than adequate prima facie case that AWB knowingly and deliberately disguised the true nature of the prices in contracts A1670 and A1680. If it be relevant, I also consider that the evidence establishes the foregoing matters on the balance of probabilities and to a level of satisfaction commensurate with the seriousness of the allegation: see Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 at 362 per Dixon J. No question arises here of evidence which would not be admissible in a final hearing: cf Propend . AWB argued that there was no evidence that the transaction furthered any particular fraud, iniquity or illegality. It submitted that it is common ground that the United Nations' resolutions were not in terms incorporated into Australian law. AWB submitted that, consequently, the fraud exception is not available to take the documents out of the operation of the doctrine of legal professional privilege. This narrow approach is at odds with the authorities that stress the wide range of fraudulent or iniquitous activities that fall within the principle. I have inspected the six documents that were said to relate to the iron filings claim. My inspection of AWB's documents revealed a further four documents that fall within this category and are still the subject of a privilege claim. I am satisfied that these 10 documents are not privileged. The documents were, prima facie, brought into existence in furtherance of an improper and dishonest purpose, viz inflating the prices of contracts A1670 and A1680 so as to extract payments out of the United Nations' escrow account that would then be utilised, in part, to satisfy a compensation claim by GBI. Prima facie, the evidence establishes that the transaction was deliberately and dishonestly structured by AWB so as to misrepresent the true nature and purpose of the trucking fees and to work a trickery on the United Nations. It would be contrary to public policy for the privilege to enure in communications of this kind.


case_text: As French J said in Australian Securities and Investments Commission re Richstar Enterprises Pty Ltd v Carey (No 5) (2006) 58 ACSR 6, s 1323 of the Corporations Act 2001 (Cth) does not authorise the Court to order that the person or company the subject of the orders appointing receivers to the property pay the costs of the receivers in discharging their function. This is consistent with a long established practice in England, see Evans v Clayhope Properties Pty Ltd [1988] 1 All ER 444 at 446.


case_title: Evans v Clayhope Properties Pty Ltd [1988] 1 All ER 444


case_text: It is the almost invariable practice for courts not to make any final order for costs in favour of a plaintiff on an interim application, the reason being that usually the substantive merits remain to be determined. The plaintiff's case may then appear to be very strong, indeed unanswerable, but as Dixon CJ pointed out in Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19 ; (1962) 107 CLR 9 at 20: "Experience of forensic contests should confirm the truth of the common saying that one story is good until another is told ..." It would be better if ASIC did not seek final orders for costs in interim applications of this nature. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: 6 July 2007 Counsel for the Plaintiff: M Scott Solicitor for the Plaintiff Australian Government Solicitor Counsel for Receiver for first and fourth Defendants: N Fryde No appearance for fifth Defendant Counsel for sixth and seventh Defendants: N Evans Solicitor for sixth and seventh Defendants Baker & McKenzie Date of Hearing: 6 July 2007 Date of Judgment: 6 July 2007 SCHEDULE OF PARTIES AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION Plaintiff - and - FUELBANC AUSTRALIA LIMITED (ACN 117 937 327) ("Fuelbanc") First Defendant - and - PAYCARDS GLOBAL PTY LTD (ACN 116 759 472) ("PayCards Global") Second Defendant - and - PAYCARDS INVESTMENTS PTY LTD (ACN 118 252 369) ("Paycards Investments") Third Defendant - and - C PROPERTY GROUP PTY LTD (ACN 118 252 387) ("PC Property Group") Fourth Defendant - and - STEPHEN JOHN MCDOUGALL ("McDougall") Fifth Defendant - and - TIMOTHY ROSS MCDOUGALL ("Timothy McDougall") Sixth Defendant - and - MATTHEW ALAN MCDOUGALL ("Matthew McDougall") Seventh Defendant AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/1033.html


case_outcome: referred to

case_text: The Commission asked me to incorporate in the orders the findings of fact made for the purpose of determining the appropriate penalties and other remedies. I do not think that it is appropriate to do that for a number of reasons. First, it would make the orders of the court unnecessarily lengthy and it would raise the question of what findings should or should not be included. Secondly, such a course would create a risk of inconsistency between the findings in the orders and the findings in the reasons for judgment: Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (ACN 008 799 040) (2001) ATPR 41-802. Reference was made by the Commission to s 83 of the Act, but that section does not suggest that such a course is necessary or appropriate. The findings of fact in the reasons for judgment can be proved in the manner contemplated by the section. 7 Cambur Industries was incorporated in 1962 and it carries on business as an importer and wholesale supplier of electrical goods, homeware products and tableware products. The company's business is divided into three divisions, which correspond to those different types of goods. The evidence is that for the most part the divisions operate separately. 8 The electrical goods supplied by Cambur Industries include kitchen products manufactured under two well-known brand names, Bamix and Magimix, such as stick mixers, juicers, food processors and coffee machines. The coffee machines are referred to as 'dual branded' Nespresso/Magimix. The contraventions in this case relate to the supply of the Bamix and Magimix products and the Nespresso/Magimix coffee machines. I will refer to these products as 'the Cambur products', except where it is necessary to distinguish between them. 9 The head office of Cambur Industries is in Victoria and the company has a regional office in New South Wales. The company has salespeople in Victoria, New South Wales and Adelaide. In the other States and Territories it operates through commission agents. Cambur Industries has about 35 employees, of whom approximately 60 per cent are full-time employees and 40 per cent are part-time employees. 10 The electrical goods division of Cambur Industries has four employees, one of whom is Mr Caulfield, who is the sales and marketing manager. The other three staff members report to him and he in turn reports to the managing director. Mr Caulfield is 57 years old and has worked as a salesperson for a number of years. Mr Caulfield and his wife have a small shareholding in Cambur Industries. Mr Caulfield is effectively the product manager for the Bamix and Magimix products, including the Nespresso/Magimix coffee machines. At the time of the conduct that contravened the Act, he was the one who made the decisions on behalf of Cambur Industries about the marketing and distribution of the Cambur products. At the time of the contravening conduct, Mr Caulfield was working in South Australia.


case_text: In fixing the pecuniary penalties, I have had regard to the cases to which I was referred. It is important to bear in mind that other cases are no more than a guide and there is an obvious danger in attempting too close a comparison for the purposes of fixing a penalty. In particular, there is a danger in taking a broadly analogous case and the penalty imposed in that case and then adding for circumstances considered more serious, and subtracting for circumstances considered less serious. Bearing those observations in mind, two cases which I have found quite helpful are Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482 and Australian Competition and Consumer Commission v Westminster Retail Pty Ltd (2005) ATPR 42-084. 103 Injunctions might still be appropriate even if the likelihood of future contraventions is slight, if future contraventions are likely to cause significant damage to other persons: cf Australian Competition and Consumer Commission v Dermalogica Pty Ltd (supra) at [111] per Goldberg J. Without wishing to minimise the seriousness of the contravening conduct here, I do not think this case falls into that category. 104 For these reasons, I decline to grant the injunctions sought by the Commission. 105 The Commission seeks an order that the respondents pay its costs of an incidental to the proceeding to be agreed or taxed. The respondents do not dispute the fact that they must pay the applicant's costs. The parties have attempted to agree an amount for costs, but have been unable to do so. In the circumstances, it is appropriate to make the order sought by the Commission.


case_text: Cambur Industries proffers an undertaking that it will maintain the compliance programme formulated by Mr Dee in January 2006 for a period of three years. The Court's power to accept an undertaking is constrained by the limits of its power to make an order to similar effect as the undertaking. The Court's power to make an order that a contravener comply with a compliance programme is contained in s 80 or s 86C of the Act. As far as s 80 is concerned, a training programme may go no further than the contravening conduct, or, it seems, that Part of the Act in which the section contravened appears: Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197; Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79 at 88-90 [25], [26] and [36] per French J. The programme which may be the subject of an order under s 86C is a programme relating to 'the contravening conduct, similar conduct or related conduct'.


case_text: In fixing the pecuniary penalties, I have had regard to the cases to which I was referred. It is important to bear in mind that other cases are no more than a guide and there is an obvious danger in attempting too close a comparison for the purposes of fixing a penalty. In particular, there is a danger in taking a broadly analogous case and the penalty imposed in that case and then adding for circumstances considered more serious, and subtracting for circumstances considered less serious. Bearing those observations in mind, two cases which I have found quite helpful are Australian Competition and Consumer Commission v Dermalogica Pty Ltd (2005) 215 ALR 482 and Australian Competition and Consumer Commission v Westminster Retail Pty Ltd (2005) ATPR 42-084.


case_title: Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197


case_title: Foster v Australian Competition and Consumer Commission (ABN 83 975 695 966) [2006] FCAFC 21 ; (2006) 149 FCR 135

case_text: The Commission in this case only seeks injunctions to restrain conduct which would constitute a contravention of the Act and does not seek to restrain conduct which would not or may not constitute a contravention of the Act. In an appropriate case it seems the court has the power to make such orders: Foster v Australian Competition and Consumer Commission [2006] FCAFC 21 ; (2006) 149 FCR 135. In this case, the granting of injunctions would add only one remedy, ie, a remedy for contempt of court, to those provided by the Act. 101 Generally speaking, injunctions which do no more than restrain contraventions of the Act will have little impact in terms of general deterrence. The pecuniary penalties are likely to have the greatest impact in that respect. Injunctions restraining no more than contraventions of the Act may have an effect in terms of personal deterrence and may be granted because of that consideration. They may also be granted because, in a particular case, they will reduce the likelihood of further contraventions. In this case, I am satisfied that the possibility of further contraventions is slight. Although Cambur Industries should have exercised greater control over Mr Caulfield, it was Mr Caulfield who was responsible for the contraventions. I am satisfied that the investigation, court proceedings, and pecuniary penalty I propose to impose has had and will have a very significant impact on him in terms of deterrence and, coupled with the compliance programme put in place by Cambur Industries, means it is very unlikely that he will engage in contravening conduct in the future. 102 As far as Cambur Industries and Mr Jeffs are concerned, I am satisfied that Mr Jeffs' lack of knowledge of the provisions of the Act, his lack of control and supervision of Mr Caulfield, and the lack of education programmes and checks and balances to ensure compliance with the Act have now been addressed and, coupled with the pecuniary penalty I propose to impose on Cambur Industries, means it is very unlikely that the company will engage in contravening conduct in the future.


case_text: Under s 80 of the Act, the court may grant an injunction in such terms as the court determines to be appropriate. The section provides that the court may grant an injunction whether or not the person intends to engage in the relevant conduct again, whether or not the person has previously engaged in the relevant conduct and whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in the relevant conduct: s 80(4) of the Act. These matters, which are often highly relevant to whether a court exercising equitable jurisdiction grants an injunction in an action between private parties, are of much less relevance when a court is considering the power to grant an injunction under s 80. However, they are not irrelevant to the exercise of that power: ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 253-257 per Lockhart J.


case_title: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285

case_text: I start by reminding myself of some well-known general principles relevant to the fixing of pecuniary penalties. What follows is taken from the reasons for judgment of Burchett and Keifel JJ in NW Frozen Foods v Australian Competition and Consumer Commission (1996) 71 FCR 285. 63 First, the effect of the respondent's conduct on the function of markets and other economic effects of the conduct will generally be regarded as a significant matter, and the court is likely to be assisted by views put forward by the Commission, or by experts called on behalf of the parties (at 290). In this case, the Commission put forward no direct evidence as to the effects of the respondents' conduct on the function of the relevant market. 64 Secondly, deterrence (both general and personal) is important in assessing the appropriate penalty. It has been described as a 'principal purpose' of s 76 and a factor of 'particular significance' (see the cases referred to at 293). However, at the same time, it is important that the penalty imposed is not oppressive. 65 Thirdly, cooperation and the implementation of a compliance programme by the contravener is also an important matter in fixing the appropriate penalty. Burchett and Keifel JJ said (at 294): 'Where the Commission established to administer the Act is satisfied that an appropriate programme has been undertaken, or the undertaking of it is proved to the Court, this is the most important matter to take into account on penalty.' 66 Fourthly, the penalties imposed in one case cannot dictate the appropriate penalty in another case. That follows from the fact that the circumstances in two cases are rarely the same or equal. 67 The fifth point is perhaps an observation more than anything else. Burchett and Keifel JJ expressed the view that the penalties imposed by s 76 are not criminal sanctions and their purpose, established now by a long line of cases, is not punishment (at 296-297). Carr J, on the other hand, considered that the question was an open one (at 299). 68 Section 76 identifies four matters which are relevant to the determination of the appropriate pecuniary penalty. They are: 1. the nature and extent of the act or omission; 2. the loss or damage suffered as a result of the act or omission; 3. the circumstances in which the act or omission took place; and 4. whether the contravening company and accessory have been found guilty of previous relevant contraventions. 70 The above matters are not exhaustive of all the relevant circumstances: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (supra) per Burchett and Keifel JJ (at 292). Other factors have also been identified, such as the respondents' financial position and any profit made by the contravening company. A number of the matters overlap and, clearly, the significance or weight to be accorded to any particular matter will depend on the circumstances of the particular case. 71 As to the nature and extent of the acts constituting the contravening conduct, in the case of Pete N Peppa I have found that there were eight acts which contravened s 48 of the Act. Those acts occurred over a period of about 16 months and the conduct culminated in the withholding of supply of Cambur products. In the case of Tabletop and Kitchen, there were four acts which contravened s 48. Those acts occurred over a period of about three-and-a-half years from January 2002 to July 2005, during which time, as a result of the respondents' conduct, Tabletop and Kitchen did not discount Cambur products. 72 As to any loss or damage suffered as a result of the contravening conduct, there are two groups which may have suffered loss or damage and they are the retailers and consumers. There is no precise evidence of loss or damage suffered by either group. As far as retailers are concerned, it was suggested that retailers other than Pete N Peppa or Tabletop and Kitchen may have been induced not to discount. Certainly there is evidence to suggest Mr Caulfield was speaking to other retailers about the price of Cambur products, but I do not think that I could find on the evidence that other retailers suffered loss or did not discount so that they or consumers suffered loss and damage. Mr Milosevic of Pete N Peppa gives some general evidence of loss and damage suffered by Pete N Peppa when he says that the Bamix and Magimix products were the best on the market and Pete N Peppa lost money because they were not selling them and were sending customers to other stores. There is no evidence from Mr Mitchell or Ms Gilbert of Tabletop and Kitchen of the effect of the contravening conduct on the business of Tabletop and Kitchen. I am prepared to assume that some loss was suffered by Pete N Peppa and Tabletop and Kitchen, but I can be no more precise than that. The conduct in each case occurred over a considerable period of time and Bamix and Magimix products were popular in the marketplace. Both businesses sought to discount the products. As far as the effect on consumers is concerned, I am prepared to assume that some loss and damage was caused because consumers could not buy discounted Cambur products from Pete N Peppa and Tabletop and Kitchen.


case_text: It is common ground that it is appropriate to make declarations and the only question is the form of those declarations. A declaration under the Act and s 21 of the Federal Court Act 1976 (Cth) must identify the contravening conduct. It must be precise in its terms, such that a person reading the declaration understands the nature of the contravention and, in broad terms, the conduct constituting the contravention. On the one hand, it is not necessary to put all the relevant findings of fact in the declaration, but, on the other, the gist of the conduct (as found) should be identified: Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75 ; (2003) 216 CLR 53 at 91 [89] - [90] per Gummow, Hayne and Heydon JJ. 97 The declarations I am prepared to make are set out at the end of these reasons. They are similar to the declarations put forward by the Commission, with the qualification that I have identified eight acts of resale price maintenance in relation to Pete N Peppa and four acts of resale price maintenance in the case of Tabletop and Kitchen. I do not think it offends any principle to declare that some acts referred to in the declarations fall within more than one paragraph of s 96(3) of the Act and I have framed the declarations accordingly. 98 The Commission seeks a series of injunctions against the respondents. The injunctions it seeks against Cambur Industries would restrain it from engaging in conduct in breach of s 48 of the Act by virtue of engaging in conduct which falls within the terms of s 96(3)(a), (b), (d) and (f) of the Act for a period of three years. Similar injunctions are sought in relation to Mr Caulfield, the first restraining him from being involved in contravening conduct by a corporation and the second restraining him from being involved in conduct where the recipient of the goods is a corporation (see s 96(2)).


case_text: In Trade Practices Commission v CSR Ltd (1991) ATPR 41-076, French J identified other relevant matters as follows: 5. the size of the contravening company; 6. the degree of power it has, as evidenced by its market share and ease of entry into the market; 7. the deliberateness of the contravention and the period over which it extended; 8. whether the contravention arose out of the conduct of senior management or at a lower level; 9. whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programmes and disciplinary or other corrective measures in response to an acknowledged contravention; and 10. whether the company has shown a disposition to cooperate with the authorities responsible for the enforcement of the Act in relation to the contravention.


case_text: Appellant contended that when explaining her case to the Tribunal she was " nervous ". Given the importance to her of the claim that she was making, so much may be expected. Indeed, it is important to constantly recall the difficult circumstances in which applicants for refugee status are called upon to give an account of their circumstances: Taylor S, "Informational Deficiencies Affecting Refugee Status Determinations: Sources and Solutions" (1994) 13 U Tas LR 43. In Guo v Minister for Immigration and Ethnic Affairs (1996) 64 FCR 151 at 194, Foster J also helpfully gave the following reminder: It is well to remember that self-contradictory statements and apparent evasiveness, although of obvious importance, do not necessarily require a conclusion that the witness is being untruthful in those aspects of his or her evidence or, more significantly, that the whole of his or her evidence should be rejected. In the case at hand, the Tribunal has carefully set forth the claims being advanced by the now Appellant and has made findings of fact by reference to the materials before it. In such a context, those findings are findings for the Tribunal alone and not this Court: cf Kopalapillai v Minister for Immigration and Multicultural Affairs [1998] FCA 1126 ; (1998) 86 FCR 547 at 552 and 559. Such findings are findings of fact falling far short of jurisdictional error: Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 at [67], 168 ALR 407 at 423 per McHugh J.


case_title: Kopalapillai v Minister for Immigration and Multicultural Affairs [1998] FCA 1126 ; (1998) 86 FCR 547


case_title: Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 , 168 ALR 407


case_title: SZFDE v Minister for Immigration and Citizenship [2007] HCA 35 , 232 CLR 189

case_text: 2, for example, alleges a failure to " afford procedural fairness ". Section 422B of the Migration Act provides that Div 4 of Pt 7 of the Act " is taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with ". See: SZFDE v Minister for Immigration and Citizenship [2007] HCA 35 at [48] , [2007] HCA 35 ; 232 CLR 189. One of those requirements is the obligation imposed by s 425 to invite a person seeking review " to give evidence and present arguments relating to the issues arising in relation to the decision under review ". But the manner in which it is said that the Tribunal failed to afford procedural fairness in the present proceeding was not explained and was not readily apparent. The Appellant, for example, appeared before the Tribunal to give evidence and to present her arguments during the course of a hearing held on 20 March 2009. Prior to that, the Tribunal had written to the Appellant pursuant to s 424A of the Migration Act on 23 February 2009. The Appellant's representative wrote to the Tribunal on 7 March 2009 and forwarded a further submission on 15 March 2009. A yet further submission was received on 19 March 2009. When reference is made in Ground 3 to the " relevant considerations or integers central " to the claims being advanced, the " integers " are not further identified. Nor has there been any identification of the manner in which the Tribunal " failed to consider " the claims being advanced or was otherwise " preoccupied " for the purposes of Grounds 4 and 5. There is no evidence that the Tribunal was " preoccupied " and the detailed elaboration of the claims being advanced and the manner in which they were resolved belie any conclusion other than a conclusion that the Tribunal discharged the functions entrusted to it in a careful and measured fashion. Nor was there any elaboration of the manner in which Grounds 6, 7 and 8 were sought to be advanced. Grounds 2 to 8 of the Notice of Appeal (inclusive) are rejected.


case_outcome: affirmed

case_text: application for review by the Federal Magistrates Court was then filed and in February 2009 that Court quashed the Tribunal's decision by consent. A differently constituted Tribunal thereafter conducted a further review and on 24 March 2009 again affirmed the decision not to grant the protection visa. On 5 August 2009 the Federal Magistrates Court dismissed an application seeking review of the March 2009 decision of the Tribunal: SZKOO v Minister for Immigration and Citizenship [2009] FMCA 729. On 26 August 2009 the Appellant filed a Notice of Appeal in this Court. The Appellant appeared before the Court unrepresented, although she did have the assistance of an interpreter.


case_text: Paragraphs 105-109 of the Statement of Claim will be struck out on the ground that they do not disclose a reasonable cause of action. Nonetheless I consider it appropriate that Dr Wearne be granted leave to replead, should she be so advised, the alleged contravention of s 51AA of the Trade Practices Act. The phrase 'conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories' is not confined to conduct of the kind considered by Amadio (see Australian Competition and Consumer Commission v Berbatis [2000] FCA 2 ; (2000) 169 ALR 324 esp at [13]-[28]).


case_text: The power conferred on the Court by O 11 r 16 is to be exercised to ensure that a party complies with the rules of pleading ( Australian Competition and Consumer Commission v Fox Symes & Associates Pty Ltd [2005] FCA 1071 ( 'Fox Symes' ) at [95]). Ordinarily the party should be given an opportunity to replead in accordance with the rules ( Fox Symes at [95]). However, if a party's pleading is repeatedly struck out, it may be inferred that the party is unable to plead a reasonable cause of action as required by the rules ( Fox Symes at [109]). 12 The principal rules of pleading are, for present purposes, to be found in Orders 11 and 12 of the FCRs. Order 11 r 2 provides: 'Subject to these Rules (a) a pleading of a party shall contain, and contain only, a statement in a summary form of the material facts on which the party relies, but not the evidence by which those facts are to be proved; (b) paragraph (a) has effect subject to this Order and to Order 4 (which relates to commencement of proceedings) and to Order 12 (which relates to particulars).' Order 11 r 4 provides: 'Where any document or spoken words are referred to in a pleading, it is permissible to state the effect of the document or spoken words without setting out the precise terms thereof.' Order 12 r 1(1) provides: 'A party pleading shall state in the pleading or in a document filed and served with it the necessary particulars of any claim, defence or other matter pleaded by him.'


case_text: The University submitted that while an implied term of mutual trust and confidence is part of the law of the United Kingdom, there remains a question whether such a term may be implied by law in an Australian contract of employment. I accept that the law is not certain in this respect ( Heptonstall v Gaskin (No 2) (2005) 138 IR 103 at [22]-[23]). However, the implied term as pleaded (which does not involve mutual obligations) finds some support in Australian authorities ( Burazin v Blacktown City Guardian [1995] IRCA 660 Madgwick J's consideration of this issue was not disapproved by the Full Court on appeal in Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144; Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186). It would not be appropriate on the present motion to foreclose argument on the important question of whether an Australian employer has the implied obligation pleaded in par 10 of the Statement of Claim.


case_title: Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144


case_text: I therefore conclude that Dr Wearne has not adequately pleaded a claim pursuant to s 51AA of the Trade Practices Act. It is therefore unnecessary for me to give detailed consideration to pars 107 and 108 of the Statement of Claim. I am, however, inclined to doubt that par 107 adequately pleads circumstances of 'special disadvantage' for the purpose of the unconscionable dealings doctrine expounded by the High Court in Commercial Bank of Australia Limited v Amadio [1983] HCA 14 ; (1983) 151 CLR 447 (' Amadio' ) esp per Mason J at 462. 35 Paragraphs 105-109 of the Statement of Claim will be struck out on the ground that they do not disclose a reasonable cause of action. Nonetheless I consider it appropriate that Dr Wearne be granted leave to replead, should she be so advised, the alleged contravention of s 51AA of the Trade Practices Act. The phrase 'conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories' is not confined to conduct of the kind considered by Amadio (see Australian Competition and Consumer Commission v Berbatis [2000] FCA 2 ; (2000) 169 ALR 324 esp at [13]-[28]).


case_text: I accept, at least, that the argument that such conduct was 'conduct in trade and commerce' could not be characterised as clearly untenable (see, for example, Stoelwinder v Southern Health Care Network (2000) 177 ALR 501). However, par 106 does not plead that the relevant conduct was 'in trade or commerce' ; it is drawn on the apparent assumption that it is sufficient for the relevant contract to be in respect of trade or commerce. In Concrete Constructions (NSW) Pty Limited v Nelson [1990] HCA 17 ; (1990) 169 CLR 594 at 603 the High Court observed with respect to the identical expression in s 52 of the Trade Practices Act: 'it is plain that s. 52 was not intended to extend to all conduct, regardless of its nature, in which a corporation might engage in the course of, or for the purposes of, its overall trading or commercial business. Put differently, the section was not intended to impose, by a side-wind, an overlay of Commonwealth law upon every field of legislative control into which a corporation might stray for the purposes of, or in connection with, carrying on its trading or commercial activities.'


case_text: As this proceeding was instituted before 1 December 2005, the power conferred on the Court by O 20 r 2 is to be exercised to ensure that a clearly untenable case that cannot possibly succeed does not proceed to trial ( General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125; Murex Diagnostics Australia Pty Limited v Chiron Corporation (1995) 55 FCR 194). The lower threshold of 'no reasonable prospect of successfully prosecuting the proceeding' , for which s 31A(2)(b) of the Federal Court of Australia Act 1976 (Cth) now provides, has no application in respect of a proceeding instituted before 1 December 2005 (Item 44 of Part 2 of Schedule 1 of the Migration Litigation Reform Act 2005 (Cth)).


case_outcome: distinguished

case_text: The University further complained of Dr Wearne's failure to identify the basis upon which an implication of the kind which she alleges may be made. However, as I understand Dr Wearne's case, she will contend that the implied term presently pleaded in par 10 of the Statement of Claim is to be implied as a matter of law into every employment contract. She does not accept that the necessary implication depends upon the express terms of the contract and the actual intention of the parties (cf Griggs v Noris Group of Companies (Including SA Helicopters Pty Ltd and Captured Pty Ltd) (2006) 94 SASR 126). Again it would not be appropriate to foreclose argument on this important question. 24 Although par 10 of the Statement of Claim will be struck out for the reason identified in [21] above, it is appropriate that Dr Wearne be granted leave to replead the implied term. I am not satisfied that her case in this respect is clearly untenable. 25 The Statement of Claim does not plead as a material fact that the University breached the implied term in one or more specified ways and then particularise the specified breach or breaches. Rather the Statement of Claim provides a narrative of Dr Wearne's experiences as an employee of the University and her dealings with other employees of the University. The narrative concludes with par 111 of the Statement of Claim which opens as follows: 'The respondent breached the term of the contract set out in paragraph 10 above in that the following conduct of the respondent, was, separately and cumulatively, calculated or likely to damage or destroy the relationship of trust and confidence between the parties: ...'


case_title: Heptonstall v Gaskin (No 2) (2005) 138 IR 103


case_title: Murex Diagnostics Australia Pty Limited v Chiron Corporation (1995) 55 FCR 194


case_text: It is premature, in my view, to give detailed consideration to whether the Statement of Claim adequately pleads an appropriate nexus between the losses allegedly suffered by Dr Wearne and the relief claimed by her. I note, however, that the High Court observed with respect to the Trade Practices Act in Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 204 ALR 26 at [45] : 'The Act's references to "loss or damage" can be given no narrow meaning. Section 4K of the Act provides that loss or damage includes a reference to injury. It follows that the loss or damage spoken of in ss 82 and 87 is not confined to economic loss. What kinds of detriment constitute loss or damage, when a detriment is to be identified as occurring or likely to occur, and what remedies are to be awarded, may all raise further difficult questions. Especially is that so when it is recalled that remedies may be awarded to compensate, prevent or reduce loss or damage that has been or is likely to be suffered by conduct in contravention of the Act.' (citation omitted) 39 I am not satisfied that Dr Wearne does not have a reasonable cause of action, or reasonable causes of action, against the University. The application for the proceeding to be dismissed or permanently stayed therefore fails. 40 However, I conclude that the Statement of Claim does not comply with the rules of pleading. Its deficiencies are so extensive that it would be counterproductive, in my view, for individual paragraphs or groups of paragraphs to be struck out. The Statement of Claim will therefore be wholly struck out. However, in my view it is appropriate that Dr Wearne have one final opportunity to plead her case against the University.


case_title: Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186


case_title: Stoelwinder v Southern Health Care Network (2000) 177 ALR 501


case_text: Section 52 of the Act provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Proceedings before this Court involving s 52 claims are not infrequent and feature widely varying factual scenarios. A number of principles should be kept in mind in considering claims in the context of s 52. These include the following: 1. Section 52 of the Act requires that the relevant corporation engage in conduct that is misleading or deceptive. Section 4(2)(a) of the Act provides that: a reference to engaging in conduct shall be read as a reference to doing or refusing to do any act, including the making of, or the giving effect to a provision of, a contract or arrangement, the arriving at, or the giving effect to a provision of, an understanding or the requiring of the giving of, or the giving of, a covenant. "Conduct" is not co-extensive with "representation" in s 52 (Lockhart and Gummow JJ in Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470 at 504, Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60 ; (2004) 218 CLR 592 per Gleeson CJ, Hayne and Heydon JJ at 603, McHugh J at 622) however engaging in conduct does encompass making representations (cf McGrath; in the matter of Pan Pharmaceuticals Ltd (in liq) v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2 at [150] ). 2. Where a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive, it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court the nature of the alleged conduct and the circumstances which rendered the conduct misleading: McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318 (cf for example, Lahoud v Lahoud [2006] NSWCA 169 at [91] , Yang v American International Assurance Co (Australia) Ltd [2008] FCA 39 at [89] ). 3. 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: Watson 49 NSWLR 315 at 318 (cf for example Christofidellis v Zdrilic [1999] FCA 39 , Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 6) (2007) 63 ACLR 1 at 107, Yang FCA 39 at [89]). 4. The essential characteristic of misleading or deceptive conduct is that it contains or conveys a meaning which is false ( Global Sportsman Ltd v Mirror Newspapers Pty Ltd [1984] FCA 180 ; (1984) 2 FCR 82 at 88). 5. There will be no contravention unless error or misconception results from the conduct of the corporation, and not from other circumstances for which the corporation is not responsible ( Equity Access Pty Ltd v Westpac Banking Corporation [1989] FCA 506 ; (1990) ATPR 40-994 at 50,950; Miller's Annotated Trade Practices Act (29th ed) 1.51.5). 6. Whether or not conduct is misleading or deceptive is a question of fact to be decided by considering what is said and done against the background of all surrounding circumstances ( Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202). 7. The words likely to mislead or deceive add little to s 52; at most they make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone (Gibbs CJ in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 198). Conduct will be likely to mislead or deceive if there is a real or not remote chance or possibility of misleading or deceiving, regardless of whether it is more than 50% ( Parkdale Custom Built Furniture Pty Ltd [1982] HCA 44 ; 149 CLR 191 at [6] , [15], Equity Access Pty Ltd ATPR 40-994 at 50,950, Global Sportsman Pty Ltd [1984] FCA 180 ; 2 FCR 82 , McHugh J in Butcher [2004] HCA 60 ; 218 CLR 592 at 626). 8. Silence, or failure to disclose information, can fall within the gamut of misleading or deceptive conduct in the sense that having regard to all the relevant circumstances, it constitutes conduct that has been misleading or deceptive or that is likely to mislead or deceive ( Demagogue Pty Ltd v Ramensky [1992] FCA 557 ; (1992) 39 FCR 31 at 32, 41; Fleetman Pty Ltd v Cairns Pty Ltd [2005] FCAFC 80 at [1] - [2] ). 9. The conduct of a corporation must be viewed as a whole. It would be wrong to select some words or act which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading (Gibbs CJ in Parkdale Custom Built Furniture Pty Ltd [1982] HCA 44 ; 149 CLR 191 at 199). 10. As a general rule intention (or lack of intention) to mislead or deceive is not a necessary element of conduct proscribed by s 52 ( Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228). The liability imposed by s 52 is unrelated to fault (Gibbs CJ in Parkdale Custom Built Furniture Pty Ltd [1982] HCA 44 ; 149 CLR 191 at 197). 11. The court must decide objectively whether the conduct is misleading or deceptive or likely to mislead or deceive, and that evidence that members of the public have actually been misled is not conclusive, although it can be very persuasive (Gibbs CJ in Parkdale Custom Built Furniture Pty Ltd [1982] HCA 44 ; 149 CLR 191 at 198-199, McWilliam's Wines Pty Ltd v McDonald's System of Australia [1980] FCA 159 ; (1980) 33 ALR 394 per Smithers J at 399 and Fisher J at 414, Equity Access Pty Ltd ATPR 40-994 at 50,950).