case_text: a submission by the respondents that 'Mr Tracy is responsible for the day to day management of the company', I note that the financial records were produced to the Court by the administrator by subpoena on 21 July 2006. From this event, it is clear that the applicants do not have possession, custody or power over the records, other than as determined by the administrator in the exercise of his powers. In circumstances where a company is under administration, an order for non-party discovery or subpoena is the appropriate order to require the production of documents in the possession of the administrator (cf Beach J in Hore-Lacy v David Syme and Co unreported Supreme Court of Victoria, 5 September 1996, BC9604308 p 4). Order 15 r 15 provides: 'The Court shall not make an order under this Order for the filing or service of any list of documents or affidavit or other document or for the production of any document unless satisfied that the order is necessary at the time when the order is made.' In the circumstances the court would be imposing an artificial tier of disclosure to order the third applicant to disclose the financial records.


case_outcome: cited

case_text: terms 'possession, custody or power' in O 15 represent three alternative states. As summarised in one learned text: 'The term "possession" means the physical or corporeal holding of the document pursuant to a legal right to its possession... (for example, agents and bailees); "custody" means the mere actual physical or corporeal holding of a document, regardless of its right to possession, (for example, servants and employees)...; and "power" means an enforceable right to inspect the document or to obtain possession or control of it from the person who ordinarily has it in fact.' (SD Simpson, DL Bailey and EK, Evans Discovery and Interrogatories 2 nd edn, Butterworths, Australia, 1990 at 43, see also Halsbury's Laws of England 4 th edn vol 12 Discovery par 39. With respect to 'possession' and 'custody' see also Santow J in Horsley v Phillips Fine Art Auctioneers Pty Ltd (1995) 7 BPR [97557] at 14,371-14,372; Stephen J in Federal Commissioner of Taxation v ANZ Banking Group Ltd [1977] HCA 57 ; (1979) 143 CLR 499 at 504-505; and S Fisher Commercial and Personal Property Law, Butterworths, Australia, 1997 ch 3; and with respect to the meaning of 'power' see also Beaumont J in Australian Independent Newspapers Ltd v John Fairfax Holdings Ltd (Federal Court of Australia, 22 June 1994) par 12 and Lord Diplock in Lonrho Limited v Shell Petroleum (1980) 1 WLR 627 at 635-6.)


case_text: earlier, Lyndhurst LC in Taylor v Rundell (1841) Cr & Ph 104, 41 ER 429 framed discovery in terms of an obligation which parties to litigation must satisfy: 'If it is in your power to give the discovery, you must give it; if not, you must show that you have done your best to procure the means of giving it.' (ER 433, cf more recently von Doussa J in Re McGorm; ex parte Co-operative Building Society of SA (1989) 86 ALR 275 at 278 and Tamberlin J in KC v Shiley Inc [1997] 796 FCA (14 August 1997).) It is also in my view important to ensure that the parties, so far as possible, are on an even footing in relation to available evidence, their obligations to discover relevant material, and to paraphrase Tamberlin J in KC v Shiley Inc , are not surprised by new material unexpectedly appearing. ORDERS As to the First Notice of Motion the Court orders that: 1. The first and second respondents file an affidavit stating whether any of following documents or classes of documents referred to in the schedule to this application is or has been in their possession, custody or power and, if it has been but is no longer in their possession, custody or power when they parted with it, such affidavit to be filed and served within 7 days of the date of this order: • Agreement for Purchase of Assets dated 24 January 2001 • Budgets • Budget Summaries • Hancock Board paper evidencing the consideration of various options in relation to the orchards and the view that the orchards were not performing in accordance with their return criteria • Hancock Board minute evidencing the decision to sell the orchards referred to by Strahley • The actual pack out rates for 2004 and the notional budgeted packout rates for the financial year 30 June 2005 referred to by Strahley. 2. The first and second respondents file and serve a Supplementary List of Documents in Form 22 and otherwise in compliance with Order 15 Rule 6 of the Federal Court Rules within 14 days of the date of this order discovering any document annexed to the affidavits of the respondents' witnesses filed in this action which are not already listed in the first and second respondents' List of Documents filed 29 March 2006 and the documents referred to in the affidavit required to be discovered by paragraph 1 of this order. 3. Inspection of those documents in the supplementary list of documents is to be provided within 21 days of the date of this order. 4. The time for service of the notice of motion be abridged until a time no later than 4.00 pm, 20 July 2006. 5. Costs be reserved. As to the Second Notice of Motion the Court orders that: 1. The applicants file an affidavit stating whether any of following documents or classes of documents referred to in the schedule provided in support of this application is or has been in their possession, custody or power and, if it has been but is no longer in their possession, custody or power when they parted with it, such affidavit to be filed and served within 7 days of the date of this order: • Item 1 Confidentiality Agreement between the First Respondent and the Second Applicant • Items 19, 20 and 22 Spray Records • Item 14 The second applicant's 100 day plan • Item 13 Westpac and ANZ documents and correspondence • Item 15 Copies of all cash flow • Item 16 Creditors invoices for first applicant • Item 18 Email from David Breed to the second applicant • Item 21 Management reports for the Orchards and Packing shed • Item 25 Third applicant's orchard management plans • Items 26, 27 and 28 Cash flows, correspondence and emails 2. The applicants file and serve a Supplementary List of Documents in Form 22 and otherwise in compliance with Order 15 Rule 6 of the Federal Court Rules within 14 days of the date of this order discovering any document referred to in the affidavit required to be discovered by par 1 of this order. 3. Inspection of those documents in the supplementary list of documents is to be provided within 21 days of the date of this order. 4. Once the respondents allow the applicants to have access to the computer in the packing shed for the purpose of accessing the SmartPak, TotalPak and packout records the applicants are to, within 7 days of the date of access being provided, file and serve a Supplementary List of Documents in Form 22 and otherwise in compliance with O 15 r 6 of the Federal Court Rules discovering the SmartPak, TotalPak and packout records referred to in items 2, 17 and 30 of the Schedule provided in support of this notice of motion. Inspection of such documents is to be provided within 14 days of the date of access being provided. 5. The time for service of the notice of motion be abridged until a time no later than 4.00 pm, 20 July 2006. 6. Costs be reserved. I certify that the preceding one hundred and ninety-two (192) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. Associate: Dated: 4 August 2006 Counsel for the Applicant: Mr RA Perry SC Solicitor for the Applicant: Lynch & Co Counsel for the Respondent: Mr PP McQuade Solicitor for the Respondent: Mc Cullough Robertson Date of Hearing: 28 July 2006 Date of Judgment: 4 August 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/1001.html


case_title: Kennedy v Dodson (1895) 1 Ch 334

case_text: respondents have indicated that this document is annexed to the affidavit of Mr Strahley sworn and filed 12 July 2006. However, as submitted by the applicants, inclusion of a document as an annexure to an affidavit is not, in itself, proper discovery of the document. While the rules of discovery have been subject to change over time and in different courts, the comments of Lindley LJ in Kennedy v Dodson (1895) 1 Ch 334 at 340 over a century ago continue to apply, namely: 'It is the right, as a general rule, of a plaintiff in equity to exact from the defendant a discovery upon oath as to all matters of fact which, being well pleaded in the bill, are material to the plaintiff's case about to come on for trial, and which the defendant does not by his form of pleading admit.'


case_outcome: applied

case_text: terms 'possession, custody or power' in O 15 represent three alternative states. As summarised in one learned text: 'The term "possession" means the physical or corporeal holding of the document pursuant to a legal right to its possession... (for example, agents and bailees); "custody" means the mere actual physical or corporeal holding of a document, regardless of its right to possession, (for example, servants and employees)...; and "power" means an enforceable right to inspect the document or to obtain possession or control of it from the person who ordinarily has it in fact.' (SD Simpson, DL Bailey and EK, Evans Discovery and Interrogatories 2 nd edn, Butterworths, Australia, 1990 at 43, see also Halsbury's Laws of England 4 th edn vol 12 Discovery par 39. With respect to 'possession' and 'custody' see also Santow J in Horsley v Phillips Fine Art Auctioneers Pty Ltd (1995) 7 BPR [97557] at 14,371-14,372; Stephen J in Federal Commissioner of Taxation v ANZ Banking Group Ltd [1977] HCA 57 ; (1979) 143 CLR 499 at 504-505; and S Fisher Commercial and Personal Property Law, Butterworths, Australia, 1997 ch 3; and with respect to the meaning of 'power' see also Beaumont J in Australian Independent Newspapers Ltd v John Fairfax Holdings Ltd (Federal Court of Australia, 22 June 1994) par 12 and Lord Diplock in Lonrho Limited v Shell Petroleum (1980) 1 WLR 627 at 635-6.) Although from the submissions of the parties it appears that the applicants may have an enforceable legal right to obtain the documents from the respondents, the applicants do not, in the words of Lord Diplock in Lonrho Limited v Shell Petroleum (1980) 1 WLR 627 at 635-636, have 'power' over the documents. They do not have the enforceable legal right to obtain the documents from the respondents without the need to obtain the consent of anyone else . The submissions of both parties indicate that the applicants would need to obtain the consent of the respondents to access the computer and therefore obtain the documents. Even if the respondents are likely to comply voluntarily with a request of the applicants to access their property, and in turn the computer and the documents, it does not mean that the documents are currently 'in the power of' the applicants (cf comments of Lord Diplock in Lonrho at 636H). As the respondents have offered to allow the applicants access to the computer containing the records, in my view it is appropriate in relation to these documents that, once the respondents allow the applicants access to the computer and its contents, the applicants discover the records sought by the respondents. Accordingly, at this stage, I make no order for discovery of these documents by the respondents. Emails (par 41 Strahley affidavit) The respondents have stated that they have already discovered these documents. There is no question that the administrator is the agent of the company to which he or she is appointed: s 437B. However, as made clear by s 437A(1) , administrators have very extensive powers over all aspects of the company's business, property and affairs. Indeed as the High Court noted in Australasian Memory Pty Ltd v Brien [2000] HCA 30 ; (2000) 172 ALR 28 at 30, Div 3 of Pt 5.3A Corporations Act 2001 (Cth) provides that the administrator of a company under administration is to assume control of the company's affairs. On the basis that the administrator had possession of the documents, the relationship of administrator and company as contemplated by Pt 5.3A Corporations Act does not permit the company other than with the consent of the administrator to have 'power' over documents retained by the administrator: s 438C (cf Lord Diplock's comments in Lonrho at 636H discussed earlier in this judgment).


case_text: seems no doubt that, as a result of the 1999 amendments to O 15 r 2, the criteria in O 15 r 2(3) superseded the 'train of inquiry' test as the usual requirements for discovery. As pointed out by Branson J in Lubizol Corp Inc v Imperial Chemical Industries plc [2000] FCA 1464 (par 9) '...unless the Court should order to the contrary, documents the relevance of which is only that they may fairly lead to a train of inquiry which may directly or indirectly enable one party to advance its case or change that of its opponent are not required to be discovered.' (note also Finn J in South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 519 at par 10, The Hon Justice JW von Doussa 'Discovery in the Federal Court' Law Society of South Australia and the Federal Litigation Section Seminar, 14 March 2000; Spyer v Cuddles 'N' Mum (Franchise) Pty Ltd (No 3) (2002) FCA 1563 pars 4-8; Aveling v UBS Australia Capital Markets Holdings Ltd [2005] FCA 415 at par 10).


case_text: essence, the submissions of the applicants are as follows: 1. Order 15 r 2(3) sets out the criteria by which the obligation to disclose might be tested. 2. Those criteria do not include documents leading to a train of inquiry. That was the test before the rules were amended in 1999. 3. Order 15 r 2 should be interpreted according to its terms; and the 'train of inquiry' test (as articulated in the leading case of The Compagnie Financiere et Commerciale du Pacifique v The Peruvian Guano Company (1882) 11 QBD 55 per Brett LJ at 63, note also Menzies J in Mulley v Manifold [1959] HCA 23 ; (1959) 103 CLR 341 at 345) has no place in that context. 4. General discovery is that which occurs under O 15 r 2. 5. Order 15 r 8 entitles a court to make an order wider than that apprehended under O 15 r 2, however only where an application is made under O 15 r 8. 6. In terms of the Federal Court Rules and Practice Note 14, the order made by the Court on 15 February 2006 was an order apprehended under O 15 r 2(3). The submissions of the respondents may be summarised as: 1. The order of 15 February 2006 was 'The applicants and the respondents make discovery by verified List of Documents and file and serve such List of documents on or before 4.00 pm on 29 March 2006'. 2. The order did not limit discovery to the categories of documents in O 15 r 2, O 15 r 2(3) or otherwise. 3. Order 15 r 2 continues to authorise orders for general discovery, and although the court would not ordinarily make an order for general discovery it may consider it appropriate to do so, in which case the traditional obligations to discovery any document relating to a matter in question in the proceeding continues to apply. 4. Pursuant to O 15 r 8 the court may make orders requiring discovery of a document or class of documents 'relating to a matter in question in the proceeding' that may be or may have been in the possession, custody or power of a party. 5. An order of the court that the parties give discovery, without any further limitation , is a general order or direction for discovery. To limit the ambit of discovery the order, by its terms, should limit the extent of the discovery to be made by a party. 6. As there was no limitation appearing in the orders/directions the direction was for general discovery and the train of inquiry test applies. 7. Alternatively, the court may order a document or class of documents be discovered by affidavit in terms of O 15 r 8. The current version of O 15 r 2 was introduced into the Rules by SR 295 of 1999 Schedule 1, and became effective 3 December 1999. On the same day Practice Note 14 was issued by the Chief Justice. This Practice Note states, inter alia , that: • the general position is that the Court will not order general discovery as a matter of course • the Court will mould any order for discovery to suit the facts of a particular case • in determining whether to order discovery the Court will have regard to the issues in the case and the order in which they are likely to be resolved, the resources and circumstances of the parties, the likely cost of the discovery and its likely benefit • to prevent orders for discovery requiring production of more documents than are necessary for the fair conduct of the case, orders for discovery will ordinarily be limited to the documents required to be disclosed by O 15 r 2(3).


case_text: support of this contention the respondents rely on statements of Sheppard and Pincus JJ in Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490 at 494. This case also involved an application under s 52 Trade Practices Act 1974 (Cth) for misleading and deceptive conduct in relation to the sale of a business. The majority of the Full Court said: 'We reiterate that, where a purchase has been induced by misleading conduct, it is not enough, in order to recover losses subsequent to the purchase, to prove that but for the misleading conduct or as a partial consequence of it, the agreement to purchase would not have been made; that is so in every successful application of that kind. It is not the law that in every such case the party held to have been engaged in misleading conduct (who may have acted quite innocently) becomes the insurer of the other's success and prima facie liable to indemnify him against the consequences of the purchase. As the trial judge said in the present case: "To recover a loss sustained in the business, the applicant must show more than that it was sustained in the conduct of that business; for to show only that is to establish what is perfectly consistent with the loss having arisen from his own misguided management decisions, or even total neglect."' I agree with this reasoning. The applicants state that: • records up to 22 March 2005 are in the possession of the respondents already and are not required to be discovered by the applicants • the applicants do not have records after 22 March 2005, but they may be with the Administrator. Unfortunately the respondents have not specifically indicated how these documents satisfy the criteria under by O 15 r 2(3). To the extent that the applicants are required to prove their case as explained by the Full Court in Netaf the rain data records appear to be documents which fall within r 2(3). The response of the applicants does not suggest a dispute that the documents are discoverable. However, the applicants have stated that these documents up to 22 March 2005 are already in the possession of the respondents. This is not denied by the respondents. In my view, O 15 r 2(4) applies in this case. It is difficult to know what further could be achieved by requiring the applicants to discover the documents. However, the respondents in relation to documents between 22 March 2005 and 23 June 2005 also claim that the documents are relevant to loss or damage claimed by the second and third applicants as to causation and measure of loss. The respondents rely on the Netaf case. In my view these documents fall within the scope of O 15 r 2(3) and should be discovered by the applicants. Item 25 Third applicant's orchard management plans There does not appear to be any dispute that this document, if it exists, should be discovered. The applicants claim however that they do not possess the document. On the basis that, as submitted by the respondents, documents of that class are referred to in other documents discovered by the applicants in the circumstances, the appropriate order is that the applicants advise the respondents whether the document is in their custody or power, and if it is, the applicants should discover it. Items 26, 27 and 28 Cash flows, correspondence and emails As submitted by the respondents, the applicants do not suggest that these documents are not discoverable. On 5 July 2006 the applicants indicated that they were searching their records and would revert to the respondents shortly. As at the hearing date of this matter, it appears that they had not been discovered. It does not appear that these items have been the subject of previous correspondence between the parties. As a consequence of this, there are few grounds submitted by the respondents as the basis of discovery, and no responses from the applicants in relation to discovery of these documents. To the extent that I can interpret the Schedule, the only grounds submitted as a basis for discovery of these documents are: • in relation to items 33, 34, 37, 41 and 46: they are relevant to allegations in issue and reliance. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case • there are no grounds asserted in relation to items 47, 48 and 49 • in relation to items 50, 51, 52, 53: these classes of documents are relevant to allegations in issue as to reliance and loss or damage. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case; also see Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490 at 494 • in relation to items 54 and 55: these classes of documents are relevant to allegations in issue as to reliance. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case • in relation to item 56: these classes of documents are relevant to allegations in issue as to reliance. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case. Also see Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490 at 494 • there are no grounds asserted in relation to item 57 • in relation to item 58: these classes of documents are relevant to allegations in issue as to loss or damage. They will also lead to a train of inquiry which would advance the respondents' case or damage the applicants' case. Also see Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490 at 494. Other than in relation to the '100 day plan' referred to in item 58, and in relation to which an order will be made, it is not possible to identify whose documents these documents are. I also note there is some duplication, for example '2005 business plan' in items 53 and 56, 'SHE plan' in items 53 and 58, 'marketing plan' in items 53, 56 and 58, and 'communications plan' in items 53 and 56. Although the respondents have referred to the Netaf case in relation to a number of the items, the relevance of the principle is not substantiated in relation to these items. Further, the 'train of inquiry' test is applied in relation to all documents with the exception of items 47, 48, 49 and 57. On the basis of the evidence before me I am not satisfied that an order for discovery is necessary in relation to any of these documents. I order that the time for service of this Notice of motion be abridged until a time no later than 4.00 pm 20 July 2006.


case_text: history of the law in this area, and more recent cases, indicates that 'general discovery' means an unqualified or unlimited order for discovery, possibly in one of the following forms: • as noted by Beaumont J in Reading Entertainment Australia Pty Ltd v Birch Carroll & Coyle Ltd [2002] FCAFC 109 at 70, quoting Butterworths Practice & Procedure of the Federal Court at [40.760] 'general discovery as traditionally understood'. This refers to discovery of any document which may fairly lead to a train of inquiry, as per the Peruvian Guano test, and is consistent with the submissions of the respondent; or • as submitted by the applicants, 'general discovery' as is now contemplated by O 15 r 2(3) (The court may make an order for particular discovery in broader terms under O 15 r 8). The respondents have referred to comments of Beaumont J in Reading Entertainment at par 70 concerning the court ordering general discovery following the 1999 amendments, however in my view his Honour's observations were referable to extraordinary circumstances where the courts may order discovery in accordance with the Peruvian Guano test. Although his Honour did not give the example, an order pursuant to O 15 r 8 would be an instance of such a circumstance. The consent order made on 15 February 2006 was in my view an unqualified order for general discovery, as contemplated by O 15 r 5, and requiring discovery of documents as contemplated by O 15 r 2, in particular subrule 2(3). Accordingly, the 'train of inquiry' test as posed by the respondents in this case is not applicable. It is appropriate to consider the remaining documents in the Schedule where this test is sought to be applied, in that light. Other documents as listed in the Schedule were not the subject of written submissions by counsel. The Schedule does however provide a summary of the communications between the applicants and the respondents on the issue of discovery of these documents. Item 10 Rain data records In seeking discovery of these documents, which are identified as rain data records of the first or second applicant in respect of the Bundaberg and Tairo Orchards, the respondents claim they are relevant to loss and damage, and cite par 21 of the amended Statement of Claim and par 30 of the Defence.


case_text: earlier, Lyndhurst LC in Taylor v Rundell (1841) Cr & Ph 104, 41 ER 429 framed discovery in terms of an obligation which parties to litigation must satisfy: 'If it is in your power to give the discovery, you must give it; if not, you must show that you have done your best to procure the means of giving it.' (ER 433, cf more recently von Doussa J in Re McGorm; ex parte Co-operative Building Society of SA (1989) 86 ALR 275 at 278 and Tamberlin J in KC v Shiley Inc [1997] 796 FCA (14 August 1997).)


case_outcome: considered

case_text: seems no doubt that, as a result of the 1999 amendments to O 15 r 2, the criteria in O 15 r 2(3) superseded the 'train of inquiry' test as the usual requirements for discovery. As pointed out by Branson J in Lubizol Corp Inc v Imperial Chemical Industries plc [2000] FCA 1464 (par 9) '...unless the Court should order to the contrary, documents the relevance of which is only that they may fairly lead to a train of inquiry which may directly or indirectly enable one party to advance its case or change that of its opponent are not required to be discovered.' (note also Finn J in South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 519 at par 10, The Hon Justice JW von Doussa 'Discovery in the Federal Court' Law Society of South Australia and the Federal Litigation Section Seminar, 14 March 2000; Spyer v Cuddles 'N' Mum (Franchise) Pty Ltd (No 3) (2002) FCA 1563 pars 4-8; Aveling v UBS Australia Capital Markets Holdings Ltd [2005] FCA 415 at par 10). The history to the amendment to O 15 r 2(3) was explained by Lindgren J in Spyer v Cuddles 'N' Mum (Franchise) Pty Ltd (No 3) (2002) FCA 1563. His Honour in that case also observed that the broader test of 'relating to any matter in question in the proceeding', which derives from the Peruvian Guano case, continues to be used in the context of O 15 r 8 (par 6 of Spyer ), and that in this respect there is a disconformity between the tests of discoverability as between O 15 r 2(3) and r 8 (par 7 of Spyer ). In my view, in the absence of qualifications or limitations to an order for discovery, the correct interpretation is that the discovery ordered by the Federal Court pursuant to O 15 is that contemplated by O 15 r 2(3), as submitted by the applicants. Clearly this will not be the case if the Court makes an order pursuant to O 15 r 8, which, as pointed out by Lindgren J in Spyer v Cuddles 'N' Mum (Franchise) Pty Ltd (No 3) (2002) FCA 1563 , seems to countenance a continuation of the broader test of discoverability. This interpretation is consistent with: • Order 15 r 5, which is titled ' Order for General Discovery ', and provides: 'The Court may, at any stage of the proceeding, order any party to give discovery in accordance with rule 2.' • the amendments to O 15 r 2 in 1999, the aim of which, according to the Explanatory Statement Statutory Rules 1999 No 295, was 'to limit the documents that must be discovered to those which are directly relevant to the proceedings' (note also Advanced Medical Institute per Lindgren J at par 23) • Practice Note 14, which states that orders for discovery will ordinarily be limited to the documents required to be disclosed by O 15 r 2(3) • Order 15 r 8 which continues to use the language of Peruvian Guano but only in the context of particular discovery and • the authority of cases to which I have already referred, in particular Spyer , Aveling and Advanced Medical Institute .


case_title: South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 519


case_title: Taylor v Rundell (1841) Cr & Ph 104, 41 ER 429


case_text: there is some further reason why the applicants should provide discovery of those documents, it is unnecessary to make an order requiring them to do so (note recent similar comments of Bennett J in Telstra Corporation Ltd v Australian Competition & Consumer Commission [2006] FCA 737 at par 31). In relation to the documents after 22 March 2005, on the basis that the documents are in the possession, custody or power of the administrator, in my view the applicants are not required to discover them for the reasons I have already explained in relation to documents held by the administrator. Item 13 Westpac and ANZ documents and correspondence I note that the respondents have stated that this documentation will lead to a train of inquiry which would advance their case or damage the applicants' case. I have already held that this test is not applicable in this case. The respondents state that the documents are relevant to reliance, and point to par 18 of the amended Statement of Claim and par 17 of the Defence. In my view the documents sought fall within O 15 r 2(3) and should be discovered. Item 15 Copies of all cash flow


case_text: The Commissioner concedes that the application for vacation of hearing dates is very late but submits that the taxpayer would suffer no prejudice which would not be compensated by an appropriate costs order: State of Queensland v J L Holdings Pty Ltd [1997] HCA 1 ; (1996) 189 CLR 146. 5 The taxpayer disputes this on the basis that the tax in dispute, in excess of $4 million, was paid to the Commissioner over 18 months ago and is retained by him pending the outcome of these proceedings. To vacate the hearing dates would only extend the time that the taxpayer has been out of pocket. 6 The lateness in bringing the application and the basis of the application are explained in an affidavit (sworn 27 May 2008) by an officer of the Australian Taxation Office ('the ATO') within the ATO's Legal Services Branch who has the carriage of the matter. He deposes: '9. The issues raised in these proceedings are difficult and complex, involving: 9.1. a complex financial transaction between a large Australian financial institution (the Commonwealth Bank) and a U.S. subsidiary of a large financial institution (Deutsche Bank) ("the Transaction"); and 9.2. the interpretation of articles of the Convention between the Government of Australia and the Government of the United States of America for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, dated 6 August 1982, as amended by the Protocol signed on 27 September 2001 ("the Convention"). 10. On 11 March 2008, the Commissioner's counsel provided the Commissioner with written technical advice in relation to these proceedings. 11. In the course of considering that advice, my colleagues and I also gave consideration to an aspect of the Convention which had not previously been taken into account by the Commissioner nor the subject of counsel's advice, namely the specific US law purpose for which Article 11(9) of the Convention is addressed. 12. As a result, the Commissioner instructed the AGS to engage a lawyer with expertise in United States law. I am informed and verily believe that in response to the Commissioner's instructions, the AGS engaged Professor David Rosenbloom of the NYU School of Law on 15 May 2008. 13. On 23 May 2008 a conference was held between representatives of the Commissioner and Professor Rosenbloom. 14. The Commissioner now wishes to adduce evidence in these proceedings in relation to the meaning under United States law of the term "contingent interest", which is relevant to the interpretation of Article 11(9) of the Convention and the matters which a US Court would take into account in construing Article 11(9) of the Convention. 15. The specific new matter which the Commissioner now wishes to argue may briefly be summarised as follows. 15.1. Article 11(9) of the Convention is a clause peculiar to double tax treaties to which the USA is a party. It seeks to deny the 10% tax rate limit otherwise in Article 11 (the Interest Article) to certain payments which are or which would otherwise be treated as interest under the Convention. 15.2. Article 11(9), together with corresponding articles in the USA's other tax treaties, derives from the notion of "contingent interest" under US domestic law. The expression "contingent interest" is used in the U.S. "Technical Explanation" relating to Article 11(9). That material has a status similar to extrinsic material under Australian law. 15.3. The Commissioner wishes to contend that 15.3.1. Article 11(9) should be construed by reference to relevant extrinsic material and consistently with US domestic law about the treatment of "contingent interest"; and 15.3.2. The income derived by the applicant from its interest in the Industrie Limited Partnership would be considered to be "contingent interest" under US domestic law. 16. The Commissioner further wishes to review the evidence and his position in relation to Article 11(3)(b). 17. Following the conference held with Professor Rosenbloom, on 23 May 2008 I gave instructions to the AGS to apply to this Honourable Court to have the hearing in these proceedings vacated. In giving these instructions I took into consideration the Taxation List Directions issued by the Federal Court on 4 April 2008. The Commissioner is concerned that an application to vacate the hearing will result in delay in the proceedings. On the other hand, the Commissioner is also concerned to ensure that this Honourable Court has before it evidence, including expert evidence, that will be relevant and of assistance to the Court in determining the difficult and complex issues that have arisen in these proceedings. 18. I am also instructed that our counsel put the applicant on notice of the application to have the hearing vacated. I am informed and verily believe that this occurred around 11am on Friday 23 May 2008.' 7 Dealing first with the lateness of the application, I do not think the explanation that has been given for that lateness justifies vacation of the hearing dates. There does not appear to have been any impediment to consideration being given, at an earlier point in time, to the matter on which the Commissioner now wishes to adduce expert evidence; the fact that it had not crossed the minds of the deponent and his colleagues until they considered counsel's 'written technical advice' was certainly no impediment. Indeed, on the deponent's own admission, the matter was not even the subject of counsel's advice. 8 That aside, there are two other considerations which are relevant to my conclusion that the explanation of the lateness of the application does not justify the vacation of the hearing dates. First, if I vacate the hearing dates to allow the Commissioner to put on expert evidence, it will be necessary to allow the taxpayer to put on expert evidence going to the same matter, and then, perhaps, evidence in reply. The consequence will be that proceedings which have already been set down for hearing for over seven months will not be heard until the first half of next year. Second, it is not as if the Commissioner is 'locked out' so to speak because of an inability to plead a ground of defence not already pleaded, cf., J L Holdings Pty Ltd . It will be open to the Commissioner to frame and put submissions with respect to this particular matter supported by authority (if it exists), extrinsic material such as US Treasury explanations of the purpose underlying Article 11(9) of the Convention and, insofar as that provision is predicated on a US model tax treaty, Treasury explanations of that model. Of course, this assumes the relevance of such material to the issue in contest between the parties. It is to that matter I now turn. 9 I am not presently persuaded that the matter on which the Commissioner wishes to adduce expert evidence, namely, that a US Court would construe Article 11(9) of the Convention as applying to interest which qualifies within the notion of 'contingent interest', as that phrase is understood under US domestic tax law, has any relevance to the tasks of construction and application which this Court must undertake to resolve the dispute between the parties. There was more than a hint in the submissions of counsel for the Commissioner that the relevance of such evidence resided in the desirability for a uniform construction of Article 11(9) by the courts of each country. However desirable that outcome may be, a US domestic law concept or notion of 'contingent interest' cannot control the construction of a provision of the Convention, the text of which does not use this phrase; and even if it did, in the absence of it having a meaning under Australia's domestic tax law, its meaning under US domestic tax law would not control the application of the provision by Australia: see Article 3(2) of the Convention. 10 For these reasons, the motion, including the order to vacate the hearing dates is dismissed, with costs. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. Associate: Dated: 4 June 2008 Counsel for the Applicant: Mr A Slater QC with Mr M Richmond Solicitor for the Applicant: Allens Arthur Robinson Counsel for the Respondent: Mr J Hmelnitsky Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 3 June 2008 Date of Judgment: 4 June 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/837.html


case_outcome: referred to

case_text: In SZJOC v Minister for Immigration and Citizenship [2008] FMCA 637 the learned Federal Magistrate said at [52]: '... I have looked at the Tribunal decision and supporting material in order to ascertain whether any arguable case of jurisdictional error could be made to which the Applicant has not referred. I am unable to discern any arguable case of jurisdictional error and I am of the belief that there is none.' 12 I do not share the view so expressed by the learned Federal Magistrate. 13 In support of the Notice of Appeal the appellant was invited to address the Court, which she did in an unusual way. She had the advantage of having in Court before me an interpreter who was able to translate both from Fuqingnese and also from Mandarin into English and vice versa. The submission which was made by the appellant took the form of a written document apparently in Mandarin which the interpreter interpreted into English for my benefit. I did not invite the interpreter to interpret that submission into Fuqingnese in circumstances where the appellant had said that it was what she wished to rely upon.


case_text: As Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ said in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 228 CLR 152 at [48] , procedural fairness does not require the Tribunal to give an applicant a running commentary upon what it thinks about the evidence that is given.


case_text: In relation to country information there is an express exclusion in s 424A(3)(a) of the Act which relieves the Tribunal of an obligation to give an applicant particulars of such information with a view to inviting comment on it. In the light of the decision of the High Court in SZBYR v Minister for Immigration and Citizenship [2007] FCA 26 ; (2007) 235 ALR 609 it seems clear to me that there has been no failure on the part of the Tribunal to comply with s 424A of the Act in the circumstances of this case having regard to the submissions that were advanced by the appellant. 17 In my opinion none of the grounds of appeal in this case have been made out, with perhaps one exception, that is to say, the assertion in ground 1 that the learned Federal Magistrate failed to consider that the decision of the Tribunal had 'constituted a jurisdictional error'. 18 Section 430 of the Act relevantly provides: '430(1) Where the Tribunal makes its decision on a review, the Tribunal must prepare a written statement that: (a) sets out the decision of the Tribunal on the review; and (b) sets out the reasons for the decision; and (c) sets out the findings on any material questions of fact; and (d) refers to the evidence or any other material on which the findings of fact were based.' 19 As has been pointed out by the High Court, s 430 cannot be used as a back door route to a merits review of a Tribunal decision. In this case there was plainly both written material before the Tribunal and also country information to which it had access and an oral hearing at which evidence was given, which is not available to the Court as no transcript was tendered in the Federal Magistrates Court of what had been said at the second Tribunal hearing, or indeed at the first Tribunal hearing.


case_text: Nevertheless, it is important to bear in mind what Gleeson CJ said in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at [10] which was repeated in generally similar terms in the joint judgment of McHugh, Gummow and Hayne JJ in the same case at [69]. The Chief Justice said: '10 The requirement imposed by s 430 is to prepare a written statement that, in the context of setting out the Tribunal's reasons for decision, "sets out the findings" on any material questions of fact. It is impossible to read the expression "the findings" as meaning anything other than the findings which the Tribunal has made. By setting out its findings, and thereby exposing its views on materiality, the Tribunal may disclose a failure to exercise jurisdiction ...'


case_text: It should not be overlooked that in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272, Brennan CJ, Toohey, McHugh and Gummow JJ said: '... any court reviewing a decision upon refugee status must beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision. ...' 22 In relation to applications for the grant of protection visas a critical section is s 65 which relevantly provided: '65(1) After considering a valid application for a visa, the Minister: (a) if satisfied that: ... (ii) the other criteria for it prescribed by this Act or the regulations have been satisfied; ... ... is to grant a visa; or (b) if not so satisfied, is to refuse to grant the visa.' 23 In respect of protection visas, s 36(2) of the Act relevantly provided: '36(2) A criterion for a protection visa is that the applicant for the visa is: (a) a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol; ... The references to the Refugees Convention and to the Refugees Protocol are references to the Convention relating to the Status of Refugees done at Geneva on 28 July 1951 and the Protocol relating to the Status of Refugees done at New York on 31 January 1967 (hereafter collectively referred to as 'the Convention').


case_text: Whether under s 36(2) Australia has protection obligations to a particular person depends upon whether that person satisfies the definition of a refugee in Article 1A of the Convention in the context of the other relevant Articles (per Gummow A-CJ, Callinan, Heydon and Crennan JJ in Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 [2006] HCA 53 ; (2006) 231 CLR 1 ('QAAH') [37]. In Article 1A(2) of the Convention, the term 'refugee' applies to any person who: '... owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country...' 25 The definition of 'refugee' presents two cumulative conditions, the satisfaction of both of which is necessary for a classification as a refugee. The first condition is that a person be outside their country of nationality 'owing to' fear of persecution for a relevant convention reason which is well-founded both in an objective and a subjective sense.


case_text: The second condition is met if the person who satisfies the first condition is unable to avail himself or herself 'of the protection' of the country of nationality. This includes persons who find themselves outside the country of their nationality and in a country where the country of nationality has no representation to which the refugee may have recourse to obtain protection. The second condition is also satisfied by a person who meets the requirements of the first condition and who, for a particular reason, is unwilling to avail himself or herself of the protection of the country of nationality, that particular reason being well-founded fear of persecution in the country of nationality which is identified in the first condition (per McHugh and Gummow JJ in Minister for Immigration and Multicultural Affairs v Khawar [2002] HCA 14 ; (2002) 210 CLR 1 ('Khawar') [61], cited with approval by Gummow, Hayne and Crennan JJ in SZATV v Minister for Immigration and Citizenship [2007] HCA 40 ; (2007) 237 ALR 634 ('SZATV') [16]. See also Chan Yee Kin v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 ("Chan"), Applicant A v Minister for Immigration and Ethnic Affairs [1997] HCA 4 ; (1997) 190 CLR 225 ('Applicant A') at 283 and Minister for Immigration for Immigration and Multicultural Affairs v Respondents S152/2003 (2004) [2004] HCA 18 ; 222 CLR 1 (' S152 ') [19]).


case_title: SZATV v Minister for Immigration and Citizenship [2007] HCA 40 ; (2007) 237 ALR 634


case_title: Chan Yee Kin v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379


case_title: Applicant A v Minister for Immigration and Ethnic Affairs [1997] HCA 4 ; (1997) 190 CLR 225


case_title: Minister for Immigration for Immigration and Multicultural Affairs v Respondents S152/2003 [2004] HCA 18 ; (2004) 222 CLR 1


case_text: Before proceeding to consider the Statement of Decision and Reasons in detail it is appropriate to have regard to the observations of Mansfield, Jacobson and Siopis JJ in WALT v Minister for Immigration and Multicultural and Indigenous Affairs [2007] FCAFC 2 at [28] where their Honours indicated that it is not appropriate for the Tribunal to take on the role of arbiter of doctrine with respect to any religion and then went on to say: '28. ... Degrees of understanding and commitment of those practising any particular faith will vary. To ascribe to all who are, or claim to be, adherents to a particular religion a required minimum standard of practice or a required and consistent minimum understanding of its tenets may be erroneous.' 29 As previously mentioned the Tribunal made reference to the appellant's written statement setting out her reasons for claiming to be a refugee. On the fourth and fifth pages of its Statement of Decision and Reasons the Tribunal proceeded to summarise that statement. The statement was recorded in English and contained within a statutory declaration made by the appellant on 6 February 2006. It contained 11 numbered paragraphs. The appellant claimed to be a Christian (see paragraphs 9 and 11). The appellant claimed to have attended some religious gatherings organised by a family church in her home village from around 2002 (see paragraph 3). She claimed to have been impressed by the kindness of 'religious sisters and brothers' (see paragraph 3). She claimed to have participated in weekly worship on a regular basis (see paragraph 3) and she claimed that in July 2003 she was baptised at a 'religious sister's home in my village' (see paragraph 3). 30 The appellant claimed that the Public Security Bureau ('PSB') took action in respect of religious observance in the area in which the appellant lived (see paragraphs 4, 5, 6, 8 and 9 of the statement). The appellant claimed that she had been detained for one day in December 2003, that she had been detained for one week in April 2004 and that she was detained for one month from May to June 2005 (see paragraphs 4, 5 and 8). The appellant claimed that to secure her release from detention, she made payments of RMB 1000 yuan, 3000 yuan and 10,000 yuan (see paragraphs 4, 5 and 9).


case_text: Nevertheless, and this is the third observation, the remedies available under s 1323 are dramatic and the court should exercise care before making any order. While it is not necessary to show that the aggrieved person in fact has a case against the relevant person in order to obtain an interim injunction, the strength of the case is important. If the investigation is in its early stages it may be enough to show a possible case against the relevant person or the person on whose behalf the relevant person holds property. If the investigation is in late stages, or has been completed, probably no order should be made (or continued) unless the evidence suggests a prime facie case of liability: see generally Corporate Affairs Commission (NSW) v Walker (1987) 11 ACLR 884; Corporate Affairs Commission (SA) v Lone Star Exploration NL (No 2) (1988) 14 ACLR 499; Australian Securities Commission v A S Nominees Ltd (1995) 18 ACSR 459, 511-512.


case_title: Corporate Affairs Commission (SA) v Lone Star Exploration NL (No 2) (1988) 14 ACLR 499


case_title: Australian Securities Commission v A S Nominees Ltd (1995) 18 ACSR 459


case_text: The final observation concerns the "jurisdictional pre-conditions" that are imposed by s 1323. Here I am not referring simply to the three conditions referred to in s 1323(1) that were commented upon in Corporate Affairs Commission v United International Technologies Pty Ltd (1987) 6 ACLC 637, 642. I have in mind what might also be described as a "jurisdictional pre-condition" namely the requirements in paras (d) (e) and (f) that a protective order can only be made in respect of "[indebtedness]... to the relevant person or [his] associate" (para (d)), "[any] money, financial or products or other property [held] on behalf of the relevant person or [his] associate" (para (e)) and "money of the relevant person [or his associate]" (para (f)). At a final hearing of an application under s 1323 it will be necessary for ASIC to prove on the civil standard that one of these conditions exist. When an interim order is sought this is not a requirement. All the court need do is decide whether it is "desirable" that an interim order be made. And it may be desirable even if ASIC is not able to tender proof that will establish the existence of any one of the conditions. By analogy with cases on interlocutory injunctions, if ASIC can show something like a possible or prima facie case that will usually be enough. 14 Returning to the case at hand, the interim orders were made for the following reasons: As I have said, it appears not to be in dispute that some of the money paid by investors has found its way into each defendant's account. I infer from this that each defendant was either involved in the fraud or holds money on behalf of a person who was involved. The inference is more readily drawn by the fact that neither defendant has gone into evidence to explain how he came by money from the Universal or Capital Marketing Services accounts in Hong Kong. In these circumstances the investors might have good claims against each defendant, or in respect of the funds in each defendant's possession, and are entitled to a protective order to preserve those funds until the matter is more fully investigated at the trial. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. Associate: Dated: 11 April 2007 Counsel for the Plaintiff: M Sifris SC J Moore Solicitor for the Plaintiff: Australian Securities and Investments Commission Counsel for the First Defendant: J Delany SC A Hanak Solicitor for the First Defendant: Baker & McKenzie Appearing for the Second Defendant: Praveen Kumar Jugraj (in person) Date of Hearing: 9 February 2007 Date of Judgment: 11 April 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/508.html


case_text: As to unreasonableness, Mr Bryant submitted that the Tribunal's reasoning, whereby it placed equal weight on sleep apnoea and/or psychological factors as accounting for the Applicant's symptoms, was unreasonable and perverse. It was submitted that no Tribunal acting reasonably could have made that decision or, alternatively the decision was so unreasonable that no reasonable person could have come that decision, and as such the decision was vitiated by what was termed " Wednesbury unreasonableness". 24 The submission in regard to sleep apnoea and psychological factors were put by Mr Bryant in this way. Sleep apnoea was mentioned in the Statement of Facts and Contentions, but was not considered as a possible cause of headaches until Dr Lethlean's report of 3 November 2006. Even then, so it was submitted, it was considered as a possible cause and not the most common cause of headaches. Further, Dr Lethlean was not an expert on sleep apnoea and no evidence was called on the subject. Psychological factors were submitted to be a non-issue. Such factors, it was noted, were not included in the Statements of Facts and Contentions of the parties, were mentioned only once in the transcript and were not the subject of closing address by either counsel. Psychological factors were first raised in Dr Lethlean's report of 3 November 2006. This issue was outside of Dr Lethlean's expertise. 26 The Commission submitted, by reference to the Full Court decision in Minister for Immigration & Multicultural Affairs v Betkhoshabeh [1999] FCA 980 ; (1999) 55 ALD 609 , that the decision of the Tribunal, at most, falls within the scope of a decision where the facts were such that an opposite conclusion would have been open to the decision maker, and as such does not evidence an error of law. The Commission also pointed to the evidence before the Tribunal, particularly that of Dr Lethlean, which questioned the extent of the impairment resulting from the injury and submitted that it was therefore open to the Tribunal to proceed as it did. The Commission sought further to support these submissions by referring to the high threshold for a determination of " Wednesbury unreasonableness", citing Lord Green MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 230; and also the observation of Gummow J in Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 654, [137] , that it is very difficult to show unreasonableness where the facts are such that reasonable minds could reasonably differ. 52 The submission for Mr Bryant that this constituted " Wednesbury unreasonableness" misconceives the nature of that type of error of law. As Gummow J explained in Minister for Immigration and Multi-cultural Affairs v Eshetu at 649, [124] this descriptor, derived from the decision of the English Court of Appeal in Associated Provincial Picture Houses Ltd v Wednesbury Corporation , refers to that body of administrative law which is concerned with the judicial review of the abuse of discretionary powers. When standing in the Commission's place so as to decide whether Mr Bryant had an entitlement to compensation under s 24 of the SRC Act the Tribunal was not exercising a discretionary power. Neither does s 24 of the SRC Act posit an eligibility test grounded in a state of administrative satisfaction to a state of affairs. The principles attending the judicial review of a decision made under this type of statutory provision were comprehensively discussed by Gummow J in Eshetu's case, but are of no present relevance. That is not to say that no error of law is revealed. If the Tribunal reaches a conclusion critical to its determination without any material to support that conclusion that is an appealable error of law: Secretary, Department of Social Security v Murphy [1998] FCA 809 ; (1998) 52 ALD 268 , at 271-272.


case_text: The Commission did not dispute that Mr Bryant had by his notice of appeal engaged the jurisdiction conferred on this Court by s 44 of the AAT Act. Though that statute terms the proceeding an "appeal", it is one in the Court's original jurisdiction. That jurisdiction is only engaged if there truly is a question of law, for that is what s 44 specifies the appeal is "on": TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation [1988] FCA 119 ; (1988) 82 ALR 175 ; Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232 ; (2003) 76 ALD 321 ; Price Street Professional Centre Pty Ltd v Commissioner of Taxation (2007) 243 ALR 728. Having considered the questions specified in the notice, I am satisfied that the Commission was right to adopt this stance.


case_text: For its part, the Commission submitted, principally by reference to Telstra Corporation Limited v Hannaford [2006] FCAFC 87 ; (2006) 151 FCR 253 , that, questions of liability to pay compensation under s 24 of the SRC Act can involve "primary aspects" of liability such as whether there is an "injury" for the purposes of that Act. The Commission also emphasised that the Tribunal was not obliged, subject to procedural fairness considerations, to limit the conduct of its review to the case presented by the parties, citing Grant v Repatriation Commission [1999] FCA 1629 ; (1999) 57 ALD 1 and Bramwell v Repatriation Commission (1998) 158 ALR 623 in support of this proposition.


case_outcome: followed

case_text: In aid of this submission, Mr Bryant pointed to observations made by the Full Court in Lees v Comcare (1999) 56 ALD 84 , at [39] to the effect that the powers and discretions conferred on the Tribunal by s 43 of the AAT Act are conferred for the purpose of reviewing the decision under review and are not powers able to be exercised at large. Reference was also made to observation of the Full Court of the High court in Canute v Comcare [2006] HCA 47 ; (2006) 226 CLR 535 , at 542, [14], taken up by Greenwood J in Parker v Military Rehabilitation and Compensation Commission (2007) 96 ALD 624 , at [52], to the effect that the Approved Guide fell for application through the "prism" of the injury which the claimant had suffered resulting in permanent impairment. Reliance was also placed upon the proposition, flowing from the rejection of a submission to the contrary by Jenkinson J in Comcare v Amorebieta (1996) 66 FCR 83 , at 96, that s 24(5) of the SRC Act was not to be construed in a way which admitted of an assessment of the degree of permanent impairment proportionate to the causal contribution of the incident giving rise to the compensation claim. 40 In Canute v Comcare [2006] HCA 47 ; (2006) 226 CLR 535 , in a joint judgement, a Full Court of the High Court emphasised by repetition (226 CLR at 548, [37] and [38]) that the task under s 24(5) involved the assessment of compensation " resulting from an injury ". As the High Court put it, the occurrence of an "injury" "both actuates and defines the ambit of Comcare's duty under s 24 of [the SRC Act]" (226 CLR at 548, [37]). The suffering of an "injury" as defined is antecedent to that assessment task which in this case fell on the Commission rather than Comcare to undertake because Mr Bryant was a member of the Defence Force. 41 As is revealed by the portion of para 50 of the Tribunal's reasons emphasised in the excerpt quoted above, the Tribunal seems to have conceived its task to be to decide whether it was satisfied that the Mr Bryant suffered a degree of whole person impairment " which can be attributable to service life ". With respect, Mr Bryant's entitlement, if any, to permanent impairment compensation was not just to the extent that his employment with the Commonwealth contributed to that impairment to a material degree. It was to compensation in an amount which reflected the degree of permanent impairment resulting from an injury. 42 Canute v Comcare revealed one type of impermissible conflation of inquiry in the determination of permanent impairment compensation, the treating as relevant to the inquiry as to the degree of permanent impairment resulting from an injury something which independently satisfies the statutory definition of an "injury". This case, in my opinion, reveals another, the treating of employment contribution as relevant to the determination of the degree of permanent impairment "resulting from an injury". The contributors to an ailment may be multi-factorial. If an employee's employment by the Commonwealth contributed in a material degree to the employee's ailment, than that employee has suffered a "disease" and thus an "injury" for the purposes of the SRC Act . That "injury" then provides the "prism" through which permanent impairment compensation "in respect of the injury" is determined: s 24(1) SRC Act . So far as that "injury" is concerned, and subject of course to the Tribunal's ability to revisit that antecedent question, the focus of inquiry then shifts to the degree of permanent impairment resulting from that injury as assessed by reference to the Approved Guide. In that inquiry, it is nothing to the point that there may be other contributors to the "injury" apart from employment with the Commonwealth. 43 This type of conflation of inquiry is also evident in part of the emphasised portion of para 49 of the Tribunal's reasons, "the headaches reported could not then be attributable to service life and therefore be compensable under Table 13.1". The reference to "compensable under Table 13.1" is also, strictly, erroneous as the source of the liability to pay permanent impairment compensation is s 24 of the SRC Act , not the Approved Guide. This reference though was not the subject of any complaint and seems to me to be but infelicity or casualness of expression.


case_title: Comcare v Amorebieta (1996) 66 FCR 83

case_text: In aid of this submission, Mr Bryant pointed to observations made by the Full Court in Lees v Comcare (1999) 56 ALD 84 , at [39] to the effect that the powers and discretions conferred on the Tribunal by s 43 of the AAT Act are conferred for the purpose of reviewing the decision under review and are not powers able to be exercised at large. Reference was also made to observation of the Full Court of the High court in Canute v Comcare [2006] HCA 47 ; (2006) 226 CLR 535 , at 542, [14], taken up by Greenwood J in Parker v Military Rehabilitation and Compensation Commission (2007) 96 ALD 624 , at [52], to the effect that the Approved Guide fell for application through the "prism" of the injury which the claimant had suffered resulting in permanent impairment. Reliance was also placed upon the proposition, flowing from the rejection of a submission to the contrary by Jenkinson J in Comcare v Amorebieta (1996) 66 FCR 83 , at 96, that s 24(5) of the SRC Act was not to be construed in a way which admitted of an assessment of the degree of permanent impairment proportionate to the causal contribution of the incident giving rise to the compensation claim. 44 If Mr Bryant's headaches were solely the result of an ailment other than the accepted injury, "muscle tension type headaches" condition, then no compensation under s 24 of the Act would be payable in respect of the accepted injury. That would be because, whatever degree of permanent impairment from which Mr Bryant suffered, that impairment would not have "resulted from" that accepted injury. The task for the Tribunal was to decide for itself the degree of permanent impairment which had "resulted from" the accepted injury: Comcare v Amorebieta (1996) 66 FCR 83 , at 96. 45 That is not though, as its reasons evidence, how the Tribunal conceived its task. The Tribunal, wrongly, conceived that its task was to assess the impairment that had "resulted from service life". This aspect of the jurisdictional challenge made by the Appellant has merit. 46 Further comment is also necessary in relation to the way in which the Tribunal dealt with this matter.


case_text: For like reasons, albeit at the cost of an elongation of these reasons, it is necessary to set out certain passages from the Tribunal's reasons under each of these headings: "1. The cause and relationship to service of the applicant's headaches 37. There are conflicting medical opinions on the cause of the applicant's headaches, either that they are derived from his service related rugby neck injury, or that they are due to tension headaches. ... 39. Neurologists Dr Beran (Exhibit 3 folio 157) and Dr Lethlean (Exhibit 1 folio 70) both diagnosed tension headaches. 40. The Tribunal finds that the evidence for a cervical spinal cause for the applicant's headaches is inconclusive. On balance it favours the diagnosis of tension headaches made by both Neurologists. 41. However, further to this, the Tribunal finds that the diagnosis of the nature of the headache is incidental. Both Dr Rowe (Exhibit 1 folio 42) and Dr Lethlean ( ibid folio 71), the only doctors asked if the applicant's headaches are due to his Navy service, have determined that they are. 2. Whether the applicant's headache condition is permanent 42. Both Dr Rowe (Exhibit 1 folio 42) and Dr Lethlean ( ibid folio 83) have concluded that the applicant's headache condition is permanent. The other medical witnesses have provided no opinion. 3. The applicant's whole person impairment from his headache condition 43. Again there is conflicting medical opinion on this. Dr Rowe has assessed that the applicant suffers 10% whole person impairment from his headache condition, whereas Dr Lethlean assessed this at 0%. 44. Based on the reports by the various medical specialists together with the oral evidence provided, results in our placing greater weight on the evidence of Dr Lethlean in preference to the evidence of Dr Rowe. While both these specialists have provided more recent reports, Dr Rowe conceded that his opinion is based essentially on the applicant's statements. However, of greater importance and weight was the fact that Dr Lethlean, while agreeing with Mr King-Scott (Counsel for the applicant) that it is possible to regard the factual evidence as affecting the activities of daily living of the applicant, he did not resile from his opinion that the applicant has a 0% whole person impairment and did so on the basis of the principle that such an assessment should only be altered following a re-assessment. A re-assessment had not occurred between the date of his latest report on 3 November 2006 where he observed some significant differences in the symptoms described by the applicant in his statement of 14 June 2006, in comparison to his examination of the applicant some 8 months earlier on 31 October 2005. o In addition, his reasoning was quite analytical. He emphasised if a clinical re-assessment was to occur, that a psychiatric assessment should also be included, as he formed the view that Mr Bryant's symptoms were multi-factorial. He further stated that sleep apnoea could also account for the present level of impairment and if that was found to be so, then it would not be compensable under Table 13.1. If sleep apnoea was a major cause of the applicant's headaches, then, not only would it be non-compensable under Table 13.1, but it would explain the condition as being not stabilised and that there may be potential for a reduction in the level of headaches by further medical treatment. We therefore regarded Dr Lethlean's report as providing greater cogency or weight of evidence. ... 47. In relation to the above conditions, it is essentially a contest as to whether or not the applicant satisfies the 10% whole person impairment criteria. If he does not, then the 0% whole person impairment criteria is more appropriate. In relation to the 10% criteria, the applicant has described to Dr Rowe and in his other evidence, that he has attacks which occur 12 times or more per year. Of importance is whether they cause "minor interference with activities of daily living" or are readily reversed by medication. In relation to the evidence provided to Dr Lethlean, the frequency of headaches seems to have reduced from 1994 to October 2005 when the applicant was examined by Dr Lethlean. But the activities described do not require any particular functions of daily living to be satisfied although "due weight must be given to the psychosocial aspect of the function i.e. the ability to stand may be impaired because one cannot stand straight, or stand still or stand around or even stand by without some supervision or direction": Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees v Emery [1993] FCA 601 ; (1993) 32 ALD 147 at 151). 48. That principle must be read in the context that all the attacks must be considered in making the assessment of frequency, not merely those of relevant severity ( McKenna v Repatriation Commission (1995) 39 ALD 254). Of direct relevance is the case of Re O'Rourke and Comcare (AAT 12152, 26 August 1997) which was a case involving an assessment of severe headaches on the activities of daily living as required by Table 13.1. The decision in that case noted that the 10% level of impairment requires "minor interferences with activities of daily living". Activities of daily living refers to primary biological and psychosocial functions. "Minor interference" it was said must be greater than "no" interference but less than "most" interference. The Tribunal there held that a global view or assessment is more appropriate; that on some occasions, one activity of daily living may be so affected in both biological and psychosocial terms as to constitute a minor interference with activities of daily living, whereas in another case there could be multiple activities of daily living which are affected at such a low level but which could still be described as constituting a "minor interference" with activities of daily living. It was said however, '[i]t is highly unlikely, when taking a global approach to this assessment, that a small infraction of one [activity of daily living] could properly be described as "minor interference with activities of daily living'. 49. In assessing the evidence presented against these criteria and their interpretations as outlined above, we have also kept in mind the underlying principles which inform Table 13.1. In O'Rourke's case it was found that the frequency of headaches suffered by the applicant there was approximately 25 per year (greater than the standard in the criteria of 12 or more) and that the duration of the headaches involved several hours and the severity at the upper level. However, the Tribunal there found that the level of impairment under Table 13.1 was 0% as the attacks did not interfere with activities of daily living as defined in the glossary of the Guide. In the present case, the applicant has to rest or stretch and sometimes even double checks his work. These responses to stimuli could be regarded as being on the one hand, part of the ordinary incidence of life which results from tiredness, stress in the workplace or other influencing factors. There is the possibility however, that those activities of daily living may be experiencing a "minor interference" as defined. However, we have concluded on the balance of probabilities that the likelihood of the latter conclusion is far outweighed by the factors raised by Dr Lethlean that sleep apnoea, for example, could equally account for the symptoms described. On that basis, the headaches reported could not then be attributable to service life and therefore be compensable under Table 13.1. That is not to detract from the acceptance of liability for the original injury or even that headaches may be related to the original injury. However, the doubt raised by Dr Lethlean that some psychological factors may be involved lends credence to the requirement for clinical re-assessment including psychiatric assessment. The time lapse between Dr Lethlean's original and more recent reports, his observation of apparent inconsistencies as specified in his latest report should not be viewed lightly and his suggestion of a clinical re-assessment would accord with the best evidence rule in order to make the correct or preferable decision. 50. Having considered all of the evidence, we are satisfied that the applicant does not suffer a 10% whole person impairment which can be attributable to service life , in terms of s 24 of the Act. An amount of compensation is therefore not payable under that provision. (Emphasis added) 58 Though the term is a collective one it does not, with respect, follow that the "global approach" is thereby mandated. Indeed, in its reference to one ADL being so affected as to fall to be described as "minor interference" the Tribunal itself in O'Rourke seems to counsel against the adoption of such an approach in such a case. Be that as it may, the correct way to approach assessment in respect of those parts of the Approved Guide which make reference to the collective term "activities of daily living" is that stated by Spender J in Comcare v Emery [1993] FCA 601 ; (1993) 32 ALD 147 , at 151: "The Tribunal referred to the use of "Activities of Daily Living" in other Tables of the Guide, and said that certain conclusions could be reached. The Tribunal said: 'The first is that to find 'some supervision and direction in ADL was needed' there is no requirement that all, or most, or any one of the particular functions listed in the glossary definition have been adversely affected. Another conclusion is that the term ADL is not limited to the basic mechanics of an activity but due weight must be given to the psychosocial aspect of the function ie the ability to stand may be impaired because one cannot stand straight, or stand still or stand around on even standby without some supervision or direction.' It seems to me that no criticism can be taken of the correctness of this passage, save for the ambiguity in the reference to "any one of the particular functions listed in the glossary definition". If that reference was meant to read "any particular one" was necessary to have been adversely affected, no complaint could be made." 59 These observations were made in relation to the construction of the collective term "activities of daily living" in the context of Table 5.1 of the Approved Guide, which referred to a "need for supervision and direction in activities of daily living" They apply mutatis mutandis to the construction of that collective term in Table 13.1. Thus there is no requirement that there be "minor interference" with all, or most or any particular one of the activities listed in the definition of that collective term before a finding of "minor interference" may be made. To the extent that the "global approach" counselled in O'Rourke suggests otherwise, and that seems to be how the Tribunal in the present case understood it, it is inconsistent with the decision of this Court in Emery and should not be followed by the Tribunal.


case_text: In regard to the construction and application of Table 13.1 in the Approved Guide, Mr Bryant's submission was that the Tribunal's reliance on an earlier Tribunal decision, O'Rourke v Comcare [1997] AATA 304 , led it to apply an incorrect construction of the term "minor interference". Mr Byrant's submissions proceeded as follows. The global approach to "minor interference" in O'Rourke v Comcare , is contrary to the approach the Court has taken to interpreting the Guide in Whittaker v Comcare [1998] FCA 1099 ; (1998) 86 FCR 532 and Comcare v Fiedler [2001] FCA 1810 ; (2001) 115 FCR 328. These cases are, it was submitted, supportive of the proposition that, where there is ambiguity in a phrase, as there is with "minor interference", then the Tribunal should take the approach most favourable to the employee. If the global approach in O'Rourke v Comcare has the effect of limiting or reading down the meaning of "minor interference" then it ought not be followed. If an "activity of daily living" (ADL) is interrupted, temporarily suspended or ceased altogether because of a headache that amounted, it was submitted, to an interference and whether it is minor or significant depended on the frequency, duration and severity of attacks. Where headaches amount to more than a de minimus interference with ADL, it was submitted that this would then constitute a "minor interference". It was submitted that Mr Bryant's medical history, as provided to Dr Lethlean, which history was assumed to be uncontroversial, would fall within the meaning of "minor interference" so construed and hence amounted to a 10% impairment under Table 13.1 of the Approved Guide. 29 On behalf of the Commission, it was submitted that the comparison between the term "difficulty", as considered in Whittaker v Comcare and Comcare v Fiedler , and the term "interference" as used in Table 13.1 of the Approved Guide was not appropriate to support a de minumus argument. In support, the Commission pointed to the observation of the Full Court in Fiedler at [24] that, "There is no reason to think the Tribunal considered that any difficulty with digital dexterity, no matter how slight, was sufficient to come within par 1 of Table 9.4".


case_title: Comcare v Tiscay (1992) 32 FCR 181

case_text: Like the other provisions of the Approved Guide, if competing constructions of Table 13.1 are open, that which favours the employee is the one to be preferred: Whittaker v Comcare [1998] FCA 1099 ; (1998) 86 FCR 532 at 544-545 (Full Court), citing with approval remarks earlier made by Olney J in Comcare v Tiscay (1992) 32 FCR 181 at 188.


case_text: In support of these submissions, Mr Bryant pointed to observations by Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1985) 162 CLR 24 at 41 to the effect that a court may set aside an administrative decision that has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance, on the ground that the decision is manifestly unreasonable. It was also noted, by reference to Federal Commissioner of Taxation v Swift and Ors (1989) 18 ALD 679 and Riddle v Telstra Corporation Limited [2006] FCA 58 ; (2006) 149 FCR 348 , that these principles apply equally to a decision of the Tribunal.


case_title: Grant v Repatriation Commission [1999] FCA 1629 ; (1999) 57 ALD 1


case_text: The relevant compensable "injury", from which the Tribunal accepted Mr Bryant suffered was a particular type of headache condition, "muscle tension type headaches", not "headaches" generally. It may be that it is possible definitively to distinguish the symptoms of "muscle tension type headaches" from those occasioned by, for example, psychological factors or sleep apnoea. Equally, it may to some extent not be possible to draw such a distinction. To the extent that it is not, the Tribunal, like the Commission, was obliged to assess impairment by reference to the totality of impairment "resulting from" the accepted injury on the footing that it was not possible to isolate from that impairment anything which did not result either from another "injury" or from a condition which could never constitute an "injury". A like approach is taken where it is not possible to isolate the impairment flowing from an aggravation of an underlying condition from that flowing from the underlying condition itself: Jordan v Australian Postal Corporation (2007) 99 ALD 303 at 310, [30]. It is settled that in those circumstances a body such as the Commission or the Tribunal sitting in its place is obliged to make an assessment beneficially in favour of a claimant. 48 In his most recent report, that of 3 November 2006, Dr Lethlean opined, inter alia: • "My impression is that psychological factors are the principal ones interfering with the wide range of activities as now described [by Mr Bryant]. I would not modify my assessment without the opportunity of re-assessing Mr Bryant clinically and discussing his condition, symptoms and restrictions." • "Mr Bryant's Table 13'1 impairment might well be assessed at 10% WPI, or a higher impairment, but this should ... be made with clinical reassessment." • "On 31 October 2005 Mr Bryant reported that sleep apoena had been diagnosed. Sleep apnoea in itself can cause (or increase) headaches, concentration and tiredness difficulties. It's possible that this is relevant to his current and continuing difficulties. " (Emphasis added). 49 As to sleep apnoea, the following answer was elicited in cross-examination from Dr Lethlean: "So it would be fair to say that your considered opinion, even to this day, is that the diagnosed condition that you have diagnosed for Mr Bryant is a muscle tension headache for which the service is responsible, at least to the extent of being a 51% contributing factor? Yes."


case_title: Lees v Comcare (1999) 56 ALD 84

case_text: In aid of this submission, Mr Bryant pointed to observations made by the Full Court in Lees v Comcare (1999) 56 ALD 84 , at [39] to the effect that the powers and discretions conferred on the Tribunal by s 43 of the AAT Act are conferred for the purpose of reviewing the decision under review and are not powers able to be exercised at large. Reference was also made to observation of the Full Court of the High court in Canute v Comcare [2006] HCA 47 ; (2006) 226 CLR 535 , at 542, [14], taken up by Greenwood J in Parker v Military Rehabilitation and Compensation Commission (2007) 96 ALD 624 , at [52], to the effect that the Approved Guide fell for application through the "prism" of the injury which the claimant had suffered resulting in permanent impairment. Reliance was also placed upon the proposition, flowing from the rejection of a submission to the contrary by Jenkinson J in Comcare v Amorebieta (1996) 66 FCR 83 , at 96, that s 24(5) of the SRC Act was not to be construed in a way which admitted of an assessment of the degree of permanent impairment proportionate to the causal contribution of the incident giving rise to the compensation claim. 31 In Telstra Corporation Limited v Hannaford [2006] FCAFC 87 ; (2006) 151 FCR 253 , after an exhaustive review of earlier authority, Conti J, with the agreement of Heerey and Dowsett JJ, reached (at 273-274, [57] - [59]) the following conclusions: 57 In my opinion, it should be concluded, upon the correct construction of the SRC Act , and in particular of the provisions thereof upon which I have focused attention in these reasons, that the AAT is empowered to make subsequent findings of fact in relation to the circumstances the subject of decision-making under ss 16 and 19 of the SRC Act , and also under ss 21 and 27 of the SRC Act , where the determination of the first instance decision-maker (here of course Telstra) made under the auspices of s 14 of the SRC Act remains in operation in the sense that it has not been the subject of any inconsistent outcome in the context of a subsequent review by the AAT. The statutory scheme allows for progressive and evolving decision-making giving effect to the provisions of ongoing review of relief or entitlements in the nature of course of workers compensation, being review which allows for adjustment or change in the light of events and circumstances which may subsequently happen. The statutory scheme hence reflects a flexible scope for adjustment by way of decisions in the nature of awards to be made subsequently to the determination of s 14 liability, whether that determination be made in isolation, or in the context of decision-making concerning consequential relief that may be required in the light of evolving circumstances. It is therefore a scheme which allows progressively for ongoing relief, and is thus not comparable of course with the process of curial resolution of the traditional common law entitlement of an injured employee for damages as a consequence of the negligent conduct of an employer. The opening words of s 14(1) '[s]ubject to this Part...' are consistent with the flexibility inherent in the ensuing codification of the various facets of compensation envisaged. 58 The first instance decisions of this Court in Power, Hill and Riddle, which I have reviewed, each reflect in my opinion correctly the operation of the statutory scheme, and in particular its provision for ongoing adjustment designed to accommodate changing circumstances inclusive for instance (as here involved) of changing medical diagnosis. The approach to statutory construction and operation evident in those first instance authorities is not at odds with the approach to statutory construction and operation adopted by the Full Court in Lees subsequently to Power and Hill and prior to Riddle . 59 I would therefore conclude , contrary to the decision of the primary judge, that the AAT below was duly empowered , upon the true construction of the SRC Act and in the events which happened: (i) to make findings of fact that effectively undercut the necessary findings of fact made in the initial or original decision of Telstra under s 14 of the SRC Act to accept liability in respect of Mr Hannaford's claim for compensation; and (ii) to do so in circumstances where the AAT was undertaking its review of whether any compensation should be payable or further payable, for instance under ss 16 and 19 of the SRC Act , and/or under ss 21 and 27 of the SRC Act ; and (iii) to do so in the circumstances further where Telstra's s 14 decision remained in force to the extent that it had not been actually reversed, and had not been the subject of any adverse review per se by the AAT. In short, it matters not, upon the true construction of the SRC Act , that there has never been any reconsideration of the determination of Telstra of 8 May 2002 whereby liability under s 14 thereof for Mr Hannaford's claim originally made on 1 May 2002 had been accepted. (Emphasis added; citations for cases referred to in the passage quoted omitted) 32 These conclusions as to the operation of the AAT Act, in the context of the jurisdiction conferred upon the Tribunal by s 64 of the SRC Act were reached after, materially, consideration of what had been said on the subject by an earlier Full Court in Lees v Comcare (1996) 29 AAR 350. They bind me as much as they bound the Tribunal. Given that, there is no utility in a rehearsal of earlier authority. Rather, the task is to ascertain how those conclusions operate on the facts of the present case. 33 Here, as it was entitled to do in its administration of the SRC Act , the Commission chose to bifurcate the process of making of determinations in response to a claim made by Mr Bryant, via his solicitors, on 15 July 2005 to extend the Commission's existing liability to pay compensation under the SRC Act so as to include a headache condition and to reassess his lump sum impairment compensation entitlement accordingly. Initially, on 25 January 2006, the Commission determined that Mr Bryant had suffered the contraction of a disease to which his military service had contributed to a material degree. The disease concerned was identified as "Muscle-tension type headache". It was determined to be a "stand-alone condition", i.e. one unrelated to Mr Bryant's earlier accepted compensable injury to his neck. The disease identified in this determination was an "injury" for the purposes of the SRC Act .


case_title: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1985) 162 CLR 24


case_text: The Commission submitted, by reference to the Full Court decision in Minister for Immigration & Multicultural Affairs v Betkhoshabeh [1999] FCA 980 ; (1999) 55 ALD 609 , that the decision of the Tribunal, at most, falls within the scope of a decision where the facts were such that an opposite conclusion would have been open to the decision maker, and as such does not evidence an error of law. The Commission also pointed to the evidence before the Tribunal, particularly that of Dr Lethlean, which questioned the extent of the impairment resulting from the injury and submitted that it was therefore open to the Tribunal to proceed as it did. The Commission sought further to support these submissions by referring to the high threshold for a determination of " Wednesbury unreasonableness", citing Lord Green MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 230; and also the observation of Gummow J in Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at 654, [137] , that it is very difficult to show unreasonableness where the facts are such that reasonable minds could reasonably differ.


case_title: Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611